"Who owns the customer?"

This is a question I have heard from a wide variety of organizations. Insurance firms wonder if the agent or the company "owns" the customer. B2B firms struggle with sales and account teams that seek to "protect" their clients. CPG brands wish to have more direct customer relations while retailers work to control the customer relationship. And companies with many competing or complementary products and services strive to balance the contradictory needs of different brands and departments.

Author Ursula K. Le Guin once said, "There are no right answers to wrong questions." "Who owns the customer?" is the wrong question. The terrible connotation of asking who owns a human being should be the first hint we're on thin ice. Moreover, it should be easily apparent to everyone that brands don't own or control anything; it is the customer who chooses us, pays for us, and abandons us if we fail to provide the right value or experience vis-a-vis the competition. If you consider this question from the perspective of the customer and not the organization, there is no question that you don't own the customer; he or she owns you.

Thus, the right question is not "Who owns the customer?" but "How best can we serve the customer?" This servitude approach is not simply philosophical but can have a profound effect on the actions of your firm and your employees. To see how important it is to start with the right question and learn the ways it drives better process and outcomes, please visit my Gartner blog for the complete post. Thank you.

photo credit: on strike via photopin (license)

There are times you simply need to destroy what exists in order to replace it with something better. Such is the case for social media. The past seven years have been so full of mistaken beliefs, poor assumptions and outright misinformation that the time has come to reassess completely what social media is, how it works, how consumers use it and what it means for brands.

The fact is that much of the social media dogma we take as gospel has been wrong from the start. As a result, brands are wasting good money to chase irrelevant or even damaging social media outcomes, and the required improvements are not minor adjustments. In many cases, the wrong departments have hired the wrong people to do the wrong things evaluated with the wrong measures.

Together we will burn social media to the ground and rebuild it from scratch. We will do this with data. Data will provide the spark and accelerant that destroys today's social media strategies, and data will also be the bricks and mortar to build a credible and accurate understanding of consumers' social behaviors and the legitimate opportunities available to business.

Destroying Social Media Marketing Myths With Data

Every social media marketer and pundit knows case studies that tease the promise of organic content success. They share and reference the same ones time and again, building false hope that marketers' next social campaign will be Oreo Dunk, #LikeAGirl or Real Beauty. But tear yourself away from the rare and apocryphal stories of success and focus instead on broad, unbiased data, and a different picture emerges.

"Organic social media stopped working." Those words are from the latest Forrester report, "It's Time to Separate the 'Social' From the 'Media.'" This is the same Forrester that in the 1990s counseled IT leaders to pay attention to "Social Computing" and whose 2008 book, Groundswell, introduced many business executives to the ways social media was changing consumers and the marketplace. Today, Forrester is again ahead of the curve, making the case that brand organic opportunities have disappeared and social media marketing has become entirely a paid game. As a result, the research firm recommends that marketing leaders assign their social budgets not to the social team but the media team because, as Forrester notes, "Social ads aren’t social; they’re just ads."

The report states a simple fact that too many content marketers ignore in 2015: "If you can’t get a message to your audience, you can’t very well market to them" Facebook reach for top brands' posts was just 2% of their fans in 2014, and that number will only decrease further this year.

Evidence of social media's remarkably poor reach is all around, and many social media marketers are simply ignoring it (or hoping their bosses do). For all of its brand strength, Coca-Cola's Facebook page this past weekend had a People Talking About This figure--which includes every page like, post like, comment, check-in, share and mention the brand earned in seven days--of just 37,700 people. The world's largest consumer brand (which sells 1.8 billion drinks a day) on the world's largest social network (with 1.5 billion monthly active users) engages fewer people in a week than can fit in one MLB stadium--and not even Dodger Stadium but Kansas City's modest Kauffman Stadium.

Source: Custora Pulse

Not only is reach falling but social has never succeeded in delivering reliable marketing scale, no matter how many case studies suggest otherwise. Social does not deliver purchasers (accounting for 1% of e-commerce sales, compared to 16% for email and 17% for CPC). Social delivers poor conversions (with a conversion rate of 1.17% compared to 2.04% for search and 2.18% for email). Social fails to deliver trust (with B2B buyers rating social media posts among the least important for establishing credibility and just 15% of consumers trusting social posts by companies or brands.) Nor is Social media a major factor in search engine rankings (placing dead last among the nine major factors affecting SEO according to MoZ's 2015 Search Engine Ranking Factors report.)

