Yet many may not realise the full potential of SM, or engage poorly, which could lead to missed opportunities and/or open them to a variety of risks.
For every SM marketing success, however, there are a dozen examples of organisations getting it wrong. A single public failure can have far greater ramifications than multiple successes. Boards and management teams must be aware of, understand, and manage the risks that online conversations may present to their business. This is especially important for listed companies.
"Today's customers expect that the organisation they do business with will be 'on' social media and will be contactable via the most prominent platforms such as Twitter, Facebook or LinkedIn."
Partner, Risk Consulting
Handling grievances in a professional and considerate manner is critical to achieving a successful resolution for both the customer and the company.
This two way communication increases opportunities to connect with customers and prospects but also increases risk, especially as corporate regulators and bodies (such as ASIC, ACCC and the ASX) are already announcing compliance requirements and guidelines with respect to social media use.
A fundamental question you must ask is whether your marketing department or agency is aware of these guidelines – let alone the risks to reputation and your bottom line. Most SM activities will come from a marketing perspective, without necessarily including an eye to risk management.
Management must ensure the organisation comes together to capitalise on the opportunities SM presents but also heads of departments need to share responsibility for managing risk and training staff on how to do this in their day-to-day jobs.
Risks you need to watch out for
Social media risks fall under three main areas, operational, regulatory and reputational (SM can be a risk itself, or alternatively, it can accelerate traditional risks).
- Operational risk can involve copyrights, employee non-compete and confidentially agreements, monitoring employees on social media, who ultimately 'owns' the content you post on LinkedIn, Facebook, Twitter, etc.
- Regulatory risk is all about 'public-company disclosures' and what official information is made public, when and by whom. If you tweet ‘great numbers’ before your actual numbers are released, what disclosure rules have you just broken?
- Reputational risk may be dealing with what you or your employees say online as much as what others say about you (and how you react to that).
Additionally, SM can result in supply chain risk and business continuity issues through to IP and confidential information leakage. These impacts are occurring with a speed and frequency that often catch many organisations by surprise.
Managing risk – better practice
- Adopt a comprehensive SM strategy that outlines the requirements (and culture) of your business.
- Training is critical to ensure SM is an asset for your organisation, ensuring everyone is vigilant but collaborative about getting it right.
- Carry out an annual SM 'health check/diagnostic' to quantify exposures and provide recommendations on how to best address various identified risks.
- As the ASX suggests, utilise issues based monitoring, in particular when market sensitive announcements are being made.
- Consider implementing appropriate monitoring during a crisis or as a precautionary measure when incidents or issues may occur.
- Include SM within your reporting framework – beyond marketing. A diagnostic report can also identify what measures need to be in place regarding your SM exposure and risk.
Ultimately, regardless of all of the procedures you put in place, there is one thing you need to do: be vigilant. Create a culture where everyone in your organisation understands how to protect your business brand and their own personal brand.