When you have a PR crisis what do you do? All companies are eventually faced with this question. What happens when your good company’s name is about to be dragged through the mud, ruining all the credibility you have been building for several years? There are a few tips to manage a PR crisis for startups. However, it’s more effective to look at examples that prove that no PR crisis is irredeemable. 90% of the time, your good name can be salvaged; albeit with a few bruises sometimes.
Here are 5 startups that handled a PR crisis with honesty and directness that we can learn from:
Zenefits is a Saas platform that provides a platform for companies to manage their HR facets – from benefits and compliance to payrolls and performance management. The company also earns commissions for selling health insurance covers to these businesses that use their platform.
On 5th February 2016, Buzzfeed broke a story about Zenefits flouting insurance rules by brokering health insurance without being legally licensed. Of particular concern was the Washington State law that required every insurance broker to have a license. Zenefits had 56 employees doing insurance deals in the state, 44 of whom were selling insurance without the required license.
What the Buzzfeed story also showed was that the presiding CEO at the time, Parker Conrad, apparently encouraged the act. In responding to this major PR crisis for the startup, the company’s board immediately fired the CEO and Founder. He was replaced by David Sacks.
In a letter to the Zenefits customers, the new CEO apologized to existing customers and said “We want to address any concerns you may have and let you know what we are doing about the situation.”
The news from Buzzfeed nearly crippled the company as it continued to create a media frenzy. This was definitely not something the company would recover from by sending out apology emails. Since then, the company has laid off over 45% of its workforce from a team that was bloated by over 1,600 employees. It is this over-hiring and attempts to scale too fast that had made it impossible to control the workforce leading to the claims of fraud. In addition, the founder had written a software program that helped the salespeople to flout insurance requirements in some areas.
David Sacks’ efforts
David Sacks who was also a former COO of the company put license compliance in place, negotiated settlements with states, and released a new version of the core product. He later stepped down for other reasons. However, his immediate addressing of the problem helped Zenefits stay afloat. In fact, the company lost very few customers.
The company is still recovering its brand image but what the approach by David Sacks showed was that Zenefits was committed to change, and would stop at nothing to ensure the change was achieved no matter the costs. This has since earned the company applause in the media from time to time.
In 2014 December, some private emails of Michael Lynton were leaked. He is an investor and the serving Chairman of Snap, who are the makers of Snapchat. At the time he was also the CEO of Sony Pictures. Among the leaked emails were some between the CEO of Snapchat, Evan Spiegel, and Michael. These emails had information about Snapchat’s strategies and upcoming features, as well as financial details and partnerships.
The media went into a frenzy. At the time, it seemed like Evan Spiegel was far from the darling of the press. There was just too much negative media attention on his personal life. This leak fueled the fire even more.
Despite the bad publicity, Spiegel wrote a very heartfelt letter to Snapchat’s employees. He apologized that Snapchat’s secrets and future plans had been exposed and violated by the hackers and the media. He acknowledged that company secrets had been leaked. Moreover, he enforced the idea that it was okay to have secrets as a company.
“We keep secrets because we get to do our work free from judgment – until we are ready to share it. We keep secrets because keeping secrets gives you space to change your mind until you’re really sure that you’re right,” he said. “It’s not fair that people get to take away all the hard work we’ve done to surprise our community, family, and friends.”
This letter was taken to heart by a lot of Snapchat’s employees. The effects of this letter even spilled over to the public. One thing about Snapchat’s users is that they absolutely love the platform. Spiegel’s letter gave them a chance to get to know a more vulnerable side of the CEO – one that they had never seen before.
Eventually, the crisis didn’t matter at all because the media began speaking highly of Evan Spiegel’s letter and his personality. This was a PR crisis that got addressed immediately by attempting to create a connection between the CEO and employees. It succeeded. Today Snapchat is thriving more than ever.
On November 23rd 2015, users of Slack went on Twitter to protest that the service was down. They even created a hashtag for the protest codenamed #slackdown. In the hours that followed, Slack learned of the outage from some customers via Twitter and went to address the issue. They sent a message to each Twitter user who was tweeting via the hashtag.
In total, they sent out over 2,300 personalized messages for every Slack customer who was having an issue. Eventually, in a crisis that would have gone negatively viral for Slack, it went well and they got over 3,000 new followers on Twitter that day, That’s 7x the number of followers they get on any normal day.
Support from Slack
Their approach was very direct. They usually have an internal tool built specifically to let them know of any customer support issues that come through Twitter. They were therefore able to quickly find out about the hashtag and get on with addressing the issue. Their major PR win was reaching out to each and every user with a personalized message to resolve their problem. Sending out over 2,300 messages in a day on Twitter is no mean feat, even for a startup that big. Lots of bigger companies could never do it. This was a show of their commitment to ensuring their customers have the very best support they can offer.
