Changing A Down Economy: It's Psychology

At least once a week in this market, someone tells me their company is holding off on advertising, marketing, or social media until the government can fix the economy and the market improves. And every week, I give them the same advice to think about.

The economy is not your company's problem, it is your company's psychology that is a problem.

As part of what our company does every day, we research specific industries in order to find strengths and weaknesses within specific niches. We do this for many reasons, ranging from our own market intelligence purposes to specific research, forecasting, and communication recommendations for an assortment of clients in this market and elsewhere.

One cursory research study we recently completed tells the story aptly enough. According to research, this particular niche outperforms in a down economy. And, sure enough, in most markets across the country, this particular niche does excel. Except in this market. In this market, 15 percent of businesses operating in that niche have closed. Why?

Localized, national, and global markets behave differently, but with similar psychologies.

Jeanne M. Liedtka, faculty member at the University of Virginia's Darden School of Business, knows. Writing for The Washington Post's leadership blog, she suggests that many businesses have adopted the same strategy as Goldman Sachs — "hunker down, cut costs, batten down the hatches, play it safe, and wait for the economy to turn around."

Her advice? Change your psychology, followed with four solid tips for businesses on any playing field (paraphrased below).

• Conduct some research to help you understand your company and its place within the market.
• Do something, even if it is small, to demonstrate the value of an idea that can propel the company forward.
• If your company has to lay people off, resist any temptation to cut across the board and focus on keeping performers.
• Learn to embrace uncertainty rather than allowing it to immobilize your company with fear.

The economy is not your company's problem, it is your company's psychology that is a problem.

There was some cautionary advice left in the comments of Liedtka's post too. Several stood out, but one worth mentioning came from Giancarlo Newsome, who works with Clockwork Solutions.

"The advice is reasonably sound but there are some significant mines in this field of approach that have been laid that must be exposed... the HOW is critical," wrote Newsome. Hmmm ... how indeed.

While it's always prudent to ensure that internal ideas have not descended into what Kurt Vonnegut once described as badges of friendship or enmity — Their content did not matter. Friends agreed with friends, in order to express friendliness. Enemies disagreed with enemies, in order to express enmity — the how is useful as long as it doesn't immobilize the do.

Sometimes the how needs to come from the first bullet rather than an internal vote on the individual popularity of various people and badges of friendship or enmity (or worse: entitlement, rank, and position) within the organization. If it doesn't, then the organization stands to go the way of Goldman Sachs' thinking.

For that one niche that ought to be over performing in this economy (mentioned earlier), 15 percent have already proven the outcome of that thinking. As the old saying goes, one definition of insanity is someone who does the same thing over and over, and expects a different outcome. It's time to change your organizational psychology. Or has it changed already?

Impacting Everyone: FTC Aims To Regulate

According to Dow Jones Newswires, Lifestyle Lift released a statement yesterday that any complaints were related to the period before the current management team took over and that Lifestyle Lift “regrets that earlier third-party Web site content did not always properly reflect and acknowledge patient comments or indicate that the content was provided by Lifestyle Lift.”

The statement was attributed Gordon Quick, president. We can then only assume that Quick, who became president in February 2008 after working as a executive consultant and mentor, isn't aware of dozens of Web sites created on behalf of the company, including Dr. David M. Kent's Lifestyle Lift Fact, which attributes the cause of complaints to patients with unrealistic expectations and astroturfing by competitors.

"The Internet is filled with misperceptions perpetuated by companies that call themselves 'real this' or 'real that', diaries and 'scams.com' of all sorts," it reads. "Lifestyle Lift is not the only firm being targeted by these unscrupulous websites that profit from sensationalism and hype."

"In the past at Lifestyle Lift, we have had a small number of patients who elected a procedure for the wrong reasons. These patients, although they have no medical problems, tarnish the image of Lifestyle Lift and our Doctors on the Internet," another section reads. "These unhappy patients will often complain of long recovery times, no change in their appearance,'scar for no reason', pain, missed work, unhappiness, scarring, 'no one cares', 'no one noticed me' etc."

The publication date is 2008. Most other sites that look as if they are patient generated (except for disclaimers) were also published in or after 2008.

How It Affects People Beyond Cosmetic Surgery

Lifestyle Lift isn't indicative of all cosmetic surgery or all social media. However, it's fair to assume their online approach sets the tone of the Federal Trade Commission, which has proposed new rules that could take affect this summer.

