MEDEF UNIVERSITE D’ETE PLENARY SESSION – 3 September, 2009
“Will capitalism become ethical or not?”
Plenary Session animated by Jean-Pierre Elkabach
Below I will highlight a few points that I took away from the two hour plenary session, brilliantly managed by JP Elkabach, on Ethical Capitalism at the MEDEF Summer University 2009.
As with the other subjects discussed in all the sessions at the Medef UE 2009, the US clearly remains a nevralgic centre for business leaders in France. To be sure, I was not the only American in the audience to be fingered. The newly assigned US Ambassador to France, Charles Rivkin, was on hand to hear a number of rather broad criticisms of the US in the current crisis. Not too surprisingly, a large part of the ‘debate’ was focused on America, the originator of today’s world crisis.
With a few broad strokes, Pierre Bellon, President of Sodexho, ranted (since he feels he has earned the right), “the fault [of the current crisis] lies with bankers…credit agencies…and politicians…” As if that were not enough, he also felt the need to state that “the citizen and the small companies cannot be held responsible.” Mr Bellon called for, among other things, greater transparency, the cleaning up of conflicting interests, and the end of the eternal optimisation of corporate profits… What irked me about his tirade was the feeling that there was little accountability in his words There were no corresponding concessions understood in the propositions and there was no ripost from the stage or floor…
Laurent Fabius, former PM of France, explained that the US will have to rebalance its budget. ‘It is an enormous “black cloud” that looms over the world’ said Fabius about the US budget deficit. Regarding France and the system of ‘privileges‘ (defined as that which is “read in private“), Fabius suggested that the MEDEF should review that which should be allowed to be transparent as he believes that the trend toward total transparency is dangerous. Fabius grandly called for a Social and Ecological Economy, whatever that means.
Christine Lagarde, France’s Minister of Economic Affairs, also did not like too much transparency either. However, in a play on words, if not shadows, she prefers to shed “light”… shone on the shadier, darker areas, including the Swiss banking traditions (2/3 of the world’s transactions occur in the ignorance of, or outside the realm of the world’s governing agencies). However, unfortunately, she did not have the opportunity to elaborate on which transparency she did not want to have…
What struck me about the intervention of the three people I cite above was the recurring issue of transparency. To be transparent or not to be… and about what? This was certainly a topic that came up again and again in the various sessions. In certain regards, on an emotional level, total transparency is an unlikely objective, even dangerous. In any event, is there such a thing as total truth? Unlikely. The issue of total transparency is that one may risk removing all the mystery of life (as one might appreciate in surprises, love and luxury … ). Secondly, there are certainly some things better left unsaid in terms of avoiding unnecessary heartache…e.g. white lies. Whether personal or political, some secrets are better kept that way. But, how and when to know to stop the transparency tap? Aside from state secrets, there is the case of some ‘sensitive’ subjects being put into the wrong hands (notably the media), and these do indeed need to be treated with great care. But, shrouding facts behind the veil of secrecy is a tricky business. And, for the cynical, if everything is transparent, there is no more wiggle room for propaganda?
Nonetheless, notwithstanding the philosophical nature of total disclosure (cf Rousseau’s Confessions), I truly believe that, in the field of business, there is a need for much greater transparency and I would be worried to believe that Mme Lagarde would not agree. Transparency is, in this case, an issue of strategic communication. This does not mean that one need be saying everything about every subject; too much information is one of today’s major curses. Yet, there is much to gain in terms of employee ‘buy-in’ by being transparent about a corporation’s its financials, challenges and ambitions. Such transparency helps galvanize what is sometimes termed as ‘psychic ownership‘ whereby, without needing recourse to stock options, an employee comes to ‘own’ the vision and the problems and, along the way, becomes part of the solutions, too. Even in the case of brands and their relationship with the customer, transparency is more desirable. The myth of “mystique = value added” has worn thin. The brands need to regain the [lost] trust of the customer which is why there is so much being attention paid to authenticity and transparency. Surely, it is not too strong a leap to suggest ethical capitalism should include transparent values and justifiable value? Would be glad to have your feedback on this topic!
I finish with what, for me, was one of the more poignant phrases of the conference. Philippe Lemoine, President of LaSer said, “[t]he French need to have confidence in themselves…” He encouraged the MEDEF business leaders: “You need to listen better…” and you will find your way better.
