Verizon Wireless is the latest corporate culprit to learn the hard way it is better to listen before acting.
The 24-hour turnaround by Verizon Wireless on a proposed fee for online transactions showed good sense, but it still scarred its reputation. How hard would it have been for the marketing department to conduct a couple of focus groups to test consumer reaction to the fee? Video footage of consumers who pay online saying "no way" should have been enough to convince C-suite officials to scrub the fee — before announcing it.
The tone-deaf Verizon Wireless move is all the more puzzling because, not long ago, Netflix and Bank of America committed the same kind of klutz. Bank of America faced customer rebellion and ditched its proposed $5 per month debit card fees. Netflix watched its subscriber base shrink in the face of what consumers viewed as a huge price increase for bundled online streaming and home delivery of movies. A CEO apology for failing to listen didn't seem to help much.
Companies need to raise prices from time to time to cover their rising costs. The key is to think about how to position increases so consumers believe they are getting additional benefit. That's where active listening comes in. Consumers can offer clues about what they value.
A good way to tune in to these clues is through a continuing conversation with customers on a corporate database. That conversation can include survey research as well as more interactive engagement, such as invitations to special events to preview new products.
Bob Feldman of PulsePoint Group has blogged that "companies we admire these days tend to be those that really engage with their employees and customers. They actively listen and co-create the future with their constituents."
Research has always been an essential part of effective marketing strategies. Now digital platforms allow research and marketing to become almost indistinguishable.
"Engaging customers is a best practice marketing strategy," says CFM research partner Tom Eiland. "Effective engagement starts with active listening. One of the most convenient ways to engage is through online conversation."
Consumers want to be involved with brands they buy, so it won't take much to coax them into conversations. "If you ask, they will tell," Eiland says. "They will compliment and criticize. They will keep talking as long as you keep listening."
Some executives may be uneasy with managing by partnership. As Feldman notes in his blog, controlling the dialogue is an illusion. The standard today is cultivating the conversation.