CommonSense Blog

“I’ll Be Back…”

By Gary Grates | Aug 12, 2013

 A Perspective on Reputation, Trust, and Purchase Decisions in the Social Age 

John Sacco was furious.  The resident of a small Upstate New York hamlet had just caught up with the media reports that millions of gallons of oil had devastated the Gulf Coast due to a malfunction on a deep-sea oil rig owned by BP.

In the days and weeks that followed, John and several neighbors participated in numerous protests outside of the two BP gas stations in their community.

But as the weeks wound on and the third month of this tragedy began, a funny happened to John and those who vowed a complete distrust for all things BP:  They bought gas from the stations that weeks earlier they had picketed.

Was it because BP lowered its prices?  For John the reason was much more heroic.  He had read on Twitter that the company was establishing a trust fund to clean up the mess and reimburse businesses and homeowners for their losses.

The cheaper gas… Well, it was an unexpected benefit.  Following the event in the months and years since, John feels better and better about how BP stepped up to the crisis, as do his neighbors.

Note:  Oil giant BP in 2011 reported profits of $5.1billion (£3.2billion) in the three months to September, showing its recovery from the 2010 Gulf of Mexico oil spill. The company’s third quarter profits show massive growth compared to their $1.8billion (£1.3billion) made for the same period last year.

 

Late Arrival

When Randy Vetrone ordered five books from Amazon to send as Christmas gifts to five different people, she was certain of one thing: they would all get there in time.

But one didn’t.  Arriving several days after the 25th, her friend called to acknowledge the gift.  Randy apologized (none was really needed as her friend was happy about the thought) and then contacted Amazon.

Randy expected the typical apology and probably some type of reimbursement for the shipping.  She also vowed not to purchase anything from the e-retailer for a period of time.  And she was right.  Amazon apologized, provided a discount coupon toward future purchases, and did not charge her for either the book or the shipping.

But Randy kept her word…  up until four months later, when Amazon contacted her and sweetened the pot, so the speak, providing another coupon and free shipping on her next two purchases.  Further, her social communities indicated that Amazon was a “great company” that truly cared about customers and always did the right thing for them.  It worked. Randy purchased a pair of shoes and a movie. She was back.

 

Evasive Answers

Reading local news reports about how the energy company, which owns a nuclear facility in the region, was having difficulty with safety inspections at said facility, Sarah Munn began to question the integrity of its leadership.   From news reports, it appeared leaders were being evasive in their explanations, and that didn’t sit well with her.  So she went on Facebook to express her feelings.  Dozens of friends engaged in a series of on-line conversations questioning everything from the company’s pricing to the long-terms effects of the nuclear facility in the area.  They decided to create a petition asking the company to be more open about these issues.

The company did just that, scheduling several “Open House” discussions in person and via social outreach to talk about each and every subject.  Sarah, her husband and neighbors attended one of the sessions.  The dialogue was open, clear and forthright.  And while not all the answers were to her liking, she became convinced that the company and its leadership are operating properly.

She now has regular “chats” with the company via a Facebook page and Twitter, forging an ongoing relationship that did not exist several weeks ago.

 

What’s Going On?

What does all this mean from a reputation, trust and purchase point-of-view?

A number of insights can be gleaned from these three examples.  But first, let’s take a look at some recent studies:

  • 87% of consumers “research” companies online prior to deciding if they will do business with them. This can really hurt the bottom line of a business that suffers from negative reviews.
  • Mixing smart “business” decisions with a clear social communications outreach allows consumers and detractors alike to re-engage with the organization in a less tense environment, increasing comprehension.
  • The fact that only 3% surveyed in a current study never check out brands online before doing business should be an eye opener for every business.

 

Empowerment

From this, we can conclude that empowering consumers upfront and consistently impacts behavior, including perspectives on reputation and purchase.

Technology is rapidly driving transformation throughout industry. Respondents in a recent survey indicated that social media such as Facebook and Twitter, mobile and online shopping, and promotions and coupons through mobile and online channels are having the most significant impact on their businesses.

  • Social Media (Facebook, Twitter, Pinterest, etc.) – 71%
  • Mobile/online shopping – 52%

In this social age – from a reputational standpoint – consumers appear more energetic to work through issues such as poor customer service, bad decisions, and even real crises if the organization shows a willingness to engage in real discussion and debate.  Additionally, seeking and relying on other’s opinions on the same company or subject is often a regular activity influencing perceptions and, most importantly, future purchasing decisions.

The point here is that reputation and trust can often be rebuilt or repaired quicker if organizations are truly sincere and committed to fixing what needs to be broken.  Further, maintaining active and authentic relationships with communities of interest including customers does two important things:

  1. Establishes networks of informed consumers who advise the company when things aren’t right while keeping the company abreast of new ideas that impact innovation;
  2. Allows organizations to balance the argument during times of crisis.

Compare this state of affairs to the way it used to be, when negative news would fester like an untreated open wound. The ability of businesses to counter-balance the often one-sided public debate was severely limited, and company leadership had few opportunities to engage in the valuable back-and-forth dialogues with communities of customers that social media now affords them.

The Social Age has truly upended business and relationships, pointing the direction toward clear, concise, authentic, and open discussion and debate that encourages trust and builds bonds between and among companies, people and groups.

The good news for business leaders is that people will buy again. They just have to believe again.

Gary