Cluetrainplus 10: Thesis #89 We have real power and we know it. If you don’t quite see the light, some other outfit will come along that’s more attentive, more interesting, more fun to play with.

I have been privileged to take part in the 10th Anniversary of the Cluetrain Manifesto. I was made aware of and signed up for a blogging event in which 95 bloggers each write a post on the same agreed date, April 28th, about one of the “95 theses” from the Manifesto. Details about this event and Cluetrain’s history are found here. I will provide viewpoint on thesis number #89.

For years marketers like me have believed that advertising had the strength to influence consumer attitudes and behaviour. Advertising had more power when ad vehicles were few. As consumers, we were easy to get a hold of – we read the same papers, listened to the same radio programs, and watched the same television shows as everyone we knew.  Marketers had it easy…but it was rare for consumers to see an ad that was relevant to them. That was ok for marketers because 2% response rate or a break-even ROI was all they required to deem a campaign successful.

These days, technology has made it increasingly difficult to reach consumers. Media has become fragmented. Access profileration has allowed the consumer to be in multiple devices simultaneously including:  access from radio, TV, mobile, MP3s, search, print, billboards, videogames, IM, email, video consoles etc. Overlay the incredible explosion of the number of radio and TV channels, magazines, newspapers. This pace of change is making it increasingly difficult to pin target consumers down with a relevant message at the right place and right time.


It’s become increasingly apparent that the difficulty in reaching the consumer has been compounded over time. Access proliferation has put the consumer in control of how, when and what media they consume. At the same time these same channels are giving the tools to communicate to many people at a much faster pace. Universal McCann’s Worldwide Comparative Study on Social Media Trends, April 2008 indicates the growth of social media since 2006. Some highlights include:

  • 73% of active online users have read a blog
  • 45% have started their own blog
  • there are over 184 million bloggers worldwide, with approx. 1/4 from China
  • 57% have joined a social network
  • 34% post opinions about products/brands on their site/blog

People are talking about brands to each other and surprisingly many brands are oblivious to this; or if they are aware,  they don’t realize the enormous impact it has to their reputation as a company.  The power shift from the corporation to the consumer is apparent. Advertising messages do not influence as effectively as marketers have always believed.


The very medium that divides the brand from the consumer also has the ability to bring them together. Consider this stat from the Universal McCann Study:  36% of active online consumers think more positively about companies that have a blog.  Start-ups have easily figured this out and from day one are leveraging the conversation with the consumers to help shape and evolve their businesses. They have figured out that unless they listen and respond to the market needs, there will be no market for their product or service offering. Coming from a start-up, the lack of big marketing budgets forced me as a marketer to really understand social media if I was to effectively drive reach:

  • Use the networks to bring awareness of your offering.
  • Engage with relevant target groups to help you fix the current bugs and improve your product over time.
  • Take it on the chin and be willing to accept the good with the bad.
  • Continually engage your consumers for feedback. Develop relationships and nurture them over time. Do NOT bail on your community.

Malcolm Gladwell’s “The Tipping Point” provides the best illustration of the power of conversation. He points out, ” I’m convinced that ideas …. move through a population very much like a disease does….Ideas can be contagious in exactly the same way that a virus is.”  It doesn’t take much effort to pass along a cool idea but the very nature of one idea being passed along from person to person can result in an epidemic. “The virtue of an epidemic, after all, is that just a little input is enough to get it started, and it can spread very, very quickly.”  In this way, the effectiveness of word of mouth begins to produce a clear picture of the power of the individual:


Dell found out the hard way how consumer opinion could negatively impact their business. Now, the emergence of Ideastorm, and Twitter engagement has catapulted the company into social media success and has effectively put their Dell Hell days behind them.

Customers talking about brands are making it clear what they want, how they want to be serviced, and what they consider good value for their dollar. The great thing for marketers is that engaging in these discussions limits the guessing game. Companies can now provide a product or service that the customer wants….what a concept!

Other top brands are getting on the band wagon and they are capitalizing as early adopters:

  • Starbucks Coffee created a site that allows users to submit suggestions to be voted on by Starbucks consumers, and the most popular suggestions are highlighted and reviewed. Their heavy presence on Twitter has also helped the company to disseminate information and gauge consumer opinion in real time.
  • Zappos and CEO Tony Hsieh have become known for embracing Twitter as an essential tool for exceptional customer service. Tony, himself, through his Twitter account has become accessible and has helped personify Zappos as a company who is friendly, trustworthy and helpful. Twitter is ingrained in the company much so in fact that the Zappos site aggregates the Twitter streams.
  • Ford Motor Company and its head of social media, Scott Monty have used the channel as a way to inform the public in real time of company happenings especially during periods of volatility. It was this kind of transparency in communication that helped quell much negative public opinion and, in my view, has helped elevate Ford’s brand presence above GM and Chrysler during the government bailout period.

So, for those brands that are afraid to dip their toe in this new conversation, who are afraid to engage with consumers, it will only be to their detriment.  Consumers will continue to speak about your company and your brand(s) with or without you. Social media is not a fad. It will continue to grow and evolve and as new devices are invented, conversation will multiply at alarming rates. The opportunity for big brands and businesses is enormous. Begin to engage in discussions at a peer level…listen and understand…develop important relationships…and build strong brand advocacy and a sustainable model in the meantime.


