Recently, while talking with executives about social media, I got three different messages from them:

1. I get it and we are building our social media presence. 

2. I don’t get it and until somebody shows me the money, I’m not gonna get it. 

3.  I know that we need to get on top of the social media thing, but I’m not sure if it will do us any good. 

Ok. Here is what social media data can do.

1. With the proper analysis, it  provides insight and justification for your major decisions.

2. It gives you the truth. And remember, every post, whether good or bad, has a good deal of truth to it.

And your “truth” and their ”truth” may be completely different. Not the same picture at all.

3. It gives real-time feedback on the performance of your products.

4. It provides trending information, which will be a leading contributor to upcoming sales forecasts.

Here are some things that data cannot do:

1. It can not make decisions for you.

2. It should not be  manipulated. If it is, it will be at great risk to your company and your career.

3. It cannot be your friend. When data says the momentum is good, it doesn’t care. When momentum is bad, it doesn’t care.

4. It cannot be ignored. Data is direct from are your customers, your life-blood. Ignore them and you ignore the performance reviews of your products. It is the beginning of the end for your company in the 21st century.

I say these things because recently there has been too much emphasis on both the power of social media and the weakness of social media. Both are true.

Social Media Reporting becomes a competitive weapon when you:

1. measure correctly

2. analyze

3. deliver the data in a way that senior managers can understand and compare to performance in other sectors of the enterprise.

And when data is delivered this way, it is still your gut, but with more ammunition.

Companies in the sporting goods business are now coming out with their growth plans, many of them 3 years or more. These plans are aggressive and this signals a change in the landscape. For at least ten years the sporting goods business has been consolidating. This means that stock holders and stake holders want healthy and sustained growth from the new larger company.  And it’s up to senior management to plot that growth.

Here’s the challenge.

Where will that growth come from? The traditional sales channels are specialty retail, large specialty retail (REI, EMS, Dicks, Cabela’s,etc.), and huge retail (Walmart).

Specialty retail is averaging growth of between 3-5% over a six year period ending at the beginning of 2010.  Large specialty and the big retailers are growing, on average, in the area of 8-10%. These numbers won’t change much. It takes a lot for any of these channels to plan for the explosive growth demanded by the brands. A lot of money will be needed for expansion, inventory and salespeople.

Brands realize that traditional retail can’t supply the lion’s share of the growth, unless many of the brands go to the very big boxes and most brands still believe that Walmart will dilute the authenticity of their product offerings.

The explosive growth will come from two relatively new channels, branded stores and online sales. Online sales have grown, on average, about 20% a year in the last 4 years.

New Balance, Nike, Columbia, The North Face, Merrell, Icebreaker, Marmot, and many others, have announced they will be opening retail stores across the country. Why? Because they can offer wider selections and fulfill inventory faster, which means a bigger upside.

Same thing with the Online Sales Channel, aka, the company web store. Brands are selling merchandise at full price, can replenish inventory instantly, and offer the entire collection. There is a lot of profit margin here.

So, online sales and branded retail stores will be  joining the landscape of Channel Management.

Here’s Channel Signal’s guess as to how Brand’s will position the Channels.

• specialty retail will be used to create momentum and maintain authenticity.
• large retail…less of the same but bigger numbers for the brands.
• Walmart, Kmart, etc…look for the brands to open this channel in limited amounts to move merchandise that is lower end. Numbers are good here.
• Branded stores…good margins, good selection and success will fuel more stores across the country.
• Online stores… great margins, great selection, and more money pumped into the web site to make it more of a shopping experience.

One thing we haven’t addressed and that is social media. My guess, the brands will find ways to build this channel as a sales channel or use it to drive traffic to the other sales channels.

Channel management will be critical moving into the future. And so will tracking what channels are generating the buzz and how that translates into profit.

Thanks to Leisure Trends for the growth stats.

The spill in the Gulf of Mexico started as a news report of an explosion and eleven men missing. Only one sentence was dedicated to the oil spillage…saying only that a tiny amount was leaking.

It has now grown and threatened the coastline of several states. It is telling a story much larger and much more damning to the shrimpers and the oil people.

