Tuesday, May 31, 2011

Clout, Klout and Social Media Influence: An Interview with Klout CEO Joe Fernandez

Last week, I had the good fortune to interview Azeem Azhar, founder and CEO of PeerIndex, about influence in social media. And today I am excited to continue the exploration of influencers and influence measurement with Joe Fernandez, cofounder and CEO of Klout.

Klout was founded in 2008 with the goal of measuring the influence of those on Twitter. I first became aware of Klout in 2009 when people on Twitter began to compare and track their scores, but Klout really burst onto the scene in 2010. That was when mainstream media took notice of how Fortune 500 brands were using Klout to find and offer special deals to influencers in social media; for example, The Palms Hotel and Casino upgrades guests based on their Klout scores, and Virgin America extended an offer for free airfare to promote a new San Francisco-to-Toronto route. (Disclosure: Thanks to my Klout score and love of Disney, Klout furnished me an invitation to a special preview showing of Disney’s Tangled.)

Today Klout calls itself “the standard for measuring influence online” and this isn’t an idle boast, considering almost 2,000 companies are using the Klout API for things like social CRM and influencer campaigns. Among Klout’s clients are Nike, HP and Disney. (If you’re not familiar with Klout, you can view my public profile here.)

While I respect the success Joe and his team have created, I still have some doubts and concerns about the way influence is calculated and used, so I extended an offer to have Joe share more about Klout and the science of influence.

Joe begins his discussion of influence not with an exploration of science and algorithms but where I believe the dialog should start—philosophy and human emotion: “When you think about it, the idea of measuring influence is kind of crazy. Influence has always been something that we each see through our own lens. In that sense, it's not that different than love or jealousy.”

It is kind of crazy, but the desire to measure and use influence is inevitable today because, as Joe points out, “For the first time ever, influence can scale and there is data to back it up.” While social media has done new things for influence, Joe notes that Klout isn’t the first to consider the science of influence. “Our goal wasn't to invent math here. We definitely spent a lot of time looking at all the work that has been done in the past and then thinking about how to apply it in the context of the social web.”

Klout scores became synonymous with influence and activity on Twitter, but the company continues to expand its focus and inputs. In October 2010 Klout added Facebook as a source of data, which required Klout to consider how to recognize and weigh influence in one channel versus another. “We've had a lot of late nights at Klout HQ arguing about things like whether a retweet is the same as a ‘Like.’ It's almost like a currency exchange but much trickier. Many of the actions that drive engagement and interactions on Twitter would make you obnoxious on Facebook.”

So, which is more important to your Klout score—your Facebook or Twitter activity? That depends, says Joe. “We look at each platform holistically to determine what the signals of influence are. We then perform sophisticated analysis to weight the different platforms appropriately for each person.”

Among the criticisms that Klout and other influence tools have faced is that people who blabber a lot and thus get a proportionally high number of retweets and replies can earn higher scores even though they may actually exert little influence over others. Joe acknowledges this is challenge but is confident true signals of influence are locked in the data. “The data is there to begin closing the loop. We look at things like the ripple effect in your network when you ‘Like’ something on FB and whether your content gets retweeted into networks far beyond your own.”

Still, there must be a difference between posting something that people retweet because it causes them to think versus something many people retweet because they merely like it. The most retweeted thing I posted in the past 30 days was a comment about the erroneous doomsday prediction: “If tomorrow is the end of times, I want to thank my Twitter followers for the great ride. If tomorrow isn't the end of times, see U Monday.” That rippled, but did I actually earn influence?

Joe says that depends on two things--what happens next and whether that tweet aligned with topics I typically share. "We don't judge some content as better than any other—we let people do that for us through their reactions. Your example is part of the reason we also show topical influence on someone's Klout profile. If you are looking for a marketing expert, you need to ensure not only that they have a high Klout Score but they are influential on subjects that make sense, such as marketing or social media as opposed to cooking or something unrelated to your company."

I asked Joe about the objections Klout faced when an experiment demonstrated that a retweeting bot could rapidly earn high Klout scores. Joe acknowledges the challenge but argues that not all bots are created equal. “We have whole science team who is devoted to ensuring our scores and analysis are accurate. Bot detection is part of what they are working on. They then try to analyze how being a bot affects your influence. For instance, @Techcrunch may simply be a bot—a feed of their articles—but to say it is not influential would be unrealistic. We try to look at both sides of every issue when it comes to measurement.”

