Open up your mind and say, ahh...

The way you price expensive transactions is going to train your partners and customers in how to behave.When selling a book to a major publisher, it’s common for the publisher to offer an advance against royalties. In fact, the advance is the most significant tool that publishers use to get a coveted author to pick one house over another–royalties and most everything else are fixed.

It turns out that if an agent offers a hot book to multiple publishers at the same time, the advance offered goes up, often dramatically. Obviously, the publisher was capable of offering the higher advance without the auction, but it was the risk of losing the book that got them to pony up more money.

This trains agents and authors to be disloyal, to shop around and to create an artificial game to raise the price.

Or consider the real estate developer who calls up an electrician to re-wire a building. She uses this electrician often, and the estimate comes back at $18,000. The developer shops around and finds a similarly talented electrician for $14,000. Loyalty is great, but that’s a huge difference. She switches to the higher value choice. Indignant, the original electrician says, “why didn’t you tell me! I could have beaten that price.”

The answer, of course, is, “well, why didn’t you quote me that price in the first place?”

You might leave money on the table if you reward people for being loyal (and don’t make them shop around each time). I think it’s money well spent, because loyalty is worth more than a little more margin. If you train your partners to shop around, expect them to shop around.

I’m frequently given the best opportunity in the world: the chance to explore a world I’m not normally a part of. Next week, I’m going to Birmingham, Alabama to speak at Green Building Focus, thanks to some wonderful people, including Mr. Merrill Stewart, who has the dubious fortune to have been the very first non-Human Business Works guest to my new offices. More on Mr. Stewart later.

What I Don’t Know Is the Best Part of What I Do

I know nothing about building. I do know, however, that adaptive reuse has been a passion of mine for decades. You see, I love mill towns. I live in a reclaimed mill building right now, and have lived in a few over the years. That’s part of green building.

Another part of green building is growing community around these projects. In a world where we’re just as quick to tear down the old, to run off and start fresh on some unturned soil, there are people out there reclaiming those frontiers all around us that I’ve talked about before. And whenever you meet someone doing that kind of work, and who also understands how to bring community to bear on such experiences, you go with him or her.

Merrill Stewart is one of those people. I had the pleasure of sitting down to talk about his business, about why Stewart Perry and all the other sponsors of the Green Building Focus event were dragging me down there, and what I could do to help Birmingham and the green building world a little in the process. Mr. Stewart is a smart man, who knows his strengths, who’s overcome his challenges (so far, so good), and who knows that by growing the value of others, he will grow as well.

He sold me on his passion for Birmingham, Alabama, and for the story of a 100 year old city that’s looking to reinvent and rebuild and reuse the better parts of the past, while never losing sight of those parts we all might wish to forget, but never should. And when we talked about social media, Mr. Stewart said to me, several times, shortly after talking about how he was using the tools of social media to be successful in his business, that his job was pouring concrete and hanging steel.

What I Do Know Is What I Share

I don’t know how to build or rebuild a factory building into a home like mine. I know people. I know how to build communities around rebuilding a muddled downtown. And I know that we’re going to have fun in Birmingham, next week.

Here’s what happens as a result of security theater at the Orlando airport:

• You wait in line at least twenty minutes
• There’s a scrum of pushing and shoving
• The staff are unhappy and not afraid to share it
• An unreasonable workload leads to fatigue and errors
• People miss their flights

Here’s what doesn’t happen:

• Security is not increased
• Peace of mind is not enhanced

In other words, we’re paying a significant tax (time and money) and getting nothing in return. In fact, we get worse than nothing. We could call it an anxiety program, instead of a tax. (After all, when you pay a luxury tax, you get some hard-won luxury as part of the deal).

The reason the TSA keeps changing the rules is not because the rules work, but because changing the rules creates more anxiety (for bad guys, they say, but for us too).

Another example: the MBA. A lot of entrepreneurs get an MBA because they are afraid to go out into world without one. They are seeking the reassurance a credential will bring them, even though the cost is huge and there’s no data to indicate that they’ll be more successful as an entrepreneur as a result.

We pay the fear tax every time we spend time or money seeking reassurance. We pay it twice when the act of seeking that reassurance actually makes us more anxious, not less.

We pay the tax when we cover our butt instead of doing the right thing, and we pay the tax when we take away someone’s dignity because we’re afraid.

