Quote from F. Kotler’s book “Chaotica”
In the past, companies dominated the information landscape. They could launch powerful advertising campaigns, create a brand using radio, television, billboards, newspapers, and magazines. If customers sought additional information about a brand or seller, they could only rely on their own experiences or the experiences of close friends and family. This “asymmetrical” information clearly favored the sellers.
Over the past 10 years, a revolution has taken place. Today’s consumers continue to receive advertisements from sellers, but they can also turn to hundreds of “friends” on Twitter, Facebook, or MySpace. They can search for online reviews on Angie’s List or Zagat, and explore what other companies and individuals think about the products and services of the company they plan to use or are already using. More and more, in every region or in individual countries around the world, a network of interactive communication is developing, connecting companies and people so they can share their experiences.
This means that customers and other stakeholders are no longer passive agents in the marketing process. They can learn about a company, product, or service as much as they want. Furthermore, customers and all stakeholders can use what they have found and discuss it with others online, whether through blogging, podcasting, sending emails, or chatting.
“You can no longer shut yourself off with an iron curtain in this new world. Credibility is a key characteristic, and if there is any sign of unreliability, news about it spreads like wildfire among consumers… this is why service planning is so vital,” says Anna Kira, a recognized expert in creating innovations and concepts. “Understand that people view a company as a service in itself. People buy experiences—not products or services—and if the experience does not meet expectations, the company will pay the price for it.” In conclusion, she states, “We see that the integrity of this process is extremely important for the modern information revolution.”
A profound effect of this process will be that sellers who offer substandard products or provide poor services will disappear faster than ever. The volume of word-of-mouth spreading among companies and individuals who have experienced a product or service will ensure that the good players receive recognition, while the bad ones will be defeated. This will encourage the good players to become even better. Thus, the increasing power of customers and stakeholders acts as a catalyst for the continuous improvement of offerings from serious competitors.
The power of word-of-mouth also has the potential to create turbulence and chaos for sellers. One person, extremely dissatisfied with their service during a flight, can create a website dedicated to the airline, inviting others to share their unfortunate experiences and post their stories. One angry customer or consumer can potentially destroy a large company. Vigilant companies must strive for high customer satisfaction and monitor online communications to ensure that one disgruntled customer doesn’t ruin their reputation. In today’s world, a single angry voice has the potential to influence thousands.
British Airways and Virgin Atlantic are two examples of companies that suffered from negative news spread through social media and paid the price for it. In October 2008, Virgin fired thirteen of its flight attendants who posted derogatory comments about the company’s safety standards and some of its passengers on Facebook. By the way, Virgin crew members joked that some Virgin planes were filled with cockroaches and referred to passengers as “chavs,” a derogatory British term describing people with poor taste in luxury. A few weeks later, British Airways faced the same issue when it began investigating the behavior of several employees who described some passengers as “smelly” and “annoying” on Facebook. While both airlines stated that they had rules prohibiting employees from posting such information online and had internal channels for staff to submit complaints, these measures proved insufficient to prevent employees from publicly humiliating the companies online.
The Economist Intelligence Unit (EIU) conducted a study in 2008 that gathered feedback from over 650 business leaders, more than half of whom were senior board members. The research indicates that the key driving force behind change is the improved interaction enabled by new technologies among employees, suppliers, investors, and most importantly, customers. The data also shows that over the next five years, email through fixed and mobile devices will solidify its position as the most important communication channel for establishing and maintaining strong online business interactions with these audiences. Key highlights from the EIU study include:
- Email (according to 93 percent of respondents) and the World Wide Web (81 percent) maintain their leading positions as preferred channels of business communication and will continue to do so until 2013.
- There will be a general increase in the emergence of new “network” channels by 2013, which will allow companies to build new internal competencies and collaborate with external partners.
- The empowerment of consumers through technology will have a strong impact and a positive effect on businesses. More than 76 percent of respondents believe that this empowerment will positively influence the development of new products and services, and 73 percent expect it to have a positive impact on revenues.
- Organizations believe that the most significant impact on their business models between now and 2013 will come from technology-driven changes in business operations.
- Leaders expect that technological changes will significantly impact customer service in their companies (40 percent of respondents), and (24 percent) of initiatives in marketing and sales that rely heavily on web communications and email.
In the face of the accelerating pace of technological progress and social change, email is becoming the new “slow mail.” Traditional companies are less likely to recognize this quickly enough and will suffer defeats at the hands of those who adopt faster means of communication. The internet and the World Wide Web enable communication and collaboration between consumers, whose influence has grown, and the companies they wish to engage with. As customers increasingly demand that their voices be heard in how businesses interact with them, leading organizations of all sizes will benefit by transforming this heightened consumer involvement from a risk into new opportunities and long-term success.