Product Family

Human Nature in a Virtual World

2.4 billion of the world’s 7 billion citizens are internet users.

Google alone process 100 billion searches per month, 3.3 billion per day.

YouTube counts 1 billion unique monthly visitors. Facebook boasts 1.1 billion monthly users, Twitter a modest 500 million.

According to the Pew Research Center, as of August of this year, 72% of adults now use social networking sites. In the past four years, even the number of people over age 65 using social media has tripled to 43%.

This upward trend shows no signs of decline. McKinsey and Company observe that both Twitter and Facebook garnered 50 million users within their first year! Contrast this pace with the radio, which took nearly 40 years to reach 50 million audience members. What is the difference? Interaction.

The growing majority of the world’s population abides by the social meme: “I love my computer, because my friends live in it.”

It’s Easier to Meet Your Neighbour Online

Industrialism ushered in the age of the metropolis, anonymity and social isolation—loneliness in a crowd. Now, ironically, cold, mathematical technology offers the virtual remedy, reconnecting people.

People reach for the internet not only to connect globally, but also locally. You know this is true when the last great bastion of romance has capitulated to the digital wave. It’s becoming easier to find local singles to date online, than at the neighborhood watering holes. Even the French are wooing online, creating an online dating industry with an annual turnover of USD 154 million. The British top that with an additional 100 million. The latest news is that one third of British romances begin on the internet.

Maybe the new social meme is, “I love my computer, because even my future partner lives in it.”

The fact is that we now connect to other people virtually at least as much, often more, than we do in the physical world. We want to make friends, one way or another.

We Trust the Voices on the Internet

No wonder then, that we trust the multitude of small voices, our online friends—whom we’ve never met in person—more than anonymous corporate monoliths.

The latest Nielson Survey reports that two thirds of the public rely on social media product recommendations. Only personal recommendations are considered more trustworthy.

In this online global village, where gossip is traded 24 hours a day, a company that fails to establish social network friendships with consumers is no longer a leader.

Amplified Small Voices

Almost every man, woman, and child around the world now has access to a public podium.

The Dale Carnegie classic “How to Win Friends and Influence People” taught us that leadership is about turning people into friends. By listening and responding to small, personal voices, we establish trust. We can rarely persuade people to follow in a time of crisis, if we have not already earned their trust.

When 2.4 billion of these small voices also have global megaphones, it can become rather expensive to ignore them.

True, many companies already have social media accounts. Unfortunately, some of them are merely tacking up virtual billboards.

This common corporate model does more to offend consumers, than to make friends of them, if it turns a deaf ear to complaints. It fails to grasp the essential value of a “social network”.

More Complaints than Before, Higher Expectations

A study by Social Media Today shows that at least 1 in 4 consumers complains about products through social media, and the numbers are rising.

Another study by College Hill reports that at least half of adults between 18 and 34 say they are more likely to air product complaints via social media than they were last year.

Perhaps it is a lot easier to upload a sentence or two than it is to wait on the telephone, maddening elevator music piped into your ears…

Consumers report that after being ignored multiple times via phone and email, they resort to social media: strength in numbers and public exposure have compelled corporate responses when nothing else worked. The balance of power has shifted.

51% of those on Facebook expect a personal response within 24 hours, and 52% of the Twitterati expect a response within 2 hours!

Of course, these expectations are based on the constant access to social platforms, not on real corporate online availability.

The problem: What does this difference between customer expectation and company performance spell? Dissatisfaction! Complaints are personal, instantaneous and global, and it is the company’s responsibility, not only to follow suit, but to take the lead.

Pretending to Listen Will Not Fool Consumers

As this article was written, within two days, 11 product recall tweets appeared, from consumer watchdogs, trade organizations, private citizens, and a parent’s magazine account with over 743,000 followers.

One of the repeated tweets demanded that a certain company recall pet food which is suspected of being contaminated with salmonella.

The company’s social network response: Silence.

Food and Beverage brands are especially vulnerable to rumors of contamination. Survival can hinge on how well a company responds in such a situation.

We may choose to ignore the consumer megaphone, but the rest of the world will not, least of all journalists.

Finally, the Corporate Response: Too Little, Too Late

Not only does every media outlet disseminate headlines 24 hours a day through Twitter, Facebook, Digg, Reddit, etc., but standard journalistic procedure also directs every editor and reporter to scout the social networks for story leads, and advertise for eyewitnesses.

On September 2nd of this year, for the first time a consumer purchased a series of sponsored tweets in an effort to drive business away from a company.

Incensed that an airline had lost his father’s luggage, he tweeted, “Don’t fly…. Their customer service is horrendous.” Subsequent messages compared the company’s logistics to a horse and buggy, and pictured pilots as slobbering dogs flying upside-down helicopters.

