Category Archives: Customer Relationships

Will Customer Service Disappear with the Elimination of the “Middle”?

First published October 18, 2012 in Mediapost’s Search Insider

In response to my original column on disintermediation, Joel Snyder worried about the impact on customer service: The worst casualty is relationships and people skills. As consumers circumvent middlemen, they become harder to deal with. As merchants become more automated, customer service people have less power and less skills (and lower pay).

Cece Forrester agreed: Disintermediation doesn’t just let consumers be rude. It also lets organizations treat their customers rudely.

So, is rudeness an inevitable byproduct of disintermediation?

Rediscovering the Balance between Personalization and Automation

Technology introduces efficiency. It streamlines the “noise” and marketplace friction that comes with human interactions. But with that “noise” comes all the warm and fuzzy aspects of being human. It’s what both Joel and Cece fear may be lost with disintermediation. I, however, have a different view.

Shifts in human behavior don’t typically happen incrementally, settling gently into the new norm. They swing like a pendulum, going too far one way, then the other, before stability is reached. Some force — in this case, new technological capabilities — triggers the change. As society moves, the force, plus momentum, moves too far in one direction, which triggers an opposing force which pushes back against the trend. Eventually, balance is reached.

A Redefinition of Relationships

In this case, the opposing force will be our need for those human factors. Disintermediation won’t kill relationships. But it will force a redefinition of relationships. The challenge here is that existing market relationships were all tied to the “Middle,” which served as the bridge between producers and consumers. Because the Middle owned the end connection with the customer, it formed the relationships that currently exist. Now, as anyone who has experienced bad customer service will tell you, some who lived in the Middle were much better at relationships than others. Joel and Cece may be guilty of looking at our current paradigm through rose-colored glasses. I have encountered plenty of rudeness even with the Middle firmly in place.

But it’s also true that producers, who suddenly find themselves directly connected with their markets, have little experience in forming and maintaining these relationships. However, the market will eventually dictate new expectations for customer service, and producers will have to meet those expectations. One disintermediator, Zappos, figured that out very early in the game.

Ironically, disintermediation will ultimately be good for relationships. Feedback loops are being shortened. Technology is improving our ability to know exactly what our customers think about us. We’re actually returning to a much more intimate marketplace, enabled through technology. Producers are quickly educating themselves on how to create and maintain good virtual relationships. They can’t eliminate customer service, because we, the market, won’t let them. It will take a bit for us to find the new normal, but I venture to say that wherever we find it, we’ll end up in a better place than we are today.

The Good Side of Disintermediation

First published October 11, 2012 in Mediapost’s Search Insider

You know you’ve found a good topic for a column when half the comments are in support of whichever side of the topic you’ve lined up on, and half are against it. Such was the case last week when I wrote about disintermediation.

This week, I promised to present the positives of disintermediation. I’ll do so at the macro level, because there are market forces at work that will drive massive change at every level. But there were also some very interesting questions raised last week by readers:

  • Is disintermediation killing relationships and our ability to deal with people?
  • Are the benefits of disintermediation tied to social status, driving the haves and the have-nots even further apart?
  • Is more information good for the market, or does it just create more noise for us to wade through?
  • What will the social cost of disintermediation be?
  • What are the global implications of disintermediation?
  • In knowledge-based professional markets where experience and expertise are essential (i.e. health care) what role does disintermediation play?
  • Are we just replacing one type of “middle” with another (for example, online travel agencies for traditional travel agencies)?

Each of these questions is worthy of a column itself, so I’ll file those away for future writing over the next few weeks. But today, let’s focus on the silver lining inside the disintermediation cloud.

I’ve written about Kondratieff waves (also K waves) before. In the world of the macro-economist (who are of mixed opinion about the validity of the theory), these are massive waves of disruption (often driven by technological advances) that first deconstruct the marketplace and then rebuild it based on the new (improved?) paradigm.

The Industrial Revolution was one such wave. What that did was create a new marketplace built on scale. Bigger was better. It introduced mass manufacturing, mass markets and mass advertising. It also created the “middle,” which was an essential part of getting goods to the market. Given the scale of the new markets, it was essential to create a huge support infrastructure. Most of the wealth of the 20th century was built on the back of this particular K wave.

