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11/02/2011 The Rise of the Socially Empowered Consumer


There’s been a lot of talk about empowering consumers over the past few years. But the events of the past few months show that we’ve passed an inflection point. The actions and reactions around Bank of America and Netflix show that the power has shifted from an unbalanced company/consumer relationship to a much more balanced one.

Bank of America announced yesterday it was dropping plans to raise its debit card fees by $5. When it revealed its plans in September, BOA caused an outcry of protest on Twitter and Facebook. “Debit card fees” was a trending topic on Google.

Social media enabled consumers to not only show their discontent with the new plan, it allowed them to spur and encourage people to do something about it: switch banks. Apparently that threat of customer loss and negative publicity helped BOA change course.

This summer Netflix bumbled through an organizational and operational change that increased customer costs while decreasing what they received for it. Despite numerous attempts to explain what it was doing, Netflix only succeeded in enraging millions of people. Those people then used social media to tell each other how mad they were.

Not only that. They acted and encouraged others to act. The result: Netflix lost almost 1 million customers in a very short time. 

Both of these results would have been unthinkable back in the day when companies had a near monopoly on communications. In the broadcast or propaganda age, companies controlled the message and the means to distribute them. Consumers, who lacked any organizing principle or mechanisms, let alone the combined resources to act as a counterweight to those messages, had little power to counteract company actions.

Social media has disrupted that. Our digital revolution has delivered the means of production and distribution into the hands of consumers. Social media has created a channel to match and overwhelm the broadcast channel. With that, we’re seeing a very significant power shift. 

And it’s not only in consumer markets. The same thing happened in Tunisia and Egypt.

PoeplePower

Companies best take note. It’s one thing if people make you change back your logo, like Gap. It’s another when they stop doing business with you.

Imagine instead if all of these same companies had used social media to help test and form the business decisions. Perhaps they wouldn’t have always produced the most popular results, but the companies would have been more prepared, and created more consumer friendly decisions than otherwise.

For those companies who don’t really like paying attention to what’s happening on social media, I can only say one thing: You deserve everything you get.

Today’s consumer is empowered thanks to social media and that empowerment is going to grow stronger. People will no longer simply accept decisions and messages that affect them. What a great time to be a consumer!

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