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Three Types of Insights That Will Help Shape Your Strategy

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Three Types of Insights That Will Help Shape Your Strategy

Ideas without insights - especially coming from a group of people who usually are very far removed from the audience - are akin to throwing darts in the dark. Even the best ideas, without direction, won’t hit their mark. These brain dumps are a waste of everybody’s valuable time. You need to start with research.

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5 Things Customers Don't Want to Hear...EVER

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5 Things Customers Don't Want to Hear...EVER

Notlistening
Notlistening

Oh companies. Relationships are SO much easier than you make them. In fact, there are only a few things that you need to do in order to make your customers significantly happier. Or rather, there are a few things you must stop doing and saying that will change your customers' experiences drastically.

I've compiled a short list for you (though there are more). Here are some things you need to stop doing and saying:

1. "It's our policy."

Now, you may use this and think: "Why is this wrong? It enables a fair way to treat customers across the board."

The problem with trying to treat customers the same across the board is that not every situation is cut and dried. And, frankly, some policies are antiquated and outdated. The moment you have to let a customer down by saying "it's our policy," you are failing that customer.

And yes, I know that you don't want your customer service staff running all amok with bleeding hearts and breaking your bank, but that is why you need to train them properly and empower them to help your customers. A good customer service policy is to:

a. train your agents on multiple scenarios and then;

b. give them a buffer allowance each month and;

c. give them all sorts of ways to help the customer instead of shutting down the conversation.

If they have a certain budget to play with each month where they can make a decision on whether to give a customer a break or take a return marked "no refunds", they can use their training to decipher a reasonable response and then be empowered to make it. Here is an example:

A customer calls their cell phone company and says, "My bill is outrageous! I didn't realize that going over my data would cost me an extra $200! I can't afford this!" The agent then can walk through a customer's bill and figure out if the mistake was made in earnest and then either undo the $200 OR adjust the bill a smaller amount (maybe cut it in half), but talk the customer into a more robust ongoing data plan (which can help the company make the money up in the long run).

Of course, if a customer doesn't know what to expect, this is an issue in itself. Which leads me to #2.

2. "It was in your contract."

Newsflash: nobody actually reads contracts. I'm not sure why anyone uses a big long legalese document to give customers upfront information about a service. It's the worst way to present information in the universe. You may as well write it in Sanskrit on a stone tablet.

I'm not saying your customers have no responsibility to read what they sign, but when you are excitedly signing up for a new service or website or whatever, the last thing you do is to sit and read a long document. And the salesperson moving the sale through doesn't really give you much of a chance either.

Why not present limitations and terms and conditions in a readable, fun manner? A great example of turning boring, mandated information into something people will engage in is Virgin America's awesome in-flight safety video. Everyone knows that when those safety videos come on, our eyes glaze over and we focus on the book or magazine or anything else. But not when you are on a Virgin Flight:

[youtube=http://www.youtube.com/watch?v=DtyfiPIHsIg&w=420&h=315]

Right? You don't have to go to that level of production, but why not make it readable and enjoyable? This way, you will never have to say, "It's in your contract." Your customers will know. In fact, they may even be able to sing it back to you.

3. "See our answer here [with link]."

Why not just talk to me? Seriously. If I ask something that is too long for a tweet, answer me with a few tweets. That's cool.

Scenario:

@myhandle: Hey cable company! Why am I on hold for over 45 minutes today? WTH?

@cablecompany: @myhandle Sorry for your inconvenience. Go check our outage schedule here: [link to website]

Grrrrrrrrrr. A wee bit of effort would help a whole lot here. I have probably already gone to your website to find your really hard to find number to call to be put on hold. I'm trying to use Twitter to get some answers and be more efficient. Don't make me click something else!

This would be better:

@myhandle: Hey cable company! Why am I on hold for over 45 minutes today? WTH?

@cablecompany: @myhandle Sorry for your inconvenience. I see you are calling from Toronto where there are lots of outages. Can I help?

@myhandle: @cablecompany Yeah. Do you happen to know what's wrong? When the cable service is expected to be fixed?

@cablecompany: @myhandle I just checked internally. It's a weather issue. :( It may take more than a few hours. Sorry! Time for a good book? :/

@myhandle: @cablecompany LOL. Okay. Maybe it's the universe telling me to hit the gym. LOL.

@cablecompany: @myhandle Hit the gym for me, too! Oy! ;) Sorry again!

