Nicholas de Wolff

The Power of Engagement

The acronym for the day is SOCIAL, or “Suitably Overt Customer Interaction And Loyalty”.

Many of my new clients express frustration at Twitter, decrying it as a shadow play with little substance and no value to their corporate brand needs. In those cases where Twitter conversation would be a useful mechanism in brand building, it doesn’t take long to lay out the many reasons why such engagement has value. It takes more than a few minutes, however, so when a brand demonstrates the value of Twitter engagement in literally a few minutes, I want to celebrate the case study.

This afternoon, in between meetings, I stopped by a Chipotle restaurant, to grab a chicken burrito (one of my occasional not-too-guilty pleasures!). I’ve enjoyed the experience at this restaurant for several years now, with its proven mix of marketable ingredients (organic, sustainable, carefully prepared, etc) and fast friendly service. I was surprised and disappointed, therefore, when I was served today by a somewhat lackluster team of servers with little enthusiasm, who doled out minute portions, and then back-filled my burrito with copious amounts of lettuce, in order to disguise the miniscule mix of “main” ingredients. To make matters worse, they left my burrito sitting open on the counter for a lonnnng time, while they went off in search of the lettuce, such that it was stone cold when I finally bit in to it. I was in a hurry to get to my next meeting, so I hurriedly vented via Twitter, and carried on my day, disappointed, but focusing on other matters. Here below is my tweet:

Within less than a minute I got this reply on Twitter:

Keeping with my shark analogy, I decided to bite, and – while listening to a particularly monotonous Q1 earnings call, I filled out an online customer feedback form. I hadn’t even finished the call, when I received an email from a customer service rep at Chipotle (copying a grand total of 13 other Chipotle employees!) apologizing to me for my experience, and detailing the actions the company intended to take to ensure that the restaurant where I had had my unfortunate experience improve its service with all due haste. That I was also offered a free burrito was a nice “icing on the cake” gesture that I appreciated. I was most struck, however, by the clearly demonstrated urgency and seriousness with which Chipotle’s online customer service team responded to my offhanded “vent”. In a matter of minutes, this individual disenchanted customer was converted in to an admiring partner in their success. I immediately tweeted my reaction:

And was instantly answered:

That short exchange cemented the brand’s humanity and intimacy, which is all too often a casualty in a very noisy retail marketplace, especially in the food services sector. It took Chipotle less than 20 minutes to fix a relatively small problem, but that 20 minutes also served to reestablish and strengthen a relationship with one of their most valuable brand stewards, the customer.

So, when you’re next wondering whether an investment in social engagement is worth it, take a look at the cost of all your ad buys, and the time you spend interfacing with your agencies, and the weeks you spend percolating messaging, and then perhaps you’ll realize that the ability to have quick and direct conversations with your end-user is of far greater value than you previously imagined: 20 minutes, perhaps 8 times daily, exponentially multiplied by the knock-on goodwill generated…there’s real power in doing things right.

Small Business Advice You Can Use

Historically, small businesses founded during periods of market malaise grow to become behemoth multinational empires. At least, that’s what the track records of the likes of Microsoft, GE, IBM, GM, Disney, and even Apple would have you believe. Whether it’s because a recession throws a marketplace in to clearer and sharper relief, and identifies gaps that can be filled by innovators…or the simple possibility that it is perhaps less challenging (in the short term) to start one’s own business than to get a job when companies are reluctant to increase their workforce when their revenue projections are so shaky.

Whatever the reasoning, small businesses seem to appear by the legion during economic downturns, and the challenging economic times we are currently experiencing are no exception. Starting a small business is but the first step, however, in a very long and often unpredictable journey to success.  Advice abounds for these self-starters. Some of this advice is spiritual, some aspirational, some inspirational, most destined for the remaindered bin (or today’s e-book equivalent thereof).

It is refreshing, therefore, to come across a book that offers little by way of cheerleading, and a lot by way of practical and actionable advice. Susan Wilson Solovic and Ellen R. Kadin have recently co-authored a small biz startup guide entitled “It’s Your Biz” (Amacom, 227pp), and much of it is well worth the reading. If you are thinking of, or in the process of, starting up your own business for the first time, you would be well advised to skip all those feel-good tomes designed to raise your consciousness or karmic frequency, and instead study the experienced advice of these women, who will help you raise your eyes to see the road ahead, and guide you around many of the potholes thereon.

