Social media – real opportunity or risky business?

(As originally published in the Financial Post, June 2013)

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By Abhay Raman, Partner, Advisory, Ernst & Young LLP

Social media is the fastest growing form of technology in the world, and for many entrepreneurs, a perfect way to promote their business. The speed of this growing medium is overwhelming and its effects are reaching every corner of business activity, from product development to customer support.

The ever growing presence of social media is forcing established businesses and entrepreneurs to create new business strategies that revolve around social media as a medium to understand their customers more intimately. The problem is social media is growing so fast that the type of strategy needed is unclear. Furthermore, the rapid evolution of this social medium accelerates the need for a nimble, actionable, and measurable call to action where effective execution is a large part of the strategy itself.

However, there are universal steps that established businesses and entrepreneurs can follow in order to create a social media business strategy.

  • Ask the question “If I knew my customers better, what parts of my business will be better off? Identify areas of your business that can thrive in a social media setting. These areas can include: Sales, marketing, support, customer relationship management, human resources, and research and development.
  • What information do I need to know about my customers? What information do my customers want to know about me? What communication medium do they prefer? Involve stakeholders from each specific area in your strategy discussion.
  • Investigate how social media can support the goals of each area of your business.
  • Determine how you want each area to engage in social media.
  • Identify beforehand a ladder for success and how you will measure each step taken.
  • Continually optimize your engagement in social media based on how high each area climbs the success ladder.

While there is a need to develop a social media strategy, your business must also be aware of potential risks. Social networks allow customers to voice their opinions about your product either positive or negative and can influence potential buyers. A social media strategy includes the potential for employees who are involved in social media sites to inadvertently leak sensitive information from your business to the public. There is also potential for hackers to “re-engineer” confidential information from your business through employee posts. These posts can include log in and password information. There’s also the possibility that employees may also use social media inappropriately while at work. Your business’ reputation or brand is also at risk of being damaged from negative posts from the public, or employees. Posts that are meant to be positive can also be misinterpreted and result in unintentional consequences. All of these risks can result in loss of revenue, customers, and market share.

When business owners see the potential risks involved with social media, some may decide to ignore it all together. Leading business owners; however, have recognized not only the risks but the potential for success that working with social media has for their business. These business owners are creating strategies with objectives and measurements for success. They’re developing policies for employees to follow when using social media as well as educating employees to use social media in a safe and effective manner.

Another important step business owners are taking is the development of a social media listening program. This involves using real time analysis tools to monitor key conversations regarding your brand or product. Business owners can also monitor not only what their customers say, but also what they do through the use of analytics focused on transactions, website behaviour and call center information. These listening programs allow business owners to move past the traditional customer relationship and continue to develop that relationship by listening to and engaging with customers.

This listening program should also lead to your business actively responding to information gained from that listening. There are certain guidelines your business can follow in order to properly respond to the information you gather. Identify the relevant information from the noise; share that information with the relevant business group; use that information for future strategic planning; develop and execute a plan and continue to listen and repeat these steps in order to always keep your plan relevant.

After you’ve established a strategy and are aware of the risks, it is essential to create social media policies in order to guide employee behavior – either a “reactive policy” or a “proactive policy”. Business owners must provide clear direction on how to respond to user generated content or comments. Do you want your company to address complaints publicly, privately, or to simply ignore them? There should also be specific guidelines on how to use social media while at work. Do you want your employees to be on Facebook at work? If not, will there be consequences for violating these rules? Some universal guidelines that should be followed include:

  1. Employees should disclose that they are an employee of the business when commenting on anything related to the business.
  2. Unless your employee is a spokesperson, they should make it clear that their opinion does not represent the opinion of your business.
  3. You and your employees need to be aware of what is being posted; because once it is posted it becomes permanent, even if you delete it.
  4. Employees should not comment on legal or financial matters.

Whether you are just beginning to create your strategy, or are nearly finished developing it, entrepreneurs and established businesses need to realize the importance of a social media audit. A social media audit can offer your business a clear understanding of social media activities, sanctioned or not. An audit can assess if employees are following your business’ policies. It can also assess the effectiveness of the execution of your strategy and recommend ways you can improve.

It is important for entrepreneurs and established businesses to realize the influence social media has and use that to their advantage. A responsible entrepreneur will set out clear policies for employees, familiarize themselves with the risks of using social media, as well as create a strategy that is always optimizing itself through the use of social media listening tools.

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