Consumer power

Written by  Masters Student at Lund University

Introduction

Back in 1999 Shawn Fanning and Sean Parker wrote a computer program called Napster, that eventually turned out to be the beginning of a new music industry (bbc.co.uk, 2009). Company records tried to fight the impact of consumers sharing their favorite music online, by protecting the company’s rights and finally having Napster closed on July 11, 2001 (wired.com, 2002; news.cnet.com, 2003). For a while the record companies might thought they had the fire under control, but shortly after, new Napster alternatives popped up online, and the sharing continued.
Years later, we now know that the record companies failed by trying to fight this consumer based revolution. Music has become digital and CD records are almost a forgotten media.

Though this is one of the extreme examples of how consumers can manage to turn something upside down, it is not unique. Consumers have new possibilities to affect a market due to the internet and social media, by create, innovate and express their satisfaction as well as dissatisfaction like an uncontrollable wildfire. 

Internet consumers

The purpose of this paper is to discuss how consumers impact a market, due to the internet and social media. The company records learned a valuable lesson when they tried to control the changes that went on at the internet. Instead of protecting, what they should have done was to focus on how to benefit from this new technology and changes in consumer behavior. The record companies where given a clear signal from their consumers, that listening to music should now be done digitally – but the company records kept focusing on producing CD’s. They simply failed to see and act on the consumer’s demands.

By using a netnography study of consumers who has taken charge of their dissatisfaction with the telephone provider Vodafone, this paper will contribute to the discussion of the new role of consumers in the internet era. The discussion will focus on consumer resistance and whether the internet have helped consumers gain a more powerful position in the marketplace, including a discussion on whether consumers are empowered or working for the companies.

Consumer resistance

Consumer resistance have been of great interest for researchers, especially within the last 10 years. Adversaries of consumption (Kozinets and Handelman 2004) the burning man ritual (Kozinets 2002) and political consumption (Micheletti and Isenhour 2010; Thompson and Arsel, 2004; Ger and Belk, 1996) are all expressions of consumer movements and expressions of resistance towards brands and certain kinds of consumption.

However, within the last couple of years, researchers have started to focus on similar consumer movement in the online world. Anti-branding sites, blogs, consumer communities and social media are all online channels for consumers to express their negative opinions about a company, product or service (Scott 2010). Anti-branding and the alike is considered to be damaging for brands (Krishnamurthy and Kucuk 2009). Since we are all connected, we have the possibility to find others that share the same interest as ourselves and create communities within no time, whether the purpose is to innovate, search for information or share experiences (Seraj 2012). The internet have become one of the main platforms for social interaction. It functions as a place where creativity and innovation can spring from, and it helps consumers to form communities.

Empowered or working consumers

Research and the vast amount of different consumer activity indicates that consumer resistance it is an important part of being a consumer. With the internet and social media it has been even easier to create new consumer communities and show ones dissatisfaction towards certain brands and industries.
Still, researchers disagree on what kind of role the consumers is actually playing in these resistance movements. On the one side, research shows that consumers are empowered by the internet (Pitt et al., 2002; Moynagh and Worsley, 2002; Nelson, 2002). Through discursive actions consumers can affect the power balance between consumer and company (Denegri-Knott et al., 2006) and thereby the role of the consumer in the internet era is defined as more powerful than ever.
On the other side, other researchers claims that consumers have become workers for companies since they contribute with value, innovation and product improvements, either in a consciously way or not (Cova and Dalli, 2009; Barwise and Meehan, 2010: Antorini, 2012) and thereby holds a role as workers instead.

By using Vodafone as an example, this paper will discuss these two views on consumer resistance and thereby define the role of consumers in the internet era.

Vodafail

The empirical data for this paper is gathered through a netnography approach. Netnography is most relevant since this discussion is based on internet activity but also due to a limit of resources. The data was collected from online consumer communities, social media sites and online newspapers, to gain insight about the actions and behaviors of the online consumers.

The consumer community in focus is Vodafail.com. Vodafail have been chosen because it represents a good example of a site, created by consumers who are dissatisfied and shows their resistance towards a huge brand and its way of doing business.

