Was 2011 the beginning of a customer revolution? Are consumers beginning to flex their muscle and demand fair treatment? At the end of 2011, Verizon Wireless announced a $2 fee for paying your bill on-line. Because of customer backlash and negative publicity, only one day later the company reversed its decision. Earlier in the year Bank of America held out longer after announcing a debit card usage fee, but when most other banks didn’t follow and through social media consumers crafted a response by announcing Bank Transfer Day, Bank of America reversed course. Netflix announced a significant price hike and unbundled their DVD and streaming services. In response to customer outrage, they explained they were doing all of this to break the company into two parts; one focusing on streaming and the other on DVDs by mail. This upset customers even more, so they too reversed course and said they would keep both services. As a result Netflix lost one millions customers, half of its market value and went from being a customer loyalty leader to showing up among the worst online retailers, according to Forsee’s annual Holiday E-Retail Satisfaction Index.
The dynamics between customer and company are shifting. The cover story in Consumer Reports’ February issue is titled “Fight Back Against Your Bank.” It is no longer sufficient to look for the best value or minimize fees, but customers are now encouraged to “fight back.” Customers have always had the option of taking their business elsewhere, but with social media they now have the tools to actually put up a fight and potentially damage the reputation of large or small companies. It only takes a few minutes to send a tweet to thousands of followers, post something negative on Facebook or write a blog.
Customers may become upset with technology problems, but outrage usually comes from how they are treated and whether the outcome is considered fair. A typical Verizon Wireless bill has a number of fees, but it doesn’t seem fair to charge customers to pay their bill online. Customers may value debit cards, but don’t think they should have to pay to use their own money. When customers feel they are treated unfairly, and that it was an intentional decision by the company, they look for ways to fight back. Bank of America and Netflix learned this the hard way, while Verizon Wireless backtracked quickly.
How do you keep customers on your side? Make customers a part of your decision making process. If you don’t know what your customers think, ask them before you implement changes. At the very least put yourself in their position and think about how you would react. Make sure you have a consistent vision of how you treat your customers. Put together guiding customer service principles and make sure every employee understands them. Then measure how well you are living up to your own stated principles. When you do make a mistake, admit it and apologize. Don’t make excuses.
Let’s not make 2012 the year of the customer revolution, but rather the year of the customer. Focusing on the customer is the only long-term path to profit and growth.