Ctrl Alt Delete
Reboot Your Business. Reboot Your Life. Your Future Depends on It.
By Mitch Joel
Grand Central Publishing Copyright © 2013 Mitch Joel
All rights reserved.
From Me to You
The shift toward direct relationships with consumers.
Several years ago a leading brand (that shall remain nameless) contacted my marketing agency, Twist Image, about a new business opportunity in the digital space. The brand's reality was this: As the years passed by, they were discovering that the number of retailers they were selling to was diminishing at a rapid and terrifying pace.
As the major big-box outlets continue to grow and as consolidation rifles through the retail sector, the bigger brands have only a handful of outlets to sell their wares. Plus, with these retailers' size and growth comes another reality: They begin to dictate everything from quantity and terms to acceptable margins. For some businesses, this is a dream come true because it secures significant sales, but for others (like this brand), a massive global business was becoming a game of diminishing returns. They were selling to fewer stores at weakening margins. It got ugly fast if you ran the numbers: Eventually this brand would only have their products on the shelves of one or two of the major retailers, which would be constantly dictating and changing the terms of sale. Beyond that came the retailers' demands for either exclusivity, their own unique product lines, or both. At the end of the day, the brand/client came to a harsh realization: While they were a household name, they had no direct relationship with the consumer.
HOW DO YOU WIN?
The client's idea was to create a new e-commerce brand online that housed only their own brand-name products but would feel like a new online player. This was their last chance. While they constantly battled with retailers over the rights to sell their own products directly to consumers online, the time had come to draw a line in the sand. This project became the hope and prayer to save the business. They would use this online business as a place to start a direct relationship with the consumer.
Notwithstanding how the major retailers might have felt about this project—in terms of how it would not only cannibalize their business but perhaps keep customers away—it would have been a very smart and wise play for the brand to make. For a brand to truly shape its own destiny, it must lead the relationship with the consumer as well. I was fully behind this initiative ... so what happened? The company never pulled the trigger on their e-commerce project, and now they're busy scrambling for "likes" on Facebook and are selling their products through the handful of big-box retailers left. Ironically, other, scrappier startups have disrupted this traditional retail model with digital- only brands that are capturing the imagination (and money) of consumers all over the world.
WHAT APPLE KNOWS.
What happened prior to 2001 that made Apple go into the retail business? Whenever the topic of Apple and the Apple retail experience (aka Apple Store) is brought up, many media pundits roll their eyes as if the success of these sparse and crisp stores is some kind of anomaly in business lore. It's not. Apple came to a conclusion in the 1990s that many businesses have yet to wake up to. They knew that if potential customers walked into a traditional consumer electronics goods store and became inundated with a massive selection of computers and laptops, they would, instinctively, defer to the first sales associate they could wrestle down. What would happen next? Would the sales associates spend the time needed to uncover the needs of individual customers, or would they attempt to sell those same customers whatever was either on sale or would garner them the highest commission? I think we all know the answer to that question.
The solution for Apple was to create a "cradle to the grave" business model where the customer is—at every touch point—speaking directly with Apple's brand. A true, direct relationship—in every sense of the word. Apple could not win on price (their computers and other devices are usually much more expensive than their competition's), so they had to win by being there for the consumer and by making these consumers a part of a more complete brand ecosystem. Don't think for a second that the Genius Bar doesn't play directly into this very forward-thinking business strategy, which is driven by the power of direct relationships.
At the time that Apple first launched retail stores in 2001, the common practice among retailers was to cram each nook and cranny of space with merchandise to maximize the sales per square foot. Sadly, most retailers (and businesses) still hold on to this traditional thinking. For Apple, it was less about every square foot of retail space and much more about every square inch of the direct relationship. Apple didn't start in the retail business to compete with other consumer electronics stores; they went into retail for the direct relationship with their customers. Apple's attitude was: "Why give that power to Best Buy or anyone else?"
HOW ARE YOUR DIRECT RELATIONSHIPS?
