Student Retention and Fletch

if the above video does not work, Click here to review the presentation
Here are the links to the Fletch App videos:
1. Fletch App
2. What is Fletch?

Wells Fargo Revisited: Social Media Monitoring

Let's revisit Wells Fargo's (WFC) response to its consumer banking scandal to try and find any change in its communications strategy, message, and tone in its conversation with people on social media in the company's attempt to regain consumers' trust.


Wells Fargo created over two million unauthorized accounts for its customers. In the process, WFC robbed millions of dollars from its own customers in the form of fees. This scandal was driven by WFC's ridiculous sales goals.


The WFC consumer banking scandal crippled WFC's 165 year old reputation, resulted in the resignation of its CEO and the executive of its consumer banking arm, the termination of 5,300 line staff, a fine of $185 million, and the loss of customers and future businesses. Full timeline of the scandal is available here.


In response to the scandal, WFC launched a commitment campaign with a TV ad, attempted to communicate with consumers on social media (SM) about its commitments, and created a web page to apprise customers of the scandal and steps WFC is taking to make things right. In a previous blog post, I argued the failure of WFC's approach in responding to the scandal. In this post, I will revisit WFC's SM pages to explore any change in its communication strategy, and report on any changes in the perception of the company following this scandal.
 
I acknowledge the difficulty in assessing the impact of one product line on brand image, particularly in the case of Wells Fargo, a diversified company with multiple product lines. This is not an attempt to arrive at superficial conclusions on the lasting effective of this scandal but rather to explore alternatives to WFC current communications to rebuild customer trust.

What's new

At this moment, people are more concerned about WFC financing of the Dakota Access Pipeline (DAPL) than its consumer banking scandal. Citizen activism is pressuring cities to discontinue its banking relationships with Wells Fargo. D.C. is the latest city to join the advocacy in divesting from Wells Fargo.

Wells Fargo's response on social media has been to ignore messages posted on its SM pages that reference #noDAPL #waterislife #divest. WFC silence has not slowed activists' push to encourage divestment from Wells Fargo for its involving in the DAPL.

There was no response from WFC to the above response and many more that are on Twitter. Furthermore, on social mentions the tag #noDAPL shows strong activity and reach.

Yet, the brand appears unaffected by the negative commentary on SM. Below is a snapshot of +Wells Fargo from social mentions. It is likely that the diversity of products and the size of the company mitigate the impact of negative commentary about one product line or a certain business contract such as DAPL. Maybe +Wells Fargo is right to not engage people discussing divesting from it. Maybe WFC is not only too big to be jailed but too big for criticism to impact is brand.




Wells Fargo Social Mentions



Facebook


There is still a lot of commentary on Facebook about +Wells Fargo in relation to its scandal. There is a subtle change in WFC engagement with people that comment on its posts. WFC responses are still automated and formulaic. The formula is acknowledge the person, apologize, offer to assist via private message (PM). The minor change is that WFC has decided to ignore replying to certain posts. Below are example of posts the company is not responding to.




Bhumi Rami writes in response to Joe Gorzkowski comment seeking assistance to resolve a mishap with changing his billing options:

 

A new campaign coming soon


WFC will run a national ad campaign, “Building Better Every Day” in mid-April. According to Sloan, CEO of WFC, the intent of the campaign is to continue to communicate the banks message that it is focus has changed to continuous customer service improvement. Sloan said,

It's not just a tagline. This is our commitment. So why better? Better is the drive that lives in all of us. You get up in the morning, all of us, individuals, communities and organizations, and you want to be better. You don't want things to be worse than yesterday. You want them to be better, to have a better future. You want more people to hear about how we're making things right, how we're fixing what was broken, and how we're building a better Wells Fargo.

It is just a tagline. To me, this sounds like a desperate plea and a pile of 💩. Previously, I have argued that this strategy is ineffective in rebuilding trust, that TV ad campaigns

...may have worked in a different era, but this is the era of social media, the era of the groundswell, the era of collectively trolling you when you F**k up.

I guess +Wells Fargo has not seen my previous blog post or the gazillion tweets and Facebook posts from others.


To understand employee perception of WFC mission statement, WFC is administrating survey to its employees. 

The survey will help us understand how you experience our culture. Our goal is to uncover our culture’s positive attributes and its potential weaknesses, so our leaders can understand how best to foster an ethical, inclusive and customer-focused culture.

Previously I did not stand with the line employees as I did not understand how we can excuse criminal acts of individuals. So here is the best I can do in defense of white collar criminals.