Rather than hit the brakes, social media marketers are trying to keep their shaky strategies together with wishes and duct tape. For example, marketers are desperately trying to overcome declining organic reach by posting more frequently, but that is not a long-term solution (nor much of a short-term one, either). Another tactic is to chase consumers from one social network to the next for brief windows of organic opportunity. Instagram is the latest social network hyped for delivering higher engagement, but the social platform is busy adding and growing its advertising programs, which means organic reach will rapidly decline on Instagram as it has elsewhere.

Social media marketing has become a house of cards, teetering with lies stacked high since the dawn of the social media era. Entire corporate social media strategies are crafted on baseless assumptions that presume brands can reach prospects and customers in social networks, consumers want and trust brand content, all engagement matters, likes are marketing KPIs and fans and followers are advocates. The best thing social media professionals can do now is to burn down that tower of cards and start from scratch by studying the data, creating new and realistic proof points and producing more effective social media strategies.

Building Social Media Strategies With Data

Starting from square one, please allow me to introduce you to social media and the opportunities available to your company, one fact at a time:

FACT: People take social media seriously, and so should business. 
The numbers are impressive--1.5 billion people use Facebook, 316 million use Twitter, 300 million Instagram and 200 million are on Snapchat. And social media behavior is still growing, with the average usage time rising from 1.66 hours per day in 2013 to 1.72 hours last year. Despite some spurious headlines suggesting Facebook's demise, that social network continues to dominate, with 59% of users accessing the social network two or more times a day (which is two-thirds more than Snapchat or Twitter and 1000% more than Pinterest). What these data points tell us is that social media is important to consumers, and brands should find ways to meet consumers' needs and expectations in the channel. While numbers like these typically tempt marketers into believing social media is a fertile content marketing opportunity, this is not the case because...

Source:  PageFair

FACT: Consumers work hard to block and ignore brand messaging.
Use of adblocking software is on the rise in 2015, having gone up by 41% since last year. Of people who view time-shifted TV, 37% do so because it permits them to skip ads, and 56% skip every commercial when viewing from a DVR. Of those who have seen online pre-roll ads, 94% have skipped them. And 57% of consumers are actively taking steps to avoid brands that bombard them with irrelevant communications, with 69% having unfollowed brands on social channels, closed accounts and cancelled subscriptions. The reason people do this is that...

FACT: Consumers do not trust brand content.
In the latest Edelman Trust Barometer Study, the majority of countries now sit below 50% with regard to trust in business, and this past year trust in business dropped in 16 out of 27 countries. In the US, consumers do not trust text messages, social media posts or ads from brands. Millennials are an especially tough crowd, with only 1 in 100 saying that a compelling advertisement would make them trust a brand more and they place sales and advertising at the bottom of their trust rankings. So, if organic reach is continually declining toward zero and consumers do not welcome or trust brand messaging, should brands abandon their social profiles? Of course not, because...

FACT: Consumers count on brands to be present in social media, particularly on Facebook.
Consumers indicate they expect brands to be available in an average of 3.5 social media channels, and around 80% of consumers expect brands to be present on Facebook. But if we have established consumers do not want or trust brand messaging in social media (or pretty much any other channel), why do consumers want brands on social networks? It isn't for brands to fill their news feeds with a stream of promotional messaging but...

FACT: Consumers expect brands to engage on consumers' terms.
62% of Millennials say that if a brand engages with them on social networks, they are more likely to become a loyal customer. It is not as if brands have no opportunity to listen and engage with consumers one-to-one, considering nearly 50% of people have used social media to praise or complain about a brand in the past month. On the B2B side, 75% of B2B buyers want brands to furnish content of "substance," that helps them to research business ideas, but 93% of brands focus their content on "marketing" their own products and services. Of course, while too many marketers believe broadcasting messages is a way to engage consumers, people do not consider marketing content to be "engagement." Instead, they want brands to treat them individually, listen and respond. For example...

FACT: Consumers want fast, responsive customer care in social media. 
63% expect companies to offer customer service on social media, and one in three social media users prefer to reach out to a brand on social media for customer service. 75% of consumers using social media for customer service expect to hear back in an hour or less; half want a response in real time. But despite the demand for customer care in social media, brands fail to meet expectations; one study found that 33% of consumers who reach out to brands for customer service get no response, while another recent study found four out of five inquiries go unanswered on social media. The stakes are high for brands to get this right. Econsultancy asked consumers how brands performed to resolve recent issues, and of those who said the brand was very ineffective, 46% are still customers (compared to 71% for very effective brands) and 13% shop at the same level (compared to 46% for very effective brands).

