The listening business

Some years back a crook computer repairer did the rounds of Sydney and regional NSW. For all his sins, Joe, as we’ll call him, always stood out as an example of a business that effectively listened to the customer.

Joe would advertise in local papers and you could spot his ads by the line “all our technicians are qualified computer programmers”, which is a nonsense slogan – like a landscape gardener claiming all her labourers are civil engineering graduates – but it was an effective catchphrase in a market that didn’t know better.

After awhile the local community would start to wise up to Joe and his “computer programmers” and when the complaints and fair trading investigations mounted, he’d change his business name, move to another suburb or town and the cycle would start again.

I was reminded of Joe at the City of Sydney’s discussion on the connected consumer at the latest Lets Talk Business seminar last week and wondered how he’d survive in today’s markets where people are quick to go online and criticise.

Dealing with criticism has always been big businesses’ Achilles heel; bureaucracies have a tendency to protect themselves and when there’s managerial or team bonuses at stake there’s strong incentive to ignore the concerns of customers.

A good example of this is Vodafone, where the chief executive, Nigel Dews, has been open in admitting the company failed to listen to their customers as their network failed to meet the demands placed upon it.

While the network itself was buckling under the strain, the company spent millions on sponsorship and advertising effectively trying to drown the criticism under a wave of tightly controlled good news stories, promotions and competitions.

It didn’t work, just as Facebook’s PR agency Burson-Marsteller failed dismally in planting an anti-Google story, which saw the two organisations not only busted but also descend into an unseemly argument with their client while frantically deleting Facebook posts.

All of these actions – deleting social media comments, ignoring customer complaints and attempting to distract critics with pictures of pretty girls and racing cars – smack of the old way of doing business, in an era where tightly controlled mass media was the only channel complaints could be heard. Those times ended with the arrival of the internet.

At the Lets Talk Business event, one of the panellists, Jody Fox of Sydney’s Shoes of Prey described how her business is engaging with customers online and discussing any concerns openly on the Facebook page, not deleting them.

This is the new reality of business, if you don’t listen and engage with upset clients or (even worse) try to control their comments on your sites, you’ll only get them angrier and they’ll go elsewhere to tell their stories.

Another striking difference between the new and old business was Jody’s point that Shoes of Prey treats customer service as a marketing expense, not a separate cost centre. In most large organisations helping paying customers is treated as an unnecessary expense that should be outsourced and minimised as much as possible.

This sort of works when you have a licensed oligopoly like telecoms or banks but fails dismally in competitive industries. Without purchasers there are no shareholder returns and eventually no executive bonuses.

Ignoring customers worked nicely in the era of mass media when it was difficult for upset clients to be heard above an expensive marketing campaign; Vodafone, Burson-Marsteller and even governments are finding it doesn’t work today.

Joe the computer technician would have understood this, if he’s still doing dodgy IT support then he’ll be watching the Facebook pages, Twitter feeds and blogs for bad news.

Somehow though I suspect he’s no longer in computer repairs, my guess he’s making a lot more money in social media or search engine optimisation these days.

Paul Wallbank is one of Australia’s leading experts on how industries and societies are changing in this connected, globalised era. When he isn’t explaining technology issues, he helps businesses and community organisations find opportunities in the new economy.