Even if it doesn't go as smoothly as above, it's a MUCH better interaction. I can hang up the phone with a bit more information and reset my expectations. I also feel taken care of even if the representative couldn't give me a definitive answer.

4. [Insert Lame Company Excuse Here]

Just recently, we had a ISP tell us that their service was bad because one of their partners (the people who owned the fibre) were playing dirty.

Really? I couldn't give a damn. Fix our service. I don't need to get involved in your business drama. I've just paid you $300 to get my internet installed. I'm not your mediator. Guess what happened? We canceled, asked for a refund, then went to the partner in question. They seemed to have the upper hand and get things done. We wish we knew that in the beginning.

Your company woes are YOUR company woes...and quite often they are the result of bad decisions/deals you've made (short-term thinking). Your customers don't care, nor should they. They just want to get the stuff they paid for. Don't make excuses. Fix it. If you can't fix it, own up to it and refund your customers. Apologize and hope that they will forgive you and come back when you've fixed your stuff.

The customer experience should be seamless and simple. The mess and duct tape and hoops behind the scenes? Invisible to the customer's eye.

5. [Silence]

It's late 2013 and 72% of customers expect a response within the hour on Twitter from your brand after they complain. And it doesn't really matter if it's during business hours or not.

I, personally, have a black list of companies I will no longer buy from after getting radio silence to a concern or complaint. I'm sure I'm not alone.

Even the most angry complaints can be handled. People are just upset and need to be heard. One of the best pieces of advice I ever heard was to respond to an angry complaint like this:

A. Identify B. Apologize C. Assist

@myhandle: @restaurant FU! I will never eat at your awful overpriced restaurant again! 

@restaurant: @myhandle Oh no! What happened?

@myhandle: @restaurant After waiting for a table FOREVER, your server treated us like crap and the food was cold by the time it was served. Grrrr.

@restaurant: @myhandle Oh man, it sounds like you had the WORST experience. It's not what we aim for. Is there any way we can make it up to you?

@myhandle: @restaurant I don't know. I don't want to feel that way again. But I appreciate your response. Maybe it was just a bad night.

@restaurant: @myhandle I know you don't want to take my word for it, but it sounds like it may have been. Let us know if you want to try again. We'll set you up. :)

@myhandle: @restaurant Okay...well...I'll consider it. Thanks again. I feel kind of bad for being so angry now.

@restaurant: @myhandle I would have probably felt the same. Glad I could help.

Identifying completely diffuses a situation. Trust me on this one. Even if you can't help someone, just identifying and apologizing will help. And that customer will feel a bit bad for blowing up at you online. If they don't come back, they'll certainly tell the story differently. This time, you'll be cool...not a jerk that doesn't listen.

...

So there you go. Simple ways to respond to customers in a way that will help you build bonds and loyalty and probably a few more sales rather than letting angry customers fall through the cracks (and tell everyone they know about their awful experience).  In fact, take some of that billboard and other outbound advertising spend and put it into your inbound/customer service channels so you can totally empower them. It doesn't have to be a lot, but I guarantee you that these interactions will benefit you far more than that extra month on the billboard.

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Meritocracy is Almost as Real as this Unicorn

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Meritocracy is Almost as Real as this Unicorn

While living and working in San Francisco many years back, I learned a new term: Meritocracy.

It sounded like such a lovely thing - the idea that people are celebrated, rewarded and advanced by the merits of their talent and hard work. If I worked hard and produced great stuff, I would benefit the same as anyone else who did the same. And those who weren't getting ahead? They just weren't working hard or smart enough. And the poor saps that lack the talent and skills they need to rise to the top? They would still be recognized for their input.

But as time went on, I noticed that reality didn't quite match this romantic idea of meritocracy. Only a certain type of person seemed to get ahead again and again. And there were plenty of talented, hard-working people who were left behind.

But I still wanted to believe that the system worked. It just sounded so amazing! So I had some theories about the discrepancy between idea and reality:

  1. Those same types of people who kept getting ahead in a meritocracy had more time and resources to hone their skills and contribute. For example, a young single guy from a wealthy family could afford to work more on an open source project than a middle-aged woman with kids.
  2. There was some unchecked bias that was leaking over into this merit-based system. All we needed to do was check our bias at the door.