FACT: Consumers want to collaborate with brands to develop better products.
42% of Millennials say they are interested in helping companies develop future products and services, and studies have shown, not surprisingly, that customers are more likely to buy products they helped to create. The secret isn't merely to offer a database into which people can dump their product ideas; once again, people want true bilateral engagement with brands. A recent study of ten co-creation projects found that the largest percentage of participants (28 percent) was driven by curiosity and a desire to learn, and another 26% had an interest in building skills.

FACT: Consumers want brands to stand for something, not simply push products and generate profit.
People want more from brands. Consumers do not see a conflict between businesses being profitable and being good for the world--81% agree that a company can take actions that both increase profits and improve the economic and social conditions in the community where it operates. Edelman's 2015 Trust Barometer study also found that half of respondents attribute increased trust in business to the fact that a business enabled them to be a more productive member of society. Edelman found the biggest gap between business importance and business performance on 16 trust attributes was not products and services or even purpose--it was integrity and engagement. The Nielsen Global Survey on Corporate Social Responsibility found much the same, with 55% of global online consumers across 60 countries saying they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact. Millennials have even higher expectations--three-quarters say that it is either fairly or very important that a company gives back to society instead of just making a profit.
In the US, 70% of consumers trust brand and product recommendations from friends and family, which is almost 400% greater than the trust they have in brand posts in social media. Millennials do not trust traditional media and advertising, so they look for the opinions of their friends (37%) and parents (36%) before making purchases. However, marketers continue to struggle with Word of Mouth (WOM)--64% of marketing executives indicated that they believe WOM is the most effective form of marketing but only 6% claim to have mastered it.

Doing Social Media Right

Most companies are doing social wrong and have done it wrong from the beginning. The key to success is to stop most of what today passes for social media strategy and rebuild social plans from the ground up:

• First, create and measure a new definition of WOM. An individual who recommends your brand based on their actual customer experience is gold; a customer who clicks the "heart" button on a pretty photo posted by your brand isn't even tin (and a like that is bought is a stain on the soul of your brand). Now is the time to recognize that not all consumer interactions are equal and to succeed, brands must generate the WOM that matters--not the activities that are easy to manipulate and tabulate but the ones that are difficult and meaningful. Discard the fake WOM strategies created with brand-to-consumer content broadcasted in social channels and focus on the real WOM forged peer-to-peer with customer stories, recommendations and advocacy. Fake WOM gets people to click "like" on something the brand posted; real WOM gets people to tell others why they should trust, try and buy your product or service.
     
• Toss out your social media scorecard immediately. The first step to refocus social activities on what matters is to change what is measured. Stop rewarding employees or agencies for generating engagement that fails to deliver business benefit and start measuring what matters--changes in customer loyalty or consideration, positive and authentic Word of Mouth, inbound traffic that converts, quality lead acquisition and customer satisfaction.
   
• Reconsider what department should lead your social media efforts. Once you have reconsidered the metrics that matter, the next question is who within the organization is best equipped and staffed to deliver on those metrics. If organic social media is not proving an effective marketing channel, should your marketing team be responsible for content creation and managing social media calendars? If one-to-one engagement and responsiveness are the new goals, which department is best staffed to provide what the brand needs and consumers expect in social media? These are vital questions, because whichever department funds and manages social media will expect the outcomes and use the metrics about which they most care. A recent report from Econsultancy makes the case: Among Financial Service firms, just 38% see social media as a channel for retention; the majority sees it geared for acquisition and cross-sell. That means most of these firms are using social media to chase marketing strategies to drive sales (an approach we now know will fail) while the minority have social media strategies designed to improve customer satisfaction, reputation, loyalty and retention--goals generally not associated with Marketing but with Public Relations and Customer Care departments.
        
• Objectively assess the return your brand generates with content marketing in social channels, and stop what is not working. If you are not today validating positive return on marketing content posted to social channels, you certainly will not do so in the future as organic reach crumbles to nothing. Marketers continue to act as if content marketing is destined to work and they have simply failed yet to find the right content marketing strategy. Data tells us otherwise; customers and prospects inundated with marketing messages, distrustful of brand content and protected behind social paywalls and adblocking software are not interested in or available to your content marketing output. Content is essential and has a place in Marketing strategies, but now is the time to rebalance the investment the brand is making to match the return it receives and can expect.
     
• Stop talking at consumers and telling them what you want them to hear. Start listening to customers and responding with what they want and need. Your brand's intent is more evident than your content, and actions speak louder than words. If the best thing your company can think to do with this wonderful one-to-one relationship channel is to talk about itself, you have no right to be disappointed when consumers perceive and punish your company for its self-interest. Brands that win in the social era will not be better at storytelling but in using social media to hear, help, educate, encourage, empower, connect and respond to their customers and prospects as individuals.
    