But is TechCrunch’s Twitter profile a bot?  In my definition, it isn't because @TechCrunch shares original and highly-influential content produced by TechCrunch bloggers. Joe approaches the bot question from another perspective; he sees a difference between a bot, which may automatically feed valuable and influential content, and a spambot that merely posts nonsensical or misleading content.  Notes Joe, "Our science team is continuously working on methods to detect spammers and reduce their Klout. This is a challenging problem that even Twitter has not solved yet, but we love the challenge and take great pride in the accuracy of our score."

Another challenge I offered to Joe was to explain how Josh Bernoff, a best-selling author and in-demand speaker, earns a lower Klout score than I do. No reasonable measurement of influence would make this mistake. Joe admits Klout has room to grow in measuring real-world influence: “Influence is absolutely contextual, and that is why we are looking to add more networks all the time. Right now, Klout measures influence on Twitter and Facebook and is not necessarily a good measure of offline influence. Every day we hope to take in more data and become more accurate.”

Joe tackled the offline-versus-online influence challenge in a humorous and thoughtful post on the Klout blog. In it, he explores how it is Justin Bieber can earn a higher Klout score than President Obama. Joe posted, “Justin Bieber is one of the first worldwide pop stars to figure out how to influence his fan base efficiently through social media and he has done it at a level we have never seen happen before. If Barack Obama and his team wanted to be more influential than Justin Bieber online I am sure they could be. However, given the level of engagement of each of their networks and the actions they drive, that just isn’t the case right now.” In other words, Obama can change the world, but he doesn’t engage enough on Twitter to have this influence demonstrated and measured in social channels. 

As an influence tool should, Klout recognizes that earning influence is difficult. Collecting a lot of followers is easy—you can use a number of tools to auto-follow thousands of people. But it is much more difficult to say something that not only your followers will repeat but their followers will. Notes Joe, “We don't think followers are a good metric for influence. The soccer mom with a hundred friends on Facebook may actually be more influential than the social media professional with thousands of followers on Twitter. It all depends on topical expertise and how engaged and influential your network is.”

Joe knows that Klout’s work will never be done. “Our goal is to never be satisfied and always innovate. Our science team is working on better bot detection, spam detection, improved algorithms, and adding new networks. We are also working on making Klout a more social experience—influence is most relevant in the context of your peers, not in a vacuum.” The idea of an influence measurement tool that is social makes great sense; after all, without socialization there can be no influence. Toward this end, Klout recently rolled out a new version with the goal of allowing you to “own your own Klout.”

I appreciate the time Joe has taken to share his insights about influence and Klout. There’s so much more to be explored as our understanding of influence measurement grows, and I hope to continue to engage Joe on the topic in the future.

Thursday, May 26, 2011

PeerIndex, Influence and the “Magic Middle”: Insights from CEO Azeem Azhar

Influence is a term that is tossed around a lot in social media circles and is done so quite lightly. People pursue and grow their influence, brands want to leverage influencers and a new breed of tools strives to define influence and identify influencers. But influence has always been a slippery concept, defying easy definitions and metrics. To learn more, I interviewed Azeem Azhar, founder and CEO of PeerIndex (PI), a technology company that applies a scientific approach to the problem of influence. (If you’re not familiar with PI, you can check out my public PeerIndex profile here.)

Ironically, Azeem starts by tossing the term “influence” into the trashcan. “In a broad generic sense we know what we mean by influence, but in a specific sense it truly breaks down.” Instead of the term “influencer,” he prefers to use “peer opinion leader.” Azeem notes that opinions matter, but only the opinions from people others find trustworthy within specific domains of interest. “Expertise and influence rarely cross boundaries,” he says, although Azeem notes there are exceptions to the rule--polymaths such as Paul Kedrosky who manage to earn high topic PI scores across a range of very diverse topics.

While there are those who seek to game influence and amass tens of thousands of followers in automated ways, none of that delivers true influence or opinion leadership. “Simplistic counting mechanisms that reward the inane and popular do not reflect the discrimination with which most people and businesses make decisions,” Azeem notes.

PeerIndex’s solution to this problem is to separate the social media signals that are “cheap” from the ones that are “expensive.” “Following someone on Twitter is cheap. Retweeting a tweet to all your followers is expensive because you impose a cost on them. Getting a smart, busy, respected person to retweet a tweet of yours is even harder and more expensive.”

I love Azeem’s use of the terms “cheap” and “expensive” in this context, because it reminds us that the essentials of relationship building are not altered in social media. A “cheap” automated DM that thanks users is not the same as an “expensive” personalized DM that conveys specific curiosity in a new follower. Building relationships is and should be difficult, and PI's approach reinforces the precept that there are no “cheap” shortcuts.

