Jun 10 2014, 5:44pm CDT | by Forbes
Porter Gale and I are writing a book called Resurrecting Trust: Tech, Transparency & the Bottom Line. As I have done with previous books, I am using social networks and my Forbes Blog to get ideas, feedback and sponsorship inquiries from as many people as possible.
Previously, I posted a draft Introduction and the Table of Contents [ToC] as well as a piece on Scott Monty , and how the enterprise is changing how it uses social media. While the ToC and the piece on Scott were well received, Porter and I felt that the response to our ToC indicated that it was not yet ready for prime time.
This was useful feedback. Respecting the wisdom of Forbes, Facebook, Twitter and LinkedIn readers, we went back and totally rewrote it. Along the way we tweaked the subtitle of the book. Here is the new version and I will hold my breath until I can determine if this attempt provokes any more interest and enthusiasm than did our previous effort.
Here it is:
Warren Buffet, a well trusted billionaire, once said “creditworthiness is like virginity. It can be preserved but not restored.” The same can be said about trust and virginity.
But, while virginity and Buffet’s creditworthiness may stay lost, we think trust can often be regained. It can be a long and trying process, but people will generally forgive most transgressions as long as the relationship is built on a concrete foundation of trust.
For a business, lost trust is a bottom line issue; restoring it may require significant time and money. Sometimes the transgressions are too great and the loss of brand trust will cause a company to die a long, slow death.
We’ll also tell you about the rapidly changing roles of marketing, communications and advertising professionals who are entrusted to build brand trust. Although their behavior is rarely the cause of broken trust, they are required to clean up any messes that arise and, in so doing, sacrifice the public’s trust in them.
We’ll use these examples to show how trust is a nuanced and granular thing. It can be very fragile, but when a company gets caught in a breach, trust can hit you like a linebacker, protecting the goal line, at the final buzzer in the Super Bowl.
Such breaches directly affect the bottom line and can be measured in terms of lost sales. Sometimes, however, soft costs are overlooked. Uncertainty raises doubts about how your products are built, and whether support people are paid to churn calls and post tweets, rather than actually solve customer problems.
Broken trust means many of the most promising recent graduates won’t apply to your company. It can heighten suspicion of your marketing claims. The media will treat you with suspicion moving forward and the number of invites to speak at public venues is likely to dwindle.
Mistrust spreads like a virus, infecting everyone who touches your brand—inside your organization, on a retail shelf or in a business-to-business partnership.
When trust is broken, most companies use established crisis management systems to douse fires—particularly media damage. This system works well enough to quell noise and get past the initial crisis; but it almost never includes plans to improve the structural and cultural flaws that are very often the root of the problem. With no permanent fix, more crises will inevitably recur./>/>
Resurrecting Trust talks about the role of company culture in maintaining trust. As technology and times change, corporate cultures often have trouble adapting. In this book, we argue that company cultures should be directed at serving customers—even at financial expense.
We are champions of the new technologies that are transforming almost every aspect of modern business and customer relationships. They provide an unprecedented opportunity. to personalize marketing on a global level with lower costs and higher gains.
Through logic that eludes us, US Courts have ruled there is such a thing as “corporate personhood ,” with rights and obligations. Corporations can break the law and they can be punished for their actions as companies we discuss in the next chapter have learned.
We have no plans to take a corporation to lunch or to help a homeless enterprise, but we do see an aspect of them as a living being, where all stakeholders flourish or flounder—and trust is the currency that holds this delicate ecosystem together.
We’ll talk to people who measure trust scientifically and understand how you gain or lose it. Trust isn’t just affected by what you do, but by what you say. It isn’t just what happens in backrooms, it’s how you express yourself in public.
Brand trust is no petty thing. People will forgive little embellishments, just like they’ll forgive a friend who claims he was delayed in traffic when a look at a Waze report shows otherwise.
We almost expect marketing embellishments from the companies we do business with. Who among us, really believes that one product will make us feel younger, taller or thinner even when taken as directed?
But then, there are the bigger untruths, the unsavory whoppers that leave permanent scars on a brand’s face: the Exxon Valdez incident, the manipulations of financial service institutions, the Watergate scandal of the Nixon years.
This is not a book of horror stories. Rather it is one of hope. It is about new technologies that allow businesses to know everything about their customers and face choices on just how to use that data. It is about the profits of being trustworthy, acting with integrity and speaking with candor and transparency.
These new technologies allow people to share what they know, think or feel about you in ways that are far beyond your ability to command or control. That power, when executed in social media and online reviews, can create an overnight rock star , or instantly bash a reputation against the rocks.
This technology has created a new mutual observation paradigm where they are watching us and we are watching them. Both sides are not entirely comfortable with the situation, but the reality is this is not going to go away any time soon.
Much of this book looks at the decisions that will shape the futures for many brands, and how corporate culture plays a role in the changes that new technologies demand.