WFC leadership is still infatuated with pointing the fingers at line employees. It is well documented that it was not perception of culture, but rather unrealistic sales goals that created the environment for corruption to thrive. The checks WFC put in place, such as its audit and fraud departments failed, not for lack of notifications about illegal activities, but because executing an investigation meant crippling company sales goals. Instead of looking at how employees interpret the culture, WFC ought to look at the failures of its leadership in designing such a weak system. Audit 101, create space between auditor and the department being audited. I guess WFC doesn't get that too.


You say SWOT, I Say SWAT


What are the strengths of WFC on social media.


+Wells Fargo has a strong following on Social media. Over 940,000 follow WFC on Facebook and over 960,000 like its Facebook page. On Twitter, there are 260,000 followers, and 25,000 likes. On Instagram, the company has 22,000 followers.


In addition, banking is not an exciting sector that people would want to constantly stay in touch with, thus this serves as a shield for WFC in limiting its exposure to a wider, more critical audience. Keep in mind that WFC is a corporation with $1.9 trillion in assets. WFC has tremendous resources to employ in rebuilding product trust.




Weakness of +Wells Fargo is well noted in my previous blog. I will briefly restate some of the points I have made. First, its overt focus on national TV ad campaign is ineffective. Second, its webpage to highlight its commitments lacks any social features that involve consumers in the discussion on changes that need to be made for better banking experience. Third, its responses to SM media posts come across as robo-generated, insincere, particularly its silence on certain post critical of its scandal and the divestment movement in in which people are seeking dialogue in working on solutions together not being dictated to.




Opportunities abound for +Wells Fargo to repair its stained consumer bank products. First, it can sincerely engage with all commentators by hiring a cross-sectional team with one underlying objective - the customer is right. So long as actual (real) consumers complaints are present, it will continue to drive away potential customers. Agree to disagree. Give customers what they demand. Second, engage everyone that engages with you. For those concerned about the DAPL, hire a team of philosophers to argue your point. The underlying argument can be to agree that water is life, but that it is the responsibility of our political representative to protect our water resources. It may be best to pressure your government to change course, instead of us. if we don't do it, I bet someone else will, like the bank of North Korea. This may sound like a weak argument, but I think it would redirect the energy in the right direction, our government. Third, make the damn webpage for your customers social. Add a forum, a chat room, and here is a grand idea, schedule a Q&A session between customers and the CEO on the webpage.


Threats are minimal for a bank of this size and with as diversified of portfolio as WFC. However, if WFC is unable to create a more positive social media ecosystem, it will continue to lose customers. It is concerning when a competitor is praised on your post and you don't reply to the post. If Wells Fargo is providing innovative features such as using a code on your mobile phone to make withdrawals, it ought mention that in response to a post about competitors. Furthermore, I think its biggest threat is its continued financing of DAPL. Water is vital to life. If a bank can not stand up for that, they will certainly trample over your consumer rights over and over again.




What is your savings goal?

Social Media: The Forgotten Employees

There is a lot of chatter in the Human Resources (HR) world on ways to better utilize social media as a recruiting tool. HR social media (SM) recruitment may in the near future include applications we now consider unconventional such as Tinder. It won’t be long before your recruiters are swiping left and right.

Amazonian Tinder

The fact is many companies primarily use social media to either engage with current and potential customers, or appeal to jobseekers. If you observe your company’s social media activity, you will find that if it posts are not about an upcoming product or service, chances are they are about the #joboftheday.

Conversely, for all the talk about employee engagement, only an occasional nod is extended to current employees in companies' social media pages.

You will find that in observing your own company, nods to employees corresponds to some employee or professional appreciation day on the calendar. This is analogous to saying I love you to my partner only on valentine’s day and on our anniversary. Though HR has never been known for spontaneity, it certainly can work on exhibiting more love to employees.

It is true that HR has other ways to engage employees. Examples include internal surveys, quarterly or annual company events, emails from a loquacious executive, internal contests, and the immortal uninformative company newsletter. Except for the internal survey, all the other formats above are ways to talk at employees instead of engaging people in conversation. Besides, the dismal response rates of surveys raise suspicion of its efficacy as an engagement tool.

Increased employee engagement results in lower turnover, stronger ties between worker and company, more productivity, and boosts company performance.

Common sense tells us to meet our customers where they are. In observing Human Resources use of social media as a recruiting tool, common sense in addition says to go where jobseekers are, to go to the social media sphere.

