Crisis advantage: How real-time alerts reduce the impact of a brand crisis
In today’s information economy, companies must take advantage of AI to identify relevant information in real-time.
In an era when information travels at the speed of the internet, a brand crisis can easily catch any company off-guard — garnering traction on social media and in news coverage while corporate leaders play catch-up. According to a recent PwC study, companies with over 5,000 employees have averaged one meaningful crisis a year for the past five years. The consequences can be significant, with businesses experiencing widespread operational, financial, reputational and strategic impacts.
But what if you could proactively limit the effects of a pending crisis unraveling on social media thanks to an early alert? This is called a crisis advantage. It’s quickly becoming the differentiator between businesses that confidently navigate crises and those that find themselves haphazardly reacting to unexpected events.
The crisis advantage explained
A crisis advantage denotes the amount of time companies have to act from the initial indication of a potential crisis to peak online chatter, major media coverage, and business and operational fallout. The time advantage can range from minutes to days. But in all cases, it allows companies to more thoughtfully evaluate emerging risks, take action to reduce negative impact, and protect their reputation.
Unfortunately, corporate crises have become commonplace. In 2018, the Institute for Crisis Management (ICM) tracked 792,336 stories of business crises reported in the news. Sixty-seven percent of the crises were smoldering problems that the ICM contends could have been prevented or mitigated if addressed earlier. The crises range from mismanagement and discrimination to cybercrime and labor disputes.
Social media’s role
Most social media managers are constantly monitoring feeds for percolating news about their companies and brands, sifting through the millions of tweets, news articles and other public sources. But this reactionary approach will only surface a scant number of tweets — making it a futile effort that relies on companies stumbling on relevant social media activity. Instead, companies must take advantage of artificial intelligence (AI) to identify relevant information as early as possible — before the information gains traction.
AI helps scale and accelerate your event and risk detection efforts, uncovering and highlighting potential crises before they reach a critical mass. While organizations can spend tens of thousands of dollars on social media strategies to raise visibility and increase mindshare, there are numerous examples of how brands have stood out on social media for all the wrong reasons.
For insurance and financial firms, in particular, there are also external, unpredictable events that can affect an organization’s bottom line, such as natural disasters and major accidents.
In today’s information economy, companies must take advantage of AI to identify relevant information in real-time. It is impossible to manually sift through millions of tweets and other publicly available information sources on one’s own, every minute of every day.
Why minutes matter
Having more time to assess and respond to critical data can mitigate and reduce the impact of a pending crisis and lend more opportunity for decision-makers to get in front of the story before it breaks in news outlets.
Absent advance warning of a potential crisis, companies often find themselves in reactive, damage control mode, with 70% of U.S. companies experiencing crisis situations at a higher rate than their global counterparts (58%), according to research from Hotwire.
While some businesses choose to remain silent during a crisis, that tactic opens the door for others, including competitors, to narrate the story about your brand’s role — without your input — placing the brand’s reputation and bottom line at risk.
In contrast, companies using real-time alerts put their crisis advantage to good use for preserving brand safety and beyond. With the advent of social media and the public’s willingness to share events in real-time, social platforms surface relevant, breaking information that could not otherwise be discovered.
Millennials and the generations succeeding them have matured in or grown up during a digital-first, rapid-response age. At the same time, other common experiences such as retail chatbots have changed all our expectations for quick awareness and response from their favorite brands. It is imperative that businesses adapt to keep up with such evolving expectations.
The ability to thoughtfully and strategically address a crisis can limit brand damage, legal fallout, and operational missteps. Such proactive action can have a real impact on company finances. Consider that companies lose an average of 5% of shareholder value in the year after a crisis. A well-planned crisis response that gets in front of the news helps stem potential losses and gets the organization back on track sooner.
Companies ultimately do what they can to prevent crises from happening. But in the event that one does occur, a crisis advantage is key. Taking advantage of real-time alerts to receive the earliest notice possible will help your company and brand navigate crises better and minimize economic and reputational consequences.
Michael Affronti is the senior vice president of product at Dataminr. The views expressed here are the author’s own.
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