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Managing Brands in a Prickly Digital World

Companies that ignore or do not respond quickly and effectively to negative social media may find that the perceptions of their brands, and their corporate revenues, profits and stock prices are impacted.  Donald E. Sexton, Columbia Business School, writing in the September 2015 issue of the Journal of Advertising Research recommends an action plan for brand managers to respond to social media criticism.

Social media has had a great impact on the ability of customers to share negative experiences with a company or dissatisfaction with a brand.  Customers can share these experiences via social media very quickly with a large number of consumers.  Sexton discusses the high rates of non-response by companies to negative stories or complaints by customers.  He points out that negative posts which are not addressed quickly and effectively can result in decreases in the brand’s perceived value, which will have a negative impact on sales, revenue, and the stock’s price.

Sexton’s suggests the following action plan for brand managers faced with social media complaints:

-Monitor the quantity and content of comments on social media regarding products and services in real time.

-Ensure that complaints on social media are dealt with quickly and effectively.

-Understand the drivers of the monetary perceived value of the brand’s products and services.

-Know the financial outcomes of actions before taking them.

Sexton concludes that companies must monitor and respond to social media complaints to avoid negative impact on their brands.  He also advises that customers should be considered members of the marketing team.

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