The BBC will take an article and, for a limited time, convert the selected article into an online debate where readers have to register to participate (write and/or recommend). In essence, I assume they make the divide along the lines of articles strictly reporting versus opinion pieces. For the sake of this post, I am going to refer to a debate which is already ‘closed’ entitled: “Is US right to block Google digital library?” (Link no longer working). This is basically how the BBC’s Online Debate works. During the period of debate, the BBC allows registered readers to comment, and very explicitly identifies its full moderation policy. In the policy box (see below), they identify the number of comments sent in, the number published and the number rejected. There is also the number of comments in the moderation queue.
Beyond the article of news you are reading, oftentimes, you can find equally pulsating thoughts and analysis in the internet community’s commentary. Too often, however, when reading most MSM sites, popular blogs and the like, there are just too many comments to wade through, amounting to a completely unreadable mass of jumbled thoughts, written in differing styles, without an attractive layout, in no particular order, and with very little interaction amongst them (for this, I tend to like the “reply to this comment” option). However, in the BBC’s case, the 539 published comments have a democratically voted triage that takes place via the number of positive recommendations. This makes great sense.
Overall, I believe that the BBC is pioneering a new best practice… However, as you might imagine, I have a few thoughts regarding BBC’s initiative that might improve further their efforts, and could serve as a best practice recommendation for other MSM companies, perhaps as part of a greater solution for the freemium debate.
I think that there is room to add a few more dimensions to this democratic (if moderated) style of vote, taking the TED.com system that includes a host of different adjectives that describe the post. Examples of voter categories could be: Well Written, Thought Provoking, Not My POV, Funny, Informative…
ded a more comprehensive list of available services (e.g. what about Twitter?). Social bookmarking can only help spread the word. And, when they do put the tags, the tags come below the comment box… Readers are more likely to tag and bookmark than add a comment I believe, so ‘go with the flow’ and put the tagging zone front and centre. Here’s a good example from mashable (who make the difference between a comment, i.e. thoughtful article, and a reaction, i.e. a 140-character twit).
3./ Most Popular Follow-ons. Another functionality I would highly recommend to the BBC (and other media companies, of course) is the NY Times’ Most Popular Page. This page gives the top 10 of the most emailed, most blogged, most searched and most popular movies. The one that caught my attention most was the ‘most blogged’ list which is a very engaging way to follow the discussion. Of course, I was just missing the ‘most commented’ list.
5./ Interest Groups & Chat Rooms. Another idea would be enable interest groups to be formed on the site which, like Amazon, would allow “readers like you also read this” type of functionality.
There is real value embedded in the comments section, even more so when/if the subject is about a company or a brand (i.e. for the marketers). The trick of course is to keep on encouraging commenting, all the while not publishing everything or, as the BBC would defend, keeping a neutrality in the filtration system. As MSM continue to scramble to find the right economic model, my belief is that there needs to be a closer fit with the experience of the reader. By getting closer to what the reader really wants (time savings, consistent content, aligned values, advice & education, and even entertainment …), the MSM players will find ways to give value to the reader who, in turn, will be more willing to pay for the service. How that payment is provided is as yet WIP — providing a personal address, opting in for advertisement, etc. — and a subject for another post.
I cannot practice exactly what I preach on this site (limited functionality of blogger), but I certainly would be happy to have your comments and thoughts (as usual, moderated only per the Minter Dialogue blog policy as stated at the bottom of the page).
I will present below which four major changes I believe will have staying power, at least in the much of the developed world.
As the need to green has invaded mass media, I have three thoughts here about the more lasting cultural shifts: (1) There is clearly a move away from heavy consumption of fossil fuels (SUVs and cars in general), creating new habits such as walking to work or taking public transport which may, in turn, help justify and finance more public transport development. (2) Purchasing “green” for the long term should have, by definition, a long tail. An example is the purchase of long lasting LED lights whose benefits of durability and low energy consumption are slowly gaining traction, even if they present a higher upfront cost. (3) Attention to reducing water consumption has meant walking away from bottled water (at restaurants as well as at home) and perhaps showering a little quicker and, perhaps, less frequently… On average, every minute under the shower represents 2 gallons or 7 1/2 litres. (Find out how much water you use daily with this handy USGS calculator here). There’s a continuing business opportunity for the water filter companies, although it is not so good for the shower gel business.
