Follow by Email

Thursday, 8 March 2012

Banking on the apathy of Customers...

Australia is an interesting market.
The most successful businesses are often the most hated. "Tall Poppy syndrome"?... not always.

Let me mention 2 categories and you check your immediate emotive response when you read them...

1) The Big 4 Banks
2) Coles and Woolworths

Most of my friends reactions are as follows:

1) The Big 4 Banks - "Arrogant", "someone needs to do something about them", "how do they get away with with crying poor and yet continue to rack up record profits?", "they are hurting middle Australia!"
2) Coles and Woolworths - "I shop there because I have to, but I am not proud of it", "their ad's are cringeworthy and treat me like a fool", "their produce is awful, I hate the fact that they bully suppliers and small businesses", "To be honest, I'm not sure that I am getting the best price anyway".

It is true that the media has played a fairly significant part is these reactions, but when you have Wayne Swan attacking the Banks and the ACCC urges grocery suppliers to speak out this is more than a media beat up...

I was speaking about this with a Lawyer friend the other day (yes it is possible to be friends with a Lawyer!) and we got to the question: "Well what can we do about it as consumers?"

His response was, "appears they only care about their shareholders, so maybe the answer is: Become a Shareholder"
This got me thinking... "They only care about their shareholders"... that's obvious and probably fair too. But there may be more to this. Actually, they only care about what their shareholders care about! And their shareholders care about share price and dividends! And despite what we say about these businesses and their practises, they largely deliver for their shareholders!
So as long as you have representative banners in your halls showing smiling customers, as long as you preach the customer matters mantra in your offices... it doesn't matter if they don't like you as long as they keep shopping with you.

So what to do?
Well, you've probably already worked out, like me, that if you alone make a stand and choose not to shop with them or use their service that with such a dominance of the market, they will not even notice. Certainly, the shareholders wont go into a panic just because of little ol me

And so you feel helpless and then apathetic to action... AND THAT IS WHAT THEY ARE COUNTING ON! The apathy of customers!

So back to the shareholders: Do shareholders care about customers? Well if customers started leaving or changing the way they shop in a way that impacted the share price or dividend... you better believe that they would care about Customers.

So lets get to the point... What is the solution? Enter... (drum roll)... Customer Groups
Social Media has provided the solution! 

1 customer can't make a difference, no matter how much we wish that they could.
But what if a group of customers were able to find each other through social media?
What if this group of customers decided to act together for THEIR own good? In the right numbers they become a powerful force. (Just ask Kadafi)

For example... Take 1000 bank customers who act together to go to the bank and negotiate a better deal for the group? I think they'd listen to 1000... if not, a group of 1000 customers business is a pretty attractive gem for other financial institutions to bid for! Either way, each individual in that group gets a better deal.

Or what if X number of customers could start sourcing products and produce together on mass? You'd have to think that direct interaction between producer groups and customer groups could be good for both the producer and the customer (and bad for the big supermarket that is banking on your apathy and the fact that the producer has no other way to sell their goods).

Social media makes all this possible, AND we are only just at the beginning of the Consumer Revolution.

For the next blog... I'll introduce you to a business that is putting this into practise

Want to join the revolution? follow me on @ljecks

Til next time

1 comment:

  1. Friends with a lawyer eh ? And the cheque's in the mail ! Interesting subject Luke. The way I think about this, the big companies have "stakeholders". Consumers are one of the stakeholders, but I think they come a long way third behind two more important stakeholders. Stakeholders who drive the company's behaviour. First - are the key executives, whose remuneration and financial incentives are based on short time financial criteria (whatever it takes). Their conduct is justified in support of the Second - their shareholders, a lot of whom are major corporates themselves , who want short term results too. There are other stakeholders like bankers and service providers, but who cares about them ? I still find it incredible that, despite what is going on in the rest of the economy and the rest of the world, there is an expectation that companies continue to deleiver increasing profits and their share price will increase...likes its the "Magic Pudding"! I agree with you Luke, the big guys - especially the Coles and Woolies of this world, do it by squeezing their suppliers and service providers, restricting alternate supply, taking advantage of their customers and spending millions on stupid ads and PR people to tell us how they are an indispensable part of our way of life, I think we're ready for a Consumer Revolution Luke. Lead the charge ! Peter