We have no doubt the people at Forbes are smart people, but this article about how to keep another “flash crash” of the stock market from happening offers advice that sounds hopelessly outdated, naive, and in fact dangerous for businesses to follow. Basically, the author claims that a large organization can control the message people hear about it, on a social network no less.
Please, everyone, take note: in the 21st century online world, you can not control what people say about you. We doubt you could before, but now more than ever it’s important to think less in terms of controlling what others do and more in how you frame your response to an event.
To be fair, Forbes contributor Jake Zamansky is talking about a very specific method of communication: how companies report official financial news for the Security and Exchange Commission. But take a gander at this troubling logic:
The potential for social media to do harm to investors became apparent last week, after a hoax used the Associated Press Twitter account to post the supposed breaking news that President Obama had been injured due to explosions at the White House. That report wiped out $136 billion in market value, with the Dow quickly dropping 150 points before snapping back.
… “The vulnerability, in part, stems from the Securities and Exchange Commission’s decision to let companies and executives use social media sites like Twitter and Facebook to broadcast market- moving news,” the Times reported.
… Until controls are in place, the SEC needs to require all corporate communications—meaning earnings, major announcements, guidance—by way of press release issued through nationally recognized outlets.
See the problem yet? Here, we’ll highlight it: “The vulnerability, in part, stems from the Securities and Exchange Commission’s decision to let companies and executives use social media sites….”
We’ll buy that the SEC’s decision may encourage reporters and executives to put too much reliance on social news, which is often chaotic and rife with inaccuracies directly after any major event (as we cautioned on our blog recently).
But even if the SEC, the financial news companies, and the government all put their collective power together, we doubt they could ever completely ban people from passing information to each, especially with the ease and ubiquity of social media sharing. After all, what’s the difference between a hot tip and a false rumor?
Besides, this top down approach wouldn’t even address the real problem. To quote the Forbes article again,
A huge problem for markets is the indiscriminate trades of turbo-charged, high-frequency trading systems that are built to make trades based on keywords in milliseconds, according to the Times…. In a fraction of a second, the program traders can move the market, get in and out, and normal retail investors are left in the dust, suffering major losses before they even know what hit them.
Keywords aren’t assigned by some great and all-powerful Google wizard. They’re generated by thousands of exchanges between various people and organizations online, including private citizens and foreign nationals. Forbidding executives and reporters from engaging in these conversations would prevent people with actual knowledge from clearing up the confusion.
In the aftermath of that infamous fake AP tweet, online “first responders” like AP reporter Sam Hananel quickly corrected the info circulating around. That kind of response got the markets back on track, not any high level meeting from the SEC.
This way of thinking is still prevalent in many businesses who claim they want to grown their online presence. People think they can simply buy positive search results or social fans, then sit back and reap the rewards. These same people then get upset when they see their rankings slip due to inactivity or negative comments on a social profile.
Here’s a better way to do it.
A new business moved into our neighborhood in April: Cowfish, a sushi/burger bar (yes, really, you read that right). This restaurant is based out of Charlotte; Raleigh is its second location. They, like anyone new to the area, want to put their best feet forward.
But rather than try to control how people perceive them, Cowfish is working hard to listen to the public and respond as quickly and courteously as possible. Here’s how the Raleigh manager described his company’s approach in a Triangle Business Journal article,
… we believe one of the most unique aspects of our approach to social media is that our team strives to monitor online mentions 24-7 and join the conversation when relevant or necessary. Social media plays a vital role in our ability to do what it takes to ensure our customers are completely satisfied. Of course, we love the kudos and accolades we receive, but we’re always quick to jump in the conversation if there is anything we can improve upon, too.
A quick glance at Cowfish’s Facebook Page shows they’re as good as their word. When one diner complained about the service and the food, Cowfish immediately responded with an offer to rectify the situation, commenting “We have no excuse for our actions.” Another commenter wrote that despite a “disappointing outing,” he would return because his complaints were addressed.
In fact, Cowfish credits social for media for its expansion success:
We have built up such a vocal and passionate following at our first location in Charlotte – we call our fans ‘Cowfish Junkies’ – that our very first step was informing them about our expansion plans. The Cowfish Junkies played a huge role in helping build a buzz and get the word out about our new location in Raleigh.”
When it comes to getting your message out there, talking down to people or limiting the conversation just doesn’t cut it anymore. Social media requires and rewards those businesses who are willing to trust their customers, and who will take the time to listen and work toward resolving complaints rather than pretending they didn’t happen.
Don’t be an ostrich. Be a Cowfish instead.