Tag : customers
“Civilizations have clashed in an unexpected way this year, as ordinary people using Facebook and Twitter knocked down dictators in Tunisia, Egypt and Libya…” This is the opening sentence of an article titled, “Social Power and the Coming Corporate Revolution,” from Forbes magazine, September 2011.
The “Customer Spring” as it’s being called, is related to the ‘Arab Spring’ referenced above. Customers, like those protesters, are exerting their influence in unprecedented ways.
In the 1980’s Porter’s Five Forces model (see image) became a model “framework for industry analysis and business strategy development.” Porter’s widely-used tool helped businesses think through which competitive forces were the most potent.
The green square (the Bargaining Power of Customers) appears equal to others, but in the new social world order, customers (and employees!) have unparalleled leverage. Here’s an example:
Adidas recently found itself under attack when fans of a popular rugby team were outraged to learn that Adidas team jerseys were being sold for significantly more in their country than elsewhere in the world. Fans went online to research comparative prices and then organized fellow fans in protest. People started returning Adidas clothing to stores in disgust, the New York Times reported.
For those of us who remember the ” Tylenol recall” of 1982, we know that building trust through transparency may not easy or cheap, but it is worthwhile. The twist is that a similar episode today would ‘hit’ the Internet and be global in seconds. CEO be nimble, CEO be quick – but you better be honest and transparent as well. That green square is growing faster than you can imagine.
Image is Michael Porter, Harvard University, Five Forces Model
This entry was posted on Friday, November 11th, 2011 at 8:42 pm
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Social media makes our interactions more transparent. So hearing their feedback directly can be good and bad.
What we know is that traditional market research (while it used to be better than nothing) has big flaws. Check out this research from Forrester, “Making Better Use of Customer Data.“
Words like interactive, adaptive and real-time are hardly ever used in conjunction with traditional market research. We’ll talk more about how customer feedback is being gathered in real time. In the meantime, check out Zappos realtime service on twitter.
Have fun talking to customers!
photo credit: thinkhappynow. com