How a consumer revolt works

Marketplace Staff Oct 13, 2011

How a consumer revolt works

Marketplace Staff Oct 13, 2011

Jeremy Hobson: You don’t have to look far in this country right now to find ordinary Americans who are angry. From Occupy Wall Street — to Occupy Boston — to Occupy Salt Lake — people are mad and they want action. Well maybe there’s a lesson to be learned
from what happened this week at Netflix. The company tried to spin off its DVD by mail business
a month ago, consumers revolted, and a couple days ago, Netflix backed down.

For more on this, let’s bring in LA Times consumer columnist David Lazarus. Good morning.

David Lazarus: Good morning.

Hobson: So what makes a consumer revolt work?

Lazarus: Well, first of all, you’ve got to cheesed off. That’s the first step, obviously. But it’s not just that, because a lot of people are cheesed off with companies. The big thing that I think that really marks a consumer revolt is disrespect. When a company that you do business with, especially long-term, comes off as disrespecting you in some way — as, say, Netflix did with the whole Qwikster thing — then it suddenly goes up to another level.

Hobson: Well Netflix customers felt disrespected, but Bank of America also felt disrespected. It’s clear, it’s out there in the news and on Twitter — everyone’s upset about this $5 debit card fee. But doesn’t look like Bank of America’s going to change its plans.

Lazarus: No, nor does it seem like a lot of people are actually going to leave even though a lot of people have emailed me and said, ‘I’m going to pull up stakes.’ I don’t think so. And there’s three key differences here: first of all, is ease of the revolt. In the case of Netflix, it’s pretty much like pulling the plug. I mean, boom you’re gone, you go over to Amazon, you go to Blockbuster, you do whatever you want.

Second, there is more competition against Netflix, which does give you more alternatives. But I think the most important thing here is in the case of banks, people tend to have a passive relationship with their bank. They seem to feel that they have to take whatever they get, whereas with a company like Netflix, you feel like, “No, I’m calling the shots here.”

But, I do want to say, it’s not a passive relationship — you do have the ability to vote with your feet and there are alternatives: credit unions, for example.

Hobson: If you’re not going to actually leave the organization, though, is there anything that you can do to try to get a consumer revolt off the ground?

Lazarus: Well you can definitely make a lot of noise, and that doesn’t hurt. You can go to Facebook and go to Twitter, you can do all that stuff. These big companies do monitor the social networks. It is important to them how their reputation is. Also, write letters to newspapers — subscribe to newspapers, too, for that matter!

But most importantly, it’s a one-on-one relationship, and if you’re dissatisfied with your relationship with a company, make it clear to the company how you feel and make it clear to them that you are leaving.

Hobson: L.A. Times consumer columnist David Lazarus. Thanks David.

Lazarus: Thank you.

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