I have two quibbles with the publication:

a)      Resources are cited in a manner that leaves little room for the inevitable evolution of information sources in the 21^st century. Sites come and go, new resource offerings crop up on an almost daily basis. The authors are handing out free fish, as much as they are teaching the reader how to fish. I would prefer if they would perhaps challenge the reader to find the resources for themselves. Perhaps providing pointers and search tips, instead of direct links; hints and clues that will not only yield resource opportunities, but empower the conscientious reader to seek out emerging resource opportunities not available at time of publication. Gamefication is a deeply embedded convention in today’s marketplace. Why not apply a little of that methodology to the book, and integrate a layer of interactivity in to the publication?

b)      Yet another “expert” has mistaken product marketing and sales support for strategic marketing. So long as marketing is seen as little more than a support activity, the sole purpose of which is to drive and support sales, organizations will only realize – at best – 50% of the value of this practice area. Marketing is a complex undertaking that –when successful – manages to connect an offering (product, solution, service, or brand) with one or more markets, in a manner that delivers exponential returns to all stakeholders. These returns are not purely fiscal, but also relational. Marketing has the potential to turn customers into salespeople, employees into evangelists, and brands into currency. Today’s social economy requires that business ventures recognize the new and very collaborative relationship they must foster with their clients and customers, in order to survive and thrive. Today’s marketing strategy is all about commitment, and far less about campaigns.

Extant these two quibbles, I am impressed with this guidebook, at least as a solid “get your head on straight” introduction to the basics of business building. This is not, as the book’s cover would have you believe, “the complete guide to becoming your own boss”, but rather the initial guide to the planning, preparation, and perseverance required to start a small business. Reading this book will not guarantee you business success, but it will assuredly get you in the headspace necessary to evaluate whether you are prepared to undertake the adventure.

Pigeonholing Evolution

{EAV_BLOG_VER:833d5130113b8052} My friend, Mike Brown recently posted a short piece on his own blog, entitled “Who is creating social media content in your organization?”, exploring where the departmental responsibility for social media (or “social engagement”, as I prefer to call it) lies within an organization. I added a comment to the posting, which drew some very flattering responses via Twitter, Facebook, LinkedIn, and email – so I thought I’d post my comments here below (as much to remember what the heck it was I wrote, as to keep the conversation going!):

Perhaps above and beyond the obvious impact Social Media is having, in terms of offering new opportunities for brand evangelists to introduce and moderate their platforms in existing or new constituencies; for product and solution marketing teams to try and launch “campaigns” via new channels; for corporate representatives – be they CRM, legal, or otherwise – to try and cautiously bring their brand and offering connection closer to the end-user, in response to an increasing demand by consumers and clients to participate in the valuation of offerings, further up the value chain….above and beyond these and other immediately evident opportunities, benefits, or enticements (presented across the still primordial social engagement landscape), there is growing one even larger opportunity that has been only tangentially addressed here, and deserves to be directly examined:

Instead of attempting to qualify which existing department should or does own or lead social engagement activities, within traditional corporate infrastructures and silos, the real question of deepest worth may be “has the advent of social engagement, greater organizational transparency, transversal responsibility for failure and success alike, and deeper demands from every part of the process (including consumers) for collaboration in development, innovation, productization, distribution, and iteration (breathe here) created not just an opportunity, but a demand, for organizations to review their org. charts, and functional infrastructures, in order to best respond to and manage new models and ecosystems in customer and client relationships, product sales and management, and other aspects of B2B and B2C business?”.

Perhaps the answer lies not in shoving social media activities into one or the other pre-existing pigeon hole, but instead taking this opportunity to stir the pot more than just a little, and take some time to divest ourselves of 1950′s functional structures..?

This is the moment to loosen our grip on the past and present, and see this undeniably disruptive practice of social engagement as a chance to reinvigorate and possibly reinvent the way we manage innovation, human resources, market penetration, customer service, and so much more. Let’s not get carried away with a presently rather shallow tide, but let’s recognize that the tides have nevertheless shifted, and the currents are moving in compelling new ways which will certainly change the landscape. Where your ship lands depends on how well you learn to navigate these currents and tides, and how efficiently you reassign your crew.

