Early in 2020, wireless sound-system manufacturer Sonos announced that it would no longer provide support for some of its oldest products: wireless speakers launched between 2006 and 2009. The company argued in an official blog post that the wireless speakers had been “stretched to their technical limits in terms of processing power” and “would no longer receive software updates or new features.” Moreover, systems containing both new and legacy products would no longer receive updates, making perfectly functional devices more-or-less useless, according to some critics. Hordes of angry users took to Twitter under the hashtag #SonosBoycott and argued that loyal early adopters were being punished. It did not take long for Sonos’s CEO to reach out, stating “We heard you. We did not get this right from the start,” and promising continued technical support for older devices.
This example illustrates a strategy hijack — that is, a situation in which groups of dissatisfied customers overtake the control of an organization’s strategy. Sonos is far from alone in having its strategy hijacked: Adidas, Coca-Cola, Carlsberg, H&M, and Lego, to mention a few examples, have had to adjust strategies in response to consumer backlash.
Our research explores the underlying causes of strategy hijacks, the changing nature of consumer-company dynamics, and resulting implications for leaders. Together, our findings suggest a fundamental shift in power dynamics in the realm of strategy stemming from technological and social developments that have changed how companies and customers interact. Thanks to the connectedness of social media, it’s becoming much easier for consumers to unite against companies — and thanks to the transparency of widely available data, it’s now also much easier for consumers to keep an eye on company behaviors.
Why Are Strategy Hijacks So Prevalent Now?
We argue that strategies increasingly become hijacked due to significant technological developments and fundamental changes in consumer behavior. Specifically, customers have become more entitled, engaged, and entangled. (See “Three Dimensions of Customer Behavior.”)
Let’s explore each of these dimensions of the modern customer.
Entitled. Customers become more entitled due to both technological and competitive developments. Technological developments have accelerated customer demands, both in terms of customization, real-time responsiveness, and customer centricity. Moreover, companies increasingly compete with each other to fulfill consumer needs. In many ways, the situation can be described as “the Red Queen’s race,” in which companies run faster and faster just to stay in place. As a result, what were extraordinary, nice-to-have features meant to delight customers have become taken-for-granted baseline features that are expected by customers. Failure to deliver on the features expected by customers triggers strong responses. In other words, customers have become entitled.
A symptomatic example of customer entitlement arose when Mondelez International announced that it was changing the iconic shape of its globally recognized chocolate bar, Toblerone, by leaving out every other mountain peak, thereby reducing the weight of its 170-gram bar to 150 grams. The company blamed rising ingredient prices and indicated that the new shape would allow it to maintain the same price. The announcement fueled immediate attention and outrage online, as illustrated by a Google Trends search around the day of the announcement (see below).
When we first read the strategic announcement from Mondelez, we predicted that Toblerone’s consumers would “hijack” the company’s strategy and force it to revert to the initial shape — and we were right. Companies can’t scale down performance on taken-for-granted expectations, illustrated by Mondelez’s 2018 reintroduction of the Toblerone bar — in its original shape and even bigger than before.
Engaged. Companies increasingly want to engage their customers, and technology has been a driving force in connecting consumers to companies and each other. Users have been given tools to codevelop products with companies, online communities have applied themselves to problem-solving product features, and loyalty programs and analytics have helped companies understand consumer behaviors and deepen consumer ties to products. Consequently, many customers develop deep, personal relationships with organizations and brands. While such engagement is important for satisfaction and loyalty, it can also result in dissatisfaction if the organization acts in ways that are incongruent with customers’ ideals.
For instance, the Swedish clothing brand H&M recently faced consumer backlash around potential “greenwashing” following accusations that the company burned unsold clothes despite issuing ambitious sustainability statements. H&M experienced further backlash some time later when the company ran an advertisement that many consumers regarded as racist. Whether their critics were right or wrong in their outrage, consumer engagement always entails the risk of turning sour. When you develop a relationship with consumers, you similarly provide them a stake in your business.
