 Several months ago I was telling a co-worker my theory that we had entered a new era of consumer influence. It was an off-the-cuff observation based on the recent public relations trouble at Netflix. A company which was renowned for flouting conventional wisdom and treating customer concerns with arrogance found themselves on the end of a whupping from their subscribers who were upset with price increases and service changes. After taking a drubbing in the press and hemorrhaging several hundred thousand subscribers, Netflix beat a hasty retreat. Social media made the difference.
After some time to reflect, I’m even more convinced this is the beginning of something new. In less than twelve months, we’ve seen four high-profile victories for the consumer. Verizon faced a consumer backlash over their $2 fee to make an online or phone payment, and gave up on it prior to implementation. Bank of America announced a plan to charge $5 a month to customers who used a debit card unless they maintained a minimum balance of fifteen thousand dollars. A social media revolt repelled the attempt. And Netflix bowed down to their subscriber base as well.
Now, the Susan G. Komen Foundation is the latest entity to face the wrath of their own clientele. After severing ties with Planned Parenthood for apparently political reasons, Komen reversed course in record time and amended their own regulations in the wake of nationwide outrage. Regardless which side of these issues you’re on, you can’t deny we seem to have entered into a new era of corporate accountability.
We’re likely to see a few counter-moves from the corporations as a result of this new consumer confidence. First, we’ll likely see large entities exploring ways to raise prices, cut services, and charge fees without announcing the moves in advance. We’ll also likely encounter new pricing models where customers are broken into smaller sub-groups — when prices need to be raised, they’ll just be raised on one sub-group at a time, upsetting a smaller percentage of the customer base. And Lord knows what other gimmicks and tricks they’ll come up with. But for those corporate CEOs who want to try a different tack, there is an opening here.
There is opportunity in populism. More than ever before, consumers are rewarding virtuous behavior (ask Ford) and punishing greed (ask BP). Imagine the following scenario for a moment. It’s Super Bowl Sunday, you’re watching the halftime show with your friends, and a commercial comes on.
A young CEO steps to center frame, looks into the camera, and speaks:
Hi, I’m Harvey Taylor, CEO of TS Reinhardt Guitars
And we want you to know… we hear you! We know times are tough.
Families across the country are struggling. And America needs jobs.
So, effective immediately, TS Reinhardt Guitars will be moving our guitar body operation back to the United States.
And in the coming year, we hope to move our electronic parts manufacturing back to the US as well.
And in a tough economy, we promise to price our American made guitars competitively. We can do that by improving the efficiency and cost effectiveness of our manufacturing operation through cutting edge American innovation.
We pledge to continue making the excellent guitars you know, employing American workers and know how.
We hope you’ll honor us with your business. Enjoy the game.
[Graphic] TSReinhardtGuitars.com
Now that’s a completely fictional company and pitch that I just made up -- a good copywriter could write a bullet-proof version. But I can virtually guarantee TS Reinhardt would have their biggest sales week ever. And with repeated ads reminding people of their patriotic vision, they’re on track to becoming twice the company they were. There is opportunity in populism. The question remains, which company will be the first to embrace the fire and buck conventional wisdom? And if they experience lasting success, will other organizations follow?
Troy
Team Fargo
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