Privacy vs. technology, freedom vs. convenience: it’s only going to get worse

3.21.2008

Item: Citizens are concerned about online privacy and security. According to a new report from USC’s Center for the Digital Future, “Sixty-one percent of adult Americans said they were very or extremely concerned about the privacy of personal information when buying online, an increase from 47 percent in 2006. Before last year, that figure had largely been dropping since 2001.” These fears are well-founded.

The study, to be released Thursday, comes as privacy and security groups report that an increasing number of personal records are being compromised because of data breaches at online retailers, banks, government agencies and corporations. Continue reading

Maker’s Mark illustrates the importance of thinking BEFORE you act

Makers MarkIn case you haven’t been tracking along, the folks at Maker’s Mark (which is owned by Beam, Inc.), faced with more demand than they could meet, recently announced that they’d be lowering their alcohol by volume (ABV) from 90 proof to 84 proof. You won’t even notice, they assured us.

The backlash was swift and loud. Makers Mark customers pitched a hissy fit, and at least one marketing analysta (Roger Dooley, writing at Forbeswondered if the company had committed “brand suicide.”

Do you really want to go on the record as saying the palates of your customers are so unrefined that they can’t tell the difference when the whiskey is diluted? In reality, in blind taste tests most people probably can’t tell the difference between similar colas, beers, whiskeys, etc. Nevertheless, brands still strive to maximize their taste differentiation. Can you imagine Coke saying, “We could change our formula a little, or even put Pepsi in our cans, and not many of our customers would notice.”?

To their credit, MM leadership today changed course, announcing in a public letter that:

…effective immediately, we are reversing our decision to lower the ABV of Maker’s Mark, and resuming production at 45% alcohol by volume (90 proof). Just like we’ve made it since the very beginning.

Good for them. The thing is, we shouldn’t over-congratulate them because this was a butt-stupid mistake to start with. Dooley had commented on their missed opportunity last Thursday:

Maker’s Mark could have used their looming shortage as an opportunity to make their brand stronger. If they encountered sporadic shortages for a period of years, they could raise prices and leverage the scarcity to take the brand up a notch in prestige.

And all he was doing was stating what every smart marketer in America knew instantly: you never give people less. If the choice is between raising prices or cutting portions, for instance, raise the prices. Customers may not like it, but they react worse when they find themselves getting less for their money. Psychologically, when you do so you are taking something away from them.

Same thing with the MM trainwreck. The shortage was arguably even good news from a brand perspective because the unanticipated shortage (whatever that may say about your forecasting operation) emphasized the demand for your product. You could have responded with something like this:

Wow, folks, you like our product so much that you bought more than we expected. It’s going to take us about five or six years to get caught back up because we will not sacrifice the quality of our fine whiskey, no matter how much it costs us. In the meantime, we’re grateful to our customers and salute their discernment.

Instead, you miss the obvious opportunity, you violate the customer’s trust, and you dilute your brand by far more than the three percent you’re cutting the ABV in your now somewhat less prestigious liquid refreshments.

Given that Makers Mark had committed the gaffe, today’s announcement was precisely the right move. But there was no excuse for the mistake in the first place. Now, thanks to a moment of unfathomable stupidity, they’re faced with the challenge of restoring their tarnished reputation.

Maybe Makers Mark will be just fine. Maybe this won’t even register a blip on their sales numbers – time will tell. In the meantime, though, the company’s need to understand what they have done. Leaving the product as is, running a new ad campaign, dumping money into PR aimed at assuring us that everything is hunky-dory, none of that can undo one simple fact: a few days ago, they announced to the world that they can water down their whiskey with no noticeable impact on quality.

That’s a hell of a brand promise, and it’s a bell that you can never unring.

Think. Act. In that order.

LImited Run Dumps Facebook

Facebook’s bad year just got worse

LImited Run Dumps FacebookIt’s an interesting time to be Facebook. You know, as in the old Chinese curse “may you live in interesting times.”