Here’s an example…reported by the New York Times.

“About 35 endangered sea turtles have washed up dead on beaches along the Gulf of Mexico since Sunday, sowing fears that they were done in by the growing oil spill.

But so far scientists have found no connection between their deaths and the spill. Autopsies indicated that the turtles had ingested no oil.

It is now suspected that shrimpers out at sea before the April 20 rig explosion and spill caught the turtles in their nets, which can suffocate them.

The A.P. reports that federal fisheries investigators are looking into whether shrimpers were responsible.”

So, the oil spill exposes other abuses.

And is social media having a hay day with the suspected killing of endangered species in pursuit of the dollar? Yep. Search for “sea turtles” on Twitter and it is all about turtles and the oil spill.

Why is the sea turtle episode exploding on Twitter? Because it is the sidebar that puts a new spin on the story. There are pictures. And people are becoming emotionally attached.

And this whole business is dirty.

Our dependence on oil is dirty… due to carbon loading.

According to the University of California, every car is responsible for 1.28 tons of carbon per year.  A nation with five percent of the earth’s population consumes about 23 percent of the world’s oil output. And we are currently exceeding the regenerative ability of the earth to sustain us. Today we occupy 145% of the earth’s regenerative ability.

The extraction is dirty, and dangerous.

According to the Associated Press, the U.S. Minerals and Management Service is developing regulations aimed at preventing human error, which it identified as a factor in many of the more than 1,400 offshore oil drilling accidents between 2001 and 2007.

Sea turtles are now proving that commercial shrimpers are dirty.

And this story has so many sidebars, many which are still unknown,  that it will be tweeted about, facebooked about, and blogged about …for years.

There will be more pictures of wildlife, total victims.  And millions more new media comments.

There will be villains. And more new media comments.

There will be innocent human victims. And more new media comments.

And my point?

There is no new media strategy that can solve this, next time. This is a national tragedy.

Pundits are already coming out and writing that BP didn’t handle this the right way. Well what is the right way? Set up a war room and have the best minds churn out news?  Stay on top of the issues? Be the first to break the stories…before the media?  Be transparent? Be honest? Be responsive to new media questions?

Won’t help.

Again, this is a tragedy and one that is unfolding before our eyes. And new media is a part of delivering the story and the millions of opinions surrounding it.

BP better concentrate on fixing the problem and cleaning up the mess. And pay for all of it. After nearly two decades of screwing around with the legal system, Exxon got exactly what it wanted: a Supreme Court that reduced punitive damages from $2.5 billion to $500 million. According to reports, that is just a week’s profit for Exxon.

This time we should put the big hurt on BP. 10 billion. 20 weeks of profit. Make them howl. And the judicial branch should level the fine and walk away. That will get the attention of the other oil companies.

The Obama Administration would be wise to forget about the deals they made with the Republicans to get the health care bill passed…and kill the off-shore oil drilling initiative. DOA. Period.

Shrimpers…stop killing endangered species. You might have been innocent victims, but you sure aren’t now.

This is a big story of our time. And because of new media, we are all involved. Writing. Discussing. Taking action. Being disgusted.

And there is no strategy that will lessen the impact for BP.  It is caught in a huge unfolding story.  And the federal government is caught in the same story. So are the shrimpers. And so am I. And so are you. BP is just a spoke in the massive feeding machine connected to our lifestyles.

We in new media can pontificate all we want about this national disaster, but until we view the future with sharp, clear-eyed vision and determination…expect bigger environmental disasters.

And expect our free fall into the future to continue with the ground approaching at an ever increasing rate.

We have met the enemy, and it is us.

In recent conversations I have been painfully reminded that many me-too brands in the Outdoor Industry are not building solid funnels but building buckets with holes and no bottom.

How? Well, these companies crow that they have a Web Site, Facebook Page, are on Twitter, YouTube, and Flickr.

And consumers are initially engaging…entering the bucket. But they are not directed or invited to go anywhere.  They  just sit in the bucket, quickly draining to the bottom…without direction.

