I recently took a trip to San Francisco and met with two companies, the first, a solar client, the second, the main SF Bloomberg office down on the wharfs. Both have open office environments. The solar company has low cubes for everyone including the CEO, and each conference room has floor-to-ceiling glass walls so any passers-by can see what’s happening inside. Bloomberg has an even more open environment, long tables of workstations with employees lined up before four screens each, a TV production area in the open center aisle surrounded by employees, and recording devices to capture what happens inside each conference room.
My first reaction coming from more traditional East Coast layouts was: Isn’t all this noisy. A deeper part of me wondered if such supposed transparency was driven by an Orwellian instinct to listen in on employees, avoid legal risks, etc. But I noticed something else — all the employees were more courteous than I’ve seen elsewhere. A spirit of shared professionalism was breathable in the halls. My Bloomberg friend and I chatted about tech column ideas and segued into a few colorful stories about sex, knowing that the conversation was going on tape. Who cared? The environment encouraged pure honesty.
The challenge with corporate values is like all intangibles, initially they are hard to tie to external customer demand or internal profits. Customers of that solar firm or readers of Bloomberg can’t see initially that the employees inside are acting more honest, more courteous, more respectful with each other, so “values” may not jack sales or readership. But that “value” bubbles up in productivity, idea generation, and service expansion in ways that help make such companies more competitive.
Corporate values in my mind are the fitness test of the production body, and when it comes time for the competitive race, companies that are more fit will perform better. Any company can optimize for itself in the short term by cutting corners and ethics, getting a bump in this quarter’s profits. Values recognize the deeper truth that the corporate, corporeal body really does not exist, and instead is a fiction filled with human beings whose ethical performance is tied to the product output. We’ve seen what happens to market ecosystems when values break down — housing bubbles, near-catastrophic financial collapses. The same lack of values can damage smaller corporate bodies.
It all comes down to motivating the real humans who make or serve things to perform, both for profit and for organizational strength. What is the value of “values”? What is the value of being surrounded by 100 honest, motivated, ideating, empowered, nimble, fast, trustworthy people who are pulling together in a common purpose? The second question answers the first.
Investments in fitness never pay off in the first day, but they do over the long haul.
(A response inspired by Gunther Sonnenfeld’s brilliant post on corporate ethics.)
Image: Sergio Tudela Romero
One of the fallacies of marketing is we “target” people as if they were static bull’s-eyes — you there, in the affluent demo, married with kids, PRIZM category mid-life crisis with SUV, intent to buy a red convertible — when really people contain multitudes. Today you’re an office worker. Tonight a mom. Later tonight, a Glee-watching high schooler. Much later, a sexy vamp. Whatever you’re into, you’re into different things, yet marketers fail to recognize your emotional and modality states.
Microsoft will change that. News percolated today that the Redmond giant has a patent for an ad system that would recognize your emotional state, and then match corresponding advertisements. The patent gives a hypothetical example: “For instance, OMG, Inc., is an advertiser that owns bowling alleys and lounges specializing in birthday parties…” OMG wants to serve ads that go “Bang!” with excitement, but kids or adults who are feeling sad don’t react well to such ads. So being smart, OMG sets up multiple versions of its advertising creative, and when the scanner/camera notices the digital viewer looks sad or stressed, either suppresses the ad (no whiz-bang party for you glumster) or could pitch an alternative (come relax in our chill lounge…).
Microsoft calls this “emotional targeting.” You may ask, how in the world could a company track our emotions? Well, your laptop has a camera pointed at your head; Microsoft owns Kinect, which uses body-monitor scanning to allow cool video games, and Skype, where you share videos of your face; in fact, every company working on a smart TV is embedding video cameras aimed directly at you.
In George Orwell’s 1984 the TV sets watch people. In one scene the protagonist moved out of the room, around a corner, to open a book or journal to try to have privacy, but the monitors caught him. Are we afraid of what could happen if the devices we love to watch start watching us back? Or is this a natural extension of marketers trying to personalize offers meaningful to us by moving beyond data trails to direct observation?
If you’re curious, here’s a list of the ways Microsoft says it might track you:
The client devices … include, without limitation, personal digital assistants, smart phones, laptops, personal computers, gaming devices, or any other suitable client computing device. In some embodiments, the client devices include image capture and voice capture devices. The image capture devices include cameras, video cameras, etc. The voice capture devices include microphones, recorders, etc. The client devices … include a user and system information storage to store user and system information on the client device. The user information may include search histories, cookies, user identifiers, online activities, assigned emotional states, and passwords. The system information may include Internet protocol addresses, cached Webpages, and system utilization.
Famed 1990s’ bubble analyst Mary Meeker is out with her annual digital media forecast, and one of her jaw-dropping findings is that Apple users now download a collective 46 million apps each day. At first, reading this, you go “yay, apps!” And then you pause. “Crap. That’s a lot of apps. How can people use so many of those software-ish things?”
And that is the problem. Apps are no longer software; they have become commoditized, fly-by-night media. Apple has, by our estimates, 300 million current iTunes accounts with registered credit cards. If you divide 300 million users into the 16.8 billion apps downloaded each year, each Apple user grabs 56 apps annually — or about one per week per consumer.
No one uses 56 apps. Which means apps are disposable. Instead of a software portal (each app-maker’s dream) or new platform (you want your app to become the next Foursquare yes!), apps are now just a media slot — easily seen, quickly forgotten, like a TV commercial or banner ad flashing by in the night.
This doesn’t mean you shouldn’t build an app. Instead, it means you need to launch 100 of them. Apps get noticed — users love to download them after all — but their lifecycle is short. So go build an app. Then forget it, because next week you’ll need to build another.
