Does Privacy Scandal Dial Brand Crisis for Verizon?

“Can You Hear me Now?” Verizon Customers Bark, But Don’t Bite

When news broke that Verizon had been supplying the NSA with millions of customers’ phone records, consumers unsurprisingly took to social media to voice their opinions on the shocking situation.
Using Crimson Hexagon’s ForSight platform, we wanted to examine the scandal’s impact on the Verizon brand as a whole. To first establish a brand baseline, we analyzed over 250,000 relevant posts about the Verizon brand in the three months leading up to the scandal, from March 1, 2013 until June 3, 2013. While it seems clear that, no matter what the legal or policy outcomes, the NSA’s data collection has become a political scandal in the U.S. But is it also a brand crisis for Verizon?
Verizon opinion analysis prior t p scandal
Over the entire period, negative opinion dominates the conversation (73%), with the majority of consumers taking issue with Verizon’s high fees, low performing network, and poor customer service. While Verizon can take pride in the fact that more consumers are praising the performance of their network (26%) than complaining about it (17%), the same cannot be said of their customer service, with only 1% of consumers experiencing exceptional customer service.
With this brand baseline established, we can now look at the consumer response to the Verizon privacy scandal. For this analysis, we examined conversation on social media addressing the alleged NSA data gathering program and Verizon at the same time. After evaluating over 42,000 relevant posts surrounding the scandal across Twitter, Facebook, blogs, and forums, the consumer conversation is overwhelmingly negative with 74% of people expressing distrust with Verizon due to the privacy leaks.
Verizon brand crisis daily opinion
Looking at the graph above, we can see how the proportion of conversation changes in the days following the scandal. Distrust for Verizon peaks on June 5th – 7th when The Guardian initially reported the scandal. Then, starting on June 8th, there is a significant uptick in neutral and positive sentiments. This increase can be attributed to the news of the PRISM program being revealed to the public, which pushed the conversation away from focusing solely on Verizon to the wider political and social implications of the related privacy scandals.
Verizon brand crisis tweet
How did all of this negative chatter affect the Verizon brand?  Consumer sentiment expressing that the Verizon brand is untrustworthy increased from 3% before the scandal to 31% during the week following the scandal, reaching a peak of 42% on June 6th, the day after news sites published the story.
Verizon brand crisis opinion
Perhaps more interesting is the shift in consumers speaking about Verizon’s poor customer service, which increased from 12% pre-scandal to 40% after. The cause of this increase is a bit trickier to unpack, but by looking at some example tweets posted in the period after the scandal we see that consumers are associating the incident with Verizon’s poor customer service.
Verizon brand crisis tweets2
Thus, this scandal has not only impacted the brand through an intangible brand characteristic such as trustworthiness, but also through a tangible dimension in customer service as well.
The last question to ask now is how does this increased consumer distrust directly translate into lost customers for Verizon? While it is still too early to tell, we can get a hint of customers’ evolving perception of the Verizon brand through our analysis of their response to the scandal.
Verizon scandal consumer  around brand crisis
Distrust for the brand is understandably high, but actual expressed intent to leave Verizon is low, representing only 2% of the conversation and peaking at 8% on June 7th. Lost customers represent the true bottom line impact that companies hope to reduce when faced with a brand crisis. In this case, customers initially express a distrust of Verizon the days following the scandal which coincides with untrustworthy brand sentiment from consumers. Yet, little of this translates into Verizon customers expressing intent to switch carriers on social media.
Using the ForSight platform, we are able to categorize the nuanced differences between consumers communicating distrust with Verizon and customers expressing intent to discontinue their relationship with the company. ForSight’s opinion analysis allows us to assess the true bottom line impact when a company faces a brand crisis.
 

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