Module 8
Social Media: Risk and Reward
Virginia Gambale: We are now at a point where we have six billion people enabled by mobile devices around the world. That alone changes the playing field for all the companies.
Thaddeus Arroyo: We’re constantly looking for new opportunities to use information and insight to enhance efficacy and efficiency that ultimately helps us better serve our customers.
Sanjaya Krishna: Social media allows you to try and build brand loyalty and then actually turn those brand loyalists into actual brand advocates.
Jack Clare: It’s the ability for individuals to communicate with each other and develop a sense of community as well as spread outside even their communities anything, whether that’s positive or negative about your brand.
Virginia Gambale: The power is so intense, but yet people are afraid to embrace it because of the risks. It’s just like anything else, done responsibly, managed properly, it can have enormous power for a business entity.
Social Media: The Business Value
Virginia Gambale: I wish the board understood how truly powerful the role of social media is. The power comes from having the engagement of every single person that you interact with instantaneously.
Steve Weber: You have a great ability to, you know, stay in contact with your customers, with other key stakeholders and to use that community of people to actually improve business results.
Jack Clare: Social and mobile, certainly in our business as a brand-facing business is terribly impactful. We have our employees and crew members are also carrying these devices. Our corporate environment users are also carrying these devices. So, there are an infinite number of use cases where I can develop applications and services to make them more efficient, to engage them more with our brand.
Sanjaya Krishna: When you combine social media with the amount of data that’s being generated and recorded -- what I call digital residue about people, the things that they leave behind on networks when they’re interacting on networks -- you can learn a lot about them. And social media is really about personalized marketing.
The Risks: Reputation in an Age of Transparency
Jack Clare: My CEO has said the potential brand reputational issues that now exist are what predominantly keep him up at night, whether that’s the use of social media by employees or potential food safety issues or other things that can, you know, spread virally through social media. I would be hard-pressed to think of a business that is truly not exposed in some way. At a minimum, all of our brands and businesses can be discussed online. And that is out of your control, whether you want it to be or not. So, if you’re doing nothing, the consumer and new media will potentially do damage to your brand, whether you like it or not, or to your business model, whether you like it or not.
Sanjaya Krishna: A clear policy on employee use of social media is table stakes for any company that wants to be engaged in social media or any company that is engaged in social media. And I would expand that to be beyond just an employee policy. I would say it’s a workforce policy, because there are more than just employees of the company who potentially carry the brand.
Jack Clare: I think our industry is probably one that’s the poster child for this over the last few years where, you know, various videos will show up on YouTube with employees doing things they probably shouldn’t be, the exposure for your brand reputational risk is enormous. And so we’re really quite strict about our direction on the use of social media and what we encourage our franchisees to do.
Virginia Gambale: It can tear down a government in a country. It can also alert people to things that are taking place that we don’t know about, and we all want to know about those things. If there is a danger in the product and services that we offer, we want to know about that. We don’t want that filtered through ten layers of management. If our customers service call centers are not operating correctly, we want to know about that.
Jack Clare: You have to be credible and honest in the social media channel because everyone is suddenly a journalist and anyone can comment and that can take on a life of its own. My number one counsel to everyone is accept that it’s out of your control. Don’t lose sleep over it. If it’s happened, it’s happened, and the only thing you can do is go back to brand principles and start working to repair it, both using the new channels as well as traditional channels and means.
The Reward: Empowering Strategy
Sanjaya Krishna: We’ve had a lot of conversation about risks and risk detection, but, don’t forget that social media is also a great way of looking at new potential opportunities. The really savvy companies are actually utilizing social media to engage with customers for product and service ideas.
Virginia Gambale: At the end of the day, we are all in business because we want to acquire customers, and we want to maintain and keep those customers.
Steve Weber: We have a case study of an organization that rolled out a product and they had a Facebook page and they got immediate feedback on the rollout on this product from their customers and their customers hated it. They knew that within a week as opposed to six months later after the rollout had done and so they’re actually able to change the product, make the necessary enhancements so that they had a newer one by the end of the quarter. Those types of timelines and changes can get positive business results. And an organization that’s worried about reputation risk and worried about employee risk will never take the leap to use that that way.
Jack Clare: The short answer is ignore it at your own peril, but the level of focus is probably a fair question that I would offer. Directors should be focused on their particular business model and industry.
Sanjaya Krishna: From a strategic standpoint, you need to have a good business case. Obviously, there’s going to be a strategic plan that the company has. You need to understand how does social media fit into that strategic plan. You need to understand what is my primary purpose here? Is it building more customer engagement? Is it doing more customer service, as we’ve seen companies like Best Buy and a lot of the airlines are doing? It’s probably something along multiple fronts that involve marketing, corporate communications, customer experience.
Thaddeus Arroyo: Let me provide one example of how we’ve applied this fast and focused innovation process. AT&T IT, working with our colleagues in marketing, sales, and network operations, identified multiple opportunities to better track discussions about the company in social media and other online outlets. There is an obvious need for real-time visibility into what is being said about the company for reputational purposes, but for AT&T, social media monitoring also helps us identify potential network issues and spot emerging world events or external issues that could impact the services we provide.
The Board’s Role
Sanjaya Krishna: I think that social-media governance is still something that you don’t see baked into the strategic execution as well as you could see it, and I think that that’s just a natural function of who has normally led the charge. It’s the marketing folks. It’s the corporate communications folks. It’s the people who are driven and incentivized to drive and be nimble and be quick, and, you know, so they’re not going to have the strongest governance orientation. That’s where the board’s governance role comes into play, and some of the management-level kind of risk-focused and governance-focused roles.
Steve Weber: Boards can ask for an update on a quarterly basis on, A: are they using these technologies, and B: what are they getting as a result of that? I think that’s really the key the social media stuff is it’s really having an identified business purpose before you start making those types of investments and then report and say and this is what we’re getting from. I don’t think it’s any more magical than having a business purpose for doing that and then be able to show the results because the capabilities are there and they do work.