We should quantify the tax. The government should publish how much of
our money they’re spending to create fear and then spending to (apparently) address fear.
Corporations should add to their annual reports how much they spent
just-in-case. Once we know how much it costs, we can figure out if it’s
worth it.

Instead of seeking out gatekeepers and critics and others that demand we get the broom of the wicked witch, perhaps we should just publish our work. The tax is too high.

Instead of forgetting about the wasted anxiety after the fact, perhaps we ought to keep a log of how often we needlessly pay the fear tax.

Instead of over-staffing, over-planning, over-meeting and over-analyzing, perhaps organizations should take lower-cost steps and actually ship.

Think about how much you could get done if you didn’t have to pay a tax to amplify or mollify your fear…

If Social Media warranted a mantra, it would sound something like this, “Always pay it forward and never forget to pay it back…it’s how you got here and it defines where you’re going.”

This intentional form of alternative giving is referred to as “generalized reciprocity” or “generalized exchange.” And, the idea of giving something to one person by paying another is credited to Benjamin Franklin, which contributes to the definition of “pay it forward.” The capital of this social economy is measured in these productive relationships and those relationships are earned through the constant acts of reciprocity, recognition, respect and benevolence.

How can businesses, which, one could argue, typically represent a “pay it backward” approach (i.e., pay me for my goods and services), thrive in this environment? In my experience as a longtime social media observer who advises companies on how to successfully navigate the new media landscape, the key lies in embracing the linear concept of Relevance, Resonance, and Significance. This approach begins with establishing relevance for your brand and messages, which then achieves resonance, and finally, attains significance and helps to build your company’s social media legacy and augment your other, more traditional brand-building efforts.

To understand this model, it’s important we define the base unit for social media, and that is the social object. What are social objects? They take the form of our tweets, posts, updates, videos, pictures, etc. introduced into social streams. As a result, they serve as the catalyst for conversations and engagement.

Relevance

The first step on this path to social media success is to make sure your social objects are relevant to your constituencies. And how do you attain that? Just as in any offline conversation, you have to listen. Listen to the conversations that are already taking place, either directly around your brand, or in other affiliated areas. Pay attention to the nuances of these conversations. Play the role of anthropologist here- what cultural components do you observe in these exchanges? What do you see the participants valuing in these exchanges? Until you understand what kinds of conversations are taking place, who is in them, and what they value, it will be hard for you to attain this first critical step of producing relevant, shareable social objects.

Once you feel you’ve done a good amount of initial “field studies” and are ready to engage, it’s important to join the conversation as a person, not some platitude-spewing automaton. Your community will see right through that. Companies have attempted to humanize their brands and products over the decades through mediums and spokespersons, of course. The difference now is that the act of humanizing a brand through a static avatar, compelling bio, and participation in social networks is not enough to earn the attention and trust of desirable consumers, who themselves have become influential in these channels.

The good news? Online behavior already indicates that consumers willfully follow the brands they support and admire. And their responses are consistent when introduced to valuable opportunities that encourage sharing, response, and action. Like email marketing however, every update within social networks either maintains or strengthens the relationship or it breaks it, causing the opt-out act of unfollowing the brand.

Before creating or distributing any social object, ask yourself a few important questions:

- What value am I introducing into the mix?

- What makes this object worthy of attention?

- What action do I want to inspire?

- How does this contribute to our standing within each community?

- How can I make this shareable?

Resonance

Sharing is an important element in any mutually beneficial relationship and it’s a critical component of successful social objects. Successful sharing of these objects lead to the second step on the path, Resonance. Resonance is measured through the speed and degree at which social objects change hands. To increase the resonance of your social objects, you first have to insure their relevance to your communities. Naturally, the more relevant and compelling the social object is, the greater the likelihood for triggering reactions across the entire social graph, while also creating valuable touchpoints back to the source.

The popular concept of KISS, which once stood for Keep it Simple, Stupid, can be shifted here to Keep it Significant and Shareable. Social objects rich with recognition and reward resonate with individuals and encourage sharing from person to person. Each exchange increases the lifespan and reach of an object.