It took the airline eight hours to respond to the original tweet; they explained that their customer service hours were limited. Whose fault was that? By then every media group had covered the story.

That complaint your company ignores for two hours? It is potentially the next headline; rebroadcast hundreds or thousands of times around the world, before your crisis communications folder has been cracked open.

The Gossip that Cost USD 150 Million

What about the Twitter post, on April 23rd of this year, which leveled the S&P 500 in three minutes?

A hacker hijacked an Associated Press account with 1.9 million followers, and tweeted that Barack Obama had been injured in a White House explosion.

4,000 retweets followed, and the S&P dropped USD 150 million.

Fortunately in this case, the response was swift. The Associated Press quickly refuted the false report, as  did the White House, and the S&P recovered and finished strong by the close of business the same day.

The Economist reported the loss as “brief and superficial”. It could have been much worse.

The lesson is that a prompt response, and a genuine one, can neutralize damage before it becomes radioactive.

As we have learned, the United States government monitors cyberspace closely. So do journalists. But how many companies would have been prepared to act that quickly?

Taking Charge of Social Media: Advantage in the Case of a Product Recall

Every national consumer product safety commission alerts citizens to product recalls via their Twitter and Facebook accounts. The Australia Competition and Consumer Commission (ACCC) insist that companies include social media announcements as part of the standard product recall protocol.

Evidence is beginning to show that companies who broadcast recalls globally via social media and interact with consumers directly, before government is forced to intervene, gain a distinct advantage.

While the protective urge is to delay a public announcement and regroup, it is better to take advantage of the global scope of social media, and announce product recalls at the earliest opportunity.

Fully Engaged Companies Benefit in Every Way

There are brands whose entire reputation has been forged online, almost entirely through social media.

The strategy: establish a social media domain from day one.

A deliberate, professional plan, which makes social media an integral component of the communication strategy, will almost always beat widespread, but disorganized, unrest.

McKinsey advises clients to take charge of the online exchange by continuously soliciting consumer feedback. This does not mean just trying to whip up enthusiasm on a fan page-23,000 likes! It has to be more authentic than that.

According to McKinsey, only 1 in 4 companies even try to use social media as a customer service channel.

70% of those have simply added social media monitoring as a side task. This halfhearted effort produces poor results, causing companies to conclude, falsely, that it isn’t worth it.

The other 30% have dedicated social media teams.  Those companies report that the initial investment in increased headcount is recouped many times over. They document an increase in customer satisfaction of up to 50%, after just a few months of continuous activity.

Trust and Friendship Count in a Crisis

We have to pay homage to human nature, and the paramount value of friendship. When customers can rely on a listening ear, and a fast, genuine response to their concerns, they will choose the direct route to the company over a public rant.

Also, use the tools available. There are more than 50 social media monitoring tools to help companies track their online reputations. These systems quantify and weigh key words. As soon as negative comments exceed a certain percentage of the total, alarms are triggered. That’s the time for companies to roll up their sleeves and engage in real, online—and yes, public—dialogues.

Not only can companies address a complaint before it is amplified by the media and the consumer chorus, but they have the chance, really for the first time, to create a public record of each interaction, permanent, scrollable evidence that they are reliable and trustworthy.

Does it require a concerted effort? Yes. Is it worth the investment? What if a wave of complaints, or something as serious as a product recall, never materializes?

McKinsey urges companies to take advantage of this new opportunity for mining ideas. By establishing a trusted channel of direct interaction, you can constantly glean fresh ideas for product innovation and development, based on explicit consumer demands.

Seek Assistance and Have a Plan

Companies also need to develop response plans. Recalling 5 million units is a setback, but it does not compare to the long-term damage which can result from a loss of consumer confidence, and the subsequent drop in shareholder value.

Insurance companies can help. For example, our service providers at College Hill, specialists in crisis communications, have helped us to design a social media course tailored for food and beverage companies. The goal is to help clients to align the customer service, marketing and technical processes, to ensure that social media are effectively monitored, and that the corporate response to a crisis is expertly managed.

It is important that the response plan goes beyond financial risk transfer. When a recall hits, a company needs 24/7 access to crisis consultants, who will support the company in deploying a unified response that derives optimal benefits from social media, rather than merely attempting damage control.

Return on the Friendship Investment

Corporate success will depend increasingly on the authenticity of your online presence in our digital global village. It really requires nothing more than the dedicated transfer of traditional communication and leadership skills to the social media realm.

Professionally managing your social media presence gives you unprecedented, direct access to consumers, and the benefits work both ways.

When the worst happens, a product recall, the friendships established on these social networks are likely to yield a significant return on investment.

A good example …

If you wish to see how to engage with social media view this YouTube clip of Maple Leaf Food’s CEO, Michael McCain .

The way in which he handled one of Canada’s largest recalls in 2008 led to him being recognised for his strong leadership and communications skills.


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