The customer angle is concerned with the possibility that customers might negatively affect the reputation of a company via social media activities. The literature shows several characteristics of Web 2.0 applications that enable the empowerment of customers and the actions with which consumers can actually harm an organization’s reputation.
In a world where consumer time zones have become invisible and communication more and more immediate, the power shifts away from a company towards the consumer.5 Therefore, consumer-generated content or consumer-generated media play a significant role in shaping current markets. Research10 identified the democratization of communication, that is, the shift of power towards individuals and communities, as one of the most important results of the wide adoption of social media by the public.
Due to this empowerment, consumers often confront companies with their social, ethical and commercial responsibilities.2 These confrontations may include exposure of product failures or misconduct, forcing the organization to respond to criticism. Furthermore, research also identified anonymity on the internet as a possible threat. Other research17 confirms the influence of social media that allows users to post content or get interactive without any permission. Another characteristic leading to higher influence of the consumer is pro-activity as ‘consumers use new media to contribute to all parts of the value chain, ranging from superficial articulation (reviews on retail or fan sites) to extensive co-creation […]’.17
The fact that social media content is visible to other users can also influence the reputation of a company because the number of internet users is steadily increasing and thus many potential or existing consumers have the opportunity to gain access to the published content of other users. The real-time sharing of knowledge and experience as well as the memory of the internet can be potential threats. This refers to the difficulty in deleting content that once appeared on the internet and can still be found years later, harming the corporate reputation, even though these statements might be incorrect or no longer represent the company.
As consumers have the power to affect the company’s reputation in various ways, companies should be aware of reputational problems caused by consumers via social media. In this respect, ‘creative consumers tend to mess with products, often modifying them in ways that have little to do with the product’s original purpose and frequently at odds with the original need the product was intended to fulfil’.5 Due to differences between countries and cultures, consumers may experience a different satisfaction level with products and often use products in ways that do not provide them with the expected value — in such cases, customers try to modify or adapt products, which may not correspond to the original product usage patterns as intended by the manufacturer. This may lead to negative perceptions and negative product reviews, which may be damagingly associated with the overall image of a brand or the whole organization. Through social media, these negative reviews and perceptions can be further shared all over the world.
Anti-branding sites might also have a negative effect on a company’s reputation.14 Anti-branding sites are organized by consumers and usually focus on expressing feelings of dissatisfaction, thereby creating negative publicity about a specific target brand. The issues can range from ‘workplace equality and corporate domination to environmentalism and marketing propaganda’.18 The internet facilitated anti-branding as it can be done extensively and strategies, as well as coalition building, are not restricted by space or time.19 Anti-branding communities do not require much effort and time from the consumer to create negative content. Additionally, the consumers’ amalgamation into a bigger group increases the influence of their anti-branding sites.18
‘Sh*tstorms’ are another way consumers can negatively affect the reputation of a company.20 A term used in some German-speaking countries, ‘sh*tstorm’ denotes emotional and often irrational criticisms carried out by many consumers. Rational negative opinions usually form the basis for ‘sh*tstorms’, which eventually grow through irrational and assertive content added by other dissatisfied users. Such forms of customer activism are often magnified due to the leader-follower effect.21 The leader-follower effect can be explained as follows: ‘These days, one witty tweet, one clever blog post, one devastating video — forwarded to hundreds of friends at the click of a mouse — can snowball and kill a product or damage a company’s share price’.22
The above facts describing the seriousness of customer activism are illustrated by a real-life case. Some users of the video platform YouTube criticized the fact that Google restricted the option to comment on videos.23 As a protest against this restriction, the British singer Emma Blackery wrote ‘My Thoughts on Google+’, a harshly written song with numerous insults about Google. The song reached more than 2 million views, many of which supported and shared Blackery’s negative opinion about Google+. Some of them suggested that people stop using YouTube and switch to the video platform Vimeo. Furthermore, a petition was started on the website change.org, which reached more than 200,000 people.
