Ctrl Alt Delete

Reboot Your Business. Reboot Your Life. Your Future Depends on It.

Grand Central Publishing

CHAPTER 1

From Me to You

The shift toward direct relationships with consumers.

Several years ago a leading brand (that shall remain nameless) contacted mymarketing agency, Twist Image, about a new business opportunity in the digitalspace. The brand's reality was this: As the years passed by, they werediscovering that the number of retailers they were selling to was diminishing ata rapid and terrifying pace.

As the major big-box outlets continue to grow and as consolidation riflesthrough the retail sector, the bigger brands have only a handful of outlets tosell their wares. Plus, with these retailers' size and growth comes anotherreality: They begin to dictate everything from quantity and terms to acceptablemargins. For some businesses, this is a dream come true because it securessignificant sales, but for others (like this brand), a massive global businesswas becoming a game of diminishing returns. They were selling to fewer stores atweakening margins. It got ugly fast if you ran the numbers: Eventually thisbrand would only have their products on the shelves of one or two of the majorretailers, which would be constantly dictating and changing the terms of sale.Beyond that came the retailers' demands for either exclusivity, their own uniqueproduct lines, or both. At the end of the day, the brand/client came to a harshrealization: While they were a household name, they had no direct relationshipwith the consumer.

HOW DO YOU WIN?

The client's idea was to create a new e-commerce brand online that housed onlytheir own brand-name products but would feel like a new online player. This wastheir last chance. While they constantly battled with retailers over the rightsto sell their own products directly to consumers online, the time had come todraw a line in the sand. This project became the hope and prayer to save thebusiness. They would use this online business as a place to start a directrelationship with the consumer.

Notwithstanding how the major retailers might have felt about thisproject—in terms of how it would not only cannibalize their business butperhaps keep customers away—it would have been a very smart and wise playfor the brand to make. For a brand to truly shape its own destiny, it must leadthe relationship with the consumer as well. I was fully behind this initiative... so what happened? The company never pulled the trigger on their e-commerceproject, and now they're busy scrambling for "likes" on Facebook and are sellingtheir products through the handful of big-box retailers left. Ironically, other,scrappier startups have disrupted this traditional retail model with digital-only brands that are capturing the imagination (and money) of consumers all overthe world.

WHAT APPLE KNOWS.

What happened prior to 2001 that made Apple go into the retail business?Whenever the topic of Apple and the Apple retail experience (aka Apple Store) isbrought up, many media pundits roll their eyes as if the success of these sparseand crisp stores is some kind of anomaly in business lore. It's not. Apple cameto a conclusion in the 1990s that many businesses have yet to wake up to. Theyknew that if potential customers walked into a traditional consumer electronicsgoods store and became inundated with a massive selection of computers andlaptops, they would, instinctively, defer to the first sales associate theycould wrestle down. What would happen next? Would the sales associates spend thetime needed to uncover the needs of individual customers, or would they attemptto sell those same customers whatever was either on sale or would garner themthe highest commission? I think we all know the answer to that question.

The solution for Apple was to create a "cradle to the grave" business modelwhere the customer is—at every touch point—speaking directly withApple's brand. A true, direct relationship—in every sense of the word.Apple could not win on price (their computers and other devices are usually muchmore expensive than their competition's), so they had to win by being there forthe consumer and by making these consumers a part of a more complete brandecosystem. Don't think for a second that the Genius Bar doesn't play directlyinto this very forward-thinking business strategy, which is driven by the powerof direct relationships.

At the time that Apple first launched retail stores in 2001, the common practiceamong retailers was to cram each nook and cranny of space with merchandise tomaximize the sales per square foot. Sadly, most retailers (and businesses) stillhold on to this traditional thinking. For Apple, it was less about every squarefoot of retail space and much more about every square inch of the directrelationship. Apple didn't start in the retail business to compete with otherconsumer electronics stores; they went into retail for the direct relationshipwith their customers. Apple's attitude was: "Why give that power to Best Buy oranyone else?"

HOW ARE YOUR DIRECT RELATIONSHIPS?