One of the characteristics of a K wave is that the positive benefits outweigh the negatives. After the period of destruction as the old market is torn apart, the new market scales to new heights. Technology fuels increased capabilities and opportunities. The world lurches ahead to a new possibility. We were better off (arguably) by most metrics after the Industrial Revolution than before it. We were more productive, had a higher standard of living and could do things we couldn’t do before.

Today, we’re in the middle of another K Wave disruption, and I believe this one is going to dwarf the impact of the Industrial Revolution. Of course, K waves by their nature are long-term phenomena whose impacts take decades to roll their way through society.

This particular K Wave is reversing many of the market dynamics established by the previous “Bigger is Better” one. We’ve begun to deconstruct the gargantuan support system required to service mass markets. Inevitably, there will be pain, and last week’s commentators zeroed in on many of those pain points. But there will also be growth. And the bigger the wave, the bigger the growth. In this case, the same factors I talked about last week – democratization of information, better user experiences, solving the distance problem – are all being driven by technology. As this wave continues, the market will become more efficient. Information asymmetry will be lessened (if not eliminated) and the superstructure of the “middle” will become unnecessary.

A more efficient marketplace means new opportunities. More businesses will start and grow. Previously unimagined sectors of a new economy will emerge. This new economy will be global in scope, but hyperlocal in nature. Pure ingenuity will have a chance to flourish, freed from the constraints of the need for scalability. Once we get through the stumbles inevitable in the transition period, the economy will ramp up for another bull run. But we have to get there first.

The Disintermediation of Everything

First published October 3, 2012 in Mediapost’s Search Insider

Up until five years ago, I had never used the word disintermediation. In fact, if it would have come up in casual conversation, I would have had to pick my way through its bushel of syllables to figure out exactly what it meant.

Today, I am acutely aware of the meaning. I use the word a lot. I would put it up there as one of the three or four most important trends to watch, right up there with the Database of Intentions, which I talked about last week. The truth is, if you’re a middleman and you’re not dead already, you’re living on borrowed time.

Why is the Middle suddenly such a bad place to be? A lot of people have made a lot of money in the Middle for hundreds of years. The Middle makes up a huge part of our economy, including a lot of middle-class jobs. Systematically eliminating it is going to cause a ton of grief. But the process has started, and there’s no turning back now.

Three big shifts are driving disintermediation:

The Democratization of Information

The Middle exists in part because we didn’t have access to what, in game theory, is called perfect information. Either we didn’t have access to information at all, or the information we had was not reliable or useful to us. So, in order to function in the marketplace, we needed a bridge to what information did exist.

Think of travel agents (which for the majority of us, is someone we probably haven’t spoken to for a few years). Travel agents were essential because we were walled off from the information we needed to arrange our own travel. We had no access to the latest airfares, hotel availability or room rates. If you had asked me what was the best hotel in Istanbul, I would have had no clue. We used travel agents because we had no choice.

Today, we do. The travel industry was one of the pioneers in democratizing information. The result? The travel marketplace is infinitely more efficient than it was even a decade ago. The average person can now put together a six-week multi-stop vacation relatively easily.  The middle is being eliminated. In 1998, there were 32,000 travel agencies in the US. Today, through elimination and consolidation, that number is closer to 10,000. Disintermediation has cost thousands of travel agents their jobs.

The Improvement of User Interfaces

When’s the last time you spoke to a bank teller? If you’re like me, it’s probably the last time you had to do something that couldn’t either be done through online banking or at a local ATM.  99% of our banking can now be done quicker and easier because banks have invested in creating platforms and interfaces that enable us to do it ourselves.  It’s better for us as customers, and it’s much more profitable for the banks. Disintermediation in banking has created a more efficient model. Ironically, unlike travel agents, bank tellers have not lost their jobs. They’ve just changed what they do.

The Overcoming of Geography

The final factor is the problem of distance. When mass manufacturing became possible, the distance between the factory and the market started to grow. Suddenly, distribution became a major challenge. Supply chains were born, making a lot of people very rich in the process. Becoming big became essential to overcoming the problem of distance.

