If you have followed my advice thus far, you now have some sort of risk framework and assessment of your social media footprint. How accurate and encompassing this footprint is thus far is probably difficult to establish, but it is still relevant information regarding your company. What can you do to bring it to managements attention and get them to understand its importance?
One simple word……REVENUE
Typical areas of interest:
Counterfeit product marketing or sales
–product
–coupons
–manuals
Unauthorized agents/sales posing as representatives
Traffic Diversion Schemes and SEO
Document Leakage
Reputation
False Endorsement claims
Identity theft
For consumer products it has been estimated that there is a 1 trillion dollars in the market annually or 10% of GDP of purchased goods that are illegal counterfeit. Let’s put that in terms of your revenue. If 10% a company with a 3.5 billion dollar revenue stream was being stolen by counterfeit activities ($350,000,000), don’t you think management would much prefer to have that stream of revenue go to the company or shareholders?
Some may think that traffic diversion may not cost the company anything, but if you take into account your conversion ratios of how many customers come to your site and actually purchase goods or services, you can relate that back to a revenue number as well.
– Average monthly online visitors to your site 50,000
– Average monthly visitors diverted 10%, 5000
– Conversion rate to offending sites 1.5%
– Average monthly customers lost (5000) * (.015) = 75
– Annual loss of 900 customers
– Value/Customer $125
– Total cost of online diversion to competition $112.5K
If $112,500 in cash was missing, would you investigate?
These are just a couple of examples of how you can quantify the cost of ignoring the risks around social media. Start evaluating your company based on where you have seen your name in social media and what types of products or services you offer. How easily would they be subject to any of the above scams for diverting your companies cash?
