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Who’s in Charge? Your Customers, That’s Who!

How well do you know your customer? Most companies believe they know their customers well, at least in a traditional marketing sense. But in the digital age where any data nugget can be accessed from mobile devices in our pockets, customers are more empowered than ever to tap readily available information and respond in a myriad of ways. Add in social media, bloggers, and the relentless 24/7-news cycle, and companies would be naïve to think that they alone control the dialogue with their customers. We are seeing it more often: customers are speaking their minds like never before. Are you ready for the newly empowered customer of today?

The past twelve months witnessed two groundbreaking events in Boston area consumer behavior. First, the customers of the Market Basket chain took to the streets to defend their vision of the store using a combination of social media, press, and old-fashioned shoe leather to force a reversal in management direction. Around the same time, the customers of Beverly Bank took the unprecedented step of rejecting a management request to take the bank public. Finally, the controversial formation and sale of Connecticut’s NewAlliance Bank in 2011 surprised customers and angered politicians – and serves as a strong example of how far we’ve come in consumer communication. Take a lesson from these three case studies:

NewAlliance Bank of Connecticut has roots that date back to 1838 when it was chartered with the formation of New Haven Savings Bank. It expanded as NewAlliance Bank in 2004 through the union of The Savings Bank of Manchester (Connecticut Bancshares, Inc.), New Haven Savings Bank, and Tolland Bank (Alliance Bancorp of New England). Converting from a mutual to a public bank in 2004, NewAlliance Bank has seen consistent growth since its formation.

Throughout the next decade, banks were strong and well regarded in the marketplace, and NewAlliance Bank acquired three more banks. Each constituency – customers, non-profits, employees, and politicians – were concerned how an acquisition would affect their accounts, funding, jobs, and local economy, respectively. NewAlliance developed its communications strategy and relied on traditional marketing channels to quell fears. A letter to customers and mailed marketing collateral conveyed the key message: all three acquisitions would increase convenience for customers. This was well before social media was as prevalent as it is today.

In April 2011, NewAlliance merged into First Niagara Bank, a transaction that created a highly contentious political and public situation. The popular mayor of New Haven was against NewAlliance going public and selling to First Niagara, as he feared his city would suffer from decreased banking opportunities and increased unemployment. The public rallied behind him, and a compromise was reached: another bank would be created to serve the customers of New Haven. The move resulted in minimal layoffs (less than 100 jobs) in a city where unemployment was a serious issue. While not surprised by the acquisition, customers were surprised by the sale of NewAlliance Bank so soon after the merger. Had social media been a more pervasive part of the media landscape then, the customer outcry might have yielded a different result.

Another bank story from just last summer shows how communities can impact local businesses – and how important it is to know your customers. Beverly Bank was founded in 1888, holds $327 million in assets, and employs 75 employees in four locations. The last of three local banks still operating on the North Shore, Beverly Bank is a beloved cooperative bank with a loyal customer base. In the summer of 2014, bank management put to depositor vote a conversion to a stock-owned bank. The community was concerned about losing its last community bank, the potential for layoffs, and the perception that conversions harm communities while enriching top executives. In a banking environment where Massachusetts has lost 25% of its banks since 2000 (according to The Boston Globe), Beverly Bank customers took the unprecedented step of rejecting management’s request to take the bank public.

Bank management greatly miscalculated its proposal. At the depositors’ meeting, only 443 of the 10,000 depositors voted. Few in Beverly even knew the conversion was taking place. The meeting notice was buried on the bank’s web site, and the meeting time changed at the last minute and was not well communicated. To boot, there was no easy way for depositors to read the conversion plan summary. Shortly before the vote on Beverly Bank’s conversion, the owner of a Salem coffee shop wrote a letter opposing the plan to the Salem News and published it on his business web page. Surprisingly, the bank made little to no effort to counter a possible negative association with previous local bank conversions. The bank assumed that depositors who opposed conversion just wouldn’t bother to vote.

Though a majority of depositors were in favor, Beverly Bank’s conversion was rejected by not receiving the two-thirds vote required. American Banker magazine reported that no Massachusetts cooperative bank had ever failed in the past to get the required approval. In this process, Beverly Bank spent $1 million on legal fees in 2014, ten times the amount it spent in 2013. The Beverly Bank vote shows that bank executives can no longer take the support of depositors for granted, and suggests that other mutual banks considering conversions may need to start expecting more pushback form their local communities.

As marketers advising company management, it is our responsibility to explain to our publics what is going on and communicate that effectively. In this case, social media could have worked to Beverly Bank’s advantage by capturing a younger audience and creating a platform for promoting its position. Beverly Bank’s next steps are still to be determined.

Finally, the business story of 2014 was the Market Basket’s family feud over control of the supermarket company. At the time, Market Basket had 71 stores, 25,000 employees, and $4.6 billion in revenues. A feud for company control and ownership amongst the Demoulas cousins waged on for years, culminating in Artie S. Demoulas ousting Artie T. Demoulas as president and taking control of the company. Fiercely loyal to the employee-friendly Artie T., Market Basket employees immediately went on strike.

Public outrage to the ouster ensued, and loyal customers joined employees on the picket lines in front of stores and company headquarters. Since the company had no web site or social media platforms, protestors launched a Facebook page and Twitter account to organize rallies and post photos of empty shelves at Market Basket stores around the region. More than 13,000 people signed an online petition calling for a boycott of Market Basket. The protests, strike, and boycott received tremendous press coverage for several months, and through it all, the company declined repeatedly to communicate with the press. The new management stayed mostly silent on the ouster and employee protests, except for issuing letters to the workers on strike threatening to fire them if they did not return to work. The only communication was a Boston Globe ad placed by Artie S. and the new co-presidents, apologizing to customers but criticizing employees.

The Globe reported that: “What began as a family feud spread into an insurrection among employees and quickly escalated from a public relations nightmare into an outright business crisis for the Market Basket chain.” To stay in business, the company was forced to re-instate the former president, Artie T., and employees finally went back to work. After a six-week PR spectacle, brand awareness was at an all time high, with loyal customers gushing to the press about the chain’s low prices and friendly culture. New customers started shopping there too.

During this period, the silence of the board of directors stood in sharp contrast to how employees delivered their message via social media. The Boston Globe Magazine named Market Basket employees the “2014 Bostonians of the Year,” declaring social media’s proven force as a protest tool. Protesting employees and Market Basket fans of the store proved far more web savvy than the company itself, illustrating how Facebook, Twitter and blogs can spread the message and win converts for little or no money.

What can we learn from these case studies? The customer is king. Companies need to listen to their customers and not get complacent with communication. Small touch points can make a big difference. Always be honest, don’t ignore the customer, and tailor the messaging to address public concerns. Our role as marketers is to turn a negative situation around and promote a positive business-friendly dialogue. To that end, monitor online posts diligently, and respond immediately via the same communications medium. Ask for customer input and feedback, and put yourself in the customer’s shoes. On social media, people want to be heard, so publicly acknowledge the customer but try to take it offline. Customer perceptions can change very quickly. Do you have the skills to respond to the empowered customer?


Susan Shelby, FSMPS, CPSM, is the president and CEO of Rhino Public Relations, a full-service PR and marketing agency focused on meeting the unique needs of professional services firms. Rhino PR offers customized services based on each individual client’s goals and budget. Susan received the 2016 SMPS Boston Marketing Professional of the Year Award, which honors marketing excellence in the A/E/C industry. Follow her @RhinoPRBoston or visit for more information about how Rhino PR can help you take charge of your PR.

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