Some brands do this well ... but most fail at it in spectacular fashion. Is itpossible to be so judgmental? It is. One of the reasons I still enjoy the debateabout the efficacy of social media marketing is that the majority of brands thatstruggle with the return on investment are comparing it with traditional pushadvertising, instead of treating it as an opportunity to have real interactionsbetween real people (one of the core pillars of my first book, Six Pixels ofSeparation). A consumer who hits a "like" or "follow" button is opening upthe perfect opportunity to have a direct relationship with a brand. If all thebrand does is blast back impersonal offers and specials, it is simply notpushing toward direct relationships ... it's pushing toward broadcastadvertising.

THIS ISN'T ABOUT SOCIAL MEDIA (ANYMORE) ... IT'S ABOUT MAKING YOURBUSINESS MORE SOCIAL.

This is a very unique moment in time. It is not only a revolution inbusiness—one that we will probably never again see in ourlifetimes—but it is ours either to capitalize on or to squander. The truthis that most businesses are wasting this moment because they are unable to thinkand react through this purgatory. The next five years are going to be aboutthese direct relationships. The next five years are going to be about how well abrand can actually change a relationship from one that looks at how many peopleare in their database (and how to target them more effectively with advertisingmessages) ... to one focusing on precisely who those individuals are and how thebrand can make the connection with them even stronger.

THE STARS ARE ALIGNED.

We have the technology. We have the data. We have the new media channels andplatforms. We have the opportunity to publish whatever we want—in text,images, audio, and video—instantly (and for free) to the world. What we dowith this moment will be telling. It will also set the pace for everything thatflows out of our businesses for the next decade.

NO DIRECT RELATIONSHIPS. NO FUTURE.

The true opportunity going forward is for your business to develop a directrelationship with your consumers. But there's a big challenge to this. It turnsout that your competition is no longer just your traditional competitors,because suddenly joining the fray are your third-party resellers or anyone elsewho sells your products on your behalf. Confused? You should be.

The official Beats By Dre Facebook page has over five million people who haveliked it (as of this writing). You can buy your Dre Beats Solo Headphones withControlTalk from Target for about $180. Target has over twenty million likes ontheir Facebook page. Both Target and Beats By Dre are actively amping up theirlikes on Facebook. It's not a subtle, sit-back-and-relax type of play. They areboth enthusiastically and actively fighting for every like and friend they canfind (one aspect of direct relationship building).

What's a confused consumer to do? If I bought my Beats By Dre at Target, am Isupposed to like the Beats By Dre Facebook page? The Target Facebook page? Both?The answer is: I don't know ... and that's the problem. To add to this confusionand complexity, we also can't ignore Facebook.

With well over a billion users, Facebook is an Internet unto itself. Not unlikeother online social networks, there is a cost to being active on Facebook, andthat cost is both the data and the direct relationship with your consumers.While Facebook continues to work more closely with businesses to help build thisengagement, much like Las Vegas, what happens on Facebook stays onFacebook. If you have three thousand people who like your brand on Facebook, youcan't pick them up (with all of their data, usage, and engagement) and take themover to your website.

In essence, Facebook actually owns the direct relationship with the consumerhere; you're merely on their turf leveraging the consumer's activity. TheFacebook value proposition to Wall Street is simple: We own the data anddirect relationships with these hundreds of millions of people, and the value isin the data and the ability to put advertising on the pages of content thatthese people are creating and sharing (more on that in chapter 2).

And it's not just Facebook—it's everyone who allows you access to anaudience online. If you're posting videos to YouTube and are lucky enough to begenerating millions of views and positive reviews, what would happen if yousuddenly started posting the videos only to your website? Where does the truecommunity reside? While your company may be able to lure some of its audienceover for a new video (or two), you will quickly come to the realization thatYouTube is where the activity is. That is where the direct relationship lives.

You can see that it's a real horse race for that key direct relationship:There's your company; there are the clients that you sell through (or yourvalue-added partnerships); there are the channels and platforms that you'reengaging through ... and we still haven't even made our way down the competitivefood chain to your true competitors.

CONSUMER-CENTRIC CAN'T JUST BE YOUR BUSINESS JARGON.

