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Quail Ridge Books and the dark matter of customer experience

Last weekend we stopped into Quail Ridge Books, a wonderful independent book store just down the street from where we live in Raleigh, NC. After browsing for a while and finding a few things, we went up to the cash register to buy them.

I have to admit, I always experience a little ounce of dread when I walk up to the counter at a bookstore. Most of this comes from my experiences at Barnes & Noble, where each time I approach the counter I’m alerted that I could save from 10-40% on my purchase just by joining their membership program and whatever else is in their rehearsed speech that has probably been tested to ensure each word helps optimize their chances of getting you to sign up so they can “capture” you.

I’m sure Barnes & Noble keeps detailed monthly metrics at their corporate office highlighting how many people sign up at each location due to this point-of-sale promotional technique. I’m also confident that there are incentives (either carrot or stick-based) that 100% guarantee that I’m going to not only have to listen to that speech each time I approach the counter, but also turn them down when they ask me to join. (By the way, I don’t have anything against these sort of programs, I just don’t need to join one for every single store I shop in.)

So I’m standing there at Quail Ridge Books, and I see the cashier reach for a yellow bookmark that I’m positive is going to be the entry point to Quail Ridge’s version of the membership club speech. Instead, the cashier simply says, “We have a membership program called the Reader’s Club. I’m going to put this bookmark in your book and if you like, you can look at the benefits there.”

Whoa. No speech, no sales pressure forcing me to say no. It was like a breath of fresh air.

I’m sure if the folks at the Barnes & Noble corporate office had seen this performance at one of their stores, they would have hit the ceiling. Multiply that approach all across the country at every Barnes & Noble and their point of sale membership spreadsheet would look atrocious. People would get fired.

The problem is, Barnes & Noble is only tracking the data they can see. They have no way of tracking the dark matter–the impact their membership strategy has on the experience of people like me, who now go out of their way to avoid shopping there.

I don’t expect I am the only person out there who is annoyed–not just at Barnes & Noble, mind you–but at every store that forces me to say no to a point-of-sale sales pitch… to give a dollar to this cause, or to join this program, or whatever.

Because the spreadsheets only track the revenue impact that come from these promotions and not the negative brand impact, they probably look stunning on paper. What’s the downside, right?

Well, the downside is people like me not wanting to ever set foot in a Barnes & Noble store.

Stores like Quail Ridge Books that don’t sacrifice the health of their brand community for the sake of hard numbers on a spreadsheet understand the importance of the customer experience in establishing brand reputation, loyalty, and even recommendation.

So next time, before you implement a strategy that is guaranteed to make the numbers look good, make sure you are also studying the dark matter impact to your brand experience and reputation at the same time.

Just because these impacts are harder to measure doesn’t make them any less powerful.

Where should you focus brand efforts? Community or customer?

It has become a truism in marketing that you should stay focused on your customers. In most of our organizations, we are attempting to sell something to make a profit. We need customers.

But I often use the word community in places where most people would use the word customer. Why? Am I just being naive about what pays the bills for our organizations to continue to thrive? Am I committing heresy by not staying focused on just customers?

I don’t think so.

I believe that the dogged focus on marketing to customers alone has created a myopic view that makes us ignore many of the important people who interact with our brands.

Customers are important; most organizations couldn’t exist without them. So what is the issue?

Customers are not just listening to us anymore.

When organizations focus on only interacting with customers rather than taking a holistic view of the entire brand community, they forget that in the twenty-first century, the version of the brand represented by the organization might only be a small percentage of the brand the customer sees. Where is the rest of the story coming from?

Everyone else who interacts with the brand: the brand community.

When rolling out brand positioning, ad-free brands understand that it matters what everyone thinks about the brand—not just the customers. By understanding and planning your interactions with all of the communities around your brand, you have a chance to impact the customers’ views of who you are in a much deeper way than if you were just speaking to customers directly through marketing and advertising.

And that’s just if you are only concerned with the success of your business itself. If you are a nonprofit or a member of the growing breed of socially responsible businesses interested in benefitting the communities they serve while remaining for-profit, you’ll see even greater benefits from this approach.

