Most marketers would say that good strategy requires you to treat your customers well — turn them into raving fans and they will recommend you to friends and family. In the online world, good reviews and links from grateful customers will contribute to good search-engine optimization (SEO), that much-sought collection of factors that results in high rankings in search engines.
But according to a Nov. 26, 2010, article by David Segal in the New York Times, one online entrepreneur has turned conventional wisdom on its head. His solution: Generate good SEO by creating enemies instead of fans. Enraged customers that you have ripped off and abused will fill Internet consumer web sites with negative reviews that will actually increase your ranking in Google searches. (See “A Bully Finds a Pulpit on the Web” for the full astonishing story.)
I would hate to contribute to the success of the retailer profiled in Segal’s article, so I’m not going to name him or his site. This SEO contrarian runs an e-commerce business selling designer eyeglasses. Segal interviewed one of his customers who says that when she complained and tried to get her money back after paying for fake designer frames, she received threats of sexual violence, phony legal documents, harassing phone calls, and a threatening email with a photo of the building where she lives and an “I am watching you” message.
Evidently, though, the marketer in question uses this kind of customer abuse as an SEO strategy. When he received many complaints on one consumer site, he posted this message in response:
Hello, My name is ********* with *********.com I just wanted to let you know that the more replies you people post the more business and the more hits and sales I get. My goal is NEGATIVE advertisement Its a new proven to work strategy when you post all kinds of negative it always turns positive. I never had the amount of traffic I have now since my 1st complaint. I am in heaven.. Thanks so very much for your continued effort. I really appreciate it.
This retailers’s create-enemies strategy is carefully crafted. It has to be, or he would lose his credit card merchant accounts. Segal, who interviewed the retailer, relates:
The only real limit on his antics is imposed by Visa and MasterCard. If too many customers successfully dispute charges in a given month, he can be tossed out of their networks, he says. Precisely how many of these charge-backs is too many is one of the few business subjects that Mr. ********* deems off the record, but suffice it to say he tracks that figure carefully and dials down the animus if he’s nearing his limit. Until the next month arrives, when he dials it back up again.
Has this retailer’s recent notoriety reduced his Google rankings? Evidently not. A search today on “lafont designer eyeglasses” reveals the following rankings:
The listing for the master of dysfunctional customer relations is third in organic search results.
Building a business by enraging your customers is exhausting work, Segal learned from his interview with the retailer:
Mr. ********* typically works from about 10 a.m. until 5 the next morning, spending much of that time feuding with unhappy customers. He describes this grueling regimen of confrontation with a heaviness that is enough to make you want to give him a hug.
“I’m sure this is taking a toll on my health,” he complains. “I probably won’t live as long as you.”
An interesting study, soon to appear in the Journal of Risk Research, by Yale law professor Dan M. Kahan and colleagues, suggests that people tend to disbelieve scientists whose cultural values are different than theirs.
I’m not able to determine when this study will be published, but you can find an abstract at this link, and I was able to download a preliminary version of the whole article in PDF by clicking on the link on that page that says “One-Click Download.”
We know from previous research that people with individualistic values, who have a strong attachment to commerce and industry, tend to be skeptical of claimed environmental risks, while people with egalitarian values, who resent economic inequality, tend to believe that commerce and industry harms the environment.
Kahan and colleagues based their study on the theory of the cultural cognition of risk. In his paper, Kahan says this theory “posits a collection of psychological mechanisms that dispose individuals selectively to credit or dismiss evidence of risk in patterns that fit values they share with others.”
The researchers surveyed a representative sample of 1,500 U.S. adults. They divided this sample into groups with opposite cultural worldviews, some favoring hierarchy and individualism, the others favoring egalitarianism and communitarianism.
They surveyed the respondents to determine their beliefs about what in fact is the scientific consensus on issues of climate change, disposal of nuclear waste, and concealed handguns, with particular focus on the associated levels of risk in each of those areas. Various statements were attributed to fictional personas portrayed as authors of books on these various issues. Respondents were asked to judge whether each author is really an expert or not.
Analysis of the results on the climate-change issue revealed that:
Disagreement was sharp among individuals identified (through median splits along both dimensions of cultural worldview) as “hierarchical individualists,” on the one hand, and “egalitarian communitarians,” on the other. Solid majorities of egalitarian communitarians perceived that most expert scientists agree that global warming is occurring (78%) and that it has an anthropogenic source (68%). In contrast, 56% of hierarchical individualists believe that scientists are divided, and another 25% (as opposed to 2% for egalitarian communitarians) that most expert scientists disagree that global temperatures are increas-ing. Likewise, a majority of hierarchical individualists, 55%, believed that most expert scientists are divided on whether humans are causing global warming, with another 32% perceiving that most expert scientists disagree with this conclusion.
