Why Companies' Giant Blunders Keep Coming
BOSTON ( MainStreet) -- Is anybody listening?
From a consumer view of the world, it may seem companies often treat them as an afterthought.
We've seen Bank of America (BAC) impose a $5 fee, then retreat from the plan after a deluge of complaints. Netflix(NFLX) , which raised prices and planned to split its DVD delivery service into a separate company called Qwikster, also did an about-face after a customer revolt. Verizon(VZ) was chided into dropping a $2 convenience fee for subscribers who pay their bills online or via phone calls.
|Of course companies still do market research -- but it's still possible to talk to the wrong people, and in an age of social media "megaphones," results can be unpredictable.|
In October 2010, when The Gap (GPS) decided its logo needed an overhaul to appeal to millennials, the result was disastrous. The simplistic image they settled on was brutally mocked on the Internet for its lack of creativity and aesthetics, aptly described by some -- perhaps giving insight into the company and its design firm's thought process -- as a cross between American Apparel (APP) and Facebook. Released on a Monday, the design was yanked by Friday.
Tropicana, owned by Pepsi(PEP) , tinkered with its traditional packaging, eliminating its recognizable straw-pierced orange. Unveiled in January 2009, the change was undone in less than a month when the company bowed to public pressure. Even temporary, holiday-themed silver cans of Coca-Cola(KO) ticked off shoppers enough to get the design prematurely retired.
If companies have not only tried-and-true focus groups, surveys, in-person retail channel checks and other marketing tools at their disposal, but are adding technology-driven solutions to the mix as well, how does a redesign of Gap's logo get so botched? Why didn't Netflix anticipate subscribers would threaten to leave in droves? Why were Pepsi executives so surprised when shoppers put the squeeze on it?
Perhaps more importantly, if there were well-considered business objectives behind the decisions, why did these companies give up so quickly?
It is legendary how Mark Zuckerberg defied much of the shrewd counsel he got, stuck to his vision of what Facebook should be and proved most everyone else wrong. The late Steve Jobs is a poster child for this sort of internalized decision making, famously bragging (not altogether truthfully) that "Apple doesn't do market research."
That Jobsian take is hardly a modern invention. Henry Ford -- who famously resisted releasing cars in any color other than black -- once dismissed the notion of market research with the quip, "If I asked my customers what they want, they simply would have said a faster horse."
But, despite Jobs' boast, Apple(AAPL) does indeed cultivate customer feedback. So do Netflix, Pepsi, The Gap and Bank of America, despite their recent failures to keep a finger on the public pulse. The question is if they use that data, as well as how and when.