PeerIndex evaluates opinion leadership in ways that might seem obvious and in other ways that are not. Of course, it helps to get many people commenting and replying and to be added to Twitter lists, but much like Google’s search engine algorithm, quality matters—not every retweet from every Twitterer is equal.

Another key to building your opinion leadership is to narrow your topics. As noted, it is difficult to be an opinion leader across multiple topics. “Your activity density in that topic matters--it is harder to be a Peer Opinion Leader across multiple topics,” notes Azeem. In other words, if your goal is to build influence, focus on a topic and the people who matter in that topic domain.

PeerIndex’s model goes even deeper to find those with real influence, not just Twitterers with many connections and interactions. The company’s system values more highly people who say something other people will come to believe or agree with and finds the people who are viewed as knowledgeable by their peers. Here again, the concepts of “cheap” and “expensive” resonate—it’s “cheap” to auto follow many but “expensive” to earn trust and be seen as knowledgeable by others.

Azeem brings a refreshing humility to his discussion of PeerIndex and admits the technology is still early. For example, automated bots can earn high influence scores merely by systematically retweeting others. Azeem notes this is a problem, “but we do a better job of identifying bots than anyone else I have seen,” and he points to PI’s code which performs “bot identification and punishment.” Azeem also invites people to bring any problems they may see in PI to his attention: “Tell us about them - it’s the best way we can improve.”

Among the challenges that PeerIndex is working on is to find ways to assess “real world authority.” Today’s tools overemphasize social at the expense of other channels, a problem Azeem calls the “Shirky problem” after Clay Shirky, author and professor on digital culture. “Clay rarely tweets, but he builds amazing theses and publishes books that literally create industry sectors for the next ten years. Should he have a sucky PI score? No way! The data to take into account other, often more important, channels exists; we just have to get around to indexing it.”

In my discussion with Azeem, we turned repeatedly to how influence cannot be confined into a single score because influence is created within specific topic domains. He said to me, “I would trust you on the subject of peer influence marketing, but I wouldn’t trust you on the topic of neuro-oncology. Sorry!” (No apology necessary!) To overcome this problem and appropriately reflect opinion leadership within topic domains, Azeem says, “We already measure topic PI across more than 3000 topics, and that number is growing. We can also estimate it on any arbitrary topic–even one we haven’t seen before.”

Azeem admits the current PeerIndex site does not do an adequate job of reflecting the number of topic domains monitored or how specific opinion leadership accrues to individuals. Currently, the site provides an individual’s scores in specific topics based on frequency of discussion and resonance, but changes are coming to the PeerIndex interface.

As you might imagine, PeerIndex’s business model is based on assisting brands to find the right opinion leaders within their product categories. I found it interesting that when PI works with brands, they neither focus on overall PI scores nor ignore them completely either. “As we work with brands, we focus on topic PI scores as a first pass and then cut by overall PI score as a final sense check, not the other way round. The reason is that someone with a very high topic PI of 70 in Computer Security may be a specialist with a more moderate overall PI, such as 40. If we cut first on the overall PI score, we’d lose this key expert.”

As a former Forrester analyst, one of my great concerns with the focus on influence is that it can miss the point—the key to success isn’t to find the few with massive influence but the many who represent mass influence. Azeem agrees, which is why PeerIndex steers brands toward the “Magic Middle,” a term coined by Charlie Osmond, CEO of FreshNetworks.

Says Azeem, “The obvious top-twenty bloggers in a given topic resemble media outlets--inundated in tips and leads and with audiences so wide they are restricted in who they can engage with personally.” Rather than focus on those, PI “directs brands to the tier below the most obvious names--towards people who show strong affinity and influence and who have engaged networks in that topic. Engage with enough of these and you’ll unleash ‘mass influence.’”

I appreciate Azeem taking the time to share insights on influence—excuse me, I mean peer opinion leadership. I hope we’ll continue the dialog, because the topics of influence and influence measurement will remain essential ones for social media professionals. Also of note, I posed many of the same questions to Joe Fernandez, CEO of Klout, and I will soon share his perspectives on these fascinating topics.

Wednesday, May 25, 2011

Learn From My Facebook Flub: Two Lessons to Keep You Safe

Yesterday, I became "that guy."  I'm an experienced social media professional, know the dangers of mistaking personal and professional accounts, and had just this week discussed with my team ways to diminish the risks of mixing up accounts when posting to social media sites. And yet, last night I made the classic social media blunder: Thinking I was on my personal Facebook page, I accidentally made a status update that resulted in my employer, USAA, broadcasting an opinion of American Idol's final duo.

