Digital disruption has forever changed the nature of risk – and small businesses need to keep up with this change.
Warren Buffett said: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
In the age of social media – where it takes less than five seconds to damage a reputation – what would you do differently?
The risks businesses face today
Aon’s 2017 Global Risk Management Survey identifies four top risks facing business today:
- Damage to reputation or brand
- Cyber risks – such as cybercrime, hacking, viruses and malicious codes
- Business interruption
In this article on the risks businesses face today, we’ll look at how businesses can protect their brand’s reputation on social media. Going forward, we’ll also discuss how you can protect your business against cybercrime.
The role of social media and reputation in a business
Businesses, big and small, know that reputation is everything. Yet, with the rise of the internet and social media, protecting your brand is a mammoth task. Think about the damage an ill-conceived tweet can do or how content gets a life of its own once you’ve shared it on Facebook or Twitter.
Why social media is good for your business
Discovery Insure CEO Anton Ossip says: “Social media offers businesses the opportunity to access a large pool of potential customers and it allows instant interaction between businesses and existing customers. This can help businesses improve their service offering and reputation with customers, which may increase sales.”
Businesses can take advantage of social media platforms to advertise their services and products, while customers today expect them to be visible online and easy to reach.
But social media can also harm your business
“Entrepreneurs that are not professional on social media can damage the reputation of their business,” Ossip says. “This can lead to loss of customers and loss of business revenue.”
Even a distasteful tweet in your personal capacity will reflect badly on your business, because you are an ambassador of your brand. Ambassadors of a brand are not limited to managers or the marketing department. It is everyone who shows an association with your business or brand. The words we share on social media can have serious brand and legal repercussions.
“Unprofessional social media interactions could result in a lawsuit and legal costs to the business,” Ossip says. “The business may also be found liable to compensate third parties for damages suffered as a result of their actions on social media.”
How should businesses conduct themselves on social media?
“Businesses need to learn how to use social media platforms to their advantage rather than to their detriment,” Ossip says.
They have to conduct themselves in a professional and responsible manner. They must abide by the laws of the country and uphold the values of the constitution, such as no discrimination. One way to ensure that businesses are respectful and sensitive to their customers’ circumstances is to have a clear social media policy.
A social media policy shows managers and employees how to conduct themselves on social media, ensuring that they are more responsible when they interact with others on these platforms.“You may still unintentionally offend people on social media,” Ossip says. “This is why it’s important for businesses to have social media liability cover, and cover for reputational risks.”
Business Insurance for today’s risks
Discovery Business Insurance includes crisis and reputation management cover, which covers businesses should something happen that jeopardises their reputation.
“We have partnered with Edelman a leading global communications firm, to give businesses access to reputation specialists that will help them manage a crisis that may result from their social media interactions,” Ossip says. “Our clients have 24/7 access to this reputational specialist as part of their business insurance.”
And this reputation specialist will tell you – next time you want to share something in anger, breathe, count to 10, and ask yourself: is this worth my hard-won reputation?
About business insurance from Discovery
We understand that different businesses have different needs. That's why we give you comprehensive, yet flexible, insurance cover that is tailored to your business and considers the business risks you face in a modern, fast-paced world. You'll get business insurance that is driven by technology and built on a model that shares value for managing your business well. Through our partnership with Endeavor South Africa you'll have access to a diagnostic tool that will help you identify key areas of development so that you can grow your business. In addition, you will get access to service providers, at a preferential rate, who can help your business develop in the right direction. To find out more, speak to your broker or contact us and we will help you.
Discovery Insure's Impact Alert sends help when you need it most
Wish you had the technology to call for help when you most need it? Discovery Insure's Impact Alert feature can detect when you've been in an accident. If we can't get hold of you immediately, we'll send emergency assistance to your location, while our Vehicle panic button can be used to alert emergency services when you're in your car and need help.
In South Africa’s entrepreneurial landscape, good financial planning is important when it comes to making small businesses not simply survive, but thrive.