Looking For Miracles: Retailers

Most retailers are looking for an economic turnaround miracle. And as early back-to-school sales fizzled, many of them aren't sure if they should look for another traditional peak shopping season or push off hope for the holidays.

The bad news for retailers hit when monthly figures for July showed only modest growth over last year. Overall, retail sales increased 0.4 percent in July, and rose 5.9 percent over sales in July 2009. It's movement, but most fear that the movement isn't sustainable.

"Retailers continue to persevere in an uncertain economic environment, relying on cost controls rather than sales growth to maintain profitability," noted Sandy Kennedy, president of the Retail Industry Leaders Association. "Retailers continue to deal with considerable market and regulatory uncertainty."

With the exception of automotive, retailers saw a decline in virtually every category. Department stores, clothing, furniture, and building materials were all slightly down. The most common reason for the sales slump is attributed to 14.6 million Americans remaining out of work.

Finding New Solutions In A Down Economy.

In days of old, most retailers relied on location. It was the reason that malls were mapped out all over the United States. As a retailer, you wanted to choose high traffic areas in order to capitalize on pedestrian traffic. The same was true for high traffic streets and urban centers. The people were already there. You only had to be there among them.

One change seems certain in this economy: people need a reason to visit beyond location. In a tightening economy, most consumers are trying to cut back on necessities in favor of occasional luxuries. So maybe, just maybe, retailers need to stop waiting for the people to show up and start trying to find them.

Proximity mailing and online market penetration are good starting points, but even those alone are not enough. You have to do something and that something has to be more than host a sale. Mini-events, new line launches, and educational series are smart starting points.

I'm not making this up. Two of the retailers we work with have seen the most success building connection-centric communities online (helping consumers meet each other) and complimentary or low cost events that people cannot find anywhere else. They don't have to be huge events. Some can be as simple as a local chef hosting a cooking demonstration or authors signing books.

As long as the marketing that accompanies these events includes traditional event listings (citywide), proximity mailers (store radius), and online (interest focused), more people are likely to attend than if the establishment simply handed out in-store flyers to a dwindling walk-in consumer base.

As for the freeze created by regulatory uncertainty? I don't blame retailers for being concerned. However, at some point, you have to forget what the emperor is doing and get down to the business of milking cows. The day to worry about future regulations is best saved for the day they happen. And the day to wait for a miraculous economic sales surge is, well, never.

Decoding Data: Fresh Content Project

Something happened in between social media being considered a fad and full adoption. When companies asked people to prove social media worked, they obliged by providing any number of measures. It didn't matter what these measures were. Most of them include anything with numbers.

Never mind that numbers lie. It seemed to be what executives wanted to hear. All five of these fresh pick posts poke holes in most commonly accepted beliefs. If you think that the number of retweets conveys trust and/or transaction, that social media is different from strategic communication, that free platforms don't carry risk, that B2B and social media doesn't mix, or that Facebook is isolated from the Internet, then please read on.

Best Fresh Content In Review, Week of July 30

• New Experiments Question The Power of Social Proof On The Web.
While one of my passions has been to debunk "reach" on social networks, I'm not the only one conducting experiments. Dan Zarrella recently ran an experiment of sorts on Twitter. In one experiment, a post showing "0" tweets was clicked on more than one showing "776" tweets. In another, "15" tweets earned just as much traffic as "776" tweets. In yet another, he tested subscribers, discovering no significant difference between "0" and "62,172" subscribers. When you add it all up, the measures most marketers look at nowadays are extremely poor indicators of success.

• 7 Common Business Pitfalls that Impact Social Media Strategy.
Valeria Maltoni offers up seven excellent ideas to help keep social media programs on track. Rather than look at raw numbers, she suggests you consider everything much like you would any marketplace: changes in the competitive landscape, customer attrition rates, focus, vision, product problems, goal misalignments, and channel issues. The point, of course, is that any number of factors cold be outstripping your performance on a day-to-day basis. And often times, it might not even be what you think it might be.

