Tag Archives: crisis management

1st2c CGM Report: Northern Rock – Social Media Becomes People’s Crisis Management Mechanism

No doubt September 13, 2007 will earn itself a moniker. Perhaps it’ll be remembered as the ‘terrifying Thursday’ that saw hundreds of consumers queuing at Northern Rock branches, desperate to withdraw their savings, as Britain’s 5th largest mortgage lender found itself in a liquidity crises. Those six days, in which people queued for hours to get at their savings, have already been likened to the 1929 Wall Street Crash and the collapse of the Weimar Republic, the following summer in 1930’s. Behind the headlines, however, 1st2c (www.1st2c.com) analysts observed an emerging social phenomenon, facilitated by the networked market reality, that might change the way market crises are handled in the future.

Using its unique Online Strategy Research© tools, 1st2c identified a change in the way social media is now being used by consumers in crisis situations; A change from deference to reference, from reaction to pro-action, from coping to management.

Chronicle of a crisis foretold

1st2c analysts monitored online resonance on the Northern Rock crisis throughout the first 10 days of its unfolding.

When news of Northern Rock’s temporary cash-flow problem broke, thousands of Britons went online.

As indicated by online mind-sharing behavior (see graph) consumers were highly reactive to media coverage – especially about short-term implications and measures taken by the government and BoE (Bank of England).

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As the event unfolded one could observe a shift in attention from the immediate issue of mortgages to the more macro scope of savings and the economy as a whole.

However, while using the internet for seeking and sharing of information is not new, the Northern Rock affair generated new levels of depth and sophistication of online peer to peer support.

Perhaps like never before in this type of crises, social media was used by consumers as a collective crises management mechanism.

Social media emerges as the people’s crisis management mechanism

While mass media voiced crisis social media voiced alongside concern also reassurance, proportions and practical advice.

Not only were concerns and questions answered by calculated reasoning, counter factual possibilities, framing of possible scenarios and suggested solutions. Many individuals across the nation and beyond were informing, reassuring and convincing each other that ideas about withdrawing savings from Northern Rock accounts were irrational and short sighted. It was not uncommon to find criticism of “the media” as over-reacting and “sensation-alizing” the situation for commercial reasons while the real picture is much more balanced.

Perhaps even more interesting were the numerous online entries suggesting that the Northern Rock ‘crisis’ might actually present a wise long-term investment opportunity. This is because the bank’s shares are so low and its sound base and the government’s decisive support will eventually put it back on track to recovery and growth.

These insights suggest the emergence of fundamental change in the balance of powers that shape consumer perceptions, attitudes and behavior. While the traditional models of public opinion forming were largely dominated by corporate media, government media and mass media, the networked market gives rise to a challenger to that dominance — the people’s media.

The Northern Rock crisis is a vivid reality check to decision makers. It demonstrates how the networked marketplace shifts from reactive to proactive. Consumers take the media with a grain of salt and don’t wait for or trust corporations and institutions in defining their world view.

In the face of a shake in confidence in financial markets and the development of adverse economic scenarios it may be advisable for decision makers to consider new strategies for managing online social media.

Perhaps the cornerstone for these strategies is the acknowledgment of the increasing engagement power of peer-to-peer communication.

Precisely for this reason, the understanding of the mechanics and dynamics of online consumer-driven influence is a key aspect of 1st2c’s Strategy Research© methodology.

An IMPORTANT message from the public to crisis managers

BoE’s rapid intervention with decisive measures and the clear presentation of these measures to the public through the media invoked reactions reflecting a sense of control and confidence among the general public.

At the same time, online resonance reflected the existence of a strong unmet need in the crisis management equation!

Numerous discussions conveyed the feeling that while the bank side of the equation was very effectively addressed, the public side of it was less so. Many felt that the government and BoE managed the situation “over their heads”, leaving them with only vague authoritative picture of the implications of this event for their personal finances management.

These feelings were further aggravated by the media’s intensive preoccupation with apocalyptic spin-off scenarios such as a downturn in the real-estate market, interest-rate hype, developing recession, etc.

Concerned Britons expressed a need for authoritative guidance on what they should do to secure their assets in the short term, and how they can protect their assets or adjust their financial plans in face of the talked about adverse economic scenarios.

The expectation for support and guidance was only partially met by peer advice as the expressed need was addressed to authoritative bodies such as the government and BoE.

