How Net exploits value of customer feedback

The Internet has always been a breeding ground for exotic business models, but this one takes the biscuit: a dot-com that gathers up and sells customer complaints to the companies concerned.

Planetfeedback.com is building a business entirely devoted to helping consumers complain. Among its services are pro-forma letters, so that every consumer has access to the best letter-writing skills (“just fill in the blanks” as it were); names and addresses of the people to direct messages to within corporations; and recommended cc lists of appropriate pressure groups, media and politicians, to force the recipient to stand up and take notice. “We will raise the stakes for companies to respond to their customers,” declares Planetfeedback founder and former Procter & Gamble executive Pete Blackshaw.

There’s big money in opening the floodgates of consumer comment, claims Blackshaw. He estimates that only four per cent of “feedback impulses” end with a message being sent, because the process is time consuming and people are cynical about what they’ll get for their efforts. By making complaining much easier and increasing the likelihood of a positive response, Blackshaw hopes to get that other 96 per cent flowing.

Planetfeedback is a small, fledgling dot-com but it’s interesting for a number of reasons. First, look at how it plans to earn its money. Unlike many other dot-coms, it isn’t pinning its commercial hopes on a magic but elusive ingredient called “advertising revenues”. In fact, it doesn’t carry any advertising at all because, as its manifesto states, it wants “to earn consumers’ permission to act as their advocate”, not to act as the advocate of any corporation or brand.

So it hopes to earn its daily crust by becoming a “value added repackager” of consumer feedback. One service it provides is crisis early warning systems. If Coke had the services of a Planetfeedback in Belgium it would have realised it was in the midst of a PR crisis much sooner, claims Blackshaw. On the other hand, reports Blackshaw, 40 per cent of customer messages take the form of compliments or suggestions. “Customer feedback is gold,” he comments. “Soon it will be analysed as rigorously as the financials.”

Another potential revenue earner is analysis of aggregated feedback data – for example, complaints are up ten per cent this quarter, but how does that compare with our rivals? As the database grows, companies will turn to Planetfeedback to get real-time consumer responses to their services – for example, how do BA’s meals rate in comparison to American Airlines? Planetfeedback will also build up a comprehensive profile of key influencers: the activists who shoot their mouth off about brands and influence other consumers. “Understanding viral power is as important as understanding buying power,” contends Blackshaw.

If Blackshaw is right, we are in the midst of a sea change in marketing: a tsunami far bigger than appears at first sight. Peer back into the mists of marketing history and you can see that modern marketing’s edifice was constructed on a lack of consumer “feedback”. Marketing boils down to two vital tasks: understanding demand (so that suppliers can match supply to demand), and connecting with customers (so that they can turn supply into revenues).

But in the industrial age, when goods and services were sold on a remote basis to anonymous units of demand called “the consumer”, there was no effective mechanism for the consumer to give feedback and say “Here I am. This is what I want”. So marketers had to invent a whole series of remote-control mechanisms to compensate for this critical information void: brands as surrogates for relationships, advertising as a surrogate for the dialogue that takes place within such relationships, market research as a surrogate for the learning that takes place within such a dialogue. With these artefacts marketers built a completely different system, which said “here we are, this is what we have to offer”.

Now, however, new technologies are making consumers’ precise desires economically and operationally viable for the first time. The information hole is being filled, at source. As a result, marketing will evolve to focus as much on eliciting and responding to feedback as it does on broadcasting selling messages – with fundamental implications for industrial age artefacts such as brands, advertising and market research.

Mindsets, as well as mechanisms, need to adjust to a new era of customer feedback. Enlightened companies already accept that, far from being an enemy, a complainer is an opportunity. Peeved customers tend to badmouth the brand wherever they go. Mollified customers are often even more loyal than satisfied ones. That’s very important in a world where sideways flows of information between consumers can be more influential than top-down advertising messages. But still, adjusting to such a world is very difficult for an industry steeped in industrial age assumptions about top-down control.

David Weinberger, who helped draft the highly influential and iconoclastic critique of marketing principles, Cluetrain Manifesto, sums up the difference with this comment: “Brand management is an attempt to hide the full truth about a product or company by reducing it to a single word that’s broadcast from a single orifice in a managed process.”

Marketing, he declared in a recent article for the Journal of Brand Management, is about sending messages to people “who do not want to hear them”.

Marketers try to manage these messages. But real, valued information flows through conversations between people. And not even the biggest control freak in the world can manage the myriad of conversations that make up a market. So “the biggest challenge facing marketers is learning not to manage”, but how to be open, honest and transparent.

So far, most debate about the Internet has revolved around business models: revolutionised cost structures, channels to market, and so on. That’s all incredibly important. But in the longer term, the Internet’s effect on business culture, attitudes and mindsets – and on the nature of marketing itself – might prove just as important.

Alan Mitchell

asmitchell@aol.com