The Risks and Rewards of Social Media

"It takes 20 years to build a reputation and five minutes to ruin it."

- Warren Buffett

Managing risk is something that organisations do every day. Day in, day out. Financial risk, cyber risk, operational risk, regulatory risk, reputational risk. When risk is managed effectively, the organisation can continue serenely on its merry way towards their corporate vision. When things go wrong, however, a price is paid. Although sometimes that can be difficult to quantify, specifically with regards to an organisations’ reputation. How can you put a value on that?

In the interconnected digital age, social media can present a significant challenge around managing reputational risk, as direct control is not always in the hands of those “risk managers” within a business. The last few years are littered with examples of how NOT to do social media (just google the Walkers Wave campaign from a couple of years ago, or recall United Airlines dragging a customer off one of their flights…), with the odd ray of inspired marketing off the back of a potential disaster (KFC anyone?).

A couple of colleagues and I presented to the Risk Forum of the Building Societies Association last week, with risk professionals from a large number of societies present to talk about “Social Media Risk” as well as the opportunities that are presented as part of a wider digital strategy.

Social media can go wrong. Badly wrong. But if you put in place a clear framework and consider where threats may come (the unintentional and well-meaning employee versus a sophisticated cyber attack designed to cause harm), you can put in place appropriate response plans.

But the power of social media for positive outcomes can not be ignored either. Social media can be a source of direct feedback from customers/consumers and it can be amazingly powerful at identifying gaps in your service offering. It also presents an opportunity to talk to your customers directly. It affords you an opportunity to convert a customer into a loyal customer.

And the wider digital world can also shine a light into shaded corners. Whilst Feefo, Trustpilot and Glassdoor are not precisely social media sites, they do offer companies the chance to take feedback (often on the chin) and interact with customers. But many are not proactive. In fact, in the building society sector, very few are proactive. Hats off to the Leeds Building Society for leading the way in the sector on Trustpilot specifically.

But Glassdoor is still a site ignored by too many. The “Tripadvisor” of the employment world, Glassdoor gives disgruntled employees a platform to vent on. But is also aggregates job adverts, offers opportunities to provide feedback on interviews and even salaries. It is one of the top 10 job sites in the UK. However, an organisation has to proactively “claim” their own business. And this trend is still the most concerning for me. I wrote a blog on Glassdoor back in 2015 in a previous life, and there are still far too many companies that have not claimed their page on Glassdoor and hence do not know what is being written about them as an employer. How can you manage your reputational risk if you do not know what your reputation is?

Social media is just one aspect of the digital world in which businesses operate in. But it is invaluable in terms of developing your customer experience (#CX). It is just one of the 36 different attributes on our digital maturity self assessment model that can highlight how prepared your business is for digital transformation. Or to affirm if you really are a digital leader?

It would be great to hear feedback – and if you are interested in taking our digital self-assessment, please message me directly to discuss – but please share any experiences of social media risk management (or social media fails) and start a conversation.

Mark

** Thanks to Denise, Belton and to Phil Relf for the invitation to speak at the BSA **