So should you be focused on customers? Absolutely. But just remember that you aren’t the only folks talking to your customers about your brand. When you build a brand strategy that ensures the positioning resonates with all the people around your brand and not just customers, you’ll be on the path to much deeper, more fulfilling relationships with the communities surrounding your brand–and you’ll probably be heard by potential customers who would have never given you the time of day otherwise.

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This is the eighth in a series of posts drawn from The Ad-Free Brand.

How is your organization faring in the war of control vs. freedom?

In October 1969, when experts at the US Department of Defense Advanced Research Projects Agency (DARPA) connected the first two nodes of what has now become the Internet, they probably weren’t considering the ramifications of their actions on future organizational cultures. But while these DARPA folks likely wouldn’t have considered themselves management innovators, the Internet they created has rocked the traditional management science to its core.

Sure, organizations have embraced the technological changes that have come with the Internet (or they have not, and have since disappeared). But fewer organizations have truly embraced or even begun to understand the cultural changes that the Internet has ushered in.

We may live in 2011, but given how many of our organizations are structured, we might just as well be working in 1911.

Fundamentally, traditional management and the Internet are at odds over one simple thing:

Traditional management is designed for control. The Internet is designed for freedom.

That’s why the principles used to manage assembly line workers in 1911 are often rejected in 2011 by a new generation of employees who have grown up enveloped in the freedom of the Internet. To them, the old management model is an anachronism; a legacy system held onto by an aging generation of leaders who are unwilling to give up control because they see freedom as a threat.

In volunteer-based community settings, efforts to exert control are often poisonous. Volunteers will simply quit before being forced to do something they don’t believe in or value. Yet in traditional organizational settings, control—over people, resources, and information—is a fundamental lever.

If you’d like to see your organization become more aligned with the spirit of the Internet than the legacy of traditional management, consider looking for places to replace control-based practices with freedom-based practices.

If you manage people, start thinking of your staff members as volunteers in a community. By giving them more freedom to choose things they’d like to work on while giving them additional say in their own futures, you stand a better chance of keeping them feeling like… well… paid volunteers.

When employees are forced to work on projects they haven’t chosen, and don’t believe in or value, they may not actually quit their jobs, but they will often quit in every other way—doing just enough to get by and keep their job safe, or in some cases even undermining the effort.

Often this is a fate worse than having them quit. They become organizational drones, complacent, indifferent, and dispassionate. They’ll stop contributing ideas because they think no one cares. They’ll stop giving full effort because they think it doesn’t matter.

Replacing control with freedom is a great way to inspire your employees to view themselves as volunteers, deeply engaged in achieving the organization’s goals, rather than drones or mercenaries, who seek only safety and a regular paycheck.

Moving from control to freedom is one of the most difficult transitions an organization (or even just a manager) can make. This transition requires much more than simply a good strategy for change—it requires a will to change. Those in charge—the very people who have the most to lose by giving up control—must make a decision that granting freedom is a strategic imperative. The competitive landscape is littered with the carcasses of formerly successful organizations whose management team did not know how—or didn’t have the will—to make the leap.

The strategic decision to change a control-based culture into a freedom-based culture is not one that leaders should take lightly, and it is not necessarily right for every organization in every situation. But in order to compete with companies born in the age of the Internet, employing the children of the Internet, and built in the spirit of the Internet, in the long term there may be few other options.

[This post originally appeared on opensource.com]

Why is this blog called Dark Matter Matters?

Over the past couple of weeks, I’ve had a few people ask me why my blog is called Dark Matter Matters, and since I haven’t told that story in a while, I thought I’d share an excerpt from The Ad-Free Brand explaining it (and appending some more recent information). Here goes:

In late 2008, I was struggling mightily with the question of how you measure and quantify the value of brand-related activities. As someone whose father is an amateur astronomer, I’d long been intrigued by the concept of dark matter in the universe. If dark matter is new to you, Wikipedia describes it as “matter that neither emits nor scatters light or other electromagnetic radiation, and so cannot be directly detected via optical or radio astronomy.”

In other words, it is matter out there in the universe that is incredibly difficult to see, basically invisible, but that has a large gravitational effect. What’s particularly interesting about dark matter is that, apparently, there is a lot of it. Again according to Wikipedia:

“Dark matter accounts for 23% of the mass-energy density of the observable universe. In comparison, ordinary matter accounts for only 4.6% of the mass-energy density of the observable universe, with the remainder being attributable to dark energy. From these figures, dark matter constitutes 83% of the matter in the universe, whereas ordinary matter makes up only 17%.”

