Depending how wide spread the damage is with the bad reviews, sometimes it is good to start over with a new brand. Phillip Morris and various other companies have changed their image a number of times because of the association with cigarattes. At the same time, negative reviews can HELP the business. Address the reviews directly (either on those old posts, or on the website). Be up front and acknowledge that a poor job was done with hosting in years past, but things have started over and since "X" date/month a new shift has happened.
Get reviews from existing customers who have been there a while, and not just ones that were good. Get bad reviews and post them on your site. Respond to the issues directly.
The best thing in a situation like this (and any situation) is to be as transparent as possible. Take the issues directly to the public. If you had a server that crashed every 4 days for a month, address it with your customers and future customers.
I know, you're scratching your head and saying "I should market what's BAD about my company?" - in a sense, YES. You need to first address what went wrong, what you've done to change it, and what your future plans are with the company.
Hands-on for example - for many years, our slogan has been "we do one thing, and do it well". It is still something that our employees repeat and practice. Our business is Web Hosting (shared, VPS and Dedicated). We are NOT an SEO company, we are not a design company. We sell domains and ssl certs as a service to customers, but again, that's not our focus.
Finally, and probably most importantly, have a business plan. Write down exactly what went wrong with the old business practice and what didn't work. You must also have a focus on what DID work. How are you going to prevent yourself from falling back into the old habbits unless you have a company policy and goal outlined? There must be a clear set of goals for the company and how to accomplish them.
Again, it comes down to honesty (with the customer and the company). Know your strengths and weeknesses. Build upon the strengths, and send the weeknesses to other companies. If you don't provide design, team up with some designers that you can send links to. Try not to setup affiliate programs with those designers as that will negatively influence you pushing customers to choose "X" designer over "Y". An honest review and guide to help your visitors choose a designer should not be clouded with the anticipation of getting a kickback for sending a customer to them.
Hope that helps your friend. You may also want to suggest that they seek professional help from a marketing or spin company to help change their reputation. It's not cheap, but well worth the money if the reputation has been tarnished badly.
