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Anyone wondering how NOT to handle a customer confidence crisis online should thank digital storage firm, Seagate, for a recent masterclass.

As reported by Robert Scoble on his blog, the company not only didn’t move quickly enough to fix the problems affecting a batch of hard drives (i.e., the things you rely on so not to lose data you want/need to keep), but then removed critical discussions about the problem from its online forums. Surely if people can’t read about it, then the problem will go away, right?

Well, what did this achieve? It made people even angrier, prompting them to start up online discussions away from the Seagate forum and spreading the negative message like a Californian wildfire. Then the tech blogs get involved and suddenly you’ve got confidence in your product ebbing away.

As Scoble describes it, the problem for your company ends up like “bricks flying through the window”, which tends to make people sit up and take notice.

The weapon Seagate does have in its armoury is good blogger relations with Scoble himself, whose influential blog is acting as part customer service centre for disgruntled Seagate customers and evangelist for their products.

What people are saying online about your company or product matters as the ease with which the information can be shared replicates old fashioned word of mouth, and then some.

Illustration: Anne Marie-Sonneveldt

The “word of mouth” concept has been thoroughly appropriated by social media as its own, and rightly so. But it’s still going on off-line and in the most unlikely places.

With no national advertising campaigns, how else would AB demographic shoppers be helping to push up the profits of the discounter to end them all, Poundland? It’s probably not on their usual shopping route and they might be snobbish about their purchasing, but when you hear that everything costs no more than a quid a 20%-off deal at John Lewis or House of Fraser just doesn’t cut it.

And when did you last read a full-page of good business news in a national newspaper? Saturday’s piece on Poundland was exactly that.

Poundland has built a reputation by defying all the sophistication of modern retailing by simply doing what it says on the tin - selling at the same consistently, iconically cheap price.  

It’s when you don’t fufil your “brand promise” that you come unstuck. Take the Christmas theme parks currently choosing to prefix themselves “Lapland”. It’s a risky strategy, especially if you’re located in Milton Keynes. None of them are, but could they be any less like the destination whose spirit of Christmas they’re aspiring to capture?

As a parish councillor commented on one of the Lapland-themed days out: “Does it look like Lapland to you? It doesn’t to me.” The Lapland New Forest facility is now closed; but maybe it could have survived by scrapping the impossibly aspirational association with Lapland and achieving true authenticity by calling itself “Christmas in the Mud”.

The Guardian’s chief iconoclast, Charlie Booker, feels the failed Lapland attractions could have flourished with a wave of ironic visitors on a macabre pilgrimage as a result of the bad press. But kids and Christmas don’t do irony well and Santa is a brand you don’t mess with, as Lapland UK owner, Mike Battle says: “If you get it right people will love you. If you get it wrong, they’ll want your head.”

ChangeWave research used a survey earlier this year to show that companies were “hot on using Web 2.0″. But as their graph above suggests, there are more than 60% who won’t touch it with a barge pole. Maybe the avalanche of jargon and new, thrusting brands associated with social media is partly to blame. But what if we called it what it is - word of mouth? Ok, the channels for that word have changed, but the principal remains the same. Steve Rubel, as usual, puts his finger on what matters in social media and reminds us that people tend to listen to and take the lead from people they know and trust. What a concept! If I’m quick, I might just patent that.