• The Sharecroppers Are Revolting.
Becoming too reliant on one network or platform without a backup plan is always a bad idea. Ike Pigott, with his flair for analogy, sized the issue up as something akin to sharecropping. There are many different forms of sharecropping, ranging from people who build their social presence on networks to those who utilize platforms with extensions (Typepad, Wordpress, etc.). He's right and, personally, I wish he would have been right years ago. I've personally lost three content assets: one when a network closed; one when a network shredded data; and one where YouTube didn't realize a production company owned the rights to its own clips.

• The Case for Social Media in B2B.
Every time I read about B2B excuses for not engaging in social media, I always shake my head. First and foremost, I shake it because the people who tell me this read my blog (marketing/communication is B2B). But even more bothersome, I always envision some account executive telling a prospect in a restaurant that he can't talk business in a restaurant. In a much more eloquent fashion, Valeria Maltoni outlines her thoughts on B2B social media, after sharing projections that B2B online marketing spending could reach $54 million by 2014.

• 6 Facebook Search Engine & Data Visualization Tools.
After Lee Odden noted a significant increase in referring traffic from Facebook to Web pages over the past 6 months, he decided to pull together a list of six Facebook tools that could prove useful. All of them rely on Facebook search functions and range from fully functional to visually interesting without any other substance. One of the most interesting ones, in my opinion as well as Odden's opinion, is Touchgraph Facebook Browser. It reorganizes your friends and fans to display what might be mini niche networks on their own. It lined up mine perfectly. Check out the other ones too.

Want to review more Fresh Content picks? Click on the Fresh Content label or join the Fresh Content Project on Facebook.

Stereotyping: One Bad Habit Social Media Needs To Dump

Earlier this week, I checked up on a Twitter chat session about blogging, but could only sit through one question. The question seemed innocent enough. Who do you target? Bloggers who are consumers or bloggers who are influencers?

The session quickly broke down into defining influence, with the most commonly accepted definition being a combination of "reach" (total followers) and "credibility" (engagement and RTs). Most people know how I feel about that definition. It fits in nicely with personal branding.

Here's a short answer so you don't have to read the personal branding post (unless you want to). Focusing on influence sucks. It can be summed up with an alternative title for this post: How I stopped chasing influence and became a better person.

Have Some Social Media Pros Taken To Trees Instead Of The Forest?

Before social networks, when blogs were the primary source of communication, the general likability of social media was that everyone had an equal voice regardless of reach. Sure, some people benefited from knowing a bit more about a subject, were better writers, or learned a few things about SEO. But let's not split hairs.

Everyone was at square one.

Most people involved in blogging were excited because they could present their ideas with an equal opportunity to be heard. They didn't need any reach, authority, or influence. They only needed to share their insights and, occasionally, they would capture more interest than major media networks. There was ample chaos, but chaos is kind of fun too.

Chaos is not very sustainable.

Most people think nature has a propensity toward chaos. It doesn't. It has a propensity toward organization. Even after the very messy Big Bang, entire universes and solar systems slowly began to organize themselves into pinwheels or other designs. The same thing happens in tiny ecosystems. Move ants to a new home and they will organize shortly after the initial confusion.

People are prone to stereotyping.

For people, part of our organizational structures include stereotyping. It is one of the things I've always found interesting about watching online behaviors. Many of the people who once celebrated the chaotic nature of the Web are now those trying to create a whole new hierarchy to replace experience, credentials, authority, and expertise.

The new hierarchy is kind of an unintentional scam with reach, interactions, associations, and time online as replacements. These things frequently creep into every communication decision being made on the Web — who to read, who to follow, and who to retweet or acknowledge. It's a load, and I don't mean Tootsie Rolls.

Kayne West Already Disproved All Those Influence Theories.

With a few simple clicks, Kayne West disproved everything some social media pros teach about influence.

He decided to only follow one kid named Steven Holmes. So overnight, everyone started following the kid. Even members of the media bombarded Holmes with questions and messages, hoping he would pass them along. West has since stopped following the kid after learning he unintentionally disrupted the kid's online life. (Or maybe Holmes deleted the account as he said he might. I didn't look and it doesn't matter to make this point.)

