An old saying goes that you can deceit a small group of people for a very, very long time. Or you can cheat a large number of people for a very short period. You cant do both.
The same applies to your customers as Wells Fargo learned the hard way. They managed to cheat relatively large number of customers, during a relatively short period. There’s no need to dig into the details of business practices that resulted in a federal-level probe and massive negative news coverage on the Wells Fargo corporate policies. Their CEO resigned, customers moved to other banking institutions, they will need decades to restore their business reputation and can hardly rely on Google’s “right to be forgotten” policy.
The lesson learned: Do not lie to your customers unless you plan to make massive amounts of cash through fraudulent practices and then disappear.
Samsung did not exactly lied their customers when they released a smartphone intended to be a flagship bestselling product – the Galaxy Note 7. What they did was to shorten the research and development cycle in order to release the product simultaneously with the Apple’s iPhone 7 and hit the ground running to reverse plummeting sales.
Their Galaxy Note 7 model started exploding, in the air and at home, and after an obscure PR campaign Samsung were forced to stop its production, replace all smartphones already sold, and suffer a massive blow to their reputation.
The lesson learned: Do test your products to the utmost before release. Samsung could have easily witnessed their sales grow thanks to the Galaxy Note 7, which is a device that is not short of functionality and features. They should have tested it thoroughly, though, and would have easily discovered an ill-designed battery that spoiled their would-be flagship product, which now ruins their sales and reputation among customers.
The two examples above look quite different on the surface, but the underlying cause of these massive failures is related to excessive corporate greed. Business is about profit, no doubt. But if you want steady growth, you should allow your product or service to complete the entire research and development cycle. And, later, you should not cheat your customers to sell them unnecessary services.
Both Wells Fargo and Samsung are going to survive, probably. Their recent massive failures will cost them billions and will cause considerable damage in the long term. After all, your product or service will sell itself without much publicity if your customers trust you.