I find this fascinating.

And dark matter is still a theoretical concept. Again from the Wikipedia entry: “As important as dark matter is believed to be in the cosmos, direct evidence of its existence and a concrete understanding of its nature have remained elusive.”

But it was actually reading about all the problems with the Large Hadron Collider in 2008 (at the very same time I was having my own problems figuring out how to measure the value of brand-related work) that helped me make the connection between what I do for a living and this concept of dark matter.

The Large Hadron Collider is the world’s largest particle accelerator. It was built on the border of France and Switzerland and is about 17 miles wide. One of the things that particle physicists hope to prove with this enormous project is the existence of dark matter.

I’m no physicist, but as I understand it, the accelerator shoots protons at super-high speeds around the collider, and, if these scientists are lucky, the collisions eventually might produce a few particles that will exist for only a few milliseconds and then disappear again. And these particles might prove that dark matter isn’t just a theory.

Might being the key word. In fact, noted physicist Stephen Hawking bet $100 that they won’t find anything (a bet which he may soon win). The cost of building a collider to maybe prove the existence of dark matter? About $9 billion dollars. (And as of this post, written in September 2011, three years since its was first fired up, we are still looking for evidence.)

Another attempt to prove the existence of dark matter used the Hubble Space Telescope. This image below (which I also used for the header of the blog) was taken by Hubble and first shown by NASA in May, 2007.

In this picture, you are looking at many galaxies a really, really long way away. But you can also see fuzzy gray areas all over that look like clouds. When the astronomers first looked at this photo, they thought the fuzzy areas were a problem with the image. But after analyzing it for over a year, they realized that the fuzziness might actually be evidence of dark matter.

Their reasoning? The fuzziness is actually a gravitational distortion of the light rays from distant galaxies that are being bent by dark matter on their way to Earth. The effect you see is kind of like looking at the bottom of a pond that is being distorted by ripples on the surface.

So finally, scientists had discovered some real visual evidence of dark matter.

I believe the type of activities I talk about in the book and on this blog—those related to building brand, culture, and community—are the dark matter within organizations. Often brand, culture, and community are extremely difficult to measure well, and sometimes accurate measurement is simply impossible.

That’s not to say we don’t try anyway. I’ve seen and even tried many formulas, processes, and products that attempt to measure the value of brand, community, and culture-related efforts. Some of them can provide valuable information.

Others, not so much.

Yet here’s the kicker: brand, community, and culture are having a huge impact on your organization, whether you can effectively and cost-effectively measure that impact or not.

Just as dark matter is a strong gravitational force within the universe even though it is notoriously hard to see and measure, so are many of the things that will lead to the long-term success of ad-free brands.

So that’s how the blog got the name.

One last thing: I’ve been toying with the idea of changing the name at some point down the road, perhaps re-naming it The Ad-Free Brand and simplifying things. If you have any thoughts on that, or if you like the dark matter analogy and think I should keep it, I’d love your opinion. Feel free to comment below or send me an email at chris(at)newkind.com.

To establish brand positioning from the inside out, think like a conductor

In an earlier post, I highlighted one of the key concepts behind the ad-free brand approach: building your brand from the inside out, starting with the folks who are likely to know and care most about the brand—the employees.

When building the brand from the inside out, the goal is to embed the core positioning deeply within the mind and actions of each employee of the organization so that it comes out consciously and even unconsciously in their interactions with the external brand community.

This is very hard.

You can’t force people into “living the brand.” No one likes to be told what to do. I certainly don’t.

Ad-free brands work from the core principle that those who are not invited on the journey will usually reject the destination. So, broad participation in the brand-building process is often a prerequisite for the brand positioning to really take off. Unfortunately, the larger the organization, the harder it is to achieve consistency in the way the brand positioning is rolled out.

I like approaching the internal rollout of brand positioning by channeling the mindset of the conductor of an orchestra. An orchestra conductor is able to create amazing, complex, and beautiful music just by using a tiny baton.

The conductor’s role is to organize, motivate, and inspire a group of people to make music together. The conductor chooses the piece of music, interprets the piece, gives every person in the orchestra a part to play, and helps each musician rise to the level of his or her talent or experience.