It is not by accident that they were able to handle things so well. They had planned for it. They knew someday something might happen and cause them a stressful workday. A part of that plan included a special social media clean-up group. When that service outage happened, this strategy and group came into place and were tweeting incredibly thoughtful, kind, remorseful, and funny messages to every user who had a complaint. They were able to turn the tide in their favor thanks to planning in advance for a crisis.
Buffer is a Saas solution that enables users to schedule posts to Facebook, Twitter, Instagram, and LinkedIn. On October 26th 2013, the company had one of its most challenging PR crises. The platform had been hacked and details of thousands of customers were stolen. The hackers then used the stolen information to post spam messages on social media. The issue was so serious that Buffer had to shut down their platform to allow for investigations to continue.
In response, the CEO and co-founder, Joel Gascoigne, created this blog post to address the issue.
To start off, he apologized and acknowledged that indeed the Buffer service had been hacked. Additionally, he provided assurances that no payment information was stolen, and that the only data that had been compromised was related to customers’ social media pages.
From his initial and immediate response, customers were informed of every step that was being taken to handle the breach. From working with Facebook, AWS, and Twitter to continuously updating users about the progress of the investigation on the blog, and Buffer’s Facebook and Twitter, everything was brought under control.
Eventually the company was able to restore the service after over 9 updates. They also worked to seal loopholes to ensure the chances of this happening again were minimal.
For a young company that was just getting into the game, their service being forced to shut down and thousands of customer details at risk, they handled this quite well. It was facilitated by acknowledgments and constant updates.
Airbnb is an online marketplace that helps people rent out their spare rooms or properties to guests. As you can imagine, this poses a lot of risks for the guests and hosts alike because you are never too sure about the person you will be hosting or the person who will host you. This has led to lots of firefighting by Airbnb every time there is a crisis. In fact, almost all crises on Airbnb’s platform have led to lots of social media attention.
However, Airbnb seems to have learned a lot from the past about managing a PR crisis. They now quell most fires within no time and receive adequate trust from lots of their users. For instance, most recently a new story broke out on Twitter where guests had been treated in a discriminatory manner, rudely talked to, and even abused when they arrived at the place where they were to stay for their vacation. There is a thread and videos that include the host verbally abusing the guests with claims that she did not feel safe in her home because she was hosting black guests.
Last night, a group of friends and I reserved an Airbnb in NYC, and encountered a racist and rude host.
When we arrived at our @Airbnb, we were harassed several times before being thrown out at 2 am. Her reasoning was that she felt unsafe, she assumed we were going to steal and destroy her property.”
— TooN (@Kartoon_1911) June 1, 2019
Airbnb quickly flagged the issue and got involved in the thread. Their initial response was an apology – before they even offered a solution for the problem. They also highlighted an Anti-Discriminatory Policy that they have for their company.
We’re so sorry to hear about this, Airbnb does not condone discrimination in any way. You can view our Anti-Discriminatory Policy here. Could you also provide us with more details regarding your experience via DM? We’d like a closer look.
— Airbnb Help (@AirbnbHelp) June 1, 2019
After looking at what went down, Airbnb finally decided to terminate the host from the platform entirely and even helped the guests find a new place to stay.
The language is unacceptable and has no place in the Airbnb community. We’ve removed the host from our platform and are supporting the guests with a new place to stay. We’re thankful to them for bringing this to our attention so we could take action.
— Airbnb (@Airbnb) June 2, 2019
This is by no means the end of these issues for Airbnb. However, the team seems to have understood how to deal with the issue.
They have policies to show that they understand the nature of their platform and all vulnerabilities that the business has. They have foreseen these issues and created policies on how to deal with them.
Their immediate response was an apology. They did not attempt to dismiss the guests or defend the host. They promised to take action after receiving more details on the story. The company then investigated and found that, indeed, the guests were verbally abused and discriminated against. They took action by totally banning the host from the marketplace. They then shared the actions they had taken to help the guests find another place to stay. By publicizing their actions, they ensured that the chances of hosts treating guests in a similar manner were minimized.
In all these 5 scenarios, each of the companies dealt with their crisis in a very direct, transparent, and honest manner. This is what helped them to survive. Companies like Airbnb have their good name come into question from time to time, and their PR crisis strategy is in place to ensure things do not escalate. All the same, every startup can learn something from how these crises were handled in order to formulate proper PR crisis management strategies for the future.
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