Sometimes strong resonance is referred to as something “going viral.” It’s a perfectly fine term, but not a good motivation for companies. In my experience, the social objects created solely with the goal of “going viral” will consistently underperform and reduce the likelihood for earning relevance and resonance. Those objects incentivized by thoughtfulness, value, and perhaps even empathy, will gain traction and encourage response and sharing, transitioning from relevance to resonance. And, the ingredients for resonance are readily available for those businesses that pay close attention to the recurring themes in customer conversations, actions, and reactions.

Starbucks has done a good job creating resonant social objects by identifying what communities it had in what channels, and crafting targeted, valuable objects for those respective communities. On Facebook, Starbucks saw an opportunity to reinforce service and personalization by sharing customer stories and experiences, providing personal control of loyalty programs, and introducing discounts in exchange for participation. On Twitter, Starbucks took a different approach, combining service, humor, incentives, customer recognition, and exclusive opportunities. Via Twitter’s new Promoted Tweets, Starbucks offers free coffee for those who promote reusable tumblers to promote recycling. Promoted Tweets are a great way to see if you’ve crossed the bridge to resonance. As Twitter COO Dick Costolo recently emphasized, “Promoted Tweets that don’t resonate with users will disappear.”

Speaking at Mashable’s recent Media Summit in New York, Starbucks’s Vice President of Brand, Content and Online, Chris Bruzzo claimed that social media helped propel last year’s Free Pastry Day, driving more than one million people locations nationwide.

May I have your intention please? It is intention and commitment that breathes relevance into social objects. When we intertwine individual focus with purpose, functionality and benefits we inspire the necessary resonance that prolongs the lifespan of an object.

Significance

If we were to break down the concept of RRS into a simple formula, Relevance + Resonance would equate to the overall significance of a brand in these digital communities (R+R=S). Online significance is the earned stature we merit as measured by our actions and words. It is the culmination of reputation, trust, influence, accessibility, value, and capital within each social network. Significance is not measured by size and shape, but instead by affinity and through the collective influence of the actions and reactions that follow every interaction.

Consistently demonstrating relevance over time and continually striving to earn resonance will contribute to the level of significance of any businesses in the long run. In the social economy, businesses that “pay it forward” and actively employ generalized reciprocity as part of baseline engagement and communication strategies increase the value and social capital of the brand in each network. Businesses essentially mitigate a “pay it backward” approach by investing in the communities where conversations are commodities, but reward, insight and information are precious commodities.

Loyalty, advocacy, and action inspire the online/offline behavior that serves as the hallmark of Significance. As such, social media’s critical path or RRS serves as the blueprint to construct a social media legacy.

This is the unabridged version of my recent article in the Harvard Business Review

By Brian Solis: www.briansolis.com

Subtle is a cousin of beautiful.

Subtle design and messaging challenge the user to make her own connections instead of spelling out every detail. Connections we make are more powerful than connections made for us. If Amazon and Zappos had been called “reallybigbookstore.com” and “tonsofshoes.com” it might have made some early investors happy, but they would have built little of value.

Subtle details demonstrate power. Instead of being in an urgent hurry to yell about every feature or benefit, you demonstrate confidence by taking your time and allowing people to explore. They don’t put huge banners on the Hermes store, announcing how good the silk is and how many famous people shop there…

And subtle messaging communicates insider status. I don’t have to say, “Hey I was in Skull and Bones too! You should hire me!” Instead, a subtle (secret) handshake does all the talking that’s needed.

It’s tempting to turn the dial all the way to 11, the make everything just a bit louder. The opposite is precisely what you might need.

I’m aware of the oxymoronic nature of spelling out details about subtlety. At least I didn’t explicitly point out the Spinal Tap reference.

The competition for attention is focused on social networks as brands vie for awareness and consideration. Establishing a presence in Facebook and Twitter is as necessary as it is trivial. In the great social land grab, many organizations are missing true opportunities to connect with the fifth P of the marketing mix, people. It’s less about communicating with those individuals who are already following you online and more about those who aren’t.

To excel in social media, engagement has its rewards but it is through the acts of recognition, empowerment and reward that advocacy extends a brand’s reach across social graphs and social networks, online and in the real world.

Competing for the Moment: The New Influencer

Transcending visibility into presence and presence into community is the critical path for companies to earn a place in the hearts, minds, words and actions of the very people who define its markets.