However, we deviate from common sense in engaging current employees. Yes, they are still on social media even when on the clock. And you will be glad to know that it is good for your bottom line. 
In viewing current employees as customers, HR may be able to implement a crowd-sourcing strategy to improve engagement. In their argument for faster innovation, Li and Bernoff posit two reasons that customer engagement in innovation can lead to quicker innovation (182). First, who knows your products better than the people that use it, they might be aware of vital improvements your product team has overlooked. Second, there is the potential for continuous improvement, in conversing with customers you can bounce ideas of each other, plus get your questions answered quickly. 

When you are tapped into the customer community, you get feedback quickly, and once you've processed it, you can go back and ask the next question (183).

Below are some common-sense tips to help you better engage with your employees on social media. 

Tips on Engaging Employees on Social Media:

First, just wish them a good morning and a safe commute. A lot of organizations claim they are starved for content to post on their social media pages. You are relaying to your people that you woke up this morning and they were on your mind. In fact, they are on your mind everyday. You are grateful to have them in your life. 

In this simple gesture, you have achieved two things. First you have created new content, may be you can include a story you found of interest which relates to your business for your staff to read as they are getting settled in during that first hour in which nothing seems to be done other than drinking coffee and catching up. Second, you have found a way to continuously engage with your employees. 

Second, wish everyone good evening at the end of the day and thank them for all their labor towards your mission. Maybe include a link to your mission here.

Third, on Fridays, compose a special post to thank everyone for their work. And maybe share a cute video to hint to them it’s time to recharge.

Fourth, Happy birthday! If your employees are in your network, extend your wishes that they have a happy birthday. Everyone else is wishing them happy birthday, why not you? What kind of a friend are you? For example, if it is Susan's birthday, you may compose the following post: Sue, happy birthday from team @companyname, extending our #love to our #queen.

Sixth, how about employee recognition. Your SM pages are the best spaces to spotlight superstar performances. Plus, you don't have to wait until the end of the month or at year-end performance reviews to recognize someone who has gone above and beyond for you. With social media, you can share your gratitude instantaneously. Don’t hold back. Write sincerely. But please avoid designing a template to reuse again. Each recognition must be unique. I bet this technique would indirectly draw job seekers to your company as well. I will leave it up to you to speculate why that might be.    

Lastly, and this is where you utilize the relationship you have built in your prior engagements really come to benefit you. Crowdsource event planning. Instead of the traditional method of delegating a team (most likely your HR team) to plan employee appreciation events, reach out to your employees for suggestions. The suggestion with the most likes is the winner! This grows your event planning team and provides relief for HR. Avoid the pitfall of giving a list of suggestions to choose from. Since you reserved control in the items to be voted on, your list will be interpreted as an insincere attempt at democratization and empowerment. It will certainly limit participation. You really want to utilize the creativity of your team, right? Give them true democracy.

On crowdsourcing, Li and Bernoff say that it is only good for a moment engagement with the groundswell (190) and that it does not "move the company in a positive direction". I disagree in so far as we are considering internal customers. By following the format above or a similarly designed format and building on it, you can transform your the ways in which you engage your internal stakeholders. You have found a way to continuously engage with your internal customers and to involve them in an event in which they are at the center of but have previously been left out of in its design.

However, I argue that this should be the start of your long-term commitment to innovating employee engagement at your company. Li and Bernoff have discuss others ways to engage employees such as wikis such Intelpedia (241). Regardless of the technology used, the foundation of all mutually beneficial relationships are just that, the relationships you build. 

Companies continue to search for ways to improve their interaction with their customers and their appeals to jobseekers on social media. However, companies have made little effort to connect with their employees and engage them on social media. An inclusive social media strategy which includes employee engagement as a primary objective can increase employee morale, productivity, and retention.

What are your suggestions on ways companies can engage with employees on social media?

Social Media Monitoring: Rebuilding Trust, WFC Case Study

Were you ever lied to?
How difficult was it for you to fully trust the person that lied to you gain?

I will argue that if the story of the boy who cried wolf were reimagined for adults, it would have ended thus:  The wolves tired of the anxious boy's warnings, attacked him first instead of the sheep he was herding. The towns people were awaken by the boy's agonizing cries as the wolves devoured him limb by limb.

The same is true in any relationship in which one is considered a liar. The liar has to prove his innocence ever time an issues of trust arises until he regains the confidence of the people he deceived. Once a liar, always a liar (possibly).

