Wednesday, May 27, 2009

Can and Will Communicators Reinvent Themselves for Web 2.0?

I was a panelist at a Conference Board program in New York hosted by the reputation and issues monitoring web company, DNA13. The topic was corporate communications and Web 2.0. I spoke about brand and reputation management while fellow panelists, Peter Debreceny focused on employee engagement, and Chris Johnson talked about monitoring software to track on-line discussions and issues. We agreed that social media are creating two major trends for corporate communications: 1) the need to reset the value proposition of the function from messages to relationships (complements to Jim Grunig for pushing that concept for years!!) and 2) that the traditional barriers between marketing and communications are breaking down, creating new challenges to those without good business acumen and training.
The world is all atwitter—sorry about the bad pun!—about how new social media are changing our society and impacting how we dialog with internal and external stakeholders. Social media are evidence of the increasing “me-ness” of society. Twitter, Facebook, etc. are all about the individual at the center of the “universe”. In the era of mass media, corporations were the center—they controlled the information and its dissemination. Today, people are gathering news, sharing information about brands and companies, and creating communities of common interest. I heard one young woman recently state that if the news is important enough, it will find her. Newspapers will continue to die. But, people still want information. Where they get and who they trust for that information has changed. Recommendations from friends and on-line news are now the two most trusted sources of information in the U.S. We also are in a world in which employees are twice as likely to believe a colleague as the CEO.
I’ve heard a lot of talk from communicators, but I’m not sure there has been much real change in mindset. The conversations at communications conferences still seem to center around media relations, dealing with key opinion leaders, getting the CEO’s message out, etc. It’s hard for a profession that has historically hired former journalists, been the CEOs messenger, and valued media contact-lists to change. Will it? Can it? Those are the critical questions.

Saturday, May 16, 2009

Is the Demise of Newspapers Bad for Reputation Management?

I spoke at a Conference Board program in New York this past week. The topic was about corporate communications at Web 2.0. There was a lot of talk from the participants about the demise of newspapers and what will happen when there is not an editorial filter on ideas so that "quality" wins out over quantity.

The newspaper business model has been broken for a long time. When I was in graduate school--a long time ago!!--we did case studies on the newspaper business and we could not figure out why the companies maintained printing presses and delivery trucks. Their core competence is news gathering and reporting, not production. But, their model hasn't changed and now with the decline in advertising, newspapers are having a tough time surviving.

Against this concern about the demise of newspapers was a quote from one young woman who said "if the news is important enough, it will find me".

Newspapers came into being because people wanted information about things that affected their lives. Because of the economies of scale in gathering and distributing the news, it only made sense for a few large companies to dominate the news business. Few others could afford it. The Internet has changed that model. We have millions of bloggers and microbloggers (Twitter as an example) who are gathering news and disseminating it instantly and for free. The young woman is right, the news is finding her.

At the same time, I can understand the concern over whether of not the information out there in cyberspace is of the highest quality. We are in a transitional phase right now. It is being fueled by a number of factors: the demise of newspapers, the rise of blogging, and the increasing importance people place on connecting and hearing from "people like me". We are finding the news--or it is finding us. It is news from people we trust because they think like us. Not all of it is on the Internet. Some of it is on Fox News, Air America, and other politically-based or politically-biased news sources. But, long ago David Brinkley defined bias as anything someone doesn't agree with.

So, people are comining together and becoming each other's news source, brand guidance, etc. It is a transition to a society where the individual is in the center, not the news media organization.

Will this impact reputation? Of course it will. But, the same basic tenets of good reputation management will hold. We cannot talk at people, but we must dialog with them; we need to be real and transparent; we need to be honest, not just talk about it; and we need to be more concerned with the value proposition of those we want to influence than in what we want them to believe. If we focus on authenticity and transparency, we will continue to have good reputations regardless of what happens technologically.

Monday, May 11, 2009

Is Perceived Value Reputation?

There is a new book by Columbia Business School professor Donald E. Sexton that is well worth reading. Called Value Above Cost, Sexton makes the important observation that the most important function of marketing (and I would also add communications) is to enhance perceived value, which is defined as the "maximum that the customer will pay for your product or service".

This is an important concept. Perception is the same as fact in the marketplace. So, the concept of perceived value means that the job of marketers and communicators should be to enhance the perceived value of the organization with its key stakeholders. What I like most is that Sexton also cautions against the focus on "delighting the customer" that permeated company thinking for too long. Delighting the customer could mean that a company spends more than a customer is worth, leading it also to offer items for free to further delight the customer. When something is free, there is no apparent value. Value is only demonstrated when something is exchanged--money, our time, our relationship, our information, etc. Simply adding more or doing more to make a customer happy is bad business. There must be a balance between what we are willing to spend on the customer and what the customer is willing to pay for the product or service. At some point, it may no longer be worth our investment to make the customer happy, and we can actually gain competitive advantage by allowing our competitor to spend too much on delighting the customer.

Is perceived value the same as reputation? I think that the concepts are very close, if not identical. The greater the perceived value, the more the customer is willing to pay. He/she perceives us as being better than any other offer. Is that not what reputation is--being distinguished from peers as being the best? So, if we extend Sexton's concept, we can see that perceived value not only influences willingness to pay, but also willingness to join, support, invest in, etc.

The concepts contained in Sexton's book are extremely important for anyone who wants to truly understand the role of both marketing and communications.