Isabel Walcott Draves

Pandora

A cool new music service that finds songs like ones you like and plays them for you.  My friend Marivi has done an amazing job helping build their WOM - of course it helps when the product is really good! 

I really like the name Pandora; I think innovators within corporations are often seen as Pandoras, which may be why there isn't more innovation in corporations...  More on that later, perhaps.

TrustBusters

A brief comment on the public's eroding trust in the American corporation. 

In the wake of the recent case against Merck, some newspaper articles have criticized the American legal system's  "irrational verdicts" and "insane" awards.  Others said the verdict was "bad news for all consumers who hope that pharmaceutical companies will continue to develop new drugs", bemoaned the sick people who would now have to wait longer for drugs, and recommended lawsuit immunity for drug companies.

Merck hoped it would be safe from liability since they pulled Vioxx from the market ages ago, they followed FDA rules, and there didn't seem to be any proof citing Vioxx as the actual cause of Carol Ernst's husband's death.

Apparently, though, the jury was just really pissed off that Merck obviously knew their product was dangerous and they chose to ignore the dangers in order to raise their revenues.  That is what was unacceptable - Merck's dishonesty, greed, and abuse of trust. 

"The Texas jury didn't pull that $229 million punitive damages figure out of thin air. According to an internal memo written in 2001, that's the amount of extra profit the company estimated it could make if it could delay a Food and Drug Administration warning on the label.", explained an editorial in the St. Louis Post Dispatch.

I'm not an advocate for "lottery winning" lawsuits in any way -- and I think the award should go to a good cause and not into someone's wallet.  But I believe the punishment fits the crime -- which was cheating the American people.  For shame.  If Merck gets forced into bankruptcy because of this case, it won't be that different from Enron, or any other company that cheated in order to win and then got caught.  They have no-one to blame but themselves.

Nuzzle, Don't Muzzle!

Dan Miller sent over an article today with stories of more netizens being fired for their postings and a list of suggested rules "to add to employee conduct policies".  While some companies are praying (and paying) to see themselves blogged about, others are shutting up eager WOM-ers as fast as their termination policies allow.  Gagging the sneezers is a good way to stop the virus from spreading. 

Word of Mouth can be bad or good; insiders are a common source of insider information.  Trying to cover up bad WOM, or generating enthusiastic fake WOM, is a good way to lose customer trust.

So what to do?  Companies who care about WOM should provide a responsive environment where employees can turn with their frustrations.  I don't recommend biting the hand that feeds -- if employees like their paychecks they shouldn't vent their frustration in public.  Nevertheless, if people's complaints are being listened to at work, they'll have less of a need to plan rebellions or trash the company online.

Customer Service Departments of the Future

Are corporations serious about developing positive WOM?  Then their customer service representatives will actually need to troubleshoot customer problems and have the internal traction to get issues resolved, both on a case-by-case basis and across the board. 

Example: my buddy Sanford recently had an issue with a popular ISP terminating his IM username of many years, due to a new policy (one that makes sense -- except in the case of an exception).  Sanford happened to have access to a corporate executive who pulled some strings to fix his problem for him.  Talk about customer service!  Of course, Sanford got no satisfaction going through traditional channels.

If we're well-connected, we've all had similar experiences, and we're all familiar with getting screwed when we don't have an inside track.  Here's a fundamental for getting good WOM: contacting Customer Service is the same as knowing an insider at the company.

Put your Mouth where your Money Is

As traditional media and corporations lose credibility, companies need more than ever to build good Word of Mouth about their products.  The smart ones recognize this shift and are paying more attention than ever to WOM. 

This means infusions of cash into innovative online initiatives and creative new ways of spending ad and PR dollars -- great news for innovators, and a big threat for those of us who have been resting on our laurels. 

Of course, this is only the first step; businesses will have to change fundamentally if they intend to actually harvest gains from positive WOM.  More on that later.