Vodafail.com is a private owned website, aimed at the Australian division of Vodafone, made by one person who in his own words “started this website out of frustration for Vodafone’s customer service and ongoing network problems” (Adam Brimo 2011). At this site, unsatisfied Australian consumers can submit their complaints about Vodafone and its (lack of) service and network coverage. It turned out that Adam wasn’t the only one feeling Vodafone could improve their business and that there were many problems in general, so his site developed into a community within no time, where unsatisfied costumers could share their problems and speak about their frustrations. It further developed into also generating a list of alternatives for those how wished to find another telecommunications provider, giving the costumers the option to find a better match.

Besides having the webpage, Vodafail also generated a Facebook page that got more than 5300 likes (vodafail.com). It is a great example of how fast a fire of complaints from dissatisfied consumers can go viral and reach many different people in no time, thanks to the internet and social media.

Please see appendix for examples of complaints and screenshots from Vodafail.com.

Discussion

Vodafail represents an example of consumers belonging to generation C (trendwatching.com, 2004). Generation C is (among others) characterized by people who are creative and wish to have control, which is exactly what we see in the context of Vodafail. They are consumers who controls their possibilities to put pressure on a company in a creative and efficient way. You might call it generation complaint.

Generation C can be linked to the theories of empowered consumer. Empowered consumers can force companies into doing something that they otherwise would not have done, through a discursive action (Denegri-Knott et al., 2006). Empowered consumers is exactly what the consumers from Vodafail have become, since they have forced Vodafone to revisit their business. In an official announcement, Vodafail informs that have they “achieved the goal of raising awareness and promoting concrete action” and that they “will no longer receive new complaint but the site will remain online as a reminder for Vodafone” (vodafail.com).

The fact is though, that Vodafail at the same time, maybe unconsciously, acts as working consumers for Vodafone. By providing a list of complaints and alternatives for the consumers, they also provided a window of opportunities for Vodafone to look through and learn by. Vodafail contributed by producing value to Vodafone, which is one of the core elements of a working consumer (Cova and Dalli, 2009). Vodafone got free access to information about how to improve their business just by following Vodafail. No questionaries´ no external agencies and no misinterpretation of data – just raw information served on a silver platter. Vodafone listened and began to improve those areas that received most critique, which was delayed upgrades in network, poor customer service and a lack of quality network coverage (The Sydney Morning Herald, 2012).

Paradox

This is paradoxical, because Vodafail shows that the role of consumers is powerful, since Vodafail got what they were complaining about and forced Vodafone to improve their business, but at the same time, they contributed to Vodafone by adding value to Vodafone’s business without being paid for it. Thereby the consumers contributed to Vodafone in a positive way. The became free worker for Vodafone.
Movements and communities like Vodafail, express a willingness to participate in the market process (Cova and Calli 2009), it is just being expressed in a critical way. Whether it is consciously or not, the consumer provides work for the company (Cova B, & Dalli, D. 2009) by adding value to the product and to the market.

By then, the role of the consumer becomes twofold – empowered but also a free source of labor for companies.

Limited power

Another thing to consider is the actual power of the consumers role. The power of the consumer is limited – limited to the reaction made by the company that the consumer is trying to influence. If the company ignores the pressure from communities such as Vodafail, then the power can best be defined as a power to put focus on a certain strategy, by questioning its methods. In this case, the Vodafail questioned the strategy for customer service and network coverage, but their complaining was only turned into an actual power, the second that Vodafone decided to act upon those complains.

So even though the role of consumers is powerful, they still depends on actions that can only be controlled by companies. Therefore the role of the consumer is still no more powerful than the company, but the consumers have a better position now, than ever before.

Conclusion

The consumer’s role is twofold. Consumers are empowered and workers. The study of Vodafail and theories of consumer’s role in the internet era shows that consumers should not be considered as either empowered or working, they are being both things at the same time. One thing does not exclude the other. Those two theories belongs together. It’s a process of improving the company’s product by showing its flaws. Does that give the consumer a more powerful role in the internet era? Yes it does, the consumers of the internet are more powerful than ever. Vodafail succeeded and got Vodafone to work on improving their customer service and network coverage. 

But consumers should remember one thing, and that is that the power is still limited and that companies holds a very powerful decision. It is possible to complain and show resistance but those things will only help, if the company decides to act upon consumers complains. That is a power consumers can not control and most likely never will be able to do so. However, consumers should continuously complain and speak up if they feel dissatisfied, because when consumers does so they still adds value to the market through their complaints.

Consumers have proved that they have the power to create something better, whether they do it in a great number as a community or if they invent a better alternative like Shawn Fanning and Sean Parker did when they created Napster.

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