Someone who owns more than two homes knows what I am talking about: each home creates multiples of paperwork, presumably having to adjust to different rules and regulations. Just making sure that each house is stocked with the basics, much less complete dinner settings, etc. is quite the ongoing exercise. If you are someone who owns a super expensive car, you know that investing in spare parts and getting little scratch marks fixed is a hassle — especially as you roam away from the local dealership. Finding “protected” parking when you decide to take your jazzy car for a ride in town is an extra constraint. Of course, having too much of anything means that you need to have the space to store it… extra hassle and expenses. One of the more potent trends that plays to avoiding owning yet another holiday house: swapping homes (whether for the holidays or not). Here’s a plug for a friend’s initiative, Geenee, which allows for a swap with the “world’s best.”
On another level, eating at home as opposed to going out to the restaurant will create a new culture of homecooking, with a sharper attention to the ingredients (not just their cost). There has apparently been tremendous growth in cooking school enrollments. And, in a similar vein, there is also the notion of SLOW FOOD*, as promoted diligently and valiantly in the US by Alice Waters (check out her restaurant Chez Panisse in Berkeley CA where they serve only in-season fruit and vegetables).
So, the lasting trend here is a move away from amassing goods that crimp my space, burden my mind and waste resources. Instead, people w
ill focus on goods that bring mental freedom, physical health and, hopefully, a smile to the face. As the literature and media coverage latches on to this trend, I see this trend going mainstream even in the rich circles. Recommended reading: The Story of Stuff by Annie Leonard and The Art of Simpe Food by Alice Waters.
- Zipcar: a for-profit, membership-based carsharing company providing automobile rental to its members, billable by the hour or day.
- ArtRentandlease.com: providing “rotating monthly rental packages, Fine Art Leases and direct sales… Individual prices start at just $20 per month, including eco-friendly Green Art.”
- Avelle, or BagBorrowSteal: Rent by the week, the month or for as long as you’d like top fashion brand names for jewelry, handbags, sunglasses, watches, etc. “There’s never a late fee.” You don’t have to be a member, but if you are, the prices are better.
- Babyplays: A membership-based online toy rental site. About time kids’ closets stopped bursting with just-opened, barely used toys, no?
Underpinning virtually all these structural changes in behaviour are (1) the internet and (2) sustainable development.
*Slow Food, a non-profit, eco-gastronomic member-supported organization, was borne out of the anti-fast food movement in France in 1989 and is headquartered in Bra, Italy. Slow Food stands against “the disappearance of local food traditions and people’s dwindling interest in the food they eat, where it comes from, how it tastes and how our food choices affect the rest of the world. To do that, Slow Food brings together pleasure and responsibility, and makes them inseparable.” The organisation boasts over 100,000 members in 132 countries.
Macro and Micro Consequences of When A Recession Begins
In a recession, timing plays an absolutely vital part at the macro level. Much of the debate about when the current recession will end is related to when it actually began. The “reality” of a recession — as defined by the numbers as opposed to perception or sentiment — is subject to much variation, interpretation and retroactive restating. As we continue lower and deeper into the current recession, and as the various governments (USA, Germany, France, Spain, UK…) worsen their economic forecasts, there is growing evidence to believe that the recession began earlier than previously thought. And, at the very same time, the [US] stock market has started to show signs of life and confidence metres are bouncing off the very low levels.
Yet, if the duration of the recession is related to the timing of the start on a macro level, there is also an interesting phenomenon of timing on the micro level. When the existence — or indeed the potential existence — of the recession sinks in, people and companies get into battle stations. Common wisdom says that the companies that react most quickly (cutting costs and focusing on the essential business drivers, etc.) are those likely to do best. This is especially true these days because, over the last 25 years, the recessions have tended to be rather short. Three of the last four recessions in the US lasted on average 7 months (the school book definition states a minimum of two quarters is necessary). The other one, 1981-1982, lasted 16 months. (See here A History of Recessions from CNBC).
There is much written about how companies ought to respond. I am not going to add to that catalogue. The point that I want to raise here is the importance of the month(s) of the year when the recession is perceived as starting (as opposed to when it is post-factum marked as officially beginning). The nature of the timing is more than psychological. If the moment when people perceive the recession is at the end of the year, as opposed to the beginning or the middle of a year, there are logical consequences as to how the following year will be planned and budgeted.