But technology has made physical fulfillment much more efficient. Getting a product from the factory floor to your front door is still a challenge, but our ability to move stuff is so much better than it was even a few decades ago. The result? Massive disintermediation. And this particular trend is just beginning.

So What?

Much of what we’re familiar with today is part of the Middle. Just like travel agents, video stores and bank tellers, every year something we have always taken for granted will suddenly disappear. Huge swaths of the economy will be disruptively eliminated. That’s the bad news. The good news will have to wait till next week’s column.

Three Myths About Customer Love

First published July 5, 2012 in Mediapost’s Search Insider

Today, I want to talk about the last of the three posts by Harvard Business Review bloggers, Karen Freeman, Patrick Spenner and Anna Bird  I have been surveying: “Three Myths about What Customers Want.” Specifically, I want to look at this post’s implications for online marketing.

Myth #1: Most consumers want to have relationships with your brand.

This myth is at the crux of many, many social media campaigns. The theory is, a “like” = “intent to buy.” I have said before that I believe this is hogwash. The HBR bloggers concur:

“Only 23% of the consumers in our study said they have a relationship with a brand. In the typical consumer’s view of the world, relationships are reserved for friends, family and colleagues. That’s why, when you ask the 77% of consumers who don’t have relationships with brands to explain why, you get comments like ‘It’s just a brand, not a member of my family.’”

Marketers being marketers, we tend to think the entire world revolves around whatever it is we’re trying to sell. We believe people actually give a damn. They don’t, at least not in the vast majority of cases.  In contrast, relationships endure. They are there for the long haul. Consumer consideration runs on much shorter timelines.

There are degrees to consider here, however. What consumers can develop for a brand is loyalty. This falls into the category of beliefs, and that is what drives a lot of consumer behavior. We can believe a brand offers good value without having a relationship with it. Beliefs are heuristic decision shortcuts, which help consumers cut through cognitive overload.

Myth #2: Interactions built relationships.

Actually, say the HBR team, relationships are built on shared values:

“Of the consumers in our study who said they have a brand relationship, 64% cited shared values as the primary reason. That’s far and away the largest driver. Meanwhile, only 13% cited frequent interactions with the brand as a reason for having a relationship.”

Values can be a powerful driver of how we form beliefs. The brand I probably have the strongest affinity for is Apple. And it’s not because I have a relationship with Apple (never having visited its Facebook page). It’s because I believe Apple shares my values of creative freedom, uncompromising design and aesthetically pleasing experiences. I interact with an Apple device every day of my life. But I interact with the company only when I need something.

Myth #3: The more interaction, the better.

Marketers want to dominate a prospect’s time, in the mistaken belief that it will make the relationship “stickier.” If “stickier” means frustrating and annoying, they could be right.

“There’s no correlation between interactions with a customer and the likelihood that he or she will be ‘sticky’ (go through with an intended purchase, purchase again, and recommend),” writes the HBR team. “Yet, most marketers behave as if there is a continuous linear relationship between the number of interactions and share of wallet. That’s why, as the Wall Street Journal recently reported, you see well-established retailers like Neiman Marcus, Lands’ End and Toys R Us sending customers over 300 emails annually.”

We all have lots to do. The last thing on that list is to spend unnecessary time interacting with a brand because they’ve targeted us as a “loyal” customer. Here’s a question to ask yourself: Who benefits most from all these interactions — the customer or the marketer? If the answer is the marketer, then why should the customer care?

The danger of becoming marketers is that we gain a distorted perception of reality. Our job is to love a brand. It consumes our professional lives. This does weird things to a human brain. It makes it almost impossible to look at our brands the same way the rest of the world does. We care because we have to. We get paid to. The rest of the world doesn’t share the same motivation.

Paralyzed by Choice

First published June 28, 2012 in Mediapost’s Search Insider

In last week’s column, I looked at how Harvard Business Review bloggers Karen Freeman, Patrick Spenner and Anna Bird spelled the end of the purchase funnel. Today, I’d like to look at the topic they tackled in the second of the three-part series, “If Customers Ask for More Choice, Don’t Listen.”