The study revealed similar results around the issues of geologic isolation of nuclear wastes and concealed-carry laws.
So should we conclude that people are going to believe what they want to believe, and that’s all there is to it? The authors make an interesting statement about the implications for public presentation of scientific findings:
It is not enough to assure that scientifically sound information — including evidence of what scientists themselves believe — is widely disseminated: cultural cognition strongly motivates individuals — of all worldviews — to recognize such information as sound in a selective pattern that reinforces their cultural predispositions. To overcome this effect, communicators must attend to the cultural meaning as well as the scientific content of information.
The report suggests some ways that cultural meaning might be considered in communicating with the public. One such strategy is what the authors call narrative framing:
Individuals tend to assimilate information by fitting it to pre-existing narrative templates or schemes that invest the information with meaning. The elements of these narrative templates — the identity of the stock heroes and villains, the nature of their dramatic struggles, and the moral stakes of their engagement with one another — vary in identifiable and recurring ways across cultural groups. By crafting messages to evoke narrative templates that are culturally congenial to target audiences, risk communicators can help to assure that the content of the information they are imparting receives considered attention across diverse cultural groups.
This interesting graphic from PPC Blog shows how Google ranks pages, what happens when a user searches, and how ads are incorporated. Useful for anyone who creates content for the Web or uses Google AdWords (click on the image to see it full-size):
Sickening as it is, the unfolding oil disaster due to the runaway gusher in the Gulf of Mexico (the terms “leak” and “spill” hardly seem adequate) is giving rise to a flurry of innovations in oil cleanup that should result in more effective responses to such crises in the future.
Watching BP and the federal government flounder around these first several weeks of the disaster, many individuals, small businesses, and local officials in the Gulf region have stepped forward with cleanup solutions, some sophisticated and well-thought-out, some not so much (see “Battling oil with ‘Cajun ingenuity.’” But the point I’m making is that it’s interesting to see how a crisis like this is useful as a stimulus for innovation.
I’ve been able to dig up a few CNN reports that show examples.
I was particularly struck by a report just today about two boatmakers who have quickly generated a kind of floating “M*A*S*H” facility for cleaning up oiled birds. The unit is based on the design of shallow-draft fishing boats that can easily maneuver in coastal waters and marshlands. Birds can be picked up, cleaned, and released right from the boat, without the time-consuming process of taking them into land-based facilities. (See “Boatmakers: Oil officials ignoring bird-saving boats“)
As is often experienced by innovators within large companies and organizations, the two Alabama boatmakers, Mark Castlow and Jimbo Meador, have run into problems getting uptake of their innovation by the large bureaucratic entities running cleanup efforts.
CNN made calls to find out why the solution has not been exploited by BP and the government. The CNN journalist says that, “The unified command center admitted that juggling all the offers of help has been a problem.”
One of the boatmakers says, “It’s one of the most frustrating things I’ve ever been involved in.” So far, they have been able to produce a prototype boat with funds from private donors, including musician Jimmy Buffet. From here on out, they plan to produce a new boat every seven days.
When I heard that actor Kevin Costner was getting involved in cleanup efforts, my first reaction was, “Oh, ha-ha, he should get together with Brad Pitt and George Clooney, ha-ha!” But thanks again to CNN, I have learned that, in reality, Costner and his colleagues at their company, Ocean Therapy Solutions, are actually selling BP a cleanup device that he and his brother, a scientist, developed during the early 1990s.
Costner’s machine is a device for separating oil from water. His largest machine has about a 5′ x 5′ footprint, weighs about 4,000 pounds, and can separate 200 gallons of liquid a minute, separating oil and water at 99.9 percent purity on either side.
Costner brought the machine to market over a decade ago, but couldn’t raise any interest until the current crisis. “I guess people just thought spills were over,” he tells Anderson Cooper of CNN. But to the contrary, he says, “Spills occur on a daily basis. Someone said enough oil spills on a daily basis that every seven months we’re having an Exxon Valdez out there. It’s just, out-of-mind, out-of-sight. It takes something like this to happen, where now we’re all pointed at it.”
Costner took his product for years to government agencies and private industry with no success, but now BP has ordered 32 of the devices. Costner tells CNN, “I’ve had to be kind of silent the past few weeks as this machine was put through a lot of hoops, and it just passed everything that BP could throw at it.” (See Cooper’s video interview with Costner, “Kevin Costner’s solution to oil spill.” See also Ocean Therapy’s news release, “BP to Proceed With Costner Centrifuge Devices to Cleanup Gulf Oil Spill.”)