It's not that our brand isn't personal or doesn't have personality in social media; in fact, it's not outside the range of possibility that the community managers on my team might decide to start a conversation about American Idol with our members on Facebook. But, that should be a carefully considered post and not something done carelessly.

I rapidly deleted my post, but not before it garnered some "likes" and a few comments, both positive and negative. Then, moments later, someone added a comment to the USAA wall asking if a Facebook administrator had just mistakenly posted a personal thought to the corporate fan page. Guilty! I fessed up (with my real name) and apologized. I got some nice supporting comments (since our members are the best and are willing to forgive), and life went on.

I'm ashamed and asked my community managers to (literally) slap my hands with a ruler, but they didn't because they're the best and are also willing to forgive. But, I learned a couple lessons worth sharing:
  • Have a personal filter:  The fact you are responsible for a company's social media profile doesn't mean everything you say personally has to reflect the brand's personality, but you must consider the implications of your posts. First, once you are officially associated with a brand, anything you say in your Twitter or other social media streams can reflect upon your employer. Plus, there's always the chance you pull an Augie and mix your personal thoughts into the company's channel.

    My mistake could've been the stuff of headlines--the reason you're reading about my mistake here on my personal blog rather than on ABCNews.com is that the tone and content of my erroneous update were mildly, not wildly, off the mark for my employer's fan page. This is because I have a personal filter. I strive to keep things positive in my social media interactions, so even when I post something negative ("I liked American Idol better before it became Country Idol..."), I attempt to include an equal portion of positivity ("...but both of the finalists earned their way here with hard work.")  If you set a personal social media filter and avoid criticizing entire cities, dropping an F-bomb, or mocking a news organization for blathering, you diminish the risks to both your employer and to you.
  • Keep them separated:  With apologies to The Offspring, you gotta keep 'em separated--your personal and professional social media tools, that is.  For Twitter management, it is too easy to set up both your personal and professional accounts in a single Twitter client such as HootSuite or Tweetdeck. Doing so is a recipe for danger. Use different Twitter clients for different purposes, and you'll greatly reduce the risk.

    Unfortunately. Facebook doesn't easily allow for that sort of separation. If you are the admin for a page, you will post as that page when on the fan page and will post as an individual elsewhere. Since your wall looks a lot like your company's wall, it is easy to fail to notice when you're on one page rather than another, resulting in errant status updates.  One solution is to use a third-party Facebook management tool (which is what we do at USAA), but most administrators still check their fan page in a browser, and therein lies the danger. There isn't much of a solution other than taking care (more than I did), but Facebook could certainly help matters by making your posting state more evident and controllable.
My infraction was minor and the repercussions negligible; I get to keep my job. You may not be so lucky--if you say the wrong thing in the wrong channel, you wouldn't be the first person to lose your job over a seemingly simple mistake. Protect yourself by reconsidering the personal filters and standards you bring to your social media interactions, and sever your personal and professional accounts as much as possible. Doing so could protect your company's reputation--and your job!

Saturday, May 21, 2011

Not Getting What You Want From Social Media? Give More!

Brands participate in social media with the expectation of getting something in return from consumers, and brands should. After all, your company must weigh investments in social media against other needs and demands. But while dollars and cents must be the starting point for corporate social media efforts, brands that fail to shed the financial mindset are destined to create bad social media programs that produce no positive impact on relationships or sales. The problem is reciprocity and how it differs in the business and human spheres.

Brands live in the dispassionate world of accounting, regulation, quarterly reports and ROI while consumers live in the emotional world of feelings, irrationality, relationships and happiness. In the business world, exchanges of value are exact and defined, with reciprocity measured in debits and credits that always balance. But reciprocity in the human world has no such universal or precise rules. Social media is a place where the rules of reciprocity in the business and human worlds collide, and the brands that do not understand this will fail to provide the necessary emotional reasons for consumers to reciprocate in valuable ways.

Reciprocity in social media, while often discussed, is little understood.  A common mistake in social media is to treat reciprocity like a contract--"I followed/retweeted/liked/shared/commented about you, and now I expect you to do the same in return."  Or, even worse, "I gave you a coupon, and now I expect you will advocate on my behalf to your friends and family."  That line of logic is mistaken because it applies the rigor of business reciprocity to the emotional and subconscious processes that create human reciprocity.

Devising the right social media approach requires strategists who can begin the journey in the business world (with cost-benefit assessments, metrics and yearlong strategic calendars) but end in the human world (with an understanding of emotions, real-time needs and irrational reciprocity). If a brand wishes to create action that matters, such as sparking advocates to actively champion a product, it must do so with more emotion than logic.