Barry Schwartz, the author of “The Paradox of Choice,” believes we’re overloaded with choices. In fact, we have so many choices to make, often about inconsequential things, that we live with the constant anxiety of making the wrong choice.

This paradox meets today’s consumer head on, over and over, in situation after situation. The other factor, which I’ve seen play a massive role in buying behaviors, is the degree of risk in the purchase. The bigger the purchase, the higher the risk.

The final piece of the buying puzzle is the reward that lies at the end of the potential purchase. Our brains are built to balance risk and reward in fractions of a second. But we don’t do it by a calm, rational weighing of pros and cons, thus engaging the enlightened thinking part of our brains. We do it by unleashing emotions from the dark, primitive core of our brain. The risk/reward balance whips up a potent mix of neural activity that sets our decision-making engine in motion.

The degree of risk or reward sets the emotional framework for a purchase. High reward, low risk generally means a fairly fast purchase, such as an impulse buy. High risk, low reward may mean a very long purchase cycle with an extended consideration process. Whatever the buying path, there will be an undercurrent of emotion running just below the surface.

Now, let’s match up the findings of the HBR team. High-risk purchases automatically ramp up the level of anxiety we feel. We’re afraid we’ll make the wrong decision. And, in a complex purchase, there’s not just one decision to be made – there are several. At each decision point, we’re bombarded by choices. If the hundreds of purchase path evaluations I’ve done are any indication, the seller spends little time worrying about presenting those choices in a user-friendly way. Catalog pages are jammed with useless and irrelevant items. Internal site search results are generally abysmal. And product information typically takes the form of a long shopping list of features. Very little of it speaks to buyers in a language they care about.

This is a dangerous combination. We have the natural anxiety that comes with risk. We have a gauntlet of decisions to make, each raising the level of anxiety. And we have websites that contribute greatly to the frustration by making it difficult to navigate the information that does exist, which is either too little, too much, too irrelevant or too salesy — never does it seem to be just right.

Again, Freeman, Spenner and Bird ask us to make it simpler for the buyer. Provide them with fewer choices, and make them as relevant and compelling as possible. Ease the burden of risk by providing information that reassures. Realize that one of the components of risk is the degree of bias in the information we’re given. It that information reeks of marketing hyperbole, it will be discounted immediately.

In our numerous eye-tracking studies, we’ve found that in most instances, three to four options seems to be the right number to consider on a Web page. These can be easily loaded into working memory and compared without causing undue wear on our mental mechanics. So, on a landing or home page, three or four groups of coherent and relevant information seems to be an optimal level. We call them “intent clusters.” For navigation bar options, we try to keep it between five and seven choices. If we expect mostly transactional traffic, we ensure there is a “fast path” to purchase. If we expect a lot of purchase research, we aim for rich promises of relevant and reliable information.

As Freeman, Spenner and Bird remind us, “The harder consumers find it to make purchase decisions, the more likely they are to overthink the decision and repeatedly change their minds or give up on the purchase altogether. In fact, regression analysis points to decision complexity and resulting cognitive overload as the single biggest barrier to purchase.”

As marketers, our job is to eliminate the barriers, not erect new ones.

The Death of the Purchase Funnel

First published June 21, 2012 in Mediapost’s Search Insider

A recent series of three posts on the Harvard Business Review blog by Karen Freeman, Patrick Spenner and Anna Bird explored some of the myths about how consumers make decisions. I think each of these has direct implications for search marketers, so over the next three weeks I want to explore them one at a time.

The first, titled “What Do Consumers Really Want? Simplicity,” talks about the breakdown of the purchase funnel. The HBR bloggers contend the funnel, which has been around for well over a hundred years, no longer applies to consumer behaviors. I concur, and said as much in my book, “The BuyerSphere Project.”

We differ a little on the reason for the demise, however. The HBR team credits the demise to cognitive overload on the part of the consumer. We’re simply bombarded by too much information on the purchase path to fit it all into the nice, simple, rational filtering process captured in St. Elmo Lewis’s elegant funnel-shaped model. The accompanying research, a survey of 7,000 consumers, shows decision simplicity was the number-one thing people wanted when making a purchase.

