Social Media and a New Era of Consumer Empowerment


Since the days of Adam Smith, we have operated under the assumption that capitalism and democ- racy always walk hand-in-hand. After all, a system that empowers consumers to vote with their dollars is one that ensures their needs are met. A free market inexorably ties sellers’ interests to those of their buyers. When customers can simply take their business across the street, companies either exceed value expectations or cede market share to someone who can.

Until recently, however, capitalism’s reality was more autocratic. Consider the lone consumer who had a sub-par buying experience. Ten years ago, there was no way to communicate the resulting dissatisfaction in a manner that would truly impact the purveyor of poor service. There was the backyard fence, a dinner party, or the kids’ soccer games; none of which provided a venue large enough to build real strength in numbers. That meant the little guy had no real voice. How democratic is that?

But since then, the digital revolution has brought about dramatic changes — and signs abound that a true democratization of the free market system is underway. With the advent of social media, consumers of goods, services, and ideas have been provided a force multiplier that has tilted the balance of power in their favor. In the Information Age, ordinary consumers are visible, organized, and able to virally affect buying decisions with expansive reach and fiber-optic speed. That results in marketplace influences that are increasingly of the people, by the people, and for the people. Simply put, consumers have taken control of the narrative — and they are using it to exercise power as never before.

In just the past six months, we have seen consumers force embarrassing reversals of Netflix’s decision to split its streaming and DVD-by-mail services; Bank of America’s decision to attach a five dollar monthly fee to debit card usage; and Verizon’s decision to charge a two dollar fee for paying a bill via phone or Internet. We have seen them force Apple® and Victoria’s Secret to review supply chain policies after reports of poor working conditions overseas. We have even seen them band together to affect changes in public policy on business issues ranging from food safety to the environment.

In each of these cases, the reforms and reputational dam- age consumers wrought were the direct result of coordinated online efforts that swelled the ranks of the dissatisfied. They leveraged blogs, Facebook, Twitter, YouTube, and countless other social media platforms to spread the word and inspire action aimed at changing corporate behavior. At the same time, they took steps to ensure that their messages could be found amid all the clutter in the online space. With the optimized content that search engines crave, they dominated the portals by which more Americans access information than any other.

Consumers didn’t — and still don’t — possess the traditional marketing muscle that Corporate America employs so adeptly. But there was no significant investment in print, radio, or TV advertising because one simply wasn’t needed. Consumers recognize that the digital space represents the high ground in the battle for hearts and minds. Through the power of social media, they told the story while the companies they targeted followed it. From such defensive public positions, it was all but useless for the companies to do anything but bow to consumers’ demands.

All of this supports the conclusion that companies need to think differently about customer engagement strategies moving for ward. They need to engage the all-important online conversations that are impacting perceptions about their products and services — and they need to do so in ways that match the visibility advantage they enjoy in traditional marketing venues.

Look at Southwest Airlines, whose blog actually encourages customers to air issues or problems, thus containing them in a semi-controlled environment where they can be quickly recognized and addressed. Look at Marriott, which trolls the Twitter landscape for reports of customer service issues so that they can be rectified before they go viral (and often before the tweeter even checks out of the hotel). Look at Coca- Cola, whose Facebook page boasts 38.3 million fans who act as brand ambassadors that can help quell criticism from within consumers’ own ranks. Look at the countless companies that now rightly view Google as today ’s Yellow Pages and devise Search Engine Optimization (SEO) and Marketing (SEM) campaigns that help them win the online race to be found.

All of the above not only represent industry standards in Digital Age customer engagement; they represent strategies that can be scaled and employed across a full range of companies and industries — regardless of size, budgets, or audience demographics. More important, they provide concrete evidence that consumers need not exclusively dominate the digital space if companies recognize that they too can take part in — and wield some measure of control over — the conversation as partners with their customers.

Social media has democratized the free market system in ways that even Adam Smith could never have imagined. The digital era is one where consumers can influence, organize, and act in their own self-interest with greater skill and efficiency than ever before. The sooner that companies adapt to the new, level playing field, the greater the chances that they will thrive under the capitalist paradigm.

Richard S. Levick, Esq., president and CEO of Levick Strategic Communications, represents countries and companies in the highest-stakes global communications matters — f rom the Wall Street crisis and the Gulf oil spill to Guantanamo Bay and the Catholic Church. Levick was honored for the past three years on NACD Directorship’s prestigious list of “ The 100 Most Influential People in the Boardroom” and has been named to multiple professional Halls of Fame for lifetime achievement. He is the co-author of three books including The Communicators: Leadership in the Age of Crisis and is a regular commenta- tor on television, in print, and on the most widely read business blogs. Follow Richard Levick on Twitter @richardlevick.