The potential cost of an SERM crisis
Posted by Louis Venter on 18 Sep 2009 | Tagged as: SERM
Last week, the Guardian broke the story about employees at PC World and “Currys” who had created a FaceBook group that mocked customers for their ‘stupidity’. It highlights the need for a good online reputation management strategy, and it astounds me that they didn’t have a scanning strategy in place.
One of the worst comments I saw reads: “Short answer: No. Long answer: No and go f*** yourself you hardfisted, smallwalleted, annoying, ignorant tightfisted f***tard.” Nice. Makes you want to run up and buy from them, doesn’t it?
A mere week later and the piece ranks on page one for the brand search “Currys” and page two for “PC World”. With a cumulative brand search volume of 5 million monthly searches, this is a major issue for their holding company. But, the cost isn’t limited to the damaged public perception of the brand.
If we roll this forward and assume that the piece will soon rank above the fold we can take a reasonable guess on what the impact on sales revenues could be.
If 5% of the 5 million decide not to purchase after Googling the brand, and we assume the conversion rate from brand traffic is about 5% and the average sale is around is £150, the resultant loss of revenue through the web channel would be £1.87 million for EVERY month that the piece continues to rank well.
In a recent post on SearchCowboys, I wrote about a typical route of a SERM crisis and the first step is usually inaction. In this case it’s the inaction of the corporate communications team / PR Agency to keep abreast of the digital PR trends and initiate a good online reputation management strategy.
The cost of such a strategy is far less than the cost of a crisis.
