Sales & Marketing Management - September/October 2008 - (Page 12)

SMART MARKETING BY DON PEPPERS AND MARTHA ROGERS Beware: perception is reality Online word-of-mouth can lift (or sink) your reputation hil Gramm, the former U.S. senator-turnedeconomic advisor to John McCain, stirred a big controversy back in July when he declared that the main economic problem America faced was pessimistic thinking. He called our economic malaise a “mental recession,” adding that we are becoming a “nation of whiners.” McCain immediately repudiated these comments, while Barack Obama’s camp gleefully leaped on them as proof that McCain and his advisors were out of touch. It’s certainly possible Gramm is out of touch politically, but in a purely technical sense he was correct: The “recession” we have been lamenting for nearly a year now isn’t really a recession at all. A recession is defined as two successive quarters of negative GDP growth, and as of this writing we haven’t yet had a single negative DON PEPPERS AND MARTHA ROGERS ARE FOUNDING PARTNERS OF PEPPERS & ROGERS GROUP, A DIVISION OF CARLSON MARKETING, IN NORWALK, CONN. WRITE THEM AT EDIT@SALESANDMARKETING.COM. P quarter (tepid, yes, but not negative). No doubt, housing prices and the financial industry are both taking a beating, and the price of gasoline has surged to record levels, but a large part of the angst we have all been feeling really does seem to be self-induced—driven more by attitude than by actual numbers. Still, while the numbers show Gramm’s statement to be technically correct, the bigger truth is that the “mental state” of our economy has a lot more to do with its actual, dollars-and-cents reality than most people realize. In plain English: If you see others who think the economy is bad, you are more likely to think so yourself. The more decisions you base on this thinking, the more influence you will have on other people’s thinking, and so the economy really does become “bad.” These are the same network effects that, as business 12 SALES &MARKETING MANAGEMENT SEPTEMBER/OCTOBER 2008 managers, we have to consider among our customers. Stock market investors have always looked over their shoulders at other investors’ opinions before making their decisions. Customers have, too—to a more limited extent. Marketing fads have their origins in network effects. But new social media technologies are aiding and abetting this, as customers go online to blog to other customers, post customer reviews and ratings, and circulate word-of-mouth. Part of the logic inherent to this kind of phenomenon is that small perturbations in a social network sometimes have enormous influence over the direction of the network. It starts with one person who reads a review and rates it highly. Because of that high rating, another few people read it and also rate it highly … and thus the cycle repeats. Consider a 2007 Wall Street Journal study of sharing and collaboration Web sites. It was discovered that one user of Reddit.com had attracted the interest and favorable reviews of a large number of other Reddit users, owing to his appraisals of the security flaws and price tag of Microsoft’s Vista operating system. His name is Adam Fuhrer … and when the WSJ reporters tracked him down, they found out he was 12 years old. If you were in charge of Microsoft’s marketing and wanted to find the next Adam Fuhrer, it just wouldn’t be possible. You could predict with a high degree of confidence that there would be another highly influential customer like him sooner or later, but it would be impossible to say who that key influencer would be. And guess what? Sometimes your key customer influencers will be off base, creating stampedes based on false (i.e., “mental”) threats. In 2005, one blogger’s comments about Dell’s poor customer service cascaded into a storm of online outrage, which made it into the mainstream media. Dell’s reputation suffered greatly as a result, but in a later analysis of the incident, a British research firm concluded that a substantial amount of misinformation had fed the incident. Maybe so—but the money it cost Dell was very real. IF YOU HAVE SUGGESTIONS ON WHAT HAS WORKED FOR YOU IN LEVERAGING YOUR MARKETING DOLLARS, GO TO www.smmsoundoff.com YOUR IDEAS AND EXPERIENCES. AND SHARE www.salesandmarketing.com www.salesandmarketingmanagement.com http://www.Reddit.com http://www.smmsoundoff.com http://www.salesandmarketingmanagement.com

Table of Contents Feed for the Digital Edition of Sales & Marketing Management - September/October 2008

Sales &�Marketing Management - September/October 2008 Contents Editor's Letter Brian Tracy University Smart Sales Sales Strategy Smart Marketing Marketing Strategy Smart Management Management Strategy The Low-Cost Sales Leader Why Sales Process Gets the Shaft Training Q&A Technology Making the Case for Travel (Part II) Travel/Meetings On the Road The Way I See It

Sales & Marketing Management - September/October 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.