Someone has besmirched your good name. They have unfairly called you out for putting out a lousy product or providing indifferent customer service. Eventually, it happens to everyone. Now that companies are becoming more aware of the power of social media and online recommendations, they want to know what to do about it.

In many cases, it's best to do nothing. Keep your distance and just let the thread fizzle and die. But, some occasions require a response. Factual mistakes need to be corrected. False and damaging claims about your product or company need to be addressed.  Before I offer some pointers on how to deal with these situations, let me give you two examples of what not to do.

1) A Toronto based hosting company mistakenly sent out very large, very incorrect invoices - 1,000s of dollars instead of 10s of dollars.  One customer was incensed and he blogged about it.  "How can I rely on them for hosting if they can't even get their billing right?".  The CEO responded by offering three months free service if the customer removed the blog entry. Big mistake. The blogger followed up with another blog entry about an attempted "bribe" and refused the "hush money".

2) On a snowboarding forum that I frequent, a member posted about breaking a very expensive, custom snowboard, handmade in Europe. A rival snowboard company speculated that the cause of the equipment failure might have been a design flaw. The owner of the European company went ballistic. He was clearly upset that a competitor would question his design and expressed his anger in a personal attack. The damage to his reputation from his emotional response far exceeded any damage incurred by the original, perceived design flaw.

The three lessons to be learned:

1) Be careful when trying to turn a negative opinion into a positive one. The cost of trying to convert a negative opinion is often too high and can backfire. Accept that there are going to be negative opinions about your company and product no matter what you do. Focus your efforts on neutral opinions or near-neutral (eg. one bad experience after many good).

2) Don't shoot the messenger. Separate the person from the issue and address only the issue. In the snowboard example, the company owner questioned the knowledge and integrity of the rival manufacturer.  In doing so, he came across as petty and defensive. It turned out the original poster exceeded the recommended weight limit on the snowboard by 100 pounds. If this fact was revealed immediately, the issue would have been resolved to the positive gain of the manufacturer.

3) Above all, remain calm. Don't let emotion get in the way of a reasoned, calm correction or statement of facts.

A few more tips about managing your online reputation:

1) Don't shill. Never impersonate a customer or neutral party to make your company look good. If you are found out, the hounds of online hell will be unleashed.

2) Try to resolve it offline. People are much more civil over the phone and the result will often be a post complementing you on your personal commitment to customer service.

3) Don't be scared off. Online referrals are a powerful way to find customers. Think of yourself as a farmer, trying to grow a luscious crop of positive reviews. Don't let the occasional weed discourage you.

Want to learn more?  Here's a great article from the New York Times, targeted at small business.  And leave it to the U.S. Air Force for establishing clear Rules of Engagement.  Click on the image for a larger version.