Companies with some negative history face a more difficult challenge in successfully managing social media discussions during a company/brand crisis, argues professor Erik L. Olson at BI Norwegian Business School.

 

Research @ BI: Social Media

The recent rise of social media sites such as Facebook, YouTube, and Twitter have totally changed the way many consumers interact with the firms and brands. 

Unfortunately, there are relatively few studies to provide guidelines regarding how to most effectively protect company/brand reputation through active management of communication flows on social media sites. 

A recent MSc thesis by Danyi Feng and Lise Marie Nordby, under the supervision of Professor Erik Olson, however, offers some useful insight into this issue.    

Pampers and Nestle on Facebook

Content analysis involving over 5,000 messages on the Pampers and Nestle brand Facebook pages determined strategy effectiveness in managing the tone and frequency of messages during a recent crisis to minimize damage to each brand’s reputation.

The two cases offered some key differences in brand history that provided important insights into strategy choice and likely success. 

Pampers is a market leader with an enviable history involving virtually no product crises, while Nestle has experienced a series of product crises going back several decades that has made the firm unpopular with some segments of the market. 

  • The Pamper crisis involved rumors that new diaper technology was causing diaper rash
  • The Nestle crisis involved a charge that the firm was buying palm oil from environmentally unfriendly suppliers.  

Consumer responses to company message

In both cases, the total number of posted messages increased dramatically during the crisis period, with the largest portion of the increase being very negative consumer comments, although the proportion was nearly twice as high for Nestle as for Pampers. 

Only in the Pampers case was there also an increase in very positive comments defending the brand.  This difference, together with an analysis of the proportion of specific comments discussing crisis responsibility, suggests that Nestle was held more responsible for their crisis, perhaps because of its previous history of crises. 

An analysis of consumer responses to company messages reveals that Pamper’s initial attempts to deny responsibility, even though it was a truthful response, caused a huge spike in negative comments. 

Later messages from management sought to reduce the seriousness of the crisis (i.e. diminish strategy) and change the subject of conversation away from the crisis (i.e. distraction strategy), and both types of messages were much more successful in reducing negative comments and generating supportive comments from consumers. 

Nestle’s initial reaction involved messages to diminish the crisis, but this strategy proved ineffective and prompted many angry responses from consumers.  Nestle’s next strategy involved distraction, but again this strategy failed to change the negative tone or frequency of crisis related discussions. 

Finally, Nestle initiated a rebuild strategy with sincere messages stating the concrete steps the company was taking to speed up their disengagement from the offending palm oil suppliers, and only this strategy appeared to start a positive trend for the brand. 

What Does This Mean for Marketers?

Companies with some negative history face a more difficult challenge in successfully managing social media discussions during a company/brand crisis. 

The findings suggest that only responses that are seen as respectful and sincere in addressing the crisis issues are likely to create a positive trend for discussion about the firm. 

On the other hand, firms with unblemished reputations have more leeway in effectively reducing negative conversations about the firm/brand during a crisis, although even in such cases the firm needs to be careful in appearing to not take the complaints seriously and denying any responsibility.

Reference:

Feng, Danyi and Lise Marie Nordby (2011): "Crisis Handling in Social Media - A Content Analysis of Real-Life Cases". Msc thesis, BI Norwgian Business School. Supervisor: Professor Erik Olson.

This article is published in BI Marketing Magazine nr. 2 - 2011.

Comments?:

Send your comments and questions regarding this article by E-mail to forskning@bi.no

Text: Professor Erik L. Olson and 2011 Graduates MSc program in Strategic Marketing Management Danyi Feng and Lise Marie Nordby.

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