In less than a decade, social media networks have brought about unprecedented levels of rapid communication that permeate various sectors of society. The exchange of information between media outlets and the public has been altered from traditional means by the new interactive facet of social media. Consumers now possess the ability to interact directly with the conveyers of information. Businesses have readily taken advantage of this contemporary component to marketing through garnering public reception of its brand along with products or services. Social media networks also provide companies with the opportunity for enhanced customer service; however, this feature holds the potential for a distinct problem to arise. With the quick spread of information comes the risk of a negative perception of a business to go viral through social media’s worldwide affiliated platforms.
The liabilities of social media regarding reputation result from the incredible reach of social media networks. A 2011 Ernst & Young survey states that 67% of social media users say social media influences their purchases. Social media facilitates the opportunity for word-of-mouth marketing to impact businesses heavily. One of the most famous examples of social media negatively influencing a company’s reputation is the “Dell Hell” example. By the summer of 2005, Dell computer owners had begun to launch complaints with the company’s customer service. One customer in specific, Jeff Jarvis, launched a campaign that led to major brand backlash. Jarvis posted a rant on his “Buzz Machine” influential blog calling it “Dell lies. Dell sucks.”
The post was a result of Jarvis’ frustration with his purchase of a Dell manufactured laptop with a four year at home warranty. When the computer malfunctioned soon after Jarvis had received it, the blogger contacted Dell’s customer support only to be told that he would need to send the machine back to the company because the technician was not able to come to his home. Jarvis then posted the influential blog post that initially received 253 comments from other consumers who had experienced similar dissatisfaction with Dell’s customer service. Dell did not respond promptly to Jarvis or the other people who were responding to his blog, and as a result made a classic mistake. In 2005 and 2006, Dell experienced the aftereffect of the social media customer revolt. On November 10th 2005, Dell announced quarterly profits had dropped 28%.
The error of companies wanting to avoid the potential challenges resulting from social media by ignoring ultimately has the likelihood of creating more problems to the company’s standing. Damage to a brand or business reputation from negative customer posts is a problem that companies must face in regards to social media. Dell initially made the error of ignoring social media’s influence; however, the company ultimately learned from this experience. Dell retooled their customer service operations and launched a social media operations capability that monitors social conversations in real time. Dell launched its own blog called Direct2Dell in June of 2006 that showed the change in the company’s conception of online customer service. The importance of participation and reaction to online conversation was clearly understood. February 2007’s launch of IdeaStorm showcased this as well as it served as Dell’s online suggestion box. The forum invited customers to share ideas and suggestions on ways to improve products and services.
The example of Dell’s experience with the influential reach on their reputation by blogger Jeff Jarvis presents the importance of company involvement with social media. By implementing various new tactics in attempt to rectify their previous error in social media relations, Dell went from a company with a poor reputation to an example of social media business integration. Continuing this path today, Dell has recently expanded their program by launching their Social Media Listening Command Centre for customer service.