Can Social Media Make Customers More Civilized?
Social media often make it a little too easy for good people to behave badly. (Think, for example, of the nastier comments one sees on this site.) When those good people are your customers or clients, those consequences can be excruciating and expensive.
Some customers, alas, aren’t above being bullies, blackmailers and/or jerks. They live for the opportunity to vent their unhappiness through Twitter, Yelp, or Amazon. Companies live in justifiable fear that a couple of complaints going viral could irreparably damage their business.
Yes, customer-centric firms need serious social media strategies and processes to manage legitimate complaints and concerns. But minimizing the challenge posed by impulsive and/or excessive digital badmouthing is unwise. Companies have a huge stake in making social media platforms more sociable and more civil.
Accountability and transparency cut both ways. There’s no question that consumers have more power than ever before to call attention to bad products, services, and experiences. But it’s equally true that companies also have greater power to call attention to bad customer behaviors. The same social media platforms that can viralize customer complaints can similarly share unflattering aspects of customer excess. That may be a powerful incentive for better behavior.
I’m not talking about restaurants tweeting the names of reservation no-shows or posting photos of receipts with horrible tips (although they’re undeniably interesting social media “business” malpractices.) My concern is designing reasonable, rational, and reliable mechanisms for encouraging customers to think twice before behaving badly. Social media make wonderful platforms for “nudging” people into making choices that reduce the chances of unhappy outcomes.
Uber, the popular and fast-growing car hailing service, ensures that its drivers can rate customers just as surely as customers rate drivers. Airbnb, the pioneering travel renting/share company, similarly encourages renters to rate guests and guests to rate renters. The goal here is obvious: create symmetry of accountability and transparency between parties. Whether you’re driving or hailing a car — or renting or letting an apartment — you know you’re being rated and that those ratings are being shared. That should make you at least a little self-conscious.
Insurance companies increasingly use clever technologies to segment their customers. Progressive’s Snapshot literally instruments the car to see how well, how often, and when its people drive. “Socializing” the data — letting you know how well you drive relative to others in your community or peer group — would be an excellent way of subtly reminding you to drive better and safe.
These “sharing economy” companies have little choice but to invest in mechanisms that encourage greater accountability and better behavior from their customers. Their business models depend on it. If reliability and good behavior doesn’t scale, they can’t succeed.
Of course, as anyone who’s applied for a loan or credit card well knows, rating customers is an integral part of global finance. Smart businesses are quick to run a D&B of a prospective client; FICO scores ostensibly help screen and manage credit risky customers. There’s nothing intrinsically new about using public information to creatively segment customers and clients.
But what’s both qualitatively and quantitatively different is that customers — and clients — who ordinarily might not think twice about making a scene or being difficult (as opposed to demanding) can now find themselves ranked and rated in ways that create genuine costs.
Have a reputation as being an unusually picky and quarrelsome guest at a popular hotel chain? Don’t be surprised if you find it impossible to get any of its discount rates when you book. Your record shows that you’re an expensive and time-consuming guest; unless you pay a higher minimum, the hotel would rather inflict you on its competition. Enjoy litigating contract disputes or insisting on arbitration? You can increasingly be sure your smartest vendors have excellent insight into your litigiousness and will adjust their terms accordingly. Do your marketing and/or procurement teams enjoy bullying your vendors a little too much? Don’t think for a moment that the nastiest aspects of those interactions won’t become common knowledge.
The entwined rise of Big Data and predictive analytics virtually guarantees that — just as structured and semi-structured data are being fused — informal gossip and formal ratings systems will be collected, correlated, and converted into business rules designed to make badly-behaved customers pay more or go away.
Put another way: in the same way “dynamic pricing” takes peak demands and troughs into account, we’ll see prices dynamically reflect the quality and behavioral reputation of customers and clients. Better-behaved clients pay less; troublemakers pay more. As most serious entrepreneurs and CEOs well know, few things are more expensive than a bad client. They cost more money, time, morale, talent, and opportunity than they’re ultimately worth.
Of course, there will always be bad behavior and desperate companies chasing truly abusive clients because they’ll do anything for the money. But what’s sauce for the customer goose is sauce for the enterprise gander: companies can use social media to rate customers as surely as customers use social media to rate companies.
Being nice isn’t just nice — it’s a best practice for both sides of the transaction.
This post by Michael Schrage first appeared in Harvard Business Review.