An article I wrote for Money Marketing magazine, first published on 9th December 2010:
Much is being written about the potential rewards of social media, but after some high-profile PR slip-ups, many are addressing the risks associated with business and employee participation in social media, particularly if you operate in regulated sectors. The first complaint that refers to a firm’s Twitter messages or Facebook page may not yet have hit the headlines but it cannot be too far away.
In a business context, social media is a communication tool that helps with conversations between a business and individuals who may or may not be customers, so it can be a promotional and a customer relationship management tool. The potential for communicating with new audiences is huge, particularly for a service sector such as IFAs where this relatively low-cost medium is a great opportunity to communicate quickly and cheaply with previously difficult to reach potential customers
The FSA has stated its rules and guidance apply in a way that is “media-neutral”, so the rules will apply to mobile phone apps and any future new media as they do to more traditional methods of communication. Issues of risk must be covered and the overall principle of “fair, clear and not misleading” applies.
All businesses need to bear in mind that characteristics of social media platforms can serve to increase risk if not managed correctly. These multipliers include immediacy of communication, the viral nature of the platforms, transparency and ability to search for conversations and the global and open nature of the communications.
On Twitter, for example, you can only message in 140 characters or fewer. Does this give you sufficient space to cover all issues? If you retweet a message from a bank’s social media profile about its new mortgage product, are you recommending that product, or do you even have space to make it clear you are not?
With increasing complexity and particularly searchability of social media, users need to realise these communications, although perhaps not designed for wider public viewing, often end up that way. Tweeting is quicker and more casual than sending an email but has a potentially wider audience and can present greater risks.
If the potential rewards of social media for IFA businesses are to be fully realised, these risks must be managed through a combination of empowering the right people within the business, training these people to appreciate the risk points and the etiquette, putting in place internal and external procedures for problem management and if you are outsourcing these services to a third party, make sure your have robust and clear terms in place.
My top tip before jumping into the social media melee is to take a step back and set clear objectives about what you want to achieve. This will allow you to determine if the time investment required and increased risk represent a good deal for your business.
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