Another smart CEO? Another B2C Social Media Disaster? Why 3 CEOs made the same mistake.

Behind every B2C social media disaster, there seems to be a smart, successful CEO who chose to stay oblivious and arrogant. 

Question 1: Imagine you are a rock star. (Or famous politician). You are waiting for a delayed flight at the airport. Someone comes running to you and tells you excitedly that there are 1,500 of your fans -- 3 plane loads full -- two gates down from where you are at, dying to talk to you. Would you not at least go shake some hands, sign some autographs and get some pictures taken?

Question 2: Imagine you are at a tradeshow and someone tells you that 10,000 of your most loyally engaged customers are packed in the hall 50 feet away from you. Would you not go and talk to some of them to hear what they have to say? Or even better, say something to them and get their instant feedback?

Question 3: Imagine your VP of Product Marketing comes running to you and tells you excitedly that there are TWO MILLION of your company's loyally engaged fans, waiting to hear from you on Twitter and to tell you in great detail about exactly how they experience your product, how you can improve it and how they want you to succeed. Would you not start some conversations, sharing your thoughts with them once a week (or month!), monitoring the feedback and spend at least 15 minutes daily on your Flipboard social news aggregation app to skim through your fans comments?

If you answered "NO" to the above, then your business deserves the disasters that come your way -- and they are coming, sooner than you think!

It is not just biblical punishment for arrogance. There was a time when product marketers would pay top dollar for focus groups, market research, consumer surveys and other such niceties to find out what their consumers were REALLY thinking, how they experienced their products, etc.

Then the world changed in 2011. But business schools could not change. How could they? Their faculty still guards their "proprietary" Powerpoint slides like an ironically ancient treasure in an open world where someone paid $120 million for a company called "SlideSHARE"! Marketing MBAs are still being taught the "cutting edge" ways that worked in 2002 -- just about as relevant as an e-book on surviving a dinosaur stampede.

So today, when social media tools offer powerful monitoring and feedback gathering capabilities, B2C high-tech companies (who are expected to be particularly savvy when it came to social media management) seem to be lost at sea.

Consider these case studies of 3 CEOs of high-tech companies, well poised to take advantage of the active social communities they are blessed with yet failing to do so resulting in a shrinkage of their customer base.

1. CEO raises pricing, makes a video, then apologizes and backtracks. 
Company:  Netflix 
Business:  Online movie and game rentals
Facebook:  3.6 million fans
Twitter:  250,000 followers
Mistake:  Did not consult customer base BEFORE unilaterally changing service offerings and pricing.
IMPACT: Customers started leaving in protest, hurting Netflix stocks and revenue. 
EVENTUALLY: Netflix reversed its changes after an apology.

2. CEO raises pricing, customers flee, makes a video, then apologizes and backtracks. 

Company:  SmugMug 
Business:  Photo-sharing and photography e-commerce
Facebook:  102,000 fans
Twitter:  35,000 followers
MISTAKE:  Did not consult customer base BEFORE unilaterally changing service offerings and pricing.
IMPACT: Customers packed up and left for other competitors, discovering along the alternative had better functionality anyways. 
EVENTUALLY:  SmugMug reversed its pricing strategy allowing subscribers with lower priced packages the ecommerce functionality as before. 

3. CEO supports a political initiative, customers flee, then apologizes and backtracks.   

Company:  GoDaddy 
Business:  Web domains and hosting services provider
Facebook:  173,000 fans
Twitter:  161,000 followers
MISTAKE:  Did not consult customer base BEFORE coming out in support of a troublesome online piracy act.
IMPACT: Customers picked up and left for the competitor who offered special pricing to facilitate the exodus. 

EVENTUALLY:  GoDaddy reversed its stance and came out against the piracy act.

4. CEO changes terms of use, customers get furious, then apologizes and backtracks.

Company: Instagram

Business:  Photo sharing social network

Facebook:  2.5 million+ fans

Twitter: 13 million+ followers

MISTAKE:  Did not consult user community BEFORE changing privacy terms...

.....

