Few companies have a culture of ‘doing right by their customers’. But we heard this phrase the other day during the UK fuel contamination fiasco when, after being confronted by credible evidence that their fuel was indeed causing large numbers of cars to malfunction, something they initially denied, Tesco used the phrase to characterise its intended response.

Read on…Now, cynics among you may regard this as simply good PR. Tesco, you contend, is only saying this because while it stands to payout substantial amounts in compensation to consumers, it will recover all/most of that from the relevant fuel supplier, the ultimate wrongdoer in this case.

Equally, though, Tesco knows that it has a lot to lose from badly handling this high profile situation (something that dominated the headlines for days). Tesco is a dominant brand in a category that impinges on everyone in the UK (over 1 in 8 retail pounds is spent at Tesco), and so it has to tread carefully to avoid accusations that it is abusing its market position. Maintaining consumer trust when you are that dominant and exposed is not an easy tightrope to walk.

So, for what it’s worth, bravo to Tesco for at least making the right signals. Only time will tell whether it has successfully retained consumer and public trust. UPDATE: Tesco publishes full page ads. in papers saying it’s sorry.

The bigger issue is why more companies don’t ‘do right by their customers’. Many claim they do, but most actually give higher priority to short-term financial or other considerations. And yet for proof that ‘doing right’ generates substantial dividends long term, you only have to look at Google which spurned short term monetization in favour of giving people what they wanted, without compromise.

For Google ‘doing right’ is a core philosophy and belief, not merely a ‘brand value’. All staff live and breathe it. And the result is an organisation that went from nothing to a $150bn valuation in a mere seven years. Had Microsoft believed in the ‘doing right’ philosophy, Google would probably have never got this far since the market would already have had what it wanted - see, there was Bill Gates worrying about the next big thing and in reality it turned out to be about being sincere and genetically focused on meeting people’s needs, not monetizing the hell out of closed products.

UPDATE: From a BBC online interview with Craig’s List CEO Jim Buckmaster:

As it turns out if you’re not in the business of maximizing profit, there’s all kinds of functions that you no longer need like sales, marketing, business development, etc. All we have is technical people and customer service people.

So, you ask, what about ResearchTalk, are we believers? Of course we are. To our very core. If not, we would have stopped doing this a long time ago. The very limited income we have doesn’t justify the effort we and our guests put in. We think the industry is the better for what we publish, all free, all easily accessible. We don’t want to start charging because we believe that everyone should be able to share in the valuable, refreshing conversations that go on all over the place because that’s the only way to innovate and improve the sector.

That said, we can’t go on forever without monetization so things will have to change at some time. Unlike Google, we don’t have access to VC funding! We do have a tip jar which a few have contributed to. We’ll just have to see how things go…
Series:MarketingTalk