When is transparency a bad thing? The risks of social media
{Disclaimer: This was written on the fly so a bit wordy, at some point I'll try and edit it down to be more concise}
I'm a big believer in corporate transparency. I've certainly recommended this approach to my clients often enough. "Engage with your customers", "Utilize communication forums and social media to create a real-time feedback loop", "Make your customers feel as if they are an integral part of your future, let them invest in you with more than money". All pretty common mantras these days. But are there risks in doing so? Can they be mitigated? Can they be recovered from?
I experienced firsthand a situation in which a company who leads their sector essentially did everything right on the communications front, yet is currently experiencing a meltdown with their customers. They had been knocked by their customers in the past for not putting enough focus on customer communications. They had private customer forums, but only a small percentage of their customers used them on a regular basis as there wasn't much presence from the company itself on them. This is to be expected when the product is rock solid and everyone is happy for the most part.
The companies product is a hosted eCommerce platform. They had always used the hosting provider Rackspace as the infrastructure for hosting their product. Rackspace is well known in the industry as the leader in their space, they are also known for charging a premium for their services. Several months ago this eCommerce company decided that they could build their own data centers and manage the hosting themselves. By doing so they would save money and be able to make a higher margin on their sales as well as giving part of that back to their customers in the form of less expensive services. This move was not communicated to their customers, all the customers knew was that they received marketing communications stating that certain services were now going to be less expensive. If everything had gone smoothly, this would have been the end of the story and customers would have been satisfied.
At the same time as this was going on, the company decided to take action on the complaints they had received regarding communications and transparency. They established a stronger, more open presence on their forums. They established a twitter account and used it actively. They hired a C level executive (from Rackspace no less) whose sole focus was the customer relationship.
Unfortunately, just as this new executive arrived issues began occuring with the systems. There was a long outage. It was just before the holiday buying season so naturally this made customers nervous. As there was now a forum to communicate in, where an actual executive on the other end was accessible, customers started asking questions about the outage. This is when it came out that the move from Rackspace to their own data centers had occured. This incensed quite a number of customers, because many of them had purchased their product due to the Rackspace brand and its perceived stability/reliability. Regardless, most customers were heartened to hear actual honest feedback from someone inside the company who truly wanted to help. And they were assured that the issue was one which could have occured in any environment, including Rackspace, and had nothing to do with that transition. During the outage period many customers began communicating with this companies twitter presence as well to get updates. These customers were also pleased to find they had expanded communication options.
If it had ended here, these issues would have ended up being a positive marketing spin for the company. "Yes, we had a problem, and look how we dealt with it". If anything it would have boosted the confidence of their customers that they were dealing with a responsive vendor.
The problem is that a few more outages occured. In the meantime, what once was a platform for asking questions of the company, had become a platform for their customers to find each other. Where before a customer may have thought that they had an isolated problem, they were now able to see all of these other fellow customers complaining and realize that the scale of the problem was much, much larger. This in turn lead to a panic and a mob mentality with hundreds of customers joining together to simply complain or point fingers vs. trying to communicate with the company. Because this huge customer base could now access and communicate with each other they were able to remove any control the company had over the messaging. No opportunity to "spin", no opportunity to mitigate. Customers were actively speaking with one another about competitive products to try, ways to migrate away from this company, etc. They were now "following" each other on twitter and searching for other mentions of the company on twitter so that they could participate in any discussions. They were also establishing and meeting in offsite chat rooms to vent frustrations about the company.
Things to note: Not once did the company try and purposefully mislead during these communications, they personalized the problem and provided as much transparency into the issues as one could hope for. They owned their mistakes for the most part, and acknowledged any criticisms when they were correct. In short, from a communications standpoint they did everything right. This discussion is not about whether there were mistakes made in the transition from Rackspace to their own data center, or any other internal mistakes. Of course there were mistakes of some type made or there wouldn't have been an issue. The point of this discussion is to examine the fact that had they *not* chosen to provide such access and transparency to their customers this issue would have been a relatively minor one. It is precisely because they chose to "do the right thing" in regards to providing social platforms of communication to their customers that the issue has spun out of their control.
This is not a discussion of right or wrong. Whether a company should try and hide its mistakes, etc. Those are irrelevant to the dialog. It's to try and determine whether the levels of exposure these communication platforms can create are truly understood and planned for.
- Do companies and/or their consultants realize the additional pressures/risks these communication platforms place on them?
- If you're a consultant do you advise your clients of these potentialities?
- What can you do to mitigate the risks (outside of performing perfectly)
- Are you exposing your customer base to be directly accessed and picked off by competitors when using these public platforms?
- Is there a point in which shutting down those communications (in areas you control) would be better than the negative reaction such a shutdown would create?
- Is the "groupthink" nature of social media always a good thing?
- Obviously some industries are more exposed than others to these types of situations. Are there others you can think of?
Talk amongst yourselves...
Matt Ridings - @techguerilla