• Get social customer care right. There is no excuse for failing to staff a customer care team properly, secure the right social media management platform, listen for customer needs in every appropriate social channel, manage inbound messages, answer every question, address every complaint and help every prospect or customer in a timely manner. Self-service and peer-to-peer support are valuable tools, but they are no substitute for getting responsive one-to-one customer care right in a growing (and very public) channel of preference for many of your customers.
    
• Get people talking to each other. Your brand is disappearing from consumers' news feeds (if it has not already), but friends will always see content from the people they know, care and trust. Stop trying to spark engagement using funny, clever, hip, edgy or inspirational content, and stop acting as if authentic peer-to-peer engagement can be bought by paying influencers to tweet about your brand. Find ways to get people talking to each other about their real experiences with your company and its offerings. Engage your happy customers and help them to share their experiences; intercept customers at moments of truth to encourage sharing; build P2P ratings and assistance into every mobile and web experience; connect people to each other in meaningful ways; and more than anything, provide the sorts of product and service experiences people will want to talk about and their friends will find worthy of attention and consideration.

Here is a place to start as you rebuild your company's social media strategies: If your brand never posted another piece of marketing content to Facebook, Twitter or Instagram, how would you demonstrate your firm's values in social channels? If the ability to post promotional messages were taken away, what social media strategies would your company execute to create awareness, attention, consideration, trial and loyalty? If you could no longer rely on your brand journalists, paid influencers, social designers and marketing agencies to create content for social channels, what one-to-one, peer-to-peer, responsive, collaborative, integrated, authentic and meaningful strategies would your brand execute? (Why isn't it doing those things effectively today?)

The question is no longer if the tired, failed strategies of the past seven years will miraculously yield success; it is if your social media leaders are willing to admit the mistakes of the past, throw out what is not working and chart a new course. The data to build practical and potent social media strategies is not hard to find, but it easy to ignore.

"Those who cannot remember the past are condemned to repeat it."
  - George Santayana

photo credit: Hampton Roads Partnership via photopin cc

In my last post about the Collaborative Economy, we examined the companies that made mistakes at the beginning of the Internet era in order to learn what organizations can do differently today, at the beginning of the collaborative era. Many large companies were too confident in their existing brand strength and business models, so they did not see the need to innovate until new consumer behaviors were already diminishing revenue and income streams. The result was the collapse of companies that were household names with long histories of growth and profitability.
My friend Brett King, founder of Moven, challenged me to repeat the exercise, this time studying firms that succeeded with Internet transformation rather than those that failed. It is in an excellent idea, since not all established organizations were impacted equally. Even in industries where many strong companies crumbled, a few bucked the trend. What did they do that kept them solvent while others failed, and how can we apply these lessons as the Collaborative Economy emerges and grows? Here are the three examples we will explore:

• Source: Piotr Cieślak

  Film and Photography: Kodak, the most powerful name in photography for many decades, died and emerged from Chapter 11 a different company dedicated to corporate digital imaging. Agfa-Gevaert spun off its consumer division in 2004, but less than a year later that company filed bankruptcy and today Agfa-Gevaert is entirely B2B. Of the three largest companies that were once known for film, only Fujifilm avoided collapse; its stock is down 10% in the past decade, a huge success versus the traditional competitors the company had at the start of the Internet era.
    
• Bookstores: B. Dalton, Waldenbooks and Borders once operated more than 2,000 stores--all are gone. Today, Barnes & Noble is the only significant bookstore chain left in the US; it now owns two-thirds of the country's retail bookshelves. As with Fuji, B&N's success is relative--its stock is down 32% in the past decade and there is no assurance it will be around in five years--but it is worth considering how B&N managed to fail much more slowly than the competitors it had entering the Internet era.
   

Source: Daniel Oines

• Electronics: Circuit City, CompUSA and hundreds of small computer and consumer electronics (CE) retailers are defunct, but Best Buy soldiers on in a subcategory that has been fundamentally altered by the Internet. NPD Group found that more than 27% of U.S. CE spending took place online last holiday quarter, and about 40% of U.S. shoppers say they have tested products in stores before buying them online; in fact, Best Buy is one of the top two stores for "showrooming." Despite the unique and profound challenges of tech retailing, Best Buy's stock is at almost the same price it was a decade ago.  

Why Not Focus on the Successful Startups?

