General market sentiment shows nearly 30 per cent of top executives share a common view that they don't believe social media will ensure profitability of their organisation. This is because there is no clear matrix to qualify brand reputation of any business organisation.

The world hasn't come up with a clear calculation on how a business organisation will lose its stock value, market share, money, opportunities and customers if an unforeseen incident tarnishes its name, both knowingly or unknowingly, in social media because it’s still very elusive.

It is always the most-engaged companies that report the highest return from social media. One of most important challenges for companies is managing the word of mouth of people on their companies.

Due to that, it is being observed that companies increasingly invest time and resources into major social media platforms like Facebook, Twitter, YouTube, blog, LinkedIn and Instagram.

Digital branding

'If you're not online ... you don’t exist'’ as the digital branding slogan goes, its being propagated that customers trust a company more when top executives increase their social media presence and communication. However, how exactly the trust converts into profitability and value is still murky.

From the risk management view, the best known way to mitigate brand or reputational risk remains ensuring organisations make a clear presence in social media as it’s relatively a small investment relatively.

Much accurate dissemination of information by big organisations to their customers and general market has gone unnoticed because of their lesser structured presence in social media.

Today, risk management consultants offer social media-related advisory with regards to adverse effects on organisations on public relations, social media and crisis communication, and brand reputation.

There are people who really will make it their life work to ruin your brand. They just wait by for one specific occurrence. Many organisations have seen their brand and business being tarnished slowly over a period of time through many small attacks by competitors and unsatisfied customers.

On the other hand, there is nothing a company can do on social media or otherwise to prevent all its customers from being unhappy all the time. Due to that, managing brand risk is vital for a long-term solution.

Strong social media engagement

After all, managing an unsatisfied customer is still profitable than searching for an unknown new customer. By having strong social media engagement, we can lead the search results in our favour.

Customers searching for your organisation will see all that you offer instead of sites that tarnish you. Moreover, the most-engaged companies in social media will have more likes, friends, fans and followers.

Ensuring reputational risk management has a direct effect on your brand. As a result, we see companies have their customers do some of that work for them free of charge. Customers not only give organisations they like some leeway during mistakes but even come to their defence when organisations need help by defending them as friends.

The market is more likely to trust a company whose top management uses reputational risk management as it has a direct correlation with brand equity, profit and success.

-- BERNAMA

Dr Barathan Muniyandy, a thought leader and risk management practitioner and trainer, is CEO of Handal Group Malaysia – a comprehensive Risk Management & Corporate Intelligence Consulting Group that has been advising business organisations and governments in Asia over the past 25 years.