Got Feedback? - Got Feedback? Facilitating Communication Between Companies and Consumers

by William Mahoney

When Pete Blackshaw graduated from HBS in 1995, he decided against going directly to the high-tech world, opting instead for a position at Procter & Gamble, despite having substantial experience with the Internet. The dot-com world was very enticing, but Blackshaw felt that the timing wasn't quite right for him to go in that direction. He recalls a mystified HBS professor telling him, "There's a lavish buffet out there, and you're going to Burger King!"

Today, Pete Blackshaw and HBS classmate Betsy Cohen have reached that lavish buffet as the CEO and CFO, respectively, of PlanetFeedback, a Web site that makes it easier for consumers to offer feedback on the products and services they purchase. (Another HBS graduate, Mike Nazzaro, MBA '93, is COO.) They are proof that while the Internet has changed the scope of business, the traditional career path is still the most effective—even for aspiring entrepreneurs.

	We're like a marriage counselor for consumers and companies.
	—Pete Blackshaw

"I was intrigued by the dot-com world, but having come from a finance background, it wasn't on my radar screen when I graduated," says Cohen, who after graduating from HBS went to Oaktree Capital Management, where she worked in a private equity fund. Blackshaw adds, "I felt enormous pressure to go directly to a dot-com. But I didn't buy into the hype that you just jump into a dot-com, and you'll learn everything. Many established companies are under tremendous pressure to reinvent themselves, and there are phenomenal opportunities for people coming out of business school, especially if you're interested in being an entrepreneur."

Empowering the Consumer
PlanetFeedback is essentially a tool of empowerment for consumers. It helps to unite individual consumers so that their feedback to companies has greater influence and value. PlanetFeedback fuels the "viral power of the consumer," as Blackshaw and Cohen describe it—the propensity for consumers to share their views with other consumers. The Web site also offers consumers a host of tools: tailored letters for different types of complaints or compliments, and contact information for various companies. And, Cohen notes, "the site offers the ability to copy your congressman or an agency head—like the head of the FAA—if your complaint is relevant to a particular government agency or regulatory body."

Ultimately, consumers are able to reward the companies that serve them best. In turn, PlanetFeedback makes it easier for companies to harness that viral power of the consumer by aggregating consumer feedback and offering it to companies that value such information. "Basically," Cohen explains, "we have created a site where consumers can come and easily give feedback—good or bad—and we can then collect and analyze that feedback for companies." For the marketing departments of companies, this kind of information is "pure gold," Blackshaw says. "They crave this kind of input." PlanetFeedback effectively serves the consumer and the supplier, for the benefit of both. "We believe you can do it both ways," he adds. "We're like a marriage counselor for consumers and companies."

The Journey to the Planet
Some of the seeds for PlanetFeedback were formed in the classrooms at HBS. Blackshaw and Cohen both mention Professor Jim Heskett's Service Management class, where the parallels of a consumer's value to a company and the power of the collective consumer began to take shape. They learned that all feedback is valuable to a company, where even complaints are considered gifts. "I remember looking at the Intuit case study," Blackshaw recalls. "They treated customer service as a listening device. Every complaint is a potential suggestion."

Blackshaw integrated many of these ideas into his work at Procter & Gamble, where he was part of an interactive marketing team. "For example, we looked hard at the lifetime value of a Tide consumer—roughly $8,000," he says. "I knew that if a Tide consumer could be worth $8,000, what would a consumer be worth to an airline or to an automobile company?" And if one consumer has that kind of value, what kind of value would large groups of consumers have if they could speak as one?

Blackshaw and Cohen began to shape these notions into an innovative business model. Blackshaw based the model on research that revealed that consumers were not taking advantage of opportunities to speak to companies, mostly due to inconvenience. "We know from research that only 1 consumer in 25 will take the time to write or call to complain or compliment a company," he says. "Those other 24 opportunities are going to waste." He also knew the value of such information to companies, realizing that for companies, a lack of convenience was once again the root of the problem. "We make it easier for companies to understand, analyze, and respond to feedback," Cohen adds. "It costs about $25 to analyze an inbound phone call or an e-mail—we can help our partner companies lower that cost. If feedback is cheap for them to manage, the more the better."

Another potential dimension of PlanetFeedback's model is the ability to pinpoint dissatisfied consumers, who are extremely valuable to competitors. "We also know that 85 percent of consumers who complain are prepared to switch brands," Blackshaw says. "If the company you currently do business with is not prepared to make you happy, you can use PlanetFeedback to make other companies aware that your future loyalty is up for grabs—and let them make you some attractive offers in an attempt to capture it."

Cohen and Blackshaw point out that, surprisingly, 48 percent of the consumers who use the site do so to compliment a company. Blackshaw has direct experience in seeing the power of these consumers as marketers. In his work at Procter & Gamble, he helped conduct experiments with consumers who had given unsolicited positive feedback, asking them if they wanted the opportunity to be ambassadors for the product they had praised. If they were interested, Procter & Gamble would send free samples to 20 individuals whom these people selected. "On average," Blackshaw says, "people came up with 16 names, and the conversion rate of these people to consumers was the highest for any program we had ever tried." Once again, the power of consumer feedback was evident.

Opening the Gates for Feedback
Cohen and Blackshaw have witnessed firsthand the ability of the Internet to open the gates for feedback. "Some companies don't want feedback because it's indecipherable gibberish to them," Blackshaw says. PlanetFeedback is successful because it has simplified the process by creating a model that focuses on and structures feedback—thereby making it a valuable commodity.

The future of PlanetFeedback will include many challenges, but Cohen and Blackwell are both optimistic. "Part of our bet for the future is that smart marketers will focus as much on viral power as buyer power," Blackshaw says. "Marketers have learned that consumers are better marketers than marketers themselves are."

Cohen adds, "We could change marketing as we know it."

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From HBS New Business, Winter 2001.

Read about PlanetFeedback as an HBS case study.

William D. Mahoney is the associate director of publications in the Harvard Business School's Communications Group.

From HBS New Business