Before examining Fuji, B&N and Best Buy, it is worth explaining why we must look at these three companies--none of which have positive stock performance in the past ten years--instead of companies like Amazon, Ebay and Google, which have thrived. Too often, authors and bloggers hold up startups as examples for well-established companies to follow, but that naive approach is neither fair nor helpful.

VC investors have different expectations about risk and return than do Fortune 500 shareholders. Source: Amplifier Ventures

Startups operate with vastly different expectations than established firms, and the risk tolerance for Venture Capital (VC) investors is wildly divergent from that of Fortune 500 shareholders. Three out of four venture-backed firms fail, a survival percentage that no Fortune 500 company can emulate. Unlike VC investors, shareholders of public corporations do not reward expensive, high-risk investments that may (or may not) deliver fabulous profits years in the future.

For example, back in the early days of the Internet era, no leadership team at a Fortune 500 retailer would have been permitted to follow the lead of Amazon, which lost almost $3 billion between 1998 and 2002. With Amazon's stock down 90% and Pets.com and eToys dead, the shareholders of traditional retailers were not demanding or interested in a costly Amazon-like approach.

Just last year, despite a six-year 80% drop in its stock, JCPenney's board canned CEO Ron Johnson after only 17 months when his aggressive plan to resuscitate the retailer resulted in a net loss of $552 million. Even in 2013, with everyone wondering about JCPenney's ability to survive, its shareholders were still unwilling to accept any sort of high-risk business strategy!

Today, with the Collaborative Economy growing, established companies may look to startups like Airbnb, Uber, Lyft and Lending Club for ideas and partnerships, but this does not mean they can adopt the same strategies or risk appetite. As today's publicly held companies consider how to react to the Collaborative Economy, they should look to the lessons of Fuji, B&N and Best Buy--firms that entered the Internet era as reputable and successful corporations with millions of shareholders, not no-names backed by a handful of high-risk investors.

What did Barnes & Noble do differently than Borders? How did Fujifilm outlive Kodak? And why is Best Buy alive while Circuit City is buried and Radio Shack is the walking dead? These are lessons worth considering at the dawn of the Collaborative Economy era.

Barnes & Noble vs Borders

Barnes & Noble may not be a success story--its stock is down and the company closed more than half the 1500 stores it operated in 1999--but B&N is the lone survivor in book retailing. What caused B&N to fail slower than all of its competition? If you are expecting a mention of the Nook at this point, you are right but perhaps for the wrong reason. The Nook was B&N's attempt to compete with Amazon on Amazon's turf, and it has not been successful.

Launched in 2009 against the already established Amazon Kindle, the Nook received some early praise, with The Atlantic calling it a "Kindle killer" and Wired predicting Kindle owners would have "buyer's remorse." But the Nook could not compete against the Kindle e-reader, much less the slew of even more powerful tablets that soon came to market.

In the last four years, the Nook division has bled more than $1 billion. In fact, twenty years into the Internet era, B&N is being sustained by bricks and mortar and dragged down by its digital offerings--Nook's $475M loss in 2013FY almost equaled the $485M profit on bookstores. Nook's days are numbered, as B&N has announced it will spin off the plunging Nook business.

B&N deserves credit for trying this innovative route, but its Nook strategy was more focused on the company's past than consumers' future. B&N saw the Nook as a way to extend the bookstore model into mobile whereas others aggressively pursued the full potential of tablets as more than just a replacement for paper books. Amazon's Kindle started as an e-reader, but in 2011 Amazon followed Apple's lead with a fully functional tablet computing device, the Kindle Fire. B&N was not prepared for the constant demand for hardware innovation, and its device was left behind, a common problem that has tripped even companies with deep tech roots such as Dell, Compaq, Palm and Blackberry.

While digital hardware and distribution is not B&N's future, the company still perseveres where its competitors failed. Part of B&N's continued survival is simply due to the reduction in competition, since many people still like to sit in a quiet bookstore, enjoy a latte and leaf through a paper book. Why is B&N the last bookstore standing?

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”
                                      ― Peter F. Drucker

One of the mistakes that successful companies make when faced with profound change in the business environment is to believe that their loyal customers will stay loyal, both to the brand and traditional business processes. Of course, building customer devotion is a necessity for brands nowadays, but leaders must recognize that today's strong brand loyalty offers no protection against significant changes in consumer expectations and behaviors.

This is an especially vital message now as we witness the birth and growth of the collaborative economy. No brand, regardless of existing consumer preference and loyalty, can avoid innovating to meet consumers' evolving expectations around sharing, renting, collective consumption and P2P (peer-to-peer) commerce.

