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By B.L. Ochman

Airbnb, which has apologized more times in the past month than Anthony Weiner or Elliot Spitzer ever did, is the latest brand to suffer serious reputation damage as a result of (take your pick) ignorance, arrogance, or inexperience. Their latest round of apologies contains (finally!) what sounds like real improvements in the service. Time will tell.

If you haven’t been following the situation, AirBnB, is an online service that helps homeowners in 186 cities around the world rent their homes while they are out of town. The young company is one of the latest tech startups to convince VC investors its worth a billion dollars.

Unfortunately for a blogger who goes by EJ, not all renters are the kind of wonderful, considerate people you’d want in your home in your absence. In July, she says she “returned home from an exhausting week of business travel to an apartment that I no longer recognized. To an apartment that had been ransacked.”

Her story spread like wildfire, and Airbnb has been apologizing profusely since it realized it had to.

Apparently, Airbnb didn’t carry insurance for this kind of incident. They refused, at least initially, to reimburse EJ for damages. And she also claimed that they pressured her to retract her blog post saying that the company was actually not concerned about her well-being.

She claimed that Airbnb’s co-founder and CEO, Brian Chesky “requested that I shut down the blog altogether or limit its access, and a few weeks later, suggested that I update the blog with a “twist” of good news so as to “complete[s] the story”.

This morning, Airbnb posted a bunch of new security policies on the site. And Chesky, wrote a blog post and sent a letter to its users to apologize again and to announce a new $50,000 guarantee that will begin on August 15th to protect the property of hosts who book through its Web site. Sadly, nearly a month had passed since the incident.

Chesky: “we have really screwed things up”
Explaining the delay, Chesky wrote, “We felt paralyzed, and over the last four weeks, we have really screwed things up… In the last few days we have had a crash course in crisis management. I hope this can be a valuable lesson to other businesses about what not to do in a time of crisis, and why you should always uphold your values and trust your instincts.”

In addition, the site now has 24-hours customer service, a new Trust and Safety Center; verification of host and guest’s identity (which, astoundingly, didn’t exist before!); increased screening of inquiring guests, including letting the potential host see their full name and pictures before deciding to accept or decline a request. Plus a whole bunch of common sense, common safety policies that make it clear it’s a miracle nothing even worse happened before this incident!

What should they have done?
They hadn’t thought about worst-case scenarios and how they would respond to them. They hadn’t made any kind of crisis plan.

They waited too long to respond, and when they did respond, they were initially defensive instead of apologetic.

Key take-a-ways for every brand doing business today:
Quick response is critical
Address all available channels, especially the one in which the incident surfaced
Monitor your brand 24/7. Brand monitoring has to be constant. There are all levels of tools, from free Google Alerts when the brand name hits Google, to elaborate monitoring systems that cost thousands of dollars a month. Pick one. Use it.
Acknowledge issues quickly. Nobody expects immediate resolution of any issue. But people do expect a brand to acknowledge a problem and promise to deal with it quickly. Quickly these days means within hours, but at least that gives you time to think.
Admit mistakes. Airbnb could have saved itself a whole bunch of negative press and brand damage by immediately admitting that they screwed up instead of waiting a month.

Be prepared for a brand attack
• Have a crisis strategy: don’t jump without a parachute
• Plan and practice for the worst – don’t try to figure it out when your brand is under fire
• Have a “dark blog” ready to go – don’t try to build one in the midst of a crisis
• Don’t make your first foray into social media during a crisis.

Classic cases of brands punked by social media include:
Motrin moms – moms unleashed a Twitter storm when they thought a Motrin ad was insensitive
Domino’s – videos of employees doing disgusting things to food went viral online, viewed by millions of people, leading to a 10% drop in sales
Kryptonite bike locks – suffered major sales downturn after a YouTube video showed how to open one of the locks with a ball point pen
Dell Hell – Dell did semi-permanent damage to its reputation by ignoring bloggers, including me, who complained about lemon computers
Comcast narcolepsy – a Comcast repairman was filmed sleeping on a customer’s couch while waiting more than ½ an hour to get through to his own company
Taco Bell rats – video of rats partying inside a Greenwich Village Taco Bell went viral
All of these brands made the same mistakes. They waited too long to respond. They didn’t respond in the medium where the problem surfaced. They didn’t apologize fast enough, and they didn’t immediately say that they would make changes to prevent the same issue from happening again in the future.

What goes online, stays online. Some brands recover if they play their cards right, and make real changes. Others don’t.

Learn, plan, change: before it’s too late for your brand.

Bonus Links
Top 8 ways to stop pissing off your customers
Six lessons from customer service hell