Thanks, but No Thanks for the $500, VW

November 12, 2015

Who couldn't use some extra money, especially right before the holidays?  Giving $500 gift cards to your customers would seem to be a fool proof way to generate goodwill with your community, unless you’re VW.  The VW diesel emissions scandal has left the company and their, once loyal, customers reeling.  And a $500 gift card just doesn't cut it.  It will take a little more to win back customers that were lied to about VW’s fuel efficiency and have already seen the value of their vehicles reduced by thousands of dollars on the cratering resale market – if they could get anyone to buy a VW diesel at all right now.

Trust is earned, and fleeting

It takes years to build trust in your business and your products, and even longer to create an actual community.  VW successfully did all of that, and then saw their community swiftly turn on them.  The reversal of fortune can be even swifter for a company with smaller amounts of positive community sentiment in the bank.  This week, craft marketplace Etsy announced that they were partnering with Stride Health to provide health insurance options for their community of sellers.  Sounds like a good fit for a community with many independent businesses, right?  Not so fast said the Etsy community, suspicious that Etsy was just trying to turn a quick buck through commissions on their insurance purchases.  Just like Facebook, Twitter and other new communities have seen backlash from changes in their user interface, or the incorporation of more commercial messages, Etsy is finding that once you build a community you need to continually work with them to maintain goodwill.

Keeping Up with The Communities

Customers migrate to companies that provide products and services that align with their needs, desires and aspirations.  The shared interest of most Prius owners in driving a car that was good for the environment and their, now tiny, gas budget is the basis of just the type of community VW used to enjoy.  But, once VW’s cars stopped being so good for the environment, or their wallet, a token gesture of a $500 gift card felt less like a holiday bonus and more like a slap in the face.  Small businesses can avoid the mistakes VW and Etsy made by staying true to their initial purpose and regularly engaging with the community to get their feedback.  The more time you put into building and strengthening your ties with your community, the harder it will be to chip away at that base once things go awry.  Ask for feedback before you make big changes, limit surprises and always ask yourself, is this true to our initial purpose?  Your community will appreciate it.