We all know the power of reputation networks. It is how eBay runs its business. A web of comments for or against a particular vendor drives its sales. Overall, people talking about their experiences with a brand, product or service is how commerce will function. Forget advertising. That’s just fluff. The real brand equity is in the reputation networks.
Case in point: this particular study shows that online customer product reviews drive satisfaction and loyalty and provide a competitive advantage for sites that offer them. No duh.
But this is not the reason for this post. I want to share another story. According to this article, a single site run by a man and his octagenarian father in the UK has cost the petro-giant Shell billions of dollars. And it all started with a gripe.
The Donovan website has become an open wound for Shell. The Anglo-Dutch giant has tried to shut it down on the grounds that it uses the company name. However, as www.royaldutchshellplc.com makes no money, this hasn’t worked.
“We wanted it to become a magnet for people who had a problem with the company,” Donovan told me when I visited him recently. It has. The Ogoni tribe of Nigeria uses the website to spread information about Shell’s activities in the Niger delta. And unhappy Shell insiders frequently post on the site’s live chat facility.
Another muckraking site is targeting McDonalds. These “gripe sites” are the uber-reputation makers. They may not get millions of people to rate a company from good to bad, but they are repositories of information from those who have intimate knowledge of the inner workings of a corporation or an industrial complex. These folks can bring a company down. And it all starts with one person.
BTW, it is estimated that Donavan’s actions have cost Shell billions of dollars in lost revenue. His website costs $2/week to run.