Groww's mishandling of consumer complaint prompts debate about customer feedback ethics

The BFSI startup had asked one of its consumers to delete his social media post criticising it as a condition to resolve the issue.

Very often when consumers are not happy with a product or service, they take to social media to vent their frustrations. Handling consumer complaints on social media channels has become part and parcel of D2C brands. However, while brands get busy doing so, it is also important to look at how these are handled. Many times, brands, who are afraid of the issues going viral, may take the wrong path.

For example, Groww, a BFSI startup, was recently accused of fraud after a customer realised that the money debited from his sister’s account to invest in a mutual fund was never invested.

The user alleged that his sister's initial investment generated a folio and showed growth. However, problems arose when they attempted to redeem the investment. The mutual fund reportedly stated that the folio number was non-existent.

The consumer’s post accusing the company of fraud immediately went viral on social media. However, what irked social media users even more was the fact that Groww allegedly asked the consumer to delete his social media post in exchange for resolving the issue.

“As a final resolution, they have decided to refund/debit the amount which was in question. However, as a condition, they have asked to remove the social media posts including this one.

Ideally, I would have not removed the post but since the amount is significant and important at the moment I might have to go ahead and delete the post,” said the consumer.

afaqs! spoke to communications experts who urged people be extremely careful, and this incident can serve as an eye-opener for them. They also emphasised that both brands and consumers should be vigilant.

A negative precedent for other brands

Groww responded to the social media complaint, saying there was no fraud. It explained that no money was taken, and the mutual fund transaction did not happen. Still, it credited the disputed amount to the customer's account to ease investor concerns.

pic.twitter.com/dr5pKN2jou

— Groww (@_groww) June 24, 2024

After word spreads about the company asking the user to delete their social media post, there is a chance that such an approach might create a negative precedent for other brands as well.

Ashraf Engineer, head - strategy, Ideosphere, a communications agency, disagrees with Groww’s approach in this case.

He says that this is a world where brands are under great scrutiny and are far more accountable than they ever were. Therefore, there is a pressing need to raise standards.

“Unfortunately, what happened comes across as arm-twisting – whatever the reality may be. Groww could have solved the issue quickly and reported that the matter had been resolved. Instead, it has resulted in even more negative coverage and conversations. I don’t think it will set a precedent; I doubt that other brands will use this approach when dealing with customer complaints,” he says.

Madhukar Kumar, founder and chief strategist, Grey Cell Public Relations, an independent PR agency, believes that when companies with a large social media presence request a user to delete a social media post amid controversy, it is important to consider the broader implications.

He suggests that brands should focus on transparency and open communication. Addressing the issues head-on and showing a willingness to resolve them can build trust and demonstrate a commitment to customer satisfaction. “It is about finding a balance between protecting the brand and respecting customer voices,” says Kumar.

As per Tarunjeet Rattan, managing partner, Nucleus PR, a PR agency, this situation with Groww could have been handled more smartly given the sensitivity of the matter.

"Instead of strongarm tactics, if the company had taken the time to resolve the matter and the next post on the speedy resolution of the matter was made by the actual customer, imagine the kind of brand Goodwill they could have earned. What a golden opportunity lost!" she says.

A shift in customer service expectations

The expectations around customer service have evolved significantly. In the past, customers were often treated like royalty on social media, with companies issuing heartfelt apologies during controversies.

Anindita Mookerjee Sinha, communication mentor, perceives a shift in the dynamics. Previously consumers were seen as royalty for brands, but there is now a growing awareness of brands potentially taking legal action against consumers for defamation.

Brands are increasingly mindful of how many followers sway public perception and how far a consumer can escalate a complaint.

It has been observed that people have won cases against brands and received substantial amounts of money as compensation. This clearly shows that the outcome depends on how effectively customers can follow up and are aware of social media strategies.

“There are some brands that are not bothered no matter how many people write about them. For BFSIs, when they are governed under entities such as the Reserve Bank of India (RBI)/The Securities and Exchange Board of India(SEBI), they are alert about the regulatory implications, or if their discrepancies go public, it might affect their reputation and even their stock value might decrease. What people would like is a fast turnaround time, credibility, and maximum interest on any financial investment,” says Sinha.

Industry experts believe that companies need to handle online interactions by separating helpful feedback from baseless complaints, staying respectful to loyal customers, and protecting their integrity.

A PR and corp comm head of an integrated digital creative agency shares, on the condition of anonymity, that today, proactive solutions and empowered customers are the new standard. Brands are ditching the excessive deference and focussing on clear communication and self-service options.

The evolving interplay of social media, brands, and their CEOs

Today, the interplay between social media and brands has undergone significant evolution with the participation of their CEOs. These platforms have become powerful tools for shaping public perception and the CEOs are increasingly leveraging these tools to engage with their audience and enhance their brand image.

However, social media has also been instrumental in spotlighting a disparity between some CEOs public personas and the actual experiences of their employees. While a CEO's social media presence can boost brand image, a disconnect between their online persona and the company culture can disillusion both employees and customers.

Rattan says that the more popular the founder and her/ his personal brand, more are the expectations from the brand they create. More the strife between their personal and professional, more the customers become jaded and ensure a swift fall.

"In today's day and age, consumers want authenticity in a very real sense. And this is a great move that should encourage more brands to create experiences inside and outside the company that resonates with the founders brand," she states.

“The public would not know the discord between CEOs and employees because I don't think there are people who write against their companies while being on the job,” she adds.

Engineer shares that earlier, the tools of this projection were different; now social media have become the most prominent platforms. It can happen that the employee experience is very different from what is being projected by the CEO.

He says, “There is no way out but to walk the talk. If the CEO says the brand stands for certain values and actions, whether they are oriented towards employees or customers, then that should be reflected by the ground reality. If not, the brand – and CEO – will stand exposed.”

Kumar conveys that issues arise from various internal factors that are not always visible to the public. To bridge this gap, consistent and authentic communication from both leadership and the organisation is essential.

“By aligning the CEO's public persona with the company's internal culture, organisations can ensure that their external image genuinely reflects their internal values,” he says.

“The message for brands today is clear: embrace transparency, empower customers, and ensure that CEOs’ social media persona reflects reality. It is the only way to navigate the new customer experience revolution,” says the PR and corp comm head.