THIS IS THE ERA of consumer power. Within seconds of bad service or buying product that fails to live up to expectations, a dissatisfied customer can tell the world about it electronically.

The internet and social media open up huge possibilities to grow and promote your business. They also provide disaffected consumers and unscrupulous competitors with the means to undermine or destroy it.

“Today even the smallest small to medium business needs to be careful about safeguarding their reputation as the internet and social media are operational 24/7 and people can more or less say what they like,” says Joan Mulvihill, chief executive of the Irish Internet Association.

Dissatisfied customers are entitled to complain. Mulvihill’s advice is be careful about how you manage the exchange. “Never get into a fight on something like Twitter or provide people with a feeding frenzy of online spats,” she says. “If someone is being unreasonable try to let it go. If you feel very strongly you can make a formal response but it’s often better to pick up the phone. If someone has a genuine complaint resolve it as quickly as possible. Don’t let it escalate into something that goes viral.”

Sorting out genuine complaints from so-called “internet trolls” who attack your business for the sake of it is crucial. Responding is hugely time consuming and often does little more than fan the flames. Pick any battles carefully and never discredit an individual or another company in public. Assume that even apparently private exchanges may end up being widely aired. Refrain from knee-jerk responses that could ultimately backfire.

In the US a teacher lost her job for making remarks about her students on Facebook that came into the public domain when her security settings were changed. Elsewhere an IT professional offered a job found the offer had been retracted following what the company considered an offensive tweet about the position.

“Companies using social media need to know who are the thought leaders in their sector, what their power is and what groups they control. There is a whole dynamic to how social media works that needs to be understood,” Mulvihill says.

“There is ample evidence to suggest that more mature companies in particular are not taking the potential downside of social media seriously,” adds Damien McLoughlin, professor of marketing at the UCD Smurfit Business School. “There is a view that no one over 40 truly understands social media and because senior managers are often outside this age bracket they leave it to younger people. But younger people don’t have the experience to deal with difficult problems and if issues are badly handled the situation gets out of control.”

As an example McLoughlin cites last year’s social media furore over an incident with Kit Kat that put parent company Nestlé into the firing line. “Nestlé is one of the world’s greatest food marketeers yet it took them several weeks to react and take corrective action,” he says. “Social media fundamentally changes the relationship between producers and consumers as it facilitates direct dialogue with the brand. That a company of Nestlé’s stature apparently failed to recognise this quickly enough is a salutary lesson.”

Consumer wrath is not only directed at products and services. Also likely to lead to disenchantment are frowned-upon techniques to attract visitors to web sites or the use of social media to relentlessly plug products. Google takes a very dim view of any company getting involved in techniques such as “cloning”(using the same content on different sites) or “cloaking” (presenting content to users different from what search engines see) and will apply harsh penalties, including removing a company’s pages from its listings. And even big organisations can fall foul of its guidelines – in 2006 Google sanctioned BMW for cloaking.

“It is important to ensure that the people building your site know what they’re doing,” says Conor Lynch, managing director of SocialMedia.ie. “You are putting your reputation in their hands. You don’t want them making a cardinal error that might damage your domain.”

Getting hits is important, but not at any cost. A well-organised site with good quality, original information supported by best search engine optimisation practices is the best way of avoiding problems. It also pays to watch the company you keep. Linking is a key way of driving traffic but just because someone invites you to link does not mean you have to. The last thing a business needs is a link to an unethical or spamming site.

“In the current recession, the search for best value by consumers often includes information gathering, comparison shopping and evaluation using the internet. Negative or suboptimal content can be damaging to brands and hit the top line,” says Dr Theo Lynn, co-founder of Rezumei, which offers online reputation services to individuals and businesses.

“Potential employers are also increasingly sensitive to the online activities of their employees and prospective employees, particularly as some of these employees, may have a disproportionate influence from their out-of-work online activities, through social networks or otherwise,” Lynn adds, citing US examples Domino’s and Taco Bell who both found themselves in the limelight when disgruntled employees filmed and posted hygiene breaches on the internet.

“Manual monitoring and relying on internal intervention may no longer be feasible for many companies particularly when the speed of a crisis may be too fast for conventional marketing or PR tactics to intervene. Real-time crises require real-time responses. Against this backdrop, individuals and brands need to be more aware of their online footprint, how third parties might perceive aspects of that footprint and the response mechanisms at their disposal to manage any repercussions,” Lynn says.

Case study: Socialmedia.ie

WITH ACCESS TO hundreds of millions of users worldwide, social media has become an invaluable marketing asset for today’s businesses. As with all forms of communication, however, there is a certain “netiquette” involved. Conor Lynch, founder and managing director of digital marketing consultancy SocialMedia.ie, gives his tips for steering clear of social media gaffes.

DON’T

Don't underestimate the power of the crowdGood news and bad news can spread like wildfire on social networks. Not all consumers are equal so watch out for bloggers, influencers and powerful online communities who can make you or break you.

Don't ignore usersAny question or concern that a customer posts on a public page can be seen by anyone. By not addressing the issue and allowing the comment to sit in the social space, not only does the customer who complained know that the complaint is not being addressed, but all other fans or followers know it too.

Don't be unprofessionalUntrained staff on social media can lead to unprofessional tweets or status updates. Any comment left on a social media platform will stick out and get you noticed for all the wrong reasons. It is important business users refrain from bad language, bullying social media users and other unprofessional behaviour.

Don't spamSpammers don't survive long on social-media platforms as they don't build up numbers of friends, followers or fans. Spam usually consists of a company constantly tweeting, updating its status or blogging to promote its brand. While companies can promote their brand, it should not be a frequent occurrence. Befriend first, sell later.

Don't miss the boatLike it or not, online and offline business has changed fundamentally as a result of social media. Watch for the pitfalls but don't miss the opportunities.

DO

Define your social media strategyLike any marketing strategy, a company should have a clear vision of where it wants to go and a social media policy to guide it on the journey.

Know your audienceWhere do your potential customers spend their time online and what conversations are they having about your company. By knowing where your audience is, you can understand how they communicate and interact with each other before you try and participate in the conversation.

Listen and engageIt is important to listen to the online conversation to discover what is being said about your brand to enable you to monitor consumer sentiment. Setting up a simple Google Alert or Twitter "search" will alert you to conversations about your brand.

Create digital contentCompanies looking to start building a social media strategy should use digital content such as blogs and digital video for creating and spreading interesting news about their industry sector.

Integrate all marketing effortsIntegrate all of your social media marketing with traditional marketing which should change to take account of the new social media world we live in.