i wrote a bunch in recent weeks about Netflix’s about-face of customer sentiment: they’ve gone from ‘beloved’ to ‘betrayers’ faster than any other company I can think of in recent times.
So when I came across an article about how social media ‘incidents’ can cause headaches for companies, Netflix again came to mind.
From the article:
“Among businesses which reported experiencing social media “incidents,” fully 94% said there were serious ramifications including revenue loss, data loss, reduced stock price, loss of customer trust, and litigation costs, not to mention general damage to their brand reputation.”
Yes, of course, but what about the damage done by NOT using social media? I am convinced that Netflix could have handled this better by doing something instead of nothing.
Anyways, enough about Netflix.
The most common incidents involve sharing confidential information, or exposing the company to litigation.
The article raised a lot of good points and discussions about the possible ramifications of of online actions, even putting a dollar amount to it:
“The average loss in stock price came to $1,038,40, average litigation costs were $650,361, direct financial costs were $641,993, and lost revenue was $619,360.”
While some may see this as evidence to prohibit social media, I see it another way. For me, this illustrates the incredible power of social media and how effective it can be.
In the industry I work in, a lot of our customers are very dialed into social media, especially when researching products they are considering buying. Very few people are making impulsive purchases; instead, they take weeks or months to weigh the options of one camera system against another. Message boards play a massive role in the decision-making process, and many of these potential customers are actively participating in the conversations, initiating questions and discussions. Part of our strategy is to participate in the process and provide information.
Recently, I read one post where a customer was writing about a product they believed might be defective. I observed that many of the people joining into the dialogue were researching that brand, considering buying it, and were likely being turned off to it. For a newer brand, this is death… especially when this thread, while just 30 or 40 posts long, had been viewed by over 4,000 people….
How things could have been different if the company in question had been aware of this message thread, and joined the discussion. Sitting back and saying nothing, whether or not they were aware of it, was a bad move.
A lot of companies I’ve worked for have had very strict confidentiality agreements for employers, discussing what they can and can’t say, especially online. But perhaps a smarter- and savvier- policy wouldn’t be limited to what you can’t do online, but also provide guidelines on when an employee should speak up and interact, or when to get the company involved. Perhaps there would be a designated social media spokesperson, or designated department, to represent the company in the world of social media.
Call it damage control, call it what you will, but the study makes it clear that incidents happen all the time. Why not be prepared?
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