Most of the changes are harmless. Bloggers would be asked to disclose any relationship they have with a sponsor, any compensation received for a specific post, and whether the product they received was free. All of these changes follow standard ethical guidelines observed by most social media participants.

The one change that might not be harmless, as described by Ragan.com, is bloggers would be held liable for making false or unsubstantiated claims about products. Companies paying bloggers could be held liable too.

The policies would not be exclusive to cosmetic surgery or anonymous posts by executives, but everyone who endorses businesses and plays video games. Unfortunately, regulation of the Internet is problematic, potentially infringing on free speech and censoring honest opinions (good and bad).

Fortunately, the Federal Trade Commission is still seeking public comment. You can find those guidelines here.

Several Stories Related Astroturf And The FTC

"FTC Launches First Wave Of Smackdown On Scammy Loan Consultants" by Chris Walters, The Consumerist

"The Plaintiffs’ Bar’s Covert Effort To Expand State Attorney General Federal Enforcement Power" by Victor E. Schwartz and Christopher E. Appel, Washington Legal Foundation

"TripAdvisor Warns Of Hotels Posting Fake Reviews" by Melissa Trujillo, The Associated Press

Paying Fines: Lifestyle Lift

According to The New York Times, Lifestyle Lift, a national cosmetic surgery company with 80 doctors working in offices spread across the U.S., settled with the State of New York over its attempts to fake positive consumer reviews on the Web. The company will pay $300,000 in penalties and costs to the state.

An "attempt to generate business by duping consumers was cynical, manipulative and illegal,” Andrew M. Cuomo, New York’s attorney general told The New York Times.

The $300,000 in penalties and fines will likely be the least of the company's damages. If the Mich.-based company felt negative reviews hurt its reputation as reported, the damage caused by fake reviews will become a blemish that will be hard to overcome.

Adding insult to self-inflicted injury, the attorney general’s office shared one e-mail that instructed employees to "devote the day to doing more postings on the Web as a satisfied client.” Thomas Seery, founder of RealSelf.com, where Lifestyle Lift has more than 18o negative reviews, called it right when he said "It’s an incredible violation of consumer trust and it’s a pernicious element of the Web that some companies have embraced this idea, under the guise of reputation management.”

Make no mistake, writing a fake review is not reputation management, especially from a company that carries a "Truth In Medicine" paragraph on its Website. It also pledged that "all Internet communications accompanied by the trademarked Lifestyle Lift logo are fair and accurately represent the latest in medical information about facial firming procedures."

Faking The Net Is No Way To Manage Communication

When a company is bombarded with hundreds of negative reviews, the temptation to fake reviews might be overwhelming.

It's especially true when some reviews include comments such as "I am getting depressed and worry about looking like a freak forever," "My scars are not so bad, but my sister's scars seem to move away from the ear line to the center of her cheek as time goes by," and "My mother has horrible scars from this & her ears are numb. She also has severe pain, constant pain." All of them include procedural costs that ranged from $1,500 to $8,000.

And while the Website claims "satisfying clients has led to unparalleled growth," a simple Google search seems to reveal a different explanation all together. Websites and/or affiliate program sites here, here, here, and here seem to be the sad secret to the its success. Assuming what seems like dozens of sites will eventually be removed, you can read more reviews uncovered by the Consumer Alert Report here.

The fallout doesn't seem to be limited to the practice. The Post-Standard included a local angle that alleges "Dr. Douglas W. Halliday, an ear nose and throat doctor with an office at 4939 Brittonfield Parkway, is listed on Lifestyle Lift's Web site as one of its physicians. Earlier this year, the state fined Halliday $20,000 after he was accused of injecting patients with an unapproved drug he told them was Botox."

When you add up all the damage done to this company in the months ahead, the original reviews and $300,000 fine will be miniscule when compared to the local journalist and consumer investigations of its doctors, more women with problems come forward to share their stories, other AG offices consider launching their own investigations, and a mostly unforgiving online public weighs in on what it thinks of astroturf.

Considering Lifestyle Lift doesn't seem to have any semblance of a crisis communication plan in place, we suspect it's a company in trouble. Its story, as once seen on Montel, NBC, ABC, CBS, Fox, and even in an endorsement from David Griffin who appeared as a contestant on The Biggest Loser, will be replaced with another meaning all together.

Survivable? Perhaps a few months ago. Today? It will take a living case study to know.

Blowing Air: Why Push Falls Short

In 1982, I had a friend whose uncle sold Electrolux vacuums at a time when they didn't retail for $299 or less. He described it as an easy job, despite the skill sets being part of a dying art.

