28 technology: social media
Using social media to win friends and have new ideas (while avoiding law suits)
Although social media has become a standard marketing channel for most businesses, it is still viewed by many with suspicion and mistrust, writes Will Richmond-Coggan, partner, Pitmans LLP
For those who have worked out the subtle rules and overcome the challenges of social engagements with customers and potential customers, the rewards can be considerable. For every success story in this area, however, there are probably half a dozen reported disasters to deter other companies from developing their strategy around social media engagements.
For some, social media looks like the ideal platform to seek to leverage an established customer basis to crowd-source new ideas, for everything from branding and advertising copy, to new flavours of crisps ...
In the early days, it was common-place to see businesses using social media as a broadcast channel, putting out traditional advertising content which was not adapted to the social space beyond limiting it to the constraints imposed by the particular platform. It was unpopular, though. Existing and prospective customers resented having content pushed on them in this way. So a business on Twitter which decided to use trending hashtags to gain prominence for a sale it was running got into trouble with its followers when they used trending hashtags connected to the Arab Spring uprisings.
But there are other risks. Businesses, in the financial sector particularly, risk falling foul of the detailed rules around the promotion of financial services. Sending a tweet, or posting a pictorial advert on Facebook or Instagram, can amount to a financial promotion if certain details about the product offering are included. This in turn can trigger the obligation to provide the statutory warnings about the risks associated with the particular product or offering and if overlooked, the consequences can be severe.
Even where businesses enter into a true social dialogue with customers, they have found that this brings its own problems. Disgruntled customers use social media channels to circumvent delays on customer service lines, and to vocalise their complaints in a more public and harmful way. Good customer engagement in the social space can address this, but too many businesses ignore such negative postings. Worse still are those who seek to curtail any negative comment by reliance on draconian contract terms. Thus we have seen instances where guests at a hotel or, (in the US) users of a wedding planner’s service, have tried to voice complaints about the quality of the service they received, only to be threatened with litigation on the basis of a non-disparagement clause within the service contract.
The negative publicity that has gone along with such attempts seems to have curtailed them, in the UK at least, but the fact that businesses have felt the need to try to constrain negative online commentary about their products or services in this way demonstrates how harmful such adverse criticism can be. But, done well, the benefits of social engagement can outweigh the risks. Customers who like and feel engaged with a
www.businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – APRIL 2016
brand will tend to be good advocates for its offerings. Recent research demonstrates that increasingly the most significant factor in a consumer’s decision to buy is genuine positive reviews from other consumers.
Some businesses, though, are even more ambitious in what they aim to achieve through engagement with customers. For some, social media looks like the ideal platform to seek to leverage an established customer base to crowd-source new ideas, for everything from branding and advertising copy, to new flavours of crisps and even new product lines. Where this can be made to work, the advantages are self-evident. The customer base feels more strongly associated with the product, and feels that their views are being taken into account by the business. They are a free (or very low cost) and motivated workforce generating intellectual output which would normally represent a substantial overhead, and they bring a valuable outsiders perspective.
But if the rewards are great, so too are the risks. Crowd- sourcing intellectual property needs to be carefully arranged, and subject to appropriate binding contractual assignments of any IP created by the customer base, so that the company is free to exploit that for its own commercial benefit, without being exposed to claims by the inventor down the line, looking for their share of the profits. Considerable care must be taken that ideas which look original do not involve the infringement of some other business’s IP, because it will be the business, and not the originator of the idea, who will be on the receiving end of a lawsuit if they get that wrong. None of this is to suggest that companies should not be seeking to innovate in this area – but they need to go into it with their eyes open, and mindful of the risks that these strategies carry with them.
Will Richmond-Coggan is a partner and solicitor advocate in the dispute resolution team at Pitmans LLP. He specialises in online reputation and IP disputes for a range of business and private clients.
Details: Will Richmond-Coggan 0118-9570369
wrcoggan@pitmans.com
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