Reputational risks heightened as more consumers take to social media to voice complaints

Young consumers are becoming more likely to complain about a product on social media, according to a new survey carried out in the United Kingdom from global insurer XL Group.

Half of 18 to 34-year-olds surveyed said they are more likely to complain via social media that they were a year ago, and almost a quarter said they had already used social media to make a complaint, according to XL.

The majority of complaints are still made in person at the place of purchase, or through a customer care telephone line, the insurer noted. However, a third of respondents in all age groups included in the survey were more likely to complain using social media that they were a year ago, the company said.

“As people integrate the use of social media into their everyday lives, they are more likely to use these channels to interact with companies and brands,” Ed Mitchell, chief underwriting officer with the product recall group at XL noted in a statement on the survey findings.  

“This is great for a company when it is getting ‘liked’ but when things go wrong – a large recall because there is a fault with a product for instance – then a company needs to have the tools and capability to respond – fast,” Mitchell said. “Not doing so can cost a firm the loyalty of its customers and its hard earned reputation.”

Food and beverage companies are particularly at risk, because news of a recall can “spread like wildfire on social media,” he added. “The survival of the product and the integrity of the brand can hinge on how a company manages and responds in such a situation.”

Still, among respondents who had complained on social media, 16% said they received “no effective response,” and others said they experienced a delayed response, XL said.

“Companies also need to develop response plans with their insurance company,” Mitchell noted. “Recalling 5 million units is one thing, but the loss of consumer confidence and resulting loss of shareholder value can be far more costly.”