Why Efficient Crisis Management in the Social Media Marketing Age is Crucial

Written by Vanessa Martin

A Warning Example - The Nestlé Case

With more than a billion users worldwide social platforms such as Twitter and Facebook attract all kinds of businesses who want a slice of the action. By setting up fan pages they hope to turn online customer engagement into future profits (Piskorski, 2011). One could even get the impression that although some companies do not seem to be genuinely interested in social media marketing, they are doing it nevertheless. Why? Because everybody else is doing it – and nobody wants to fall behind the competition. 

However, half-hearted social media engagement hides dangers. It is not enough to only know how to use social media. Its power has to be thoroughly understood – and thus what it implies for crisis management (Gruber et al, 2014).

Taking the case of Nestlé as an example of this hidden danger, the purpose of this article is to reflect on the downside of enhanced stakeholder dialogues offered by social media and to underline the reasons why social media marketing and a well organised crisis management should be treated with equal importance.

How social media has changed marketing

In order to discern the dangers hiding in social media marketing, it is first of all important to understand how social media has transformed marketing during previous years. 

The rapid growth of social media influence during the early 21st century has turned the existing world of marketing upside down. Whereas traditional marketing was labelled by a considerable degree of control concerning both the marketing instruments and the messages communicated, today’s new marketing can be compared to a pinball game, characterised by a high level of interaction and uncertainty (Henning-Thurau et al, 2013). 

In the past consumers were seen as rather passive recipients of advertising messages. Social media, however, enabled consumers to actively participate in branding by sharing and spreading their brand experiences. This leads to a loss of control regarding the advertising content and can cause possible changes in meaning and purpose (Henning-Thurau et al, 2013). 

So what is marketing’s new challenge? It is to deal with the rising degree of consumer power by accepting consumers as co-creators of brand stories. Instead of seeing themselves as sole directors of brand stories, marketing managers need to take over new tasks such as monitoring communication trends and activities and the moderation of brand story creation between customers and the company (Henning-Thurau et al, 2013). In other words – brand managers should observe and guide customers’ online brand creation activities. 

This sounds reasonable. So where does the danger hide? 

Where does the danger hide? – The power of social media

Social media activity is broad, fast-moving and difficult to predict. The task of keeping an overview of all customer activity, let alone control, is extremely difficult. Especially in the case of a crisis, when criticism and negative word-of-mouth escalate at tremendous speed, companies often find themselves in apparent powerless situations (Henning-Thurau et al, 2013). 

Overall a sheer lack of knowledge can be considered as one of the biggest dangers for companies being active in social media. Many companies do not have an overview of the large variety of media types and how they are connected. They tend to regard their Facebook or Twitter pages as their property and in isolation from other media. However, all elements of social media are interconnected in a complex and sensitive ecosystem, which should be understood thoroughly in order to be aware of its actual power (Schultz, 2007).  

Corcoran (2009) identifies three different types of media: 

  1. Owned media
  2. Paid media
  3. Earned media

Whereas owned media (such as company websites) and paid media (such as bought adverts) are to a certain extent controlled by the company, earned media (for example word-of-mouth) are not controlled and thus hide great potential for threats in crisis situations (Hanna et al, 2011). The power of earned media seems to be underestimated or even unknown by many firms. There is a lack of awareness that a brand is not only communicated and discussed on a firm’s website or fan page but also on various platforms the company cannot control (King et al, 2014). 

Nestlé’s Facebook crisis – A warning example

Exactly this underestimation of earned media power caused a serious social media crisis for the food and beverages company Nestlé in March 2010. 

 The reason was a provocative video published by Greenpeace, criticising Nestlé’s use of palm oil in its Kitkat chocolate bars. Nestlé was condemned for sourcing the oil from an Indonesian company who was accused of illegally clearing rainforests and therefore destroying the last remaining living space of the orang-utan (PR Week, 2010). 

greenpeace campaign-nestle-social media crisis.jpg

                                        Source: Engaging Networks

The shocking video gained a lot of social media attention within a short period of time and led to a flood of customer complaints on Nestlé’s website and Facebook fan page. The actual crisis however was not caused by the campaign itself but by Nestlé’s impetuous reaction to it. A series of very serious mistakes led to the story resulting in a crisis of global extent (Everything about PR, 2010):

1. Deleting the video on YouTube: 

‘If people cannot watch the video anymore, they will stop complaining’ must have been the thought behind the action, when Nestlé decided to make YouTube ban the video. This step however led to consumers showing even more effort to spread the video through a variety of other channels, annoyed by the company’s ignorance (Everything about PR, 2010).

