Leading On Marketing: Risk Management Of Social Media Marketing

Last year, a lawyer friend of mine left her law practice to become an entrepreneur.

A life-long animal-lover, she opened a pet store and joined the multi-billion dollar pet industry.socialmediarisk

Then, her startup struggled to bring in customers. Fortunately, she contacted a social media consultant long before her financial situation became dire.

As a former lawyer, she weighed the pros and cons of the use of social media in customer development. Law firms often lag behind in social media, so she was in unfamiliar territory.

So, it was perfectly normal for her to ask, “Is the risk of being sued over social media worth it?” Her consultant replied, “Yes! Social media is here to stay and most of your customers prefer it. The law is in a state of flux right now.”

Social Media Risk-Benefit Analysis

Social Media Law

New technology is outpacing the speed at which legislatures can react and create new laws. Many questions of law can be resolved up front via a signed, written contract but often no contract is used.

Social media is evolving daily and raises multiple questions of law. Here are a few examples:

Who owns and has access to passwords?

By the summer of 2012, the public outcry about employers seeking Facebook passwords from job candidates reached is peak. As of this summer, twenty States have laws that forbid companies from requiring that job candidates turn over their social media passwords.

Who owns a Twitter account set up by an employee?

A contract between the employer and employees can add clarity and avoid expensive litigation.

In PhoneDog v. Kravitz, the Twitter handle @phonedog_noah established by Noah Kravitz had 17,000 followers on Twitter. When Noah Kravitz resigned, he changed the Twitter handle to @noahkravitz. Subsequently, a dispute arose over compensation for followers Kravitz acquired while working for the company. A lengthy lawsuit in Federal Court, with huge legal fees, ultimately settled out-of-court with undisclosed terms.

A contract, indicating that accounts used or established on the company’s behalf belong to the company, could have solved the problem and prevented the need for litigation. Furthermore, the employee handbook can refer to the social media policy indicating that if an employee leaves, the company owns the social media account.

Are your company’s trade secrets protected online?

Your competitors want your customer lists and vendor lists. If these cases are argued in court, a Judge will ask if they are secret or confidential? If they are publicly known, they are not protected under the law. Here are a couple of examples:

If your business contacts match your LinkedIn contacts, they are a publicly known replica of a customer list and are no long protected under the law.

Keep in mind that you do not own your public tweets because your expectation of privacy is gone.

For an in depth review of this area, see Business Situational Awareness, which addresses how your social media strategy can compromise your business assets, including trade secrets.

Managing Social Media Risks

State and Federal lawsuits involving social media are increasing while the legislation lags behind. Since outcomes vary case-by-case, we lack sufficient clarity on how to manage these risks.

If you are concerned about your social media policies, contact a social media consultant, a social media lawyer and insurance broker familiar with cyber insurance that can be tailored to your business.

The Benefits Of Social Customer Relationship Management

A few months after implementing a customer relationship management strategy using social media, my friend’s business began to flourish, as it should have done in a prime location in a growth industry. Here’s why:

The Benefits Of Social Media

Social media introduced excellent tools and customer feedback data streams allowing my friend, the pet storeowner, to monitor customer perceptions and trends, such as:

  • Listening to what the customers need.
  • Interacting with the customers based on their needs.
  • Making emotional connections.
  • Leverage customer stories and testimonials to energize everyone involved in the business and the brand.

Active Listening

My friend, the pet storeowner, needs to be where her customers are – online. If you listen to your customers on social media, and engage with them, you are developing a whole new set of channels of communication. For example, by using surveys, user tests for website interaction and customer comment databases, you will allow customers to run the show, while you listen and then interact.

Customer Feedback

Are you aware of the power of your customer’s voice? If your customer speaks, you must hear them and address their valid issues. Of course, you can filter out anything outlandish.

Your own customer surveys can help you to prioritize issues and even help you to decide whether to make changes or launch a new product or service.

Emotional Connection

Social media allows people to connect with other people in an emotional way. You should show the customer that you care and that you appreciate them.

Customer Loyalty

If you meet customers’ needs, then you build customer satisfaction resulting in brand advocates.

Keep in mind that once you meet your customers’ basic needs, you need to make them feel valued by offering even more. For example, some companies offer an online community that allows for knowledge sharing and Q & A between customers.


The social media risk-benefit analysis reveals that the benefits of using social media far outweigh the risks.

We face risks every day in business, and most are manageable. Thus, we should welcome the technology and tools to help us improve our business despite the risks.

Dawn Kristy

Dawn Kristy

Dawn Kristy has a writer’s love of words and storytelling, an editor’s keen eye for details, a risk manager’s proactive caution and an advocate’s desire to help those in need whether in the for-profit or non-profit community. Dawn is an attorney licensed to practice law in NJ and PA with over 25 years work experience in law, insurance, reinsurance, business development, writing, editing, presenting, sales, fundraising and campaigning. Dawn had the good fortune of working abroad for nearly 13 years gaining first-hand experience in cross-cultural client relationship management, business development, marketing and communications. Dawn has successfully led projects with determination and compassion, developed new business and raised funds for non-profit organizations. Disclaimer: This blog post is made available for informational purposes and is not intended to be a substitute for professional or legal advice. No attorney client relationship is formed or implied between you and the guest blog author or the blog/web site publisher.
Dawn Kristy
Dawn Kristy




  • September 8, 2014


    gingerconsult Thanks Jen!

  • September 8, 2014


    Clarkehouse Thanks, David. dawnkristy has a great insight into the law and #socialmedia #bealeader

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