Are Your Values Worth More Than Your Profits?

CVS Pharmacy did a brave thing today: they decided to stop selling cigarettes in their drug stores. The decision according to Forbes will result in $2B fewer sales per year out of a total of $125B in sales for the pharmacy.

The question for you is: what would it take for you to turn away from $2B assuming, of course, that you don’t run SnapChat?

Maybe 2% of sales isn’t that big of a deal for them. More important is the approach CVS is now taking: they are evolving from a pharmacy into a place of wellness. They are shifting from simply selling drugs into a place that helps people feel healthier.  Selling cigarettes did not fit into CVS’ new vision or values

Currently CVS offers a Minute Clinic with nurse practitioners and physician assistants on site. As part of this shift away from tobacco, they will now be offering a "robust national smoking cessation program" in their stores.

It’s an impressive to see a brand, the second largest pharmacy in the U.S., attempt a shift like this.

What should your brand to less of, or more of, to align your products and services with your vision and values, assuming you have some?

 How would the people with the most to lose from the shift react?

Morning Improv

Last week I organized an Improv for Marketers event here in Burlington. We had two groups of 15 people led by local comedians Nathan Hartswick and Natalie Miller of Spark Arts VT. 

Needless to say, it was a very fun morning.

 This event was a bit different than my previous ones. But as I shift my business into a more experience and service design focus, I’m struck by the absolute necessity of improv skills for innovation and creativity. Or perhaps I’m struck by the lack of these collaborative and open-ended skills among most business people (regular people too, for that matter). So part of my desire was to get better at this myself, and part of it was to educate the VT business community.

I was impressed by the comments I heard afterwards, like:

“I need to go back to my work to get us to listen more. I’m realizing how much we only talk about ourselves without listening to the other person.”

“It was really uncomfortable not to be in control all the time. I have to sit on that for a bit.”

“Amazing how much creativity there is in the room when you work together.” 

In my design workshops I usually include one improv exercise but after doing this, I have one or two new ones I’m going to introduce. Getting to “Yes and” is a continual challenge for everyone.

I even brought a few of the exercises home to use with the family at the dinner table. Of course the kids were way better than us parents.

Hopefully there’s more improv training in my future.

Designing out of “Stuck”

I’ve had a number of conversations lately with people who feel stuck. Stuck in a job, stuck in a routine, stuck in unfulfilling tasks, or stuck in a bad relationship with work superiors. The first instinct is to jump, away. But in a recent design thinking workshop I helped facilitate, people started to become aware of another solution: designing a path out of the stuck.

Taking people through the design thinking process freed up their brains to start envisioning something different. Three parts seemed to have the most impact:

• Interviewing/Listening – It’s amazing to watch people realize that listening to someone else’s challenges gives them unexpected insight into their own challenge. Or maybe it’s the simple fact of making sure they have to think about someone else’s problem for a change. In any case, sharing and caring are critical. How could you do more of this every day?
• Brainstorming/Collaborating – This is always fun but it’s challenging for a lot of people. The challenge comes from building upon the ideas of others. It’s something most of us are not that good at. The real power comes from the “aha” of working with others. I think this surprised some of the people at the training.
• Prototyping – The best part about this was that everyone knew that what they built in the 10 or so minutes they had wasn’t really that good. It was practicing failure in a safe place, failure that was appreciated by everyone. Most of us in our daily routine are not cutting, gluing and folding stuff, unfortunately.

After a day or two of doing this, I saw people re-thinking their stuckness. They started to think of designing their way out of it. Some had grandiose design plans. Others had much more modest approaches.

So here are a few simple pieces of design advise: if you’re feeling stuck, talk with some people you know and a few you don’t. Gather up a couple of people to brainstorm and collaborate with. Create a simple prototype; an artifact of what you want to do different. Share that with other people to get feedback.

Who knows, it might even lead to better work, better relationships or even new responsibilities.

