How to Ruin a Company in Two Hours or Less

It’s amazing how quickly you can hit rock bottom. You see it everyday-companies who have been around a long time are closing their doors permanently. Circuit City, Linens in Things, and CompUSA are a few examples who have filed bankruptcy protection and liquidated assets. Turn on the news and you’ll hear how sorry everyone feels that their favorite stores are closing, people are loosing jobs, and investors are experiencing huge losses.

As I’ve mentioned before, I don’t feel sorry for anyone. These companies have gone bankrupt because they didn’t prepare for an economic downturn-an event that cycles naturally in our economic system. Those who are loosing their jobs are just as responsible. The inability for a worker to be staffed on another extremely low-paying job is the result of poor life planning and lack of higher education. Those who have lost on the stock market know investing is always a huge gamble.

Belkin is an excellent example of such a company. Over the weekend, The Daily Background, uncovered a huge scandal where a development representative, Mike Bayard, was caught paying people $0.65 to write fake positive reviews on Amazon.com for a product that received horrible market feedback:

“give [it] a 100% rating (as high as possible).” It doesn’t matter if the reviewer doesn’t own the product or has never tried it- the requester has helpfully written, “Write as if you own the product and are using it.” It even goes a step further, asking the Mechanical Turk user to “Mark any other negative reviews as “not helpful” once you post yours.”

Within a few hours, Gizmoto, Slashdot, Engadget, and Digg picked up the story. Suddenly everyone was doing research, finding Bayard’s LinkedIn profile, the Google Cache history of the product, and other products that have been affected. They found Bayard lowered the price of the product to $69 as positive reviews came in. The scandal got worse as the price soured to $200 in the matter of hours. The president, Mark Reynoso, made the following statement regarding the scandal:

“Belkin has always held itself to the highest standards of corporate ethics and its employees to the highest standards of personal integrity. Similarly, we support our online user community in discussion and reviews of our products, whether the commentary is good or bad. So, it was with great surprise and dismay when we discovered that one of our employees may have posted a number of queries on the Amazon Mechanical Turk website inviting users to post positive reviews of Belkin products in exchange for payment.

Belkin does not participate in, nor does it endorse, unethical practices like this. We know that people look to online user reviews for unbiased opinions from fellow users and instances like this challenge the implicit trust that is placed in this interaction. We regard our responsibility to our user community as sacred, and we are extremely sorry that this happened.

We want to stress that this is an isolated incident and to re-instill trust with you, we have taken the following courses of action:

- We’ve acted swiftly to remove all associated postings from the Mechanical Turk system.

- We’re working closely with our online channel partners to ensure that any reviews that may have been placed due to these postings have been removed.

It’s also important to recognize that our retail partners had no knowledge of, or participation in, these postings.

Once again, we apologize for this occurrence, and we will work earnestly to regain the trust we have lost.

Sincerely,
Mark Reynoso
President, Belkin”

After Reynoso made his statement, the story worsened as larger blogs found more evidence of wrong doing with other Belkin products. Suddenly the LinkedIn profile, Amazon profiles, and the solicitation were scrubbed and anonymous tips came in from Belkin employees claiming they have a history of wrongdoing and scamming the public.

It isn’t shady employees and bad business practices that are hurting them, however-it’s a collection terrible products and poor customer service that is brining them down. This could have easily been prevented with suitable product testing and quality assurance. In other words, poor quality products and services are almost always the source of these corporate meltdowns.

Belkin’s solution, of course, is to terminate the parties responsible and make sure the public knows this is an isolated occurrence. It’s going to take a lot of work to repair their reputation. Many consumers, especially in this economy, are more likely to choose competitor products. Some of the damage will never be repaired.

While this issue is far from over, it should serve as a reminder that no matter how much you get away with participating in shady business practices, it always comes back to haunt you in the long run.