My fundamental suggestion is that corporate and organizational models are ripe for transformation, reflecting massive evolutions in internal and external communications, operations, personnel management and education, marketing, and customer relations – to name but a few areas that are both deeply impacted by and – in turn – heavily influence hierarchies and processes within organizations. The way social engagement permeates an infrastructure could prove invaluable in effecting valuable transformation: watch the practice as it flows through the organization: something akin to a corporate blue dye (BDT) and modified barium swallow (MBS) test! Should Marketing and Communications continue to be lumped together (“MarCom”)? Is the skills set of Marketing best maximized as a Sales support function, or is there a more strategic opportunity therein? Should Communications really be a satellite support function, activated only whenever a Business Unit or other department determines there exists a need to “push” information outward, or is more potential just itching to manifest itself? The communal nature of social engagement gives organizations the priceless opportunity to move beyond legacy charts, developed to manage the 19th Century industrial revolution. Several revolutions have taken place since then, and this latest one – effectively disrupting how we connect, communicate, and transact with one another – presents an opening that should not be overlooked.

Growing is Forever

Too many startups are still pursuing strategic trajectories designed to afford them “quick exits”. While this has a valuable place in the larger marketplace (letting the larger companies focus on developing strong positioning and wide platform user bases, while the smaller and more nimble entities can innovate and then be acquired), the two models need to be far more interconnected than they are, as a matter of course. The “quick exit” dynamic of business building needs to be better contextualized, so one can only hope that the new breed of startups (emerging in the wake of mass executive level layoffs and payoffs) will begin to think and operate a little more like the old: let’s apply some focus on growth; let’s connect our endeavors in mutually supportive allegiances; let’s recognize the complex value of the ecosystem as a whole.

Let’s build our businesses as if they were meant to last forever. What we choose to do at any point along the way should be as a result of opportunity, not necessity or pre-ordained and inflexible design :

This is the Time of Empiricism

A fascinating, if somewhat random, interview with Stephen Fry. What do you agree with, and what do you contest? There is so much in here; it took me two viewings to begin to synthesize the content.

“The real heroism of people who think of others should be rewarded…and it usually is”

Mr. Fry, explores – among other things – his belief that experience, expertise and fulfillment come via interaction and generosity.

“Sharing the benefits of life IS the benefit of life”

It behooves today’s business leaders, perhaps, to see how some of these philosophies might be applied to their sector(s). While the commentary is more on a social scale, the applications have bearing on businesses seeking to maintain and enhance their validity in the new social marketplace.

Digital Darwinism

Have you heard of Habbo, MyLife, Netlog, Orkut, QZone, Tagged, RenRen or Vkontakte? These and plenty of other social networking sites boast impressive numbers of registered users on each, and they are but a few of the high fliers that may have nevertheless slipped under your radar.

Social networking is – despite its paradigm shifting promise – a business proposition not unlike many others: it begins with an exponential market grab, representing the transition from fad to trend more than anything else. That stage is now passed, and is being replaced by the inevitable “backlash and absorption” period: For every Facebook, there are many Bahus, Mugshots, Pownces, Sixdegrees, Soundpedias, Yahoo360s, et al. The list of broken and dissolved social networking sites will grow as alarmingly as once did the numbers of people registering on some of those same sites. This list will be matched only by the accelerating roster of social media companies being purchased, absorbed, liquidated, and otherwise consumed by more robust and aggressive “co-opetition”. This happened in the automobile industry, in the banking industry, in the airline industry…and it will happen with this new socially impactful dynamic.

So all this was predictable enough, and shall come to pass (it has already begun). However, there is a 3rd – and less quantifiable – dynamic which is inexorably rising in influence, and could prove more impactful than any of the other aforementioned mitigating trend milestones: user burnout.

When new social networking sites cropped up over the past few years, many of us felt compelled to sign up with each and every one, for fear of finding ourselves on the wrong bandwagon, stranded at the starting point while everyone else rode thrillingly forward on the roller coaster of social media engagement. Today, it is not unusual for individuals to belong to 5 or more social networking sites, and consequently spend a large portion of their day managing their online presence. This investment of time is not matched by the reward, and the ROI (Return On Investment) must be at least balanced for an initiative to survive. While the social media brands will do their part in the coming months to raise their value proposition via conglomeration, acquisition, and improvement, this will not- in and of itself – suffice.

I predict (not sure you can predict something that is already manifesting itself, but there you go!) that the next 4 months will see a powerful degree of social network decline and realignment, as consumers and users begin to streamline their social presence online, and deactivate certain accounts, in favor of others. We have kicked the tires long enough, and the testing phase is over. Selections will be made, and loyalties cemented.