Hold A Workshop

A recent notice about Champlain College’s new branding and positioning caught my attention. More specifically, it brought me back to a brand retreat I attended there in 2011.

The retreat/workshop was primarily for Trustees and other Very Important People. I got a free pass from the then Dean of Communications & Creative Media, the brilliant Jeff Rutenbeck, mostly because I sat on his advisory board.

The main part of the retreat was to go over the initial branding study and to discuss the Champlain culture and positioning. We listened a lot. Then the workshop portion of the event started. We broke into sub-groups at our table for smaller discussions. We were then tasked with coming up with, on our own, some statement that captured the essence of Champlain College and the changes it was going through.

To be honest, what I heard about competing in higher education sounded at odds with the very forward thinking parts of the college I was involved with. New groups like the Emergent Media Center and the Gaming Division were truly groundbreaking in college education. The branding felt at odds with what I was experiencing. So, in small part capture that, and also probably to provoke, I wrote this description of Champlain College:

Radically Pragmatic

I wanted in some way to capture the dynamic tension I was feeling through this process and that the college, in some way, seemed to struggle with. I have to admit, I was going through an “Oxymoron Phase.” At the time, I was trying to get a travel client to embrace the brand concept of “Active Relaxation,” to no avail. But I liked the contradictions inherent in describing a brand this way. It felt real.

So imagine my surprise when I finally went to this page and saw this phrase at the start of the positioning. Who knows, maybe 7 or 8 other people had the same idea and it came out of years of engaged discussion.

What I do know is that the phrase made it up on the wall of the brand workshop. And somehow made it out of the workshop to the positioning.

The real point of this story is this: If you and your brand are struggling with an issue, ask your customers and constituents. Engage them in active participation. Allow them to help. Hold a workshop, or something like it. 

You’ll be surprised at the value that comes out of it.

 

 

 

“I’m Not Creative”

At a recent corporate training I held, one of the participants blurted out “I’m not creative. I can’t do this.” Actually, she said that no one in her division ever asked her to be creative and it made her feel uncomfortable.

It was a shocking statement, but not surprising.

Let me give some context: The training was primarily to educate employees and vendors about certain company policies and best practices. I mixed in a number of design thinking exercises to make the training more hands-on and collaborative. The last part was key, since the policies would work best when people from different silos worked together.

The last exercise allowed people to take some leaps, to improvise and innovate, to create. It was loose enough to allow lots of leeway, but focused enough to provide direction. The last exercise built on the previous exercises in a consequential way.

The person in question was, in my mind, creative in her own right. She had asked good questions during the training. She dealt with people, often difficult people, all day, so she had to be adept at crooked paths. She did admit she liked to organize things, a creative talent to be sure. 

But to label herself as a non-creative person because no one at her job asked her to do so is a sad statement. It’s a sad statement about her state of mind and a sad statement about her enterprise group. What’s most disappointing is that I don’t think this as uncommon as it sounds. 

People in business are busy getting things done. Usually they are busy doing the things other people tell them to do. The Tellers want things done quickly. They want them done in the ways they’re used to, rather than done in the ways that will have the most impact. That last part is critical: that’s where the creativity comes in.

When we’re so busy doing, we don’t have the license or time to be creative. There is no constant culture of innovation, failure and insight. After all, those things could reflect badly on you at review time.

The problem isn’t that the woman doesn’t feel valued for her ideas. The problem is that her managers have created or accepted that culture. They’re the ones who need re-programming. And their bosses, and their bosses.

Not being creative reinforces a safe status quo. Since most businesses would rather have predictability than constant innovation, they don’t see a problem with this. It’s only when things get tough that they realize they’re too late to change. Then things get ugly. Over the last 15 years, we’ve seen a lot of this ugliness. Unfortunately, the ones who suffer the most are people like this woman who’s never been asked to be creative. So when she looks for a new job, she won’t find many like her old one.

