Creating Success: The Psychology Of Winners And Losers

Some people don't understand how 73 percent of small business owners can remain optimistic about their business futures despite 52 percent thinking it is worse than it was twelve months ago. And even while the financial stressors are considerable, the Pitney Bowes survey reveals most small business owners have two or three more options before they would have to consider closing their companies (hat tip: MarketingProfs). Even if they did, 28 percent would start a new business.

Top Financial Concerns For Small Businesses

• 74 percent say decreased sales is their top concern.
• 52 percent say health care costs are a top concern.
• 42 percent say late payments from customers.
• 42 percent say greater restrictions on corporate financing.

But there is something else too. Small business owners tend to be among the most adaptive and resilient during the worst economic conditions. They tend to be optimistic even in the face of adversity, especially those that had the audacity to start their businesses during a recession.

It strikes at the heart of the challenge. Many small business owners opted to believe that the recession was optional. It was a case I made on a couple of occasions during the last two years, asking leadership to start by engaging their employees.

Some bigger companies agreed with me too. You can see it based on performance. United Services Automobile Association, Republic Services, Wells Fargo, Dollar General, Visa, PNC Financial Services Group, JPMorgan Chase & Co., CenturyTel, Merck, and O'Reilly Automotive (among others) all posted profit gains of 65 percent or more. For them, the recession was optional.

And while we all might wish that the media covered more success stories to help lift the general population out sooner, most were too busy covering the recession. In fact, most were covering the pending recession as much as two years before it happened. Now, many news outlets are trying to shift the story in a new direction; expect to see more success stories soon.

What Makes Some Companies Succeed And Others Fail?

The only answer is their outlook. Earlier today, Ernie Varitimos shared a link to his video about winners and losers as it relates to investors. While there is a certain combatant mentality in the video that I don't personally share, Varitimos nails the psychology of it all.

He applies it to investing, but it accurately describes the relationship of trends and reversals to several arenas. As he points out in his video lesson, trends are easy because they move in straight lines and, unless you're a loser, you follow the trend to the end. That is how many companies, good and bad, made money in the last three decades. You didn't have to be good. You only had to follow the trend.

Reversals are not so easy. It begins when one trend ends and another begins, marked by a change in attitude. Basically, when the trend changes, people who were winners during the trend begin to feel like they are losing control. And as they lose their belief in themselves, this allows others — the anti-group as Varitimos calls it— to snatch control away from them. How does it happen? In defending their position, the previous followers make mistakes and eventually lose.

It doesn't just happen in investing. It happens in politics. It happens in business cycles. It happens with marketing. It happens in social media (with blog traffic or whatever). The psychology of success is directly linked to the optimism of leadership and their willingness to adapt to changes in the marketplace. It's also why my company will end in a better position than when the recession started. How about you? How are you doing today?

Advertising Challenge: Apple Suggests No Crappy Stuff

"As a creative director, I can completely understand that they [Apple] created this new baby and they want to make sure it gets born looking gorgeous. But as a creative director, I don't feel completely comfortable letting Apple do the creative." — Lars Bastholm, chief digital creative officer at Ogilvy & Mather Worldwide.

That was what Bastholm told The Wall Street Journal on the news that Apple's upcoming iAd program will require advertisements to go through an approval process and require Apple to build the ads for aesthetic and functionality reasons. It is one of several hurdles, along with price (1 cent per banner impression and $2 per view),  to reach more than 85 million iPhone and iPod Touches sold.

For the launch, marketers will pay as much as $10 million, which is much higher than the $100,000 or $200,000 most agencies are used to paying. One early example is Nike (it has endorsed the Apple creative), which Apple has been using to introduce the iAd concept. How to build an app advertisement isn't the only advice Apple CEO Steve Jobs recently shared with Nike.

Mark Parker, president and CEO of Nike, shared Jobs' advice at Fast Company's Innovation Uncensored conference. "Get rid of the crappy stuff," he said.

The Apple Approach.

There are two ways to take anything Steve Jobs says. You can think of him as an egomaniac, as some people reportedly do. Or, you can think of him of someone who is always trying to raise the bar higher, which is why you won't see Adobe's Flash technology on an iPhone. He said more than that.

"Flash was created during the PC era--for PCs and mice," Jobs said in the letter. "New open standards created in the mobile era, such as HTML5, will win on mobile devices (and PCs too)," Jobs recently explained in an open letter. "Perhaps Adobe should focus more on creating great HTML5 tools for the future, and less on criticizing Apple for leaving the past behind."