The best way to begin thinking about these direct relationships is to rebootyour perspective. In the past year, I've shifted my presentations on digitalmedia. I've moved them away (almost completely) from what businesses should bedoing in the digital marketing space to focusing them 100 percent on whatcustomers are actually doing—out in the wild. Don't misconstrue the termcustomer-focused to mean that I really care about the consumer (this isthe traditional way of looking at business). Customer-focused in 2013 meanslooking at things as a consumer and not as a businessperson. It may sound overlysimplified, but how we think about business during regular working hours isusually diametrically opposed to how we act as consumers. We'll instinctivelyask in a boardroom, "Does anyone really download and use apps on their iPhone?,"and later that week we'll spend our hard-earned dollars downloading apps andcontent to our smartphones. Instead, we should think like our true customers. Weshould start acting like them. Sadly, most brands are not thinking like theircustomers. Don't believe me? When you wake up in the morning, what's the firstthing you grab? How long is it before you grab your iPhone? And yet most brandsare still doing little to embrace this new consumer.

WHAT'S YOUR BUSINESS REALLY UP TO?

Your business needs to not only sense this urgency, but also realize thisseismic shift in the battle for direct relationships. While some businesses arebeginning to capitalize on this by recognizing the value that comes from theserelationships, most are still using these channels as a form of broadcastadvertising. It's almost as if businesses have become anesthetized because oftheir reliance in the past on using media channels as a gateway to the consumer.

In the pre-Internet media world, your business could not have a directrelationship with the consumer. If you wanted to let people in your city knowabout your products or services, you had to take out advertising (few were greatat direct marketing). The value of traditional media was not in the high qualityof content that they produced, but rather in the direct relationship they hadwith an audience because of the perceived value of the content to the consumer.Now, in this world where consumers are liking, friending, tweeting, and +1-ingbrands, not only have the tables turned, but the game has completely changed.And yet, if you look at what the majority of brands are doing in these digitalspheres, you will be stunned:

• They're asking consumers to "like" them on Facebook while few actually make aneffort to connect to those individuals on their own spaces. Here's a hint:Instead of asking people to like your business, why doesn't your business startliking these people first?

• They're asking customers to subscribe to the RSS feeds of their blogs or sharetheir content, while the brand editors spend zero time engaging in the commentson the blogs being created by their customers. Here's a hint: Be active on everyblog that serves your industry. Don't expect everyone to come to you.

• They're looking for customers to follow them on Twitter, but don't actuallypush beyond their own tweetstream to build affinity and loyalty. Here's a hint:If your Twitter feed is nothing but announcements about your sales or serviceupgrades and nobody is retweeting or sharing your content, it may be time tostart thinking about adapting your content strategy (more on that in chapter 9).

• They're asking customers to watch their videos on YouTube, but few brands aredoing anything unique on this channel. It's mostly their traditional advertisingor longer versions of TV ads. Hint: The Web isn't a receptacle for your TV adsand corporate videos. Get creative! You can show real demos, answer realquestions, and give customers a sneak peek into what you're planning. What'sbetter: begging for views or having people willfully share your content?

CREATE A NEW SCENARIO ...

Many businesses create personas. These personas are fictional people whorepresent the "typical" customer. Most businesses have multiple personas becauseit's hard to pigeonhole people. These personas wind up being deep-dives into notonly who these people are (demographics and psychographics), but also how theybuy. The problem with the majority of the "how they buy" scenarios attached tothese personas is that they have traditionally been very linear.

Here's some new "fiction" for you: Sophie needs a new pair of sunglasses. Shegoes online and does some research. She posts some options up on Facebook andasks her friends on Twitter and Pinterest to check them out and help her decide.Then she heads down to the store (if she hasn't already made the purchaseonline) to buy the sunglasses. Sounds realistic and simple enough, doesn't it?It's only half of the story.

Let's try that story again. Here's some nonfiction for you: Sophie needs a newpair of sunglasses. She does some online research (reads some peer-basedreviews), posts some options on Facebook and Pinterest, and tweets them up. Herfriend Rachel sees the tweet, and they text each other about heading over to themall together. While strolling through the mall, not only are they both chattingto each other, but they're connected. They're responding to text messages,they're being alerted to Facebook and Twitter updates, they're laughing atposts, and—maybe—they're even checking in with foursquare (or someother location-based online social network) to see who else is around to jointhe outing (OMG, Lianna is already here at the mall!). While in the store, theynotice a couple of other glasses, they snap some pictures and post them, butthen a question comes up about the materials that were used to make the glasses.Sophie and Rachel do some quick online searches ... nothing. They realize thatthe brand is on Twitter so they ask the brand directly ... and so the storygoes.
(Continues...)Excerpted from Ctrl Alt Delete by Mitch Joel. Copyright © 2013 Mitch Joel. Excerpted by permission of Grand Central Publishing.
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