I agree that information overload is part of it, but I also believe that two other factors have led to the end of the purchase funnel. First, the purchase funnel assumes a rational filtering of options based on careful consideration of a consumer’s requirements. I don’t think this was ever the case. Emotions drive our decisions, and more often than not, rationality is applied after the fact to justify our choices. Prior to the Internet, emotion was tough to distinguish from rationality, as buyers didn’t have much control over the content they accessed during the consideration process. They were limited to whatever the marketer pushed out at them. So, whether driven by emotion or logic, they tended to go down the same path and display many of the same behaviors. Given the pervasive believe in humans as rational animals at the time, it was not surprising that a logic-driven model emerged.

The other factor, as I alluded to, was that the Internet shifted the balance of power during the purchase process. Suddenly, we could choose which paths we took during the consideration process. We weren’t all forced down the same path, according to some arbitrary notion of a funnel-shaped model.

What became clear, when consumers could choose their own path, was that the simplicity of the funnel model bore little relation to the actual paths consumers took. And those paths were driven by emotion. People bounced all around, depending on what they were looking to buy. They could go all the way to a shopping cart, then suddenly abandon it and go back to a destination that would be considered “upper funnel” and start all over again. From the outside looking in, this resembled a bowl of spaghetti much more than it did a funnel.

So, we have a trio of suspects in the death of the purchasing funnel: cognitive overload, emotion trumping logic, and consumers gaining more control over their consideration path. All lead to an interesting concept to consider: laying an online path that anticipates the emotional needs of the buyer, and yet keeps the information presented from overwhelming them. For example, marketing has traditionally taken a “turf war” approach to persuading a prospect: “as long as they’re on our turf, we do everything possible to close the sale.

But this doesn’t really match up with the three trends we’re talking about. What online consumers are looking for, according to the HBR research, is a safe online zone that will make their decision easier. Rather than going from site to site, collecting information and filtering out overt marketing hyperbole, what consumers want is a single information source they can trust. They want to be able to lower their “anti-BS” shields, because being a rational, cynical shopper takes a lot of time and effort.

Today, it’s extremely rare to find that trustworthy information on a site you can actually purchase from, but it’s starting to happen in some high activity categories, where independent portals facilitate this simplified approach to shopping. Travel comes to mind.

But let’s consider what would happen if a brand’s website took this approach. Rather than bombard a prospect with exaggerated sales pitches, putting them on the defensive, what if a more neutral, objective experience was provided?  After all, why shouldn’t the decision path be built on your own turf, giving you a home field advantage?

Look at the Big Picture in 2012

First published December 29, 2011 in Mediapost’s Search Insider

Another year’s pretty much in the can. And because I’m working on idle this week, trying to catch my breath with my family before plunging headlong into 2012, search marketing falls somewhere behind the recent releases on Netflix and trying out the new Wii game on the list of things preoccupying my mind. So, don’t expect any salient and timely search news from me!

When I look back on what has preoccupied me over the last 12 months, I will say that much of it has been spent “stepping back” and trying to look at the bigger picture. As online interactions have taken a bigger and bigger chunk of our lives (you’ll notice that both of the recreational options I mentioned have online components woven into them), trying to understand how our actions play out against a broader online backdrop has been the thing I think about most often.

We digital marketers tend to take that “bigger picture” and break it into pieces, trying to make sense of it by focusing on one small piece. Digital marketing lends itself to this minute focal depth because of the richness of each piece. Even the smallest chunk of an online interaction has a lot to explore, with a corresponding mound of data to analyze. We could spend hours drilling into how people use Linked In, or Twitter, or Google+ or Facebook.  We could dig into the depths of the Panda update or how local results show up on Bing and never come up for air.

