Editor's note: V. Kanchana is an independent researcher based in New Delhi. She can be reached at v.kanchana10@gmail.com. This article appeared in the November 12, 2012, edition of Quirk's e-newsletter.

The rise of social media has given consumers the freedom to say anything they wish about a company and its products and services. As more companies venture into the social media space, the fear of negative sentiment looms large. In the past, a dissatisfied customer would tell 10 people about a bad experience. Now, the same customer has the power to communicate his anger with millions of people in real time. Any misstep can be blogged about, shared, tweeted and retweeted in a matter of seconds, leaving a company's online reputation in tatters.

A negative post in a blog can have a profound impact on a business's reputation in the marketplace unless timely crisis management is done. Businesses should address negative comments and reviews to protect the brand and company image and represent what the brand truly stands for in the public domain.      

A recent customer survey by American Express showed that almost half of U.S. Internet users use social media for seeking a response from a company about a service issue or for providing feedback and sharing information about their service experiences, both positive and negative, with a wider audience. As consumers increasingly go online to discuss products and brands, seek advice and offer guidance, it can be difficult to see where and how to influence these conversations. Additionally, these conversations may take only seconds to change the mind of a prospective customer.

There's no single measure of online media's financial impact and many companies find it difficult to justify allocating significant resources - financial or human - to an activity whose precise effect remains unclear. If companies can identify exactly how, when and where online media...