I was so naive. When I brought up the first theory, I would get the, "So, what are you proposing as the solution? That we reward people differently? That goes against the idea of a meritocratic system!" When I protested that we ARE treating people different by expecting 80 hour work weeks, thereby eliminating anyone with any sort of responsibilities, they accused me of being one of those socialist types that discouraged hard work.

The second theory was harder to prove - the very idea that meritocratic types had bias was offensive and any example I brought up was defensible - but lucky for me, a study came out a few years back (Dec. 2010) that looked into bias and meritocracy and guess what it found?

Not only is bias a factor that renders meritocratic rewards decidedly UN-meritocratic, it actually exacerbates bias!

Let me repeat: BIAS IS EXACERBATED IN A MERITOCRACY!

In three separate and controlled studies with 445 participants (pre-screened to have deep managerial experience), they found that time and time again, the participants rewarded male employees significantly higher than their female colleagues (in the same job, with the same supervisor, with the same performance evaluations). And even more interesting was that, when they controlled for a non-meritocratic condition, the female employees were rewarded slightly higher.

Wow, right? So those that strive for this utopic, egalitarian ideal of meritocracy are actually MORE biased. And why was this?

"Uhlmann and Cohen’s (2007) argument that  a sense of personal objectivity moderates the extent to which individuals act on their beliefs, including stereotypical beliefs, would also predict the paradox of meritocracy in employment settings. They showed that when people feel objective, they become more confident that their beliefs are valid, and thus more likely to act on them." p.27 (emphasis mine)

In other words, the more you believe in the soundness of the system, the more likely you are to leave your bias unchecked. It reminds me of when people say, "no offense but," then follow it with something incredibly offensive, believing their initial statement removes the speaker from responsibility for the statement.

The only way that meritocracy could actually work is in a world where:

  1. we are all starting from the same position of advantage. Time, money, ability, education, etc. [bonus: read The Invisible Knapsack of White Privilege]
  2. we had checks and balances on our biases.

In other words, a world in which unicorns and leprechauns exist. In other words, not in this world in 2013.

So let's please stop fooling ourselves that those that get celebrated, rewarded and advanced are the most deserving. We should know better by now.

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Switching Costs: A Person's #1 Reason for Not Trying Your Service

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Switching Costs: A Person's #1 Reason for Not Trying Your Service

Shutterstock photo
Shutterstock photo

People get comfortable with routines...even if they aren't the most efficient. Sticking with a familiar inefficiency is often less daunting than switching to an unknown.

Many companies try to sell their products and services as an 'easier' or 'time saving' or 'better' way to do something, but even if your potential customers will save time and effort in the long-run, there are often huge switching costs that prevent them from making the leap.

Here is a personal example:

I was banking with an institution I had been unsatisfied with for years. Their fees were high, their customer service was awful and their practices were not very friendly. I was constantly complaining about them, but it took me forever to switch. Why? Because my whole life was tied to that bank. Even though I was miserable and there were much better banks for my needs, I was avoiding the time and pain it would take to switch my bills, PayPal account, credit cards and day-to-day routine. Besides, what if I took the time to switch and things didn't improve? I felt like I'd be happier being unhappy with what I already know.

I finally switched when things got unbearable and another bank gave me the tools (and sat with me) to switch everything over effortlessly, but even then, it was a bit of a pain. I'm happier now, but it took a few years and being acutely dissatisfied for me to switch and I'm just an individual.

If you are selling to larger businesses, the switching costs are even higher. New processes, even if they are simpler, take new training. And for a large organization, this takes a big swath of time and money. People get used to the irritating workarounds for their inefficient systems. They learn shortcuts and tricks to beating the odds that become part of a daily routine.

Just the other day, I encountered a business that used Photoshop for their invoicing because they understood the tool and didn't want to learn a new one! I even demonstrated how simple it was to use something like Freshbooks (I have no affiliation, but I use it and love it), but the business owner explained that this worked just fine and switching would mean he'd have to relearn and do a bunch of work to transfer all of his clients to the new platform. Even if this only took a few days, he didn't see the advantage over the switching costs.