So how difficult is it to regain trust? I want to investigates this using Wells Fargo's (WFC) Commitment Campaign as a case study. I will provide a little overview of how Wells Fargo (WFC) lost the trust of its customers, then share its ad campaign and related webpage to restore customer confidence, and lastly I will analyze social media (SM) to attempt to shed light on the impact of WFC commitment campaign.

About WFC

Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Founded in 1852, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial financial services through more than 8,600 locations, 13,000 ATMs, online (wellsfargo.com), and mobile devices.  

About WFC Scandal

Pressured into meeting cross-selling goals, WFC employees opened over 2 million fraudulent customer accounts without those customers' consent. Customers were charged fees related to the fraudulent accounts. WFC defrauded millions of dollars from its customer over the course of five years, and possibly extending back to 2005. Furthermore, the total damage to customers is immeasurable at this moment. It is presumed that the scandal raised customers' cost to borrow. The implication is that this scandal affected customers' credit standing.

Response to WFC Scandal

WFC was fined $185 million dollars (a drop in the bucket for a company that is the 7th biggest public company in the world). It was ordered to repay customers, and prosecutors are contemplating criminal charges. WFC fired 5,300 of its front and mid-level employees associated with the scandal. The executive of its retail banking operations retired, and the CEO resigned. Full timeline of the scandal is available here.

This scandal will continue to haunt WFC for the foreseeable future. A report projects that 14% of current WFC customers intend to switch banks. This is significantly higher than industry average switch rate of 7 to 8 percent. It is projected that this scandal will cost WFC billions more dollars in the form of lost business.

Social Media Response:

First, keep in mind that banking is unattractive to the average person. As it should be. When there is magic happening in a bank, it is most likely cooking a deadly meal. If we investigate the WFC brand over 2016, we see the trend is pretty flat for most of the year, there is a bump here and there in line with industry movements. Below is comparison of WFC, BoA, and Chase. We see that as the scandal unfolded WFC trends higher compared to the industry - Sept 18-24 (data from Google Trends).

The boost in WFC's trend is partly associated with the exposure of its fraudulent activities. That big boost above is also seen below when the terms "scandal, investigation, and fraud" were included in the search. In this case in which we can observe the trend of the brand in association with negative search terms, we can conclude that the trend is mostly negative. 

It would be an understatement to say the town's people in the cloud sphere went crazy. People were talking in September and they are still talking about the WFC scandal - that is why I am writing this blog. You will have to live in an alternative universe to find any positive comments in relation to the exposure of WFC's fraud. So what were people saying. You would have to intentionally misinterpret people's tweets and Facebook (FB) posts to find any positive comments related to this scandal. See for yourself.

This was a clever comment that WFC did not bother responding to. Remy wrote this in response to the WFC stagecoach.

WFC Responds with Commitment Campaign.

In response to the scandal, WFC aired an ad campaign promising to renew its commitments to its customers. The company launch an associated webpage to apprise customers of the activities WFC is carrying out to regain customer confidence.

How effective is this campaign? It is hard to directly ascertain the effectiveness of this campaign as WFC disabled commentary on the above YouTube link. However, as we learned, you can never silence the people. So let's inspect elsewhere for chatter about this ad.

Ursula sums up the feelings of WFC customers, observers and analyst.

WFC posted its commitment campaign message on its Facebook page with a link to its commitment webpage. This posting received 1.1K likes, 2.2K comments, and was shared 234X as of the posting of this blog. If we aggregate the commentary, we notice a very negative trend in the comments section. We can speculate that the 1.1K likes associated with this post was from employees pressured to like the post or risk losing their jobs - I would call this the social media boiler room.

In fact, all of the comments associated with their Sept. 20, 2016 post are negative with the exception of WFC's responses. WFC's response to customers' comments sounds automated. The formula is simple: acknowledge the person, apologize, offer to assist via private message (PM).

The irony is that WFC commitment page which should have served as a customer centric webpage doesn't allocate any space for customer interaction. It provides zero social features. No forums, review sections, voting buttons, or suggestion tab. Horrible start so far. In an attempt to rebuild its relationship its customers, WFC has become deaf to those customers' concerns.

Even potential customers are dissatisfied with WFC. Potential customers complain of delays in mortgage processing.  I will share just a few of the 2.2K comments that I found of interest in relation to the above WFC campaign post on Facebook.

Lana captured the mood of most commentators on the WFC commitment post on Facebook. Most are asking WFC, you just stole millions of dollars from your own customers, how can we trust you?