In the real-time attention economy that is social media, branding gives way to resonance as recognition is not nearly enough to compete for the moment. Many businesses are focusing time and resources on engagement while others are experimenting with advertising and promotions. What’s clear, is that in social networks, information is not only democratized, it is deafening. For brands hoping to connect value with demand, rising above the noise is critical, but in order to see the effects of a rising tide, it must have a fleet of boats in the water.

Connecting with traditional intermediaries who maintain desirable audiences is one way to stay visible and relevant. Connecting with authorities and tastemakers directly in social networks represents a complementary opportunity to spread the word and apply a sense of endorsement and credibility to the marketing mix.

While the ideas of recruiting respected and connected individuals as brand ambassadors or creating digital street teams isn’t new in social media, it is still highly effective. As social media becomes pervasive, individuals are increasing their digital footprint through every connection they forge. Everyday people are gaining prominence in social networks and as such, a new genre of both audience and spokespersons are rapidly gaining traction.

In June 2007, I joined Chris Heuer, Tom Foremski, JD Lasica, Cathy Brooks, iJustine, Frank Gruber and others as part of the Intel Insider program. Our mission was to learn about new Intel initiatives and share its impact on the technology landscape and our lives in general.

In 2008, Graco launched the Graco Nation Ambassador program for online influencers looking to build a deeper relationship with the Graco brand and participate in unique opportunities.

Also in 2008, Walmart established the ElevenMoms program to humanize the Walmart story with those customers seeking advice from respected peers rather than solely relying on company messages and value propositions to help may common household decisions.

In April 2010, I joined a powerful Social Media Envoy along with some truly incredible people on behalf of the United Nations to raise awareness and the donation of bed nets to help #endmalaria.

Over time, many companies enlisted influential voices to help brands directly connect with existing and new audiences through social networks and blogs. In the last year alone, we witnessed an explosion of social media advertorials that created a new classification of sponsored media where influential individuals were paid or rewarded for their commercial support through Tweets, blog posts, YouTube videos and status updates. Companies such as Izea, MyLikes, and Ad.ly led the way, eventually catching the attention of the FTC and prompting new guidelines for companies to keep their endorsement and testimonial ads in line with the FTC Act. The amendment marked the first update since 1980.

Recently, Ann Taylor was the subject of the first FTC investigation as a result of the new guidelines. The FTC’s Associate Director of Advertising Practices Mary Engle stated in a letter to Ann Taylor’s legal team, “We were concerned that bloggers who attended a preview on January 26, 2010 failed to disclose that they received gifts for posting blog content about that event.” The investigation was later closed without any fines or penalties imposed, but it did serve as a very public reminder that individuals who possess reach are not pawns for corporate marketing messages. The FTC believes that consumers deserve the ability to delineate between paid or leveraged information in order to make informed decisions and judgments.

The Influence Factor

Many social services are verticalizing the horizontal nature of peer-to-peer networks creating a defacto digital hierarchy. Klout, Edelmen’s TweetLevel, and PeerIndex, for instance, introduce a level of prominence into online connections measured by complex human algorithms.  From tastemakers to bloggers to mommy bloggers to you, a new trend in influencer relations is emerging, one that fuses recognition, reward, reach, and disclosure with those individuals who turn social networking into a verb.

When we look at what defines influence online, the definitions are as varied as they are debated. I believe influence is the ability to cause measurable action. Working with this interpretation allows us to examine an interesting approach by Klout, a SF-based startup that employs a rather sophisticated human algorithm that measures activities and relationships fostered by individuals on Twitter (and soon Facebook) to calculate social capital. Social capital represents the balance of your stature as dictated by the social currency exchanged with others via public and backchannel conversations, recognition, reciprocity, and the relationships that form as a result.

Klout is much more than a credit score provider for the social Web; it is a database of influencers that sorts through the massive cloud of collective consciousness to assign weight and authority to individuals based on themes and topics. One could only imagine the possibilities to connect with the long tail individuals that cause significant and measurable actions online around any topic, brand, cause, or movement.

Relevance. Resonance. Significance.

As I wrote recently in a post for the Harvard Business Review

How can businesses, which, one could argue, typically represent a “pay it backward” approach (ie, pay me for my goods and services), thrive in this environment? In my experience as a longtime social media observer who advises companies on how to successfully navigate the new media landscape, the key lies in embracing the linear concept of Relevance, Resonance, and Significance (R.R.S.).