Corporate America, even Small Business America, needs a mental reset. Competition sucks, but it is, after all, a cornerstone of the very capitalist model we’ve all embraced. Not being creative is not an option for the future.

Can Marketers Really Change?

Recently I’ve been struck by two simultaneous trends that at first glance seem diametrically opposed to each other, but may have more in common than you may think.

On the one hand, marketing departments are still having difficulty changing and transitioning from old practices of broadcast marketing to social businesses. Yes, many marketers have embraced social media tools and channels yet they continue to treat these as broadcast channels. In that sense, they find it hard to transition out of their old marketing habits and become more nimble and customer focused. It’s odd, in some sense, that so many very smart people have so much trouble changing. Or maybe I should say changing their marketing departments and organizations.

Change is a scary thing for most people and most brands. If you make a change and it doesn’t quite work out, your job or position may suffer. At the same time many marketing people have expressed to me their desire to change and their confusion as to what to do.

On the other hand, I’m witnessing a number of new people jumping into jobs in marketing departments who can’t wait to change things. Unfortunately many of these new people’s desire for change doesn’t stem from wanting to shift an organization but rather to put their mark on existing tactics.

This reminds me of the evolutionary strategy of male lions: kill all of your competitors’ cubs before you mate with a female lion.

New marketing people have a tendency to want to erase or undo their predecessors’ work in order to show their evolutionary value. Unfortunately this often entails doing the same type of work, just with a different spin or a different color. Coming in and fundamentally changing an operation is hard; just ask former J.C. Penney’s CEO Ron Johnson (who didn’t do organizational change well at all).

Change, especially in a digital world by traditionally oriented marketers, is a frightening proposition. It gets worse when marketers try something new and flashy, only to have it fail miserably, an occurrence more common than one thinks. This raises the distrust level of anything new and increases the resistance toward new initiatives.

For marketers who know in their guts that they need to change and are held back by fear of the unknown, here are a few steps to consider when jumping into the digital or social worlds:

1. Do your homework – Remember: You are not alone. You are not the first marketer to try something. Make sure you do your research about brands that have done what you’d like to do. Pay attention to what has succeeded and what has failed. Pick a few small lessons from each and extrapolate to your own brand.
2. Figure out the “Why” – “Everyone else does it” is not a good reason for doing something, even if we are herd animals. Why should your brand start a digital or social initiative? Ask the question: In the long term, how will this benefit my customers and ultimately our brand?  A good discussion about “Why” will stop a lot of poorly thought out initiatives.
3. Start small and grow – Big initiatives are exciting. They take time and resources. They also have greater risk of failure. Instead, start modestly and follow your strategy. That will allow you to learn as you go. Small also means that failures along the way aren’t that important. They turn into actionable intelligence instead. If you can make failure your ally, your boss will give you more space.
4. Connect with real people – Your customers are not an audience; they’re real people. Build your small digital/social experiments with real people in mind and make sure you are using these initiatives to connect with them through the digital channels. This human connection will give you more actionable intelligence and give your internal stories value.
5. Educate and inform – Internal communication is important when you want to try a change. Tell stories and keep telling them. Successes and ruts keep people interested and allow you to keep changing. Make sure to keep the stories on a human level.
6. Don’t pay attention to the shiny – Let the crows gather shiny objects. Your initiatives should have a longer perspective. That means that apparent quick fixes, like flashy contests or “new” social channels should take a back seat, unless you find a strategic use for them.

None of this will transform your marketing department or brand overnight. That’s not the point. Instead you will be building a culture that will accept change, even if it doesn’t always embrace it. It will make the “new” feel less risky. I’d like to hope it would make you happier and more successful in your job, too. 

Real Time Marketing is Not Just An Extension of Paid Media

 In the last month, the marketing world was abuzz about two huge media events: The Super Bowl and the Oscars. These two evenings represent an aberration in our constantly splintered media world. They command huge TV viewing audiences and thus extremely expensive ad costs.

