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I usually dismiss people who say that social media “changes everything.” At least in marketing, it’s a variation on a theme of “listen, react, and serve your customer” that has served us well for generations.  But in a world where everyone is a publisher and critic — and can potentially be sued for it — this DOES change everything in the world of public relations!

I’ve been honored to explore this topic with Steve Farnsworth, Chief Digital Strategist of Jolt Social Media, who is absolutely one of the smartest PR and marketing guys I know.  On Monday I wrote a post describing a real case where a marketing firm, Low and Tritt,  sued a Knoxville pizza restaurant for $2 million over alleged libelous comments on Facebook and Twitter.  The fact is, this is just the beginning — we are going to witness more and more of this kind controversy.  The marketing firm’s reputation is now spinning out of control.  Once it goes viral, what can a company do?

Steve answers this for us in a guest post, his first ever!

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When Mark challenged me to respond to his post on libel lawsuits and social media, I was thrown for a loop. Crisis communications for a business who had sued a client or tenant?  Where do you even start on a self-inflicted gunshot wound like that?

It was a little like asking me to talk about safety to a young man as he recovers in the hospital burn ward, after he met the business-end of a Roman candle in a deeply misguided Jackass reenactment.   All you can really do is take pictures of the awkward injuries to show the other kids that it is just not a good idea.  You don’t want to try this at home.

Being a regularly reader of {grow} I couldn’t pass up a chance to work with Mark or his challenge.  To mix things up, Mark agreed to participate in a Twitter chat (#SM4B) with me on Wednesday October 7, 2009.  A sampling of the comments from the chat are included at the end.

Since I only have access to openly published details of the case, and lack internal insights of the cases Mark cited in that post, it is difficult to address those situations specifically. So, I am using this assumption:  The marketing firm realizes that as an unintended consequence of the lawsuit they risk potential irreversible damage to the firm’s long-term reputation, a reputation that they have spent years nurturing, and the very real potential of lost future business.

Situation Analysis

At risk for both parties

  • Loss of Money: court fees, attorney fees, and judgments against the loser by the court.  Also, vendors and banks see extending credit or loans to a business in litigation as potentially risky.
  • Bifurcated Mental Focus:  Cases can drag out for months or even years. Being involved in a lawsuit, even if you think you might win, is a drag.  It takes your mental focus off your business, family, and your life. With so much at risk you can’t think about building your business, taking care of your family, or health.
  • Time Sink: Meeting with lawyers, responding and filing court documents, and depositions all take your most valuable and limited resource: time.

Brand Impact Risk for Pizza Restaurant

  • You want people to think, “Hey you’re the guy who makes that fantastic Three-Cheese Pasta Bake.” Not, “Hey, you’re the guy who called your agency crooks and got sued for a million dollars.” Needless to say this is way off topic for your brand image.

Brand Impact Risk for Marketing Firm

  • Even if the courts decide that they are the clear victim in our scenario, the public is going to see the offending words calling them crooks and thieves repeatedly, and hear accusations that their work is subpar.  Public sentiment, as reflected by dozens of published comments, is establishing them as “That agency that sues its clients.”  There is absolutely no upside for their brand.  They could be a  very reputable agency, but this will impact new business development for years.

 My Suggested Plan Of Action

  • Make It A Non-Issue
    • News, and social media discussions, thrives on conflict.  Often when words have been said, and egos bruised, it is next to impossible to have a meeting of the minds, but that would be my first effort.
    • Both sides have a lot at stake in this case, and both have a great deal to gain by putting their differences aside and coming to terms. No one is going to be happy.  However, if they can agree on settling this matter quickly they can start repairing reputations and move on to building their business.
  • Create A Listening Dashboard
    • The train is off the tracks, but you still need to know where it’s going to land so you can be prepared to engage or adjust your efforts as needed.  Using an RSS reader like Google Reader, I would create several persistent searches for terms related to the case and save them as RSS feeds. At a minimum, sites I would include are Google Alerts, Twitter search, and Technorati. Probably Social Media Firehose (Yahoo Pipes), too.
  • Speak Once On The Topic and Shut-Up
    • I would write a very conversational, from-the-heart, brief blog post from the face of the company (owner, president, or GM) on the resolution.  I would have them acknowledge, in clear, but gentle terms, their mistakes, and I would do this without mentioning Pizza Kitchen by name. No need to beat a dead horse.  I want to capture the human nature of the situation, a genuine mea culpa, so that the public would connect with the people involved.  If the client had any believability on video I would do it on camera, and then post it to YouTube.
  • Create Positive Online Content
    • Diluting the negative online content with expert content is extremely important. Any time a new customer Googles L+T they will see the negative results. So, they should publish downloadable, no sign-up required white papers, case studies, and/or e-books.
    • Also, they need to start a blog hosted on their website (huge SEO benefits), and develop a videos series to post to YouTube.  All the content must be well crafted and targeted to potential client’s business concerns.  The blog and videos must provide great usable advice and demonstrates their marketing expertise.  This will help return some positive standing to search results, and likely shorten their sales cycle.
  • Show Your Face and Become a Resource
    • It looks like L+T primarily works with local businesses. I would create a few powerful presentations designed to help local business owners generate new clients, and then take it on the road. I  would talk to any group that could put 5 or more butts in seats.  Getting management out in front of potential clients will do a lot for rebuilding the company name by putting a human face on it, and great for generating new  business.

L+T  should continue to evaluate damage to new business, and decide how best to evolve their efforts.  Also, I would seriously consider rebranding the company and changing the name.  When I suggested this during the chat it met with a number of dissenting opinions.  The general sentiment was that the negatives would outweigh the benefits because people would see it as hiding behind a different name.  However, this does not track with the effects I have seen in the real world.

Names are very powerful. Johnson & Johnson rebuilt their very damaged brand effectively after the Tylenol tampering scare, but they were the victims and got out in front of the story. It is almost impossible to rehabilitate a brand that consumers see as the bad guy.  Blackwater Security Consulting knew this and changed their name pronto.  Now, if you ask a room full of people what Blackwater’s new name is, most would be unable to tell you. It’s Xe Services LLC.

For a full listing of comments, search Twitter for #SM4B.  Here is a sampling of some of the best insights:

@Dan_Holden: So even if they are right (win the lawsuit) they’ve damaged the reputation of the firm, perhaps irreparably.

@kimmolinkama: Maybe this is simply the first highlight case of ambulance-chasing turning into tweet-chasing?

@steve_dodd: the power of an apology… fix it and move on … would generate positive press that more than counteracts negative

@NitinGuptasays: I agree that BPB has risked its reputation and future business by sueing. .. but was PD justified in defaming the agency?

@Dan_Holden: My resolution would be to get the suit out of court and have a pizza and beer … maybe even sponsor a neighborhood beer bash

@markwschaefer: My take is that suing a customer is almost always a losing proposition.  And now under the glare of SM … wow.

What have I missed?  What would you do in the event of a social media PR crisis?

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