How Groupon Could REALLY Break the Mold

Posted on February 9, 2011 by Paul

Groupon remained silent the second day after its offensive ad campaign ran on the Super Bowl. The Wall Street Journal quotes spokeswoman Julie Mossler as saying “we don’t really have anything else to say,” meaning that the defensive statement by founder Andrew Mason on the company blog on Monday would have to stand on its own.

Groupon is donating up to $100,000 to each of four charities whose causes were cited in the company’s ad campaign. That’s $400,000 (tax-deductible) against a Super Bowl Ad budget of at least $9 million, and that’s not counting all the media buys since then. So if Groupon has spent (conservatively) $10 million on media buys since Sunday and given $400,000 in matching donations to the causes it exploited, then its licensing costs amount to 4% of the total spend. Pretty good deal if you ask me. For a company that just raised $950 million in financing, it’s not even a rounding error.

Groupon likes to think of itself as working against the grain, so what if it REALLY broke the mold by challenging the model that has advertisers throwing absurd amounts of money at the TV networks for a football game every February? What if Groupon announced that it wouldn’t buy any Super Bowl advertising but would instead donate the $9 million ad budget as matching funds to those four charities? What if it further challenged the other big Super Bowl sponsors like GM, Coca-Cola and Annheuser-Busch to do the same? Do you think Groupon could get the same impact giving money to rainforests and Tibet as it got by sending the money to Rupert Murdoch?

I’m not sure, but it seems an interesting idea to explore, at least for an outfit that presents itself as a rule-breaker. How about breaking the rules of the world’s largest commercial stunt in the name of the environment and human rights while also challenging others in your community to do the same? Could it possibly have the same impact?

I’d sure like to see someone try it.

Groupon Digs the Hole Deeper

Posted on February 7, 2011 by Paul

It’s been a little more than 24 hours since Groupon aired the most offensive advertising campaign in history, and the company’s response to the outpouring of negative commentary has been a textbook example of how not to handle a crisis.

The Groupon ads, which were intended to be parodies, used celebrities to stage mock public service announcements that ended in pitches for Groupon’s coupon service. In the day since the ads were aired, we’ve learned that the messages were intended to raise awareness of the causes that were mentioned and to stimulate giving to those charities. Too bad Groupon didn’t mention any of those noble goals in the commercials themselves.

I haven’t conducted a scientific analysis, but in monitoring the mainstream media coverage as well as the chatter on Twitter and Facebook today, it appeared to me that commentary was running about 80% negative on the campaign. As of this writing, there are more than 300 comments on the blog entry CEO Andrew Mason posted just before the ads debuted, the vast majority of them critical.

Mason finally posted a response to the outpouring of commentary today. Rather than admitting that the campaign was a failure, he attempted to defend it. “When we think about commercials that offend us, we think of those that glorify antisocial behavior – like the scores of Super Bowl ads that are built around the crass objectification of women. Unlike those ads, no one walks away from our commercials taking the causes we highlighted less seriously.”

Actually, when I think about commercials that offend me, the image of Timothy Hutton using the suffering of the Tibetan people to sell direct marketing services will forever remain etched upon my mind. Andrew, you set a high-water mark for offensiveness. You’ve made the GoDaddy ads look like Dr. Seuss by comparison.

Mason goes on to explain why the ads are clever and innovative. Unfortunately, anyone knows that it’s pointless to explain a joke. If people don’t get the joke in the first place, then attempting to tell people why it’s funny just looks pathetic at best and arrogant at worst.

I don’t know who counsels Groupon about public relations. Its press releases cite Julie Mossler, who appears to be an employee, as the contact. This company clearly needs some help in crisis communications, though. Any experienced counsel would tell Groupon to apologize, make good with its critics and put this problem behind it as quickly as possible.

However, Groupon appears to be committed to moving ahead with this campaign. It’s tweaking the endings of the ads to make the tie-ins to charities clearer, and I suppose that helps a little. But it doesn’t change that fact that this campaign is tasteless, unfunny and now only borderline offensive. It is vaguely reminiscent of the Pets.com sock-puppet ads of the late 90s, the difference being that the sock puppet was at least amusing. These ads aren’t, and Groupon would be well advised to run screaming from them as quickly as possible.

Here’s another thigh-slapper from the video series for your amusement. Deforestation is a great tie-in to product discounts.

