Can We Ban Customer Relationships
Monday: August 25, 2008 5:23 PM
People are always asking for the business value in social media but few seem to ask about the consumer value of social media. Last summer, we had an interesting story emerge from the UK. It has been a long standing bank tradition to offer interest free overdraft protection for college student up to two years past graduation. The protection was limited to around 2,000 pounds. In July, the HSBC bank announced that they would no longer honor the policy and would discontinue the program by August 8th. In typical business speak, the bank responded to the outrage by saying: "We are helping graduates pay off their debt". Normally in this type of environment, we would complain and mumble to our family about how unfair life is to the little people. Maybe we would write a letter or email the President of the bank which would get intercepted by some gate keeper. This would result in some form letter being sent or simply ignored. After a week or so, the world would move on and the bank could start collecting their 9.9% interest and celebrate the new revenue stream for the company.
However, this wasn't 1985 and Wes Streeting didn't just sit around waiting for some formal chain of complaint. Wes was the Vice President of the National Union of Students and he turned to Facebook; a social software application. He created a group called "Stop the Great HSBC Rip-Off!!!" which drew 2,500 student sthe first few weeks. This got a little bit of attention from the media but after 5,000 students signed up, then the ball got rolling. The students then started to plan an attack on the local branches and flooding the support lines forcing the bank to explain every detail of the decision. Soon the bank retracted the decision and claimed that "they weren't too big to listen to their customers" and "Students and graduates are valuable future customers for banks, and it is therefore crucial that those banks recognize that their support and fair treatment is likely to be rewarded with customer loyalty in the long term". Ugh, this coming from the same group that was just about to hit these "valuable customers" with triple the going rates of interest.
So what can we summarize from this story? Is management out of touch with reality? Do they have too many MBA's that focus on the bottom-line numbers? Is this a business out of touch with their customer base? Well, maybe but this is more of a story of how "Customers" can come together and force change in ways never seen before. Even if Wes had the passion, how would he have been able to assemble 5,000 people to revolt against the policy just a few years ago? We have all heard the story of how the unhappy customer told 10 friends who told 10 friends who told.. But it really doesn't happen that way. Quick, who banks at the same bank you do? Who shops at the same grocery store as you do? Who buys their gas from the same retail chain? Admit it, you don’t know and the amount of energy required to assemble 5,000 people is monumental due to the discontinuous relationships that we have. Social media simply breaks down the discontinuous nature of relationships and bonds us together, not by means of geography or family linage but one of interest. This new reality is very scary for all organizational structures especially from those that don't learn to leverage it.
People are always asking for the business value in social media but few seem to ask about the consumer value of social media. Last summer, we had an interesting story emerge from the UK. It has been a long standing bank tradition to offer interest free overdraft protection for college student up to two years past graduation. The protection was limited to around 2,000 pounds. In July, the HSBC bank announced that they would no longer honor the policy and would discontinue the program by August 8th. In typical business speak, the bank responded to the outrage by saying: "We are helping graduates pay off their debt". Normally in this type of environment, we would complain and mumble to our family about how unfair life is to the little people. Maybe we would write a letter or email the President of the bank which would get intercepted by some gate keeper. This would result in some form letter being sent or simply ignored. After a week or so, the world would move on and the bank could start collecting their 9.9% interest and celebrate the new revenue stream for the company.
However, this wasn't 1985 and Wes Streeting didn't just sit around waiting for some formal chain of complaint. Wes was the Vice President of the National Union of Students and he turned to Facebook; a social software application. He created a group called "Stop the Great HSBC Rip-Off!!!" which drew 2,500 student sthe first few weeks. This got a little bit of attention from the media but after 5,000 students signed up, then the ball got rolling. The students then started to plan an attack on the local branches and flooding the support lines forcing the bank to explain every detail of the decision. Soon the bank retracted the decision and claimed that "they weren't too big to listen to their customers" and "Students and graduates are valuable future customers for banks, and it is therefore crucial that those banks recognize that their support and fair treatment is likely to be rewarded with customer loyalty in the long term". Ugh, this coming from the same group that was just about to hit these "valuable customers" with triple the going rates of interest.
So what can we summarize from this story? Is management out of touch with reality? Do they have too many MBA's that focus on the bottom-line numbers? Is this a business out of touch with their customer base? Well, maybe but this is more of a story of how "Customers" can come together and force change in ways never seen before. Even if Wes had the passion, how would he have been able to assemble 5,000 people to revolt against the policy just a few years ago? We have all heard the story of how the unhappy customer told 10 friends who told 10 friends who told.. But it really doesn't happen that way. Quick, who banks at the same bank you do? Who shops at the same grocery store as you do? Who buys their gas from the same retail chain? Admit it, you don’t know and the amount of energy required to assemble 5,000 people is monumental due to the discontinuous relationships that we have. Social media simply breaks down the discontinuous nature of relationships and bonds us together, not by means of geography or family linage but one of interest. This new reality is very scary for all organizational structures especially from those that don't learn to leverage it.
