GONE IN 60 SECONDS? - Crisis management in a social media context

Abstract: The spring of 2013 has seen a spurge of discussion concerning web-hate, where both individuals and companies have been affected. Social media presents opportunities to build customer relationships, but besides inviting users to like, share and comment on a brand's fan page, companies' presence on Facebook has made complaints and criticism public. This has created a new type of crisis situation - flash crises - that could potentially harm the company if not handled correctly. This study investigates how flash crises on Facebook affect brand evaluation, purchase intention and eWOM intentions depending on what type of user comments and company reactions it has received. The study adds to companies' understanding of how to act in social media and contribute with guidelines for how to handle issues of snowballing company criticism on Facebook. Furthermore it adds to the current research by investigating situations when a company's Facebook fan page becomes a platform for web-hate, as users become hateful and attack someone posting a complaint on their page A quantitative experiment was carried out with 535 respondents that were exposed to different crises scenarios on Facebook. Respondents were randomly allocated to one of 14 manipulations or a to a control group. The results indicate that the flash crises do not have a significant impact on brand evaluations and eWOM intentions. This could be attributed to the brands' high familiarity and individuals' low attention span online. The company's handling of the crisis is shown to have an impact on the customer relationship variable, where the findings show that a response is better than no response. Furthermore company response has an impact on the eWOM engagement, where an ambiguous response can lead to an increase in eWOM intention and the spread of negative content. Therefore it is concluded that it is important for companies to take complaints that arise in social media seriously and to be proactive by giving empathic and informative responses as well as take responsibility and condemn potential web hate arising on the fan page.