Facebook
While Facebook has made several missteps along the way, I see most people sticking with that brand, so long as Messrs Zuckerberg et al don’t really screw things up: we sense there is a bigger, more long-term vision at play here, and are willing to stay on the ride, for the present.

LinkedIn
With a little spring cleaning, and cross-platform functionality (the Blackberry app is very weak, and the TripIt app seems occasionally buggy, to name but a couple), this brand could prosper during this phase. It remains to be seen how the business model will integrate itself with potentially complementary offerings.

Orkut/Plaxo
Can more than one address book aggregator survive? Is there a merger in the offing? Which will be the first to aggregate in the Cloud with full effectiveness? Will LinkedIn realize that it could – in fact – slip past these two in that offering, and become the default Cloud business address book, as well as online profile and professional group discussion environment?

iRead/GoodReads/Amie Street/Last.fm/ReverbNation/deviantART/Shelfari/Buzznet/ANobii/Librarything/etc…
There are way too many book and music social networks out there. Watch as the smaller ones either become absorbed into larger offerings (will Pandora and Slacker also move more aggressively in to the space and compete, or will partnerships such as the recent FB bridge suffice?), or carve out ever more specialist niches for themselves, like crabs scuttling out of reach of their predators..?

Stickam/OneWorldTV/FilmAffinity/YouTube/imeem/Gather/Flickster/Auters/etc…
How many social networks can the movie-fan community support? With Hulu and others bound to upgrade their social media integration, I imagine this will be another area ripe for confluence.

With over 400 (at last count) social networking sites currently in operation, and a plethora in the offing, we have finally reached the point, I believe, where saturation has peaked and integration and selective pruning will ensue, manifest from all quarters. As I suggested above, brands will dissolve through neglect or lack of differentiation; others will be absorbed by stronger enterprises, for better or worse; and still others will find themselves deselected by their user base: the Dodo birds of Social Media.

After a period of fat trimming, including some new introductions that make sense (Social Media for the under 13 set is a challenging but attractive sector, so long as the privacy and protection issues are well-managed, and there are several compelling players coming out in the next month or two), social media will settle in to its next phase of existence: less intrusive yet more smoothly integrated into our daily lives. The novelty has worn off, and the value needs to clarify and communicate itself. More importantly, the value must find a way to unobtrusively integrate itself in to our daily lives, so that it becomes a tool in our quotidian existence, as opposed to a distraction.

Habbo (162,000,000 registered users), MyLife (51,000,000 registered users), Netlog (62,000,000 registered users), Orkut (100,000,000 registered users), QZone (200,000,000 registered users), Tagged (70,000,000 registered users), and Vkontakte (73,000,000 registered users).

From The Mouths of Babes…

Kevin Rose, the 33-year old founder of social bookmarking phenomenon Digg, spoke recently at Webstock in Wellington, New Zealand and offered up some tips for entrepreneurs. Given that Rose himself founded and built his now ancient (6 years old!) company while working at another fulltime gig, he knows whereof he speaks. Web Marketing strategist Elyssa Pallai, a previous contributor to this blog, was in attendance and compiled the tips into a good old-fashioned “Top Ten” list.

I am especially enamored of number 3 below, and am available to chat with any brilliant innovator seeking my sort of “Grey Matter”!:

1: Just Build It: You don’t need anyone’s approval and in fact, you probably won’t get it, so don’t even try.

2: Iterate: Build, release and iterate. Make a list of the features you want to create over the next six months and get going! For small companies, once a week; for larger companies, maybe twice a month.

3: Hire Your Boss: Make sure you hire people that you would want to work for, who challenge you and you can learn from.

4: Demand Excellence: Ensure staff are committed to and understand your vision. Passionate, committed staff have a tendency to rub off on people. There is nothing like a new junior developer who runs circles around everyone to get people hyped up and raise the bar! Stay involved in the hiring process as long as you possibly can.

5: Raising Money: The higher your valuation is, the more equity you have to work with. Beg, borrow and steal. Be creative about finding ways to cut costs. For example, tell the bar you are having a “birthday party” instead of a corporate event (which they would charge you $5,000 for). Rent servers, don’t buy them. Don’t just take the cash, make sure your investors can add value. Stick with angel investment. Venture capital mean board meetings, which is a huge sap on time and resources.