I love the Drucker quote that leads off this blog post, although I would change one word, replacing "marketing" with "Customer Experience" (CX). At the time he said it, Drucker was referring to the old "Four Ps" model of marketing--product, price, place and promotion; nowadays, too many marketers are concerned with Promotion, leaving the other Ps to different parts of the organization. Nonetheless, what he says is that today's success is not enough; marketing and CX can create strong customer relationships today, but innovation is what creates strong customer relationships tomorrow.

Of course, studies demonstrate Drucker was correct. For example, in "The Living Company," Arie De Geus shares a study completed by Royal Dutch/Shell Group. Researchers examined similarities in companies that have existed since the nineteenth century. The study found that companies that enjoy long-term success share four attributes. Two do not pertain to innovation, but are important nonetheless--successful companies are fiscally conservative and have strong cultures with a firm sense of identity. The remaining two factors speak to the way innovation is baked into the core of their business:

• Successful companies are sensitive to their environment: "As wars, depressions, technologies, and political changes surged and ebbed around them, they always seemed to excel at keeping their feelers out, tuned to what-ever was going on around them." These companies "managed to react in timely fashion to the conditions of society around them."
   
• Successful companies are decentralized: De Geus later rethought the word and redefined it as "tolerant." He notes, "These companies were particularly tolerant of activities on the margin: outliers, experiments, and eccentricities within the boundaries of the cohesive firm, which kept stretching their understanding of possibilities."

Source: Econsultancy

History teaches us that today's brand strength furnishes no protection against the need to innovate. This has never been more true than today; while innovation has always been important, as the pace of change increases, the demand for business innovation grows. That companies today struggle with the quickening pace of innovation is apparent, as the average age of organizations in the S&P 500 has dropped from 60 years to less than twenty in the course of the past five decades.

We can examine what has occurred over the Internet era to see many obvious examples of companies that quickly failed despite very strong brand preference and customer loyalty. This loyalty meant little once the companies could not provide a product that met the changing needs and expectations of customers:

• Source: Journalism.org

  Newspapers: By the late 1990s, newspapers had seen an uninterrupted 40-year increase in both ad and circulation revenue. At the time, many in the news business saw the Internet as little risk given the high levels of subscriptions and trust people had in print media and low usage and trust consumers had for information on the Web. Newspaper were riding high with strong consumer perception and profitable business models. Then Craigslist and eBay launched P2P marketplaces, Monster created a digital job board and dozens of news sites like CNN.com and SFGate gained traction.
  
  The result was the rapid destruction of newspapers’ business models. Classified advertising dropped almost 80% in thirteen years and continues to fall today--down another 10.5% between 2012 and 2013. Circulation declines have not been as severe, but the trend has been consistently downward. In 2012, total daily newspaper circulation and total Sunday newspaper circulation were each equivalent to about one-third of U.S. households, down from around 55% in 2000.
  
  Newspapers could have innovated with consumer behaviors, but instead they are playing catch-up. The recent release of the New York Times' digital strategy demonstrates just how much change newspapers still must undertake because they relied on existing customer loyalty and business models rather than on innovation. The question is if newspapers can adjust in time--in recent weeks Gannett, Tribune Company and E. W. Scripps, all empires built on the newspaper business, spun off their newspapers into separate businesses in order to reduce the earnings drag on their bottom line. The New York Times said the newspapers were "kicked to the curb" and questioned if they can survive (or if anyone will notice or care if they disappear).
    

• Source: Zap2It.com

  Television Networks: Around 1980, the three big television networks had seen three decades of substantial growth in ratings, with viewers per season rising from 6 million in the early 1950s to more than 15 million around 1980. The launch of satellite and cable networks seemed a minor inconvenience, but it began a significant decline that only accelerated as the adoption of the Internet provided entertainment and video alternatives.
  
  The national networks have suffered a 50% decline in viewers by season over the last three decades. Today, there are even greater signs of change ahead; while traditional TV watching among older demographics has been steady in recent years, younger people are increasingly tuning out. In the past three years, Q1 TV viewing by 18-24-year-olds dropped by 4-and-a-half hours per week, or around 40 minutes per day.
  
  Television networks did not adjust to the Internet age. People were recording and sharing their favorite TV shows via filesharing sites years before the networks would acknowledge the online demand for their content. The networks were slow to innovate, leaving openings for a slew of startups (many with dubious legal models) including Napster, The Pirate Bay and even YouTube (which in the early going was subject to great wrath from the networks for not preventing sharing of their IP.)
  
