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Corporations versus Consumer Influence

consumer-versus-bi

Today I had the joy of experiencing the quintessential element of  consumerism in America, HORRIFIC customer service.    It is easy to see why the label “customer dis-service” is thrown around so much these days.    While it is easy for me to scream out “HP sucks” this morning, given my very recent experience with their version of customer dis-service, the problem of poor customer service goes well beyond HP.    As a small business owner for years I’ve had the displeasure of arguing with and fighting with a number of vendors over the past 2 years including Apple, Asus, Comcast, Dell, and Windstream to name a few.   Every one of those companies provided horrible customer service in an effort to protect and maximize profits.  However this article is not about specific bad experiences, it is about consumer influence over corporate giants in the modern era.

Are You Influential?

The question is fairly simple, how influential ARE YOU?   Decades ago, possibly even just a few years ago, consumers did not have a voice.  The only way anyone would listen to you was to call the 800-number on the back of the product package and hope you got someone that could speak English.    Those few lucky lottery winners that happened to get Abish-Jahmad-Abdula Misnakov on a good day might actually get them to click the button on their screen that gave them a positive result.    However for most of us we would get one of the responses listed on the “10 Excuses To Get Rid of Customers Quickly” sheet that was taped to Abish’es monitor.    Corporations didn’t care or even pretend to care because they knew you were a nobody.  You had no voice.  Who would you tell?  Your 10 friends that you’d talk to that week?   “Ha. I will squish you like a bug” they would say as the ran another $25,000 TV spot and make everyone forget your pithy little story about bad customer service.

Today, things have changed.   You post on Facebook, Google Plus, or Twitter and dozens if not hundreds (or for a select few THOUSANDS) of people hear you.   Not only are you given a megaphone to broadcast to EVERYONE you know, not just the 10 people you would come into direct contact with that week, the comments stick around.   People that you don’t interact with every day will still see your comments days, weeks, or even years from now.    If you make the comments public, then the “stickiness” goes up 10-fold with Google, Bing, and others grabbing your comment and cross-referencing it 1,000 times than archiving it for decades.

But does this make your more influential?  Do your comments have ANY impact on the decisions of the corporate giants?

Corporate Intelligence Is Numb

While all those rants and raves may make you feel better, how much influence do you really have.   Sure people like Oprah will have an influence with millions of followers reading her every word, but what about you.   Your influence over other people’s decisions is certainly more extensive than it was a decade ago, but is it strong enough to change corporate behavior?

Yes and no.  In my opinion you have more power and direct influence over corporate revenue and profit than corporations realize.    However corporations are much too large and their business intelligence systems too “numb” to feel it.    Most corporations are reactionary and only change course after their quarterly earnings report shows they are failing.   By then it is much too late to change course.

Big companies that spend millions on business intelligence and even more on marketing to influence YOU and your purchases are missing the mark.  They are relying on 80’s era tools to operate in the modern highly-social-high-velocity era.   They have it all wrong.     Instead of focusing on customer relations and social marketing they continue to run formulas that dictate whether or not it is OK to lose you as a customer by not providing the best possible customer service experience.   Those old formulas drastically under-estimate your influence.

An Influential Example

As an example I present a simple case from my experience today.    In my particular case an HP Direct sales agent made an error.    At the end of the day HP will decide whether or not I should “eat” the $277 extended warranty purchase or whether they will “own up” to their mistake and replace that purchase with the correct product at no charge to me.     The formula is simple, is keeping me as a customer worth a potential adjustment on their books of $277 (sadly the REAL cost for HP is more like $50 when factoring in the production cost differential between the correct and incorrect product).

In this case the customer has a potential loss of $277.    That is more than a six-pack of Sam Adams, my preferred measuring stick for economic activity, by a long shot.    Enough so that it activates my “rant button”.     On to the blogs, forums, and email lists I go.   I tell people about my horrible experience and thus my influence has begun.   However the potential corporate losses are MUCH, MUCH greater and chances are they don’t see it.

Directly Underestimated

HP tries to figure out what this means to them financially.   The first mistake in the formulaic approach?   Looking at customer history.    Sadly even with the modern business intelligence tools they have at their disposal they will find just ONE lonely record of my purchases with HP.   A $277 warranty.    Already they are starting off on the wrong foot.    I am currently looking at thousands-of-dollars in HP equipment purchased in the past 12 months alone, and that is just right here on my desk.   Several high-end HP monitors, a top-of-the-line laptop, business office printers.  None of which register in the HP intelligence database because they were purchased from a 3rd party and never registered formally with HP.    Then there is the corporate influence.   Last year I owned a few companies and provided CTO consulting to several more.   Total HP purchases in the past 12 months is unknown but is in the tens-of-thousands range.    Because they were purchased through buying agents at each organization HP never connects the dots.