An orchestra in which every musician plays the same notes would be boring, to say the least. In an orchestra, the diversity of instruments—woodwinds, percussion, strings, and brass—allows for the complex and beautiful expression of music. Yet many organizations attempt to roll out their brand positioning by expecting everyone to toe an explicit company line, sticking to a rehearsed speech.

This kind of approach does not play well for ad-free brands.

To me, the rehearsed expression of the brand positioning comes off as canned, corporate BS that most people will ignore. To be effective, ad-free brands take advantage of the talent and voice of each employee, allowing each person to utilize his or her own strengths, interests, and passions to explain or begin to live the brand positioning.

The goal is not getting everyone to play the same notes—it’s getting everyone to play in the same key.

Different people prefer the sounds of different instruments and types of music. One of the benefits of having many people playing in your orchestra is that you are likely to create music that appeals to all types of people, which will in turn attract even more people. When you create a situation where many people are communicating and living the positioning in their own ways, you increase the chance that other people will begin to hear, understand, value, and live it themselves.

And that’s when the brand has a chance to really shine.

This is the seventh in a series of posts drawn from The Ad-Free Brand.

In Cuba, ad-free brands are the rule, not the exception

This morning, NPR ran an interesting story entitled Entrepreneurs Emerge As Cuba Loosens Control (thanks to Elizabeth Hipps for pointing it out), highlighting the rapid expansion of small, privately owned businesses in Cuba as part of Raul Castro’s broad economic reforms.

According to the story, business is booming: brightly-painted storefronts, prices that significantly undercut those at official state-owned businesses, more choices than Cuban consumers have ever seen before.

Yet at least one thing remains heavily restricted: advertising.

From the article:

“It’s not clear how big Cuban authorities will let these new businesses get as they try to build their brands and open new locations. The government’s political messages and propaganda must now compete with more and more commercial signage, but advertising is still essentially banned.”

Oh no! How can these businesses succeed without advertising? Are they doomed to fail?

Turns out they are doing just fine. Without being able to resort to advertising, some have developed more creative, albeit somewhat rudimentary brand strategies. For example, one Havana snack bar featured in the story seems to be building a budding community of fans of the local baseball team by making every item on the menu baseball-themed. While this may not seem like much, it is definitely a start toward differentiation in a country where sameness has long ruled and choice has been scarce for decades.

As Cuba begins the next stage in its entrepreneurial adventure, I wonder whether there is a chance that the current restrictions on advertising might have the interesting side effect of helping Cuban businesses build successful ad-free brands, meaning brands that are built using a community-based approach rather than an advertising-based approach.

Over the long term, will Cuba be able to leap past the advertising age in much the same way that Africa leaped past the age of land-line based telephones?

It’ll certainly be interesting to watch.

Mozilla: A study in organizational openness

My theme this week is organizational openness and transparency and today I’d like to highlight a fantastic example of an organization that has built a culture with openness at its core: Mozilla.

Most of you probably know Mozilla as the organization famous for its open source Firefox web browser. But what you may not know is that open source is more than just a technology decision for Mozilla; the open source way is deeply ingrained in every aspect of its culture.

Last week, Mozilla Technology Evangelist Paul Rouget wrote a post on his blog entitled Mozilla Openness Facts. In it, he attempts to capture as many examples of openness in action at Mozilla as he can.

Here are just a few of the examples Paul shares (read his post if you want to see the rest):

1. An open door office policy: open source contributors are welcome to drop by Mozilla offices and hang out. In fact, Paul notes that he first met current Mozilla CEO Gary Kovacs (before he joined Mozilla) when Gary visited the Paris office where Paul works.

2. Transparent financials: Sure, many companies publish their financial results publicly… because they are public companies. Mozilla isn’t, but still does.

3. Open meetings: No strategy behind closed doors here. Not only are many of Mozilla’s meetings open to the public, they often post the phone numbers (and even video conference URLs) on their wiki.

4. Public product roadmap: Want to know Mozilla’s future technology direction? No need to hire a private investigator, you can find the product roadmap on the wiki too.

Not all of these examples are unique to Mozilla and some of them are simply a part of being a responsible member of the open source movement. But what is unique is that someone took the time to catalog the openness examples.