  Today, less than ten years after YouTube's launch, its growing ad revenue is beginning to approach that of some cable and national TV networks. Meanwhile, a recent New York Times article notes that “no one really talks about the broadcast side anymore;" investors care more about the cable channels that the parent companies also own more than the big national networks. The enormous power and viewership of the national TV networks in 1980 could not prevent the 30-year decline of their business model as others innovated more rapidly.
   

• Source: WSJ.com

  Retail:  By the late 90s, national retailers were riding high after decades of strong growth. Their enormous purchasing power had allowed them to shoulder smaller competitors out of the way. In 1948, single-location retailers accounted for 70.4% of US retail, but by 1997 this percentage had fallen to 39%; meanwhile, sales from chains with more than 100 locations grew from just 12.3% in 1948 to 36.9% in 1997. Worry about those tiny, money-losing online eretailers? Ha! Why would loyal customers begin to trust their credit card numbers and retail purchases online?!
  
  Less then twenty years later, Borders, Circuit City and Linens 'n Things are gone. Other retailers--ones that not long ago possessed high levels of consumer trust and loyalty--are on life support, and few believe they can pull out of their death spirals. Radio Shack may not survive through the coming holiday season. And Sears Holdings, including both Sears and Kmart, have experienced constant declines in same-store sales over the past three years. (Since the beginning of 2011, the stock of Sears Holding has dropped almost 50%.)
  
  I recently wrote about the lessons companies should learn from Borders' failure, but here is perhaps the most surprising fact about the chain's demise: Just six months before the company filed for Chapter 11 bankruptcy, Forrester declared Borders the top company in the nation in its Customer Experience Index (CxP). The research firm surveyed consumers for opinions on their experiences with over 150 brands, and customers put Borders at the top. At the very same time that Borders had the strongest customer perception in the country, it failed.
   

A free ebook in progress, being created one blog post at a time:
	Four Mistakes Made By Borders And How To Apply The Lessons To The Collaborative Economy The Innovation Imperative: Customer Loyalty Won't Save Your Company From the Collaborative Economy New (and Very Old) Consumer Attitudes Support Rapid Growth in the Collaborative Economy Old, New, Newer and New Newer: The Past, Present and Future of the Collaborative Economy
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I entered the corporate world three decades ago, and right from the start, I felt there was no affliction more common or damaging than Brand Schizophrenia (BS). This very common but poorly understood disease occurs when business leaders concentrate only on what they want professionally while ignoring what they, themselves, expect from brands as consumers.

The BS schism between "What I need from consumers" and "What I expect and do as a consumer" is a serious problem. By failing to recognize their own preferences, expectations and habits as consumers, business leaders construct and deploy brand strategies that fail to meet their customers' preferences, expectations and habits.

BS can be seen everywhere. CPG marketers who skip every single ad on their DVR continue to purchase TV advertising; customer care leaders who go apoplectic if they are put on hold nonetheless minimize call center staff and expect customers to patiently wait on hold (while lying about "unexpectedly high call volume"); automakers who would never use a product that put their families at risk calculate whether it is less expensive to recall cars or pay off a few widows. Business leaders routinely treat others in ways they would never accept themselves; that's BS.

The problems in social media may not be life or death, but today's corporate social media strategies are rife with BS. People who hate to see "like this if you're glad it's Friday" in their news feeds use identical tactics to game "engagement" on their own brand fan pages; social media pros who demand brands respond to their tweeted complaints still routinely ignore their company's customers on Twitter; and content managers who would never take the time to read a salesy brand blog post still invest in content strategies to develop the Internet's 44,600th article on the value of whole life insurance. (Seriously, that is the number of hits you get when you search for "value of whole life insurance!")

photo credit: Chris Blakeley via photopin cc

Too many social media marketing strategies are the result of BS. Social leaders expect their consumers to engage in ways they would not as consumers. Do you suffer from Social Media BS? Here is a brief ten-minute exercise to see if you suffer from BS:

Step One: Get a pen and piece of paper or open a blank Word, Notepad or TextEdit document.

Step Two: Capture every brand for which you would advocate in social or real life. Let's first be clear on the definition of an advocate. In the social era, we have conflated customers, loyal customers, fans and advocates into one sloppy category, but they are not the same. An advocate is someone who will jump into a conversation to protect and defend a brand against criticism, or someone who would actively act to encourage people to buy the brand. For the purpose of this exercise, only include the brands you would actively defend if a friend took the brand to task or have unequivocally recommended a friend buy. (After all, an advocate unwilling to advocate is not an advocate.)

