Social Media Can Make Or Break A Company In Crisis

Every day we are confronted with information on companies that allegedly did things wrong, from data breaches to cyberattacks, from bribing to unfair competition, from paying the wrong taxes to damaging the environment - and so on…

Important is to understand for top management, that a contributing factor of customer loyalty involves how a company responds to crisis situations. 

With the proliferation of social media, news of a crisis can spread quickly, impacting consumer perceptions and company reputations. Companies must adequately prepare themselves for how to handle difficult brand situations, or else risk losing customers and esteem.  

Crisp's 2019 Crisis Impact Report, released recently, surveyed 2,000 consumers in the US and UK to determine how brand crises affect consumers. More than half (53%) of respondents said they expect brands to respond to a crisis within an hour, indicating the importance of rapid response from brands. Responding quickly can be difficult though, as news travels faster than ever via social media. Consumers are more likely to share news of a brand's crisis on social media (40%) than they are face-to-face (29%), the report found. Nearly half of respondents across age groups (47%) cited social media as the preferred channel for receiving a response from a brand about a crisis. 

The influence of social media on brands shouldn’t be surprising, as social media use has experienced steady growth over the past decade. It's no wonder the platforms are essential for companies’ public relations. Social media plays a critical role in a brand’s reputation, it gives brands the opportunity to shape their identity and the way consumers perceive them on a daily basis, but what makes it unique - compared to websites or other traditional media - is that consumers can interact directly with the brand. Engagement is the powerful differentiator.

However, social media is a double-edged sword, as we all know too well. While social media can spread positive sentiments about a company, it is also a medium for bad press. Consumers consider popular company crises to include the mistreatment of workers (64%), ethical misconduct (59%), CEO misconduct, data breaches, bribing, and the mistreatment of customers (58%).

When organisations undergo these crises, those affected - the customers - expect some sort of public response, and fast. However, if you respond too quickly, you might get your facts wrong, making things worse; but if you wait too late and the crisis could snowball. Speed, accuracy, and context are competing priorities in a crisis. 

How Companies Should Respond

While bad news might spread fast, responses to a crisis can too. It is highly recommended that companies put a plan in place by brainstorming crisis scenarios, preparing for the worst, and drafting responses.

Let's be honest: failure may not be an option, but it also may not be something you can avoid. Instead of pretending it's not possible, how about preparing so it doesn’t do as much damage, and you can recover from it quickly? You need a disaster recovery plan (DRP). It's never any fun to think about things falling apart, but it is fun to know you've got a good plan in place to recover fast if they do.

The first line of defence is to have the programme in place to mitigate such risk. However should the untoward happens, it is important to equip the knowledge and skill of key personnel in the organisation. It is part of an organisation's "Response" plan and there are training programmes available; one such is Crisis Communications and Data Breach Response for DPOs that Straits Interactive runs. It trains what personnel in an organisation can do to reduce the impact of a data breach to the organisation and its stakeholders.

There are also other tools available to prepare for crises - automated tools to reduce the adverse impact on reputation which top management should could leverage. If assistance is needed, contact me at schumacher@eitsc.com.

By: Henry J. Schumacher

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official view or position of DPEXNetwork. This article was originally published on 20 November 2020.