Catalyst S+F: Is Transparent the New Black? Learning from Facebook's Mistakes - Cody Duval - MediaBizBloggers

A recent customer satisfaction survey ranked Facebook as one of the most disliked companies in America, scoring just 64 out of 100 on the American Consumer Satisfaction Index. "This puts Facebook in the bottom five percent of all measured private-sector companies, and in the same range as airlines and cable companies, two perennially low-scoring industries with terrible customer satisfaction," reported the ACSI. So where did Facebook go wrong? And what does this mean for other consumer brands?

Over its short six-year history, Facebook has repeatedly stumbled in one area: consumer privacy. More specifically, Facebook has done a poor job of being open and transparent with how it uses and shares consumer data. And why would they be? For years consumers have seemed to care little about data privacy. Credit card, phone, and direct mail companies have been far more reckless with private consumer data with little or no consequences from their customers. But as the Facebook case indicates, consumers have finally woken up to the issue. Privacy matters, and brands that practice a policy of obfuscation around personal data risk significant backlash from consumers.

And while it's hard to argue anything will truly slow the Facebook's tsunami, privacy concerns are spurring competitive upstarts like Diaspora. Diaspora just raised over $200,000 from 6,400 users on the promise of building a "privacy aware, personally controlled, do-it-all distributed open source social network." And pip.io is a new social network that gives users total control over who sees their information and posts (unlike Facebook or Twitter).

But it's not all bad news. Brands have an opportunity to garner significant goodwill from consumers by being open and transparent with exactly how they are using personal data. And in an era where it's increasingly difficult for consumer companies to differentiate themselves, the brand that actively lets its customers "behind the curtain" may just be the one that wins.

Cody Duval is General Manager, East Coast at Catalyst S+F. He leads Catalyst S+F’s New York office, and he brings with him over 12 years of experience in digital marketing and advertising. Cody can be reached at cody@catalystsf.com.

Read all Cody's MediaBizBloggers commentaries at The Marketing Capital Report - MediaBizBloggers.

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