It's not that humans never reciprocate logically, but that logical reciprocation is a zero sum game--the value of the reciprocal action is less than or equal to the cost. A coupon can cause people to purchase a product, but it cannot get them to repurchase it, much less tattoo the logo onto their body. To spark a substantially unequal reciprocal action requires an appeal to emotion, not to logic. This is why most corporate demo videos uploaded to YouTube collect a couple hundred views while "Will it Blend?" now tops 161 million views.

When faced with an emotionally powerful experience or offer, humans do not act predictably but rather come to decisions based on complex subconscious mental calculations. We humans consider reciprocity from several angles including:

  • The reason for making the offer: Why was this positive action made toward me? What are the motives on the part of the other party?  What might I have done to deserve it?
  • The value of the gift given:  How valuable is this gift or offer to me, based on my situation and set of experiences?
  • The cost of the gift given: How much did it cost for the other party to extend this offer, and how much additional cost will they incur if I accept?
  • The uniqueness of the offer:  Is this a personalized offer made only to me, or is this something that the other party will give to others?
  • The implications of reciprocity: How will reciprocating affect my reputation among others?  How will it alter my relationship with the party who extended the gift or offer? What are the costs of reciprocating?
  • Variance from expected norm:  How does this positive action differ from my what I expect of the other party?
  • Options for reciprocating: How can I reciprocate? Which option best satisfies the feeling I have to reciprocate?   
Considered from this vantage point, it is easy to see how offering a free bagel in exchange for a Facebook "like" is a poor social media program, no matter the objectively measurable outcome.  Einstein Bagels made just such as offer, and it garnered a 7,000% increase in Facebook fans in just three days. That is the stuff of many headlines, but a few quarters later, Einstein's parent company reported disappointing revenue with same-store sales down more than a percent, and it has some of the lowest growth in the restaurant industry.  A free bagel was a substantial variance from the norm, but the reason for making the offer was logical and monetary, the offer was unemotional, and a Facebook "like" creates little  value for the brand. Einstein got "likes" and gave away bagels, but it didn't deepen relationships or spark advocacy. 

Contrast that to P&G's social media campaign for "Let Her Jump," which used an emotional video to advocate for ski jumping to be included as a sport in the upcoming Winter Olympics. Among women who viewed the Let Her Jump video, 57 percent reported that their impression of the brand had improved, and the brand saw a 50 percent jump in purchase intent among those who viewed the video. In addition, clinical sales increased 8 percent, despite cutting TV support by 70 percent. 

This sort of emotional appeal has become part of Secret's brand strategy in social media.  According to Ad Age, a woman wrote on Secret's Facebook wall that she couldn't buy Secret in Spain, and P&G was not able to simply send her products because of customs regulations. The solution? An agency executive took some of the deodorant on an unrelated trip to Italy and mailed the woman Secret from there.

Consider Secret's social media strategy against the ways humans evaluate reciprocation, and it's easy to recognize why it succeeded; the appeal from Secret was unexpected and emotional, and it spoke to something bigger than underarms and discounts. Secret's brand and social strategy is paying off in store aisles--in the year ending October 31, 2010, Secret was the second-best-selling brand of deodorant in the US and Secret Clinical Strength was fourth.

The message for brands is clear:  You need to give consumers more in social media--not more discounts or other logical benefits but more emotional reasons to engage with, share and consider the brand.  Any brand can launch a Facebook page, upload a video to YouTube or create a Twitter sweepstakes, but how many brands can dig deep and create an emotional connection that sparks the desire in consumers to reciprocate in big, visible and unequal ways?  

Before you answer with an excuse about how your category is low engagement, consider the example presented.  How many of you have "friended" your underarm deodorant on Facebook?  Yet P&G found a way to create significant and valuable reciprocity in social channels. They didn't do it by raving about Secret's product features or offering coupons--they offered more and got more. 

If you're disappointed with your social media results, don't work harder to fashion strategies with objective tit-for-tat reciprocity; instead, give more--more of yourself, more that matters to consumers and more emotion. People may buy once because you've made them think, but they buy and advocate often for those brand that make them feel.  

Sunday, May 15, 2011

Three Qualities You Don't Know You Need in a Social Media Leader

It's a hot time to have social media skills.  Over on Simply Hired, there are more job postings containing the term "Social Media" than there are with the words journalism, SEO or Internet Marketing. A recent survey of marketing and advertising executives found that social media is the skill in the greatest demand, with 19 percent planning to add staff in this area.