Starbucks was among the first companies to experiment with a formal Klout influence partnership. In fact, it was the first such program for Klout as well. Essentially, Starbucks sought to connect with influential coffee socialites or more accurately stated, individuals with authority who tweet about coffee. In recognition for their prominence, these “coffee influencers” were offered a cup of Pike Place Roast on the house.

What was previously available to communications teams via media databases is now completely reimagined through the long tail of conventional clout.

Starbucks isn’t alone in its exploration of new influencers to help awaken new possibilities. Virgin America recently partnered with Klout to reward notable personalities on Twitter with free flights to Toronto. What might appear as a clear violation of the renewed FTC guidelines is actually an example of how to do it right. The flights are not an exchange for coverage, it’s simply an “opt in” reward for those who willfully submit their email address to see if they qualify for the free ticket. And, the disclosure to enjoy the flight without any obligation to publish is front and center.

I’m a true fan of Virgin America and their work in new and social media having covered their creative campaigns over the years. So, I reached out to the team to get insight into the program and the inspiration that brought it to life.

Klout and Virgin America hand-picked influencers based on Klout scores in the Toronto and California markets who fit the Virgin lifestyle.  The goal was simple: explore new, innovative, and authentic ways to engage with guests and prospects while also amplifying awareness in new and existing markets. The key is here is that budget wasn’t infinite and therefore any dollars spent had to focus on the right people with the ability to connect for less than other traditional means.

To help inspire creativity for those who may read this, I asked the very question that you are actually asking right now, how do you view the balance between recognition and reward…even though you are not requiring any form of media in exchange, the gesture naturally begets a response.

Jill Fletcher of the Virgin America new media team offered a genuine and inspiriting perspective, “We really view this program as a way to engage influencers and induce trial of our service, which we believe is unique in the skies (and a great fit for tech-forward flyers in particular). All participants are subject to the Klout Influencer Code of Ethics, which means that they are free to Tweet whatever they like about the experience – be that negative or positive – or Tweet nothing at all. Our hope is that their experience is positive, but if it isn’t, we hope that they provide us with valuable feedback on ways we can improve our service.”

Naturally, Klout is a hot ticket for brands looking to connect with these authoritative audience who each possess audiences of their own. For those looking to experiment outside of a formal program, Klout offers the ability to search for influencers on any given topic. In fact, many services such as Radian6, CitizenNet, Flowtown, mBlast, and PeopleBrowsr’s analytic.ly also offer the ability to surface influential voices on key topics and themes across multiple platforms.

The future of brand prominence and resonance starts with the recognition of the people who have earned stature in your markets. Recognition is a start. Reward is a gesture. Engagement and reciprocity is how we christen relationships. As the idea of influencers continues to diversify, embracing eminence is just the beginning.

The true promise of influencing the influencer lies in the power to become the very influencers we rely upon to tell our story. The same tools, services, and techniques that propel socializers atop these emerging social hierarchies also works for us. This is our time to not only connect with new influencers, but also establish influence and influential relationships through our intentions and actions.

#ThisisYourTime

By Brian Solis: www.briansolis.comLead Image Source: ShutterStock

Every activity worth doing has a learning curve. Riding a bike, learning to read, using Facebook… the early days are rarely nothing but fun.

Take a look at this three part chart. The first shows how much joy someone gets out of an activity. Over time, as we discover new things and get better at it, our satisfaction increases. At some point, there’s a bump when we get quite good at it, and then, in most activities, it fades because we get bored. (In the top graph I’ve also added the Dip, showing the extra joy from being an expert, but that’s irrelevant to this discussion).

The second graph shows the hassle of that same activity. Riding a bike, for example, is horrible at first. Skinned knees, bruised egos. Twitter is really easy to use the first few times, so not so much red ink there.

The third graph is just the two overlaid. That zone on the left, the red zone, is the gap between the initial hassle and the initial joy. My contention is that the only reason we ever get through that gap is that someone on the other side (the little green circle) is rooting us on, or telling us stories of how great it is on the other side.

The bigger your red zone, the louder your green dot needs to be. Every successful product or passion is either easy to get started on or comes with a built-in motivator to keep you moving until you’re in. This is so easy to overlook, because of course you’re already in…

One approach to innovation and brainstorming is to wait for the muse to appear, to hope that it alights on your shoulder, to be ready to write down whatever comes to you.

