Editor's note: Brian S. Cohen (pictured) is president and CEO of Pacific Specialty Insurance Company, based in Menlo Park, Calif., which offers a wide range of personal and commercial insurance products through independent brokers nationally. He can be reached at bcohen@pacificspecialty.com.

The plane pushed back as I settled into the sports section of my local paper. Just as I was getting comfortable, the pilot made an announcement that our flight was going to be delayed for a short period of time. We ended up sitting on the tarmac for two hours.

I missed my connection, and to make matters worse, the customer service personnel at the connecting hub airport were anything but service-oriented. Frustrated beyond belief, I posted a message on Twitter, my Facebook page, and several travel sites, "ABC Airlines SUCKS!"

Much to my surprise less than an hour later I got a post to my rant signed by the airline's customer service department with a link to their website. The link led me into a chat room where I described my experience. A chat room service representative apologized and then offered me an upgrade on my return flight home the next day. My frustration ebbed. I even posted another Tweet. "Thanks ABC Airlines Customer Service!!"

The experience taught me two valuable lessons: One, with the advent of social media, unhappy customers can do real damage to a company's reputation; and two, companies can no longer wait for their customers to call and complain. They must engage their customers in real time.

Since that experience I've been focused on how our company can leverage social media to improve our customer service. It required me to better understand all that social media entails. Fortunately we have a lot of experts—the young people who work for us. They use social media like a second language. It's incorporated into their lives.

The same approach applies to a successful social media strategy for a business. The organization must incorporate social media into its day-to-day operations. Most companies make a common mistake when it comes to their social media strategy: They set up accounts on the popular social media tools like Facebook and Twitter but don't do much after that. In effect, social media gets treated as an outlier.

Opportunism in social media

Many people think of "social media" as Facebook and Twitter—but those are just popular tools of social media. I view social media as the ability to engage in social interactions online with both people you know and don't know. You engage with social media through a series of websites and applications. But it's the collective power to communicate that makes it so impactful.

Imagine if you could "communicate" regularly with an existing policyholder. You wouldn't need to wait until some triggering event like a problem with a bill or frustration with a claim occurs. Research shows that such an action would increase an insurance company's retention rate.

Here's an example of opportunistic social media. When there's a potential major weather event, use social media sites to offer tips on how to secure a home and inventory personal holdings. The information will come up on searches and drive traffic to both your social media sites and website. A company can even change its homepage temporarily and put up a splash page: if you're in this area, click here; if not, click here for the homepage.

One of the biggest challenges for insurers is the cost and effort of reinspections. With today's smartphones, policyholders can do the work for you. Why can't a policyholder video the interior of their home and then post it to their account online? Need assistance on what to video and how to describe the contents? Press a chat icon and let the policyholder receive assistance. On every renewal, the insurance company sends an email reminding the policyholder to upload a new video. Tie a discount to this and create an online contest that encourages people to submit the funniest videos about the interiors of their home. Post the winning videos online and watch them go viral.

People don't think about insurance often. That's why opportunistic use of social media is effective. People will be more inclined to read something from an insurer when they're concerned about their immediate safety and security.

The best defense

Social media poses challenges and dangers for any company serving the public. Consumers now have power to wreak havoc. Anyone who feels, rightly or wrongly, abused by an insurer can use social media to post an angry screed that can do real reputational damage to your brand. Negative reviews get aggregated, and if there are enough of them, they'll show up at the top of an online search of your company.

Customers tend to post only when they're angry with their insurer. Happy customers typically remain silent. How can you find out about problems customers are having before they are angry enough to call? Establish a team dedicated to scouring all social media for comments about your company.

Consumer retail companies have a team of people whose job is just to surf the web looking for any reference to the company. Hire people that are adept at traveling the Internet. If you are a small company or just want to jump-start the process, engage a search engine optimization company for some initial assistance.

Whether you use employees or outsource the task, your directions are very simple: "I want you to find me any posts online about the company." Once found, negative comments should be sent to a triage team consisting of your most experienced customer service employees. Have them reach out to the source of the comment and offer assistance. Remember to ask the dissatisfied customer to post a testimonial once the problem is fixed. The result: a happy customer and a search result that is positive. The more of these you have, the more your company will earn a positive reputation.

If I had any doubts about the impact of social media, the view out my window provides ample evidence. Located in the middle of Silicon Valley and just a short walk to Facebook's headquarters, I'm surrounded by start-up companies bringing new services and tools to the digital world. The social media revolution is here to stay.

Special Reports /

Leveraging Social Media: Going On the Offensive

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