Some brands do this well ... but most fail at it in spectacular fashion. Is it possible to be so judgmental? It is. One of the reasons I still enjoy the debate about the efficacy of social media marketing is that the majority of brands that struggle with the return on investment are comparing it with traditional push advertising, instead of treating it as an opportunity to have real interactions between real people (one of the core pillars of my first book, Six Pixels of Separation). A consumer who hits a "like" or "follow" button is opening up the perfect opportunity to have a direct relationship with a brand. If all the brand does is blast back impersonal offers and specials, it is simply not pushing toward direct relationships ... it's pushing toward broadcast advertising.
THIS ISN'T ABOUT SOCIAL MEDIA (ANYMORE) ... IT'S ABOUT MAKING YOUR BUSINESS MORE SOCIAL.
This is a very unique moment in time. It is not only a revolution in business—one that we will probably never again see in our lifetimes—but it is ours either to capitalize on or to squander. The truth is that most businesses are wasting this moment because they are unable to think and react through this purgatory. The next five years are going to be about these direct relationships. The next five years are going to be about how well a brand can actually change a relationship from one that looks at how many people are in their database (and how to target them more effectively with advertising messages) ... to one focusing on precisely who those individuals are and how the brand can make the connection with them even stronger.
THE STARS ARE ALIGNED.
We have the technology. We have the data. We have the new media channels and platforms. We have the opportunity to publish whatever we want—in text, images, audio, and video—instantly (and for free) to the world. What we do with this moment will be telling. It will also set the pace for everything that flows out of our businesses for the next decade.
NO DIRECT RELATIONSHIPS. NO FUTURE.
The true opportunity going forward is for your business to develop a direct relationship with your consumers. But there's a big challenge to this. It turns out that your competition is no longer just your traditional competitors, because suddenly joining the fray are your third-party resellers or anyone else who sells your products on your behalf. Confused? You should be.
The official Beats By Dre Facebook page has over five million people who have liked it (as of this writing). You can buy your Dre Beats Solo Headphones with ControlTalk from Target for about $180. Target has over twenty million likes on their Facebook page. Both Target and Beats By Dre are actively amping up their likes on Facebook. It's not a subtle, sit-back-and-relax type of play. They are both enthusiastically and actively fighting for every like and friend they can find (one aspect of direct relationship building).
What's a confused consumer to do? If I bought my Beats By Dre at Target, am I supposed to like the Beats By Dre Facebook page? The Target Facebook page? Both? The answer is: I don't know ... and that's the problem. To add to this confusion and complexity, we also can't ignore Facebook.
With well over a billion users, Facebook is an Internet unto itself. Not unlike other online social networks, there is a cost to being active on Facebook, and that cost is both the data and the direct relationship with your consumers. While Facebook continues to work more closely with businesses to help build this engagement, much like Las Vegas, what happens on Facebook stays on Facebook. If you have three thousand people who like your brand on Facebook, you can't pick them up (with all of their data, usage, and engagement) and take them over to your website.
In essence, Facebook actually owns the direct relationship with the consumer here; you're merely on their turf leveraging the consumer's activity. The Facebook value proposition to Wall Street is simple: We own the data and direct relationships with these hundreds of millions of people, and the value is in the data and the ability to put advertising on the pages of content that these people are creating and sharing (more on that in chapter 2).
And it's not just Facebook—it's everyone who allows you access to an audience online. If you're posting videos to YouTube and are lucky enough to be generating millions of views and positive reviews, what would happen if you suddenly started posting the videos only to your website? Where does the true community reside? While your company may be able to lure some of its audience over for a new video (or two), you will quickly come to the realization that YouTube is where the activity is. That is where the direct relationship lives.
You can see that it's a real horse race for that key direct relationship: There's your company; there are the clients that you sell through (or your value-added partnerships); there are the channels and platforms that you're engaging through ... and we still haven't even made our way down the competitive food chain to your true competitors.
CONSUMER-CENTRIC CAN'T JUST BE YOUR BUSINESS JARGON.