Sure, you may offer webinars, instructional videos and a support network that help with the training, but that could make switching seem even more complicated for your potential clients. Don't fret, though, there ARE better approaches to helping people get over their fear of switching. Here are a few:

  1. Figure out a way to reduce or eliminate switching time automagically. Wordpress does this incredibly well. In most cases, you can just point it at your old blog or upload a file and it will 'suck in' your posts, tags, comments, etc. so that you are up and running in no time.
  2. Acknowledge the switching costs up front. Don't just say, "We'll save you time". That's too vague. Your homepage is for new arrivals with doubts, so alleviate those doubts. Know the pain points of your potential customers and speak to them. Give time estimates.
  3. Give them an incentive. I've seen banks offer iPads to open a new account, but it doesn't have to be that drastic. Free trials work, too. However, many people don't get the chance to really try your product unless they switch completely (and many won't switch until they try it - catch 22!), so give them test content or offer a one-on-one demo with their data.
  4. If you can't eliminate time to switch, give clear, simple instructions step by step through the sign up process. Use screenshots and clear, short instructions to help your customers through the process so they aren't left hanging at any point. It's not talking down to them, it's doing the legwork for them.
  5. Create a switching officer program...for free. Many people will give up privacy for convenience. Offer the ability to switch for them. "We'll set you up so you are ready to go!" The upfront cost will pay off in the long run.

Of course, this only eliminates a few of the switching costs involved. Some more switching costs are:

  1. legacy systems (you can make sure your product is backwards compatible)
  2. training of staff (offering free training or creating a product that has incredibly intuitive UX helps)
  3. trust (this one is very complicated in today's world of false-promises - it takes time and perseverance)
  4. costs (in the Photoshop invoice case, the business owner didn't want to pay a monthly fee to merely invoice - you need to show how your cost can make your clients money)
  5. competition (when faced with the paradox of choice, a customer won't switch at all. The choice should be crystal clear.)

But whether a potential customer needs to switch from something they hacked together or a competitor, you need to recognize that "we're better" or "we save you time and/or money" isn't enough to get over the ultimate barrier of switching. Recognizing this will help you see things from your customer's point of view more clearly so you can help them faster.

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There's No Shame in That

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There's No Shame in That

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Shame Flag on Flickr I was describing my startup experience to a woman I admire the other day, when out of the blue, she asked:

"Was it worth it?"

I hardly hesitated at all and said:

"The only thing I'd change if I could go back is that I'd integrate the incredible lessons I've learned during this time."

And it's true. I couldn't have learned any of what I've learned in a book or a seminar. I feel like I've taken the ultimate MBA. But it took her asking the question for me to realize that. Before she asked the question, I was feeling lots of shame. Why? Because I was focusing on what I didn't accomplish instead of seeing what I DID accomplish.

The reason we struggle with insecurity is because we compare our behind-the-scenes with everyone else's highlight reel. - Steven Furtick

The truth is that we (my Buyosphere team and I) did things that the vast majority of people never even attempt:

  • We raised venture capital (even if it wasn't enough)
  • We built a social web application from scratch - multiple times - and for those who haven't built a social web application, here is something to know: building a website is a challenge, building a social website (that people interact with) is another level of challenge and building a social web application (that people interact with and it changes with that social interaction) is a WHOLE 'NOTHER level of challenge. There are so many moving parts behind the scenes. I have mad respect for anyone that builds web applications now.
  • We stuck to it through thick and thin, through lots of questions and uncertainty and through not knowing how we were going to make payroll in a few days time.
  • We learned to work together - fighting like cats and dogs at times, but having uber respect for one another while disagreeing.
  • We hired and fired people - learning the importance of hiring talented people who could teach us a thing or ten.
  • We budgeted, planned and balanced a very small amount of cash to make it stretch as far as it possibly could.
  • We took that leap that lots of people talk about, but only a sliver of the population takes and did it wholeheartedly.

And, nope, we didn't become the next Facebook and fell short of our dreams for Buyosphere, but we built something to be proud of and we did it with all sorts of odds against us. Hell, we're still getting featured in major publications as their Super Clever Click and it isn't over quite yet. Who knows what could happen going forward? I don't think we built any of it in vain. Maybe it's ahead of it's time (I know from experience that brands aren't quite ready to grasp this concept). As SF Fashion Tech said in their review, " It’s hard to draw an apt comparison because there’s nothing similar to this right now..." We'll see and I haven't given up hope.

YOLO as the saying goes and it's true. Anyone who takes a risk to do something that isn't easy and has little certainty should be high-fived, as I've learned when I worked at Santacruzsolarcompanies.co Santa Cruz solar companies. There is no shame in taking that leap and falling on your face. There IS SHAME in talking about taking that leap, never doing it, then pointing fingers and laughing at those falling on their faces.

