Sarah Fudin currently works in community relations for the University of Southern California’s Master of Arts in Teaching program, which provides aspiring teachers the opportunity to earn a MAT degree and teacher certification online. Outside of work Sarah enjoys running, reading and Pinkberry frozen yogurt.
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Word-of-mouth used to be the primary way that a business’s or individual’s reputation could be enhanced or damaged. But with the growth of social media, like Facebook, YouTube, Google+ and Twitter, almost anyone has the power to affect the reputation of even the largest companies.
A recent case in point was Bank Transfer Day, which began on September 29, 2011 with Bank of America’s announcement of a new $5 monthly debit-card fee. This prompted Kristen Christian, a 27-year-old art gallery owner from Los Angeles, to log on to Facebook and share an idea with friends: Let’s all withdraw our money from big banks and open new accounts with credit unions and smaller community banks. She even suggested a date: November 5. Next she created a Facebook event page for Bank Transfer Day. Within a month more than 80,000 people had RSVPd.
According to The Christian Science Monitor, approximately $4.5 billion was transferred from big banks to smaller institutions on or before Bank Transfer Day. This amount may be just a drop in the bucket compared to the total assets of the nation’s largest banks, but as a symbolic protest, the impact of Bank Transfer Day was immeasurable. Bank of America has dropped all plans to charge customers for using their debit cards and other banks, like Wells Fargo and JPMorgan Chase, have followed suit.
Netflix is another company that recently paid the price for ignoring the power of social media. The company announced its decision to form a new entity called Qwikster, effectively splitting the business in two. Customers would have to join both Netflix and Qwikster and pay nearly double in fees for the same services they were already receiving from Netflix alone. Unfortunately, Netflix seemed to have underestimated the impact of this change on customers as well as neglected to trademark the name Qwikster or check on who owned the Twitter handle. It turns a college student named Jason Castillo already was Tweeting under the name Qwikster and refused to give up the moniker.
Netflix was soon dealing with customer uproar over an increase in fees as well as lack of control over the name Qwikster. Within a few weeks, Netflix CEO Reed Hastings announced in a blog post that plans for Qwikster had been scrapped. The Huffington Post reports that more than 27,000 people commented on Hasting’s post, leaving disgruntled responses like, “Splitting Netflix in two so that you have Netflix and Qwikster is the worst business decision since New Coke.”
What can members of Generation Y take away from these examples? Simply that social media can be a power for either good or evil when it comes to reputation. When using social media channels, companies need to focus on creating two-way conversations with their customers. Using it as an avenue for electronic press release to announce changes that customers will perceive as negative introduces the risk of a very public backlash. In the future, the social media winners will be companies that maximize the opportunity for opening up a dialogue with customers before making controversial changes. Read more suggestions about the effective use of social media in business on SocialMediaToday.com.
On a personal level, social media can incredibly useful for building networks of friends and professional contacts, but when misused it can damage a reputation in ways that are hard to undo. College admissions offices and employers have started to research candidates by performing Google searches and visiting sites like Facebook and MySpace. Reputation.com, a leading online reputation management company, states that 70 percent of people responsible for hiring in the U.S. have rejected a candidate due to something found online. Guarding your online reputation and keeping your online image clean can make all the difference in the world when it comes to getting into the college of your choice or landing your dream job.
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Alban is a contributing writer at Home Loan Finder, a 
