Finance and Economics > Economic News, the Global Economy and all Things Monetary

The Economic Fallout of Alienating Customers

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David in MN:
I'm writing this partially inspired by the recent Gillette promo video about how men need to behave better that (I'm not making this up) asserts that men would rather grill thann protect their children, portrays women as helpless victims who need male rescuing, and tells us that saying hi to a pretty girl "isn't cool". You can watch it here:

I did email the company to tell them the video was very offensive to men, women, and Armenians (they chose a Young Turks media clip because they clearly don't know the history there). And I politely let them know I would cease using their products and take a long look at other P&G products. But why would they shoot themselves ibn the foot? Why would a razor company put out an ad about male behavior and alienate their largest customer base?

I emailed it out to some friends and got an odd reply from one, a gamer. "It's Battlefield V all over again". I'll put a link to the official trailer and an article about it here:

Basically the trailer came out and the nerdy guys who like WWII games were shaking their heads wondering why a lead character was a woman with a prosthetic arm. Gamers have no problem with female characters and women did serve in WWII (notably in Russia) but it felt out of place and preachy. The game also suffered from gameplay issues and its release tanked Electronic Arts stock 45% and forced them to lower earnings estimates for FY2019. But you have to wonder, do they no know what their consumer wants in a WWII shooter game?

They're not alone. Facebook fell nearly 50% in FY 2018. And rightly or wrongly half this country believes Facebook got Trump elected and the other half believes they are actively drumming out conservatives. And both those sides might have a little bit of a case! I'd call that PR nightmare and their share price drop clearly shows they are not handling it well. I can't believe that no one at Facebook was smart enough to say "we're just a non-policing platform and all are welcome  to use our site provided they don't commit a crime." Boom. Nobody leaves in disgust.

I see it in Chick-fil-A too. I don't understand the link between abortion and sandwiches. Have whatever opinions in your private life but run your business to make money. Acting any other way is unethical by business standards and is actually a financial crime.

And I see this in privately held business too. Why doesn't the Christian baker put a big sign out front that he doesn't make gay wedding cakes? Why does he inform a gay couple quietly in the back? He knows if he puts out the sign people like me will think him a bigot who doesn't tend well to his business and walk to the next bakery. I know I can't get a ham sandwich at a Jewish deli but I knew that when I walked in.

I'm appalled by these examples of people running their business for some other reason than to be the best in their industry. But the trend is coming real for me. Companies who alienate potential consumers or their core demographic end up losing money. I've just finished divesting myself from P&G over the Gillette ad. I don't know what they're working on right now but clearly supplying me with the best razor at the best price isn't it. And I don't invest in companies who have lost their consumer focus. Ideology (in any direction) is not a market force and it's become one of my lead indicators that a business is failing. I hate to admit that but the trend is appearing. You can't invest in a concern that doesn't put their product or service first. It's been the oddest financial news of 2018.


--- Quote ---I did email the company to tell them the video was very offensive to men
--- End quote ---

offensive to men ? That's a new one. I didn't know there was such a thing ?


David in MN:

--- Quote from: surfivor on January 18, 2019, 04:02:28 PM ---offensive to men ? That's a new one. I didn't know there was such a thing ?


--- End quote ---

Well in the US about 80% of all discretionary spending is controlled by women. Marketers know this and it's why for decades the vast majority of products had an advertising slant to women and why all the sitcoms make guys appear dumb. You can't poke fun at women and then market to them. And it's not that hard to figure out the demographics where men control the spending. While the vast majority of products are marketed to women it's real easy to get products that "men buy". It's not some freak accident that they advertise beer and pickup trucks during football games. If you watch CNBC or Bloomberg you get adverts about golf clubs, European sports cars, and fancy watches.

Now we laugh this off a little and might even take some offense to 80s commercials where selling beer seemed to require barely clothed women but big businesses spend a lot of money getting this right. As a former product developer it's a big chunk of the day. You want the right product at the right price marketed to the right segment of the population. Just think of the money spent by companies to know which segments of the population are getting married or expecting a child. Products are targeted by every demographic you can imagine.

That's what blows my mind about these companies. I know Electronic Arts is selling Battlefield V to almost exclusively young men and the desired product is an immersive WWII experience. They know that a female character with a robot arm doesn't belong. It breaks the experience. Maybe the core consumer would actually enjoy unlocking a secret to meet one of the legendary Soviet female snipers. But they should have known their choices were a little off and not delivering the desiredd product.

And with Gillette... Could you imagine if Michael Kors had a commercial with a tagline of "Women need to stop dressing like whores". Never. Think of the cliche of being asked to leave a restaurant because you're not dressed well enough. Doesn't happen anymore. You just don't talk down to your customers.

When you develop a product or make advertising it's not a guessing game. You do tests and focus groups to make sure you have it right and are attracting the right customer. With the exception of Facebook which seems to relish in making poor decisions that alienate users these are companies who should know they are not delivering on consumer expectation. It smacks of the old Jon Stewart joke about moving to Israel to open a Saturday only pork emporium. I can forgive young tech execs who don't know how to craft a clean message to not offend users (though it's not really hard) Electronic Arts and P&G have been in their businesses a long time.

At the end of the day this disregard for fundamental business practices is starting to show up in earnings. Abandoning a consumer focus is a sure way to kill profits.

Youtube, facebook and others censor people for reasons other than economic. I don't know that there is some agenda that is not strictly economic. Others claim this or that politically correct policy leads to a stronger society, but it is just something people seem to subscribe to that you aren't allowed to question. You just thought or assumed it would always be based on the market etc

Smurf Hunter:
While not exactly a consumer business with "customers", I feel this way about the NRA more often lately.


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