Groupon’s Advertising Obscenity

Posted on February 6, 2011 by Paul

In my 53 years on earth, I have never witnessed a more tasteless, vulgar and morally repulsive example of exploitative marketing than this Groupon ad that ran on the Super Bowl tonight. Can you imagine using the suffering of a repressed and brutalized nation to market online coupons? It’s mind-boggling. What’s next, Groupon? Perhaps an ad for discounted cigars made by the survivors of the Haitian earthquake?

Groupon should buy network TV time to apologize for this obscenity. How on earth did the management at the company allow this to happen? If you are as offended by this ad as I am, I encourage you to tweet your opinion to Andrew Mason, founder and CEO of Groupon.

Update: David Kaplan covers the outrage on Twitter in a good post on PaidContent.org. The ad “was in such poor taste, it makes the outrage directed toward Cole’s insensitive, tone-deaf tweet equating sales and the Cairo uprising against Egyptian President Hosni Mubarak seem mild,” he writes.

Update: In a posting on the Groupon blog, founder Andrew Mason explains that the ad is partly satirical. “What if we did a parody of a celebrity-narrated, PSA-style commercial that you think is about some noble cause (such as ‘Save the Whales’), but then it’s revealed to actually be a passionate call to action to help yourself (as in ‘Save the Money’)?”

Actually, we think it’s a terrible idea. If the ad is intended to raise money for Tibet, it would have been nice to offer diners the option of sending their savings directly to Tibetan relief. But the ad neglects that detail.

Groupon is saving face by matching donations up to $100,000 to The Tibet Fund. Take them up on that.

How B2B and B2C Marketing Are Different

Posted on January 20, 2011 by Paul

My fourth book, Social Marketing to the Business Customer, came out this week. While the purpose of this post is ultimately to convince you to buy it, I hope to also impart some insight I gained from immersing myself in business-to-business social marketing for six months.

Co-author Eric Schwartzman and I wrote the book because we felt that B2B marketers were getting inadequate advice about how to apply social media constructs to their work. We’ve attended scores of conferences over the last few years and heard lots of wonderful stories about how to use everything from blogs to video games people play using servies like CSGO BOOSTING, to even sell blue jeans, potato chips and fine wine. Invariably, someone stands up and asks, “What does this mean to me as a B2B marketer?”

The response is usually something like, “Well, you can do this, too.” I used to take that answer at face value, but the more I thought about the unique characteristics of B2B buying decisions, the more it struck me as dodge. The fact is that much of what works in consumer markets would fail in B2B interactions. There are plenty of opportunities to apply social media tactics, but the context is different.

Download a sample chapter

As Eric and I began to dig into this topic, we put some thought into how B2B and B2C markets differ. We came up with six major areas of divergence, and we were surprised to realize how really different these two flavors of marketing are. Here are the six points we arrived at. I’m sure this list is not comprehensive, so leave a comment with your impressions.

1. Value-driven decision-making. Probably the most important distinction between business and consumer marketing is that nearly every buying decision a business makes is driven by the need to solve a problem, pursue an opportunity or make or company more efficient. There is no room for sex appeal, status, feeling good, tastes great or less filling. A lot of great consumer marketing campaigns sell at the gut level, but B2B buyers base their decisions upon facts and calculated value. If you don’t deliver that, you don’t get considered.

2. Group consensus. Most businesses are inherently conservative, and decision-makers seek validation from many sources, including analysts and their peers. Part of this is simple risk avoidance, but an equally important factor is that decisions made by a group are more likely to be supported by all of the members. The bigger the purchase, the more people are usually involved. Research by marketing Sherpa and TechWeb found that 41% of technology buying decisions involved 15 or more people in the process. These people typically come from many different areas of the organization, and each has different information needs.

3. “Bet the business” decisions. When Federal Express chooses a vendor of hybrid engines for 1,500 trucks or Ford installs a fleet of welding machines on its assembly lines, the decision has the potential to affect the company’s bottom line and its stock price. Even seemingly small decisions, like the choice of an e-mail marketing vendor, can have far-reaching implications if the supplier can’t deliver. Consumers almost never face issues of this magnitude.

4. Long-term relationships. Business executives buy companies as much as they do products. Most prefer to work with a small number of favored vendors who get a large share of their budget in exchange for high-quality service and “one throat to choke” accountability. Consumers make few choices that involve persistent relationships.

