Facebook Commerce

Read this interesting post on the demise of Facebook commerce initiatives.

This data suggests that brand marketers should focus on optimizing their ecommerce sites for purchases on desktop/notebooks and tablets, and their mobile sites for researching future purchases. It also suggests that mobile shopping apps are a distraction for both merchants and consumers and will fail for many of the same reasons why Facebook stores have failed.

I don’t dispute the conclusions that they are making but I do think it is important to split the argument into 2 camps:

1) Companies using Facebook to drive funnel traffic to their e-commerce sites.

2) Companies using Facebook as the storefront through which the transaction is executed.

No one disputes that using Facebook to amp up commerce activity with promotions, customer advocacy behaviors, and better targeting is effective. What the debate is about is using Facebook as the actual e-commerce platform and on this point I think the critics are making a good argument.

 

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Brands are Lies

Last week I was in Atlanta to support Brent Leary’s Social Business Atlanta event.

When Brent called me last year and said he was putting together an event I said “sign us up” without even knowing what he was planning. I trust Brent and have confidence in his ability to pull together an interesting roster of speakers, participants, and most importantly, an audience to engage with.

Trust… let’s talk about that for a minute. The social technology industry has come up with an entire array of words that ultimately just convey the notion of trust between and institution and constituent, or person to person. These words include the ever popular “authentic” but also words like “transparent”, “open”, and “honest”. Whatever you name you give it, it is TRUST that we are talking about and the ultimate objective for companies using social technologies to engage the world around them should be using trust as a currency for influence.

The night before the event the speakers had a little dinner and over the course of the meal I learned a lot about the audience, the market, and my fellow speakers. After dinner and the next morning I put my deck together and assembled my thoughts into speaking points. I began my presentation by sharing this chain of events and then started with:

“Why did I tell you that at 11:00 last night and 6am this morning I put my deck together for you? Well it’s because I want you to trust me and know that what I am saying to you isn’t boilerplate, scripted, or slickly presented, because if nothing else I say makes an impression upon you let it be this, brands are lies, half truths and good intentions.”

Why are brands lies, half truths and good intentions? Keep in mind that I don’t subscribe to the notion that companies are inherently untrustworthy or that the people in a company, any company, are dishonest… I am part of a company, you probably are as well. The reason why brand statements are untrustworthy is that they reflect what a company, specifically those in the leadership of a company, want to believe about their organization, not what the customers of that institution reflect back to them as their values.

50 years of broadcast advertising has conditioned people to not believe what companies tell them is the truth, which is why Edelman’s trust barometer regularly ranks “people like me” as more trustworthy than any institution. As a society we have a generalized trust issue with institutions of all kinds and yes it should concern you as much as it does me because institutions of government, private enterprise, and everything in between form the backbone of society, and the demise of institutions has historically been a leading indicator for the demise of a society.

I have been thinking a lot about the notion of brands lately, but what I have been focusing on is how the communications revolution we have been participating in, also known as social media technology, is thrusting forward a notion that companies and customers need a better way of talking to each other.

Let’s not call them consumers… please, they are people and people have an inherent desire to be treated as individuals. The construct of consumer is something that companies created to group customers together because they lacked the ability to address each customer individually. Today we can reach customers as individual people so why do we need things like focus groups, demographics, and behavioral segmentation?

Well they do serve a valuable purpose, which is to roll up things which are best addressed in the aggregate, like product definitions and advertising strategy but when it comes to customer service and a collection of marketing functions we need to drill down to the individual level and treat customers as individual people.

Another aspect of this that I find particularly fascinating is that customer are behaving in a very different way that in generations past, not only do they have needs that have to be met with products and services but they also want companies to intersect them on the basis of values. In generations past we cared a lot about what the brand symbolized, the fashion appeal of it, but today we care about the values of the people that make up the company. Wow.

Couple this with another observation I have, which is that brand loyalty is easy to achieve but hard to hold… a direct inverse of what was the case even just a few years ago when brand loyalty was hard to achieve but very durable once acquired. We quickly embrace companies and products with a profound advocacy but one slip and a company quickly gets black listed. From heros to zeros in no time flat…. just ask the Komen Foundation.

So what does all this have to do with the idea that brands are lies? Well it all came together for me with something that Dion Hinchcliffe passed around on Twitter yesterday titled “Culture Eats Strategy for Lunch“. You should read this in it’s entirety but let me quote this one passage for you.

(…in successful companies) Employees are actively and passionately engaged in the business, operating from a sense of confidence and empowerment rather than navigating their days through miserably extensive procedures and mind-numbing bureaucracy.

Just as we need to recalibrate our thinking about customers as people rather than consumers, we need to appreciate that in successful businesses today, and tomorrow’s leaders, the organization exists as a unified body of individuals acting with single minded purpose and empowered with the ability to carry forward on the basis of what is right and wrong for the organization. Wow.

 

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Gastronomy: Duck w/Blueberry Sauce

Last night I made a dish that I was truly proud of upon the first bite, and I am not sure whether to be pleased or concerned that I had each of the necessary ingredients in my freezer and produce bin without having to take a single trip to the market. I strive for a well stocked kitchen…

Here’s how it plated out, duck breast with a blueberry sauce on sautéed bok choy, shallots, pancetta, and mushrooms, served with rosemary roasted potatoes.