But think back to what, at one time, was another holiday season pastime. Some of us remember when we used to get a jigsaw puzzle for Christmas. You’d dump out all 5,000 of those little photographic morsels and then begin to piece it together into a coherent image of something (usually a landscape involving a barn or a covered bridge). Success came not only from examining each piece, but also in using the image on the boxtop to help understand how each piece fit into the bigger picture. Without understanding what that bigger picture was supposed to look like, you could examine each piece until the cows came home (again, often a topic for jigsaw art).

So, much of my 2011 was spent trying to understand what the picture on the top of the puzzle box was supposed to look like. What would ultimately tie all the pieces together?  In physics terms, I guess you could say I’m been looking for the Unified Field Theory of online marketing. And you know what I realized? You won’t find it by focusing on technology, no matter how cool it is. Foursquare marketing or search retargeting or hyperlocal optimization are all just pieces of a much bigger puzzle. The real picture emerges when you look at how people navigate the events of their lives and the decisions they must make. It’s there where the big picture emerges.

A few weeks ago I was speaking to a group of marketers about the emerging role of mobile.  This was no group of digital slouches. They knew their mobile stuff. They had tested various campaign approaches and honed their tactics. But the results were uneven. Some were hits, but more were misses. They knew a lot about the pieces, but didn’t have the boxtop picture to guide them.

My message (for those who know me) was not a surprising one: understand how to leverage mobile by first understanding how people use mobile to do they things they intend to do.  Don’t jump on a QR code campaign simply because you read somewhere that QR codes are a red-hot marketing tool. First see if QR codes fit into the big picture in any possible way. If you do that, you might find that QR codes are a puzzle piece that actually belongs in another box.

After delivering my sermon about the importance of understanding their respective big pictures, I asked my favorite question: “How many of you have done any substantial qualitative research with your customers in the past year?” Not one hand went up. This was a group of puzzle assemblers working without any boxtop picture to guide them.

If you want to sum up my past year and fit it into one final paragraph for 2011, it’s this: Understand your customers! Spend a good part of 2012 digging deep into their decision process and their online paths. Make it personal. Stalk if necessary. Ask questions that start with “why.” Observe. Make notes. Broaden your online reading list to include blogs like Science Daily, Futurity, Neuroscience Marketing and Homo Consumericus. At some point, the bigger picture will begin to emerge. And I bet it will be much more interesting than a landscape with a barn and some cows in it.

Ode to an iPad

First published October 21, 2010 in Mediapost’s Search Insider

I really had no idea how much I’d love my iPad. I have to say that it’s now my preferred connection to the online world. Somehow, whether by design or coincidence, Apple has tapped into something primal and intuitive in myself. Judging from other iPad owners I’ve talked to, I suspect I’m not alone. There is a magical thing happening between me and this sleek little device. And whatever it is, it’s important, even prescient. This, I suspect, is our future sitting in our laps.

What’s the Big Deal?

I’ve spent a good part of my life pondering various technology interfaces. Based on this, I really didn’t think the iPad was that big a deal. The reason I got one was because I needed an ebook reader and I felt that the iPad offered me more functionality than a Kindle. But other than the inevitable coolness (or, at least, perceived coolness) that comes with any Apple device, I didn’t see what all the buzz was about. After all, it was just a big iPhone… without the phone. I still had to deal with an all-too-touchy digital keyboard and a rather anemic processor.

But then I got my hands on one. And something rather strange happened. I suspect that Apple may have found the perfect form factor. When you combine the larger screen with multitouch technology, it completely changes how I interacted with my device. It wasn’t something I could have predicted. But everything I did on the iPad just seemed more natural, more enjoyable, more — dare I say it — sensual. This was one sexy little piece of technology.

Love of the Limbic Kind

What happened? There is no new technology here. We’re even using an obsolete OS, for heaven’s sake. There may be no rational reasoning — but I’ll tell you, my irrational mind has fallen in love. Then again, perhaps it has nothing to do with ration. Maybe Apple is just making interactions with technology more primitive, in a good way.

Keyboards are stupid in pretty much every way imaginable. I’ve dedicated several hours of my life to understanding the QWERTY layout so I’m a reasonably proficient touch typist, but the layout still makes no sense — and yes, I’m aware of the history of it vs. the Dvorak keyboard.. The mouse was a step in the right direction, but there was still some rewiring of our brains required to understand that the cursor was really our proxy for our hand movements.  I find track pads a rather poor compromise.

