Financial Impact Blogs Can Have on Your Brand
Monday, August 4th, 2008
Brad and his wife bought a brand new 2003 Dodge Grand Caravan in 2003. It was a nice looking car, but the car had not been assembled properly and the roof started to leak. The leak, which the dealer could not find for 6 months, led to several other issues such as electric problems and mold and mildew growth. Daimler Chrysler Canada and McIVER Dodge did not immediately resolve the issue and Brad created the site “Do Not Buy a Dodge” (www.donotbuyadodge.ca) to document their ongoing fight with Daimler Chrysler and McIVER Dodge. Since May 2008 over 4.2 million visitors have visited Brad’s site.
Brad was not the only person to use blogs and the internet to point of Daimler Chrysler’s quality problem. Brad’s site points to at least 16 other sites that have also made it their mission to become customer advocates pointing out faulty Daimler Chryler product issues:
- Dodge and DaimlerChrysler Vehicle Defects
- Caravan Sucks!
- Don’t Buy One - Chrysler, Mercedes, Dodge
- Dodge Caravan Transmission Problems
- My Chrysler Sucks!
- Intrepid Horror Stories
- PT Cruiser Problems
- Dodge Neon Problems
- Dodge RAM Problems
- My Dodge Durango Died!
- Chrysler Intrepid Problems
- Letter to Chrysler - Jeep Cherokee
- Sebring Problems
- Issues with Another Dodge Dealership
- Screwed at PC Dodge
- My Car Sucks
The internet has not only allowed companies to virally spread their marketing message, but it also has allowed consumers to virally spread their bad experiences with other potential customers. Companies like Daimler Chrysler who do not react fast enough, are greatly exposed to consumer backlash that can greatly cause PR nightmares.
An example of how easy customers can impact a brand is clearly identified by looking at the Diet Coke brand. If you type Diet Coke into Google you will see that the third highest post is a blog written by John McManamy, Don’t Drink the Diet Coke, who points out that Diet Coke can cause depression and fatigue because Diet Coke uses Aspartame.
Google has become a brand’s home page and information customers post by way of blogs, microsites, or comments can truly affect a brand image and sales.
Tim Anderson a blogger for IT Week documented an experience he participated in that affected Sony’s music sales. In 2005, a developer named Mark Russinovich posted a blog showing how a Sony BMG music CD, when played on a computer, would install a piece of software to prevent piracy that would scan the PC’s hard drive every two seconds and greatly slow down a PC’s performance. Since Mark was a computer expert, he was able to remove the piece of software and posted a blog to make others aware of this issue.
Mark’s post was viewed by many and several hundreds of bloggers also posted about the same issue. Within 24 hours, the story was picked up by Slashdot, the Register, and several other popular news sites. User reviews appeared on Amazon.com warning customers not to buy. Some of the most dramatic postings stated:
“It is a grave security threat” another said, “Do not buy Sony music CDs.”
Just in a period of 24 hours, hundreds of blogs were posted and I imagine 1000’s of potential Sony music buyers saw blogs and comments, on leading online CD retail sites, warning other customers not to buy Sony music CD’s. Bad news not only travels fast, but can be greatly exaggerated, which all can impact sales.
Dell went through a similar incident a few years ago when several customers started to post blogs and comments about the horrible experience they were having with Dell products and Dell’s customer support. The series of posts were called “Dell Hell” and they drew hundreds of comments from customers with similar negative experiences.
Dell chose not to ignore the posts and found a few ways to react to customers feedback.
1. Open Communication through Blogging
Dell started a blog called Direct2Dell (www.direct2dell.com) to officially start communicating with customers. Customers could now come to Dell and quickly find out about what really was the issue and how Dell would be solving the problem. Dell chose not to censor negative comments about problems, which was a contributing cause for its blog success. A post last August about the delay in shipping new In-spiron notebooks drew hundreds of comments from frustrated and irate customers. “Taking the criticism when the company screws up builds authenticity, said Bob Peason, from Dell.
2. Monitor and Respond On-Going Conversations
Over 15,000 posts mention Dell each day. Dell has implemented a tool from Visible Technologies that allows the Dell team to monitor all these conversations and route them to a team at Dell who responds to postings. Over 100 posts per day receive responses.
Also, Dell leverage’s other users responses to help solve problems. If a user likes a response provides by the community, then the user tags the response as an “accepted solution” to the problem. Dell’s community now lists over 6000 accepted solutions.
3. Capture Customer Ideas and React
Dell released IdeaStorm, a customer suggestion site, to capture customer ideas and to leverage the community to vote on the most important ideas. IdeaStorm has taken in 9,000 ideas, recorded 600,000 visitor votes, and implemented 120 suggestions. One of those suggestions was a Linux-based laptop that was developed in large part to customer responses.
Dell still has a long way to go. 21% of their customers still post negative comments about Dell, but compared to where Dell was several years ago, this is a significant improvement.
Companies such as Dell, Daimler Chrysler, Sony, and Coke have all learned the hard way that Blogs and User Generated Content can really hurt a brand and sales. Like Dell, companies need to open up communication with customers to quickly resolve customer issues, ensure that the full truth is being told, and to prevent potential PR nightmares.