Sunday, May 18, 2008

Social Media Disasters (or How Not Having a Social Media Strategy Can Hurt)

Remember when the Web was young--really young--and some companies actually debated if they really needed a Web site? For a brief period, there was a question if investing in a Web site was really necessary, given that many thought all this Web stuff was for geeks and kids.

Before it became obvious the Web was changing everything, the general consensus was that while having a site might provide little benefit, NOT having a site would be a detriment. So, brands went about launching version 1.0 of their Web sites. (Check out circa 1996--quite a difference from that site today!)

I share this trip down the memory superhighway because I believe history is repeating itself with social media. Just like that point in time in the Internet's infancy, social media has not yet been understood or embraced by most organizations and brands. Even if the ROI is hard to calculate today, it would be wise to consider the harm done by NOT having an organized approach to social media.

Jeremiah Owyang's blog has an interesting and lengthy list of brands that "got Punk’d” by social media. Visit his blog for all the horror stories, but several are worth highlighting here:

Taco Bell has rats:
A video of rats running around a Taco Bell in NYC was posted to YouTube. Soon after, duplicates and versions started multiplying, and to date these videos have been viewed around 1.2 million times. As a result, Yum Brands' stock sank, customers started doubting Taco Bell's cleanliness, and other franchisees were harmed from the bad PR.
  • Implications to Operations: There is no longer such a thing as a small problem. Is it fair that one bad franchisee should impact business for 7,000 restaurants in a chain? Perhaps not, but what yesterday would've been one person complaining to friends can today be a national-scale PR disaster. With cell phone cameras, Facebook, Twitter, and YouTube, there has never been a greater need for companies to ensure they meet their promises across every touchpoint, every time. This means--at a time when pressures are increasing to cut costs--that more attention must be dedicated to hiring standards, training, monitoring, management, and ways of engaging and involving every employee in the brand.

  • Implications to PR: Every PR department must have a plan for monitoring social media and rapid response. According to Customer Think, Yum Brands wasn't "totally asleep at the PR wheel." For example, it's CEO produced an online video apology, but unlike the dozens of rat videos, Yum Brands didn't post it on YouTube; as a result, a fraction of the people who saw the disgusting clips had an opportunity to see the CEO's response. Big business has to get comfortable using the same social media channels as consumers, but it must do so respectfully and transparently.

  • Implications to Marketing: A CEO apology is a fine initial response, but how else might Taco Bell have used social media to combat the bad Word of Mouth? An Ad Age article entitled, "Taco Hell: Rodent Video Signals New Era in PR Crises," suggests using the Web for "defensive branding," which means making sure your response to a PR crisis is as visible as possible. In the days following the appearance of the rat video, bad news was broadcast from hundreds of media outlets and thousands of blogs, but consumers could only have found the company's response by digging into the corporate Web site.

    Another strategy is to buy and own unsavory keywords so that people searching for those videos and articles will see links to your official response. I'd also suggest Taco Bell could've "fought fire with fire," using YouTube videos to demonstrate the standards they enforce. Certainly this sort of positive video won't travel as far or as quickly as the negative video, but it would've been a cheap way to make sure consumers searching YouTube are as likely to stumble upon the company's point of view as they are someone else's.
Whole Foods CEO's Secret Blogging:
John Mackey, CEO of Whole Foods, was found to have engaged in anonymous posting about his own company's stock and that of a competitor's that Whole Foods was trying to acquire. He frequently disparaged the competitor's stock in an apparent attempt to weaken the value and improve Whole Food's bargaining position for the acquisition. The respected executive had his reputation tarnished, was forced to issue a public apology, and endured investigation by both the SEC and an internal committee within his own company. In the end, no charges were filed, but this embarrassing episode has overshadowed other Whole Foods news for the past year.
  • Implications to Human Resources: Most organizations have a code of conduct and/or a company communications policy, but have these been updated in the past year since social media has exploded? Does your organization hand the policy to new employees along with a four-inch-tall stack of forms and manuals and assume it gets read, or are communication expectations regularly reinforced? Do your employees know what they can Twitter about your company, whether they can comment on financial or stock matters, or whether publicly posting criticisms of their employer will be tolerated?
Comcast Responds:
This is the story of a potential disaster that was largely averted. Michael Arrington, owner of the enormously popular blog TechCrunch, was getting bad service from his ISP, Comcast. Michael's connection was down and Comcast was not resolving the problem with the speed Michael expected, so he started "tearing into Comcast on Twitter." Problem is, he has 12,000 followers, so his tale of woe was reaching huge numbers of people, all of whom are early adopters and significant consumers of technology. Unexpectedly, 20 minutes after his Twitter post, Michael got a call from a Comcast executive who wanted to know how he could help. Comcast was monitoring Twitter and reached out to resolve the issue. What could've been a PR disaster was turned into a cause for praise and compliments, thanks to Comcast's proactive use of social media.
  • Implications to Customer Relations: The paradigm for customer service has changed little over the past half century. A disappointed customer picks up the phone and calls for support when needed. The biggest changes in customer service technology have been the use of email and online chat (which benefits consumers) and IVR menus (which annoy most consumers.)

