This article was published on March 30, 2010

New Data on the Nestle’s Social Media Crisis: Just How Scary is It?

New Data on the Nestle’s Social Media Crisis: Just How Scary is It?

The Social Media backlash against Nestle’s use of questionably sourced Palm Oil in its products, as raised by Greenpeace, has seemed massive but its true impact is unclear.

Yes it is true that Nestle has been obviously caught off guard, and was slow to respond while its Facebook page was overwhelmed by negative comments.

But is this a real customer crisis that will affect sales or just a spike of negative buzz?

The meaningful answers will come in due time when Nestle releases its financial results. In the meantime, the Social Media monitoring technology firm Crimson Hexagon has just released current social perception data and digital conversation themes surrounding Nestle.

Of the identified categories, there is an obvious negative segment that is quite significant at 30% of the conversation. It is likely that this sentiment and new segment can be directly attributed to this crisis.

But, the segments like ‘Social Media is powerful’ and the ‘Handling of the situation’ are not as significant. These conversation themes are more interested in the social media side of the story, much like this blog post, rather than the customer side which could affect sales and perhaps company reputation. Aggregating the neutral conversation themes comes to approximately 50% of the conversation, and this type of chatter is not likely to scare the company.

Similarly, when Domino’s had their own social media crisis last April due to employees posting their inappropriate product handling exploits on YouTube, sales slid 1%-2% that quarter. Only time will tell if this crisis has similar or any impact on the company, but its reputation has seemed take a slight hit according to Crimson Hexagon’s data.