Before all of this happened, I didn't really know what people meant when they said, "Failure is good. You should fail several times in your life." I thought that sounded like the most awful advice ever. But now I understand. Experience is the result of failure. I've known people who have it easy (connected to money and people and luck) and sail through to big success without learning anything only to arrogantly go at it again and fall on their faces. Any one of those people I've talked to has said to me, "I enjoyed my flop much more than my success." Why? Because of what they learned. And how slowly, but surely, they grew as individuals who had much better lessons to convey.

And yes, if I could wave a magic wand and change the outcome to Buyosphere being an IPO'd/acquired company that lined my pockets with millions of dollars, of course I would! But what I'm saying is that I don't regret that it turned out differently. Not at all.

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The Hole in the Soul of Business

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The Hole in the Soul of Business

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(the title of this post is a direct 'tribute' to a column of the same name by one of my favorite management writers, Gary Hamel) For the past 12 years, Edelman has conducted a very in-depth study of the level of trust consumers have for government, media and corporations and has found, unsurprisingly, that there has been a steady decline in public trust. This doesn't come as a big surprise to most readers who feel continuously manipulated and lied to by government, media and corporations in the interest of their own gains.

But trust works both ways and I'm less interested in convincing customers and citizens to trust and more interested in convincing government, media and corporations to trust their customers and citizens.

I've observed and been part of a growing DIY culture - one that is demonstrating that individuals can and will come together to achieve results that are inspirational and often reflecting a more democratic outcome than any of the top-down efforts.

Take, for instance, the amazing efforts of #OccupySandy, a grassroots, people powered movement of engaged and concerned citizens looking to help Hurricane Sandy victims and get affected areas back to normal (or better) in the wake of the storm. Government did an okay job coming in in the immediate aftermath, sending in troops, supplies and boosting the cleanup and some corporations have donated a good number of proceeds to the clean up (mostly going to the Red Cross and other large NGOs). But the #OccupySandy volunteers can go deeper and further and not have to encounter much for red tape. They can see a crisis, figure out the most efficient and best way to fix it and just do it. Are mistakes made in the process? Probably. But the benefits of these agile, scrappy "organizations" outweigh the losses.

I've been a fan, advocate of and participant in grassroots change for a long time and continue to believe that encouraging participation is a good thing. Generations of people were encouraged to be passive and dependent, but the web came along and changed that paradigm. Instead of Read-Only, it gave us writing privileges. We gained a voice. It allowed us to connect with others who wanted to contribute. Those who grew up with the web expect interaction and their default is participation. Those of us in the 'sandwich' generation (half our lives were pre-browser) and older are still trying to figure out what that means.

I was raised in a culture that promoted a paternal outlook on the world. People needed protection: from invasion, from the communists, from brand confusion, from the bad guys and, mostly, from one another. The default was security, not transparency. Sites like Wikipedia were frightening before they were invaluable. But as the web has evolved, it's as if the curtain is being pulled back on the Wizard of Oz and we are realizing more and more that we don't have to wait for permission or someone else to save us. We have the tools and power at our fingertips.

But power is a funny thing. Once you have it, you don't want to give it up, especially if you have it based on some default or otherwise extrinsic means. Real power and leadership is when people trust and respect you and choose to follow you. When I think of real power and leadership, I imagine those that really affected change like Gandhi, Martin Luther King Jr., Simone de Beauvoir and more recently Steve Jobs (and yes, Steve was reportedly hard on people, but he led with such inspiration). These leaders didn't feel threatened by others. If they were criticized or challenged, they would engage in the challenge and open themselves up to improvements. But most power is fleeting and extrinsic. It's gained from having money or given a position in which one can exercise their power. I've watched lots of people luck out on a bit of success only to let it go to their heads. These are the same people who feel the most insecure about their power.

Most corporations fit this bill. It's such a dog-eat-dog world. Customer loyalty is fleeting. And you can have a hit one day and be forgotten the next. Smart companies who will succeed will remain more agile and flexible like the #OccupySandy example. What works today may not work tomorrow, so how does one know how to stay a step ahead? By being open and flexible and empowering every employee in your organization to bring their innovation to the forefront. And how do you ensure that this innovation is focused and not haphazard? Strong culture and leadership. The more your employees understand and are invested in your brand, the better their ideas will be.