Nonetheless, every day, he would hit the streets, knocking on door after door in order to provide a demonstration. During a demonstration, the vacuums would practically sell themselves as he walked them through their various tricks: sucking up ball bearings; pulling dirt out of the carpet after the homeowners' vacuum had cleaned the area; and vacuuming a bed to illustrate just how much dirt, microscopic mites, and other mysterious creatures people go to sleep with every night.

The latter example, if the vacuum hadn't sold by then, almost always sealed the deal. After all, who wouldn't feel guilty for making their family sleep on an assortment of alien life forms? It worked so well, he often cut off work after the third sale, which was usually around noon. The company didn't care. Accountability was tied to sales and not time cards.

Why Door-To-Door Push Marketing Died

While he never really knew it, my friend's uncle was employing a combination of demand creation, classic marketing, and a direct call to action. And, it was relatively easy because once he engaged in a conversation and moved it toward a presentation, the only voice that could be heard over the buzz of the machine and swirling dirt was his own: push marketing at the core.

It also relied on a business model that seldom works anymore. It relied on a captive audience and solo sales pitch. Nowadays, that almost never happens. Nowadays, the problem presented by my friend's uncle would more likely prompt homeowners to dash upstairs to the computer and pull down as much information as possible on dust mites, vacuum cleaners, price points, and ball bearings (for good measure).

The end result would not be the same. My friend's uncle would very likely succeed in selling more competitive models than the Electrolux models even it was for no other reason than people feeling empowered into making their own decision. In sum, push marketing stands a near equal chance at pushing people away. At yet, so many companies persist in this endeavor.

What Is Holding Organizations To This Old Model?

Or, as one of Valeria Maltoni's readers recently asked, what is holding organizations back from doing it right? Why don't more organizations shift their marketing strategy in line with social media and pull marketing? Why is everyone ignoring the obvious?

Why? While there are many reasons, the most obvious seems to be the rapid adoption of social media by people who know very little about the composite of communication skills required to develop a successful program.

The two most common culprits, it seems, are internal marketing people who have limited experience in anything but push marketing, and an increasing number of public relations firms that are still trying to hold onto the diminishing return of media relations (less newspaper pages inevitably means less column inches to count).

Unfortunately, both look at social media as a demand fulfillment tool, despite that model being easily likened to pointing an Electrolux toward the ceiling and declaring that sucking air is a return. It isn't. In fact, there is a very good chance such efforts do little more than move dust around.

On the contrary, social media might be a communication tool but the implementation and execution requires something better than sucking air. Not everyone can do it. If they could, then every Facebook page, Twitter account, and company blog would be a success.

So is it any wonder so many organizations are being held back? Not really. I imagine it to be rather difficult for executives to get excited about social media when the only return they hear is the sound of sucking air. Give them a little more time. Sooner or later they will realize that the problem isn't in the tool as much as the operator.

The first step is usually the hardest to take. It's the one that requires them to realize that it's not about them, their product, or their company anymore. Or, like the one mentioned in regard to vacuums, it's less about vacuums and more about clean.

Speaking SyFy: The Bobblehead Equation

Last week, the Sci Fi Channel became SyFy in what is being called by some "the most ill-advised branding move since New Coke." (It's actually much worse than New Coke because there won't be a black market for the old product.)

The name change was originally floated to disbelieving Sci Fi fans as early as March. But even so, four months must not have been enough time for the future SyFy marketing and public relations team to get on the same page. It must not have been enough time because the excuses behind the rebranding effort are all over the place, enough so that SyFy deserves a Letterman-styled top ten list...

The Top Ten Stupid Excuses "Uttered" For Renaming The Sci Fi Channel

10. Although we love the name Sci Fi, because it's a generic term, we can never own it.

9. It positions the brand for future growth by creating an ownable trademark.

8. Syfy ushers in a new era of unlimited imagination and new dimensions.

7. It will pave the way for us to truly become a global lifestyle brand.

6. Syfy allows us to build on our 16-year heritage of success with a new brand built on the power that fuels our genre.

5. Michael Engleman asked "what if we could change the name without ever changing the name?"

4. It's much more hip and fits better with the new slogan "Imagine Greater."

3. SyFy is how our 18-to-34 techno-savvy crowd texts the name.

2. We want to appeal to more women and young people.

1. The name Sci Fi was associated with geeks and dysfunctional, antisocial boys in their basements.

So What Is The Real Reason Sci Fi Channel Had To Become SyFy?

