While social media may have many benefits in enhancing corporate brand reputation, it can also cause damage to an organisation’s image if not managed and protected carefully.
This report outlines the positive and negative effects of social media on corporate brand reputation depending on how different businesses manage their social media profiles. The report also reveals that not only customer negative comments can harm brand reputation but also employees can put the brand image at risk.
It is important for the companies to manage and protect their brand reputation on social media; therefore, recommendations have been provided to overcome the issues highlighted in this report. These include; to select the right social media platform and develop a policy and educate employees on how to monitor negative feedbacks on social networking sites and deal with those issues carefully, and introduction of social CRM, integration between social media and customer relationship management.
Social media is an effective platform for consumers to communicate with each other and with the companies (Lee, 2013), and gives individuals the opportunity to share their views on different brands (Kozinets et al., 2010). The number of customers spending time online reading and interacting on social media such as Facebook and Twitter is increasing (Chaffey and Chadwick, 2012, p.234). Social network users’ population around the world has increased from 1.47 billion in 2012 to 1.82 billion in 2014 (Statista, 2014). Many companies are using social media to benefit from this platform by reaching out to potential customers and maintaining contact with existing customers (Molenaar, 2013, p.31), and updating them about new products and services (Mersey et al., 2010).
About 80 percent of the companies surveyed by IBM in 2011 in USA were hesitant to interact with consumers where they are congregating virtually, though they have presence on social networking sites and are persistently launching social media initiatives. However, only a third of them felt confident that they had the strategies in place to make these efforts successful (Baird and Parasnis, 2011).
Although previous studies show that social media platforms offer companies new ways to gain business value, there are also fundamental brand-related challenges in social media (Rokka et al., 2014). Branding is facing important challenges due to the rise of digital and social media environments that facilitate and enable electronic word-of-mouth (Fournier and Avery, 2011). While social media may offer many opportunities and benefits to companies (Porter et al., 2011); Aula (2010) suggests that even strong brands are vulnerable in these new environments due to greater transparency, consumer empowerment, and internet activism. Fournier and Avery (2011) believe that there is an urgent need for a rapprochement between branding and reputation management perspectives in the context of social media.
2 Positive impact of social media on enhancing corporate brand reputation
Social media is ideally suited to interact with customers and gain valuable information about them which may not be possible with other channels (Baird and Parasnis, 2011). Without social media, it would be difficult for the companies to know how consumers feel about their products or services. Though feedback is available through other mediums such as postal surveys, however, it is still limited. Social media has made it possible for anyone to share their opinion. Whether it is a comment on a company’s Facebook page, or a hashtag on Twitter, consumers can give reviews on product and services instantly. This can benefit businesses as they can find out whether their customers have been satisfied or not.
In addition, if a company launches a new product, social media is an