Many of the job qualifications necessary for a social media leader are quite obvious: Companies want someone who is well engaged in social media, who actively exhibits a passion for the medium and who can demonstrate the ability to see a program from concept through execution with measurable results.

But what really separates the true social media leaders from the mere practitioners?  It isn't tough to find someone who's blogged, managed a community, launched and maintained a Facebook fan page or amassed thousands of followers on Twitter. Those are not the attributes that define leadership in the social media space; instead, there are three essential qualities that can be easy to overlook when hiring a social media leader. (I would be failing to convey a sufficient level of quality #3 if I didn't suggest that these are areas in which I continue to strive to develop in my position at USAA.) The three qualities are:

  • People Leadership:  It may be easy to overlook at this time considering over half of companies indicate they have no or just one person exclusively dedicated to social media, but those hiring a social media leader should beware of candidates who have only filled individual contributor roles in the past. Social is a growing area of expertise and demand, and soon most organizations will find they need at least a handful of people to monitor the social web, manage communities and execute social programs.  Even if many social functions are matrixed across the organization rather than grouped within a single team, the ability to lead, motivate and direct others is essential for social media success. Look for candidates with proven experience leading others.
  • Breadth:  Many organizations continue to hire social media talent as if social media is merely a marketing discipline, but successful social media leaders must be jacks of all trades who understand every corner of the enterprise. It has been too easy to think of social media only as a tool for raising awareness and preference, but the next wave of social media is already breaking, and it's about far more than just communications.  If your social media leader isn't already enabling customer service, market research, product development or commerce within social channels, he or she will soon be called upon to do so. As that happens, the leaders who succeed won't be the ones who can execute a social media campaign but the ones able to partner and collaborate on business opportunities with leaders throughout the enterprise.
  • Humility:  There are a lot of self-declared social media ninjas and gurus out there, and they are to be avoided.  It's not just that someone who takes this title for himself or herself is demonstrating a lack of maturity--the desire to be a ninja should pass around one's tenth birthday--but that it reveals a lack of humility. Too many social media professionals are driven by a desire for fame, increased reputation and higher Klout scores. (I routinely reject any resume that includes a Klout score--and yes, I've seen several!)  Your next social media leader needs to put your company, its brands and its employees first. I'm not suggesting that a social media practitioner with a big reputation must be avoided, but he or she must be able to convey how companies and not just individuals are advanced in social media, because those are different challenges. 
In short, your organization's next social media leader will need to be at least as much leader as he or she is social media expert. It is no longer difficult to recruit professionals at different levels who have social media experience, but finding those with leadership experience, breadth and humility is far more difficult.  The discipline of social media is growing up, and it's time for our social media leaders to do so, as well. 

Sunday, May 8, 2011

What Companies Get Wrong About Customer Service in the Social Era

The blogosphere is full of horrifying examples of customer service and commentaries about the dangers of ignoring customers in an era when one pissed-off person can distribute their experience to thousands (or ten million).  A friend shared just such an example--a response he received from model company Revell, Inc. It demonstrates a problem common among companies nowadays: Brands don't face social media PR disasters as a result of isolated mistakes but instead create reputation problems with a preventable and cascading series of careless decisions and actions.

In recent years, I've spoken with many corporate leaders who convey a sense of victimization about social media. On the one hand, they have no choice but to be present and part of the conversation; on the other hand, there is almost a feeling of powerlessness and exploitation about the influence that social media gives complainers and detractors.

There are aspects of this feeling that are accurate--no matter how great the investment in quality assurance and first-rate customer service, some customers are bound to be disappointed and spew complaints in social venues.  Even superior companies like Disney, Harley-Davidson and my employer, USAA, are bound to disappoint occasionally. A company cannot welcome 25 million guests at its resort, sell a quarter million bikes or serve the financial needs of 8 million members without falling short of customer expectations on occasion.

While it's true social media has given a larger voice to the average consumer, the impact of this can be overestimated because corporate leaders may obsess about the things they cannot control while failing to act on those things they can. The three things that companies tend to underestimate as levers at their disposal in the face of social media complaints are:

  • It's not the mistake that matters but how you handle it:  Mistakes happen. No one expects a company with thousands of employees selling millions of products to bat a thousand. What hurts reputation isn't the mistake but what you do next. The insult that companies add to injury is the fuel that fires social media PR disasters.
  • Damage is multiplied when many consumers share similar issues: A single complainer can launch a critical and inflammatory tweet to thousands of followers, but what happens next depends on the overall state of your brand and quality of customer service. If the brand generally makes people happy and enjoys a strong sense of affinity with consumers, that tweet likely falls on deaf ears or may even spark a defensive response from brand advocates. But if the brand has wronged many or is suffering from poor perception, others will be inclined to retweet and turn a single complaint into a sizable number of negative brand impressions.