The bobblehead equation.

That's right. The only legitimate reason for a successful 16-year-old brand to become something else is an entire room full of bobbleheads.

It starts innocently enough. Someone had nothing better to do. Or maybe they do, but don't want to do it. Or maybe they do, but want to feel like they own something. So they start pointing out problems: the name is too long, the name is limiting, the name doesn't appeal to enough people, especially women.

And then, maybe because people are afraid to lose their jobs in a recession, the entire room of creative guys and corporate shirts start bobbing their little heads up and down, down and up, up and down. Done. The Sci Fi Channel becomes SyFy.

Seriously. I've seen it happen in person several times over the last 20 years. And, I expect I will with even more frequency, in the next 20 years. It happens all the time and the consequences are usually much, much worse than the damage done by some committee on a nonprofit organization.

In this case, even the myth that Michael Engleman asked the question (contradicting other stories shared by the press) and inked out the new name five minutes later is baloney. Some of us already know where SyFy originated, and for a much better reason.

But no matter. Despite all the speculation, most people know the truth now. The only reason we have to endure the name SyFy is because of bobbleheads, with David Howe, according to some, being the biggest bobbler of all after he said no one would remember this in a few years' time. Um, okay. You just keep bobbling, David, and everything will be fine.

The Case For Message Management During Change.

The whole SyFy snafu actually makes an excellent case for message management. Although it often gets a bad rap, being likened to corporate speak and political spin, sometimes it's a good thing.

You see, sometimes message management simply ensures that twenty-some spokespeople don't go around the press circuit with a different excuse. When they do, it makes it look less like you had a bobblehead moment and much more like you're lying because there is no good reason at all.

Breaking Guitars: United Airlines

United Airlines might have already contacted singer/songwriter Dave Carroll to "make things right" after it carelessly broke his Taylor acoustic guitar, but given the extent Carroll and the Sons of Maxwell had to go to find justice is virtually unforgivable. Four days ago, Carroll had introduced a music video about the band's experience. In four days, the video has captured 1.5 million views (one million since yesterday) and shows no signs of slowing down.

Dave Carroll: United Breaks Guitars

Propelled by coverage by the Consumerist, Los Angeles Times, Chicago Sun-Times, ABC News, CBS News, and others; Carroll may eventually have the first customer complaint to go gold and the 13,000 plus passengers who file claims against United Airlines may have a permanent rally cry against broken customer policy.

Inept Customer Service Followed By Bad Public Relations Pun

After the first known acknowledgment from United Airlines' Twitter account, the airline issued a statement that reinforced the pun — "This has struck a chord w/ us and we've contacted him directly to make it right." Here is the extended statement:

This has struck has a chord with us. We are in conversations with one another to make what happened right, and while we mutually agree that this should have been fixed much sooner, Dave Carroll’s excellent video provides United with a unique learning opportunity that we would like to use for training purposes to ensure all customers receive better service from us.

Since, the tone of the tweets have changed from pithy to tempered, with United Airlines offering apologies and promising to use the video for training purposes. Ironically, the consumer crisis is indirectly helping the airline earn more followers on Twitter. We suspect they might not know that 50,000 followers is an empty goal if half sign on to keep the Carroll story alive until changes are implemented. Much like we suspect they didn't realize their statement would fuel more Carroll coverage.

At the same time, United Airlines is also being fined $80,000 by the federal government for not telling consumers which other airlines it has code-share agreements with. United is part of the Star Alliance, which partners international carriers. Other members include US Airways Group Inc., Lufthansa, Singapore Airlines and Air Canada. Incidentally, US Airways is not known for customer service either.

There are plenty of lessons to be learned regarding customer service and communication inside this humorous take on airline travel, but the one that resonates the most is that companies might get used to the idea that they have two opportunities to listen to unhappy customers — either on the phone when they first call or online with the whole world watching as judge, jury, and, sometimes, executioner.

To its credit, at least United Airlines has some semblance of a fledgling social media program to answer some consumer questions direct. While a quick review reveals it's less than perfect by any measure, many companies facing a similar customer-driven crisis communication challenge would have to rely exclusively on the media to tell their side of the story. Sometimes that's what it takes for organizations to finally understand you don't have to engage in social media to be engaged by social media.

This story bumped our third installation of the SyFy branding debacle, now slated for Monday. Have a nice weekend!