These lessons hold true not just for individuals but for entire organizations as well. The latter half of 2011 was marked by several highly publicized power struggles between corporations and consumers, with the quick reversal of imposed fees by Bank of America and Verizon and Netflix's (NFLX) intended spin-off of its DVD-by-mail service.
While you might assume that companies whose products impose high switching costs (e.g., the inconvenience of changing banks, or the early termination fees for breaking a cell phone contract) or whose services were wildly popular would hold the trump card in their relationships with customers. Yet these examples seem to demonstrate that the tide of power is turning in consumers' favor, and that the trend may be accelerating.
Amid the increased prominence of social media, consumers' ability to learn from each other and to mobilize as a larger group has increased exponentially. Through this increased connectivity, consumers complement their relationships with companies by adding relationships with each other.
So, the company's power of least interest has grown weaker, as it no longer manages a set of isolated customer relationships where it holds a power position, but instead must confront a web of connected players that are increasingly capable of asserting themselves as a group.
Netflix's business analysts no doubt predicted that there would be some small, but acceptable, level of customer attrition after its Qwikster spinoff announcement (a plan it abandoned in October), but it failed to gauge how the negative customer reaction would continue to compound itself via news coverage and online community discussion until customer departures totaled 800,000 by the end of the third quarter, delivering untold damage to the Netflix brand (the company has since gained 610,000 subscribers as of the end of the four quarter). And what would have been an easily ignorable smattering of customer complaints in the past was brought together by Molly Klatchpole's petition on change.org into a 300,000-signature-strong force that Bank of America could not disregard.
Navigating this new world certainly requires managers and companies to exhibit the same kind of honesty and willingness to listen as is expected in most personal relationships. But there is no single recipe for success in this new world. Facebook's journey in introducing new attributes and services to its site embodies the perils and promise of this aggregated power of "least interest", ranging from the successful roll out of Timeline despite some privacy concerns to Mark Zuckerberg's public mea culpa over the initial version of News Feed.
Just as healthy individual relationships require constant monitoring and care, the new paradigm for company and customer relationships values greater symmetry of power and dialogue between groups over issues that matter, and the willingness to reconsider things when results or reactions are not as expected. Like any love affair you want to last, it requires patient, hard work and the willingness to put power games aside to have real conversations.
Jevan Soo is a management and human capital consultant, and a research associate at Harvard Business School. Thomas J. DeLong is a management and organizational behavior professor at Harvard Business School and author of Flying Without a Net: Turn Fear of Change into Fuel for Success.