What should companies be doing to prevent disasters such as the ongoing catastrophe in the Gulf of Mexico, with its tragic loss of life and environmental devastation? Granted, some disasters are just ‘Black Swans’ (see Nassim Nicholas Taleb’s writings on this topic) and can’t be predicted. But company safety procedures can go a long way toward mitigating the risks of accidents and their potential effects.
Having served as a company safety officer and having written about industrial safety some years ago, I was very interested in the experience published today by Robert X. Cringely on his I, Cringely blog — see “Doing the Right Thing.”
Cringely republishes a comment from one of his readers, a Monsanto engineer, who recounts how Monsanto learned from the calamitous April 16, 1947, industrial accident at Texas City harbor. That accident was caused by a fire on a ship, not by Monsanto. However, the resulting explosion destroyed Monsanto’s plant, along with other facilities at the port and thousands of homes. Almost 600 people were killed. (See the Wikipedia article on the Texas City Disaster and the series of photos at the Portal to Texas History.) Here’s an aerial view of the Monsanto plant and the port after the accident:
As a result of Texas City, Monsanto developed a stronger culture of safety, says Cringely’s reader:
They developed technology to better control chemical process. They developed standards to built safer facilities. They didn’t do this alone. They worked closely with other chemical companies. The whole industry invested in best practices and shared what they learned. When I started my job [in the 1970s] I was given a set of “standards” consisting of 3 binders, each 6 inches thick — serious reading.
Union Carbide’s terrible accident in Bhobal, India, in 1984 also became a crucial lesson for industry players. Soon after Bhopal, Monsanto officials had “reverse-engineered” the disaster and reiterated company policy, emphasizing that “all plants are to be built to USA or local country safety standards, whichever is better.”
Further studies within Monsanto after Bhopal had a profound effect on the company’s business:
The result of the study was sweeping changes in how much material was stored in each facility. Many processes and lines of business were deemed too risky to continue and were shut down. Monsanto walked away from tens of millions in business to reduce risk and improve safety.
Monsanto also instituted new programs to train and equip local first-responders where its plants are and to reduce emissions “far exceeding EPA rules.”
These comments emphasize the value of adopting the stance of a “learning organization.” What kinds of company policies and practices can go the furthest in preventing accidents, loss of life, and environmental damage — and in minimizing the effects when accidents do occur?
Many people think of YouTube as a big time-waster with nothing but videos of animals dancing and guys getting whacked in their privates.
But as time goes on, I become more and more conscious YouTube as a great resource in many respects. For example, in my work as a writer and analyst, I’ve been making good use of corporate videos on YouTube, where it’s possible now to access in-depth presentations by company executives, scientists, and other experts.
Thanks to a mention yesterday in Boing Boing, I’ve learned about Khan Academy, which now has over 1,200 educational videos on YouTube. Using a very simple “chalk talk” format, Salman Khan, an engineer and manager, provides 10-20-minute video presentations on a huge variety of topics, including science, history, math, finance, economics, and more.
These videos would be useful as quick reviews or knowledge fill-ins for students, both adult and child, or for parents who are trying to help their kids with their studies. I also find them useful as a writer who needs to be able to get up-to-speed quickly on economics and finance topics.
Khan creates his videos on a tablet computer with pen input. Here’s an example of a video explaining the basics of banking:
Some readers might recall that in 1995 I released one of the first e-books published and sold online, The Smart (aka Small) Business Guide to Internet Marketing. Publishing this e-book was a great adventure and was a good experiment in online marketing itself — I didn’t get rich from it, but it did pay the groceries for the Bredenberg family for a few years.
A conversation earlier today with some of the innovation folks at IBM about their Smarter Planet initiative has got me revisiting some research we’ve done at the ILO Institute on a concept know as the “Internet of Things.” The essential idea is that objects in the physical environment around us are increasingly being embedded with networked technology, interacting with the larger network, and creating data. In fact, a video by IBM (shown below) suggests that there already might be more objects connected to the Internet than people.
I first encountered the Internet of Things concept in 2006 working on a report on the future of RFID (radio-frequency identification). RFID is a technology used to embed miniature wireless communications in objects of all kinds, such as packaging, boxes, equipment — even humans and animals. At that time I was in touch with some people working on the Internet of Things concept at MIT.
On a product level, says Murray, each item would be tagged by “a sort of Web page for each item” coded in HTML. “Thus, all products could be identified anywhere, instantly.” Plans include migrating from sticky tags to RFID devices embedded in cardboard cartons during the manufacturing process.