Sorry, I promised to limit myself to 3 cases.  But you are hopefully starting to see the pattern here?

The Solution - Change the "AFTER" to "BEFORE"

Companies are either oblivious to the room full of hundreds of thousands of loyal fans or just too terrified to engage this fan following in a meaningful way to shape their decisions and public stance on issues. Or perhaps just too lazy. Or arrogant. Whatever the cause, they are not communicating with their fans BEFORE making key decisions.  Instead, they prefer the embarrassment of eating humble pie AFTER the harm is done and issuing apologies and begging for forgiveness. 

These CEOs agree with my assertions. Instagram's CEO acknowledged "we failed to communicate".  The CEO of Netflix went a step further in saying "I slid into arrogance". 

Moral of the Story

Mr. CEO, go on your Twitter or Facebook page, shake hands with a few fans, sign a few autographs and listen to the hundreds of thousands of people who have something to tell you.  Just LISTEN.  There are tools available to help you with that.  

Listen not once or twice.  Listen for 30 minutes every day.  Remember what the doctor said about a tweet a day?

ARTICLE SPECIFIC

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What Instagram and SmugMug don't get about "pro" photography - and GoPro does

It is ironic to see two businesses built on photography, demonstrating such a lack of understanding of what the democratization of photography means:  Everyone is a "Pro" photographer.  Doesn't matter if they are not. They THINK they are and that is enough.  Smart businesses like GoPro get it and capitalize on it.  SmugMug and Instagram are still struggling with it.

Back in August, photo-hosting ecommerce site SmugMug pulled off a Netflix in its unilateral price increase, as high as 60% while taking away the ability to sell photos online for the "non-Pros".  

In its explanation, SmugMug's CEO cited rising storage costs (which did not make sense as storage costs for everything are declining, not increasing).  More importantly, he cited "Pros" using more storage.  There were some snobbish "Pros" who jumped to SmugMug's defence saying any "Pro" who makes a living by selling photography would not mind paying $100 extra to do so. 

The problem is that everyone thinks they are a pro!  Not just those who carry 3 cameras to a wedding photography shoot to pay their rent.  Every consumer is a prosumer, every prosumer is a pro.  It doesn't matter if the snobs don't think so and if the "real" pros don't agree.  Every consumer sees themselves as a pro, their photography as art, their Friday night drunk shots in a cheap club as images worthy of celebrity worship in People magazine... and so on.  

Are you with me Instagram?  You are not stealing these drunk fools' photos.  Your privacy policy changes were perceived as stealing these pros' art!  You are not doing ad sales.  You are involved in an art museum heist!  Fire that dinosaur executive from the 1980s who just wants to "monetize" everything.  Connect to your customers over social media networks -- like yourself -- to understand what they want. 

Eventually there was an exodus of customers.  SmugMug reacted in November and gave back the "non-pros" the option to sell photos. And Instagram reversed its policy changes. 

Welcome to the democratization of "pro" photography.  The memo was sent 10 years ago. 

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Harpocracy: PM wants to stop bad business by doing it one more time

Stephen Harper acknowledges there is a bad trend of China taking over oil sands and that it has to stop -- except he will stop it by doing it one MORE time? Harpocracy, anyone?

At least he finally acknowledges what I pointed out in my first blog post earlier this year that the flow of foreign money in the tar sands is disturbing and cannot be in Canada's best interest. 

Yet all this "strict, tough-talk" can be ignored as just green-washing because he went ahead and authorized another $15 billion buyout of Canada's tar sands. 

Harpocracy - Yes, let's stop it, by doing it once more

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Mayan temples banned for Mayans, tourists still welcome

Mexico banned the Maya from holding their ceremonies and rites at the Mayan temples to preserve the cultural heritage (for tourists?).  Did that sound as ridiculous to you as it did to me?

Let me see.  A Mayan temple would be a place where the Mayans go to perform their rites.  Just because they were conquered does not mean the temple is not sacred to them any more?  Or that they should be BANNED from using it for its original purpose?

Preserving the Mayan heritage, presumably for tourists, by banning the Mayans. That makes my head spin. 

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