The customer is sometimes right
April 12, 2010Jon Brooks Comments OffFrom the advertising and marketing blog Thought Gadgets, this post called “Sometimes it makes sense to ignore your customers,” which debunks the notion that customer feedback through social media will provide the answer to all business problems:
Social media gurus suggest listening to customers is everything. We say it’s not.
If you pan out and look at the five real forces that drive competition, customers are only one — and the way they feel about you at any time is often not the most important factor guiding your future decisions. Yes, user-content platforms such as Twitter, Facebook, blogs and YouTube provide marketers a chance to eavesdrop on conversations; add listening tools such as Brands Eye, Radian6, ScoutLabs, TruCast, or Umbria and you can watch the “sentiment” or vibe about your brand rise and fall like a weather report. Of course you should listen for flare-ups, and if sentiment falls suddenly and sustainably, you have a structural problem in your business that must be addressed.
But consider the things consumer sentiment could not have predicted:
1. The near-death of Detroit. As late as 2005 and 2006, Americans were still in love with SUVs and big trucks. Spiking oil prices and Wall Street-fed recessions were just about to strike, but an automotive planner of the time, if given the chance to listen to consumer needs, would have designed flashy huge new trucks. GM failed because it did what customers wanted in 2005, and its business ecosystem shifted two years later.
2. Cameras on cell phones. When these first popped up, people laughed. The New Yorker ran a cartoon showing a guy complaining he had just taken a photograph of his ear. But the version creep expanded and built the platform for today’s iPhone-app-styled smartphones which do almost anything.
3. Employer-provided health insurance. David Goldhill noted last fall in The Atlantic that our modern U.S. healthcare system in which most Americans are covered by insurance from their employers was an accident of law. In 1954 Congress passed legislation making employer contributions to your health coverage tax-deductible, meaning it was cheaper for your boss to pay you in health benefits than to pay you with a wage. The incentive of a tax benefit led to today’s insurance culture, which most people like … yet no poll or “listening in” of consumers in the 1950s could have predicted this sea change in an industry.
4. Airline baggage fees. Perhaps the best current example of something consumers say they hate but love to buy is airline tickets. Supposedly add-on surcharges for blankets and baggage are despised by today’s consumers. A simpleton could fire up Radian6, hear the complaints, and change the pricing strategy. Yet that would wreck an airline business — because the reality is consumers shop for tickets using online aggregation services such as Travelocity that compare ticket price points as commodities, and choose the cheapest fares they can find for Hawaii. By leaving some costs elsewhere, an airline makes its ticket price on the web comparison sites look more attractive. If any airline removed surcharges, it would have to add perhaps $100 to each ticket price, and that uncompetitive price point on Expedia would crush its sales.
People talk, but talking isn’t the same thing as what drives their action.
Yes, consumers are smart. Yes, your business should to listen to them. But raves and sighs about satisfaction today are just a small drumbeat in the competitive forces that shape your industry. Social-media monitoring is a powerful addition to your toolset, but beware any consultant who tells you that listening to your customers’ whims today gives you all the answers you will need for tomorrow.