According to Google, the restriction was necessary because the company increasingly has to deal with troll comments, which are comments that are neither serious nor theme-related. Customers complained with the counter-argument that people are still able to construct fake accounts on Google+. The second reason Google mentioned was that it is now able to put the most interesting comments on top because it is able to separate between the ‘[v]ideo performers and other interesting personalities’.23 In spite of this negative customer perception, Google did not change back to the old comment function or a modified one that takes customer complaints into account.
This case gives evidence for three dangerous attributes of social media, which companies always need to be aware of. First, the case shows how powerful the voice of just one customer can be. It is important to keep in mind that just one customer can lead to a snowball effect, causing numerous customers to complain as well.
Second, the case shows that even small changes can lead to high awareness. Google just wanted to connect the users of its video platform YouTube to the social media platform Google+ and ended up with users suggesting a switch to its competitor Vimeo. This shows that organizations are required not only to properly plan every change on their social media accounts, but also to monitor the implementation extensively and have contingency plans in place. Underestimating the dangers of the outcomes of small changes in the sphere of social media can lead to high reputation damages for organizations.
Third, the case can be seen as an example of how a firm should not react to customer complaints. It is important that firms choose not to ignore customers’ comments, but respond to them. Google at least tried to justify the new comment function, but did not change back to the old function.24 Nevertheless, Google’s justification was not sufficient for many users and therefore the petition gained numerous subscribers.
Employees, current as well as previous ones, have a considerable impact on the reputation of their employers. Employees are ‘the primary interface with customers, suppliers, and other key partners’.25 Consequently, their behaviour and actions can influence either positively or negatively how outside stakeholders perceive the organization. On the basis of the literature, employees are able to negatively affect the reputation of organizations via social media applications in two ways: employees can either intentionally voice their dissent as private Web 2.0 users and/or they can unintentionally harm their employer’s reputation when responsible for the management of social media accounts on behalf of the company.
With the advent of Web 2.0, new channels for voicing their opinion are available to employees. This leads to an increased power over their employers’ reputation because social media gives employees the opportunity to make their employee voice heard, not only in the real world, but in the virtual one.26, 27, 28 Intentionally expressing employee voice via social media channels can seriously harm an organization’s reputation. Employee voice can be defined as ‘an employee’s attempt to use either organisationally-sanctioned or unsanctioned media or methods for the purpose of articulating organisational experiences and issues or influencing the organisation, its members, or other stakeholders’.28
The real threat to organizations is the employees’ power to spread their dissent as private individuals29 via unsanctioned media such as Web 2.0 applications26, 27, 28 so that employee voice no longer stays within organizations. Instead, due to the inherent characteristics of social media such as real-time communication, ease of access and widespread adoption of Web 2.0, these differences of opinion can be spread ‘unfiltered’29 outside the company on a global scale, reaching vast numbers of Web 2.0 users within seconds.27, 28 Expressing dissent via private online accounts might lead to decreased consumer trust in the company.30 The unhindered access to global stakeholders is further exacerbated by the fact that the publication of negative content by one single employee can be enough to draw the attention of large numbers of people to organizational shortcomings. As Cravens and Oliver state, ‘the actions of a few bad apples can be devastating to many’.25
Various possibilities exist for employees to become global publishers.27, 28 Examples are websites specifically dedicated to giving employees the opportunity to air their work-related grievances (eg AboutMyJob.com or EmployeeDirt.com), video uploads on YouTube showing internal work processes that do not comply with legal standards, or using Twitter as a way to complain about the employer’s product offerings. Additionally, users of social media can further share and spread content published by employees — as Heng, Meyer and Stobber note, ‘this multiplies reputational risks’.29