Holmes' temporary influence didn't have anything to do with reach, interactions, associations, time online, or even trust. It had to do with perceived access. It's something I already knew from covering a few tenuous fan movements and running campaigns for independent films, causes, and other such stuff. Influence can be created overnight and dumped just as easily.

In some ways, it has a negative value. And the reason I'm starting to think making decisions based on reach, interactions, associations, or time online is nothing more than a new form of stereotyping caused by ego, naivete, or scalability.

Skip The Stereotyping And Create Community.

When I was working on a social media campaign for an independent film, I connected with the fans of select cast members. I didn't care how many followers or friends or "influence" they had. I connected with them based on their enthusiasm and our mutual potential to become friends (most of them are still friends, one year later, by the way).

These two dozen or so people often received insider news first. It wasn't always intentional. Sometimes it was because they asked questions and my team answered them as quickly as possible. As a result, their "influence" grew, often at a faster rate than the film. (Doubly so when translation was involved.) And, after the campaign ended, most retained their "influence."

Of course they did. While it wasn't formal per se, the community we created placed them at the center, and not us. That concept was by design. I didn't want to become a quasi-celebrity on the back of my client. Influencers don't always operate that way.

While I don't think it's intentional, the only people propping up influence these days are those who stand to gain something from the illusion of being influential or are trying to create relationships based on efficiency because of social media scalability. Good for them. As a rule, however, I just don't see the value, but only because my team knows better.

Selling Offsite: Delta Airlines

When it comes to social media, Delta Airlines is ready to go all in. Today, it launched the industry's first social media 'Ticket Window,' which is a fancy way of saying you can now book tickets on the Delta Facebook page.

After the page slurps your Facebook profile data and is able to secure a private connection, a process that takes a considerable amount of time, you'll be able to book flights off Facebook. How long? I started this post while waiting and quit waiting after I finished this post. Clearly, there are some bugs to be worked out.

More importantly, however, the concept kicks dust on the rented land cautions. When there is money to be made, companies don't care.

Facebook is only the beginning. Delta plans to expand its Ticket Window to other sites, including online banner ads to allow full booking capabilities within the airline's advertisements and without requiring you to leave the site you are on. Delta also has plans to provide a fully functional app that does everything its Web site and the Ticket Window can do.

Who Cares? It's An Airline.

This idea is a leap forward, because despite shortcomings, the company is doing something few have thought of — it bypasses the quest to drive visitors somewhere other than where they are. It creates an opportunity to skip the sales funnel and move directly to outcomes.

It's hard to say whether people will book flights while reading an article on The New York Times or playing Farmville, but there is a non-linear quality that can't be ignored. It demonstrates just how far social media will transform not only how we communicate, but how we sell, shop, and share.

That is not to say everything is all roses for the airline industry. Most still struggle with their basic brand promiseds. Added-value on-time flights without additional charges and some assurances nobody is busting up your luggage on the tarmac. The actual flight experience is where some innovation needs to be made and Delta still has some communication rough spots.

Communication Rough Spots.

For as much investment in the concept of a mobile Ticket Window, it's difficult to find the official Delta page on Facebook. Enough so that I had to visit the site to get the Facebook page, which defeats the purpose. Add another problem.

For creative flair, Delta altered its logo on the Facebook page (pictured left). I didn't recognize it. Sure, the new look launched earlier in the week was a step up over what most airlines offer online. (Most have websites like their service. Lacking.) It's a nice, simplified and streamlined site. However, it didn't include a new logo.

Over time, I suppose people will be able to distinguish the Delta logo no matter how they fly it onto various communication pages. But in the interim, it's disruptive in a negative way. It also assumes the airline has a huge following of fans. Maybe they do. The press release sure made it sound like they are on par with Virgin, Southwest, and JetBlue.

"Our customers are spending more time online and are looking for new ways to connect with us," said Bob Kupbens, Delta's vice president - eCommerce. "We're now delivering technology where our customers are - from our own website to our Facebook page to Internet news sites and beyond."