But the hole in the soul of business is that it can't trust. It can't trust partners, employees, customers or even themselves most of the time. Even when doing the same thing over and over stops achieving results, leaders would rather turn to outside consultants that don't know their business for the answers rather than asking their own employees who have hundreds of ideas on how to evolve. Every corporation and every government has an #OccupySandy of their own just waiting to be the incubator of potential awesome, but they either ignore or alienate their biggest assets.

I'm guessing that Edelman's Trust Barometer has a direct correlation to the trust that government, media and corporations have for their customers and citizens. You trust us and we'll reward you by trusting you back. I know it sounds more than utopic on my part, but I still believe in the awesomely powerful potential of collaboration between people, government, media and corporations - with an emphasis on people - to solve problems (and make profits) more effectively.

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Why is Culture Such a Difficult Concept?

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Why is Culture Such a Difficult Concept?

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About 6 months ago I was at a conference and the presenter brought up Zappos as the shining example of a company that has a strong culture that translates into sales. The person next to me leaned over and said, "Man, can't anyone come up with more examples?" "Sadly," I replied, "The reason Zappos and Southwest Airlines and Trader Joes and Cliff Bar and the small handful of companies are mentioned time and time again is because there aren't any other ones to take their place."

Yes, there are small, up and coming companies who have put their faith in the idea that building a strong company culture will lead to happy employees and happy customers and big profits and I look forward to the day that these companies take the place of Zappos in these presentations and I'm pretty sure it won't take them very long. But people watching these presentations are hungry for results. Big, impressive results. And saying that Modcloth has $20 million in revenues or Etsy makes $314 million when the audience isn't even hip to their brands is a tough sell.

But the question I really want to know the answer for is why is it so hard for established brands to implement a strong culture? And I have found a couple of answers to that question:

  1. Culture comes from leadership and the leadership isn't committed to it. The leaders behind the companies whose cultures aren't strong aren't believers. They were taught at the school of hard economics and something like culture just sounds willy nilly to them. Sure, they hire brand consultants to come in and create a statement and put up posters, but they don't think it's all that serious.
  2. Employees in a weak culture have become cynical, at best, droned at worst. I bet that you can go back to the early few months of 99% of any employees record and show enthusiasm, initiative, eagerness and a desire to learn and grow. I know very few people who pursue a job because they just want to sit at a desk and watch a clock. But weak culture companies have a way of sucking the life out of their employees. And most likely they've fired the employees the company can't break. You know these ones. The trouble makers. The ones that question. The ones that fight for change. Too many of those stubborn ones hanging around may actually give the drones hope to care again. Get rid of them.
  3. The connection between strong culture and results is still a bit fuzzy. There have been lots of studies and books written on the subject that show that strong corporate cultures out perform weak ones, but the correlation isn't strong enough to say, "Without a shadow of a doubt, the reason here is culture." It's because lots of the evidence is qualitative rather than quantitative. "Employees who are happy make your customers happy." And even when numbers are put to that statement, it's a hard one to prove direct correlation with. This sucks. Because in our guts, we know this is true. We just need to get better at proving it.
  4. There is still too much lip service and lazy implementations that don't work. Too many companies do the exercises and print the wallet cards, but very few of them really understand how deep cultural values have to be implanted in an organization. Years ago while interviewing Tony Hsieh for my book (I was one of the first people to talk about them btw ;)), I asked him about some of the family values and he said something like, "The one that trips people up is 'Be Humble'. We don't hire self-proclaimed rockstars or gurus at Zappos." When I asked him if I'd get the job, he replied, "Probably n0t." That demonstrated a deep commitment to those values. It's part of hiring, training, customer interactions, business development and partnerships, merchandising, the way they market, communicate...everything.

It's sad, really, but it looks like we are going to have to be patient for the up-and-comers to create some good solid data on the correlation to make this a MBA endorsed business practice. And someone will create a sort of 'standards' and processes that will fly in the face of what it really means to have a strong culture (ie. intrinsic, rather than extrinsic motivators). Until then, I think it's a-ok to shine our light on Zappos, Southwest Airlines, Trader Joes, Etsy, Modcloth and anyone else that puts culture at the core of their organization and wins because of it. Because, well, they are well worth celebrating.