    A new way of managing customer relations is going to develop rapidly in the coming years. Rather than consumers taking their time to ask the company for assistance, the company will take its time to monitor consumer discussions for opportunities to offer help. Today, a complaint posted to a blog, bulletin board, or Twitter is likely to do nothing but encourage dozens of responses that are a variant of "That company sucks." But soon, with customer service personnel monitoring social media, the first response could be a helpful solution posted by a company representative or even a direct dial phone number offered for immediate assistance.

There is no established methodology for developing a social media strategy. One good place to start for some interesting reading is Forrester's Groundswell blog where they share a high-level overview of their POST approach. That stands for People, Objectives, Strategies, and Technology (with technology purposefully being the last thing to consider.)

Even if best practices are still evolving, I believe two things are vital for large brands today. The first is to begin to act immediately to the threats and opportunities created by social media. Social media is rapidly changing (even in the past week, with Google's Friend Connect posing a challenge to the "walled garden" approach offered by Facebook and MySpace), but that doesn't mean an organization should wait until everything shakes out. The risks associated with waiting are obvious when reviewing Jeremiah Owyang's list of Punk'd brands.

The second important message is for organizations to be inclusive when developing a social media strategy. It may be an exaggeration to say that social media will become everyone's job, but it might not be too huge an exaggeration. As noted, social media has implications throughout an organization, including Human Resources, Corporate Affairs, Customer Relations, Public Relations, Marketing, and Operations.

When it comes to forming a social media committee, the more the merrier (and the more successful your strategy will be)!


Jay Deragon said...

Very good article. I am actually in the middle of some research regarding this matter and it amazes me how some business leaders simply don't get it. The consider social media as another means for marketing rather than a complete paradigm shifit in relations.

Augie Ray said...

Thanks Jay. Can't agree with you more about Social Media as a paradigm shift, but don't be too hard on business leaders. It's tough keeping a large organization humming in our ever-changing world. Hopefully organizations have smart people who get "it" and can help their leaders to make the changes necessary before they get caught in embarrassing social media disasters.

Thanks for the comment!

Clark said...

Love the post, but the Comcast example doesn't scale to all; what if you aren't a well-known social media commentator, what chance do you have?

Augie Ray said...

Clark, Why would this only work for when a large-scale media notable complains? After all, every company can go to and do a search (or better yet, subscribe to an RSS feed in order to be alerted when a brand or product is mentioned).

Brands could watch feeds from Twitter and other social media outlets in order to provide service proactively rather than waiting for someone to pick up a phone and complain. They can also thank people for making positive comments about their brand or product, encouraging more loyalty.

In fact, after commenting on this blog about Jet Blue on Twitter, I've since found out they *do* engage people who comment, complain or compliment their service. This made me think even more highly about their level of customer service and care for their customers.

Tom said...

Really useful article - thanks. The opening proposition is something that brand managers can relate to. The examples are helpful, and it confirms the need for companies to participate in social media and listen then relate if they want to survive in the new mediascape.

It's a paradigm shift in technology and human relationships - business leaders could gain such an edge by understanding the implications and changing their whole understanding of communications.

Augie Ray said...

Thanks Tom! Communications is certainly shifting under our feet. Some brands are getting it, and others will be forced to get it, eventually.