The Market Speaks

September 22nd, 2009
by

Gail Nelson
It’s Tuesday, and in my role as a consumer, I am feeling very empowered. And it feels … good.iStock_Communication_Small

Amid privacy concerns, Facebook is turning off its controversial Beacon service, which tells one’s friends about your purchases. You may recall the brouhaha that ensued when Beacon was launched. (A synopsis: By default, data about the online purchasing habits of Facebook users were automatically shared with other members of their network, and it was near impossible to opt-out if you didn’t catch a single fleeting pop-up window. Responding to consumer protest, Facebook made Beacon an opt-in program within weeks of launch. But in the end, many pundits supported the inevitably of this direction – a way for social networks to make money and marketers to capitalize on an automated form of word-of-mouth marketing.)

Now, due to privacy lawsuits, the entire program has been dismantled, and Facebook will pay $ 9.5 million in settlement charges, some of which will fund a new privacy foundation. (Read  “Facebook To Wind Down Beacon to Resolve Privacy Lawsuit” on MediaPost.)

T-Mobile joins Facebook in learning the hard way that it doesn’t pay to force customers to do what they don’t want to do, even if it’s the “right thing.” With consumer adoption of paperless invoices stalling, T-Mobile decided to charge for the privilege of receiving a hard-copy bill beginning in August. The new policy applied to new and existing clients.  At first, the program seemed to be a smashing success. After months of sluggish conversion rates spurred by voluntary “go green” marketing programs, requests for electronic invoicing exploded. (See The New York Times article, “What if People Don’t Take the Bait to Go Paperless?”)  But after a class-action lawsuit spearheaded by disgruntled clients asserted that the mandatory charge was a “material modification” to T-Mobile’s contract, T-Mobile rescinded the program.

I can understand T-Mobile’s interest in curbing paper invoicing. The paper, ink, and fossil fuels used in producing and sending paper invoices degrade the environment. Saving on the cost of mailings, especially in these tough economic times, allow businesses to hold the line on pricing, reduce the need for layoffs, and fund new products and services. But today’s consumer will use every tool at their disposal to avoid being strong-armed. These days, you need to talk to your customers, and get most of them on board, before you change policies.  

The T-Mobile situation caught my eye because we have a situation analogous to theirs: After BurrellesLuce’s “go green with paperless billing” marketing campaign had penetrated as far as it could, Client Services (CS) began to reach out to each of our clients (much in the same way both our CS and Sales teams  had done a couple of years ago when we launched a “turnkey copyright compliance” program so PR and communications could legally share their online news clips.) Anyway, as a result, in just a few months, the percentage of clients receiving electronic bills has jumped from less than 20 percent to almost 90 percent. Most of the change was the result of dialogue.

What do you think? Could the T-Mobile and Facebook initiatives have succeeded had they been implemented differently?  As a public relations professional, how would you advise Facebook and T-Mobile to proceed? And as a consumer and a citizen, what do you think of the role of lawsuits in changing the behaviors of these companies?

4 Responses to “The Market Speaks”

  1. Ibrey Woodall says:

    The saying is that you can always get more bees with honey. Strong-arm methods usually do cause some to balk, just out of principle if nothing else. A good plan is to do some research before implementing new procedures. Focus groups are a good way to go for some.

    Unfortunately, sometimes it takes a lawsuit to be heard.

  2. Gail Nelson says:

    Hi Ibrey,

    I so agree! I know that mobile phone providers aren’t known for proactive customer service, but I wonder what the results would have been if T-mobile had sent a text message to each client or conducted a call-out campaign. They may have gotten the results they sought. In a perfect world, the accountants wouldn’t always be in charge.

  3. David Bona says:

    Your communication practices are always critical when announcing bad news. Some form of pre-implementation communication explaining the rationale for the change helps the receiver believe you gave thoughtful consideration to how the change would affect them. This logic holds true for employer to employee communication, business to consumer communication and even person to person communication.

  4. market says:

    market…

    Your topic The reality of Starting a Business in this Economy | FranNet … was interesting when I found it on Monday searching for market as I also have articles and information posted on this subject. Thank You… Steve Noel Sr….

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