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Crashing the Community
Nestlé feels the crunch when its own social network turns from semi-sweet to dark.
For the rest of the June 2010 issue of CRM magazine please click here
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According to a study conducted by social media management firm Vitrue, organizations see an average value of approximately $3.60 for each “fan” they have on Facebook. A paltry sum? Well, if you multiply that by a few hundred thousand fans, community-based damage to your brand’s reputation will make retaining (or worse, reacquiring) the fans in that community quite costly.  

Manufacturing giant Nestlé may have learned that lesson in the wake of an episode on its branded Facebook fan page in March. The kerfuffle began when a Nestlé “fan”—actually a Nestlé critic who had joined the open community—used a pejoratively modified version of the brand’s logo as her Facebook photo, and others did likewise. Nestlé’s Facebook community manager responded by deleting some comments, warning members not to run afoul of trademark laws. Reactions were swift, and reached far beyond Facebook: Fans and “fake fans” alike began posting (and blogging elsewhere) to criticize Nestlé for not listening, for not grasping social media, and for its “condescending attitude.”

“Who cares about a logo,” one fan wrote. “[D]o you not have bigger things to be concerned about?????” The “bigger things” involved the palm oil used in some of Nestlé’s products, as well as the company’s impact on rainforests. Enter Greenpeace and a new level of backlash. Activists joined the thread, amplifying the indictment of the company’s practices—and the fan page quickly spun out of control. 

Nestlé, for its part, discovered that social media isn’t easy, issuing a status-update mea culpa: “[W]e’re learning as we go.” Even though the company said it had already set a date to cut ties with the palm-oil supplier in question, the comments and verbal assaults kept coming. “The difficulty with social media is to show we are listening (which we obviously are) while not getting involved in a shouting match,” said Nina Backes, a Nestlé corporate media relations spokeswoman, via email. “We have temporarily withdrawn from our Facebook page while continuing to engage with stakeholders in other channels on what we are doing around sustainable palm oil.”

In the Facebook community, it’s difficult to know at a glance whether a negative post is from a longtime member of a fan page or another Facebook member jumping on the brand-bashing bandwagon. What’s a brand to do when it comes under fire within a community, with only a moderator to rely on? [See this month’s Customer Centricity column for an argument in favor of ignoring a community.] And regardless of any judgment passed on Nestlé’s actions, should the company be applauded for having had a social presence in the first place? 

“There are big differences between engaging in your own branded, sponsored community and being in someone else’s sandbox,” points out Matthew Lees, vice president and analyst with Patricia Seybold Group. “Even in your own branded community, you don’t have full control of everything that happens.”  A Facebook fan page, or following a brand on Twitter, is only a click away when a conversation suddenly heats up. Any open community may suddenly find itself with undesirable members eager to be part of the buzz surrounding a “social media fail.”

But what’s the real brand-level damage? “On Facebook, it’s much easier to say something negative and not have any ramifications at all,” Lees says. 

Jaeme Laczkowski, senior community relations manager with educational-toy company LeapFrog, has experience managing private communities and also engaging on public sites such as Facebook and Twitter. Both approaches are labor-intensive, she says. [See this month’s Real ROI for more on LeapFrog’s community efforts.]

“The fact that social media exists has changed the very nature of how brands talk to customers,” Laczkowski argues. “The upside is greater credibility. The downside is greater vulnerability. What happened to Nestlé could’ve happened to any brand, because we’re [all] learning as we go…. It’s a case study that other brands will look to when they develop their own best practices—that’s how industries are built.”

“It doesn’t matter what size company you are,” says Brent Leary, founder of consultancy CRM Essentials. “You can make the same [social media] mistake as anyone else, and your mistakes are amplified.” They’re also immortal—these lessons last forever in community archives.  

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