Social Reputation Case studies – May 2010

Why are the stakes higher today?

… “If you aren’t listening, if you don’t have plans to respond to a negative story

online you are playing the marketer’s version of Russian roulette. As more and more people find out just how disruptive they can be online there are going to be more and more bullets in the chamber”

Andy Beal – Author ‘Radically Transparent’

Case studies

Failed to engage with an unhappy blogging customer

Failed to act globally

Failure to integrate social media with other channels of communication

Failure to understand the power and speed of social media

Failed to handle social media criticism appropriately

Failure to engage with an unhappy, blogging, customer… “Dell Hell”

In June 2005 Blogger Jeff Jarvis posted a series of rants, coined “Dell Hell” about the laptop he’d recently purchased.

Jarvis’s posts caught the attention of others who also began to lodge their own negative experiences with Dell’s customer services

It was not long before the “Dell Hell” posts began to catch the attention of the mainstream media

As a result of the bad press and the Dell’s continued silence on the issue, the computer industry giant’s reputation, and stock price, began to plummet.

Dell Inc. now embraces social engagement as part of its culture. It has it’s own blog, Direct2Dell and has moved online conversations from 50% negativity to less than 20% within the first year. A substantial amount of product development is directly informed by user feedback through its community Dell IdeaStorm. This change in reputation management has helped Dell Inc re-establish its leadership position in the industry.

Failure to act globally

In November 2009 the company announced it was issuing 1m kits in the USA to repair pushchairs sold in the last 10 years after 12 cases of children having their fingers chopped off in pushchairs’ hinges

In so doing Maclaren seriously underestimated the viral power of the story especially when the press release by the US regulator featured the words ‘child’ and ‘amputation’.

Maclaren made the mistake of treating US consumers differently to the rest of the world

In our social world the news of the US repair kit issue spread around the globe. Only later did Maclaren backtrack, under pressure from consumers and retailers, saying anyone can have a hinge cover if they ask for it, and paying compensation.

Companies need to think like human beings, how would they feel if their child had suffered a product related injury and what would they expect a company to do?

Failure to integrate social media with other channels of communication

In December 2009 five Eurostar trains broke down due to freezing weather. More than 40,000 passengers were stranded on both sides of the channel including 2,000 in the tunnels. Eurostar was criticised for their failure to communicate properly with those involved.

Its social media presence was limited at the time to a single Twitter campaign. Fuller engagement would have provided the capacity for real-time communication with customers in a crisis situation

This opportunity was lost due to the companies decision to ‘start small’ with social media and limit its potential risk to overall brand reputation

Had Eurostar integrated social media with its other channels of communication and planned for its use in a crisis it could have been instrumental in aiding passengers. Without this forward planning in place Eurostar lost control of the agenda, and their poor communications became the story.

Failure to understand the power and speed of social media

Twitter can be a “corporate watchdog” as Paperchase found out in February 2010.

When an independent artist alleged the company had plagiarised her work the allegation went viral on popular micro blogging service, Twitter.

While the firestorm ensued, Paperchase, which is without much social media presence, responded later in the day with an explanation

Whilst a process of denial and explanation followed, some key lessons could be learnt:

Social media is powerful and gives leverage to those who are often without it. In less than a day a single individual who couldn’t afford a legal battle with a big company sparked a firestorm that engulfed the company

Virtual lynch mobs form easily and action often comes before contemplation. Responding within a day is now way too long a delay.

Failure to understand appropriate behaviour within social media

Social media provides campaigning groups with new opportunities to put pressure on their targets.

Greenpeace used social media to campaign against Nestle’s choice of palm oil supplier in Indonesia. Greenpeace’s case was that the supplier was responsible for deforestation.

The protest may have passed relatively unnoticed but for Nestle’s poor handling of the campaign in social media.

Nestle requested that a campaign video be taken down from YouTube, causing massive traffic to alternative sites hosting the ‘censored’ film.

However most damaging were a series of rude and inappropriate comments from a Nestle moderator on its own Facebook fan page

Tracy Frauzel, head of digital communications at Greenpeace said. “They’ve made it so easy for us. Nestle just don’t seem to have a good understanding as to what happens in the social space.”

Continue the conversation

Julius Duncan e: julius.duncan@headstreampr.com

t: @juliusduncanB:juliusduncan.wordpress.com

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