5. Knowledgeable buyers. B2B buyers don’t hesitate to bring experts into the decision-making process. These people may have years of in-depth technical experience, certifications and degrees. They want to talk to the people who build the products they are considering, ask detailed questions and gain confidence that the company is a worthy long-term partner. In contrast, consumers may study up for a bit before buying a car or refrigerator, but they rarely bring people with Ph.D.’s into the process.

6. Intense need for information. A B2B decision usually requires information from a lot of sources about a lot of topics. The CFO, head of manufacturing and CIO all have different questions, and all need to be satisfied. The business buyer’s appetite for information also doesn’t end with the sale (see item 4). Users of call routing or process management systems, for example, may spend days or weeks in continuing education classes or at conferences to keep up with new developments. There is virtually no parallel for this in consumer markets.

For these and other reasons it’s shortsighted to tell a B2B marketer to apply the tactics used to sell blue jeans to the task of selling aircraft engines or sales force automation software. The same tools can be applied – and we devote 250 pages to explaining how – but the tools that B2B marketers differ in some pretty basic ways from those liked by their B2C counterparts. We found some wonderful case studies, lots of innovative people and even some very clever campaigns.

So here’s the promotional message: Buy it! Read it! Post your review on Amazon or tell us what you think here or on our Facebook page. If you’re a B2B marketer, this book is for you. Let us know if we hit the mark.

“Content Rules” Is an Essential Desktop Reference for Social Marketers

Posted on January 12, 2011 by Paul

My mother used to justify her massive collection of cookbooks by saying that a volume was worth buying if there was just one outstanding recipe in it. By that metric, pages 157-168 of Content Rules are worth the cover price alone. I thought I was pretty savvy about creating content, but authors C.C. Chapman and Ann Handley gave me at least a couple of dozen new ideas. This is a practical and useful book that every marketer who’s struggling with the new world of democratized publishing will find of value.

Chapman and Handley start out with a list of terms that they would like to see banished from the marketing vocabulary, including “leverage,” “proactive,” ”solution,” “drill-down” and “drink the Kool-Aid.” They have good reasons for hating these buzzwords, and I winced to realize that several regularly turn up in my own writing. The authors practice what they preach, though. This book is written in clear, declarative and hype-free language. It bubbles with enthusiasm for the topic and its recommendations are the kind you can take to the bank (there goes another buzzword).

Chapman and Handley are clearly fans of great writing, and it shows in their use of simple language and playful asides that inject a human touch when the text strays into the realm of the academic. They even invented a few new words, such as “re-imagine” as an alternative to the more mechanical “re-purpose.” Early on, they pay homage to Strunk & White’s Elements of Style, prompting me to haul out that 105-page masterpiece and re-acquaint myself with the beauty of simple language.

Pages 157-168 lay out 25 rules for successful webinars. As a veteran of more online events than I can count, I found at least 10 great ideas here. For example, how about taking audience questions during the webinar rather than at the end? Or promoting the event with a short podcast? Follow up with an e-mail inviting follow-up questions. Post the whole thing on SlideShare. Why didn’t I think of those?

Content Rules doesn’t pretend to be a visionary treatise on the future of social media. There are plenty of books out there that do that. This is a hands-on guide that’s meant to be marked up, so bring a highlighter. The book includes practical tools like the worksheet that Kodak uses to stimulate ideas from prospective bloggers and tips on where to find free art to dress up blog posts. It will even help you decide when to use in-house content experts and when to contract for those services (though some payment guidelines would have been helpful there).

The authors tracked down many new case studies to provide a welcome break from the Zappos and Blendtec examples cited so frequently elsewhere. For example, there’s Sears Yard Guru, which helps potential buyers of lawnmowers choose equipment, and Army Strong Stories, which tells of military life in the words of soldiers in the field. There’s even a chapter devoted to B2B marketing, an often overlooked category that the authors assert can be just as innovative as the consumer marketing sector.

There’s even advice on how to write headlines that are catchy but not cliché. For example, compare “Insights from Social Media Research” to “The Naked Truth: What’s Hype, What’s Not in Social Media.” Both can describe the same content, but which do you think is more likely to grab attention?

Throughout the book, Chapman and Handley encourage marketers to think big and take chances. Attracting attention on the crowded social Web isn’t about playing it safe, they say, so get comfortable with risk. “I’d worry less about shocking customers than I would about boring them,” says Jellyvision founder Harry Gottlieb in one notable quote.