 "Thank you Nestle. I would never have seen this video if you hadn`t had it kicked off YouTube. Now I`m forwarding it to all my friends, through Facebook, and guess what they are forwarding it all their mates. Fire your PR team. They are muppets." (Everything about PR, 2010).

2. Deleting critical comments 

A second step that intensified the situation was Nestlé’s decision to delete critical comments from its fan page. The company’s rude statement “It’s our site, we set the rules” had disastrous consequences, resulting in a flood of complaints and boycott campaigns, which did severely impact the company’s sales revenues later on (Everything about PR, 2010).

Nestle, you guys should be more tactful at publicly lashing your fans. Shame on you! Your response to this situation is worse than the act committed – A disgrace on your part!” (Position², 2010)

3. Responding to criticism in an unprofessional way

The third big mistake the company made was to fill the post for replying to customer complaints with an inexperienced junior employee, who was not trained to deal with crisis situations adequately. Therefore the replies to customers were written in an unprofessional and juvenile way, which again increased customers’ anger as they did not feel to be taken seriously (Everything about PR, 2010).

At no point did Nestlé succeed in containing the ever-growing threat of the crisis that loomed over the company. The situation did not calm down until the company finally announced its cancellation of the contracts with the dubious palm oil contractor. At that point the company already had to face considerable losses in revenues due to boycott campaigns against Nestlé products initiated by customers (Die Welt, 2011; IBS, 2011). 

Crisis management means being prepared

Overall the case shows that Nestlé did not know how to handle a social media crisis. There was neither a crisis management system nor a team of trained employees in place to guide the company through the crisis situation. All actions taken were unstructured and often unreasonable, leading to the situation becoming even worse. 

 It becomes clear that a company cannot wait until a social media crisis occurs until it starts thinking about how to manage it. It is crucial that there is a well organised crisis management system in place beforehand, so that the crisis can be managed in a structured and thought-out way when it occurs. Being a powerful tool for customers to share their opinions on a brand or product, it is essential that the social media ecosystem is thoroughly understood by every company that is using it. Only if a company is genuinely familiar with the way social media really works and what customers expect from a company on social media platforms, crisis situations can be handled successfully (Brand Builder, 2010).   

Social media activity guidelines

The Nestlé case has served as a prime example to point out how not to deal with a social media crisis. Furthermore it has become clear that companies should prepare themselves for potential social media crises by establishing crisis management systems. The most important question though is: How should companies prepare themselves? In the following some valuable advice given by PR experts will be listed. 

1. Listen, show presence and engage

 One of the most important things is to listen carefully and try to be present wherever stakeholders are discussing your organisation. This is a difficult task due to the large number of social media platforms. Companies should especially try to focus on monitoring critical pictures and videos, criticism from other companies, celebrities and generally statements of strong influencers and opinion leaders, as those posts have a high potential to go viral. Social media monitoring tools can serve as early warning systems, notifying the users via email or text message as soon as for instance a critical number of posts within a certain period of time is generated (Gruber et al, 2014; Komfo, 2013).

Once a post with high crisis potential is spotted, it is advisable to answer it as soon as possible. By doing so, the company gives stakeholders the opportunity to listen to the organisation’s version before judging the situation. The answers should be short and clear, formulated in a professional tone. 

It is important to not let the sometimes rude criticism affect your employees personally, which hides the danger of replying to complaints on a personal level. It is crucial to not get involved into an argument but to deliver valuable information to the stakeholder (Komfo, 2013).

Openness and authenticity are of key importance. If there does not exist an immediate solution for a problem, the company should communicate exactly this and underline its current and future efforts to solve the problem. White lies such as the making up of non-existing solutions would only worsen the situation as soon as stakeholders find out. Overall the company should try to be as transparent as possible in its communications during the entire duration of the crisis (Vernuccio, 2014; Komfo, 2013).

2. Educated and trained staff

Only if a company’s employees do exactly know what to do in a crisis situation, the aforementioned fast reaction can be ensured. Therefore it is important to educate social media teams beforehand about the efficient management of crisis situations. The triggers and characteristics of social media crises should be taught in workshops. Furthermore, the creation of corporate crisis communication manuals can be a helpful as those can serve as a guideline for action in a crisis situation (Komfo, 2013). 

Closing thoughts

The following conclusions can be drawn from the case: A lack of knowledge concerning the power and reach of social media is dangerous. Not being prepared for a social media crisis can have heavy consequences for an organisation. By establishing crisis management systems the risk of making mistakes during a crisis can be reduced. 

Is there a way to entirely avoid a social media crisis? Probably not. Especially big and well-known companies will always be a target for criticism on the part of competitors, NGO’s or dissatisfied customers. Therefore education and precautionary action should play a central role in social media marketing. 


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