Recall that the formula I observed in WFC responses to customer comments is acknowledge the person by name, apologize, and offer to help via PM. Even in the extreme example below involving the death of one of its customers, WFC continued with its dispassionate (heartless) response.

However, most customers are dissatisfied after they have engaged in PM with WFC via Facebook.

Hugo and Luigi above have come to see this commitment campaign as more of damage control and less about making actual changes, such as recommitting to core customer values. Customers have caught on to WFC robotic responses as well.  Some noticed the WFC reply messages were originated from India. Others found the redundant use of female names in WFC's reply signatures as suspicious. Here is an example of each.

What to make of all of this?

WFC got caught red handed stealing its own customers' money. WFC's response will serve as a case study for years to come on what NOT to do in mitigating a crisis.

First, don't wait until regulators expose you to reconcile with your customers. Admit your wrong and immediately begin damage control. Second, firing front line employees is a horrible first step in damage control. It doesn't settle well with anyone, current employees or customers. We are all aware of how big corporations work. There are checks and balances, there rarely is only one hand or team involved in any business function. My previous post discussed how this parsing of responsibility has absolved corporate employees of criminal liability.
Every corporate company has internal auditors. Make sure that your auditors don't become the  red army, a strong arm that suffocates any dissenters. Clearly order them to not retaliate against internal whistleblowers. Third, make a statement by firing the CEO and any other C-level executive that could compromise your attempt to rebuild your image. It is vital that you shape your customers and the public's perception. Your third acts sends the impression that you are diligently working to right the wrong by starting with a change of leadership.  It is important that your send a strong message. Lastly, make sure that promises you make are clear and sincere. Vague commitments such as we are 'making changes to makes things right again.. we are renewing our commitment to you,'' are seen as empty words and lies from thieving bankers unless customers are involved in creating your commitments.

Wells Fargo has lost some of its lifelong customers and potential customers to its retail banking scandal. Some of those relationships may never be repaired. Some customers are vowing that they will make sure no one in their family ever does business with WFC. There goes a generation of potential customers.

WFC reverted to what most of out off touch big companies do when their business is stained by internal corruption and greed. Run a TV ad campaign to rebuild brand trust. That may have worked in a different era, but this is the era of social media, the era of the groundswell, the era of collectively trolling you when you F**k up.

If WFC truly is committed to its customers, it should start by listening to them. Yet, we learn it is behaving on the contrary. The website it created for its customers lacks any social features, no chat room, forum, or even a blog, no customer engagement. In social media, it reiterated its campaign commitments. When people engaged WFC on SM, WFC responded with dull automated messages signed by robots with female sounding names. WFC should assign a cross-functional team to monitor its social media accounts to better assist its customers. WFC disabled comments to its commitment ad on its YouTube page. One would think that WFC would like to know how its TV ad is perceived by its customers. Did we click with 'em?  WFC fake sentiments are as visible as its fake accounts. WFC, you should upgrade your stagecoach to the 21st century.

For anyone still considering sticking with WFC or joining as a new customer, maybe Susan Werb can talk you out of it.

Disclosure note- my approach:
I have attempted to investigate the impact this campaign in real-time at socialmentions.com and icerocket.com. However, the results were inconsistent with the search terms. For example, when I searched for Wells Fargo Commitment campaign, Wells Fargo TV Ad, and Commitment Ad, the results ranged from zero  up to 108 hits, and most of the hits were from unrelated Photobucket photos on commitment. However, I found only one hit that specifically attempts to discuss the commitment campaign. The difficulty in assessing a campaign that has past is that it is in contrast to the intent of real time SM monitoring services such as social mentions and icerocket.com.

I believe this qualitative representative truthfully presents the impact of the overall commitment campaign. I am open to debate the veracity of my statements.

Bank responsibly.

So much crime, so much injustice. Here is what you can do

Last night, when I returned from work I found a burglar stealing the most valuable item in my apartment. Yes, you guessed it, my laptop. Anything but that right? I blocked the exit to my apartment and called the police. Yes, I know it was stupid thing to do, to try and stop a robbery because you never know what sort of weapon a person may have or what he/she may do with it. I guess I did not contemplate laptop or life? In that moment, I was concerned only for my precious laptop.

