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September 26, 2011

Coming Clean: Five Tips for Businesses in the Age of Transparency

September 26, 2011

“It is a mistake to look into the mirror and try to break the mirror. Whatever the problem was [that caused the riots in the U.K.] the Internet is a reflection of that problem. If you have a problem, use the Internet to understand what that problem is.”

-Eric Schmidt

“For everything that is hidden will eventually be brought into the open and every secret will be brought to light.”
- Mark 4:22

Facebook launched a upgraded platform last week. Google passed through the gauntlet of its congressional hearings with flying colors, according to a CBS poll. Netflix split with its DVD delivery service, according to the speculations of many, so that it could triple its streaming inventory by merging with Amazon or so that it could open itself up to be sharable and measurable on Facebook or (what is most likely) both.

How are these simultaneous phenomena related? How do we connect the dots?

They all mean one thing: the Revolution will not be televised.

It will be shared on Facebook. Because that is where future generations will be streaming content from Netflix. The difference between television and social media is that it is a dialogue between the consumer and producer, not a monologue where the producer broadcasts advertisements at ‘targeted demographics.’ In the lingua franca of marketing, the word ‘targeting’ has been replaced by the word, ‘engaging.’ The voices of consumers will now be heard and will have a weight that they didn’t have before.

For these reasons, it’s been a very tough couple of years for large organizations and governments who’d like to keep their dirty laundry secret. For dictators and dysfunctional corporations, there no longer seems to be enough storage space to keep their skeletons hidden. As small businesses move the contents of their external hard drives into online file storage systems, and large corporations move their apps onto the cloud, individual consumers are airing their opinions about both politics and products on social clouds: Facebook, Twitter, Google + etc. Both flaws and favorite features get a spotlight shined on them in a new way. Seth Godin’s prophecies about Permission Marketing are coming true, his manifesto about marketing moving out of the Television Marketing Industrial Complex and into a ‘tribe based’ system is now, for all intents and purposes, fully manifested in a beta phase. Your customers are now advertising your product to each other. For folks with remarkable products, this is a dream come true. For folks who’ve released merchandise into the market place before working out flaws, the new social landscape can become a worst nightmare.

An interesting article about this massive cultural and economic shift came out in last week’s issue of Forbes Magazine: “Social Power and the Coming Corporate Revolution.”  In the article, Marc Benioff, CEO of SalesForce, recounts his own epiphany about the humility and transparency required of real business leaders in the age of Social Media:

In 2005 we had reliability problems with one of our servers. We weren’t talking about it, and customers were upset. It turned into a PR problem. And my marketing leader Bruce Francis came in and said, ‘Marc you need to expose everything. You need to have a website that is directly connected to the computers. If they are running, the website should be green, and when they’re not it should be red.’ I had to open up.” Such a system has been in place ever since. [And it is worth noting, Salesforce has continued its explosive growth--probably not a coincidence.] Says Benioff, “Social success is really based on trust... If you don’t have transparency you will be eliminated by the system around you.

What are five things that businesses can do to make sure the social chatter surrounding their brand is positive? How can you lead your audience to discover the positive things about your products through research, rather than discovering the negative things about our products through scrutiny?

1. If you’re having problems, admit it. Your customers may forgive if you tell them up front about system issues, where they may not forgive you if you hide out until catastrophe strikes.

2. Amplify positive feedback. If a customer gives you a great review, put it on your website! If a customer has negative feedback: respond.

3. Respond to negative feedback. You can turn a negative situation into a positive one by showing off how quickly you take care of errors.

4. Communicate clearly. Gone are the days when you could sell everything with a slogan. Provide honest and encompassing information about your product to avoid dissatisfaction and negative reviews.

5. Leverage your locality. Customers are the people you live in community with. For many years, under the Television regime, the big, national brands had a major advantage over you even on your own block. Under the new regime of social media, that advantage is quickly eroding.

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