A fascinating short piece in The Economist a couple of weeks ago had this particularly provocative passage:
A second shift in consumer psychology has been prompted by fallout from the global banking crisis and the furore over huge bonuses paid by firms rescued with public money; by a wave of financial scandals, such as the Madoff affair in America; and by multibillion-dollar bail-outs of carmakers in many countries. All this seems to be denting trust in business more generally. The Boston Consulting Group recently completed a global survey of consumer sentiment involving 15,000 consumers. The results, to be published this month, show that over half of respondents from America and Europe say the crisis has intensified their distrust of big business.
Past downturns have also stoked anti-business feeling, which dissipated as growth returned. But the sheer scale of the failings that have come to light recently mean that suspicion and wariness will not vanish so easily this time around. In response, firms will need to be even more transparent in their dealings with customers, who will punish them severely if they fail to keep their promises. Bain, another consulting firm, says it has seen several firms appoint executives recently with a specific brief to ensure that price adjustments and service cuts do not damage loyal customers’ experience of brands.
The first shift, BTW, is towards less debt and greater thrift. If this welcome shift actually comes to pass, it will certainly result in some positive economic changes, assuming entrepreneurs are able to step up and take advantage.
As for the second shift. After a quarter-century where most people have looked benignly upon business, the current crisis has made many perceive it as shifty and untrustworthy. We can all tell stories of lousy service, surprise fees and charges, cut corners, interminable phone calls, and bureaucratic indifference. The current crisis has made these specific problems seem more general to business as a whole. It’s an unfair rap, but there it is.
For many firms, particularly small ones, there’s no real problem at all. But others need to blow out a heavy fog of consumer suspicion.
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