Content Rules isn’t a book for corporate strategists or CEOs. It won’t give you great insight about what’s coming down the social media road. But it doesn’t pretend to do these things. This is a disarmingly informal, friendly and approachable book that you will want to keep on your desk and consult when the creative muse has fled you, as it does all of us at times. As a recipe for content, it would have made my mother proud.

Social Media RFP Gets An Update

Posted on December 27, 2010 by Paul

One of the social marketing practitioners I most admire is Maggie Fox, whose Social Media Group was a pioneer in creating new-media campaigns long before it was fashionable.

About a year ago, Social Media Group published a comprehensive and intelligent template for creating requests for proposal (RFPs) for social marketing campaigns. Now they’ve followed it up with a second version that includes an “RFP Bill of Rights” that “will hopefully help provide guidance on how to do an RFP right and fairly,” Maggie says.

The Bill of Rights makes for interesting reading. It provides guidance for marketers to consider in publishing RFPs that are fair to the bidding agencies. With advice like “I will not issue an RFP ‘Cattle Call’”, “I will do my own homework and “I will give you feedback,” it covers the tactics that (intentionally or not) often poison the client-agency relationship. I get the sense that this guidance is born of some painful experience, which makes its teachings all the more relevant.

You can download the RFP template here or find it on the Social Media Group site.

Five Lessons From the Web 2.0 Summit

Posted on December 1, 2010 by Paul

I had a chance to attend the recent Web 2.0 Summit in San Francisco and hear from some of the business leaders of the new Internet, including the CEOs of Google, Facebook, Yahoo! and Twitter. Here are five key insights I took away.

1. Make Marketing a Service to Customers – I didn’t write down who said this, but the comment stuck with me long after the conference was over. The traditional role of marketing has been to create an image or deliver a message. Service had little to do with it. But in the new world of tuned-out customers, the only way to get make an impression is to be helpful, entertaining or memorable. This is one reason we’re seeing a race by B2B marketers in particular to give away tactics and information that were once their source of competitive advantage. It’s the only way to get prospects to pay attention. Marketers need to ask themselves a new question: “How can I help?”

2. You Need a Mobile Strategy, and Faster Than You Probably Thought. Forrester Research now predicts that smart phones will be the dominant Internet access device in the US within three years. Mary Meeker of Morgan Stanley sees smart phone shipments surpassing PCs in 2012 (Here’s the video of her terrific presentation). In countries like China, the PC was never even much of a factor. The speed at which this shift is occurring is breathtaking. Smart phones have eclipsed all other electronic devices in their rate of adoption (see chart below).

Google’s Eric Schmidt made an interesting point: smart phones are actually more useful than PCs because they know more about the user, including location, and can deliver a more personal level of utility.

This doesn’t mean PCs are going away. Rather, the plunging price of flat-panel displays will make PCs more of a dashboard for a user’s business and entertainment needs. However, the browser will be only one of several ways people will access the Internet.

On the smart phone, that access will be by applications. Apple opened the iPhone to developers only three years ago, and already more than a half-million apps have been delivered. Other platforms are just ramping up their own app ecosystems.

There is a huge free-for-all coming in mobile apps, and nearly every business needs to be thinking about how to participate. Consider item 1 above. How can you use a mobile app to provide service to the customer? Whether it’s a coupon, shopping tip, reference source, comparison engine or something else, you’ll need to address the needs of this rapidly growing mobile audience.

3. Social Is the Killer App. While you’re pondering question 2, consider this one. Mark Zuckerberg was poised and mature in a nearly one-hour interview with John Battelle and Tim O’Reilly. The Facebook founder acknowledged that great power carries great responsibility and pledged to be more responsive to the privacy concerns of members.

One memorable point he made is that “social” is a powerful feature of software. Several Facebook applications, like photo albums, were functionally weak in their early versions but were a huge hit with members because they were easily shareable, he noted. This is an important point to remember. Loading up on features quickly reaches the point of diminishing returns. Adding the ability to share, reuse, mash up and comment creates a whole different level of value.

BTW, Zuckerberg reminded me of a young Bill Gates in looks, mannerisms and the clarity with which he sees complex issues. Like Gates, he has an uncanny ability to find a logical path to a decision or point of view. It will be interesting to watch his star rise.