6: Hack the Press: Hit up the lower-end bloggers at your favorite tech blog. They have just as much opportunity to write about your product as any other blogger on the team. Attend the after-event parties. The same crowd that attends the events also goes to the parties, but the parties are free.

7: Invest in Advisors: Give away a small amount of stock to advisors (which they can vest after a few years) who you can call on in a pickle or for general advice as issues arise. Set the ground rules so you and the advisor know how much time you have access to.

8: Connect With the Community: Hold a live town hall where you can collect feedback and get advice from your users.

9: Leverage Your User Base to Spread the Word: Facebook notifications is a great example of how to do this.

10: Analyze Your Traffic: Pay attention to how people are using your site, and then learn and evolve. Use Google Analytics to understand and track traffic sources and entrance and exit paths.

Elyssa Pallai is the Marketing and Experience Manager at ReadWriteWeb. Elyssa has been working on the web since 1997 in the USA, UK and New Zealand. This, and her other articles, can be found here.

Cat Fight in The Fox's Den

Jonathan Handel is well-known as “the insider” when it comes to entertainment and media industry dealmaking. His latest posting examines the current struggles between and amidst the various content creators, providers, aggregators, and distributors:

Until moments ago (mid-day Jan. 1), when a deal was reached, Fox was threatening to black out its channels, most notably Fox broadcast, from Time Warner Cable (TWC) unless TWC anted up a subscriber fee of reportedly $1 per subscriber per month. Historically, cable networks such as HBO, Showtime, AMC, etc. got those fees, but broadcast networks didn’t. They need them now, with ad revenue shrinking, and customers departing networks in favor of cable channels — a multi-decade trend — and, more recently, video games, Internet TV sites such as Hulu, unauthorized (pirated) content, and user-generated content such as on YouTube.

Broadcast networks have started to get paid — CBS, for instance, reportedly gets up to $0.50. TWC apparently offered Fox only $0.30, but the terms of the deal they reached are undisclosed and most likely higher. Even though Fox ultimately didn’t pull the plug, it took the intervention of Senator John Kerry to keep football and “American Idol” from going dark on TWC. That’s not the sort of attention a media company wants. So why didn’t TWC just ante up the $1 and pass on the cost to consumers?

The answer is that MSO’s (cable cos. like TWC) are afraid that if they keep raising cable prices, they’ll drive more consumers to satellite or induce them to drop cable and just watch TV on the Internet. That is, instead of buying an Internet+cable bundle from Time Warner Cable, the customer might just drop the cable portion and buy Internet only.

Even worse for TWC: If customers opt for Internet only, some will be peeled away by telephone+Internet or cellular+Internet bundles from ATT or Verizon, causing TWC to lose the customer altogether. It’s called churn, and it’s especially likely because customer perception of cable company greed would dovetail with the belief that telcos offer better customer service anyway. Thus, raising cable prices could cost TWC dearly.

So, the battle between TWC and Fox is just another facet of an n-dimensional war between MSOs, satellite cos., landline telcos, cellular cos., cable networks, broadcast networks (ABC, CBS, CW, Fox, NBC), network affiliates (the local stations that actually broadcast the network signal), video game companies, Internet TV sites, unauthorized (pirated) content, user-generated content—and, of course, the consumer. And that’s not even to mention the companies that manufacture the hardware, such as handsets, TV’s, cable and satellite receivers, and other set top boxes. They’re always looking to play transmission companies off against each other and capture more of the consumer dollar.

To add to the confusion, there’s cross ownership between some of these companies but not all of them, meaning that ostensible competitors have very different profiles from each other, and also that they must often collaborate. For instance, when the Comcast – NBC Universal deal closes (assuming, of course, that it does), Comcast will control a cable system, a broadcast network, and multiple cable channels, whereas Time Warner Cable is a cable system only (that’s because Time Warner Inc. spun off TWC) and Fox’s parent, News Corp., lacks a cable system. Speaking of News Corp., throw in the fight between newspapers and Internet sites, and it’s clear that the Internet sparked a revolution that’s got everybody up in everyone else’s business. It’s the media equivalent of string theory, except that MBA’s usually have better hair than Einstein did.

Jonathan Handel is Of Counsel at TroyGould and practices digital media, entertainment and technology law.  He is an adjunct professor at the UCLA School of Law, and his op-ed pieces have appeared in the Los Angeles Times, the Daily Journal, and the Los Angeles Business Journal. Visit his site at jhandel.com.