But, to be able to grab something right in front of our eyes and manipulate it, ah — that is touching something hardwired deep in our limbic brain.  To flick, to stroke, to pinch — that is what it means to be human. Up ’til now, our user experiences have had to be jammed in the arbitrary constraints of outdated and illogical interfaces. But the iPad, perhaps more than any other device before it, is letting us be human again. And the experience is intoxicating.

The Human Part of HCI

I felt something of the same rush when I first picked up the iPhone, but the extra real estate of the iPad delivers a compounding effect on the level of the user experience. Perhaps you think I’m making a big deal out of nothing, but I suspect that the very humanness of the iPad’s interface could be a game-changer. I’m not the first to say so. This was much of the buzz I discounted when the iPad first came out. But now I’ve had the chance to see what might be behind the game-changing aspects of this device. And ironically, it’s nothing to do with new technology. In fact, it’s wrapping existing technology in a package that nailed the “human” part of the human-computer-interaction equation.

The question that comes to mind is, how might this change the nature of our online experiences? If our entire online history has been built on the paradigm of a keyboard/mouse/monitor interaction, how might that change with a multitouch, interactive screen? And that’s not even including geographically savvy devices, cameras or voice commands. That’s a substantially different paradigm, which will inevitably lead to a substantially different experience. Imagine, interacting with a virtual world where you can picture your surroundings, know where you are, touch the things you’re interacting with and express your intent verbally.  Finally, technology will start to catch up with what it means to be a human.

The Apple Approach to Digital Service Delivery

First published October 7, 2010 in Mediapost’s Search Insider

A few weeks ago, I was at a conference where the future of advertising was being debated. One of the topics that came up naturally was the future of advertising agencies. What will they look like in the future? It’s a stone-cold cinch that they won’t look much like they do today.

Here’s the challenge. Marketing is changing faster than most companies can keep up with. So many marketers find themselves chasing technology. This is an approach guaranteed to frustrate. Technology is impossible to predict. It’s an area rife with “Black Swans.” You can’t pin future strategies on technological bubbles that expand and burst. As one marketing head said, “the minute someone comes to me with a Facebook/Twitter/Foursquare strategy, I fire them.”

How to Build a Racecar

What marketers are trying to do to keep up with the digital transition wave is akin to buying miscellaneous mechanical parts and then trying to assemble them into a racecar on the fly. In most cases, you don’t know what those pieces do, how they fit together, or even if they do fit together. We’re not even sure what the end product should look like. Yet we keep having digital marketing technology vendors say we have to buy these parts because if we don’t, we’ll lose the race. It’s madness to continue this way. It’s one of the reasons my friend Scott Brinker of Ion Interactive says that we need CMTs – Chief Marketing Technologists. The theory – at least one person in the pit crew should have an idea of what a car looks like.

As I was thinking about this, I started thinking what a possible parallel might be. Where else does technology move so fast that’s it’s hard, if not impossible, for the end user to keep up? Almost immediately, I thought about personal computers.

The PC Service Model

Consider the PC approach. You buy a box designed to accommodate as many pieces of hardware and software as possible. In return for this open flexibility, you have to figure out how to get all the pieces to fit together. You have to download the patches, try to get the box to recognize the new peripheral and figure out how to get one program to talk to the other. Granted, it’s easier than digital marketing because at least the various developers of hardware and software go in with the intention of trying to get along nice with each other. There is no such consensus with digital marketing vendors.

The Apple Service Model

Now consider the Apple approach. Within an enclosed ecosystem, the pieces are pretested to ensure they fit together. The goal: to deliver a plug-and-play experience. Apple is not 100% successful in this, but its track record is much better than on the PC side. Do you have the open flexibility of the PC world? No, but you’re also spared seeing how the sausage is made.

Could you not extend this same approach to a digital marketing agency? Rather than embroiling the client in the nitty-gritty detail of multiple platforms and technologies, couldn’t you integrate the pieces so they work well in the background, pumping out results through a simple and elegant user interface?