They’ve been the target of freedom and privacy advocates for some time. All the way back in 2008 I was talking about the company’s anti-privacy tendencies and arguing that things were only going to get worse for the citizenry. More recently, I called them the most congenitally dishonest company in America, and I’m waiting for evidence that proves me wrong.

But these days, us privacy ankle-biters are the least of Mr. Zuckerberg’s concerns. Continue reading

SXSW “homeless hotspot” concept goes tragically (and predictably) wrong

What was BBH Labs thinking? Michael Sebastien at PR Daily is on the money in saying that “it might go down as one of the biggest PR disasters of the year.”

New York-based marketing firm BBH Labs equipped homeless people on the streets of Austin with devices that made them wireless hot spots. Internet seekers then paid what they wanted—in cash or via PayPal—to access the Web. The homeless men and women kept all of the money.

The media wasn’t amused, and now BBH Labs is licking its wounds.

ReadWriteWeb slammed BBH Labs, pointing out that these are people, “not helpless pieces of privilege-extending human infrastructure.”

The T-shirts that the people participating in the campaign wear say:

I’M [FIRST NAME],
A 4G HOTSPOT
SMS HH [FIRST NAME]
TO 25827 FOR ACCESS
http://www.homelesshotspots.org

Wired referred to it as something out of a “darkly satirical science-fiction dystopia.”

It seems like the idea was ultimately about benefiting the homeless. I’m a huge fan of that, and anybody familiar with me and my work knows I have no aversion to risky and edgy, either. So I suppose I applaud to core concept.

But I’m also a big fan of thinking things through. “Risky” comes, you know, with risk. If you’re going to take chances, you have an obligation to game the potential scenarios, to anticipate where things might go wrong and to plan your way around the minefields.

It doesn’t look like BBH did a very good job on this front and now they’ve garnered lots and lots of exposure. Contrary to what you may have heard, all publicity is not good publicity, especially when the end result is that you may have actually damaged your cause.

You call this swill chile verde? (Why consumer review services like Yelp are useless)

Whom do we trust when we’re looking for information? Increasingly, research shows that Americans are more likely trust friends, peers and word-of-mouth over “experts.” For instance:

  • A 2007 eMarketer survey of the most trusted sources of information for US consumers was topped by “friends, family and acquaintances” and “strangers with experience.” These sources outranked “teachers” and “newspapers and magazines.”
  • A CDC study shows that moms trust pediatricians the most, but that they trust “friends and family” more than everybody else, including parenting books, employees in the doctor’s office, and newspaper and magazine articles.
  • Heck – just sift through this page at BazaarVoice if you need dozens more examples of this phenomenon.

I’m assuming that reviews from trained professionals (like movie, music, food and software reviewers) would be included under the general “newspaper and magazine” categories, although I can’t be sure.

One of the artifacts of the Web 2.0 explosion has been the profusion of sites soliciting consumer feedback. One of the most successful such operations (maybe the most successful – it’s certainly the one I am personally most aware of) is Yelp, but you can find comments on all kinds of businesses at the Web sites for local TV and print outlets, alt weeklies, independent blogs, you name it. Because by golly, in the age of social media, we care what you think!

Which leads me to my reason for writing today. I have been known to comment that, yes indeed, opinions are like assholes – everybody in fact has one. (Well, except for this guy.) However, informed opinions are more like Mercedes-Benz E550 convertibles – that is, they’re somewhat rarer.

Last Saturday I found myself hankering for some good Mexican – specifically, something slathered in the chile verde that this part of the country is famous for. There are a couple of places that have long been my go-to options for green chile – Lime and Benny’s are very different, but I love both. I was feeling like exploring, though, maybe trying something new, and I remembered that a week or two ago my Yelp e-mailer devoted an issue to “D-town Green Chile Lowdown.” So I dug it out, read the reviews and recommendations, and settled on one of the two places closest to where I live. The commenters had some small carps about various peripheral issues, but the consensus was that the green chile was righteous.