The effects are almost mechanical. Here is a typical scenario if the recession is identified in the autumn (i.e. the fall, the last quarter of the year). Budgets for the new year are created in an environment of uncertainty. According to the dose of reality, for the companies who have recognized the recession, contingency reserves are bolstered, hiring freezes are imposed, costs are constrained and forecasts are trimmed. Heading into the first months of the calendar year (assuming a calendar fiscal year), the company faces comparisons against the healthier first quarter of the year before. And, if the effects of the recession are under-evaluated, the cutting of costs is accelerated and marketing budgets are further trimmed. However, since much of the first half of the year’s expenses are already engaged, investments to drive the second half of the year are most affected. With forecasts falling, unit volume decreases putting pressure on cost of goods further crimping profits. Quite the vicious circle and one that suggests that the quicker a company realizes and reacts to the recession — to take the painful decisions quickly — the more prepared that company will be to see itself through.
On the other hand, if the recession were to be identified in the spring, the budget of the current year is put out of commission. Companies have to scramble into battle stations and start to cut back according to the speed at which they identify the challenges. As results deteriorate, the planning phase in the autumn for the following year’s budget is also very precarious, but at least it is created in fuller knowledge of the poor macroeconomic environment.
Looking at the 2001 recession, the curious aspect was that, only with 9/11 did economists start clarioning about recession. It turned out that the recession began in March 2001 and ended in November. However, companies only started to react truly after September 11th. As a result, budgets for 2002 were tossed up and around like straw in a hurricane. And yet, the economy was actually rebounding as the new year rolled in.
It strikes me that, even if the length and depth of the recession ends up being longer than usual, the way a recession is experienced does vary according to the timing in the year of the perceived beginning. I would be curious to know if studies have ever been done to see if companies with non calendar year fiscal years have a markedly different experience to those who have calendar year fiscal years. What do you think?
If, as they say, timing is everything, does it make any material difference when in the year people identify that a recession has begun?
In these times of recession, a change is certainly gonna come… For the companies feeling the hit (not referring to Sam Cooke), there is plenty of talk of cutting budgets and payroll (though much less of the latter in France). In such environments, one speaks of light at the end of the tunnel with caution, especially if the gouging is severe. Speaking of light, sustainable development typically takes a less sustainable position in the hierarchy of expenses.
On the other end of the scale, there are those more fortunate companies that are planning major breakthroughs, profiting from a reservoir of cash and investing strategically and/or opportunistically to reap serious market share gains.
Then there are those companies flush in cash, investing strategically and that should also be taking the opportunity to eliminate dead wood.
As many managers cut dollars, it seems at times that as many are eliminating cents and plenty of good sense, too. Whether in a cash-strapped or cash-rich company, the need or opportunity to slash unproductive expenses, in my opinion, must be accompanied by two key actions in order to sustain an optimal customer satisfaction level throughout the downturn:
1) A clear, consistent and frequent (not necessarily regular) internal communication plan to keep everybody on board down the chain of management with the strategic thrusts and associated cuts. This assumes a clear vision. The visibility of [an aligned] top management is critical to communicate the vision, receive feedback (according to the company culture) and create unity of purpose. When given the right resources, a well constructed internal intranet network (with web 2.0 functionality) is surely an interesting solution across a larger organisation — according to company culture.
2) And, in order to ensure optimal execution, there must be a culling of the unnecessary tasks and actions, often times associated with the prior, fatter budgets. This is important to do in order that the remaining work and allocated resources are that much more effective. The decision NOT to do is as strategic as what you decide to do.
The first point above is about genuine leadership and getting the team behind you. The second point revolves around the strategic execution of the plan. These two actions are vital because, especially for the larger (older) businesses, at the heart of the issue is change management. As we all know, fear and psychology have generously contributed to the current predicament. And, going through the changes, employees at all levels experience fear (at one or other stage of the SARAH principle: Shock-Anger-Rejection-Acceptance-Hope/Healing/Help). Consequently, they will start to act out of selfishness and defensiveness which inevitably creates breakdowns, inefficiencies and the dreaded internal politics. Among the many typical faults made by top management are laying out a strategic plan, but not aligning expectations and creating too many exceptions. Are the individual Goals & Objectives of the people in the different business units and functions updated and aligned? Another common mistake is dogmatically and institutionally cutting budgets (by percentages) rather than involving the teams to find where and how to cut. Getting the team to own the solution (strategy) means having them own the problem.