Like many airlines, they seem a little bit stuck on themselves. It was also a little spooky that they decided to launch on Facebook because "We already know Facebook is the most used website by inflight WiFi users on more than 2,000 Delta flights every day."

Nitpicking aside, the real thrust here should send any marketer's or communicator's head spinning with ideas and applications. While making every ad a storefront could diminish branding applications, there is something to be said for being able to book flights, buy products, or even line up speakers with customized topics wherever your landing page happens to be.

Inviting A PR Disaster: Hewlett-Packard

If there is any doubt that Hewlett-Packard implemented the wrong crisis communication strategy, look no further than abundant speculation. Speculation doesn't happen by accident. It happens when the public doesn't have any semblance of clear, authentic communication.

Stanford scholar and longtime Hewlett-Packard watcher Chuck House has come out strong for HP. He says chief executive Mark V. Hurd's resignation is tied to red herrings. The real reason, he says, is Hurd, nicknamed Mark Turd by ex-HPites who worked directly for him, was a thug.

The Los Angeles Times has taken a different tact. It reports that the HP board of directors ought not to flash a high standard of ethics too liberally. They cite how employees and top brass are treated differently when it comes to compensation, including an unusual formula to calculate the lump sum value of pensions that increased John H. Hammergren's pension from $11 million to $85 million.

James B. Stewart, a columnist for SmartMoney magazine, takes yet another approach on The Wall Street Journal, claiming that the HP board of directors didn't disclose enough. He writes that "by withholding information, the HP board is only prolonging the agony and feeding the press a juicy mystery." Perhaps not on the front end, but certainly now, HP has bought a crisis communication plan that caused more pain than if it would have not reacted to the threat of scandalous publicity.

Bad Crisis Communication Plans Magnify, Multiply, And Amplify.

There are more than 10,000 HP speculation stories across the globe today. And by the looks of things, it's only the tip of the iceberg.

Even if we just look at these three stories, they are all bad, even the pro-HP piece penned by House. It makes you wonder how powerless the board of directors was, waiting for a misstep to bring the "evil" executive down. The Los Angeles Times makes it look like the board is engaged in selective ethics. And the Stewart write-up makes it look like they are holding back, perhaps even lying.

Any time the crisis flies in more than several hundred directions, you know it's botched. Now, business reporters (people who are always looking for exciting stories because the daily stories aren't always so exciting) are looking at every angle. They are making mountains everywhere and they are doing it well beyond the scope of the initial crisis, which was a mole hill by comparison.

Situation Analysis Is Always The First Step In A Crisis.

If there were any internal politics as some suggest, they do not belong on the boardroom table at a meeting to discuss disclosure in order to avoid a public relations disaster. Handling a crisis can only have one objective: minimize damage.

So, if we take the board of directors' word that there is nothing more than what they disclosed — that Hurd was engaged in a non-sexual close relationship but fudged expense reports to hide the relationship to avoid the perception of an affair — then there is no other conclusion than they botched the plan.

In this scenario, a better course of action would have been to clear the chief executive's name, make him pay the $20,000 back (which becomes a personnel matter), manage any crisis in the event it becomes a crisis, and move on. After all, in this case, there was no evidence that Hurd's transgression (which isn't even clear as a transgression) would have been as big of a blip on the media radar. Even if it was, it seems the intent — if it was to avoid a crisis — has backfired exponentially.

This leaves us with two possible outcomes. Either HP created a crisis out of nothing or there is much more to the story.

I'm not big on crisis communication rules other than treating them as situational. I look at the classic tenets of crisis communication and see guidelines that help us ask the right questions given the readily available information we have.

However, if you do want a rule to hang on your shingle, I might suggest this one: in for a pinch, in for a pound. And once you are in for a pound, you'd better hope your only motivation was to articulate the crisis as authentically as possible.

Evaluating A Living Crisis Communication Situation.

Almost every time we evaluate a living crisis communication case study, someone inevitably says that it is too soon to conclude anything. In general, I agree with that assessment. For example, I would be doing you a disservice if I said this will kill HP.