  • Size matters--different situations require different handling:  The one caveat to the first two points is that size matters in two ways. First, the size of a person's influence cannot be ignored--a relatively minor complaint voiced by someone who has true social media influence (and not just 10,000 followers on Twitter) carries more weight. Is this fair to companies targeted by upset influencers? No, but who said life was fair? Secondly, the greater the size of the damage inflicted on a consumer, the larger the risk to reputation. A single rude encounter with a customer service representative is unacceptable but barely nicks a brand's reputation; however, a single mistake that creates a major or lasting problem for a customer greatly increases the risk that a single complaint gains traction and goes viral. Larger complaints or complaints from larger influencers demand special handling.
The email my friend received from Revell demonstrates the danger of mishandling a customer complaint. Given the opportunity to make a customer happy, the brand fumbled the ball and made a mountain out of a molehill. My friend purchased a model Ferrari for his son, who opened the box and ran outside to paint the body. With paint drying, the father and son returned to the box to find the chrome parts missing. My friend didn't turn to social media to gripe but sent a cordial email requesting the missing part. 

Should be an open and shut case, right? Here's the response my friend received:

This is to acknowledge receipt of your email.
We are at a loss to explain why these parts were missing out of this kit.
The first course of action would have been to return it to the store for either an exchange or refund.  However, you choose to start painting your model before doing an inventory of the parts. 
Revell kits are subjected to extensive quality checks during the manufacturing process to ensure they leave the factory in perfect condition.  Because these kits go through a packing line there would be no way that the (chrome) could be missing from the kit without someone catching it at the end of the packaging line.
Anytime a product is assembled the (chrome) is usually the second to last part that gets packed into the box; then the (body) is laid on top of all the parts.  Upon opening this kit you would have know that the chrome was missing out of it, immediately.  At that time you should have returned it back to the store.    Unfortunately, you had already started to paint this model.  Therefore, we will be unable to replace this kit.
However, we will be more than happy to help you obtain the (chrome parts) for it.  There is a processing fee in order to receive them that we require in advance.  The fee is $15.00.  Please remit payment by Money Order (no other form of payment will be accepted) payable to Revell Inc.  Please include a copy of this email to insure proper handling of your request.
Mail to: Revell Inc; Attn: Replacement Parts (-85-4291); 1850 Howard Street, Unit A; Elk Grove Village, IL 60007
We ask that you not mail in the kit to us as it will be sent back and no replacement kit will be in order.
Once payment is received here in our office we will then process an order for you to receive these parts.
Thanking you in advance for your payment.
How many mistakes did you catch in this response?  My list includes:

  • Business rather than personal language ("This is to acknowledge receipt of your email.")
  • No apology.
  • No empathy.
  • Attempt to convince the customer the mistake couldn't have happened, and in doing so...
  • ... subtly accuses the customer of lying or being mistaken.
  • Blames the customer for mishandling the situation caused by the company's mistake. ("At that time you should have returned it back to the store.")
  • Conveys a robot-like attitude by sending a form message with template tags intact! Note the fill-in-the-blank parenthetical sections: "...no way that the (chrome) could be missing... the (chrome) is usually the second to last part that gets packed into the box; then the (body) is laid on top."
  • Turns a customer service problem into a sales opportunity by offering to solve the problem for $15.
  • Makes it difficult and time consuming to even act upon the unacceptable solution offered--the company requires a money order rather than an easy form of payment.
  • Implies the customer lacks the intelligence to follow instruction ("We ask that you not mail in the kit to us as it will be sent back and no replacement kit will be in order.")
  • Ends a service email with the expectation the customer will pay the fee and does so in the impersonal and passive voice ("Thanking you in advance for your payment").
What makes this response even more egregious is that it differs from the promises made on the Revell web site. The site states

Even with our best effort a part may be missing or broken.
Revell's Parts policy is in place to provide our customers with a quality building experience and was developed to assist with replacing parts that may be missing or broken.
If the kit was purchased from a reputable retailer like those found on our web site and, after removing shrink wrap, a part is missing or broken, Revell will provide a reasonable number of replacement parts at no charge.

Where the web site acknowledges mistakes can happen, the response to my friend does not. And where the Revell site commits to replacing the part for free, the company's response breaks this promise and demands a payment for the missing part. Does the Revell web site purposely misstate its intentions in an attempt to mislead potential purchasers, or did a renegade customer service rep take it upon herself to try to turn this situation into a revenue-generating opportunity?  The significant difference between the promised and actual experiences causes me to wonder if Revell rewards its service reps for generating sales, which would of course undermine the company's commitment to customer service.