4. Simulations Are A Powerful Incentive To Engage. Did you know that 320 million people have played a Zynga game and that the company now employs 1,300 people? Have you ever even heard of Zynga? If you’re a B2B marketer, you probably haven’t, but I’ll bet your kids have. Farmville is a mega-hit on Facebook and Zynga has nine other social gaming applications based on classic games like poker and Battleship, even a Critical Ops download for PC. Founder Mark Pincus said the company has peak usage of more than three million concurrent users. Yow.

Why should you care? Because simulation games are not only a great way to learn but also an excellent tool for modeling business processes. Consider Cisco’s myPlanNet, a game that challenges players to build a business as the CEO of an Internet service provider. It has racked up more than 75,000 Facebook fans and 50,000 downloads for what is essentially a B2B training and marketing tool. Check out the wall posts on Facebook. It’s not the usual gaming trash talk. Players are learning how the Internet works.

IBM recently released CityOne, a game that simulates sustainable urban planning. These are tools that put real problem-solving scenarios in a gaming context and they are having enormous success. Can a sim fit in with your digital marketing plan?

5. Everything on the Web. Steven Berlin Johnson gave a brief but provocative talk about the rate of change in publishing. “For the first time in 20 years, the link and the URL are losing market share,” he said, noting that there is no standardized way to link to the page of a digital book.

Johnson proposed an idea he called “Web redundancy:” Every digital content asset should have a corresponding linkable version. “Unless [publishers] embrace Web redundancy as a strategy, all those extraordinary words will continue to live in the remote continents of the unlinkable,” he said.

I was reminded of all the press releases I continue to receive by e-mail that have no online corollaries. This is old-media thinking. Why ask the reporter to rewrite your words when it’s simpler to link to them? Why forego the search engine optimization benefits of an inbound referral, especially when tweets and links are the means by which people increasingly publish information?

This year’s Web 2.0 Summit was streamed in its entirety. The conference, which is in its seventh year, is a great way to tap into the trends that will define the next 12 months. If you can’t fork over the $4,200 (and thanks to John Battelle and my friends at Procter & Gamble, I didn’t have to), it’s worth tuning in to the YouTube archive or watching the streamed coverage from next year’s event.

I had a chance to attend the recent <a href=”https://www.web2summit.com/web2010/”>Web 2.0 Summit</a> in San Francisco and hear from of the business leaders of the new Internet, including the CEOs of Google, Facebook, Yahoo! and Twitter. Here are five key insights I took away.

1. Make Marketing a Service to Customers - I didn’t write down who said this, but the comment stuck with me long after the conference was over. The traditional role of marketing has been to create an image or deliver a message. Service had little to do with it. But in the new world of tuned-out customers, the only way to get make an impression is to be helpful, entertaining or memorable. This is one reason we’re seeing a race by B2B marketers in particular to give away tactics and information that were once their source of competitive advantage. It’s the only way to get prospects to pay attention. Marketers need to ask themselves a new question: “How can I help?”

2. You Need a Mobile Strategy, and Faster Than You Probably Thought. Forrester Research now predicts that smart phones will be the dominant Internet access device in the US within three years. Mary Meeker of Morgan Stanley sees smart phone shipments surpassing PCs in 2012 (<a href=”https://www.youtube.com/watch?v=7yL9yrttESI”>Here’s the video of her terrific presentation</a>). In countries like China, the PC was never even much of a factor. The speed at which this shift is occurring is breathtaking. Smart phones have eclipsed all other electronic devices in their rate of adoption (see chart below).
<a href=”https://gillin.com/blog/wp-content/uploads/2010/11/Meeker_Smartphones.png”><img class=”aligncenter size-full wp-image-2432″ title=”Meeker_Smartphones” src=”https://gillin.com/blog/wp-content/uploads/2010/11/Meeker_Smartphones.png” alt=”Smart Phone Growth” width=”500″ /></a>
Google’s Eric Schmidt <a href=”https://www.youtube.com/watch?v=AKOWK2dR4Dg&p=2737D508F656CCF8″>made an interesting point</a>: smart phones are actually more useful than PCs because they know more about the user, including location, and can deliver a more personal level of utility.