It’s a fantastic idea, and perhaps something that every company that bills itself as open should attempt to do in a public forum.

I reached out to Paul to ask him a few questions about openness and what motivated him to compile the list of examples. Here are some highlights from our conversation:

First, I asked him about some of the challenges that come with openness and transparency. One of the points he made that resonated most with me is that “being open is not a passive task.” It isn’t enough just to make information open—you must be active about helping people find it.

“Open meetings are meetings where anybody can come. But you have to promote these meetings. Make sure the contributors hear about them. Same for mailing lists and IRC channels, open channels, but you need to find them… Just keeping the doors open is not enough,” says Paul.

Paul also pointed out another crucial lesson of organizational openness, that being open doesn’t mean everyone has the right to vote on everything.

“Being transparent and open doesn’t mean we are a democracy. We listen to everybody, but we believe that the most skilled people should make the most important decisions. And you don’t have to be an employee to be a decision-maker.”

Finally, I asked him why he took the approach of “showing vs. telling” in writing the post (which I loved, very esse quam videri). Here was his response.

“I was trying to define openness. I failed. Much easier to show. Everybody is talking about how transparent and open they are. Even big and closed companies. I say b$%^&*!t, they are not. They just use openness as a new buzz word and a new marketing thing. If you are open, show me your meeting notes, show me your source code, let me be part of your team conference calls, let me look at your metrics, and let me work with you.

I wanted to show that being open is much more than just being open source.”

Well shoot, that sounds a lot like what we are trying to show with opensource.com:)

Nicely done, Paul. Nicely done, Mozilla.

[This post originally appeared on opensource.com]

How open and transparent can a public company really be?

On opensource.com, we often talk about the benefits of an open, collaborative approach, and I see new stories every day that help showcase the benefits of an open organizational model.

But for public companies, the benefits of an open approach are often overshadowed by the risks. During my time at Red Hat (a publicly-traded company for much of my tenure), our approach was traditionally to “default to open,” sharing as much information as we could, both inside the company and with the outside world.

Yet, as a public company, there were many financial and legal obstacles that stood in the way of openness. It was challenging to find the right balance between being open with our thinking and information, yet respectful of the legal and financial responsibilities that come with being a public company.

So it was with great interest that I read Scott Weiss’s recent post about corporate transparency on Ben Horowitz’s blog (also posted at AllThingsD). Scott is now a general partner of Andreessen Horowitz, but was previously the CEO of IronPort, an Internet security company that was acquired by Cisco in 2007.

In his post, Scott talks about making the decision to build an open culture at IronPort, despite the risks:

“…the more that I thought about it, the more I believed that sharing absolutely everything would create massive advantages and that we should live with whatever consequences resulted.”

So he went ahead and did it. Yet, as soon as IronPort began to prepare for its IPO, the company was forced dial back the transparency. I’d encourage you to go check out the post for the full details of how they handled this transition. But the key takeaway at the end of Scott’s piece is one that I could not echo more strongly.

“I believe it was much healthier to set the default to full disclosure while we were private. When you prepare for an IPO, it’s definitely a high-class problem to have to work backwards with concrete reasons to withhold information from the employees. And when that time comes, they totally understand.”

Scott’s right. People totally understand. When you level with them and share as much information as you can by default, then apologize and explain why when you can’t share a piece of information, in my experience, almost everyone will be cool with it.

So if you are working for a company that is thinking about going public one day, and the more conservative folks in your organization are using this as an excuse for not having a more open, collaborative culture, show them Scott’s post.

While complete openness might never be possible in your organization, a respectful, thoughtful default-to-open approach may give you the benefits of an open culture while minimizing the risks.

[This article originally appeared on opensource.com]

The Ad-Free Brand tip #3: the community is more than just customers

My publisher recently filmed a series of short video interviews where I discuss my new book The Ad-Free Brand. This is the third in a series of tips from the book, entitled “The Community is More Than Just Customers.”

The Ad-Free Brand tip #2: don’t think like Tom Sawyer

My publisher recently filmed a series of short video interviews where I discuss my new book The Ad-Free Brand. This is the second in a series of tips from the book, entitled “Don’t Think Like Tom Sawyer.”