Employees’ dissent has a significant potential to destroy an organization’s reputation, as contradictory opinions point to wider organizational problems in terms of employee dissatisfaction or the company’s demise.31 Companies may not yet have identified the importance of becoming aware of employee dissent and reacting to it before employees make their opinions public via social media.26 This can turn into a vicious circle: employees who do not have the feeling of being heard by their employer feel increased dissatisfaction.27
The consequences of negative employee voice are described in impressive terms in the literature: public dissent can ‘cause substantial damage’29 to a company’s reputation; ‘employee voice can be […] a time bomb waiting to explode’ leading to ‘sustain[ed] serious collateral damage’ that can be ‘devastating’28 and ‘unrecoverable […], or at least a public relations nightmare’.27 Further on, negative publications by employees have the potential to ‘detract from an organisation’s desired image and its desire for competitive advantage’.27 At worst, employees’ public dissent can even ‘lead to infractions that result in legal exposure for the organisation’.28
One example concerning intentional damage by employees that quickly spread on the internet is the activity of two employees of the American restaurant chain Domino’s Pizza.32 A video was uploaded on YouTube showing how two employees violated health standards while preparing food in one of Domino’s restaurants. The video reached more than 1 million views and many people discussed the employees’ behaviour on social media applications like Twitter. The company reacted by firing the respective employees and de-contaminating the store. Overall, this video led to an increased negative perception of the company. Domino’s decided to create an account on Twitter and posted an apology video.32
This case shows that, in the era of Web 2.0, even a few employees are able to negatively influence the perception of customers towards a brand. Moreover, this case adds to the existing theory that employees sometimes act in ways that are neither fully traceable nor predictable. Therefore, companies have to be very careful and consider possible actions to prevent such situations.
In order to take advantage of the opportunities offered by Web 2.0 applications, companies increasingly adapt their marketing strategies and become active in building up their own social media presence. Networking sites such as Facebook may be used to build up two-way interactions with customers or to support market research by analysing social media sites in order to detect weak signals of market changes.33 Employees may unintentionally damage an organization’s reputation while managing their employer’s social media accounts. A survey among public relations executives6 revealed that employees might not fully understand how to use social media tools or how to incorporate them strategically. Older employees especially are less familiar with Web 2.0 applications compared with younger generations. Additionally, social media applications are being developed constantly. Both factors lead to the situation that employees may not always be able to use social media in the best interests of their employer.6
Social media accounts can also be used in crisis communication. However, if employees apologize on social media too soon, when the organization’s responsibility for the crisis has not been ascertained, the organization automatically accepts the responsibility with the apology. This can harm an organization’s reputation significantly since the company’s apology can lead to substantial financial losses or it can be used as evidence during lawsuits against the company.34
There are several recent cases of unintended organizational damage for a variety of reasons. In the case of the journal American Rifleman, which publishes articles about modern firearms, the reason was simply inappropriate timing. Via Twitter, the tweet ‘Good morning, shooters. Happy Friday! Weekend plans?’35 was released shortly after a mass shooting in Aurora, Colorado, in which 12 people died. The reactions of other Twitter users were mostly negative and the Twitter account was shut down on the same day. As it turned out later on, the tweet was published by an employee who had not heard the news about the tragedy. American Rifleman’s spokesman Andrew Arulanandam apologized in an interview with CNN: ‘Our thoughts and prayers are with the victims, their families and the community’.35 This case extends the theory by two more points: unintentional damages may arise due to poor timing of publications and employees lacking company external information. Thus, the ability of employees to use social media applications is not the only crucial aspect in protecting a company from unintentional damage.
Overall, employees can harm a company’s reputation in multiple intentional and unintentional ways. The possibility of damage can never be fully avoided because it is not possible to keep an eye on every employee at all times. The two cases show that companies cannot just focus on the threats identified by the existing literature, but have to consider more possibilities.
