How to Lose Loyalty in 10 Days: Lessons from the Facebook Fiasco

This month marks my first Facebook-less month. Like more than 35,000 other users who have signed up to do so, I closed my Facebook account on May 31. For someone like me who rarely participates in movements of any kind, Facebook has elicited in me an usually intense negative feeling. This has not always been the case, however. I had started as an early adopter of Facebook, partially due to the privilege of having a .edu email address as a university professor. In those early days, I was an avid advocator of Facebook and marveled at the revolution it would bring to the social landscape. What happened then? In a few years, I had turned from a Facebook lover to a Facebook hater. Reflecting on my own journey, I realized that there are important loyalty lessons here for businesses to learn.

Don’t Forget Your Roots

Like many media companies, one unique aspect of the Facebook business model is that the end users of Facebook are not the same people who pay the bills for Facebook. Facebook started as a social network intended to connect people and eventually grew into a business model deriving revenues from advertisers. Nobody blames Facebook for wanting to make money. After all, it is a business and it has to make money to survive. What Facebook did wrong, however, was to make every business decision based on money AND at the cost of its roots, the millions of end users. While the recent privacy issue was the final straw that made me quit the website, my dissatisfaction had started a while back from the multiple incidences of Facebook interface redesign. To me, none of the changes really enhanced user experience (although they may be claimed so), but was rather an effort to force users to go through more pages in order to maximize advertising space. That to me was the fundamentally wrong decision. By Metcalfe’s Law, Facebook would have had no value whatsoever if it were not for all of its users. Even though these users do not bring direct revenues, they represent the very foundation that Facebook is built on. When Facebook ignored these users to pursue money, it had in many ways destructed its roots. The consequence of that will show one day. Just look at the newspaper industry crisis. Losing advertisers was the direct but not the fundamental causes of the crisis. Instead, it was the fact that a lot of people stopped reading newspapers.

Simply Listening is Not Enough

Over the course of building one of the largest communities online, Facebook had made an effort at listening to its users, as demonstrated by the various forums/groups that it had devoted to Facebook-related issues. As I perused these spaces, however, it dawned on me that these places were more like a venting place without Facebook making a serious effort at trying to resolve the problems. Two cases in point. When Facebook pondered the change in its privacy policy a while back, it had posted the policy draft on its community page and asked users to comment. The comments were overwhelmingly negative. But that did not make any difference to Facebook. It went ahead with its policy change any way. Another case in point, when Facebook repeatedly changed its user interface, users had organized groups to persuade Facebook to go back to the more user-friendly old interface. That also fell on deaf ears. The lesson here? Just listening in on consumer conversation is not enough. If you participate in the social media space without an open mind to change based on what you hear, you would have not only become a hypocrite, but you would also be giving up a gold mine that may one day save or change your company’s future.

Your Customers = Your Image

My dissatisfaction with Facebook’s ignoring end users got exacerbated when my news feed on the website became jammed by endless updates from Farmville, Aquarium, and the like. A friend of mine once commented about this in his status update that would always remain my favorite: if everybody had spent the time they used to play Farmville on actual farming, we would have been able to feed the whole Africa. Many people I talked to felt the same annoyance about the endless game updates. We had originally signed on to develop or enhance meaningful relationships, but now we started to question whether we have too many idle friends who have nothing better to do everyday. It felt like you got together for dinner and catch-up with friends, but all you and your friends did was watching TV while eating dinner. In short, Facebook had stopped being a cool and meaningful place, but had become a big kindergarten of adults. The truth is that people do judge your brand by who your customers are and what they do. Oftentimes, a brand becomes suddenly cool and fashionable because it was chosen by what we considered as cool people. By the same token, when a business tries to pursue a larger market that is never truly compatible with its brand image, consumers will also start to think differently about the brand. While many brands had succeeded in completely transforming their brand image by pursuing alternative target markets, there are more brands whose initially strong brand image became diluted by inappropriate choice of target markets. So be selective about whom you go after.

Not All Apologies Are Accepted

Less than two weeks before my scheduled Facebook quitting day, Mark Zuckerberg acknowledged in an email that they had “made a bunch of mistakes”. This was followed by a more formal press conference on the changes Facebook would make to address its privacy controversy. Although by then I had been pretty resolute about quitting, I was willing to listen to what they had to say, with the faint hope that perhaps they would relent and that I could restore my confidence in them. But I was disappointed. The apologies had not come across sounding like a sincere apology, and the changes promised did not address fundamental issues with its privacy policy. The event came across as a half-hearted PR patch rather than genuine regret and apology. From past history, if a business has made a mistake and apologizes appropriately, consumers are often willing to forgive. But not all apologies are necessarily accepted. In Facebook’s case, it violated three basic principles of a good apology: (1) it was not timely; (2) it was not sincere; and (3) it didn’t even tell the complete truth. With such a half-hearted apology, the situation only became more hopeless, and the true nature of the business only became more naked in the public eyes.

In summarizing these lessons, I hope that your business will not make the same mistakes as Facebook. Otherwise, even if you had started with a solid loyal customer following, you may wake up one day finding them gone.

Good things are better shared!