How Real Should Your Brand Be Online?

By Lida Citroën

We've all seen it: Company A gets caught with its proverbial "hands" in the cookie jar; Company B is accused of being overzealous in its marketing and makes misleading statements to its customers; Company C shortchanges quality control, and the product suffers.

Aside from the legal parameters and restrictions put on companies for their online claims, liabilities, and responsibilities, companies today are finding it much more advantageous to address adversity head on, profess a "mea culpa," and answer the tough questions before the media, their competitors, and the online communities get ahold of the story.

We recently saw this with Netflix, the leader in home delivery of movie rentals. The company got ahead of the needs and tolerances of its customers, and the customers let Netflix know they were not happy. In a non-collaborative and non-transparent move, Netflix raised the price of its service offer to unprecedented levels without discussing the effects, impact, or benefits to its customers. Outraged customers took to social media to let the company know they were not happy with the move. While some may argue it is the company’s prerogative to price its product and re-price its service however it chooses, this move was representative of the impact social media has in the times in which we now live.

Without collaborating and informing its key online constituents, Netflix created backlash the likes of which it will be hard to recover from. To make matters worse, many online industry experts have spotlighted the company's lack of response to the online outrage as an example of corporate stagnancy.

Another example was the case of the CEO and co-founder of Wild Oats, who was caught posting negative comments about the natural food store chain in an attempt to affect the sale price of the company. When his name was revealed in connection to the posts, the blogosphere and online community responded with outrage and ridicule. Issues of transparency, influence, and recklessness were discussed in conjunction with the Wild Oats brand.

Most companies are not of the size or notoriety as Netflix or Wild Oats (now Whole Foods). However, most companies have stakeholders—including customers, staff, and vendors—who care about the company and look for a relationship with the values of the brand. We see the laminated posters asserting the company values in the lobby and on the website, and the stakeholders believe them to be true. When reputation is on the line, the stakes are high.

The opportunities for companies to take responsibility and accountability and own their mistakes online are many. The benefits generally outweigh the risks, and the rewards can be an increase in customer loyalty and authenticity indexes across social media.

Apple has done it, such as when the antenna issues on the new iPhone 4 caused uproar with loyal i-fans on blogs and social networking platforms. The company ultimately went to the microphone, admitted they had made a mistake, and issued a solution to customers.

Zappos also did it. When a glitch in the online retailer's software caused incorrect (lower) pricing, it decided to honor the lower price and eat the cost of the mistake.

We've all seen the celebrity apologies, politicians eating crow, and leaders of industry admitting missteps. Taking ownership of the mistake, offering a solution or remedy, and then getting back to the business of business is the highest road for most companies online.