Yet the marketing news coming out of these events reflected primarily what was happening on social media. It left us with a new buzz phrase “Real Time Marketing.” The prime example everyone pointed to was Oreo’s quick social media response to the Super Bowl blackout. After the Oscars, the pundits expressed disappointment that none of the brands were able to replicate Oreo’s success. 

Real Time Marketing has come to mean the ability for a brand to react quickly, immediately, to respond to events as they happen. It’s a very powerful concept, one that places a premium on listening and empathy. In order to do this, brands need to set up listening structures and response mechanism. They need to be able to work across silos. Those are tall orders for most marketing departments and their agencies.

One of the best examples of real time marketing I’ve seen is how REI responded to someone looking for a gift. To me, this shows a clear strategy of what to listen for and how to use social media to help solve someone’s problem. At its best real time marketing grows the business in a measurable way, through sales or increased customer service.

The Super Bowl and Oscars take another approach to real time marketing. In those two instances (and others) the real and perhaps only aim is to extend and enhance a brand's paid media, i.e. their TV ad. That may not be a bad strategy, since brands are paying through the nose to air those ads. It makes sense that they would want to recoup or maximize those costs in any way possible.

And the only way possible is to provide even more entertainment (called content) to provoke a response that’s almost solely dependent on the whims of the crowd or the pundits. They measure success not on business results but on much looser metrics such as impressions, retweets and media articles.

If this doesn’t sound like social business, it’s because it’s not.

Since this real time marketing content doesn’t always impress us, we see a lot of talk about the structure behind this response. Brands set up social media control centers to monitor events and respond quickly during these two huge media events. Maybe that’s good. But in some sense it’s a short cut or even bastardization of how other brands have set up ongoing structures to manage their social media strategy all the time, not only when the brand buys TV spots.

Brands like Gatorade and Dell pioneered this social media control center several years ago. The best brands are using real time marketing to provide utility and problem solving, not just for providing entertainment. Real time marketing can be the cornerstone of a real social business.

One of the best examples of social business is American Express. It primarily uses social media for two reasons. It uses it to respond to customer issues. And it uses it to grow its business, through innovative social promotions such as Small Business Saturday (in conjunction with Foursquare) and it’s current promoted Twitter Offers campaign. For American Express, real time marketing has clear, tangible results.

Many of the brands advertising during the Super Bowl and Oscars have a much harder time providing utility or making their business social. How does a cookie provide utility? How could you build a social business around bologna? Instead those brands are left with producing entertainment.

Most don’t do that very well. The one that did, Oreo’s did so because they had practiced it the year before through its Daily Twist campaign. Other TV advertisers take note: It’s not enough to show up a few times a year and think that you’ll succeed.

Real time marketing has huge potential for brands that use it well to build a social business. I’d hate to see the meaning of it solely focused on extending TV advertisements. If so, I think we all best lower our expectations of the promise of social media.

A View From the Tweet Seats

This weekend I was part of an experiment conducted at the Flynn Center for the Performing Arts. Marketing Director Leigh Chandler invited a group of local “Tweeters” to attend a concert in order to share live reactions through social media. Using the hashtag #FlynnTweets, we sat in the first row of the otherwise closed off balcony and watched a show with guitarists David Hidalgo and Marc Ribot.

As I walked into the theater, I met a colleague of mine. Her husband was one of the sponsors. The first thing he said to me was that he hoped we weren’t going to disturb the performance.

I can understand that. No one wants to pay money to see a concert only to have someone in the next seat tapping into their (bright) smart phone and giggling when reading responses. That did happen up in the Tweet seats. But since we were far away from the paying guests, no one seemed to mind.

Watching and tweeting simultaneously is a tough balancing act. It’s a common challenge even at social media conferences, where people spend more time tweeting out key quotes from speakers than they do sitting back, listening and reflecting. It was an issue at the Flynn as well; several Tweeters lamented that they felt “split” between trying to enjoy the concert and providing social commentary. 