We’ll explain that these technologies require unprecedented transparency—simply because it’s increasingly easy to get caught in deceptions. Research shows that people are prone to forget a product defect fairly quickly—but they are slower to forgive a cover-up, something the folks at GM learned with speed and force as we’ll talk about. We explain why the company may never recover from hiding a flaw that could have been fixed with a 57-cent part.
In September 2013, Shel Israel and Robert Scoble wrote Age of Context . That book explored the convergence of five technologies: mobile, social media, sensors, location and data. It explained how these technologies will allow businesses to know everything about their customers and will be able to predict what each customer’s intent is when a customer lands on a site or walks into a store, carrying or wearing a mobile device.
Resurrecting Trust is the sequel. The former book looked at technologies and the companies developing them; this new effort follows contextual technologies into business practices, examining how businesses are using these technologies to make customers happier and profits higher.
A very large portion of this book is dedicated to telling you about early movers that are doing it right and building levels of trust that will serve as safety nets of credibility when a reputation crisis hits. We hope these stories give you ideas to help you at work as well as a better understanding of how and why sellers do what they do when you shop./>/>
As consumers, we want to know what “those guys” are up to, and we try to explain in clear, unambiguous ways; we want to reduce the uneasiness that sensors, data and location technologies may create by explaining how they can improve your shopping experience.
Of course, that will take time. It will be disconcerting the first time your phone or car automatically checks in to a store as you pull into a parking space and when you enter a digital screen or, perhaps, a person greets you by name.
Some of us over 40 may never become comfortable with technology that seems to know who we are and what we want, but the Millennial Generation, people born between 1982 and 1996, generally take this new technology for granted. If you’re a retailer there is a need to change now or watch your customers turn gray and diminish in numbers.
If your organization has a culture that is slow to change, this book should sound an alarm that you better hurry up, or you will be left behind as your customers move on.
With the touch of a finger, they can enter a store and pick up their orders. As they leave, the transaction is recorded in the mobile app. Today’s students will be someone’s customer for the next 50 years. It will either be you or a startup that disrupts you by embracing contextual technologies that you choose to ignore.
Then there’s Aisle411 another mobile app that can help you find any item you want from over 100,000 choices at 12,000 North American superstores letting you see how both stores and customers benefit as the gnawing issue of how to easily opt out is resolved.
We’ll demystify those freaky ads that seem to know who you are when you log on to Angry Birds. We’ll spend an entire chapter telling you about Beacons, little sensors that have already started talking with your phone in stores, on streets and in stadiums—and they are talking–about you.
In Age of Context, Israel introduced a concept called Pinpoint Marketing, which allows sellers to use combinations of these contextual technologies to provide every customer with the type of close personal service our grandparents enjoyed in the simpler times of little downtown shops.
In this book, we take Pinpoint Marketing a significant step further, showing how mass marketing is rapidly being replaced with something we call mass micro-marketing. It makes close, personal service globally scalable for the benefit of both buyers and sellers.
Perhaps the least loved of all marketing messages are in the digital direct response category: spam email and other attempts to get in your face while you are online. We try to filter them out, but still enough get through to annoy us.
In fact, we ignore about 99.88 percent of the direct response ads we get, according to the Direct Marketing Association . In a June 2012 study, they reported the response rate was a miniscule 0.12 percent.
So why do advertisers bother? Simple: there are huge profits in online direct response marketing–wheelbarrows of it. For every dollar spent, according to journalist Juliette Kopecky , the advertiser rakes in $2,600. We haven’t checked her math, but even if Kopecky is off by a factor of ten that would yield a return of $260 on every dollar spent. Most businesses would be ecstatic with a return on each dollar of just $2.60.
These profits are why nearly every company uses such tactics. But therein lies a problem. This practice is making the marketplace very noisy, thus diminishing the user experience, and increasing resistance to marketing messages.
If a business—even an extremely valuable one—pisses off 99 percent of its potential customers, 99 percent of the time, it is bound to backfire eventually, and our guess is it will be sooner rather than later.
We would like to tell you that there will soon be fewer marketing messages coming at each of us, but for the near future, we think there will be more—a lot more.
Something called the Ad Exchange is a core component in the fast-emerging and complex new business category called AdTech, which includes everything that touches at the intersection of advertising and technology and is the topic of a later chapter./>/>
The Ad Exchange centers on the programmatic buying and selling of ads; it works just like the stock exchange, where there are programmed buys: billions of transactions occur in the eight-tenths of a second that it takes your heart to beat one time.
Since it’s a relatively new system, it is hard to fathom just how big this is: Rocket Fuel , just one of several AdTech server platforms estimates that it processes over 45 billion bids daily and this is just a portion of the transactions taking place globally.
This is one of the reasons why the quantity of messages you receive keeps increasing and they will continue to add to the mountain of ads already being hurled your way.
What’s different about in the AdTech world is that ads are becoming more contextual: RocketFuel uses artificial intelligence [AI] to personalize what you receive. Esri, a traditional Geographic Information Systems [GIS] is helping advertisers understand the relevance of location in mobile apps. Other companies are make ads more useful by introducing the dimension of time, so that they will not only know when to start sending you messages—but also when to stop.
