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Sign of the Times

  |  January 16, 2013   |  Comments

Keeping brands honest through online activism.

"Consumers are more empowered than ever." During the web 2.0 phase of e-commerce, that statement referred mostly to consumers' ability to make more informed purchasing decisions using the wealth of information available on the Internet. Social commerce emerged as a more relevant way for shoppers to make product decisions and connect with brands based on recommendations from people they trust. Customer evangelism has now become the focus for brands that want to use loyal customers' networks to attract new, like-minded consumers. But evangelism has a flip side. A fast-growing, highly vocal segment of consumers are using online social activism networks to promote corporate social responsibility (CSR) instead of product preferences.

Consumers are more empowered than ever to influence prospective, existing, and even disengaged customers' opinions about major global brands. But it's not just about the more common online listening platforms anymore. Brands that want to avoid sharp declines in customer sentiment should also be aware of how online petitions can impact brand preference, affect market perceptions, and influence customers' purchasing decisions.

In 2011, one Change.org petition caught national media attention as a David vs. Goliath story for the modern age: Molly Katchpole's campaign to stop Bank of America from charging a $5 monthly debit fee to the majority of its customers. In late September, the bank announced that it would begin charging the fee. Shortly thereafter Katchpole posted her petition on Change.org and received 100 signatures by October 1. By October 2, that number had ballooned to 3,000 signatures. By the end of the month - after being featured on ABC national news and even gaining a signature from President Barack Obama - over 300,000 people had signed Molly's petition. In response to the consumer backlash stemming from Katchpole's campaign, Bank of America announced that it would not go through with its plan to add the fee (see the timeline here). "We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," said David Darnell, co-chief operating officer at Bank of America. "As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so." Bank of America has become a cautionary tale for other brands that underestimate the impact a single motivated consumer with a global audience can have.

Those who label the growing use of online petition sites as "slacktivism" are missing the point. A more technologically empowered, socially conscious, and media savvy generation of young consumers is changing the way brands conduct business by shaming them into doing what's right. It's no coincidence that the petition that forced Bank of America to change its course was launched by a 22-year-old. Millennials are much more inclined to hold brands accountable for doing right by the markets they serve. And they use social media to raise awareness of issues that are important to them. The same types of online tools that spurred the growth of social networks and commerce are enabling the growth of online activism. The "Truth about Youth" report issued by McCann Worldgroup the same year as Katchpole's campaign noted that among 90 percent of millennials surveyed globally "would make a point of telling their friends about unjust behavior from a brand." According to similar research conducted by the Cone Millennial Cause Group in 2006, 69 percent of 13-to-25-year-olds reported that they consider a company's social and environmental commitment when deciding where to shop. And 68 percent said they would actually refuse to work for an employer that is not socially responsible. Those respondents are now part of the workforce and influencing purchase behaviors that decide which brands succeed or fail.

Customers and employees don't just show their dissatisfaction with picket signs anymore. Now they go online to reach a global audience of billions. During the 2012 holiday season, customers and employees protested Walmart's decision to make employees work on Thanksgiving night. As competing retailers resorted to the same tactic, petitions on Change.org from disgruntled workers and customers spiked, generating over 91 campaigns. The influence of sites like Change.org is ever increasing and will certainly lead to PR backlashes and economic losses for brands that willfully ignore ethical business practices, environmental protections, and the basic decency consumers expect.

Consumer-generated online activism networks provide opportunities to understand where and how to focus CSR efforts. They also serve as unique listening platforms for gathering market intelligence and trend data to clarify which issues are important to this engaged, connected, and socially conscious audience. Brands looking for opportunities to create relationships with more evangelistic consumers and exploit competitive weaknesses will use these petition sites as listening platforms to grow their own share at the expense of brands that still think ethics are a laughing matter. They might find themselves laughing now, but crying later.

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ABOUT THE AUTHOR

McNeal Maddox

McNeal Maddox is a senior strategist, brand development, Digital, at Siegel+Gale, based in Los Angeles. His first experience with brand development came in junior high, when, not content to remain mere consumers of comic books, he and his brother formed their own comic book company. The brand name, logo, and signature style they created were so strong that one of their books is a permanent part of the Lynn R. Hansen Underground Comics Collection of Washington State University Library's special collections archive - and they even sold a few.

Since joining Siegel+Gale, McNeal has worked for several clients including Microsoft, Dow AgroSciences, McAfee, Genworth Financial, Yahoo, United Talent Agency, Activision, and PayPal. McNeal previously served as a project manager at FoxSports.com, where he managed the design, development, and implementation of customized promotional campaigns for major advertisers. He also worked as a web developer at ING Advisors Network.

McNeal graduated from Carnegie Mellon University with a BFA in graphic design, and received his MBA from the University of Southern California.

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