This line from Cooke’s song magically resumes the process of change management at the individual level:
“Oh, there been times when I thought I could not last for long, But now I think I’m able to carry on…”
Twitter, it seems, is making mainstream headlines daily these days. Yesterday, the IHT featured on page 2, an article “A truth renewed online: It still takes a village,” which begins: “Twitter and Facebook are, OMG, so last millennium”. The article, written by Anand Giridharadas, actually suggests that today’s social media are a modern representation of the old-fashioned [Indian] village, providing “ambient love.” Giridharadas writes that social media “maintain not your 10 key relationships, but your hundred semi-key mini-relationships. They are not about understanding or soul-baring, but about being simply, ambiently present…”. It is a well expressed point of view. In today’s ice cold economic climate, the ambient warmth of a Twitter or Facebook poke or birthday wishes are a welcome reprieve.
And, on another level, speaking of the economy, I read yesterday how Mr. Martin Schmeldon, a Harvard professor, correlated the rise in twittering to the fall in the stock market and, in a case of brazen marketing, said that Twitter was at fault for the current economic crisis. Read here: http://www.gaebler.com/Economist-Blames-Twitter-for-Down-Economy.htm.
As the article goes on later to say, however, the validity of Schmeldon’s research is a little curious. Pat Sooshisif, an associate professor of public policy at the Yale School of Management is quoted as saying, “I think an informed reader of this research paper should be able to determine that Schmeldon wasn’t engaging in serious statistical analysis of this data.” [From March 2009 issue of The Journal of Economic Perspective and Analysis.]
If you listen to MSM (mainstream media not to be mixed up with MSN!), you might be excused for concluding that the global village — via Twitter’s 7 million unique visitors a month — is running, if not ruining the world.
I maintain that Twitter’s ascension is reflective of a society that is in search of itself: a community that is communicating, without having found a greater meaning or sense of purpose (akin to the general chatter one can hear in the Indian village). It is certainly not a society that is creating value. However, even if 65% of twittering is happening at the workplace, Schmeldon may yet find a better field of research in measuring the twitterers and the performance of the companies for which they work. He might potentially be surprised to find these companies doing rather well, for being more online, more open minded and, potentially more plugged in to social trends. That is a mere supposition, but likely more plausible than pointing to Twitter as the fallguy for the current recession.
J’ai participé à la première heure du débat monté hier soir par le MEDEF dans le cadre de leur programme “Bâtir le leadership Europe.” La question posée pour ce débat était: “L’influence française à Bruxelles: le vrai et le faux” — A quatre mois avant les prochaines élections européenes, quelle est la réalité de l’influence française?
La salle, qui avait autour de 400 places, a débordé de participants. Le débat, animé par le journaliste économique, Arnaud Fleury, avait comme intervenants principaux: Jean Quatremer (Les Coulisses de Bruxelles), Anne Dufermont (Dir Govt et Industry Affairs, Rohm & Haas), Henri Thomé (Bouygues, Dir des Affaires Européenes), Michel Troubetzkoy (EADS), Sonia Plecita-Ridzikova (policy officer, DG des Affaires Economiques et Financieres de la CE), Bertrand Deprez (Think Tank, The Centre).
Jean-Dominique Giuliani, Président de la Fondation Robert Schuman, a lancé le débat avec une question : est-ce que la France apporte quelque chose de différent à l’Europe, ou, sont les objectifs de la France et l’Europe en commun? Ceux sont des questions pertinentes, me suis-je dit.
Voici le receuil de quelques autres commentaires/discours d’intérêt.
Troubetzkoy a parlé des 3 grandes périodes pour la France en Europe [en tout cas dans l’ère moderne]: (1) la période avant le marché unique avec “la belle époque de l’influence française…”; (2) l’installation du marché unique où les intérêts de l’Europe et la France ont divergé avec la mauvais résultat de Nice, le vote NON en France en mai 2005 et l’elargissement de la communauté; (3) depuis 2007, avec le renouveau d’une belle expérience, ou la France est passée d’un dispositif défensif à l’offensif.
Quatremer, qui n’a pas voté pour Nicolas Sarkozy bien entendu (car journaliste Libération), a félicité le pragmatisme de la règne européene de Sarkozy–un pragmatisme “dont seuls les Britanniques sont capable normalement.” Tout le succès des 6 mois de la présidence française de l’Europe a été tenu sur les épaules d’un seul homme. Ca veut tout dire!