It sounds simple, and indeed, this is what many full-service digital agencies say they do, yet there still seems to be a disconnect when it comes to satisfied customers. I haven’t heard many enthusiastic evangelists for digital agencies. I haven’t seen the same devotion and/or longing I see in other’s eyes when I pull out my iPad in a meeting or on the plane. It was expressed in clear terms on a flight last week when, as I was reading a book on it, an elderly gentleman walked down the aisle and asked, “Do you love it or do you LOVE it?” We talked for 10 minutes about iPads. Until those same conversations start happening about your favorite digital agency, we’re missing the boat.

Zappos and the SNAFU Syndrome

First published September 23, 2010 in Mediapost’s Search Insider

Who can say no to MediaPost Publisher Ken Fadner? Certainly not me. And so, next Monday, I’ll be joining all you OMMA-ites (OMMAhanians?) in New York City for the big show. Ken wanted me to set the stage by spending a little more time talking about a subject I raised a few columns back, entitled “SNAFU: the New Normal.” In that column, I mentioned that a lot of companies going through huge transitions ask if there are any examples of other companies that have done it right. I said then the simple answer is no. We’re all figuring this stuff out as we go. But today, I wanted to share a further thought from one of the people that asked that question:

Enough Zappos Already!

“Tell me, are any companies doing this right. And don’t give me examples like Amazon or Zappos. I’m sick of hearing about these dotcom poster children. We’re not them. We can’t do the same things!”

Coincidentally, I’ve just finished reading Tony Hsieh’s book, “Delivering Happiness,” where he gives his perspective of what worked and what didn’t at Zappos.  One passage, in particular, shows that Zappos is not immune to the SNAFU Syndrome:

“It may seem sometimes like we don’t know what we’re doing. And it’s true: we don’t. That’s a bit scary, but you can take comfort in knowing that nobody else knows how to do what we’re doing either. If they did, they’d be the Web’s most popular shoe store. Sure, people have done parts of what we do before, but what we’ve learned over the years at Zapoos is that the devil is in the details. And that’s where we’re breaking new ground.”

It’s More than Foosball

Here’s the thing: Survival in the SNAFU storm is not about pizza lunches, foosball tables or wacky staff parties. It’s not about gourmet cafeterias, Segways or even culture handbooks. Hsieh didn’t do anything with Zappos that hadn’t been documented long before the dot-com era. He (like me) is a big fan of Jim Collins (“Good to Great”) and  Dave Logan  (“Tribal Leadership”). The foundations laid out in both those books have been field-tested across many different types of companies, from hospitals to hotels, grocery stores to banks, manufacturers to consulting firms. In fact, in both books there is a notable lack of high-flying dot-coms, as that wasn’t the flavor du jour when these books were researched.

These books look at the very foundations of organizational effectiveness and found that it wasn’t about cultural perks; it was about believing in something. Success comes from the feeling that you’re part of a bigger whole. It was about rising above profit statements and shareholder reports by creating a mission that makes people want to come to work in the morning.

Zappos isn’t about selling shoes. In the big scheme of what’s truly important, footwear doesn’t factor very highly. Zappos is about spontaneously creating smiles through exceptional experiences.  And that, my friends, is something any company can aspire to.

North Star

Here’s why these organizational foundations are so important in the new world. It’s very easy to lose your bearings in a sea of SNAFU. As I said, there are no maps or blueprints to follow. Strategies and five-year plans can get torn to shreds in a matter of seconds. When that happens, you’re going to need something to set your bearings by. Inspiring mission statements and real, living, breathing core values will always be there. They rise above strategy. They’re a North Star that’s always in sight.

If you do this right, everyone knows why they come to work in the morning. And, when the world goes to hell on you, it will give you a bearing point against which you can correct your course and head in the right direction.

Want to give yourself a chance to survive the SNAFU Syndrome? You don’t have to be Zappos or Amazon (and even they don’t have any guarantees). You just have to make up your mind to do it. Start by reading these two books.

If you’re not inspired, consider a new career. If you don’t now, you’ll probably be forced to later.