The risks for companies of the social media age

Well this week I have been reading stories of how social media has hurt companies reputations and their share price for that matter, and to be completely honest it does make me nervous about pushing my own little companies profile, however as an internet based company – how else am I going to increase our customer base without “getting out there” as such? But there are definitely some lessons to be learnt from those that have gone before!

United Breaks Guitars – How not paying attention to customers can cost millions! 

I came across this video and case study during my class readings over the last couple of weeks. The long and the short of it is that Guitarist and Lead singer of Sons of Maxwell – Dave Carroll – was travelling on United airlines with the band for a concert tour and witnessed the baggage carriers throw and damage his guitar case, he brought it up with 3 different flight attendants, however received no sympathy. Upon arriving at the destination he found that his US$3,500 Taylor guitar had in fact been damaged. Over the next 9 months he tried to get compensation for the breakage, however was continuously told no. So he wrote a song, and published the video on the bands YouTube channel. What conspired after that was in the end something that showed (in my opinion) the arrogance of a company who didn’t understand and appreciate how social media can damage its reputation – and in this case its share value! Taulbee Jackson’s blog on social media risk outlines how United Airlines failed to respond to this complaint early enough which resulted in the share price dropping by 10% and the shareholders loosing US$180 million….. all for a $3,500 guitar. 

Kinda gets stuck in your head huh!

From everything that I have been reading it appears that many big companies have been slow to react to the social media age – especially those that have been around long before social media was even a consideration. However social media is not a craze. It is not something that is going away. The world is becoming smaller and smaller as everyday people are connecting with each other through Facebook, You Tube, Blogs, Twitter, Flicker etc. the list goes ON! People who would otherwise never have met (and probably will never meet face to face) are sharing experiences with each other. With this connectivity it takes seconds for an upset customer to write something unfavorable about their experience or dissatisfaction with the service they have been provided, this is then read by everyone that person is connected too. In the case above, Sons of Maxwell already had a You-Tube Channel with many followers, after posting the video many of their followers would have “shared” the video through either a link on twitter or as a video on their facebook page, thereby sharing it with all the people they are connected to, then many of these people will have “liked” and shared with their list of friends. Before long the video went viral and the above loss happened for the company because they did not act on the original complaint, and then work to mitigate the outcome when the video was posted. 

How a company can fight back using social media as a tool

One of my class mates posted an interesting video on our class forum where our national airline created a video as a response to a magazine article slandering their service and where it was headed due to a proposed merger. Funnily enough the CEO responded in a way that made the magazine look like they didn’t research their story at all. 

In this situation, social media worked in the companies favor as they were able to respond to an article about them in a humorous and yet factual way, that was immediately available to all of their customers, non customers and media alike. They did what most companies refuse to do when they are caught up in a scandal. They fronted up! How often are we watching stories on the current affairs shows and at the end of the article there is a final note from the presenter saying that they contacted the company in question only to either have no response or be told no one was prepared to come on camera and comment…… The joys of the Social Media age that we are living is that companies are able to present their side of the story, either through a YouTube video (like AirNZ’s it doesn’t need to cost a fortune to make!), a Tweet, a press release on their website or through a blog or Facebook and there is no worry regarding the media twisting what they say to mean something else, or leaving part of what they have said out which then skews the rest of the statement to look like they have said something else. 

Lessons to be learnt

So what have I learnt for my own little company regarding the use of Social Media as a tool for customer satisfaction. Mostly, take care of each and every customer! It only takes one upset customer to write one bad thing about you on Facebook or the like and it can ruin your entire reputation. Especially for a little company like mine and the small market base that I have to work with.

I have learnt that Social Media can be a wonderful tool to advertise yourself, your products announce new and exciting opportunities but it can also be a tool for your unhappy customers to bring you down!

Basically – no customer is unimportant!



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