Entangled. Social media has increasingly entangled customers and companies in intricate, interconnected networks. Companies increasingly want to connect with customers on social media and seek positive word-of-mouth communication among consumers. Customers, too, desire this type of connection and, consequently, are immersed in virtual networks of fellow consumers, businesses, and other stakeholders — all trying to influence each other. As a result, changes desired by consumers or other stakeholders cannot be isolated but spread like ripples in the water in these entangled networks.
This was evident in the complicated case of Lego, Shell, and Greenpeace, in which each organization and its consumers was entangled in networks and connected via social media. In 2014, Greenpeace began to pressure Lego to end its partnership with Shell by launching a YouTube video showing a Lego universe slowly drowned in oil. The video quickly went viral and obtained widespread support among consumers. After three months of aggressive campaigning, the Danish toy company announced that it would not renew its contract with Shell.
What Can Strategists Do?
Strategy is about making choices and accepting trade-offs. But when customers hijack your strategy, they make choices on your behalf and, ultimately, change or even reverse your strategies. What can strategists do in such situations? We offer four pieces of advice.
Predict and preempt. Ideally, strategists must recognize that plans may be in danger of being hijacked by customers and take preemptive measures to counteract such resistance. We were able to accurately predict the troubles that Mondelez would face when it decided to change Toblerone. Had the relevant managers done the same, effective preemptive measures might have been put in place, perhaps by launching a “Toblerone light” version alongside the conventional Toblerone. By doing so, the company would have avoided taking customers by surprise and in fact would’ve offered consumers an additional choice — reducing the risk of a hijack. The simple rule is: Think it through and take the risk out.
React and revert. If a strategy has already been hijacked, the company must react and, if necessary, revert to the initial position. This response was demonstrated by the Danish brewer, Carlsberg, after launching a new signature beer bottle to replace its standard bottle. Both consumers and distribution partners (especially bar owners) vehemently protested. After three months, Carlsberg’s management team, swayed by customer pressure, lowered its prices for the new bottle. Yet, this was not enough to satisfy consumers, and in the end, Carlsberg relaunched its standard bottle in the Danish market. Companies need to be similarly flexible and keep U-turn options open.
Monitor and mobilize. Companies must continuously monitor sentiments among their customer base and, when applicable, try to mobilize customers around the new strategy. In a surprising turn, consumers have actually begun to show interest in New Coke, the infamous marketing failure popularized by the 1980s nostalgia of the hit seriesStranger Things on Netflix. Coca-Cola has partnered with Netflix to capitalize on this sentiment by bringing back New Coke for a brief time. In so doing, Coca-Cola not only utilizes its ability to monitor consumer sentiments, it also mobilizes those sentiments for its own benefit.
Divide and diversify. Another key element of dealing with hijacked strategies is to unbundle the overall strategy into separate projects. The organizations considered here typically did two things at once: They introduced a new product and removed an old one, thereby creating room for a hijack. By treating the two issues as two strategic projects, organizations can simultaneously address different consumer segments and buy themselves time to execute the projects at different speeds. For instance, had Carlsberg introduced the new bottle alongside its old bottle, and only discontinued the old bottle when and if consumers embraced the new one, the company’s strategy probably would not have been hijacked.
When consumers become more entitled, engaged, and entangled, your strategy runs the risk of getting hijacked. When customers hijack a strategy, the strategy’s trajectory starts to resemble that of a boomerang returning after being thrown. While this return is an excellent quality for a toy, it is very expensive for a company’s marketing strategy. Corporate managers can decide to trade out a potential boomerang for an arrow that will hit the target. By following these recommended practices — anticipating future hijacks, navigating once your strategy is hijacked, using consumer sentiment to your advantage, and simultaneously managing different interests among consumers — your strategy’s trajectory will transform from a boomerang into an arrow that is energized by the masses to meet your consumer target.
Read the full article here.
This content was originally published by MIT Sloan Management Review. Original publishers retain all rights. It appears here for a limited time before automated archiving. By MIT Sloan Management Review