Building trust with customers can immunize a company against a potential revolt. When Copulsky picked up a copy of U.S. Army/Marine Corps Counterinsurgency Field Manual, then-Gen. David Petraeus’s 2006 tome, it struck him as a revelation: “I realized that what we were seeing going on in PR and marketing was an equivalent of what was happening in Iraq and Afghanistan.” Last year, he turned the insight into his own book, Brand Resilience: Managing Risk and Recovery in a High-Speed World. He regards the backlashes against Netflix and Bank of America as insurgencies. “Brand insurgents,” he said, “are ready, willing, and able to sabotage your brand.”
Copulsky advises companies to take steps to adapt to an era in which consumers can strike as quickly—and powerfully—as a Tunisian revolt. The first, he said, is to assess “what could cause your company problems.” That in itself might have protected Bank of America. In this economic downturn, he said, consumers have become exceedingly sensitive to any change in pricing. The bank announced its new fee just as the Occupy Wall Street protests were at their height.
Employees, Copulsky noted, must also buy into a corporate culture of customer service. Most important of all, they have to enjoy their jobs. “If you look at the companies with the best consumer reputations—Nike, JetBlue, Zappos—they also tend to be extraordinarily good places to work.” A revolt, after all, can just as well be triggered from within as from without.
Companies should also consider that consumers have more to offer than dollars. “If you can get customers engaged in helping to solve real commercial problems, it can pay enormous dividends,” Copulsky said. Netflix had, in fact, tested the notion of separating its streaming and DVD services—but at an investors’ forum, not among the people who were paying for its service. If CEO Reed Hastings had approached customers to explain the challenges the company faced, Netflix might have discovered a different—maybe better—solution. At the least, the price hike might not have arrived as such a shock.
Hastings has continued to insist that the original plan was the right one—for shareholders, for the company’s long-term health, and also for subscribers, who would benefit from a corporate treasury rich enough to license a larger catalogue of films. But whether Netflix was right is irrelevant, PR maven Cody pointed out. “You have to listen to the customer. That’s where ‘right’ lies.”
CONSUMERS’ TRUE POWER
We can say two things about the consumerate: It’s powerful and it’s unpredictable. In March, ABC News aired a series of reports on “Lean Finely Textured Beef,” also known as “pink slime.” LFTB, as the beef industry prefers to call it, is a composite of meat scraps, connective tissue, and other “salvage” from the beef-production process that is treated with ammonia gas to kill bacteria. The burger you ate in February probably contained about 15 percent pink slime. The burger you’ll eat this weekend will, in all likelihood, contain none. The consumerate took umbrage at the pink slime in supermarkets, restaurants, and—above all—elementary schools. Soon, major retailers and school districts were boycotting LFTB. The beef industry swung into damage-control mode, to no avail. Forum boards, Twitter, Facebook, and YouTube fueled a viral backlash against the meat filler. Within weeks, producers of pink slime declared bankruptcy.
Such is the power of a crowd united in righteous indignation. But consider this: The ABC News series that triggered the pink-slime protest wasn’t the first time the public had learned of the yucky additive. Two years earlier, The New York Times had published a high-profile investigative piece on LFTB. The public response? Crickets.
Why did ABC’s report trigger a backlash? One reason is that the consumerate has grown larger, measured by the number of people with access—and inclination—to use online mechanisms of aggregation such as Facebook and Twitter. But it’s more complicated than that. Naturally, the conditions must be conducive: a sluggish economy, public trust in major institutions at historic lows. And there must be a legitimate point of complaint: Blasting meat scraps with ammonia is disgusting; spending five hours on the tarmac is ridiculous; being charged a “convenience fee” is galling. But probably the best answer to the question of why the ABC report struck a nerve? Nobody really knows.
Not everyone quakes in fear of the consumerate. Ralph Nader, who pioneered the art of consumer advocacy, believes that today’s consumers don’t have a long enough attention span to force real change when sizable corporate interests are involved. Seth Godin, an entrepreneur and author, has spent a career studying how the Internet affects branding and marketing. He dismisses the Bank of America, Verizon, and Netflix revolts as “slacktivist tantrums.” In all three, he said, the key “is that no nuance was required.” Anything complicated (how to alter the incentives at Goldman Sachs, say) is beyond the reach of bumper-sticker wisdom.
There is reason for skepticism. Recall how an earlier, underrepresented constituency—employees—achieved economic power. Patiently and relentlessly, over many decades, the labor movement advanced a hardheaded, specific agenda before it succeeded in creating the modern workplace. At any rate, Godin said, the power that consumers wield now has little to do with hashtags or easy slogans, and everything to do with a rapidly expanding period of consumer choice.
New technologies have given consumers a lot of leverage over companies, Godin explained, but not because of the consumerate’s ability to quickly raise a big stink. “Mob rule isn’t nearly as important as the leveling and competitive impact of online choice,” he said. What will unsettle Bank of America and Verizon—and every other company—going forward? Not mob rule. Instead, Godin said, the force will be simple competition. He points to services, such as TripAdvisor and Yelp, that allow consumers—with the click of a mouse—to compare goods and services by quality and price.
Social-media platforms, it is true, have made it possible for millions of like-minded people to gather in a virtual public square. But the lasting effect of these new technologies, as the economy reshapes itself to meet them, is the way they allow people to effortlessly join a virtual queue. “If you can make it clear to consumers that you have a better offer,” Godin said, “it’s infinitely easier to acquire a million consumers than ever before.” Fingers on a smartphone or a mouse make it simpler than ever for people to vote with their feet. Adam Smith would smile.
The writer teaches journalism at Northeastern University and is the author of Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business.