Ripples Versus Waves

OK, so maybe it is easy to understand WHY they would underestimate my purchases in the past 12 months.  However they do this with “normal” consumers as well.  Chances are you rarely, if ever, register your products online or with the warranty card that came in the box.   I know very few people that do this for anything but what they consider “large” purchases or for items that might break.     However there is a second error that is even more significant.    The ripple effect.

Another part of a good risk assessment tool for a large corporation is determining influence of a consumer.  How likely are you to purchase products in the future based on how egregious the error and lack of customer service.  More importantly, will it have a direct impact on sales not directly attributed to the consumer?   When I was actively running a corporation I could easily give them a corporate account number and they would see that this was not just ONE purchase that I influenced, but dozens.  In fact I’ve use this card in the past when not getting personal attention and depending on the vendor BOY did this create  a change of attitude.    Back when I was buying 6-figures worth of equipment from Dell their screw-up on my personal laptop purchase was IMMEDIATELY rectified with apologies only AFTER I cited the corporate accounts to which I was linked.

But that thinking on behalf of the corporation is flawed.  Today we ALL have a lot more influence than they realize and it starts with a ripple.   While my corporate purchases were more akin to a wave, a noticeable disturbance in their revenues, my tiny little personal purchase and the dozen people I reach on my personal Facebook page is but a ripple.    The direct revenue is minimal and even if you multiply it by the dozen people on my personal connections list, let’s say 36 people as that is the average active friends for a typical Facebook user, it is still nothing compared to the wave of a corporate purchase order.

Sphere of Influence

However this is a grossly underestimated sphere of influence.    To go back to my $277 example, my influence goes WAY beyond the $277 and can quickly form a big enough ripple to almost be a wave.    Even in my case with a dozen direct contacts on Facebook there are at least a FEW that will second-guess buying an HP product if I write a scathing review and back it up with facts that point to an unquestionable failure on behalf of HP.    Those few people that let me advice and input influence them tend to purchase $500 – $2500 every-other-year in electronics.  If I tell them “buy HP” like I did 6 months ago, they buy HP.   If I say “stay away from HP and Dell”, they stay away.  That is thousands in sales that shift, ever-so-subtly, to another brand.   HP will never notice.

Then there are the public Facebook posts via my software releases.  Those are NOT directly linked but reach hundreds if not thousands of technical users.  Then there are the tweets.  And the comments on public forums that discuss HP products, and every now & then an online RSS feed for a major publication picks up blog posts like this one.  Suddenly a “small guy” like me reaches tens-of-thousands of people.  Granted not all, in fact MOST, of the readers will not give a damn about what I say.   However SOME will think twice about HP and if there is a close decision it may be enough to persuade them to choose the other brand.

Ripple + Ripple = Wave

Now the REAL issue here which the corporate giants miss is what happens when ripples meet.   You write a short tweet about a bad HP experience.  I blog, tweet, and Facebook (is that a word now?) my experience.   Soon dozens of people that have no direct connections do the same.    Eventually there are people “in the middle” that are “touched” by two or more ripples.     The effect is a multiplication of the intensity of the ripples.  Before you know it all of these ripples have become a wave and since corporate business intelligence systems are too numb to feel the influence of individual ripples they MISS IT.    By the time it has become a wave and that wave has crashed into their quarterly revenue and earnings report it is too late.     It is very hard to mitigate the effect of thousands of ripples with a big marketing push.

Make Ripples

So there you have it, my theory on the influence of the “small guys” like you & I.    The modern era of online social interaction has given us the tools to create the ripples that can grow into waves.    When you have a good or bad customer experience with a company, tell people.     The good companies will take care of their customers and turn negative ripples into positives.   Those that don’t will be blind-sided by the wave of negativity.

Maybe the corporations will catch on soon, but I doubt it. The large behomoths of the 80s and 90s are likely to die a long lingering death as they spin in circles trying to figure out what is going on.    In the meantime those companies built in the modern era that understand “the small guy is in charge”, companies like Google and Amazon, will continue to grow and thrive.  Until the next paradigm shift comes along…

So what do you think?    Are you influential?  Share your thoughts!