Another challenge is that we who tweet love to see what kind of response we get. After all, that is the whole idea of “social” media; not just broadcast but response and conversation. It was a little too tempting to check your smart phone to see who responded or retweeted you. More often than not, it was the person sitting next to you in the balcony. So there was this strange but fun conversation happening between us as almost a secret layer to the concert.

The tweets, though, did get great feedback outside of the building. A number of people on Facebook or Twitter responded that they wished they were there at the concert. It certainly spread the word about Hidalgo and Ribot to people who might not have known who they were. It definitely got good PR play in the local media (it helped that the major newspaper had a person in the Tweet seats).

Will it have a long lasting effect, or will it be sustainable? According to Leigh Chandler, she wants to do this again. She certainly pulled together a fun group of people for the inaugural event. I’m sure there are others who would love to have a great, free seat in exchange for tweeting.

Will it sell tickets? Well, that’s the real question. It’s not feasible to do this for a sold out concert, nor does the Flynn need to. I wonder, though, if it’s possible to always have a few Tweet Seats way in the back, so they don’t disturb anyone.

One idea might be to not focus so much on the concert or event itself, but to reward people who’ve already purchased tickets backstage access before and after a concert so that they can tweet and post pictures. That would be a great, social reward to paying and loyal customers. It’s certainly something tweeters and others would brag about on social media. The content from those interactions could provide a sustainable fodder for Flynn’s ongoing marketing. 

What the Flynn Center really did during #FlynnTweets was to firm up its position as a very innovative organization in Burlington and to firm up established relationships with key influencers. Whether the tweets themselves provided great value might not be the point. I would love to see them continue to integrate social into their core business beyond the occasional social event.

I hope that’s the case, mostly because I love what they do, in our community and in our schools.

Check out my Storify stream of #FlynnTweets.

The Cost of Engagement

I stumbled across some data about Facebook engagement rates the other day. Apparently Michael Leander has been analyzing how Facebook fans react to brand posts based on how big a following that brand has on Facebook. It’s made me wonder – If we know engagement rates, and we know how much it costs to acquire a Facebook like, we should be able to calculate the cost of fan engagement. How much does it cost? And is it really worth it?

Leander found that the rate of people who like or comment on a post starts at less than 1% for a brand of 10,000 Facebook followers and then plummets the larger the audience. Here are his statistics:

Number Of Fans/Likes	Average Engagement Rate
10,000	0,96 %
20,000	0,29 %
50,000	0,21 %
100,000	0,19 %
200,000	0,16 %
500,000	0,13 %
1,000,000	0,11 %
1,500,000	0,09 %

Compared with banner ad engagement rates, those numbers might look good. I’m also starting to wonder what the cost of all this is. For the sake of simplicity, I’m not going to calculate the cost of what it takes to manage the Facebook channel or to create all of that content people are engaging or not engaging with.

Instead, I’m going to look at the cost of attaining those fans and calculating what the cost per interaction is.

Let’s take one year. I’m going to assume that brands might reasonably attain 10,000 fans without buying any likes (a leap, I know, but bear with me). For each number above 10,000, I’m going to assume that 1/3 of those total fans were purchased. That is, brands spent money on Facebook ads to get people to “Like” them.

According to a WebTrends report in 2011, the average cost for a Facebook Like acquisition was $1.07. Maybe that’s gone up or down since then, but let’s use that as a starting point.

Let’s also assume that, on average, a brand posts on Facebook once a day, or a total of 250 posts per year. With that, the cost per interaction for a smaller Facebook brand starts at $0.49/interaction over the year. For a big brand, the cost jumps to $1.59/interaction for a year. 

