The Anatomy of a Social Media Crisis

By | September 24, 2011

Social media crises are on the rise, but 76% of those that occurred since 2001 could have been diminished or averted with the proper social media investments, according to a report by Altimeter Group released on Wednesday.

For the report, entitled “Social Business Readiness: How Advanced Companies Prepare Internally,” Altimeter Group analyzed 50 social media crises that have occurred since 2001 and found that those reaching mainstream media have risen steadily through the past decade, with just 1-2 incidents per year in the first five years and a total of 10 social media crises last year alone. The report also sheds light on exactly how social media crises arise and how companies can avoid them.

The majority of businesses caught up in social media crises lacked proper internal education programs, but the lack of a professional staff, triage system and employee social media policy were also key problem areas for companies. Here is the breakdown of what essential internal requirements were missing from companies that have faced social media crises:

Altimeter found that social media crises originated nearly evenly across five social media platforms: communities, YouTube, blogs, Twitter and Facebook. Furthermore, the report illustrated that the top five industries affected by social media crises were: consumer goods, apparel & fashion, restaurants, Internet and retail.

And what were the causes of these crises? The majority of the time, social media users were venting poor experiences, but social media crises also arose from companies having poor influencer relations and having broken ethical guidelines.

In all 50 social media crises cases, some sort of change was seen at the involved companies, with 52% of social media crises resulting in significant change by the companies; 40% of crises resulting in a change (of some lesser magnitude) by the companies and 8% of crises impacted the short-term finances of companies.

So, how do companies avoid a social media crisis? Based on its interviews with advanced social businesses, Altimeter Group developed a “Social Business Hierarchy of Needs” (pictured below) to help businesses achieve social business readiness. Here’s a look at the pyramid and each set of requirements:

Each segment of the pyramid is accompanied by thorough, step-by-step instructions on how to achieve excellence in each section of the pyramid. Here’s a quick overview:

  • Foundation: Define business objectives. Develop four sets of policies: social media, disclosure/ethics, community and privacy. Train and empower employees.
  • Safety: Appoint a team that actively monitors social media channels during office hours and beyond. Develop a triage system. Practice with “fire drills” that simulate real-life crises.
  • Formation: Take inventory of all social assets and reform your teams accordingly, focusing on increased communication. Form a social media “Center of Excellence” that serves the entire company.
  • Enablement: Enable business units to deploy and run social media programs on their own. Set up an internal community where employees can learn from each other, and aggregate measurement data to prove successes.
  • Enlightenment: In an ideal state, businesses are able to make decisions based on real-time intelligence and use social data to inform product development and partner relations. Furthermore, “enlightened” social businesses are able to achieve real-time customer engagement by empowering all employees to use social media on behalf of the company.

For more details on developing a roadmap for each section of the pyramid, check out the embedded report below.