Adobe won't argue the point. It is reported to be working to improve Flash, specifically to appease Mac, despite what Philip Elmer-DeWitt had to say about it.

The Advertising Challenge.

When you add it all up, some people might think Apple only wins because its competition is lousy. But maybe Jobs and crew would welcome the opportunity to be pushed a little harder, with someone not only developing better products but better advertising to boot.

While there are some great examples out there, communication has become more complacent as of late. While social media has shown some companies how integrated communication can work, turf battles still exist with everyone — public relations, advertising, marketing, corporate communication, etc. — fighting for dominion over the same space.

The results are sometimes convoluted. According to one recent survey by Vocus, 43 percent of public relations professionals feel they should own social media and 34 percent of marketers feel they should own social media. Seriously?

Seriously. Someone should sit those folks down and tell them no one owns it. Or, perhaps, more accurately, nudge and remind them that the company not only owns social media but their departments or contracts as well. The first rule of order ought not to be who's in charge, but how can we accurately and provocatively communicate the company's message.

And with that in mind, can anyone blame Apple for wanting the opportunity to set a higher bar for advertisements? Say what you will about the company, but its messages match the product across all communication channels. The company already knows that the the communication of tomorrow will be both striking (advertising), responsive (public relations), and interactive (technical). See for yourself.

Deciphering Diatribe: Arizona, Alabama, Immigration

diatribe (noun) [dahy-uh-trahyb]. Definition: A bitter, sharply abusive denunciation, attack, or criticism.

That is the definition, but the history of the word tells the real story. It's Greek, derived from the verb diatrībein, made up of the prefix dia-, "completely," and trībein, "to rub," "to wear away, spend, or waste time," "to be busy."

It's a word every American ought to know. And if they knew the word, they might recognize it as the perfect definition of the political climate today, fueled by one of the most divisive administrations in history. When you see it, it's easier to dismiss it.

Diatribe In Arizona

The Arizona law didn't start as diatribe, but it certainly has ended up there.

While national estimates bear out a decline in illegal immigrants (sometimes called unauthorized immigrants), Arizona has seen a 42 percent increase in the number of illegal immigrants from 2000 to 2009.

The intent of Arizona Senate Bill 1070 was to curb illegal immigration apparently propelled by a recovering economy and talk of amnesty (with U.S. Sen. Harry Reid among the biggest supporters of including amnesty in immigration reform). Among the most debated provisions in the law is whether police officers in Arizona can ask for identification based on suspicion or whether such a provision leads to racial profiling and subjects legal citizens to unnecessary scrutiny.

The entire issue has drifted into diatribe after the law has been branded "racist" and "anti-immigration." When the conversation shifts in that direction, it's diatribe. There is nothing left to be discussed because it is a waste of time.

Diatribe In Alabama

In Alabama, the driver's license test is currently offered in twelve languages. The expansion of multiple languages likely came into existence because once the test was offered in an alternative language, the state could hardly discriminate against other alternative languages. The cost to the state is considerable.

For whatever reason, Tim James decided to make the issue one of his platform planks as part of his gubernatorial campaign. He produced a television commercial that has since been called controversial.


The entire discussion has drifted into diatribe, being branded as "racist." On the heels of Arizona Senate Bill 1070, it's now considered another example of "racist" legislation with diatribe thwarting any reasonable discussion.

Immigration And English

When my grandmother immigrated to the United States in the 1960s, she did so legally. Still, she remembers how frightening it was arriving in New York City without being able to speak a stitch of English. Doubly so because the person who was to meet her arrived late. For a few hours, she was on her own and was occasionally asked for identification.

There were no special provisions for her. She had to learn to speak and read English. And even when she did learn, her accent frequently drew derogatory comments like "kraut" from some citizens still reeling from World War II. Over the years, she came to realize that the discrimination she experienced was the same as anyone who was part of any mass migration into any country.

Immigration requires something from everyone. It requires citizens to accept a certain enthusiasm (or, at minimum, tolerance) for cultural differences. And it requires immigrants to accept a certain amount of responsibility to partially assimilate, starting with a respect for the law and language. Until people figure this out, there seems to be little room for discussion.

Pushing Pies: Pizza Hut, Domino's, Papa John's

With speciality pizzas ranging from coal-fired to innovative gourmet pies crowding out chains for the sitdown crowd, the big three — Pizza Hut, Domino's, and Papa John's — are looking to retain dominance over the delivery game. So who's winning?