Step Three: Create a list of all the brands whose content you can recall seeing in your Facebook news feed. Do not include media brands (FOX, CNN, Mashable, Upworthy, etc.), since they are in the business of disseminating content, and exclude brands that got into your news feed using paid or sponsored means; let's just focus on earned media.

Please do not simply read this blog post and skip the exercise. Being aware of BS is not the same as recognizing how deeply you are afflicted with your own BS. Do not proceed until you have taken a few minutes to complete those three simple steps.

Don't worry, I'll wait while you create your two lists. To ensure you give yourself some time, here is the Jeopardy theme song to play while you consider your answers:



Done? Good! Now, let's ask a few questions:

Question One:  How many brands are on your advocate list? In my experience, most people have trouble creating a list of more than a dozen brands for which they would really advocate. Eliminate the small number of brands that almost everyone includes on their list (such as Apple, Google, Whole Foods, Starbucks, Disney, Coca-Cola, USAA, Uber, JetBlue, etc.), and what remains is a tiny number of advocate-earning brands.
BS questions: If you didn't work at your company, would it be on your list? Do you think it is on your friends' lists? 

Question Two:  What percentage of the brands you buy and use are on your advocate list? Do a rough calculation of the brands in your life. Open your refrigerator and pantry and estimate the number of brands in your kitchen (soda, cheese, fruit, cereal, cooking oil, paper towel, etc.) Then go to your bathroom and estimate (toothpaste, cosmetics, bandages, soap, shampoo, etc.)  Then think of your car (gas, oil, windshield wipers), office (paper clips, stapler, pens, paper), closet (shoes, shirts) and devices (hardware, apps, games, etc.) Is the percentage of brands for which you would advocate more than a couple percentage points of the brands you purchase and use?
BS question: What are the chances your brand is in your customers' few percentage points? 

Question Three:  For how many of the brands on your advocate list have you actually advocated in the last three months?  In the last several months, have you posted a positive review? Tweeted praise? Written a blog post about how wonderful the brand is? Clicking like or commenting on a piece of content does not count; first of all, that is not really "advocacy" as we have defined it and second, when is the last time you have seen something in your news feed just because a friend "liked" or commented on a post? Chances are you have actively advocated for few, perhaps none, of the brands on your advocacy list.
BS question: Do you expect large numbers of your customers to actively advocate on your brands' behalf when you exhibit so little advocacy behavior yourself?

Question Four:  How many of the brands on your advocate list are ones for which you see content in social media?  In the last three months, do you recall seeing any of these brands' tweets? Do you see their pins on Pinterest? Do you visit their blogs? If so, how many times? It is likely the content from these brands--your favorite brands!--is almost completely invisible to you.
BS question: Do you expect your content to reach a significant of your customers and advocates?

Now let's turn your attention to the list you created of the brands you can recall seeing in your Facebook news feed.

Question Five:  Of the brands you have "liked," what percentage appear in your news feed? Chances are, you have become a fan of a lot more brands than you realize. Check your number of likes by visiting your timeline: Click your name at the top of Facebook, then "More," then "Likes" and then "Other Likes." How many companies and brands are there? Scan the list and take note of all the brands whose content you never see, despite the fact you are a "fan." Surprising, isn't it?
BS question: Do you still labor under the delusion that your Facebook posts will be seen by your fans? Are you still posting and investing just as much into Facebook content strategies as you did two years ago, when organic reach was greater? 

Question Six: Of the brands whose status updates you see, did you originally like them because of their social media content or a social media promotion?  Of the very few brands whose content you see in your news feed, are they ones that lured you with freebies and sweepstakes? Was it their Facebook posts that encouraged you to like the fan page? Or did you become a fan of these brands because they provide you with great products and service or furnish a terrific customer experience?  What drove your "like"--social content or real-world value?
BS questions: Are you trying to lure prospects with content on Facebook? Or in the social era, have you instead invested in creating the right customer experience that encourages people to put your brand on their advocate list?

That's it. You are cured! You can now live free of BS (at least until your next meeting with your boss when he or she demands another unreasonable goal). If you were honest, here is what you just learned:

• Your social strategies count on significant number of advocates, but as a consumer you actually are an advocate for very few brands.
   
• Your social strategies rely on your advocates to act on their positive brand feelings, but your own social activities demonstrate little advocacy behavior on behalf of your favorite brands.
     
• You continue to invest in content on Facebook even though you see very little of the content posted by the brands you have liked.
   
• You expect your social content and promotions to attract prospects, but as a consumer, you have followed brands not because of content or social updates but because they treat you right.