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10/19/2004
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A Picture of Trust

Corporate behavior under the microscope: Break a promise and customers will find out about it.

In the networked economy, the brand isn't just an image but rather a measure of trust and relationships. No longer can spin doctors and admen make bad products or companies look good. Firms need to be honest, abide by their commitments, and show they care about customer interests by providing superior products or lower cost.

Courtesy of the Internet, consumers have increased access to knowledge about products and services. They can discern true value more easily. They can find out which cars perform best, are safest, and last longest; which laundry detergent gets clothes the whitest; which flight is the cheapest; which cell phone company has the best plans; which book has great ideas; and which vacation package is the best value.

Nowhere to Hide

What's striking about such discussion sites is the zeal with which consumers discuss corporate behavior; easily rivaling the passion fans feel for their favorite professional sports teams. When one company introduces a new product, discussion almost immediately turns to how its competitors will respond. Corporate histories are compared, and previous marketplace battles recounted in great detail.

Consumers burned by Sony's proprietary Betamax or Elcaset formats from the 1970s and '80s still seize every opportunity to remind fellow consumers of the benefits of open standards. When speculating as to what unannounced products are in corporate pipelines, every scrap of intelligence is shared and dissected. Company representatives making offhand remarks to potential customers at trade shows will find their words trumpeted to the world on Web sites within hours. If company representatives plead ignorance in order to avoid saying something quotable, they may find themselves chided for stonewalling or incompetence by unsatisfied consumers.

On occasion a storeowner or large customer will put out challenges to the discussion groups. "I have a representative of Nikon visiting our store tomorrow. What questions should I ask?" Helpful inquiries pour in from around the world. Instead of making a friendly sales call, the poor Nikon representative faces something more akin to the Spanish Inquisition.

Many companies assiduously monitor the discussion groups because they're invaluable for customer feedback on current products and the features and enhancements consumers want in future models. As one manufacturer told me: "This way I don't have to wait six months for the next trade show to hear what customers are saying."

Kodak and the Customer

But it's not always smooth sailing. In early 2003, the cyberspace debate became ugly for Kodak when the company repeatedly delayed shipping a supposedly fabulous new digital camera, the 14n, which it announced in the fall of 2002. A senior company executive had gone online before the product shipped to whip up enthusiasm for the new camera, saying it was the only camera professional photographers would need. Weddings, photojournalism, catalogs — no matter what the job, this camera could do it.

But Kodak had problems building the camera to its promised specifications. Prototypes didn't work properly. Shipping deadlines began to slip. Potential buyers started getting impatient, and much of the online debate shifted to whether Kodak was being honest. Because Kodak's claims had been made by a senior executive online, photographers took the commitments much more seriously than if they had been made in an ad campaign.

Here's a sampling of the debate from the discussion rooms of online camera Web site www.dpreview.com:

"Kodak announced their product and gave their initial expected availability date and they really had no idea if they could make that date or not. The intent of this announcement was to freeze the market and keep potential buyers from purchasing a competitor's product."

"I don't appreciate being conned by a company that I had enough faith in, three months ago, to make a deposit for a 14n."

"It's really irrelevant what Kodak says at this point. Nothing in the [original] press release has proven to be true, nor have their updated statements proven to be true, so why would anyone think that what Kodak announces today, or next week, will be true? I am amazed at the people I hear proclaiming their respect for Kodak."

"I have been seriously considering the 14n. One of the factors in its favor is the participation of factory representatives. My hat is off to factory reps for toughing it out here."

"The issue is how Kodak's product marketing team has handled the introduction. First, they proclaimed to the world that the camera was ground shattering. Then, they slowly but surely ducked inside their shell as the customers asked for more information."

"We are trying our best, and we have a team that has delivered some of the best pro-level digi-cams in the market to date. Our history does not indicate we 'untruthfully' do anything, as you suggest." [From a Kodak employee.]

When the camera was finally released in March 2003 after months of delays, it fell far short of Kodak's initial performance claims. While the company claimed the camera was good and would be improved with further firmware upgrades, the boasting fell on deaf ears. Enthusiasts would email sample photos to one another and submit them to scrutiny worthy of Dan Rather's forged memos. Potential customers around the world denounced the camera's abilities, even though most hadn't actually handled the camera. Many potential buyers felt duped and were furious at Kodak's false promises. They still complain to this day.

Don Tapscott is the author of 10 books about technology and society, most recently (with David Ticoll) The Naked Corporation: How the Age of Transparency Will Revolutionize Business (Free Press, 2003). His new portal is the www.ageoftransparency.com.

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