And then an analyst from Channel Signal investigates. We find that they had good sign-up for the Facebook page, a decent  following on Twitter, and that YouTube and Flickr had good traffic, but that it fell off quickly.

Why did the traffic fall off?  Because these companies did not allocate the resources to engage. Employees were not assigned to respond to consumers, and direct them to the next point of interest. Consumer questions and comments went unanswered. They were not invited to go to Facebook or the Website, or YouTube, or a User Group. And because there was no natural momentum of engagement, no funnel, consumers were stranded and then took the easy way out….quickly out the bottom of the bucket. They were invited to the conversation and then nobody talked to them.

So they didn’t stick around. And  they took all of their knowledge about the brand with them.

A study by the Chief Marketing Council shows that 38 percent of the 480 executives in the industries surveyed say their companies have no programs in place to track or propagate positive word of mouth among customers. And only 29 percent rate highly their ability to handle and resolve customer problems or complaints

All that money to make products that attract consumers. All that money to sell into retail. All that money for advertising to attract consumers. All that money to set up conversation channels.  And then the pay-off…consumers responding online by engaging in one of the channels. And…

And silence. All that wonderful potential data about consumers and what they like and don’t like about your brand and products…out the bottom of the bucket. And all those potential Influencers, gone.

Never to be captured again.

Say goodbye to measuring ROI.

Courtesy: New York Times

I’ve been talking with a lot of the brands in the outdoor space lately and I’m hearing the same theme. Something like…”new media is important. We are looking at its impact.  We have to determine how much time this will take, who will execute inside the company, and how much it will cost.”

Fair enough. All good concerns.

This brings me to the core problem. The more information we load upon ourselves the less time we have for…everything.

Herbert Simon, a political scientist, wrote in 1971, “What information consumes is rather obvious: it consumes the attention of its recipients. The more information, the less attention, and the need to allocate that attention efficiently among the overabundance of information sources that might consume it.” Quoted from A Short Manifesto on the Future of Attention by the Design Observer

In my view, this problem is now pervasive. Consumers are focusing their attention to write messages to companies about products, customer service, and branding. And it is evident that companies do not have the attention span to:

1. Listen

2. Engage.

Why?

Because companies are swamped with so much information that much of  the valuable info gets ignored . The work force is in a dingy and the waves of information are ten feet tall.

Another problem:  many companies are still in the Broadcast Mode because it takes less attention. Executives are saying “ We are on Facebook, Twitter, and YouTube…and we have our own Blog. However, that company uses those channels to simply broadcast the message. Face it, that  company doesn’t have the “employee time” to engage with those customers.

Many brands suffer from information overload.  Reposition your company away from the endless silly emails that smack of over-communication in the form of “covering my ass” , positioning the responsibility to someone else ” I sent him an email!”, or ccing the universe “so I could solicit  feedback from the team” .  While all of this is going on, consumers are trying to communicate with the company.

Companies are more self absorbed than movie stars. Stop worrying about your brand image and look away from the mirror …and see.

To all major brands in the outdoor space: time to rebuild your marketing departments. Time to reallocate employee time for New Media. So they listen for the customer. Hear them. And then respond. Time to create content that consumers find worth responding to. Time to take money away from traditional advertising (and the push messaging) and invest it in real time feedback on your products, your service, and your brand initiatives.

Back to the future, where the motto is, “The Customer is King.”

Recently several companies have found themselves defending their logos and company names from this new creature called “the new media entrepreneur.” Logos are being bastardized and product knocked-off…all with the purpose of making people laugh, and then buy from these small start-ups.

Back in the day, big companies would bring in their crack legal team, and those guys would write a very nasty letter threatening legal action at the least, and  possibly “pain of death” if the action by the perpetrator continued.  My brother started a company called Bean Reef. Small tee-shirt company. Well, you guessed it. He got a “hang em high” letter from no other than L.L. Bean threatening legal action if he didn’t change the name. Now what L.L. Bean has to do with  a surf break off the coast of Puerto Rico…I’ll never know.

