When will they learn? Despite the many examples of companies hazarding damage to their brand by committing social media faux pas, some still wade into the arena without thinking through their actions. Where companies like Taco Bell and General Mills (NYSE:GIS) weathered their social media miscues relatively unscathed, router maker Mediabridge Products is learning that doubling down and issuing no apology for heavy-handed tactics threatens its future as a going concern.
The Medialink router maker rightly took offense to a caustic review of its products on Amazon.com that incorrectly said the company paid for positive product reviews and copied its design from another manufacturer. When that quickly became the "most helpful" negative review, Mediabridge's lawyers sprung into action, threatening to sue the reviewer and telling him the only way he could avoid legal action was to delete his negative product review within three days, stop making any other negative comments about the company, and agree to never purchase or comment about a Mediabridge product again.
Um, bad move.
Welcome to the terrordome
The reviewer posted the lawyer's letter on Reddit and asked for financial help with the possible legal action. While he first altered the review and then deleted it, the hounds of hell known as the Reddit community were already unleashed. They barraged Mediabridge with invective, not only on Amazon, where reviews of its products became worse than the original that stirred up the controversy, but on its Facebook page as well, where it attempted to don the mantle of victimhood by claiming all it wanted was the "libelous" accusations removed. Commenters unleashed a fusillade of criticism so intense the company deleted its entire Facebook account.
Worse for Mediabridge, however, was that Amazon sided with the reviewer and suspended the router maker's selling privileges for violating their terms of service. Only Amazon can remove an improper review and if you try to do that, you violate the TOS. That poses a bit of a problem for it, as other than its own website, the e-commerce giant is the company's only outlet for selling its products.
What difference does it make anyway?
Last December, Yum! Brands (NYSE:YUM) came off as callous and flinty after its Taco Bell unit developed the wildly popular Locos Tacos and turned it into a $1 billion product, but the Mexican fast-food chain was only willing to donate $1,000 to cover the medical bills of the customer who suggested the idea to Yum! when he died from cancer. They also wanted to squash the idea he should get any more recognition than that, but it turned into a PR nightmare as Taco Bell's Facebook page lit up with criticism. Is it coincidence that after eight consecutive quarters of positive same store sales growth, Taco Bell recorded a 1% decline in comps in the first quarter? Perhaps, and the Internet has a short attention span, so letting the rage blow over may be the best option.
General Mills similarly said more than it should have last month when it tried to sneak in changes to its legal terms that would have prevented someone from suing the company -- even because of its own negligence -- if a consumer merely "liked" its page on Facebook. After initially adopting an "everyone does it" defense and saying the policy was misunderstood, the Facebook pages for products like Cheerios quickly erupted in negative commentary as consumers swore off its brands. The cereal maker realized it was a losing battle and retreated on the wording change.
Cereal accounts for 16% General Mills' $18 billion in annual sales and Cheerios is its best-selling brand. Unnecessarily angering blogger moms who typically introduce Cheerios to their infants as one of the first cereals to eat just isn't worth the risk.
Double or nothing
Mediabridge, though, seemingly can't just admit its mistake and move on. Instead it says it has the right to defend its products and Amazon is threatening our employees' livelihood. Besides, we never actually sued the guy. Even if the e-commerce giant reverses course and reinstates its selling privileges, how will Mediabridge overcome the ill will it created by its actions?
Social media can be a powerful medium for connecting with your customers. It allows them to identify publicly with your products and create a level of loyalty that can result in higher sales. But when the relationship sours -- particularly when you shoot yourself in the foot -- it can be an even more powerful force against your best efforts and an utterly lethal one against your worst.
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Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Facebook. The Motley Fool owns shares of Amazon.com and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.