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Social media seems like such an pleasant, magical journey for a business to embark on. Ask a mundane question on Facebook, tweet a photo of your lunch, and the world will love you (and ultimately buy whatever you’re selling).


But social media occasionally causes instant public relations disasters – and these crises can rarely be controlled or contained.


Take Progressive Insurance, for instance. The insurance company is currently embroiled in a social media scandal that accuses them of defending killers to avoid honoring an insurance policy. The story set the Internet on fire, and Progressive’s Facebook page was flooded with pledges from customers to cancel their service.


Here are some excerpts – just from the past hour:

  • “Your company sucks!”
  • “I will NEVER do business with this company because of their actions.”
  • “I am a customer – but not anymore.”


If that wasn’t bad enough, Progressive responded to the crisis with automated robo-tweets that stated, “We feel we’ve handled the claim within our contractual obligations.” Ouch – that one will cost you. The company is now under hot scrutiny that has caused many clients to terminate their coverage. Maybe Matt Damon’s character in The Rainmaker should have taken his legal insurance fight to the social media battleground.


If you think this can’t happen to auto dealerships, I’ll direct you to Timothy Martell’s recent Wikimotive post about Clay Nissan, which came under its own social media fire after terminating an employee just three weeks after she returned from brain radiation treatment. Now her relatives have started a boycott against the dealership using social media, which (as Martell puts it) “can make or break a business with equal aptitude.”


Realize that your actions can become an instant PR nightmare when broadcast over the internet, and make sure you monitor your social media and adequately respond to complaints and mentions.

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Tags: Both, Cuts, How, Media, Social, Ways


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Comment by Stephen Jackson on August 22, 2012 at 9:31am

Just a quick update for anyone interested: Progressive settled with the Fisher family a few days ago, paying out "exactly what they asked for." This is completely separate from the $760,000 court order made last week.

I guess social media can really cost you.

Comment by Timothy Martell on August 22, 2012 at 9:17am

Well put, Stephen. These are the kind of stories that cause businesses to make the choice to "not be involved in that social nonsense." What they fail to realize is that not having a voice at all makes you subject ONLY to negative with no chance to showplace the positives associated with your business. 

Your consumers are already there, wether you like it or not. Another mistake is the set it and forget it mentality. We saw this when websites were a new thing. Remember this? "Ok Johnson, we've got a website now! Well the internet is covered. What's next?"

Having a Facebook page isn't a social media strategy. You need to be active. You need to "humanize" your company. You need some one in charge that knows what to do when something goes wrong. 

HINT: "We feel we've handled the claim within our contractual obligations." Isn't it. In social media, being right isn't what counts. Being perceived as one of the "good guys" is.

Comment by Brad VanMagness on August 20, 2012 at 2:07pm

The Clay Nissan Story is a great example of things getting out of hand quickly, I've been following that story since Tim posted it and the Boycott Clay Nissan Facebook page has 31,000 likes now. That's 31K people who will likely never buy a car from Clay.

Comment by Greg Devlin on August 20, 2012 at 1:57pm

Poor Flo, looks like she might be out of the job soon if Progressive doesn't get their act together.

Comment by Andrew Martin on August 20, 2012 at 1:39pm

The automated tweets probably put the nail in the coffin on this one. As a business fighting negative PR on social media you have to realize that people like teaming up against faceless organizations, and for lack of a better phrase "sticking it to the man" on social media. The best thing you can do even if you think you're right is to make an honest and genuine apology.

Comment by Abner Goncalves Cavalcanti on August 20, 2012 at 1:14pm

It surprises me that people still underestimate the power of social media. Some people learn the hard way, including me. 

Great article. I'm definitely going to forward this to a few business friends. 

Comment by Zach Billings on August 20, 2012 at 1:10pm

It's also important to note that it's never about who is in the right. Progressive may very well be legally correct, as is the case with Clay Nissan, but the public image of a dealer can still be ruined by an action backfiring on social media.

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