I had to wait awhile for a seat because the place was packed. Good sign, as a rule. I ordered my favorite Mexican dish – beef burrito with chile verde. It arrives, I dig in, and let me tell you, “righteous” isn’t quite the right word. A better word would be … let me think here, because I want to get this right … ummmm … what’s the word for “completely and utterly without any taste whatsoever”?

The beef itself was doing its part to hold down the restaurant’s seasoning costs and the chile, well, put it this way. I’m not a renowned Mexican chef by any stretch, but I have two recipes that are worlds better.

Disappointed? You betcha. I can’t imagine going back there, especially since it was also a dollar or two pricier than other Mexican restaurants in its general class.

I can only theorize that all those positive, nay glowing comments on the sparkling fabulosity of this place’s verde were written by employees or family members of the owners. And that’s the problem with consumer reviews – comments are of no value in the absence of some means for determining credibility. If you’re vested in the business, you may lack objectivity. Or maybe you’re an idiot, which also tends to compromise the value of your contributions.

Sure, I have family and friends I might trust on certain questions – a brother-in-law who’s a CFO in the furniture industry, for instance, might be of some value if I’m hunting for furniture bargains. But I have other relatives and social associates that I wouldn’t trust if I were trying to figure out what color the sky is.

The bottom line is that you can hit a consumer review site, read the comments, and still have no idea how to decide. One product has dozens of positive reviews – that could mean it’s really good. Or it could mean that the marketing group does a good job leveraging the power of social media.

When I got home, the first thing I did was unsubscribe from that Yelp e-mailer. All it can really do is call my attention to businesses I didn’t know about, but I can get that from a lot of places, including a local alt-weekly – and when I go there I can also find reviews from, you know, reviewers. People who do it for a living. I may not agree with them all the time, but odds are their taste buds can distinguish between tasty chile verde and dishwater thickened up with flour. Also, I’m probably not reading something my waiter wrote on his day off.

A stimulus plan for marketing: five steps for jump-starting your economy

More great insight from John Cavanaugh at The Tap Tap Tap:

I hate limbo. And that’s what I’m seeing a lot of in marketing right now. Don’t accept it. Maybe some of us have gotten past the “Rage against the dying of the light” phase. But now the light is frustratingly flickering and just not coming on. Give it some more juice! Marketing and communications is a powerful force for business change. Use it!

Read all about it. Pass it on. Then act on it.

Angel Capital Summit Roundup: a booming success

If I were an angel investor I’d probably have written four or five checks yesterday.

Well, I should probably qualify that. I’m not a finance guy, and I haven’t had a chance to vet the leadership teams and have my team review the science behind some of the green tech proposals. And hey, I thought the University of Colorado made a great decision when it hired Rick Neuheisel, so my judgment is far from infallible. Continue reading

Sam Smith to address Angel Capital Summit

I have been invited to speak at the Angel Capital Summit, which will be taking place at the University of Denver’s Daniels College of Business this coming Monday and Tuesday, December 6-7.

The ACS provides entrepreneurs with access to a variety of tools to help them in the process of securing early round funding for their ventures and an intensive coaching process that focuses on “identifying key risk and return factors that investors look for and answering those questions during the pitch.” Continue reading

I’m now available – and portfolio page updated

As many of you know I’ve been gainfully employed on the “client side” since August of 2008, and during this period of time I think it’s safe to say that I did some of the best work of my career. (When I was hired, the expectation was that I probably wouldn’t be there for more than six months – get in, do some critical things, get out, etc.) But sometimes things change and you wind up staying longer than you expected.

Anyway, I am no longer with that employer and am looking forward to hopefully broadening my horizons a bit. I learned an ungodly amount about the financial services industry that I never knew before and have benefitted tremendously from the experience, but I was also cognizant of interesting developments in other industries, and also of compelling new practices and techniques that my position really had no need for.

So, onward and upward. Meanwhile, I have updated the Portfolio page to account for some of my recent work. Have a look if you get a chance.