The police finally arrived and arrested the burglar. She was charged with breaking and entering with intent to commit a felony (since my laptop is worth more than $250, under Massachusetts law her attempt to steal my laptop is consider larceny, a felony that carries a maximum sentence of 5 years in prison or a fine of $20,000). She was convicted, sentenced to 2 years in prison, and will receive a year of probation upon her release. Whether you think the punishment is severe or not is a matter subjective to your feelings about your laptop. I love mine. Regardless, I had no say in what punishment she ought to get, the state prosecuted her.

The above story is fake, none of that really happened to me. But everything else I am going to share with you is 100% true.

So for the last few months, I like you have been pondering on how a group of thieves stole the identities of two million people, defrauded those people of millions of dollars over the course of a few years, and yet not one of the thieves has been charged with a crime. In fact, most of the bandits have access to the same resources they used to carryout their crimes. They have the same potential to commit similar crimes on a grander scale. They wield computers, big bright smiles and brighter personalities. At all times, they are constantly on the look for people looking for solutions. They are out walking the streets and you could be the next victim.

The bandits are Wells Fargo employees including its management and leadership. To keep from disturbing your state of mind, I believe John Oliver's humorous recap suffices in filling you in on the details of this bold crime by a gang of bankers.

Corporate fraud is nothing new thing. However, the actions of Wells Fargo employees are blatantly and shamelessly criminal. These are not evil geniuses cooking complex recipes. Wells Fargo committed identify theft on a grand scale.

The equivalent at the individual level is that a fraudster obtains your personal identification information (i.e. SS#, address, and DOB), opens and maxes out multiple credit cards under your name leaving you in debt.

You would most likely feel that justice has not been carried out if that person was found and fined $450 or the equivalence of just 3% of his/her quarterly income. Yet, this is exactly what happened with Wells Fargo fraudsters. So, why is that not one of the Wells Fargo bandits has been prosecuted for their crimes?

Eric Reed succinctly explains "why bankers don't go to jail,"

Criminal law is about targeted blame. A prosecutor must prove beyond a reasonable doubt what each, named defendant did and the criminal intent behind those actions. In a large institution, however, that chain can be broken and parsed so much that it's next to impossible to prove anyone's participation in the overall fraud.

If you would like learn more about why our criminal justice systems is so very merciful to white collar criminals, I would recommend you to read The Divide: American Injustice in the Age of the Wealth Gap by Matt Taibbi. You will learn about the philosophy of collateral consequences. Collateral consequences is a concept that asks that prosecutors weigh the criminal prosecution of a business against the damage that criminal prosecution could cause innocent stakeholders associated with the business, i.e. loss of jobs, loss of capital by investors, as wells as the possible disturbance a criminal prosecution could cause in the markets. Collateral consequence serves not only as a shield for a business but it now serves as a shield for agents of the business, i.e. the employees and leadership (see HSBC). Instead of criminal prosecutions, companies and prosecutors negotiate settlements via deferred prosecution agreements and non-prosecution agreements in which companies pay fines without ever confessing their wrongs. The bigger the fish, the more lenient prosecutors are because the higher the possible collateral result from a criminal prosecution. Great read.

In short, if you want to commit a crime, get a job with a multinational corporation, and do your dirt while you are on the clock.

What I would like to know is how can we the people deliver justice where our criminal justice systems fails - particularly in circumstances of corporate criminality?

In a previous blog post, I discussed the groundswell:

"desire for people to connect, create, stay in touch, and help each other,"

Such as helping each other get justice. I propose a groundswell for justice.

The recent #grabyourwallet campaign is a good example that collective action can reform business practices. Furthermore, the history of America is a history of collective resistance. There is the Boston tea, the Montgomery Bus Boycotts,  and the explosion of the divestment movement. Boycotting is one of many of our tools to protest an enterprise that acts within the law yet behaves contrary to our principles.

But! What recourse is there for justice when individuals shielded against prosecution by the great wall of big money (corporations) break the law? In the case in which our highest prosecutors do not do their job, and claim that corporations are too big to fail and individuals too important to jail?

Here is an obvious suggestion. We make citizens' arrest and demand prosecution. A citizen's arrest is

an arrest by an ordinary person(s) without a warrant, allowable in certain cases.

Imagine two million people marching to the homes of the employees that partook in Wells Fargo's fraud to make a citizens' arrest. I am not sympathetic to the argument that the boiler room culture at Wells Fargo pressured individuals to commit crimes. We talk about personal responsibility with street criminals but we absolve white collar criminals of personal responsibility. Why? I look forward to your answer.

There are times in which extreme action is required to move our bureaucrats to action. Even a few hundred people marching to the home of an executive to arrest him for his crimes would energize our spirits and move us to exercise our power. And there is no power like people power. 