Revell had several opportunities to avoid being the subject of this blog post. The company could've sold a complete model kit, could've lived up to the promises it makes, and could've sent a more personal and caring message. To become a social media problem, Revell didn't make one mistake but many. Revell had all the pieces to construct model customer service, but it ignored its own set of instructions.

Companies must recognize the opportunities and risks inherent in their handling of customer service issues. From "United Breaks Guitars" to Dooce's Maytag woes to my friend's Revell model, it isn't a single mistake that creates negative social media impressions but a failure to handle customers' problems with honesty, transparency, empathy and a commitment to do what is right. Getting your reputation right in social media doesn't require you to avoid making mistakes but to avoid multiplying them.

Sunday, May 1, 2011

Empire Avenue: The Road to Hell

"The road to hell is paved with good intentions." This is a saying that I've found thoughtful as a metaphor, but I've not before seen it realized in such a literal way, because now there is an actual (albeit virtual) road that I believe leads to a social media version of hell.

Empire Avenue is a game that also bills itself as an influence measurement mechanism--sort of a gamified version of Klout or PeerIndex. (By the way, I hope to soon feature an interview with Klout CEO Joe Fernandez on this blog.) The site is Farmville for the social media set, where one can "invest in any social media profile by buying their shares, meet new people, unlock Achievement badges, and earn boatloads of virtual cash."

There's always been an element of the fame game among social media gurus, and I admit I've tracked my blog's place on the Ad Age Power150 (a humble 448 now, but I was approaching the top 100 when Forrester asked me to abandon my personal blog) and my Klout score (a respectable 66). But while these sorts of scores have elements of competition, they are not games (or at least aren't intended to be games). To improve one's place on the Ad Age list or Klout requires hard work to offer valuable insight and build a network of engaged peers in order to earn authentic influence.

Now Empire Avenue furnishes a way to dispense with some portion (but not all, thank God) of that hard work. Since it is a game first and a legitimate measure of influence second, blog posts are popping up advising folks how to increase their value on the virtual social media exchange. For example, Eloqua's blog post on the game starts right with "Create Great Content," but it also includes "Advertise." Call me an old grump, but any social media influence mechanism that makes money off advertising as a way for players--excuse me, I mean social media professionals--to increase their score is on thin ice.

Empire Avenue strikes me as the latest in a trend toward tricks and tools that give the illusion of dispensing with hard work and providing an easy short cut to fame, influence, or business success. For example, when Google announced "Google +1," some SEO bloggers began predicting it would become a way to influence Google's search results. While it is unclear exactly how Google intends to use the data it collects from clicks on "+1" buttons, anything that replaces authentic signals of value (such as clicks to content and links from quality sites) with fake ones (clicks on buttons) will diminish rather than enhance Google's search results.

Another example is the practice of rewarding people for clicking the Facebook "Like" button for your brand. One company is currently offering Facebook users an entry into a sweepstakes to win a new hybrid car for those who will "fan" their page, and Einstein Bros Bagel famously gained 400,000 new fans by compensating these people with free bagels.

Obviously, it's much easier to pay people to friend you than it is to earn friends by authoring interesting content or creating great customer experiences, but are both equal in terms of building influence, advocacy, loyalty and business? Of course not; a fan you earn authentically is worth more than a fan who only says they're a fan because you compensated him or her to do so. The former will engage on your Facebook page, spend money with you and recommend you to others while the latter takes their sweepstakes entry and waits for your next discount or promotion.

Empire Avenue is full of good intentions, but I have the nagging feeling it is a road that leads us in the wrong direction. Should authentic social media professionals earn attention via in-game advertising and by trading shares of each other, or should they offer helpful data, insightful analysis, business-building ideas and a world-class network? To those doubters who already think social media is a self-involved fame game, does Empire Avenue send the message that we're narcissistic or that we're serious professionals focusing on serious business?

Obviously, I won't be joining Empire Avenue. If you think I'm missing out on something necessary or valuable, please comment below or tweet me; however, before doing so, visit Time Magazine's list of the most influential people of the last century. If you can envision Albert Einstein, Martin Luther King, Jr. or Mother Teresa signing on to Empire Avenue to test and build their influence, let me know. Otherwise I'm going to take a detour away from shiny, digital Empire Avenue and continue to trudge the timeworn, analog, potholed road to influence.

Both routes are paved with good intentions, but I think one leads to a more pleasant, less infernal place.