A Breakdown Of The Big Three.

Pizza Hut. For Pizza Hut, U.S. sales are up 5 percent in the first quarter after struggling last year. The turnaround is hot as the chain believes it found the magic formula. When people order pizza, what they really want is an unbeatable value and quick order convenience.

Pizza Hut has a clear advantage in this arena. By investing in easy order applications across various platforms and networks, ordering is super simple. Quick order apps have also helped make Pizza Hut the most talked about online, often by a margin of 2 to 1. And while the 1958-established pizza chain doesn't cross-connect its online assets, it has still attracted 1.3 million Facebook fans and 29,000 Twitter followers.

Of all its smart moves, the one that stands out the most is its work to implement a global marketing strategy with a localized appeal. Every application allows users to pinpoint their local Pizza Hut and receive hyper-localized offers from franchisers. The biggest misstep, of course, was attempting to be super cool in calling itself "The Hut."

Domino's. Domino's seems to have been hit by a string of bad publicity luck, ever since it accepted blame for two employees who ran amok on YouTube. Every time someone searches the headlines, Domino's has the corner on bad behavior.

Its marketing isn't always much better lately. Even on its Web site, the pizza company calls out its competitors, driving up their brand names as if this number two pizza chain was somehow a distant third or fourth. As for the 30-minute guarantee that helped it rise to to the top? Long gone.

The most recent marketing investment demonstrates heavy exposure without the buzz in connection with American Idol. However, what seems to have always worked well for Coca-Cola didn't translate for pizza pies. The campaign was barely mentioned by anyone online. (In contrast, fans are still taking about Justin Bieber's cameo on the show.)

When Domino's is mentioned online, most of it is related to the recipe mistake. Most people post how bad it sucks. On Facebook, Domino's is closing in on 500,000 fans. On Twitter, a scant 12,500. The most noticeable reason is that there doesn't really seem to be a reason to join. Its increasing corporate image is a turn-off.

Papa John's. No matter what you might think about the Papa John's push to be more Italian, which seems to drift well away from beginnings as humble as Pizza Hut, there is always something to be said for the pizza company that came on strong enough to carve out a niche that used to belong to Little Caesar's and Godfather's.

Despite its 1.2 million Facebook fans, it isn't talked about much online, capturing only a fraction of mentions when compared to Domino's or Pizza Hut. On Twitter, it has only managed 12,000 followers, which is simply a matter of its shout out, no-follow approach to messaging.

Papa John's is hoping to change all that with its "Papa's Specialty Pizza Challenge." People join on Facebook, submit topics, and provide a short write-up of why their pie is unique.

The fine print makes the contest a bit of a spin. The winner gets 1 percent of the sales, up to $10,000, and free pizza for life. The contest finalist also receive $1,000 to help market their creation to victory.

It's Not All About Social. Stick With Core Services.

In terms of domestic sales, the three pizza chains are lock step in order, with Pizza Hut on top, Domino's second, and Papa John's third. If Papa John's could make a break in some segment of its marketing, it could theoretically take on Domino's for the second spot in the next two years (with better expansion plans). Unfortunately, the social media contest isn't it.

The reason Pizza Hut is winning with its promotions isn't only about price. It seems the pizza company has figured out what hits the right spot with U.S. consumers. When consumers want cheap, convenient pies, they want cheap, convenient pies. Pizza Hut is delivering these two points, leaving social media to take care of itself. Consumers seem to like it that way.

In contrast, Papa John's is shooting for social to attract new fans despite saying they are offering the content to "loyal customers." While they might attract pizza fans, the real question is whether they can convert those pizza fans into Papa John's lovers.

Maybe. But right now, it seems more likely they'll attract contest entrants just before those entrants click on one of those super simple Pizza Hut apps and then tweet their friends how easy it is. Get it now? Give people something to talk about and social media will follow. Cater to them too much and they'll talk about everything except your product.

Nothing Has Changed: The Social Media Constant

Smart Brief recently released some results from a survey that asked corporate leaders how they view social media today. The results are not surprising. And yet, they are surprising.

What's Not Surprising About The Smart Brief Survey.

• 83 percent say that social media gives them a window into what their customers think.
• 75 percent say they were either knowledgeable or actively trying to learn about social media.
• 63 percent say that social media is not a fad, but is very "over-hyped."
• 55 percent say that social media is not a waste of time.
• 51 percent say their companies are actively using and exploring social media.
• 40 percent fear that they are are falling behind their competitors because of social media.

