Don't Overdramatize Social Media Crises
United Airlines would have never thought a customer complaining about a disservice would reach 15 million people through YouTube. More recently, in Italy Moncler was involved in fierce online discussion, after a journalistic TV program denounced unethical practices having to do with the treatment of animals and not very socially responsible decisions about outsourcing.
But how do you deal with a crisis involving angry consumers on social networks? When is it wise for a company to take active part in the discussion?
Companies should think twice before relying on analyses of online conversation and sentiment proposed by certain consultants. A company's reputation is made of the admiration, trust, and other positive feelings experience by strategic stakeholders (customers, employees, public opinion, and policymakers). Social media conversations do not adequately represent this complexity. You could en up being badly blindsided, if you exclusively relied on these sources.
Pros and cons of social intelligence
In 2010 Toyota had to recall almost 10 million cars around the world. For several months it took a very defensive stance, denying any responsibility for the accidents being reported. It didn't understand that it was building negative reputation and that the critical element were not customers' comments (usually positive), but US public opinion (and congressmen) who, in times of economic crisis, was sliding toward protectionism.
During the so-called Moncler crisis, a flurry of negative comments were posted on social media against the down jacket maker, inviting people not buy its products. In the following days, Moncler stock tumbled. With a lag, the company replied by denying unethical behavior, but without directly entering discussion on social media. Some commentators rushed into predictions of negative impact on the company's reputation and therefore on its business. A few weeks later, there were favorable comments on this response strategy, justified by the fact that negative reactions had disappeared from social media in the meantime. Posts saying this strategy was effective noted how Moncler stock had climbed due to strong sales.
Who was right and who was wrong? You cannot answer this question without knowing the reputation data (non just social intelligence) that are relevant for Moncler in the medium term, starting with the (also geographic) identification of its stakeholder. Financial media explain strong sales and stock by pointing out the good performance of the company on Asian market. Prophets of doom with respect to Moncler's business because of the storm on social media should have paid attention on what consumer segments and which national opinion most mattered for the company. Had they done so, they wouldn't have misdiagnosed so badly. However, those extrapolating the positive short-term trends pulled by markets different from the one where the PR crisis originated, could end up underestimating the longer-term consequences for Moncler on the Italian market. So nothing can be assessed too hastily. Social intelligence can help, but it cannot substitute a solid framework of crisis and reputation management.