I don't think it will (operative word is "think"). I buy HP products because the hardware is good. The ink, on the other hand, is very pricey. But I suppose it's possible.

However, public relations professionals and crisis communication managers ought to know by know that they have to draft crisis communication plans based on readily available information (not all information) and build in dozens of contingencies if and when that information turns out to be inaccurate. It happens all the time.

Sometimes the people in the field make a mistake. Sometimes public perception turns bad regardless of the facts. And sometimes, clients aren't always forthcoming. They might not lie, but I have heard "Oh, I probably should have told you ..." enough times that charging clients one dollar per utterance would have meant my retirement.

Running Into Fire: Hewlett-Packard

Ask most public relations professionals what is the first thing to do during a crisis and the pat answer is "get ahead of the crisis." That was the advice given to Hewlett-Packard’s (HP) board of directors as it related to chief executive Mark V. Hurd.

And now everyone on the board is under fire, with an unlikely charge by Lawrence J. Ellison, the chief executive of Oracle. According to Ellison, he was familiar with the sexual harassment claim against Hurd. He was familiar with the debate that raged between the board of directors. And he was familiar with the fact that the board had investigated the claim and found it to be false.

So what happened? APCO, the public relations firm advising the directors, advised that the company would face a firestorm if the accusations of sexual harassment were made public, regardless of whether or not they were true. They went so far as to make mocked up newspapers to show what the damage would be like.

According to Ellison, the board was originally split 6-4 over disclosure. On Friday, board member Marc Andreessen said the decision was unanimous.* Andreessen joined the board last year. He is co-founder and general partner of Andreessen Horowitz and co-founder and chairman of Ning (another social network that has made questionable decisions recently). He reportedly played a key role in the ouster.

What Went Wrong With The Mark V. Hurd Public Relations Debacle?

Some public relations pros are still second guessing the backlash against HP. They stand by the principle to get ahead of the problem and disclose everything. They obviously don't understand media relations whatsoever.

While Hurd had allegedly been found padding expense reports to hide a questionable relationship (approximately $20,000), most members of the media would have found the sexual harassment charges a non-event if they were false. There might have been a firestorm or not, no matter how juicy the story might have been.

Michael Holston, HP's general counsel, told investors on the conference call Friday that Hurd "had a close personal relationship" but Allred's law firm clarified "there was no affair and no intimate sexual relationship between our client and Mr. Hurd."

Stated plainly, it seems like the board of directors created an illusion of a unanimous disclosure vote to show solidarity to disclose what amounts to a non-event. The tension this caused between the board and Hurd was insurmountable, ultimately leading to the resignation (despite the breach in conduct).

The fudged expense reports could have been a quiet personnel matter, easily resolved as Hurd paid them back. It was certainly a lapse in judgement to fudge them in order to hide a relationship. However, the $20,000 compared to the reported millions in severance. Some people are baffled by this settlement. Don't be. The amount is reflective of the mistake.

What One Quote Stands Out As Grossly Misguided?

It didn't come from Hurd. It was Andreessen who said "HP is not about any one person." But unfortunately, that is precisely what the new message seems to be. Andreessen has suddenly risen to become the face of the company. And, he is already named as one of the people deciding on a replacement.

That may smell funnier than anything Hurd did. But that aside, if politics and public relations pat answers weren't involved in the decision making process, this might be be a good time to ask how differently it might have played out. We'll explore this in a second post tomorrow or Thursday. In the interim, PR pros ought to consider that crisis communication is situational.

I often illustrate the point in classes by contrasting up real life crisis situations between a tiff between a homebuilder and a handicapped elderly woman and also a tiff between a homebuilder and a vandal. Students are frequently surprised at the outcomes. We handled the one that turned out right.

HP did it wrong, and now it will still face months (and maybe years) of unflattering media coverage. You know, the stuff they wanted to avoid. Worse, we suspect it may become uglier, depending on who they pick as a replacement and how well that person performs.

* Having served on many boards, directors often revote on issues to show solidarity, even if the minority has reservations. Ergo, they knuckle.