If you or I stole someone's identity, and used that identity for our personal financial gain, we would certainly face multiple counts of felony charges. So why aren't they?

I am as enraged and fed up as you are with too big to fail, too rich to jail. I need not repeat that 'no one is above the law, the law is the law.'  Are you audacious enough to bring criminals to justice? Are you ready to make an arrest?

WELL, LET'S GO!

Are you Lit?

Can you recall when you last stepped into your local bookstore? Don't feel guilty, I can't recall the last time I bought a book from my local bookstore as well, with the exception of the bookstore at my local library. It could also be that you don't have a local bookstore to step into.

How we consume books has certainly changed. The convenience that E-readers provide us is unmatched. With E-readers such as Amazon's Kindle, we can carry hundreds of books with us anywhere we go. I don't intend to contribute to the debate of E-books and paperbacks, as I don't foresee that any argument, regardless of how sound, will bring an end to the debate of e-books vs. paperbacks. My intent here is to investigate the nuanced claim that local indie bookstores are making a comeback, and that they are here to stay. I want to specifically focus my attention on a niche business plan for a bookstore in Bronx, NY that is utilizing crowdfunding to cover a percent of its start-up costs.

I have been looking for you

Ok. Are local bookstores dying or thriving? Well it depends on how your interpret the numbers. Though there has been a decline in the number of bookstores nationwide, there has actually been an increase of 13% in the membership of the independent bookseller trade group, the American Booksellers Association (Marketwatch). It is also argued that e-books sales have dropped by 2%. However, an article on Fortune argues that even if its true that e-books sales are falling, it is rather an implication that the competitive market for consumers' attention is squeezing books out and other type of content in. So, the overall market for books is shrinking. Since how we consume content has changed drastically, it is only logical for us to stipulate that we will continue in our digital consumption path. Local bookstores may not be dead yet, but they are certainly on life support if our current consumption trend continues.

For bookstores to survive the purge of the books, they need to focus on serving a niche market (offering unique selection or marketing to a specific group). One such potential niche bookstore is TheLitBar.

So far TheLitBar has raised $62,000 on Indiegogo.com, a crowdfunding platform that has recently added a feature that enables entrepreneurs to raise money for their ideas as well as opens investment opportunities to the general public - so now, you too may have a stake in a startup with the potential for big returns. Noëlle is certainly utilizing the groundswell to her advantage here.

TheLitBar is a feel good business plan. A young women notices a problem in her community and wills herself to action. Noëlle plans to create a local community space for events and a niche hangout space while selling books and wine in hopes of transforming Bronx into a lit borough (as in literate). These goals are admirable. However, if we dig a little deeper into TheLitBar plan, we find that the problem definition is flawed, as well as the proposed business solution.

Solve the right problem

It is true there currently is no local bookstore in the Bronx. But this doesn't mean that the people in the Bronx lack access to books. There are local public libraries in the Bronx and about five colleges which I believe welcome the community to use their resources - if that is not the case this may be a problem that is worth addressing. Most of all, each of us, whether we are a Bronx resident or not, has access to a bookstore that is open 24/7, everyday of the year, and that is Amazon.com. At Amazon.com, you can buy books at competitive prices and receive suggestions from reviewers that read the book you are considering and Amazon's algorithm - this is machine-human collaboration at its best. So the problem is not lack of access.

If the problem definition is flawed, the business solution is bound to be as erroneous. Let me try to put it simple: There are no bookstores in my community, I will open a bookstore, but I can't make money from just selling books. Oh, I will also sell wine at over 200% mark-up. Great, does the Bronx really need another establishment that provides liquor, or "soft liquor"?

I don't think so. A space that offers intellectual escape need not serve any substance other than tea and coffee (which I consider holy drinks). I am more concerned about the message this sends to children in the borough. Even if a certain area is reserved for children and teens (KiddieLit), I bet that teens will be tempted by the fancy adult bar made of books and wonder how sweet that class of wine must taste. Let's not propagate the notion that people of color need alcohol to socialize. Let's get lit on books instead of the wine.

As ingenious as the idea of a bookstore serving wine sounds, it will not appeal to the current residents of the Bronx. Bronx's residents have access to multiple libraries, five colleges, and Amazon's bookstores. As for the wine, Bronx has no shortage of liquor stores and bars. Whether TheLitBar will work once the Bronx is fully gentrified and officially becomes the Piano District is another story. TheLitBar does not tackle the bigger problem, that books are going out of style. Once the veil is lifted, and we can see through the sentimental appeal, the clever utilizing of social platforms by the founder, we can conclude that TheLitBar solves a problem, but it is not the (right) problem.

