Thursday, July 23, 2009

How Much Would a Domino’s YouTube Cost Your Company?-The Social Media Risk Assessment

The most conservative estimate of the revenue loss that Domino's may attribute to the "gross-out" employee YouTube video is $37 million. (Predictify The majority of my posts regarding Social Media and Networking's impact on B2B customer relations have focused on the positive side of enhancing, broadening, and exploring different conversational possibilities with existing and prospective audiences. I have touched on the ramifications of negative Tweets, responses to unfortunate customer service stories turned into blog comments and just this morning, suggested a couple of ways that United Airlines may have turned the guitar incident to their favor. I have suggested and even consulted around the idea of a Social Media Audit as a first step in assessing the impact of our audience's participation and conversation about us. It has been suggested that the gloves need to come off and I need to reach into my information technology background and push you all very hard to consider the ramifications of ignoring what your clients, competitors and the general population is saying about you directly and indirectly, out there. Thus, I strongly advocate, as an absolutely critical component of your Social Media and Networking Strategy that you conduct a Risk Assessment that has all the weight, probabilities, and response matrix of any other IT, Disaster Recovery, or Business Risk Assessment that you conduct.

The Social Media Risk Assessment

A quick Twitter search on "worst customer service" produced a CPU stuttering result (I "graffitied" the names to protect myself and the companies, but trust me, they are big players in the IT, storage, and device community. See the image above left.)

One of our tunnel vision issues, however, is that we think a negative Tweet or blog comment is the only exposure we have. An effective Twitter Triage strategy is essential, but it does not contemplate the ramifications of a self-made video by employees or customers published to YouTube, capturing, in painful detail the backroom processing truth about our pizza.

Why do you need this?

How many more Comcast-technician-sleeping stories, Domino's-inappropriately-prepared-food, United Airlines-smashed-guitar stories do we really need to recognize that the risk of one angry customer or disgruntled employee can impact our public reputation to the tune of millions. Whether or not it is malicious, the opportunity to comment negatively on the service and products that consumers receive from businesses is phenomenally easy and is the internet has become a tremendously acceptable vehicle for voicing these comments. Further, the immediacy with which we can publish our experience is closer and closer to real-time:

One-third of Americans (32%) have used a cell phone or Smartphone to access the internet for emailing, instant-messaging, or information-seeking. This level of mobile internet is up by one-third since December 2007, when 24% of Americans had ever used the internet on a mobile device. On the typical day, nearly one-fifth (19%) of Americans use the internet on a mobile device, up substantially from the 11% level recorded in December 2007. That's a growth of 73% in the 16 month interval between surveys. – Wireless Internet Report, John Harrigan, July 22, 2009

I included a conservative loss prediction re the United Airlines "Guitar" mishap. The examples of organizations that were completely unprepared to respond effectively to the publication of less-than-satisfactory customer service stories or employee (mis) behavior are mounting on an hourly basis. Combined with the availability and acceptability of the internet as a means for communicating consumer responses, the adverse consequences of what may have been a minor case of disgruntled customer in the pre-Twitter era is now tantamount to the impact of any disruption of service, natural disaster, or cataclysmic misstep in marketing message.

The components and players

Any corporate risk assessment, IT or otherwise, includes key stakeholders such as H.R., IT, Finance. In a long-ago part of my career, I had the opportunity to educate a regional group of EDP auditors on the risks associated with the introduction of new types of long-distance transport methods available to consumers, post-Bell breakup. Point being, that new technology and its availability to different internal and external populations indicate that our social media risk assessment should be at minimum reviewed by more than the usual suspects. I have suggested that a Social Media Strategy and Audit should include as a first step a review of employees who are participating in the various networks. EVEN IF YOUR CORPORATE POLICY IS TO BLOCK ACCESS TO THESE NETWORKS AT THE OFFICE; that doesn't mean it isn't worth a review of comments by your own "family." A cursory review of the current threats and incidents should remind us that our own employees may equate to the most damaging publications in the SMN world.

The components;

  • Current metrics applied to D.R., IT and Financial Risk Assessment

  • Audiences, both internal and external, who are participants in SMN

  • Buckets of content that are published by you

  • Sites, feeds, "authorities", competitors who are relevant to your industry, brand, etc.

The players:

  • IT, Finance, H.R. Legal

  • Marketing and Sales-yes, they certainly have a bead on what is being said and how

  • Customer Service, Call Center, Support

  • Employees, contractors, partners, etc.

The formula

I will go out on a limb and offer that the same probability and threat analysis that you apply to your IT infrastructure can be repurposed for your Social Media Risk Assessment. Identify the areas of risk, assign a probability to exposure by type, ask for input re the revenue loss, damage to reputation, loss of infrastructure investment (you may need to shut down a blog, website, comment function, customer service line, Twitter profile), FTE-loss, etc and score it. If your primary call center is located in Tornado Alley, you certainly score Acts of God highly probable and can assess the damage of losing connectivity, data, and cost of going to your back-up/secondary center. The more present your organization is in the SMN world does increase the risk of exposure, but NOT being a presence or participant in the arena could contribute as significantly to the risk of negative feedback as well. Not having a website would be unthinkable today. I would suggest that very soon, it will be equally as bizarre, and remarked upon, if we do not have a Linkedin, Facebook, Twitter, etc. profile and interact with our audience via those mechanisms. Playing ostrich is not a strategy, at least not a risk avoidance one. Some elements that you may want to consider as you modify your current Risk Assessment formula:

  • # of Followers, Subscribers, Community Members (Scope)

  • Scale of Network associated with #1. (Scope)

  • # of times Brand name, solution, organization, is currently mentioned (Probability)

  • Current ratio of positive v. negative comments (Probability)

  • Any association/referral to SMN comments in customer correspondence if available (Probability)

  • Ranking of each type of network, comment, etc. (Damage Valuation)

  • Average revenue per contract/customer/opportunity (Damage Valuation)

  • Productivity loss valuation (Damage Valuation)

The risk assessments that I have conducted or designed in the past have used a number of different scoring and ranking mechanisms; from Kepner Tregoe to internally designed business continuity valuations. What is important is that you acknowledge, evaluate and prepare for the tidal wave (note I did not use the word ripple) effect that even a mildly unsatisfactory report may have when Tweeted by someone with hundreds of thousands of followers who are in your target market. I strongly believe that the SMN world is fundamentally self-regulating. I think that false and bitter negative comments, accusations, and posts (as well as truly disgusting employee footage) will be disambiguated by excellent customer service. I absolutely and strenuously argue that a proactive Social Media Strategy is the best prophylactic approach to answering the challenges of our audience in the Web 2.0 world, but I also live in Western Washington and carry an umbrella, red-polka dotted rain boots, and a baseball hat in my car…..always!

My best until next time,

Lisa, Director of Customer Conversation and Social Media DJ J

Reblog this post [with Zemanta]

1 comment:

  1. Lisa,

    You've done it again!

    This is the scary part that every company fears and almost no social media maven addresses Risk Assessment adequately.

    As someone who works on reputation risk assessment, I totally agree on the need for doing this. The formula you've worked out is solid starting ground.

    I keep tailoring the criteria with specific company/ sector/ and perceptions of both reflected in the social space.

    Great work and topic worth expanding into a white paper.

    Anita Lobo