Social web helps wrest power from suppliers

There has always been a marked imbalance of power between major IT suppliers and their customers. No matter how often IT managers are told about open standards, hear that “we are listening to you”, or are blitzed by marketing mantras such as “customer-centric”, hardened buyers know they are at the mercy of their suppliers’ whims.

Lock-in might not as often be a technical issue these days as a commercial reality – the cost of upheaval will usually outweigh the pain of the status quo.

SAP proved the point last year when it hiked support fees, apparently without consultation with customers, bringing much criticism from user groups in the UK and worldwide.

The software giant deserves some credit for listening to those complaints and responding with an innovative plan to link price increases to an independently-audited measure of the associated benefits. But surely a lot of conflict could have been avoided if SAP had been less heavy-handed in the first place.

The apparent resolution shows the potential of users working together – and there is a greater opportunity emerging to redress that imbalance.

The power of the crowd is already having a big effect on consumer-focused companies such as retailers and banks. The collaboration and information sharing enabled by social networking and the web is delivering a new wave of influence for users.

Try posting a few messages on Twitter about problems with your BT service and see how quickly the telecoms provider replies. Social media is becoming as much about advocacy and customer service as it is about Stephen Fry and telling the world what you had for breakfast.

IT managers would do well to consider the tools now at their disposal to put pressure on problem suppliers. Those suppliers need to be ready to deal with newly-empowered customers not afraid to share their experiences and pool their influence to swing the balance of power ever further away from unwanted tradition.

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Good advice - I have used social media effectively in the past in order to sort out various technical problems so it is well worth considering when dealing with problem suppliers.
Brian, I think true symbiosis is something of an out of reach Nirvana, I suppose there is a counterpoint to the SAP example, being the pressure faced by the supplier to leverage greater revenue streams from existing customers in shrinking markets. Innovation is the best way to counterbalance and drive new growth, but again R&D budgets are under increasing recessionary pressure. Social Media does empower, this throws up many interesting requirements for effective sentiment monitoring / analysis and proactive brand management. An avalanche of negative commentary could of course swamp suppliers. It would be interesting to see a case study of an organisation monitoring Twitter et. al. as ‘new channels’ into traditional call centres. I think a lot of the positive Twitter stories are really based on a few vanguard companies with unusually proactive employees engaged in ‘out of hours heroics’. Perhaps I am wrong, do you feel this has been embraced into mainstream customer service management?

thanks for the comments - you make some very good points.

There are only a few examples of companies that I have come across really using Twitter as part of their customer service. Two that spring to mind are BT and Dell.

Although I'm not a BT customer at home myself, I know a few people who have Twittered about problems with their service or with the company, and found themselves contacted by a BT team who are actively monitoring Twitter for comments about BT.

Dell, meanwhile, use Twitter as a sales and marketing channel, offering special deals and publicising offers, and have generated a lot of sales and a good service profile within that community.

I think there are a lot of tech firms investigating how and if Twitter and other social media could work for them, but ultimately I suspect they will end up reacting to the online behaviour of their customers and users, rather than driving such a strategy themselves.
Yes, I agree Bryan and I think scalability is the major issue for suppliers. Hopefully it will become 'business as usual' to build in Social Media into the feedback loop of product design. I may test the BT theory, I have been without home broadband for a month, perhaps I should be complaining on Twitter and not via traditional CSR channels!