Bank of America Protest
The influence of customers has always been impactful, but never before has it held such immediate returns or distractions in the corporate world. While companies have long paid lip service to the idea that their corporate world, and strategies, revolved around customers, today the immediacy of social media has called their bluffs in very real ways.
Netflix found out the hard way that customer’s buying preferences and their need to be a part of corporate pricing and offering decisions were far more important than in the past. In years past, major industrial shifts would be heralded by pricing or offering changes that reflected the latest technologies or industrial approaches. And while the move to streaming was clearly demonstrated, the pricing changes that were summarily handed out were simply not addressed the way modern media requires. And a deeper understanding of their customers would have saved the company much public relations troubles and ultimate customer attrition.
Bank of America also stepped into a new world of customer hurt this year when they announced new bank fees for services that customers have long considered a free service and that they considered sufficiently divorced from the company’s costs that a charge was unsupportable. When they made the move online protest sprung up immediately and ultimately they reversed the policy change. One customer in particular, Molly, spurred much of the change.
Neither of these moves were large divergences from the way the business world had always worked. A change in the external environment pushed corporate executives to consider alternative structures for their business and they announced the changes. The problem wasnt the change itself. The problem was how it was arrived at and how involved the customers were in the discussion, decision and implementation. The idea that enterprises have no real way to truly understand their customers is a fallacy. And the tools that make the analysis possible are also the weapon that shot Netflix and BofA.
If there is one thing that the new Social Enterprise thinking has brought to bear it is that a solid understanding of your customer is no longer an item that is simply “nice to have”. Rather, it is a necessity in the new world of work. Imagine a different scenario:
Either of these companies would have had deep Customer and Employee Social Networks in existence so that they could get instant feedback through their entirely democratized corporate structure. This would have allowed them to receive instant feedback from thousands of users of the service that have a direct stake in the company’s success. This feedback would have considered the internally understood industrial changes that the companies found themselves in the midst of. They could have tested waters early in the safety of their corporate firewall.
When they found acceptable and sharable alternatives they could have then extended their efforts by involving their customers and partners directly in the conversations about change. They could have activated customer groups with an interest in their current services. They could have included partners in their pricing conversations. They could have received feedback directly from these stakeholder groups PRIOR to announcing anything. They could have reconsidered hot topics and included augmented strategies so that they strengthened the partner ecosystem and customer communities rather than destroying them.
The tools to accomplish this already exist. It would have been calculated risk taking and would have paid off in droves either in avoided costs, increased revenue or both. The thought that customer intimacy is simply a “nice to have” is absolutely over. These corporate examples herald a new era. Welcome the Social Enterprise or die in its wake.
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