Fans	Bought Fans	Cost	Posts Per Year	Total Interactions	Cost Per Interaction
10,000			250	24,000
20,000	6,667	$7,133	250	14,500	$0.49
50,000	16,667	$17,833	250	26,250	$0.68
100,000	33,333	$35,667	250	47,500	$0.75
200,000	66,667	$71,333	250	80,000	$0.89
500,000	166,667	$178,333	250	162,500	$1.10
1,000,000	333,333	$356,667	250	275,000	$1.30
1,500,000	500,000	$535,000	250	337,500	$1.59

 

Remember, that’s not covering the cost of managing the channel or creating content. That’s just the interaction cost. Of course this is only for a year, if you spread that over 2 years it gets a little cheaper.

 The number of interactions isn’t terribly impressive either. But it starts putting things into perspective, such as:

• What is the real impact of an engagement?
• If people engage more with emotional imagery, say of kittens, is it worth the cost to the brand?
• None of this starts connecting interactions to real business goals. Does that matter?
• Is it really worth it to purchase fans on Facebook?

Actually, it’s that last question that’s important. Based on this calculation, however imprecise, I’d say no.

What do you think?

The Five Stages of Digital Strategy

The business of strategy is a funny one. Lots of people talk about strategy and ask for it. I seriously doubt that there’s a lot of commonality in what people believe strategy to be. In its essence, a strategy is a plan for what to do. Bud Caddell has modern spin on a digital strategy that I think is a good one. 

Is that what businesses want when they ask for a digital strategy? I don’t think so. So here is what I’m calling the Five Stages of Strategy: What businesses ask for when they ask for “strategy.”

1. Tactics – This is by far the most common intent. We see this in a lot of web strategy but social media has taken this to a completely new level. Social media strategy has in many cases come to simply mean: set up our accounts on Facebook and Twitter. Social agencies are complicit in this bastardization; they’re really selling implementation services. Strategy is just a way to open the door. Tactics without strategy are usually not sustainable, though, which is probably why many companies end up paying big bucks for Facebook Likes and even bigger bucks to communicate with those new likes through Promoted Posts.
2. Cover My Butt – One of my favorite stages, this usually happens in companies with larger internal marketing staffs. The cover my butters come in a couple of flavors. One flavor is someone who needs a smokescreen with upper management to ask for more money. It’s also useful for those who feel pressure from above to move on digital initiatives and want a way to insure themselves from blame in case things don’t work out. In either case, the strategy process can be a long one that ends up having little impact on the actual work.
3. Prove I’m Right – Many organizations listen to employees very poorly, if at all. Organizations contain a huge amount of intelligence, creativity and innovation. Unfortunately no one has time from his or her busy day to mine that intelligence. In the Prove I’m Right strategy, one quite often uncovers a plan or idea that some of the key players have pushed for, without any luck. The strategy from the third party validates that and provides impetus for implementation. Of course, if you prove someone wrong, then results may vary.
4. I Know We’re Behind – It’s easy for people to look at the success of others and to feel that they don’t measure up. This is a good place to start, strategically. There’s an uncomfortable acceptance that people don’t like the place they’re in and want to move somewhere, they just don’t know where. Strategy has the potential to move organizations like this along a continuum by providing a plan to do so. The best part about this is that people who ask for this are already willing to try something new, one of the key conditions for implementing a successful strategy. The challenge for the strategy is to not overshoot reality, something that’s easy to do given both the market place and the desires of the organization.
5. Help Us Change – The holy grail of strategy is working with organizations that embrace and recognize the need for change. Face it; if things were working perfectly, no one would need a strategy, a plan, for doing things differently. In this phase there’s not only support from upper management but also a desire from employees to do things differently. While not all strategy is change, change is a critical part of most great strategies. When organizations reach this stage of strategy they are usually poised for great success.

The red thread through all of this is tolerance for internal and external change.  Many organizations have no desire or tolerance for anything beyond cosmetic changes. That’s why the first stage, tactics is so popular.

While Elisabeth Kubler-Ross would probably turn in her grave if she read this, it’s worth thinking about before that next strategic engagement. Ask the question to determine what strategy stage your organization, or client, is at. It will make the results that much more palatable.