Murray speaks of this emerging Internet of Things in terms of the supply chain. However, the eventual possibilities go far beyond keeping track of products for supply chain management. If miniature Web pages and servers could be embedded in building materials, components of vehicles and aircraft, furniture, appliances, apparel, and other places, this could have huge implications for marketing, communication, and provision of services, not to mention changing the very nature of the world around us.
Wanting some further insights, I had a phone conversation with MIT’s Sanjay Sarma, an RFID expert at MIT. Sarma stressed the impact the Internet of Things will have on business:
MIT’s Sanjay Sarma tells ILO researchers that this Internet of Things is “going to have a huge impact,” and that RFID is one of the key enabling technologies. He points out that RFID creates a greatly increased connection between the physical world and the world of information by connecting more data to physical things and transferring it at much greater speeds in much greater volumes. “We used to connect data to the physical world through keyboards, but there’s only so much data you can get in through the keyboard. But with RFID it’s automatic and it’s happening all the time.”
Sarma says that the Internet of Things will allow you to “have control in your enterprise in a way that is completely unprecedented.” Sarma calls this control “high-resolution management—management with eyes everywhere, as opposed to management by gut reactions and guesswork.”
Earlier this year, we completed a report on how the Smart Grid is likely to affect the shape of the electric utility business in the future. If the smart grid initiative rolls out as anticipated (and utilities are working on this very aggressively right now), the electric grid in the U.S. will be transformed from the traditional century-old dumb one-way transmission utility into what Thomas Friedman has called an “Energy Internet” (see his book Hot, Flat, and Crowded, chapter 12, “The Energy Internet: When IT Meets ET”).
Under the Energy Internet paradigm, networked technologies will be embedded all through the electricity delivery system — in control facilities and substations, in smart meters at homes and businesses, in home appliances that will shut on and off in response to grid conditions, in electric vehicles and their charging systems, in home-based generating systems that will sell electricity back to the grid, and much more that we probably can’t imagine.
Friedman maintains that the smart grid will enable “a great energy transformation.” On page 286 of his book, he outlines what this could mean for utilities companies:
Utilities, instead of limiting their vision from the power plant to your home electricity meter, would be wholly transformed. Their universe would stretch from the generation of clean power on one end right into your home appliances, your car battery, and even the solar panels on your roof. Rather than just being a seller of dumb and dirty electrons, it would be an enabler of this whole smart grid-Energy Internet system. And it would make money from optimizing this system.
In effect, Friedman maintains, smart grid will bring utilities, businesses, and consumers together into an interactive energy market. Taking the reader forward in time, he projects how such a market might function (pages 277-278):
[N]ow that we’ve moved to the Energy Internet – the smart grid – utilities can run your refrigerator or adjust your thermostat in line with when the wind is blowing or the sun is shining. It can match the supply with the demand. Therefore, it can use more of these renewable power sources at much lower cost. When clouds block out the sun or the wind dies down, the utility’s smart grid lowers demand by raising prices (so your SBB [Smart Black Box] decides not to do the laundry then) or by adjusting your home temperature settings. And when the sun is shining brightly and the wind is howling, the utility runs your dryer at the lowest price. So there is now a direct correlation between how smart your grid is, how much energy efficiency it can generate, and how much renewable power it can use.
…. When the smart grid extended into a smart home all the way to a smart car, it created a whole new energy market on the other side of your electric meter. In the old days, there was no market beyond the raw dumb electrons that came into your house. Everything stopped at the meter, and you just paid the price calculated at the end of the month. But once your appliances became smart, and a Smart Black Box was introduced into your house, a market was also created beyond your meter and throughout your home, and, more broadly, inside every factory and business around the country.
How will the Internet of Things, a Smarter Planet, transform the world? My guess would be that what eventually emerges will surprise us all. As humans, our predictions tend to be vastly oversimplified. In our smart-grid report, we wrote,
It is good to remember that 20 years ago, experts were referring to the Internet as an “information superhighway” – not wrong in itself, but a vast oversimplification. How many pundits at that time could have foreseen today’s massive World Wide Web and e-commerce activity – not to mention Google or Facebook?
The implication, then, is that utility companies need to become generators not just of power but of innovation – watching for potential new ventures and business models that will surely arise out of such areas as smart-metering, electric vehicles, and renewables. Utilities need to start now building the organizational capabilities necessary to exploit the opportunities that will emerge in this networked energy marketplace – which means expanding R&D and internal venture funding, establishing entrepreneurial units and innovation teams, and building a new culture of innovation.