<a href=”https://farm5.static.flickr.com/4087/5186226125_66e1323508.jpg”><img class=”alignright” style=”margin-left: 9px; margin-right: 9px;” title=”Mark Zuckerberg at Web 2.0 Summit” src=”https://farm5.static.flickr.com/4087/5186226125_66e1323508.jpg” alt=”Mark Zuckerberg at Web 2.0 Summit” width=”299″ height=”199″ /></a>3. Social Is the Killer App. While you’re pondering question 2, consider this one. Mark Zuckerberg was poised and mature in a <a href=”https://www.youtube.com/watch?v=CRUOl03nZIc&p=2737D508F656CCF8″>nearly one-hour interview with John Battelle and Tim O’Reilly</a>. The Facebook founder acknowledged that great power carries great responsibility and pledged to be more responsive to the privacy concerns of members.

4. Simulations Are A Powerful Incentive To Engage. Did you know that 320 million people have played a <a href=”https://www.zynga.com/”>Zynga</a> game and that the company now employs 1,300 people? Have you ever even heard of Zynga? If you’re a B2B marketer, you probably haven’t, but I’ll bet your kids have. <a href=”https://www.farmville.com/”>Farmville</a> is a mega-hit on Facebook and Zynga has nine other social gaming applications based on classic games like poker and Battleship. <a href=”https://www.youtube.com/watch?v=81F1qSOq3cs&p=2737D508F656CCF8″>Founder Mark Pincus said the company has peak usage of more than three million concurrent users</a>. Yow.

Why should you care? Because simulation games are not only a great way to learn but also an excellent tool for modeling business processes. Consider <a href=”https://www.cisco.com/web/solutions/sp/myplannet/index.html”>Cisco’s myPlanNet</a>, a game that challenges players to build a business as the CEO of an Internet service provider. It has racked up <a href=”https://www.facebook.com/pages/Cisco-myPlanNet/153538644090″>more than 75,000 Facebook</a> fans and 50,000 downloads for what is essentially a B2B training and marketing tool. Check out the wall posts on Facebook. It’s not the usual gaming trash talk. Players are learning how the Internet works.

IBM recently released <a href=”https://www-01.ibm.com/software/solutions/soa/innov8/cityone/index.html”>CityOne</a>, a game that simulates sustainable urban planning. These are tools that put real problem-solving scenarios in a gaming context and they are having enormous success. Can a sim fit in with your digital marketing plan?

<a href=”https://farm5.static.flickr.com/4131/5181217508_9e1c9f2be7.jpg”><img class=”alignleft” style=”margin-left: 9px; margin-right: 9px;” title=”Steven Berlin Johnson at Web 2.0 Summit” src=”https://farm5.static.flickr.com/4131/5181217508_9e1c9f2be7.jpg” alt=”Steven Berlin Johnson at Web 2.0 Summit” width=”250″ /></a>5. Everything on the Web. <a href=”https://stevenberlinjohnson.typepad.com/about.html”>Steven Berlin Johnson</a> gave a <a href=”https://www.web2summit.com/web2010/public/schedule/detail/15397″>brief but stimulating talk</a> about the rate of change in publishing. “The the first time in 20 years, the link and the URL are losing market share,” he said, noting that there is no standardized way to link to the page of a digital book.

This year’s Web 2.0 Summit was streamed in its entirety. The conference, which is in its seventh year, is a great way to tap into the trends that will define the next 12 months. If you can’t fork over the $4,200 (and thanks to John Battelle and my friends at Procter & Gamble, I didn’t have to), it’s worth tuning in to <a href=”https://www.youtube.com/user/OreillyMedia”>the YouTube archive</a> or watching the streamed coverage from next year’s event.

Are Exclusives a Good Idea? In a Word: No

Posted on October 14, 2010 by Paul

Should you give exclusives to journalists? My advice on this has always been unequivocal: No. Exclusives are a bad deal for you in the long-term and make no difference to the audience you’re trying to reach.

This question came up last night during a panel sponsored by the New England Venture Network on which I participated along with several business journalists. I broke with my colleagues on this question, but I firmly believe that exclusives are a bad idea.

Here’s my thinking: Journalists are a competitive bunch and they care deeply about who gets information first. However, no one else does. These days information travels so quickly that its source immediately becomes lost. Outside of a few big stories – such as TMZ’s scoop on the death of Michael Jackson — the public doesn’t remember where a story originated.

Journalists remember, however, and they tend to hold grudges against sources who favor their competition. Public relations is a relationship game. It’s been many years since I pounded a beat, yet I still remember a few PR people who gave stories to my competition. It’s safe to say that I never treated those people quite the same again. I’m not proud of that fact, but the reality is that it’s difficult to be chummy with someone whom you believe has slapped you in the face.