Credits for this thesis go to P Furey and A Wong for some really cool slides I used from their presentations.

Adapt or Die: The current economic crisis creates a much harsher picture of what lies ahead in 2009.

I read a pretty compelling, albeit morbid, email the other week from Jason Calcanis, founder of Mahalo.  He spoke about “The Start-up Depression” in the wake of current economic conditions in the US. He followed up with an equally forceful article titled, “Good News for People who Hate Bad News“. It sounded more like Armageddon was imminent. His words were harsh and foreboding:

The severity of what has happened can’t be underestimated. There will be no white knight. Even the massive coordinated government action–including the first global rate cuts and bail outs–has done nothing to stop the panic or create a bottom (at least from where I sit). Bottom line: there is zero chance of a short or medium term-rebound.  Zero.

It’s clear that he’s not overexaggerating.  Market conditions are impacting investing. Here are some harsh realities:

• Just yesterday, Tim Hortons has decided to close many of its stores in New England citing lackluster performance.
• The big car giants are rationalizing big time and talks of merger between GM and Chrysler come out of a necessity to survive. It’s being felt close to home as families in Oshawa – mine included – are shaking their heads wondering where it all went wrong. In past economies these institutions have taken care of their employees, where you were seemingly guaranteed employment until you retired. The union would fight for the best benefit packages for their workers and the carmakers acquiesced – all at the expense of the company’s eventual survival.  The funny thing is that GM, Chrysler and Ford’s  market share was  being taken away from the foreign competition AND their business did not adapt, let alone, anticipate what this could mean in times of serious downturn. And now they’re scrambling.

• Banks are going to feel a softening in credit sales, and mortgage services. Credit card companies,  which would traditionally promote low introductory APR for 6 months don’t have the luxury of making these offers today. Mortgage rates will be at prime plus for the time being. Banks have no choice but to secure existing investments and mitigate risk.  This “Death Spiral” as Jason Calcanis’ labels it, will impact consumer spending, so consumers will become much more aware of reducing their debt → the very necessity that have kept financial institutions going……until now.

• I went to the mall the other day and took a chance to observe. There were sale signs in many of the stores but the prices were not indicative of perceived discounts. Traffic to individual stores was pretty light. I noticed my favourite place, “Linens and Things had closed up shop – it had recently gone bankrupt — and a few more smaller shops had popped up in its place … a glimmer of optimism or maybe foolish hope?

There are those that equate today’s crisis to the Depression of the early 30’s. I don’t know if the coming year is going to be as doom and gloom as everyone predicts. I agree that people and companies will tighten their belts and look to create efficiencies, and produce more with less resources.  While it’s upsetting to even think about how the jobless will make ends meet in a survival-of-the-fittest economy, I have to wonder about those who are fortunate to have secured their jobs. What kinds of pressures will they have to endure as they are forced to do the job of 3 people and continue to meet their performance goals, which probably will remain unchanged?

Businesses will have to start developing strategies that speak to these challenges. To sustain in these trying times, companies will need to create stronger efficiencies while not risking the health of their employees or business.  Here are a few areas that I foresee businesses adapting:

1.  Spending on accountable and measurable channels needs to be a primary focus. Metrics will validate performance and channels that can provide true attribution on a CPA and CPC will see an influx of traffic.  This means increased online spending.  But media companies be warned: you’ll need to prove out channel performance and provide increased optimization strategies to win your clients and keep their business.
2.  Search Engine Marketing will see an increase in business mainly because budgets will have shifted from traditional branding channels and because search conveniently relies on consumers who are already engaged within the purchase cycle. It’s also a channel that’s highly measurable and much more efficient dollar for dollar compared to offline or even online media.
3.  Search Engine Optimization is an absolute must for businesses with an online presence. You need to ensure that your site ranks high on search engines and can draw tons of relevant organic traffic. This will be especially important for companies who have low marketing dollars to spend.
4.  Social media marketing will begin to see more traction in the coming year simply because it’s very much a nascent space and there are no standardized ad practices or industry rates that have been established.  The state of the economy will push more consumers online → the social sphere will see incredible growth as consumers become involved in information exchange and conversation. The organic nature of this space provides a large spectrum for brand building and influencer programs. It’s still relatively inexpensive but also highly measurable, providing strong qualitative and quantitative data to prove its value.
5.  Retention will be tantamount to acquisition. The low-hanging fruit for most companies will be retaining their existing customers. This can be done through email and existing customer touch points: telephone, retail (where applicable). Stronger customer service will be just as important to mitigate churn.
6.  Vendors will play a more significant role in client businesses. Companies who have downsized will increase their reliance on vendors to make initiatives happen. It will be more important for vendors to step up, provide the additional attention to their clients and work harder to own the results as much as their clients. I see somewhat of a shift developing in these relationships as a higher degree of trust creates more of a partner mentality.
7.  Bartering will become more prevalent. This is how original deals were created. Creating true value exchange between companies and a resulting win-win scenario can help companies through the rough cycles, and potentially develop enduring and profitable relationships.

Perhaps riding out this storm smartly will give companies some clear guidance in managing a future of uncertainty. Perhaps, it’s a lesson for all of us: Count your blessings now ’cause nothing is forever.

Here is a video I found with Bugs Bunny. It is a true metaphor for “The Death Spiral” we’re currently facing:

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