As difficult as it is to provide long-term advice in a dynamic situation it is noteworthy that the need expressed was psychological as much as it was practical. Online discussions conveyed a strong need for attention and a demonstration of care by authorities for the public first, and only then expectations for guidelines in an apparently still developing situation.

It may well be that the networked market reality that enables immediate support and advice from peers, also changes the expectations from crisis managers in institutions and corporations…

1st2c in a nutshell

1st2c (www.1st2c.com) is the home of Online Strategizing Research© – the most comprehensive data-to-strategy methodology available for the networked market. Strategizing Research©’s insight and opportunity driven orientation creates a vivid picture of mindsets and behaviors of the networked marketplace and adds new dimensions to both online and offline strategies.

1st2c works with Fortune 500 companies on adding new dimensions to overall marketing strategy and on monitoring and engaging the networked market.

 

Ofer Friedman
Chief Research and Client Officer
1st2c

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1st2c CGM Report: The Michael Vick Case Study

When the publications linking Atlanta Falcons star Michael Vick with alleged illegal dog fighting exploded in the media it wasn’t much of a surprise that, in the age of players standing out as culture heroes and role models, the issue will have negative implications for Vick’s reputation.

But the big question for sports industry crisis management professionals was to what extent this will have collateral effects on his team and the National Football League as a whole!

1ST2C, an online CGM research and consulting company and home of Online Strategizing Research©, looked at this case study as an opportunity to better understand the dynamics of crisis detection and crisis management in the networked market reality.

1st2c analysts followed up on online resonance across Internet’s communities on the affair before, during and after the strom’s eye.

Volume of Mind-Sharing Posts on “Key Players”

in The Michael Vick Dog Fighting Affaire

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Consumer mind sharing activity points very clearly at a highly alert and responsive broad fan base.

Mind-sharing volumes surging far beyond “regular” levels are a clear indication of an “Alert situation” in 1st2c methodology, especially as higher-than-normal levels maintained over a week-long period. However, level of resonance gradually decreased after the first days indicating the loss of crisis momentum (for reasons subject to a different analysis).

As for the issue of “collateral damage” to Atlanta Falcons and the NFL.

Interestingly, while the NFL was “dragged” into the public discussion Atlanta Falcons were much less a “side to the issue” in terms of volume of talk “shadowing” that of Michael Vick’s.

Analyzing mind-sharing on the issue revealed a critical insight on consumer psychology (or rather fan psychology).

It appears that involved fans were separating between “personal moral” and “sports moral”. While the episode stirred controversy on the personal moral level it was not perceived as indicative of the team’s culture of sportsmanship. Actually, the Atlanta Falcons were perceived as victims of the situation rather than having anything to do with its facilitation. This psychological “framing” of the situation not only shielded the Falcons from snowballing popular resentment but also encouraged their fan core to “spring to their defense”.

As for the NFL, it’s visibility was associated with it’s proactive management of the situation and the affair’s overall development (like Nike’s endorsement suspension). Like in the case of the Falcons, the NFL too was not “held blame” for the happenings.

As for Nike’s part, that’s a subject to different analysis.

Crisis management insights

1. “VICTIM FRAMING” IS A POWERFUL THREAT NEUTRALIZER

2. DETACHMENT FROM CORE INTEREST (FOOTBALL) HELPS AVOID “CONSPIRACY THEORIES”

3. PROACTIVE MEDIA RELATIONS INITIATIVES MAY CREATE ATTENTION BUT SUCH ATTENTION WILL NOT “AUTOMATICALLY” CARRY ADVERSE LINKAGE (i.e. A CRISIS SITUATION IS AN EMPOWERMENT OPPORTUNITY FOR VICTIMS)

1st2c will continue to monitor the market and provide insights for better understanding and engagement of the networked market©.

1st2c in a nutshell

1st2c was established in late 2004 as a full service Consumer Media research and strategy powerhouse by internet and brand strategy veterans with extensive international experience.

1st2c is a forerunner of the Online Strategizing Research©. This strategic planning driven research provides vivid market pictures, in-depth understanding of market dynamics and seamless transfer of insights and opportunities to actionables.

1st2c works with Fortune 500 companies on adding new dimensions to overall marketing strategy and on monitoring and engaging the networked market.

Details: www.1st2c.com

 

Ofer Friedman

Chief Research & Client Officer

1st2c

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