In our advertising chapter, we’ll explain why the additions of AI, location and time are building blocks toward Pinpoint Marketing, which we predict will allow you to get fewer ads and find the far more relevant than you do today.
But for the near term, you’ll keep getting inundated with messages that even the senders don’t seem to like.
In March 2014, co-author Shel Israel spoke in Los Angeles to a small group of entertainment industry marketing professionals. He asked how many attendees used direct response marketing in their work and most raised their hands. Then, he asked how many liked receiving those same sorts of messages.
No one raised a hand.
He tried a couple of months later at a digital marketing conference in Texas. It was a larger room, and a few people did raise their hands, but they were clearly a minority.
At a dinner with a few marketing executives, he decided to ask again. While each conceded they don’t like the type of messages their company sends out, they considered such efforts to be mandatory.
A few months later during a lunch with Jeff Weinberger , a principal at D3Consulting a San Francisco marketing consultancy we tried again. Jeff told us “marketers hate marketing. We tend to avoid using what we use for clients when we market ourselves.”
We will talk about how this issue impacts trust and how contextual marketing can turn it around. We most certainly don’t think any sane business decision maker should abruptly halt direct marketing programs, at least not if they want to make their quarterly projections, but every now and then the focus on immediacy can blur the long view.
A decade ago, boardroom officers disdained marketing as a soft practice, whose value to the bottom line was tenuous at best.
Marketers would present hand drawings on storyboards, trying to inspire or excite decision makers. Such approaches were often poorly received. It turns out most executives are more emotionally stimulated by bottom line improvements than picture stories that make you feel good.
But then data leaped from paper spreadsheets onto cloud-based data mountains. Businesses now run on data; in fact, just about everything runs on data these days.
Data plays a large role in Resurrecting Trust. When it first became pervasive a few years back, decision makers scratched their heads on just how to use it.
They turned to IT executives who agonized on how to store and protect it, but for marketers, data was the light bulb flashing over their heads. They could use it in myriad ways to impact sales and revenue. Very quickly, marketing metamorphosed from a soft practice into a data science. Marketers evolved from brand cheerleaders into data scientists whose insights could greatly impact the bottom line./>/>
Top marketers were given their first seats at the boardroom table. New job titles such as Chief Digital Officer, Director of Growth & Acquisition, Chief Data Scientist or PR Engineer were created. Interestingly, none of them contained the word marketing.
In short, Rodney Dangerfield was booted out of the modern marketing group. Marketers today have considerable influence at the table. But in the marketplace, they are often perceived as the bearers of unwanted messages and are consequently mistrusted.
How ironic that the people entrusted to build trust are often not trusted themselves. The very way they gain respect inside the organization, erodes trust externally. This is bound to backfire for the same reason direct response advertising will eventually backfire and it has a lot to do with trust.
We believe there is significant opportunity to restore lasting trust between marketer and customer over the next one-to-five years. Marketing messages, when personalized and contextualized are valuable. Pinpoint Marketing, of which AdTech is a significant part, could generate responses of over 50 percent, if marketers know precisely when to send messages as well as when to stop sending them.
This will only work when companies understand and respectfully use customer and third party data. One fundamental barrier is trust. Certain questions related to data ownership, sharing and accuracy have to be transparently resolved.
Technology must allow people to opt out or turn services off. We know there will always be ads, but we should work towards a process and a system where they’re ads we want to see.
These are big and complex issues that we will try to simplify in this book. But, we will conclude, it is a scenario in which everyone wins and we will tell you how and why.
Forgive us if in this book we shift pronouns from time to time, when referring to ourselves. We see no other way of handling the fact that we are two authors who generally agree—but not always.
This forces us to sometimes discuss ourselves in the third-person. Also, we sometimes tell stories where only one of us is involved.
Let’s look at our two views. They come from whom we are and what we do when not collaborating on this book.
Porter Gale is former vice president of marketing for Virgin America and now consults, is a start-up advisor and is a frequent public speaker. She manages a full portfolio of clients on marketing strategies. She is a digital marketing champion, who helps clients use digital technologies to make customer relationships more effective and understands how and why the science of marketing is evolving in this “Age of Context”.
Shel Israel is a self-described “recovering publicist” who owned a Silicon Valley PR firm for 17 years. In 2001, he returned to his first two loves: writing and speaking, where he focuses on technology’s impact on people. As a journalist, he often takes a cynical view of marketing promises and practices. He considers himself an end-user champion, and when there seems to be conflict between buyers and sellers, he tends to side with the buyers.
We think this friction gives you a book that is far more balanced than either of us could have written alone. We hope from the stories, research and interviews presented, we will give you and your company executives important insights into how technology will change your life and work.
We hope this book will help you in your work and life and that you find it enjoyable to read.
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.
blog comments powered by Disqus