The challenge of course is computer product designs are converging into flat panes, and eventually panes can only go so far. When screens and smartphones achieve the apex of glass, product differentiation will be difficult. Which is why devices soon will move out of solid shapes.
Two examples are laser keyboards and miniature projectors. The Cube Laser Virtual Keyboard is a $180 gizmo that beams glowing keys onto any flat surface, and somehow tracks the position of your fingers as you “click” on the flat QWERTY layout. You pair the device with an iPad and suddenly can type away like mad. (Flatscreen tablets suck at typing, yes.) It doesn’t take a rocket scientist to guess that within two years Apple and Samsung will add such laser-keyboard inputs into their tablets and phones. And for output, miniature projectors do exactly what they sound like — beam images from your phone and tablet onto the wall, so you can regale dinner companions with cat videos or hold an impromptu PowerPoint presentation with that executive you meet in the bathroom stall.
The third and most promising way devices will leave their hardware shells behind is virtual reality projections. Google announced this week it is expanding its Google Maps 3-D modeling (which renders photorealistic images of major metro buildings, streets, water, and flora from aerial imagery) to mobile phones. Now your handset can unveil a virtual earth tied to your location. If Google has figured out how to compress this powerful software into small handsets, the next step will be putting it inside your glasses, and soon you can overlay any fiction on the world you wish. Some clever hackers twisted the Google Project Glass teaser video to show how you could overlay the “Battlefield 5” game onto your neighborhood walk, if only you wore the right pair of virtual-reality spectacles.
Soon, keyboard inputs, video projections, and virtual reality will dance in the air around our fingers and eyeballs. The hunger to buy the next Apple product will fade, because slightly recast aluminum shells will become commoditized and a glass tab that transforms into a high-def screen is just another piece of glass. Apple, Google/Motorola, Samsung, Dell, HP and other gadget manufacturers will need to spend more time thinking through virtual interfaces than concrete shells. Play it forward and you’ll see plenty of opportunity for garage startups to break into this new anti-product world. When the air itself becomes the gadget, the definition of product design will change.
This is a story about how I flirted with Zappos, yet Zappos did not return my call.
Social media is supposed to allow brands to build “engagement,” a quasi-relationship that relies on frequency of interactions. Ian Schafer, chief of the sharp social agency Deep Focus, wrote an Ad Age column recently saying frequency is key to setting Facebook apart from just another advertising medium. Ian commented, “Facebook enables frequent interactions with consumers over time … real consumer connections become the new impressions.”
Why is this important? If you want to influence someone, you have to try repeatedly. A classic precept of advertising is that to influence a consumer, you must touch them with a “frequency” of three communications per week to get the most response. The big soap-makers (P&G, etc.) in the 1970s and 1980s conducted numerous studies that found 3x contacts per week is just the Goldilocks amount of outreach to get the most people possible to respond to you. This is rather intuitive; your spouse didn’t marry you on the first date, so one “frequency” wouldn’t have worked in your courtship, yet if you hounded her every hour of each day initially, she would have reported you for stalking.
So I decided to test how well brands use frequency inside Facebook. I “Liked” 12 brands on Facebook including Apple, Bank of America, Ford, Pepsi, Starbucks, Zappos and others, as well as the U.S. presidential candidates Barack Obama and Mitt Romney, and then carefully checked into Facebook 31 times over the next 7 days to see how frequently they reached out to me organically in my stream. Liking a brand on Facebook, of course, gives that entity permission to pop up in your Facebook feed like an old girlfriend. Each time I checked into Facebook, I scrolled back for several hours of updates, fervently looking for engagement from my newfound brand friends.
And what I found is … most brands fail at using social media to build frequent interactions. Only Mitt Romney and Barack Obama did well, reaching out to me 5 and 4 times respectively. But the commercial brands averaged a frequency of only 0.6 interactions over 7 days. Less than 1 interaction — far below the threshold of 3 touchpoints required to influence a consumer! Several brands including Apple, Bank of America, Starbucks, Trek and Zappos didn’t even show up once in my Facebook feed.
Personalization? What personalization?
The other big problem I noticed with Facebook engagement is when brands did send a missive into my stream, it was one-size-fits-all. Pepsi gave me an extended version of its current TV commercial (the irony). University of Phoenix popped up offering me a teaching certificate, while my bio clearly says I work in advertising and marketing. When a brand did try to “engage,” it felt about as on point as a blaring AM radio commercial.
This isn’t really a ding on the Facebook platform as much as worrisome that leading brands such as Pepsi and Zappos can’t build coherent relationships with new fans. Big companies seem more intent on using social platforms as a broadcast medium than a two-way communications stream. But this could also indicate Facebook needs to provide better tools to enable one-to-one personalization, or quasi customization, in brand outreach. If I like Trek, maybe my updates talk about mountain biking more than road cycling, so Trek should be able to tailor its missives to my interests. Spraying all your brand fans with the same message feels a little mass media to me, and while that can work, is it what we really expect from social media?
So here’s an idea. Instead of getting me to Like your brand, how about having your brand Like me?
- If a customer lead is generated at $100 and you have a 10% conversion rate, you have a $1,000 cost per sale.
- If you spent another $20 on two additional marketing touches in an interim step on the same customer lead — say, an outbound phone call, and a nice direct mail piece with a product DVD — your cost per lead would rise to $120. But if those two additional touches boosted conversion rates from 10% to 15%, your cost per sale falls ($120 cost per lead / 15%) from $1,000 to $800.