Problem-Solution Essay Draft 1 [updated]

The huge popularity and strong influence of social media has revolutionised the way people impart and receive information. One of the ways social media differ from mainstream media is that it empowers individuals by providing them a platform for publication of their personal views to a large number of audiences. While the ease of publication is great for self-expression, it poses as a problem for businesses when negative consumer experiences are shared on social media. The rapid spread of such information can place businesses in risk of serious financial losses. While there are defamation acts in place to ease the damage from false reports, there is a need to look into better ways to protect and uphold the online reputation of businesses by taking on and improving the current social customer relationship management system (SCRM).

In the digital age, the online reputation of businesses is of fundamental importance regardless of whether a business is based online or offline. Studies have reported that 86% of customers buying decisions were influenced by negative online reviews (Gesenhues, 2013) and poor customer service has resulted in costing U.S businesses a staggering 41 billion loss a year (Strong, 2014). This reflects an underlying importance in maintaining the online reputation of a business as it can directly affect customers’ opinions, trust and ultimately sales of a business. Unfortunately, to exacerbate the problem further, a study has shown that bad customer service interactions are more likely to be shared than good ones (Marketing Charts, 2013). This was of evidence in a local incident, where a blog post of IKEA’s successful attempt to fix the situation of an unhappy customer only warranted half the amount of shares (five thousand shares), as compared to the blog post that condemned IKEA’s sorry attempt at customer service (ten thousand shares). This negativity bias further emphasises the importance of protecting, over repairing, the reputation of a business as efforts to correct a wrong will not be as widespread as the wrong.

As of current context, reputations of businesses are not well protected by laws and regulations. While defamation acts are in placed to protect businesses against defamation, they are unable to protect reputations as long as any statements made are based on a factual experience. Freedom of speech also means that subjective opinions of customers are allowed so long they are based on objective experiences. The presence of subjective opinions becomes even more problematic because they can intensify a problem through exaggerations and or by evoking emotions in other readers. In the IKEA incident that was previously mentioned, the author demonstrated this by calling for readers to “avoid IKEA at all cost” and also included subjective opinions explaining that he was "a very very easy going man and this is my first and possibly only negative review because you guys screwed up big time”. Statements as such uses comparative measures to aggravate the issue, yet it may or may not be true if it was experienced by another individual and compared to other negative experiences. In such cases, defamation acts cannot be used to demand for the withdrawal of such statements and businesses are ultimately left to deal with such issues without much regulation although it could be unfair to them.

Under such circumstances, many businesses are looking to protect their reputation by improving and maintaining positive customer relationships. One of the practices is to move away from traditional customer relationship management (CRM), and adapting to a more interactive and dynamic practice of social customer relationship management (SCRM). SCRM revolves around customer opinions where the crucial components that define SCRM are advocacy and experience. SCRM also uses social media and technologies to track customers’ opinions on social networking platforms and interact with customers on a personal level. This practice allows businesses to find, analyse and evaluate problems at ground level that might be individualistic or across board in nature. However, there are still problems with SCRM that are avoidable and to be improved on, one of which is to provide real-time help to customers. Not responding to customers in a timely fashion and requiring customers to repeatedly enquire about the same issue result in disappointment and unhappiness. In fact, a study finds that real time help produced significant benefits to a company such as increased customer satisfaction and increased customer retention (Strong, 2014). Efficiency is vital especially when customers are bounded by time constraints and in need of an immediate solution. Many companies, as with IKEA, failed to set up a proper system or department that is specialised in engaging customers in an effective manner. As previously mentioned, this problem is avoidable and there are companies with an excellent system set up to implement SCRM in the right way, one of which is “Mi Singapore”, where comments on their official Facebook page are attended to everyday within a few hours after posting.

Ultimately, the most important aspect in customer relationship management is for companies to consider the feedbacks of customers and modify their business model or practices accordingly. Businesses need to be sincere in communicating with customers and provide commendable service whenever possible. If offline businesses are able to provide excellent services, there will not be a need to worry about inflammatory or damaging remarks on the social media. 

(878 words)

References:

Brandweiner, N (2012, May 31). Customers more likely to share bad service experiences. My Customer. Retrieved from http://www.mycustomer.com/topic/customer-experience/customers-more-likely-share-bad-service-experiences-study/143371

Customers increasingly turn to social media to share bad customer experiences. Omega Management Group Corp. Retrieved from http://www.omegascoreboard.com/news/customer-service-horror-stories/consumers-increasingly-turn-to-social-media-to-share-bad-customer-experiences/

Gesenhues, A (2013, April 9). Survery: 90% of customers say buying decisions are influenced by online reviews. Marketing Land. Retrived from http://marketingland.com/survey-customers-more-frustrated-by-how-long-it-takes-to-resolve-a-customer-service-issue-than-the-resolution-38756

Greenslade, R (2014, October 20) 23% increase in defamation actions as social media claims rise. The Guardian, Retrieved from http://www.theguardian.com/media/greenslade/2014/oct/20/medialaw-social-media

Josiah, M (2011, June 17). Hotel online reputation research statistics and quotes. Review Pro. Retrieved from http://www.reviewpro.com/reputation-research-statistics-2767

Morgan, J (2010, November 3). What is Social CRM? Social Media Examiner. Retrieved from http://www.socialmediaexaminer.com/what-is-social-crm/

Ng, C.B (2014, November 14). IKEA referred to my kitchen as a shit job and here's why you should avoid getting your kitchen there at all costs. [web log post]. Retrieved from http://charlesbenedict.com/2014/11/14/ikea-referred-to-my-kitchen-as-a-shit-job-and-heres-why-you-should-avoid-getting-your-kitchen-there-at-all-costs/

Ng, C.B (2014, Decemeber 8). IKEA says sorry and gives me a spankingly beautiful new kitchen. [Web log post] Retrieved from http://charlesbenedict.com/2014/12/08/ikea-says-sorry-and-gave-me-a-spankingly-beautiful-new-kitchen/

Strong, F (2014, January 2). The complicated problem of social CRM. Sword and the Script. Retrieved from http://www.swordandthescript.com/2014/01/problem-social-crm/