The best way to begin thinking about these direct relationships is to reboot your perspective. In the past year, I've shifted my presentations on digital media. I've moved them away (almost completely) from what businesses should be doing in the digital marketing space to focusing them 100 percent on what customers are actually doing—out in the wild. Don't misconstrue the term customer-focused to mean that I really care about the consumer (this is the traditional way of looking at business). Customer-focused in 2013 means looking at things as a consumer and not as a businessperson. It may sound overly simplified, but how we think about business during regular working hours is usually diametrically opposed to how we act as consumers. We'll instinctively ask in a boardroom, "Does anyone really download and use apps on their iPhone?," and later that week we'll spend our hard-earned dollars downloading apps and content to our smartphones. Instead, we should think like our true customers. We should start acting like them. Sadly, most brands are not thinking like their customers. Don't believe me? When you wake up in the morning, what's the first thing you grab? How long is it before you grab your iPhone? And yet most brands are still doing little to embrace this new consumer.
WHAT'S YOUR BUSINESS REALLY UP TO?
Your business needs to not only sense this urgency, but also realize this seismic shift in the battle for direct relationships. While some businesses are beginning to capitalize on this by recognizing the value that comes from these relationships, most are still using these channels as a form of broadcast advertising. It's almost as if businesses have become anesthetized because of their reliance in the past on using media channels as a gateway to the consumer.
In the pre-Internet media world, your business could not have a direct relationship with the consumer. If you wanted to let people in your city know about your products or services, you had to take out advertising (few were great at direct marketing). The value of traditional media was not in the high quality of content that they produced, but rather in the direct relationship they had with an audience because of the perceived value of the content to the consumer. Now, in this world where consumers are liking, friending, tweeting, and +1-ing brands, not only have the tables turned, but the game has completely changed. And yet, if you look at what the majority of brands are doing in these digital spheres, you will be stunned:
They're asking consumers to "like" them on Facebook while few actually make an effort to connect to those individuals on their own spaces. Here's a hint: Instead of asking people to like your business, why doesn't your business start liking these people first?
They're asking customers to subscribe to the RSS feeds of their blogs or share their content, while the brand editors spend zero time engaging in the comments on the blogs being created by their customers. Here's a hint: Be active on every blog that serves your industry. Don't expect everyone to come to you.
They're looking for customers to follow them on Twitter, but don't actually push beyond their own tweetstream to build affinity and loyalty. Here's a hint: If your Twitter feed is nothing but announcements about your sales or service upgrades and nobody is retweeting or sharing your content, it may be time to start thinking about adapting your content strategy (more on that in chapter 9).
They're asking customers to watch their videos on YouTube, but few brands are doing anything unique on this channel. It's mostly their traditional advertising or longer versions of TV ads. Hint: The Web isn't a receptacle for your TV ads and corporate videos. Get creative! You can show real demos, answer real questions, and give customers a sneak peek into what you're planning. What's better: begging for views or having people willfully share your content?
CREATE A NEW SCENARIO ...
Many businesses create personas. These personas are fictional people who represent the "typical" customer. Most businesses have multiple personas because it's hard to pigeonhole people. These personas wind up being deep-dives into not only who these people are (demographics and psychographics), but also how they buy. The problem with the majority of the "how they buy" scenarios attached to these personas is that they have traditionally been very linear.
Here's some new "fiction" for you: Sophie needs a new pair of sunglasses. She goes online and does some research. She posts some options up on Facebook and asks her friends on Twitter and Pinterest to check them out and help her decide. Then she heads down to the store (if she hasn't already made the purchase online) to buy the sunglasses. Sounds realistic and simple enough, doesn't it? It's only half of the story.
Let's try that story again. Here's some nonfiction for you: Sophie needs a new pair of sunglasses. She does some online research (reads some peer-based reviews), posts some options on Facebook and Pinterest, and tweets them up. Her friend Rachel sees the tweet, and they text each other about heading over to the mall together. While strolling through the mall, not only are they both chatting to each other, but they're connected. They're responding to text messages, they're being alerted to Facebook and Twitter updates, they're laughing at posts, and—maybe—they're even checking in with foursquare (or some other location-based online social network) to see who else is around to join the outing (OMG, Lianna is already here at the mall!). While in the store, they notice a couple of other glasses, they snap some pictures and post them, but then a question comes up about the materials that were used to make the glasses. Sophie and Rachel do some quick online searches ... nothing. They realize that the brand is on Twitter so they ask the brand directly ... and so the story goes.
Excerpted from Ctrl Alt Delete by Mitch Joel. Copyright © 2013 Mitch Joel. Excerpted by permission of Grand Central Publishing.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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