Avec l’animation rhythmé, le forum était bien intéressant. J’ai noté qu’il y avait — a mon sens trop pour un débat — une grande similarité / unanimité par rapport au role de Sarkozy dans la présidence européene. La présidence française a absolument augmenté l’influence de la France — même sur le plan mondial. Mais, si on revoit la définition de leadership, n’est-ce pas un bon leader quelqu’un qui fait grandir le prochain leader? Clairement, la présidence tchèque n’a pas de bonne augure. Bon, sinon, je ne peux qu’être d’accord sur l’impressionant coup de fouet qu’a joué Sarkozy.
Customizing your Real Message & Finding a CRM Voice?
As I mentioned in the prior post, I believe that the consumer world is in the midst of a true paradigm shift. In these dire economic times, there is a huge likelihood that the ongoing increase in the share of time and mind of the Internet is going to accelerate. The consumer will turn to the Internet even more because it offers useful new tools and services that cater specifically to the needs of people living in harder times. (Read here for more about why the crisis will push up Internet use).
The question now becomes how brands and companies want to take advantage of this. What posture will companies take to reach out to the consumer who is decidedly cautious, if not nervous about his or her future? The company that speaks to me in a way that makes sense is a good starting point. For example, if a company (ex Harrods) checks out my dopplr and see that I am going to travel to London on such and such a date, then drops me a pertinent offer for that date, would that not be a great idea? The chances are that I would be more than willing to view their mail (if they only they could make their creative a little more classy, too).
There has been much written about CRM (for basics, see marketingteacher.com), as in Customer Relationship Management. But, except for a couple of rare exceptions, I as a consumer have not been “feeling the love” from any particular brand or companies. It is not like I am not present on the Internet, or do not own any loyalty cards, or do not shop frequently at certain stores. There is certainly plenty of data on me out there to mine. At this point, for most companies, the mining has been, at best, superficial. There are some companies who have cottoned on to the idea of email campaigns as a cheap way to bolster traffic — to the web site if not the store. But that’s about it. But, I am looking for more. Companies need to tap into the data (which I volunteer) and capture my attention by knowing more about who I am.
Once companies have mastered dynamic customer knowledge (i.e. created a way to keep an up to date database), the question will then become to what extent (quantity and quality) the brand is communicating with its customers? There is a real risk that a deluge of irrelevant email campaigns will completely shut down the effectiveness of the email channel — broadening the definition of spam, increasing people’s intolerance to emails and making them opt out systematically or just delete with increasing revulsion on reception. If the average rate of opening an email drops down below the 2% level — a barometer for so many formerly traditional media campaigns — you may end up pissing more customers off in the process. While companies are still saving on the postal cost and on the CO2 with emails, they will be shooting themselves in the foot if they overdo it.
There is a golden opportunity to use the ‘net as a marketing tool. There are two important points. First, don’t abuse the opportunity out of laziness. Pouring out unpersonalized, non-customized emails is not the right answer; like cutting down rainforests, it is a very short-sighted approach. Second, mind the data (think “Mind the Gap” as they say in London’s tube stations). What is needed is to craft meaningful messages (in line with the brand’s values), with a customization that reflects some of the unique elements of the receiver.
This all leads me to the main point: Brands endeavouring on CRM programs need to reflect carefully to find their CRM VOICE. There are three core ingredients to creating a CRM Voice. (1) A CRM Voice first means being getting in touch with the brand’s DNA, its core values. How is each communication refurbishing the identity of the brand and reinforcing the customer’s affinity with the brand. (2) It means knowing how to create messages that are relevant to the brand and to the receiving client. Does the brand have an interest in me? Does it know me (without the overtones of Big Brother). Does it know how to surprise me? To wow me? (3) Finally, it means getting the frequency right, knowing how often that person needs or wants to be contacted — including all the different channels of communication (TV included). A well-adapted, customized message becomes part of a well-oiled service.
