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Reputation Impact

There is an enduring fear in the financial industry that clients and others will say terrible things about you, your firm, or your products and services – a condition that has only been exacerbated by the 2008 financial crisis.

I remember a meeting in 2012 at a major Boston-based asset management firm, with the head of its advisor network, the chief marketing officer, the head of social media, and the head of customer service. As we were talking about the pros and cons of using social media, the head of customer service piped up, “Why would we want to be on social media when people can say things that hurt your brand?”

The CMO instantly chimed in, “It's happening anyway. This is a way to manage our brand.”

She hit the nail on the head: Failure to use social media in some way poses a greater risk – a risk that your reputation will be shaped by the conversations happening out there, conversations that are led by others, not by you. The new online world presents an opportunity to know what's being said and to manage it. How you respond says a great deal about your firm and its leaders.

Other fears include customer grievances being aired online. That's a real issue, since some 70 percent of customer complaints on Twitter go unanswered, according to social media researcher Maritz Research.[1]

Whether it's the airline customer who's upset about lost suitcases and bad follow through, or someone like myself who could have turned to Twitter to share a major trade mix-up between accounts, grievances can and do happen online. These are situations that can be broadcast instantly, not only to friends and family, but back through the company's own Twitter handle, now making the bad news accessible to prized clients. See Figure 4.1.

All companies with a social media presence need to manage their online reputations, a process whose importance grows exponentially when online anger erupts over a particular failure in products or services. Wise managers have already put plans in place to handle such outbreaks, so when trouble brews, the firm isn't scrambling to improvise.

This practice can actually work for a firm in the middle of a public relations disaster. Companies that respond to viral denunciations with sophistication can emerge from the crisis with heightened credibility among followers for demonstrating their expertise in managing the problem; even angry followers will respect that the company was engaged in their complaints and made efforts to reach out. See Figure 4.2.

  • [1] “Maritz Research Company & evolve24 Twitter Study,” September 2011, www .maritzresearch.eom/~/media/Files/MaritzResearch/e24/ExecutiveSummaryTwitter Poll.ashx.
 
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