The other is to seek it out, will it to appear, train it to arrive on time and on command.

The first method plays into our fears. After all, if you’re not inspired, it’s not your fault if you don’t ship, it’s not your fault if you don’t do anything remarkable–hey, I don’t have any good ideas, you can’t expect me to speak up if I don’t have any good ideas…

The second method challenges the fear and announces that you’ve abandoned the resistance and instead prepared to ship. Your first idea might not be good, or even your second or your tenth, but once you dedicate yourself to this cycle, yes, in fact, you will ship and make a difference.

Simple example: start a blog and post once a day on how your favorite company can improve its products or its service. Do it every day for a month, one new, actionable idea each and every day. Within a few weeks, you’ll notice the change in the way you find, process and ship ideas.

In Trust Agents, we talk a bit about attention as currency, and also about the idea that there are multiple types of currency. In Stephen R. Covey’s 7 Habits of Highly Effective People, Dr. Covey talks about the emotional bank account, and about the need to keep putting in current deposits, because old deposits (acts of kindness towards someone else) “age out,” and don’t go far in giving one credit for more recent experiences. Said another way, “If I call you a few times last month, it doesn’t count towards forgetting your birthday this month.” The same is obviously true in business, or at least it should be.

Two Types of Favors

There are two types of favors I do: ones that I think up, and ones that people ask of me. Over the last several weeks, I’ve performed lots of the first kind of favor. I love doing things for people when they don’t expect it. I never ever ever want anything back from people, either. That’s never what a favor is supposed to mean. The favor is for me. It’s for my feelings.

That other type of favor, where I’m asked to do something, I do most of them because I feel obligated, and I do some of them because the person asking is genuine and really deserves a break. These favors are for other people. In there, there’s the hope that someone will benefit from my effort, but still no real need to repay. That’s not why one does favors.

Random Acts of Kindness

Now, my favorite thing in the world to do is this kind of thing. I love promoting people who don’t expect to be promoted. I love putting little plugs in for things I like, for example my recent stay at the Trump International in Las Vegas. I loved the place, so I shot a promotional video for Man on the Go. There was nothing in it but just appreciation for what they do. I could do this kind of stuff all day.

It’s one of my secret missions: to see great people and wonderful companies get more credit.

How Companies Could Participate

I’ve been obsessed with Zappos since reading Delivering Happiness. I even joined their VIP club today, simply based on the fact that everyone in the business has the core mission of trying to add WOW to people’s days. Man, that’s cool.

There are companies out there just anxious and eager to pounce on doing good things for their customers and prospects. I was floored by Darion J Miller‘s offer to help with a random act of kindness the other day, because he did so, responding as part of Hubspot. Darion’s act transformed a lot of good will from himself onto my thoughts about Hubspot (though I already thought mostly good things about them).

But there are lots of companies out there thinking they’re in a war. They think that everything is about targets and acquisition, and the enemy. How do you think that shapes their view of business? How does that encourage them to participate?

Relationships And Currency

I learn something new every day. Yesterday, I learned that no matter what I’ve done in the past in support of an organization, it’s only the now that matters. I learned that my friendships matter more to me than any relationship I have with any company (bar none), and that most companies don’t value relationships as a default. I learned that we really haven’t come very far in the ideas of human business and relationship-minded business.

And as such, I’ve learned that I have more work to do in the coming years. Work that I embrace. That I’m anxious to carry out. And it involves empowering companies that believe that relationships matter, and empowering people to craft their businesses such that relationships are every bit as important as building revenue, and that the two actually go hand in hand, when executed well.

For the Favor Askers

Finally, a little trick: if you wanted to really rule the universe, you’d do this. Every time you ask for a favor from someone like me, you would do something downright amazing for someone else. I don’t want the favor back. I just want you to do something incredibly awesome for someone else. Because that would be a hell of a lot more thanks than I’m getting now, and it would be much more valuable when spent on others than it would be as a brief thanks in email. Deal?

Copenhagen-based artist Jacob Dahlstrup makes sailing vessels out of bananas, such as the above work entitled “Banana Schooner”. They were recently on display at the Shoreditch Town Hall in London. You can view several other examples at the link.

Link via Super Punch | Shoreditch Town Hall | Photo: Jacob Dahlstrup