What’s that you say? Opprobrium doesn’t appear on your periodic table? Here’s betting that South Sudan is missing on your world map, too. It’s time you updated both. Opprobrium is among the most common of elements. You can find it almost anywhere.
Opprobrium is a radioactive element with a very short half-life. In a matter of days half of its substance decays. Some say that it was first synthesized by Rupert Murdoch, though that attribution is incorrect. It’s more likely that PT Barnum was the first to appreciate the element’s many attributes. It is said that Barnum was talking about opprobrium when he opined, “There is no such thing as bad publicity.”
Still not sure what it is? Google defines opprobrium as a noun meaning, “harsh criticism or censure.” Merriam Webster considers its primary meaning to be: “Something that brings disgrace.” To most of us, it is simply: (deservedly) bad press.
Leaving politics, both domestic and foreign, aside, it is interesting to analyze how opprobrium impacts businesses. What conclusions can we draw about this here-today, forgotten-tomorrow element?
In its November 10, 2018 issue, “The Economist” cites a fascinating study by Thomas Roulet of Cambridge University’s Jude Business School. It states that: Press reports of bad behavior by investment banks during and after the 2008 financial crisis were good for business. Yes, the more public disapproval a bank garnered, the more subsequent IPO business and fees it received.
Conclusion: Opprobrium = Higher Profits.
An isolated case? I give you United Airlines. Over the past two years, it has been the author of various customer service catastrophes. From dragging a passenger bodily from a plane, to policing the clothing choices of female ticket holders, to multiple animal deaths in transit, flying the friendly skies has been anything but. United has been the subject of Twitter boycotts, late night talk show jokes and a great deal of . . . opprobrium. So, are its planes flying half empty? No. Nor are they ever likely to do so, even if United continues its string of bad behavior. Why? Because most leisure travelers are motivated by price, not satisfaction; business travelers are motivated by their loyalty program memberships.
Conclusion: Price Sensitivity > Opprobrium
Still not convinced? Then let’s look at Wells Fargo. In late 2016, Wells Fargo was fined for establishing over three and a half million fake accounts. During the same time period, it forced nearly half a million of its car loan customers to take on unnecessary insurance; these added charges contributed to thousands of loan defaults. Wow! With so many banking alternatives available, who would bank with such an organization? Quite a few of us, it seems. According to Wells Fargo CEO, Tim Sloan, this past June, customer satisfaction and loyalty levels have returned to pre-scandal measurements. Mr Sloan added that new account growth was quite satisfactory.
Conclusion: Switching Costs > Opprobrium.
I could go on, but it’s time I return to my laboratory. I’m looking into the corollary that opprobrium travels fast.
Peter has spent the past twenty-plus years as an acting/consulting CFO for a number of small businesses in a wide range of industries. Peter’s prior experience is that of a serial entrepreneur, managing various start-up and turnaround projects. He is a co-founder of Keurig.