The carefully crafted image that famous brands spend years developing is painstakingly maintained through a combination of PR, marketing and sleek advertising. But such are the vagaries of public opinion, it can all be undone in the time it takes to publish a tweet. The important lesson for businesses to learn is that reputation is not something that can be manufactured and set in stone. It has to be sustained over time through ongoing engagement and interaction with customers. As Warren Buffet once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

Of course, learning to do things differently is a challenge for companies who are trying to grapple with the unprecedented growth of social media. A recent report from Forrester showed that 86% of online US adults and 79% of European online adults engage with social media. It’s further estimated that over a billion tweets were posted every 5 days on Twitter in 2011. The rules of engagement have shifted permanently and companies must adapt or die. It’s no longer enough to sit back and rely on traditional media to act as a filter for news announcements. Traditional media is no longer in control of setting the agenda for public discourse and it is being displaced by a growing chorus of informed and engaged consumers. This non-linear media landscape has many benefits for companies, in terms of facilitating direct access to consumers, but the advantages (if not managed correctly) also carry an associated risk of reputational damage. It’s important for companies to mitigate this risk by adopting a social media engagement strategy which incorporates a three-pronged approach: anticipate potential threats, diffuse negative sentiment and amplify positive sentiment. Reputation is the most important intangible asset that a business has, but it also has a real subsequent impact on share price and profits. No company can afford to turn a blind eye to its reputation.

It’s difficult to anticipate all potential reputational threats and sometimes a crisis emerges out of nowhere and unleashes severe damage. Unless you’ve been living under a rock for the past few weeks you will be aware of the internet furore which almost cost Papa John’s its reputation as one of America’s favourite pizza chains. Papa John’s is the third largest pizza restaurant in the United States and has a presence in at least 30 other countries. On its website the restaurant chain proudly boasts about its ‘legendary customer service’. However, in just a few short minutes its entire reputation was compromised by the actions of one single employee. On January 7th a Papa John’s employee identified a customer as ‘lady chinky eyes’ on a sales receipt. After examining her receipt, the customer, Minhee Cho, posted an image of it on Twitter with the following tweet ‘“Hey @ PapaJohns just FYI my name isn’t ‘lady chinky eyes.” The image quickly went viral. Three hours after posting the offensive receipt on Twitter, the Huffington post blogged about the incident in an article headlined: ‘Lady Chinky Eyes’: Papa John’s Store Calls Woman Racial Slur In Receipt’. It took a further three hours for Papa John’s to respond to the incident and offer an apology. The spokesperson eventually reassured the public that the employee in question was being fired.

This incident operates as a stark reminder to businesses that they need to be more reactive when their reputation is under threat. The considerable delay in responding to the issue meant that a storm of protest was allowed to develop. Once Papa John’s responded to the incident in a clear, unequivocal statement, the online backlash dissipated. It is vital that companies engage at the earliest stage to counter negative commentary and put forward a statement outlining what steps the company has taken to address the issue. By failing to act swiftly companies risk escalating the problem and inflicting long term reputational damage. .

For information about Digimind’s Social Media Engagement Solution go to www.digimind.com