There are isolated incidents when an exclusive might work out. One of the audience members last night brought up a recent case in which her company had given The New York Times a scoop on a patent her startup company was about to receive. The story was picked up by many other outlets and she was satisfied with the results. I suppose if The New York Times is willing to promise you prominent coverage, an exclusive may be merited. But what if the story had turned up as a short squib in a “Miscellany” column or been cut by an editor? The PR person would have angered competitors and had little to show for it.

If you’re going to play the exclusive game, at least try to make it a win-win proposition. Perhaps you can offer one reporter a first interview with a customer or your CEO and give another a scoop on pricing or a particular new feature. Or you can promise the reporters you snubbed a first shot at your next big announcement.

In general, though, exclusives make one friend at the expense of making a lot of enemies. I can’t believe they are a good thing for your business in the long term.

Tribes Rule the Hyper-Social Organization

Posted on September 8, 2010 by Paul

I’ve been looking forward to reading The Hyper-Social Organization since I first heard François Gossieaux and Ed Moran discuss the findings of their “Tribalization of Business” research at a conference two years ago. I wasn’t disappointed. In this groundbreaking book, the authors expand upon ideas laid down in their early research that are both simple to grasp and momentous in their implications.

The assumption in The Hyper Social Organization is that human beings are basically social animals and that our behavior is fundamentally tribal. Given the opportunity, we seek help from others when making important decisions and willingly assist other members of our tribe. The popularity of social networks and collaborative projects like Wikipedia attests to these instincts.

In a business context, however, tribes have barely been a factor. Our ability to tap into networks of like-minded people has been limited by space and time. The whole relationship between institutions and their constituents is hard-wired around the assumption that people on the consuming end of the transaction are mostly in the dark. This is been a huge advantage to suppliers. Basically, he who shouted the loudest had the edge. That isn’t true any more, though.

Rules Have Changed

In the last five years, the supplier-customer relationship has begun to change fundamentally because of the Internet. Customers today can easily find each other for advice, and that’s exactly what they’re doing. The resulting changes in market dynamics, the authors argue persuasively, will disrupt business at every level. The Hyper-Social Organization is a look ahead at how those disruptions may play out.

Some markets have already seen this shift occur. A friend of mine who manages an auto dealership tells me that many customers today come into the showroom better informed about the vehicle they want to buy than his own salespeople are. As the Internet has created smarter car buyers, auto dealers have had to overhaul their businesses. Most make little margin on new vehicle sales anymore and must take most of their profit from service.

The same dynamic will play out across many more industries, the authors suggest. In markets in which peer information is easily obtained, the vendor becomes nothing more than one more voice in the crowd, and probably not a very important one at that. As companies cede control of the megaphone, they will have to re-examine their entire value proposition and change many of the ways they work.

For example, marketers will no longer be able to push empty messages because they will simply be ignored. The only hope for marketing is to become a valued source of advice. That doesn’t mean publishing more promotional white papers. It means listening to the market and helping customers make wiser decisions, even if that means recommending someone else’s product.

Similarly, sales must evolve into more of a consultation and systems integration role. Ultimately, the authors suggest, sales representatives must be encouraged and actually rewarded for suggesting lower-cost or even competitive products if that advice is in the best interests of the customer. Behavior that is anything less than helpful will be ignored or, even worse, punished in a public forum.

Marketing and sales organizations will both need to adapt to the end of the traditional funnel. Customers will no longer enter the company’s orbit at the early awareness stage; they may not make their first contact until they’re ready to buy. This means marketing materials must be overhauled to address customers who enter the funnel fully informed with information from other sources.

There are implications for the workforce as well. Gossieaux and Moran assert that successful companies will be those that empower their employees to make decisions on behalf of the customer regardless of their formal role in the organization. Among the many examples they cite is JetBlue, which shuns a rule book in favor of five core values — safety, caring, integrity, fun and passion — that each employee is expected to live by. Employees are never punished for making decisions as long as they adhere to those core principles.

Adopting an External Focus

Embracing an outwardly focused, socially active organization will require tolerance for a certain amount of “messiness.” This is inevitable and even desirable as organizations learn to quickly test, assess, fix and discard ideas based upon customer feedback. The good news is that customers can be remarkably tolerant of mistakes as long as businesses seek their input and are transparent and earnest about their motives.