The corporate angle focuses on an organization’s perspective on possible social media activities that have the potential to negatively influence the organization’s reputation and brand image. The literature indicates strategic failures when engaging on social media as well as ineffective response strategies when social media crises arise. First, the literature highlights potential risks for an organization by engaging on Web 2.0. Through the emergence of social media, responsibility for occurring crises can be attributed to an organization faster and more easily. It could be ineffective not to align different social media activities with each other because user-generated complaints could be overlooked.9
If companies miss being present on all social media sites, they are not able to correctly monitor customer complaints, which could damage their reputation immensely.36 Furthermore, the possible threat of not integrating social media activities with traditional marketing activities is apparent.9 Many companies make the mistake of treating different media independently.36 Instead, the social media approach of companies should be handled as an integrated strategy. If marketers use them independently, they are not able to reach the highest possible amount of influence and attention with their marketing strategy or may send contradictory messages. In addition, the choice of social application is crucial for a successful Web 2.0 presence. By using a variety of social media applications, different kinds of customers can be reached. Thus, the wrong choice could lead to an ineffective marketing activity.9
Second, in order to react to negative publicity, companies can use several different online response strategies. Some of these strategies are poorly planned and turn out to be ineffective. The effectiveness of response strategies can be crucial to a firm’s reputation: ‘The actions that the organisation takes in dealing with social media and how it responds during times of crisis could drastically diminish the harm if managed properly or significantly increase the harm if mismanaged’.13 This shows that it is highly inefficient to try to ignore the complaints occurring on social media.
Although firms may not have any presence on Web 2.0, they are not excluded from online complaints. Customers are able to develop their own websites to complain. Companies usually make use of different response strategies: denial, forced compliance, voluntary compliance and super effort.12 Hence, the forced compliance strategy fundamentally undermines a company’s reputation by forcing employees to implement actions that are set top-down. If a company uses the forced compliance strategy, employees are less flexible and cannot react to customer behaviour before management approves it. This can cost a company valuable time during which its reputation can be further damaged.
Moreover, it is of utmost importance that firms are honest in their social media communication because they should ‘never expect that other participants may not find out’ whether firms lie in their public statements.9 Therefore, honesty should be a basic necessity in every response strategy. Additionally, by using diverse social media applications, different kinds of customers can be reached. Thus, the wrong choice could lead to an ineffective marketing activity.
Other research37 states that the use of ‘internet-based emergency response systems’ can bring significant benefits to governments in terms of natural disasters. For companies, it is important to develop Web 2.0 crisis solutions before a disaster occurs. However, due to the infinite number of potential scenarios, firms struggle to predict the correct one.
Furthermore, there is little space for monologue in social media.15 Companies should rather try to develop a dialogue with their customers, as monologues restrict the amount of feedback companies can get. Moreover, customers might get bored due to the lack of interactivity.
The following section presents a case from Web 2.0, showing how organizational reputation damages are further magnified due to ineffective corporate response strategies. In 2010, Nestlé decided to use palm oil for the production of KitKat to intensify the taste and flavour of the company’s product. Greenpeace, stating that Nestlé is destroying vast expanses of habitats for orangutans, started a ‘sh*tstorm’ and claimed that Nestlé was endangering the population of the primate.38 Greenpeace created two videos that heavily criticized Nestlé and were intended to prompt consumers to stop buying KitKat. Nestlé’s initial reaction was to shut down its social media activities, delete comments by users on its platforms and take legal action against Greenpeace for the creation of the videos. This response strategy went in the opposite direction to what was initially desired — the topic was heavily discussed and spread on Web 2.0.
Subsequently, Nestlé identified the strong impact social media activities can actually have on a company’s reputation in the form of word-of-mouth, decreased customer loyalty and declining profits. Nestlé’s corporate management immediately changed its strategies and decided to make social media activities of strategic importance. Nestlé hired new staff with social media experience to scan and control all the social media activities related to one of Nestlé’s products. This strategy is called digital acceleration team (DAT) and is the key element of the company’s strategy.38 The aim is to listen to users, interact with customers and inspire them. In addition, Nestlé merged its controlling and scanning mechanisms on Web 2.0.
Summarizing theory and real-life cases, the importance of social media activities is demonstrated, and it can be highlighted that companies need to handle social media activities strategically.