What's Surprising About The Smart Brief Survey.

What's surprising is that the Smart Brief survey isn't all that different from surveys published in 2005.*

• About 70 percent say they were either knowledgeable (55%) or actively trying to learn about social media.
• About 60 percent say that social media is not a fad, but is "over-hyped."
• About 55 percent say that social media is a waste of time.
• About 50 percent say their companies are actively using and exploring social media.
• About 40 percent fear that they are falling behind their competitors because of social media.

*In some cases, we had to adjust the prevalent buzz words of the day to match the statistical data, e.g., "blogs" or "new media" or "social networking" since social media had yet to be adopted as a buzz word. Also, listening wasn't even on the radar, back then.

There are only a few explanations for such a chronic state of sameness: the original surveys skewed toward people already using social media (new users are most likely to answer surveys), people generally lied about adoption for fear of looking like they are falling behind, or perhaps there is something else missing from the state of social media.

Given our research back in time to 2005 revealed the same blog headlines we read today — such as "is social networking replacing SEO" and "Is social media a fad" — we think it's a little of all three, with the third revealing something especially interesting. While this isn't scientific per se, we have noticed that different countries lean toward different social media information on this blog.

The United States tends to focus on tactical tips whereas India tends to focus on strategic solutions. The United Kingdom tends to focus on predictions to determine what's next whereas the Netherlands tends to focus on research to determine what's most recent. The Philippines, on the other hand, tends to focus on pop culture tie-ins, which means they probably have more fun.

Why is this interesting? It might suggest where different cultures are focusing their energies. And if there is any validity to tracking topics of interest, it certainly foreshadows why different countries will end up in very different places five years from now, with the U.S. currently demonstrating a healthy appetite for sameness.

Embracing Universal Truth: Fresh Content

If there is a secret to social media, then the secret is that there are no secrets at all. Our roundup of five fresh content posts proves the point as social media — for all its newness to some people — is evolving to embrace the very theories, concepts, and ideas it once thought to shrug off.

The reason is simple enough. Tactics change but strategy tends to remain consistent. How people interact, fabricate, mislead, organize, and even tell a story remains the same as it did before social media entered the scene. So what's changed? It's even easier to see it online, which makes it especially fascinating. See for yourself.

Best Fresh Content In Review, Week of April 12

• Online Network Theory And Politics.
Jed Hallam shares some insight into the analysis of networks on the Internet and how people connect, interact, and share ideas as they pertain to politics. He does an excellent job taking his readers through the steps: identifying sources, evaluating influence, assessing connections, and then determining the best route to introduce messages. It's an excellent introduction to what a few people do every day.

• Imported Turf.
Ike Pigott's ongoing assessment of interaction contains a refreshing amount of dedication and detail. He continues to consider what dailies and other news outlets might discover about astroturfing if they didn't ignore it (coincidently, AOL is currently revamping its comment section for this reason). Outlined in this post, Pigott shows how some commenters masquerade as people with invented identities. On occasion, they even create supporting fake identities so they have "someone" to respond to.

• More Absurd Social Media Analysis – The Value Of A Fan.
Adam Singer was one of the first out of the box to debunk a theory floated by Vitrue that "fans" and "friends" could be reduced to a monetary value of $3.60. He provides eight points why that valuation is off, before pointing out the premise is flawed. But more than that, he makes the case that such formulas mislead companies into placing too much emphasis on mass and not enough emphasis on real marketing and customer relations. We followed up on his post here.

• Framework and Matrix: The Five Ways Companies Organize for Social Business.
Jeremiah Owyang's presentation on the various frameworks companies and organizations employ online is right on target. He presents five different organizational models that companies frequently embrace in social media, which provide a simplistic but accurate view of the way things work. While his assessment doesn't account for every model, it does accurately portray how companies create information structures not unlike those we tracked three years ago as they related to online fan bases.

• The Art Of Storytelling Is In The Telling.
A few weeks ago, someone asked if communicators get tired of telling the same story over and over (I offered they need to consider the listener is hearing it for the first time). A few days later, Ben Decker penned a post that eloquently conveys this point, using Up in the Air and himself as the example. He says that he tends to lose his gusto after telling a story for the first time whereas his mother-in-law can tell a story countless times with the same enthusiasm, often better with each telling. Exactly right. She appreciates that the story might be old to her, but it's new to the next person she tells. Perfect.