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Brands on YouTube: Hits and Misses

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Brands on YouTube: Hits and Misses

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Viral videos are still largely a mystery. Why a South Korean music video has been viewed over half a BILLION times in less than 3 months is beyond me. It's a catchy tune, yes. And the parodies have been oodles of fun. But over 500M times? I doubt anyone would have predicted that. Justin Bieber still reigns with his Baby video, which should reach 1 Billion views by the end of this year, but PSY is catching up in record time.

But while viral videos are often a one-hit wonder mystery (Chuck Testa, Double Rainbow Guy, Charlie Bit My Finger, etc) and are largely due to luck (funny/interesting/surprising content + right place + right time + slow news day), there is another realm of YouTube that has more predictable results: content channels.

Content channels are the YouTube producers that provide regular programming with deep, long-term engagement. They have loads of subscribers who tune into their videos on a daily or weekly basis, watching, commenting, liking and sharing videos on a consistent basis. And though some of these channels were jump-started by a single viral video, many of them were built over time by engaging their audience and following some well-publicized best practices on YouTube (highly recommended download).

Though these best practices, tips and tricks are readily available, I've been surprised to find that many brands that are dying to engage in the power of YouTube ignore or avoid this advice altogether, opting instead for big advertising spends and vanity plays. When I say vanity plays, I'm referring to the tendency for brands to invest more in branding than they do in long term engagement. A fully customized YouTube channel page, for instance, has a price: a major advertising investment (in the US, having a vanity page could cost you $200,000 ad spend + the cost of customizing the page). That's a whole lot of money in lieu of engagement.

So, what are some of these best practices? They are pretty simple:

  1. Create great content that's unique, compelling and engaging (informative or entertaining)
  2. Use the first 10 seconds of your video to grab attention: if you are posting a how-to video, show the results before you go into the spiel
  3. Post on a consistent basis: one video won't do it, and uploading a whole whack of videos at once won't do it either.
  4. Post fresh content on a regular basis: record, post, interact, get feedback, use that feedback to improve your next video. Repeat! The most powerful part of YouTube is the interaction. The best video bloggers listen to their audience and incorporate questions and requests regularly.
  5. Use great thumbnails (show the end result or the best snap of the video), tag well, title descriptively and use annotations and information to your advantage

THE HITS

For this analysis I'm focusing on beauty because there are MULTIPLE categories for multiple viewers on YouTube and beauty is not only one of my favorites, but the area in which I have spent most of my analysis. Music, comedy, travel and gaming are areas in which brands and independents are mixing quite well at the moment. Fashion and beauty are still laggards. And, for the purpose of analysis, I've chosen one ostensibly independent channel and two of the top brand channels (meaning that they are well-recognized beauty brands). I also rate by subscribers and not views. You can buy views, but subscribers come organically and are a good sign of engagement.

One of my favorite channels on YouTube is LuxyHair:

Though I'm pretty sure their bedrooms aren't really that spotless, they do a lovely production job of mixing casual and professional. Mimi and Leyla are sweet and generous and friendly. The lighting is perfect. The setting (bedroom) is fun and casual, but lovely. The styles they do are timely (they watch the trends and the comments). And because of this, they have amazing engagement: nearly 600,000 subscribers and nearly 100 MILLION views on their videos. They also get oodles of comments and interactions (video replies, likes and messages).

And guess what? LuxyHair is a brand!

They've been posting videos and slowly improving since a few months before they launched their hair extensions line. They did it right. They started building a community and audience and providing value before they started posting any product at all. And even today, they rarely, if ever, talk directly about their hair extensions. Instead, they show us in the audience how to wear them and look amazing in various styles. Subtly, there is always a link in the comments to the extensions they've used in the style...you know...just in case I need to know.

I actually didn't know that LuxyHair was a brand until I'd been subscribed for a few months. I found one of their hair tutorials as a related video and loved it so much, I subscribed to the channel. I kept watching the videos through my YouTube dashboard and one day Mimi mentioned something off hand about the extensions, so I clicked through and checked them out. I was impressed that they spent so much time building community and offering something for the viewers that I'm likely to order some extensions from them in the near future.

Another brand that does a pretty decent job is Mac Cosmetics:

Normally, I wouldn't think much of their YouTube content as it's sort of all over the map and much of it misses the mark on what I need to get from a beauty channel (personally, I could care less about backstage at FashionWeek), but their really short and snappy tips and tricks are pretty awesome. Like this tip for winged out eye makeup or this one on how to clean up the red pout. Their thumbnails, awful bad titles that aren't descriptive and their general inability to focus drive me a bit nuts, but the content is there. It just needs to be cleaned up.

