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Backlash Illustrates the Dark Side of Social Media for Small Businesses

30. July 2015 07:54

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Our culture is changing fast, and social media is often at the helm of that change. One business owner got a glimpse of what it's like to be on the wrong side of those shifting attitudes. According to Capitol Hill Times, Rachel Brown, the owner of the small boutique Haute Hibou, pinned a photo of a model wearing a headdress to her store's Pinterest page and used the term "gypsy" to describe the fashion.

That's when the floodgates opened.

The report states social media activists were swift to point out Brown's mistakes. Namely, they denounced…

Some posters linked to articles explaining cultural appropriation; others went straight to Yelp to scribe scathing one-star reviews of her shop. Capital Hill Times also notes that Brown's store was defaced with the graffiti "Gypsies is a racial slur."

Brown has apologized on Facebook and acknowledges she simply didn't know what cultural appropriation was or that the term she used was offensive. The social media backlash delayed her relocated boutique's grand opening indefinitely.

It's a cautionary tale for any small-business owner that relies on social media marketing. Though social media is free, sometimes an online mistake can cost you dearly.

On Social Media, High Visibility Means a Spotlight for Mistakes

Social media has its many allures for the budget-conscious business. For starters, social media…

But that visibility and connectedness can be expensive when you make a real misstep. As Brown's case proves, publishing offensive or divisive material can tarnish your business's reputation, which can cost you lost sales and customer loyalty. Plus, online mistakes live on even when you delete the offending post. All it takes is a simple screen grab, and your oversight can go viral in no time. (You can learn about the risks of going viral in "Viral Marketing on Social Media: Bigger Audience = Bigger Risk.")

That's the real downside of social media: being in the public eye doesn't give you a large margin of error. Everything you post must be carefully scrutinized, which can be time consuming when you're a one-person operation. If you fail to carefully vet your posts and content, you may end up offending your followers, which means you must pour even more time and energy into handling the PR crisis.

It doesn't help matters that your followers may not realize that you are just one person. Your small-business ownership means you are treated as a commercial entity on social media. Your followers expect more from you, both in terms of your online behavior and customer service.

When Social Media Leads to Legal Trouble

You have to worry about more than just preserving your business's reputation when you use social media marketing. Of course, you should always abide by the rules of social etiquette and common decency, but you have to follow laws, too.

For example, it's all too easy to commit the following civil wrongs online:

Each of these wrongs, known as advertising injuries, can lead to lawsuits. Let's say you are an avid Instagram user, and one day you realize a megawatt celebrity is wearing your merchandise. Without thinking twice, you post the image of the celebrity wearing your gear with the caption "I'VE ARRIVED."

Unfortunately, that celebrity doesn't have much tolerance for people capitalizing off his image without his permission. He threatens to sue your business over using his image, stating that you've already profited from the visibility his image attracts.

You want to tell him that you're just a one-person operation, but it doesn't matter. Just as the IRS views sole proprietors and independent contractors as small businesses, you are a commercial entity as soon as you sell one item. That means you also have all the privileges, responsibilities, and liabilities that come with that designation.

General Liability Insurance can help your business survive lawsuits over advertising injuries. For example, it could provide coverage for the suit described above. It can also help out when you spout off on Twitter about a specific competitor or person and you're hit with a libel lawsuit. (Example: "Social Networking Libel 101: Courtney Love & Twitter Libel.")

However, no insurance policy can help repair your brand's hurt image when your social media posts offend a whole group of people (accidentally or intentionally). That's why it's especially important to be a good online citizen by doing your research before you post. For more pointers, read "Small Businesses: Create a Social Media Policy that Works."


Advertising Injury | General | General Liability Insurance | Insurance Terms Explained | Risk Management | Small Business | Small Business Risk Management | Tips for All Small Businesses

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