Is Consumer Backlash Inevitable?

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May 03, 2012, 01:21 ET

NEW YORK, May 3, 2012 /PRNewswire/ -- Customers have always been fickle, but never before has it been so easy for them to channel discontent into social-media campaigns with potentially disastrous consequences for companies. In The Conference Board Review® cover story, "Anger Management," writer John Buchanan explores how technology has helped spur "a massive power shift," emboldening consumers to express their outrage. Still, counsels Buchanan, there's plenty that organizations can do to keep their customers from turning on them.

"The kind of business move that used to generate mild grumbling and then grudging acceptance," writes Buchanan, "now brings immediate denunciations, viral social-media protests, front-page headlines, and the worst fate of all: being made an example of." Buchanan points to three companies – Netflix, Verizon, and Bank of America – which recently suffered the wrath of unhappy customers. He illustrates how and why changes in policy quickly snowballed into major PR debacles for these organizations.

It's not just bad management decisions that can spark massive consumer revolts. It's often a lack of empathy, explains Buchanan. While this is hardly a novel complaint, what's different now is the ability of consumers to connect through social media, create a firestorm, and force companies to take notice and, many times, alter policy. What might begin with one dissatisfied tweet can quickly turn into an avalanche of negative publicity for an organization.

"Companies have to realize that the business environment has changed," Buchanan writes. "But they haven't yet. And they haven't realized how intense the consumer anger is." By doing a better job of listening to their consumers, businesses might be able to avoid backlashes. For example, executives should interact more with customers, online and in the field. And companies should engage their PR departments more when making decisions that will impact consumers. Unfortunately, Buchanan points out that market research is "a discipline that has been devalued at a time when managers wrongly believe that they can grasp customer sentiments by having a summer intern monitor tweets and Facebook posts about the company's brands."

At the same time, it's not only consumers that are scrutinizing and reacting to marketing decisions. Increasingly, boards are second-guessing management and judging leaders by how well they cater to and respond to customer demands. Ultimately, the message is clear: Pay attention to your customers.

Source:
"Anger Management"
The Conference Board Review®
Spring 2012
http://www.tcbreview.com/current-issue/features/anger-management.html

About The Conference Board Review®

For more than 35 years, TCB Review has been the thought-leader magazine of The Conference Board. Founded in 1976 as Across the Board, TCB Review is a journal of ideas and opinions with a clear mission: to raise questions you hadn't necessarily thought to ask—about how to run a business in a time of uncertainty and relentless change, about a corporation's proper place in a world transformed by new attitudes and awareness, and about how corporate leaders can best serve both stockholders and stakeholders...especially when the planet itself is a stakeholder.

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