In summary, brands need to find their CRM Voice: a Customized Real Message that is aligned with the brand’s core values. Brands that are high in love (lovemarks *****) and respect have a potentially greater starting point. But, every customer is looking for meaning and, in today’s difficult economic times, they will be more than likely spending more time online. I will be keen to see which brands or companies come through this vortex smelling like roses — for the times they are a changing, and I believe a paradigm shift is well underway. Which companies are going to capitalize intelligently on the accelerated shift in time on online that is bound to accompany this worldwide crisis? If you do what you always did, you may no longer get what you always got.
Crisis, What Crisis? Bring forth the Internet
As we spin into the depths of this worldwide economic crisis, the opportunity for companies to move to more efficient, effective and measurable marketing activities online seems perfectly obvious, if not natural. The time has never been more appropriate for companies to ramp up online activity because their consumer will be increasingly on the other end waiting for them. I identify below five main reasons why the consumer will be more than ever present on the Internet specifically because of the economic downturn.
(1) In this period of crisis, there is a very real likelihood that people will spend even more time online in the near-term because the web will offer a cheaper alternative way to spend time (watch YouTube or Daily Motion videos) and find entertainment (on a myriad game sites) than, say, going out to dinner in a restaurant or going to the flicks. Rather than going outside to buy a newspaper, free subscriptions will bring people online (or the news will be downloaded to their mobile phone). Doing banking/finances on line (a cost benefit for the embattled banks to save on bank tellers), paying your paperless bills (save on postal costs) and other administrative tasks will bring people to their computer.
(2) The internet is the most expedient way to do networking — especially important for those people without a job (linkedin, monster, etc.). The Millennials will need to have the “older” generations on board to hire them, but in general, the custom of business networking on line is beginning to build already. This notion reinforces a tenet I have long held which is that your presence online will become your most effective CV or resumé (see here for a prior post).
(3) There are plenty of new applications and sites that now make searching for a bargain substantially easier, specifically the price comparison machines, such as Kelkoo, PriceGrabber, Shopzilla… And this point goes beyond the notion that you can get better information from internet sites (and peer-to-peer reviews, etc.)
(4) In times when travel may be too expensive, there are now many virtual ways just to stay in touch with your friends and family (skype for face to face, facebook for group hugs or twitter, jaiku for group pecks). Essentially, the internet social media networks are intrinsically designed for harder economic times. Not all of them will survive, of course, but each will be forced to carve out its niche, its purpose and the likelihood is that the economic crisis will bring much needed acuity to each social media network’s positioning.
(5) And, finally, the truth is that items sold on line will be cheaper in fact and in perception. When you add the cost of getting in your car (time is money…), consuming fuel with the risk of traffic infractions to go to the brick & mortar (only to find a less informed salesperson) the chances are that the consumer is in effect going to find the Internet a cheaper way to consume. With people and companies forced to work harder and longer hours to survive, time for personal shopping will decline ipso facto. Retirees who have already shown a propensity to hit the ‘net, will do so even more (note to self: big business in keyboards will large keys). Driving to the store hardly eases with age. And, lest we forget that, with driving, there is the added nuisance of polluting the environment. Clearly, on the supply side, more and more companies will move to e-commerce platforms (expensive as they may be initially) because they offer a higher margin business model once the critical mass is reached. Moreover, having one’s own e-commerce site is a useful counter force for the brand/company against a distribution network whose strength in the balance of power has become hard to manage.
With the backdrop of the demographic and sociological surge of online traffic, plus the terrific growth numbers in developing countries, it all makes me believe that we are truly in the vortex of the paradigm shift. Beyond the crisis, we will come out different, truly changed in our behaviour and, specifically, our relationship with the Internet. With the oft mentioned Chinese expression (pictogram above), in times of crisis, yes there is danger and great opportunities. The danger lies in the fact that the crisis may be worse than expected and certainly the Internet will not solve everything. And the Internet has its own dangers in terms of potentially dehumanizing relationships or rendering us captive to the 17″ screen… That said, nonetheless, it is worth noting that since the Internet and the e-companies have already experienced their own bubble-bursting and crisis, they have created more durable models, filled with more substantial content and purpose. In the process, Internet companies are (perhaps inherently less fat and) potentially more resistant to the current crisis than many brick & mortar brethren.
All the same, the economic crisis presents a golden opportunity for the Internet. How to play it? That will be the subject of another post.
UPDATE FEB 8, 2009: I found this article written by Le Monde on Jan 30, 2009, showing that clearly this idea above is gaining traction in France: La Recession accélère la rupture entre le virtuel et le réel.