The reasons for this are several. The economic inequality that characterized 2011 looks likely to persist, with one in seven Americans currently relying on food stamps, one in six Americans below the government-set poverty line, and real unemployment above 16%. At the same time, it is likely that political gridlock will persist, especially in a Presidential election year as both parties jockey for election rather than substantive change. Meanwhile, emboldened by the citizen activism of the Arab Spring revolutions, and aided by the mainstream adoption of social media, customers will increasingly look to the private sector to become more socially responsible serving as custodians for social change.
Research bears out such expectations. Edelman, the world’s largest PR firm, found that 86% of global consumers want companies to put society’s needs on the same level as their business needs. While their 2011 Trust Barometer Report shows that “trust in US business to do the right thing” fell 8 points in 2011, to be only five points above Russia. This large discrepancy between consumer expectations and trust is all the more acute due to a lack of viable alternatives. Government is burdened by historic debt and gridlocked by partisan politics, while the important work of philanthropists, non-profits, and NGO’s is not sufficient to meet the scale of the challenges we face. As a result, in the face of persistent self-serving corporate practices, customer communities will seek to impact corporations where it hurts them most– their bottom line.
This process has already begun. We saw the dramatic backdown of Netflix over the launch of Qwikster, after so many customers deserted the brand that its stock price fell 37%. We saw over 700,000 people transfer their accounts away from major financial institutions toward credit unions to the tune of $4.2 billion on Bank Transfer Day. We saw Bank of America reverse its decision to charge a 5 dollar monthly debit fee in the face of customer activism.
Customers are quickly embracing new platforms and tools through which to express their demands, whether it’s through mobile apps like GoodGuide or online platforms like BrandKarma.com, both of which allow them to track the corporate practices of the brands they buy. To their credit, some of the smartest marketers in the world are responding, recognizing that these are the new emotional drivers that will determine the brand success stories of 2012. These include Coca Cola, PepsiCo, Nike, Patagonia, Unilever, Proctor and Gamble, and Starbucks. In fact, in an unprecedented move, Howard Schultz of Starbucks is leading 140 corporate CEO’s in a boycott of political campaign donations until the gridlock in DC is ended. Further, impatient with the slow process of economic recovery, Starbucks has taken the bold move of enlisting the support of customers and credit unions to jumpstart the ability of small businesses to thrive in the US.
The rise of customer activism can no more be turned back than we could turn back the economic crisis, the internet, or social media. Those marketers that seek to thrive in 2012 will rise to the challenge of practicing business in a more socially responsible way, unlocking the potential of becoming deeply meaningful to their customer lives by improving the world they live in. The brands that lead this charge will not only be surprised by the customer loyalty it inspires and their desire to demonstrate that loyalty across social media channels, but also by the personal fulfillment that their leadership, employees and customers will enjoy.