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Apple and wells fargo don’t respond to social media

July 31, 2009

Tom Formeski’s recent post about social media and brands is an interesting take on brands that don’t really respond to negative responses on social media platforms.

Tom singles out Apple and Wells Fargo as examples of companies who don’t really to respond to negative comments. He claims that because they face no repercussions for their inaction that this is a bad thing for the social media marketing mavens.

It’s a  complex subject and involves understanding how people relate to brands. Certainly, there’s an impact to bad news and some consumers react, communicate vocally and exit from the brand. However, it’s all about brands having strong “mental balance sheets”, if people feel that overall the brand is doing a good job they will give the benefit of the doubt and allow it a few indiscretions.

I would argue that all brands need to be aware of the balance of the conversation by monitoring and evaluating it.

There’s no doubt that brands like Dell needed a response when the conversation turned against them and they turned things around rapidly. Interestingly, Dell is a brand heavily invested in social media, but one that’s yet to reap the rewards. This is because a turnaround is a long uphill battle involving product and category evolution.

Starbucks is another brand in the same postion. In a recent report by The Altimeter Group, Starbucks ranked as the no1 brand in social media, but as we all know, the brand is in something of a crisis.

Incidently, Dell ranks as No2 in the Altimeter study, suggesting that the most troubled brands are currently the most invested in social media.

Then there’s Zappos who used social media probably to enhance its value, who recently sold to Amazon for for close to $900 million.

Social media engagement is no guarantee of instantaneous success and it doesn’t replace the need for product and service excellence. At present, it’s return on investment story seems undeveloped at best. We are the early stages of learning about this world, but within the next 24 months, companies will become much more strategic about goals and objectives setting for social media across divisions.

At present, as Tom suggests there’s no penalty for brands with strong “mental balance sheets” not engaging in social media, as the field becomes more crowded and brands get to understand it better, this is not likely to remain a “truth” for much longer.

Posted by Ed Cotton

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