Plus, I can totally forgive them because they run a full-on integrated, love for the makeup artist community show through multiple platforms, including on their own site (but really? No sharable URLs? C'mon!). They obviously care and it shows. They just need some discipline. But whatever, they are artists. ;)

Mac Cosmetics looks to be the most subscribed to major beauty brand on YouTube, but one of my favorite social brands is catching up fast...Sephora:

Of course Sephora has the advantage that many beauty bloggers have: they have multiple lines of cosmetics to work with. However, they started late in the game and through using many of the YouTube best practices (regular, timely uploads; good thumbnails; great use of playlists; effective titling and tagging; etc), they are taking the beauty world on YouTube by storm. Just a snapshot comparison of Sephora, Mac Cosmetics and Luxy Hair shows that they are growing in leaps and bounds:

They are nowhere near LuxyHair, but are poised to overtake Mac in a few months as the reigning Queen of beauty brand YouTube. I should add, however, that some of the early growth was due to paid advertising, but they've used it pretty sparingly along the way and the majority of their channel growth is organic and due to their use of best practices, attention to details and community interaction. Like Mac, they also have a fully integrated social strategy and use Facebook, their own BeautyTalk community, Twitter, Pinterest, Tumblr, Instagram and mobile platforms. They interact regularly and produce helpful and fun content on all of their platforms. They also have a robust VIB (Very Important Beauty) program that rewards loyalty, a killer email marketing program, make their stores super DIY and have a really great website and ecommerce platform that makes it easy to search for products by brand, skin issue, categories, trends, specials and expert advice. It's hard to compete with their focus on customer experience...but you should try.

THE MISSES

I originally had analyzed a few misses, but I've decided to make this a more general post because, well, it encompasses pretty much every beauty brand on YouTube. Sorry. By now, if you are reading this and you work for a beauty brand, you probably know who you are. Instead, let me point out what you are generally doing wrong.

You are making one or many or all of the following MISTAKES:

1. In a desperate attempt to 'go viral', you are paying for advertising to boost content that is best suited for a one-way medium (ie. an advertisement that has no story, emotion or interactiveness).

2. You are getting a bunch of tutorial videos professionally shot all at once so you can have plenty of content kicking around to upload over time.

3. You are spending a whole bunch of time and money getting your channel landing page branded beautifully (for those rare people that actually land on a channel homepage - less than 1% btw).

4. You are running short-term campaigns on YouTube with no long term planning or thought of how much a community would benefit your brand over the long run

5. You aren't paying any attention to how people really discover your videos...through search, blogs, social networks and other sources where your thumbnails, descriptions and titles really really matter for discoverability.

All-in-all, you are sending the signal that you would rather spend a big sum of money than spend the time building real relationships and community around your brand. Spending money is fine, but it should support, not be in lieu of community building. I've watched many too many brands with short-term visions and I know that part of it is the way that advertising budgets are set out. But if you want to really benefit from social, you need to BE social. You need to look at it through a long-term lens and budget accordingly. Online doesn't work like print worked. It doesn't work like television or outdoor or radio or any of the previous one-way media worked for brands. Social is two-way....no multi-way conversation between you and your customers, your customers and your customers and your customers and your future customers. Hell it's even a conversation between you and your competitors because even the most loyal customers use multiple brands and working WITH that fact will help you a great deal.

You need to think from a customers point of view. It's not about you and how pretty or authoritative or polished your brand is. It's about how you help make her feel. What does she need? What does she desire? I've said it before, and here I go again:

Social is about making your customers’ lives simpler, less confusing, less alienating, more efficient, more meaningful and just plain better.

It costs less money and more time. Instead of spending $200,000 on ads and $50,000 on a fancy brand channel page, spend that money on hiring great people who understand your customers and your brand (maybe even one of your biggest fans!) to build your community. It will cost you less in the short term and have way more benefits in the long term. Use YouTube best practices...learnt from those who have built strong, adoring, amazing communities of devoted viewers.

Everything is social now and your customers expect more from you now. You need to change your thinking if you want to succeed today. And believe me, you will look back and realize how wrong your approach was when you are spending little money on advertising and lots of time really interacting with your customers.

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