For some insights into the Internet of Things concept, I invite you to watch this thought-provoking video from IBM:
Not only has the music group the Grateful Dead created a musical and cultural phenomenon, but as a very successful business, they make a good case study in management.
Green’s article is inspired by the recent announcement that the members of the Grateful Dead would be donating their archives to the University of California at Santa Cruz. UCSC will be using the archives to create extensive publicly-available resources. The institution is currently processing the materials, but you can read about their progress at The Grateful Dead Archive. Initial materials from the archive are on exhibit now through July 4, 2010, at the New-York Historical Society — see “Grateful Dead: Now Playing at the New-York Historical Society.”
Green reviews the curious and controversial history of academic scholarship focused on the Grateful Dead but highlights an interesting truth of the Dead’s story — they were and are a very successful business, and much of that is due to their enlightened focus on providing customer value. Green writes that,
Without intending to—while intending, in fact, to do just the opposite—the band pioneered ideas and practices that were subsequently embraced by corporate America. One was to focus intensely on its most loyal fans. It established a telephone hotline to alert them to its touring schedule ahead of any public announcement, reserved for them some of the best seats in the house, and capped the price of tickets, which the band distributed through its own mail-order house. If you lived in New York and wanted to see a show in Seattle, you didn’t have to travel there to get tickets—and you could get really good tickets, without even camping out. “The Dead were masters of creating and delivering superior customer value,” Barry Barnes, a business professor at the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University, in Florida, told me….
As Barnes and other scholars note, the musicians who constituted the Dead were anything but naive about their business. They incorporated early on, and established a board of directors (with a rotating CEO position) consisting of the band, road crew, and other members of the Dead organization. They founded a profitable merchandising division and, peace and love notwithstanding, did not hesitate to sue those who violated their copyrights. But they weren’t greedy, and they adapted well. They famously permitted fans to tape their shows, ceding a major revenue source in potential record sales. According to Barnes, the decision was not entirely selfless: it reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets. The Dead became one of the most profitable bands of all time.
With physical goods, there is a direct correlation between scarcity and value. Gold is more valuable than wheat, even though you can’t eat it. While this is not always the case, the situation with information is often precisely the reverse. Most soft goods increase in value as they become more common. Familiarity is an important asset in the world of information. It may often be true that the best way to raise demand for your product is to give it away….
In regard to my own soft product, rock ‘n’ roll songs, there is no question that the band I write them for, the Grateful Dead, has increased its popularity enormously by giving them away. We have been letting people tape our concerts since the early seventies, but instead of reducing the demand for our product, we are now the largest concert draw in America, a fact that is at least in part attributable to the popularity generated by those tapes.
True, I don’t get any royalties on the millions of copies of my songs which have been extracted from concerts, but I see no reason to complain. The fact is, no one but the Grateful Dead can perform a Grateful Dead song, so if you want the experience and not its thin projection, you have to buy a ticket from us. In other words, our intellectual property protection derives from our being the only real-time source of it.
Insights from thinkers like Barlow led me to write my 1995 e-book, The Smart Business Guide to Internet Marketing, one of the first e-books published and sold online (now archived for free at Optimization Marketing). In fact, Barlow was one of the people who bought a copy, although I don’t flatter myself by thinking there was much in it that he hadn’t already thought of.
I think a key insight from the Grateful Dead case study is that a successful business ultimately has to rest on customer relationships. Interactive media and technologies place unprecedented control in the hands of customers, and the smart business these days is the one that realizes that the success of its brand will rest on its customer experience.
In the Atlantic article, Barlow tells Green,
What people today are beginning to realize is what became obvious to us back then—the important correlation is the one between familiarity and value, not scarcity and value. Adam Smith taught that the scarcer you make something, the more valuable it becomes. In the physical world, that works beautifully. But we couldn’t regulate [taping at] our shows, and you can’t online. The Internet doesn’t behave that way. But here’s the thing: if I give my song away to 20 people, and they give it to 20 people, pretty soon everybody knows me, and my value as a creator is dramatically enhanced. That was the value proposition with the Dead.
I ran across a great use of a slide presentation: To make a job pitch that gets attention and demonstrates your skills visually.
Laura Gainor wanted to go to work at Comet Branding in Milwaukee, so she developed a SlideShare presentation targeted at the advertising agency. I’m familiar with SlideShare as one of the applications available on LinkedIn. With SlideShare, you can upload presentations authored in PowerPoint and share them.
This approach worked well for Gainor, as she was applying for a position in social media at Comet, and the presentation gave her an opportunity to demonstrate her thinking and skills. It’s not a slick presentation, but is quite personal and engaging:
A Thinking Person, a.k.a. Cogit8R 