In the end, the rise of social media “is likely to present companies with a critical question that is bound to keep executives busy for the next few years: What business are we in?” These kinds of life-or-death choices will be propelled by the ease with which operations can now be outsourced half a world away. Any line of business that does not provide the opportunity for clear competitive differentiation should be discarded, the authors say. Many companies will find that their only source of sustainable advantage is in customer service, systems integration and innovation. Businesses must effectively become integrators because otherwise their customers will do the integration themselves.

If this sounds like a lot of bad news, it is, but there’s also a silver lining in The Hyper Social Organization. Gossieaux and Moran believe that organizations that embrace the concept of hyper-sociality and involve external constituents at every level can reap enormous benefits. Crowdsourced product development is far cheaper than hiring legions of engineers. Customers who arrive via word-of-mouth recommendation are twice as loyal as those who respond to an ad. In fact, external constituents can take on much of the work that paid employees now do if they are courted appropriately.

Not that this is going to be easy. Twenty years ago, a lot of big computer companies made their money selling hardware. As market forces turned that business into a commodity, they were forced to shed often very large businesses in order to remain viable. It was an agonizing process, but the companies that survived it are more diversified and better prepared for the future. Many didn’t survive, though, and if the scenario that Gossieaux and Moran portray comes to pass, a lot of other organizations are in for the same experience.

Paving Media Cow Paths

Posted on July 14, 2010 by Paul

I recently flew into San Jose airport with the task of making my way to San Mateo, nearly 30 miles up the peninsula. In the name of saving my hosts a rental car charge, I hopped the shuttle bus to the Santa Clara train station to pick up the usually reliable CalTrain to my destination.

I arrived at the train station at about 1 a.m. body time, looking forward to napping on the hour-long ride north. Only the train didn’t come. For a long time. After about 20 minutes hour of waiting, I pulled out my smart phone to check Twitter. Success! CalTrain had an account. Surely there would be an explanation of the delay there.

Unfortunately, the most recent Caltrain tweet was from several hours earlier, referring to an unrelated schedule change. There was nothing to explain the current delay. As I made my way slowly northward that night by alternative means, I kept an eye on the CalTrain Twitter feed but could find nothing to explain the outage that had stranded thousands of people in one of the nation’s busiest rail corridors.

Dashed Expectations

CalTrain deserves credit for adopting an important customer communication tool, but it deserves a spanking for failing to understand the consequences of that action. It’s easy to sign on to any social platform these days, but having an account and using it appropriately are two different things. CalTrain had created an expectation that it would communicate with its riders and then failed to deliver. It would have been better off not using the tools in the first place.

This wasn’t my first brush with Twitter dysfunction. A couple of months earlier, I had tweeted frustration about my credit card company’s practice of suspending accounts over unspecified security concerns. I was surprised to receive a reply tweet from a representative of the bank offering to help. I quickly posed a follow-up question and waited for a reply. That was in February. I’m still waiting.

Coincidentally, a few weeks later I found myself across the dinner table from that very same bank representative. He explained that for the past several months he had been the sole person assigned to monitor Twitter at a company with well over 100,000 employees worldwide. It was an impossible task.

The bank was shooting itself in the foot. Regardless of whether it earnestly desired to engage with customers or was just trying to be trendy, it had created an expectation that it couldn’t possibly fulfill. Enabling someone to respond a little bit was worse than not responding at all.

Paving Cow Paths

Social media has turned the corner in the last two years. Twitter and Facebook badges are now everywhere, and a company that is active on social platforms uses an average of eight of them.

Unfortunately, a lot of these businesses don’t know what they’re doing. Scan the Twitter pages of a few big brands and you’ll see lots of self-congratulatory promotional messages but precious few “@ replies” or retweets. These companies are doing the 21st century equivalent of paving the cow paths: applying new tools to old processes.

What many marketers have failed to grasp is that the tools of new media aren’t just about publishing; they’re also about conversing. A Twitter feed, blog or Facebook page that delivers a message without acknowledging replies is an insult. As a rule of thumb, every Twitter inquiry should be answered within 24 hours. Blog comments should be answered within 48. Are you ready to make that commitment? If not, then limit your activities until you are. It’s better to be late than clueless.

Over the next couple of years we’re going to hear a lot of companies complaining about the ineffectiveness of their social media programs. In most cases, the fault will be their own.

paulgillin.com

Social Media and the Open Enterprise

Category Archives: marketing