To Social Media veterans, this story is a very old hat. I do like telling it though, usually to people who are still quite new to this subject. As I explained in my last post, there are considerable disadvantages that come with choosing to ignore Social Media. A very good example of a combination of unfortunate developments is the story of how Kryptonite lost USD $10 Million, on top of severe damage to their credibility. Let me take you back in time…

In September of 2004, a video was posted on Engadget showing a Kryptonite bike lock which could be opened very easily with a Bic Pen. As you can imagine, this was a very bad thing for Kryptonite. The story was loudhailed through the blogosphere, people screaming for an explanation from the bike lock manufacturer. But nothing came. Not for 10 days. Why?

Behind the scenes, Kryptonite was trying manically to fix this. The PR department worked day and night assessing the situation, trying to figure out the damage, and how to best respond. In the olden days, 10 days was a fairly standard response time to a crisis. In the era of Social Media, it can cost you. A lot.

While Kryptonite was trying to come up with the best move, the blogosphere went nuts. The Bic pen video and comments were widely published, in all the right places (as for instance on bikeforums, a place for bike enthusiasts). 10 days is a long time in Social Media to stay quiet. Despite numerous requests for information, Kryptonite said nothing. They didn’t want to give a rash response. And at the time they didn’t think that bloggers were that influential. They were proven wrong.
The price they paid for reacting too late (and even then not answering directly to the bloggers in their medium, but only via traditional media channels – which is a big insult in the blogosphere) was as follows: they replaced 350,000 bike locks, totaling over USD $10 Million. They suffered damages from loss of credibility: after all, they had ignored a large pool of customers.
The lesson Kryptonite learned was that Social Media forums are full of people, who have an interest in their products, who passionate customers, and who want to exchange their thoughts with each other AND the company. And by refusing to take part in these conversations, these customers had to think that they were not that important to Kryptonite. You don’t want to come across as a company who doesn’t care about what your customers have to say, but that’s the image that was created for Kryptonite in the course of this crisis. To prevent this, you need to monitor and interact in Social Media, and you have to respond. Fast. An important lesson not only to Kryptonite, but to all of us!

Has anything like this ever happened to you? Let me know!