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