I paired it with a moderately acidic Sicilian rosé, thinking that the acid would offset the sweetness of the blueberry sauce, however it really deserved something a little stronger to work with the duck breast so in retrospect a traditional syrah would have been a better choice.

The prep on this dish is not complex but there are several things going on in parallel so you have to multitask. Start with the potatoes, I cubed some russets and tossed with olive oil, dried rosemary and thyme, salt and pepper. In a baking dish arrange in a single layer and bake at 400 degrees for 30 minutes, or until they start to brown.

The blueberry sauce is 1/2 cup of apple juice, 1/2 cup of water, 1/2 cup of sugar and 1 pint of fresh blueberries. Bring to a boil and simmer until you achieve the consistency you like.

Sauté 2 or 3 pieces of pancetta until crisp, set aside and reserve the drippings in the pan. Slice 4-5 shallots (depending on size) and add to pan, slice shitake mushrooms coarse (couple of handfuls) and add to pan. When softened you need to remove mushroom and shallot mix and set aside. Slice 5-6 heads of bok choy an add to pan, sauté for 5 minutes or until soft, add back the mushroom and shallot mix and add pancetta (slice thinly). Remove from heat.

Next take the duck breast and season with salt, pepper, dried rosemary, and thyme (same as the potatoes). It is best to let meats come up close to room temperature so that they cook more evenly so I would suggest taking it out of the refrigerator an hour before you plan on cooking it. In a 12″ pan melt 2 tbs of butter and cut with some olive oil to increase the burn point (I used grapeseed oil which has an even higher flash point than olive oil and is pretty neutral in flavor). Heat over medium heat and place the duck breast in fat side down, letting it cook until the fat achieves a moderately brown color, then turn it over and cook until it registers 150 degrees in the middle.

Let the duck rest tented for 5 minutes and warm the bok choy to serving temperature. Slice the duck breast medium thin, plating on a spoonful of the bok choy and drizzle with balsamic vinegar. Top with the blueberry sauce and serve with the potatoes.

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Hitching Your Boat to Customer Advocacy

I recently wrote about how McDonald’s and RIM had flamed out with their #hashtag campaigns on Twitter. Not pretty.

However, I admit that I am somewhat conflicted about this because I completely subscribe to the notion that customer advocacy will drive successful companies to sustainable competitive leadership. Gone are the days when a company could rely on IT investments for productivity enhancements and supply chain management for lower cost of goods; those things are still necessary but they are also commoditized, your competitors can make the same backoffice investments and the effect will be nullification of any advantage you previously enjoyed.

Institutions of all stripes are at a crossroads when it comes to how they take advantage of the goodwill that is extended to them by customers who are happy with them. The old way would be for the company to productize customer testimonial and package it up through traditional channels… the problem is that this is like going to a zoo that features puppets and animatronics instead of actual animals. Customer testimonials don’t work because they are not believable, customers have figured out the game and aren’t playing along.

Esurance is doing something that is really worth watching, they have built an advertising campaign that comes down to a simple message, “go to our Facebook fan page and see for yourself”. They let it all roll out in, apparently, an unmoderated format and the effect is that the negative comments actually amplify the positive comments.

I like this a lot, no pun intended.

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Facebook IPO Lessons

Like most people, I had the opportunity to review Facebook’s IPO filing yesterday and admit that, like Apple’s recent earnings announcement, this is pretty damn impressive.

Here are a couple of lessons worth reinforcing:

1) People’s view of what is normal and acceptable in emergent online activities is constantly evolving. What Facebook deserves a lot of credit for is not allowing itself to be held back by what a small and vocal group of critics said they should not do. As a result, by constantly pushing forward, and making mistakes, Facebook created a new normal that in retrospect would never have been accepted even 5 years ago.

2) Zuckerberg, like Larry Ellison and Bill Gates most notably, retained tremendous control of their respective companies through outsized stock ownership and voting structures that assured them total control of their destiny. Shareholder rights advocates will say that this is precisely what needs to change about corporate America but stock ownership is not a democracy where every vote is equal… but it is also a structure that shareholders opt into when they buy stock in a company.

3) Don’t discard old business models because they are old… Silicon Valley is home to the shiny new object syndrome and we often forget that old business models are referred to as old because they WORK. Facebook was criticized for not having a business model, well they did and it was a tried-and-true one… advertising. Turns out that a company can still make a boatload of money doing this and it doesn’t require a 60 slide powerpoint deck to explain it.

4) Raise boatloads of money when it is available to you, and do it on your own terms. Facebook benefited from a wide range of factors that drove interest in the company, not the least of which was that for private equity investors who had large funds to put to work, there were few options that scaled to the degree that Facebook did. These investors are not looking for the returns that early stage VCs are, so they were happy to put large amounts of capital to work at high valuations, and it appears that these bets will pay off. Mutual funds and other traditional investors that bought stock in the private secondary market that emerged were also reacting to a scarcity of investment options. The real lesson here is not to be constrained by the traditional venture capital cycle when macro conditions create an environment that allows you to be non-linear.

Lastly, I’ll refrain from repeating the oft-repeated mantra about hiring the best people… would you hire anyone but the best? I hate it when people say things which fall into the stating of the obvious category.