I feel smarter with every glass

Have We Forgetten About Competitive Advantage?

Everyone is doing it. No, it is not sex. It is talking. People talk to each other. People, who maybe strangers or even far away from one another exchange gossip, ideas, and surprisingly do business with each other everyday. Yes, I know that you know that people talk. But did you know that people talk about you? Oh, ok. You really don't care whether people talk about you or not. Well, if you are a business, what people are saying about you, your products/services matters a lot to your bottom line and your existence.


As a business, you know that the best type of advertising is word of mouth - that informal personal appeal current customers that love your products/services make on your behalf to their friends, family members, and colleagues. You also know that customers may also say negative things about you to those in their networks. Technology has amplified this word of mouth through social media, blogs, YouTube, and in customer review pages.

Word! You don't say!

And NO! You don't have the magical power to change the conversation. Your clever marketing is powerless against the

"desire for people to connect, create, stay in touch, and help each other," 

as well as talk about you. This amplified social connection of people interacting with other people in the cloud (yes, that magical place) about businesses (like yours); and of consumers purchasing from each other is known as the groundswell.

Feeling powerless yet? Well, great! There are a slew of market research companies that would love to tell you what these people are saying about you in the cloud. Only by first listening, can you then capitalize on their narrative or combat it if it happens to negatively portray your brand.

There is something odd right about eavesdropping on customers freely discussing your business. What is stranger is that now you are told to base your business decisions on what they say.You are told that

"To keep your customers—and to attract new ones— you need to remain relevant and superior" 

by constantly revolutionizing your products/services, and yes, your communications to your customers. You are asked to do the nearly impossible.

Well, let me ease your mind. I am going to agree with your mother's personal advice to not give much attention to what people have to say about you, it is all nonsense. Why?
Two words, Competitive Advantage. It is the difference between Cola and Coca-Cola, yes the one and only Coke you drink.

 

Competitive advantage is a "condition or circumstance that puts a company in a favorable or superior business position" (look it up in the dictionary). In "Customer Loyalty is Overrated," Lafley and Martin argue that our normative view of competitive advantage is flawed because we begin with the wrong supposition that people are conscious consumers. They write, that

"The conventional wisdom about competitive advantage is that successful companies pick a position, (compete on price, quality, innovation, or focus on your niche) target a set of consumers, and configure activities to serve them better (align your business to the changing demands of customers, i.e. bend to the customers' will)."

It turns out that customers do not want to expend the effort needed to differentiate between products. Plus, human minds prefer automated choices. So, what?




yeah, yeah, so what? What are you telling me?



Well, if you find a way to build on your competitive advantage by making your products/services the default choice, you will build a cumulative advantage that would make it very difficult for competitors to penetrate into your market share. Cumulative advantage is

the layer that a company builds on its initial competitive advantage by making its product or service an ever more instinctively comfortable choice for the customer.

In order to sustain your competitive advantage, the authors recommend that you Become Popular Early (maybe by offering free trials); design for habit (constant update reminders, i.e. the notifications on SM sites); Innovate inside the brand; keep the communication simple (avoid any compare and contrast arguments). 


Whatever happened to MySpace? MySpace failed to build a cumulative advantage. MySpace became popular early because it was free. However, the ability for users to personalize their pages created inconstancy in user experience. This was further exasperated by the constant addition of features to appeal to more users and the proliferation of ads cluttered the pages more. User experience varied by pages one visited. MySpace failed to build on its competitive advantage because it did not design for habit. Whereas now, with Facebook, every page you visit has a consistent look and feel, even on mobile devices. 


So, if you build on your competitive advantage your business can remain not only relevant but the preferred choice. Preferred by habit.

Make it easier for me!

Innovation and Customers: 

Keep in mind that innovation hardly comes from customers. Customer feedback is certainly helpful, as the feedback creates the space for continual improvement. Henry Ford wrote that

"No business can improve without possible attention to complaints and suggestions," 

But customer feedback should not drive your innovation nor should drive your competitive advantage.

Steve Jobs did not care much for market research, he reasoned that 

"customers don't know what they want until we've shown them."

If you want to survive, kneel before your gods, whether they be rational or not. Heed the maxim that the customer is always right. If you want to thrive, be different, build on your competitive advantage.