The rise of social media has been phenomenal, exemplified by the social networking site Facebook last month hitting 500 million users. What is more, social media users are influential; the core demographic for Twitter, Facebook and LinkedIn is 30 to 45 -year-olds, with an above-average household income.
While big consumer brands have adopted social media as another marketing channel, smaller companies and own-label companies have tended to think it's not an area they need to consider. That's fine until these companies experience a product issue; then social media could become an important part of their crisis response.
A derogatory statement by a consumer can resonate around the world in seconds, ultimately having the power to damage or destroy the brand, if not the business itself.
It is important for companies to provide a consistent message, as consumers around the world can compare and comment on corporate reactions in different locations.
Social media channels are increasingly used to amplify complaints, which can be especially damaging in the food and drink sector. Product problems can be first reported in cyberspace, making it essential for companies to monitor social as well as traditional media and be ready to respond.
Many companies are going further. The American supplier Plum Organics used Facebook and Twitter to reassure consumers during its recall of Apple & Carrot Baby Food. E Leclerc's CEO used an existing blog to provide information about a beef burger recall. Danone set up a website where consumers could discuss health claims for Activia as part of its strategy to manage issues in Latin America.
By actively engaging in social media, companies can present their messages first-hand, using it as a pro-active communication tool.
If you need to recall a product that could be injurious to health, how many consumers will realistically see a newspaper recall ad? Even if social media marketing is not for you it should be considered as a key part of good risk mitigation and crisis management, protecting the brand online and off-line.
Ed Mitchell is global practice leader of product recall at XL Insurance.