Part 1 in the Controls and Risk Management series

From my experience, marketing executives are often involved in the risk management process quite late, usually to manage the communications aspect of a crisis. Therefore, they are engaged only when the risk has transformed into a critical incident and the company is in a defensive mode.

I strongly believe that marketing executives can bring a lot to the table for a proactive risk management approach, notably to help in monitoring the reputational risk and protecting the brand from adverse events.

As we all know, communication channels have exponentially expanded in the last few years to reach volumes that can no longer be monitored manually.

What people say about products, services, and brands is all over the place, and this actually represents a real threat to a company’s reputation and could impact its sales: founded or not, negative opinions can seriously influence buyers’ decisions.

Furthermore, new opinion leaders emerge rapidly; identifying and then following them all can prove cumbersome, to say the least.

Coupling risk management techniques to new sentiment intelligence solutions could just be one of the right options to enable appropriate reactions on emerging social trends. Monitoring the global sentiment and being able to drill down to the source to understand people’s comments and respond effectively to concerns or demands is now possible, even on these large volumes of unstructured data.

Therefore, defining indicators that automatically pull these social sentiments and notify the marketing executive that, somewhere in the world, a negative opinion is forming can help guide the right decision. What might be indicated, for example, is a communication and explanation campaign in case there is simply a misunderstanding or an unfounded attack on the company, or in the worst case, a preventive product recall.

This can not only protect the company’s reputation and even prevent a crisis from occurring but also can show dedication to consumers’ opinions and reinforce positive perceptions about the brand.

Also on a positive aspect, I always see risk management with two sides of a coin: mitigating threats but also leveraging opportunities. This can even help in identifying new improvements requested and potentially new applications for products already on the market.

In essence, I really think that companies should involve all departments, of course, but especially their marketing executives, to put together plans to manage the risks relating to brand, image, and reputation. In practice, most risks inherently carry a reputational impact, to some extent, such as improper business or market practices, business disruptions, quality issues, regulatory noncompliance, and so on. The scope of this involvement is rather large and not limited to a single risk typology!

If you are a risk or a marketing professional, have you already taken this route, and if yes, what is your feedback? I look forward to reading your thoughts and comments on Twitter.

Please join us at the SAP Conference on Internal Controls, Compliance, and Risk Management in Copenhagen, March 3–4, 2020, which will explore the theme “Connected Controls and Risks.”

This article was originally published on SAP Community and is republished by permission.

Follow SAP Finance online: @SAPFinance (Twitter) | LinkedIn | FacebookYouTube

Read more: digitalistmag.com

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