Things have changed. A couple of weeks ago, a large company directed its legal team to write a cease and desist letter, and the young guy  starting the company hired a lawyer, and went to the media and said “bring it.”  Fox News picked it up. So did new media. And the ball started rolling the wrong way for the  big brand.

Collateral damage in new media will hurt a company, even a large one, if they pick the wrong battle. Small companies who capture the fancy of the public by making products or creating marketing campaigns poking fun at a large brand  must be handled carefully. Otherwise, damage in the form of negative new media could end up in the millions of dollars.

With all due respect, lawyers are not trained to handle many new media problems. Marketing, public relations, and sales people are much better equipped to engage a small company in conversation. Perhaps there is a possible partnership. Perhaps this new entrepreneur could help bring the younger market to the larger brand.

But before the legal guns come out, companies should try a little conversation to learn the real extent of the problem. And work to find a mutual solution.

And it wouldn’t kill a brand to sometimes laugh at a funny new start-up, and do it publicly.

And this comes back to a bigger challenge for many large brands in new media, showing their humanity.

1. Choose only communication channels that best match your goals.
2. If the news turns sweet or sour, monitor and measure across your channels to find the real issue. Only then do you respond with the corporate answer.
3. Engage when the news is good, engage more when the news is bad.

Special shout-out to Darren Bush of Rutabaga, who introduced our event to the audience. He and the Pemba boys built a video to introduce me. Very funny and creative…it got the event off to a great start.

The audience was attentive and asked great questions throughout. Used Channel Signal as the monitoring and measuring tool for all of the case studies. The audience was impressed with the power and clarity of Channel Signal. We couldn’t have done the presentation without it.

I thank everyone; the sponsors, the Outdoor Industry Association, my partners and the audience for the seminar and the event. A real testimony to the men and women who work in this industry. We do not cut and run when it gets tough. We keep working at the problems. Good for us.

I also attended a gathering of new media folks in the outdoor industry before the Rendezvous. Informal, it was a great session where thinkers outside of the typical Outdoor Box expressed themselves about how new media could drive the industry forward. This group wants more of the passion to come back to the core group. They also admit that we need to reach out to more communities and groups to introduce them to the outdoors…but in a very organic way. Just like we were all introduced to it.

How? That is the question. New media is a central part of the answer. However, we do need to wrap it into our core personality and deliver. This is a problem that every vertical market faces. We are very fortunate to have smart passionate people who care more about the industry and the outdoor experience then the money.

That’s enough for now. I have so many thoughts in my head from these two events that I’m gonna walk away for a day or two. My sub-conscious will help to work through the terrific challenges coming up.

Recently I got this research and statement from Gartner Consulting.

Media and advertising follow consumer attention, and consumer attention has shifted massively toward social media on the Internet. Social media currently reaches nearly half of the U.S. population, and usage has nearly quadrupled during the past two years, according to comScore Media Metrix.

Now, to be clear Gartner defines social media as all blogging and social networking. All interactive media. That means all blogs, social media platforms like Facebook, Twitter, YouTube, Flickr, and all online traditional media like the New York Times and CNN. No matter. It is still a staggering stat.

Welcome to the new Sales Floor. It is the largest in the world. If Media Metrix is right then over 150 million people are on this sales floor, just in the United States alone.

150 million people buying, trading, reviewing recent purchases, talking with others about future purchases, talking about brands, praising or complaining about a brand’s customer service, discussing a brand’s message, passing information back and forth about pricing, reading the news of the day and expressing opinions. Feedback loops everywhere.

The architecture of this Sales Floor would be like combining all the major cities of the world into one road map.

And it is growing larger.

And every one of these people wants to be treated as an individual.

Media and advertising follow consumer attention.

If you want to grow your business, you should follow and engage this mass of consumer attention while learning to treat each as an individual.

We have a lot of work to do.

First, I thought ORSM09 was a very positive show. Two things continue to happen. The stock market continues to move upward, reaching 9000 just before the Show. Second, this staycation thing is the real deal. People are staying home, taking up new sports, planning local family vacations, and the outdoor industry is benefiting.

It’s all working and our industry, although listing to port a little, is not capsizing. 

And I like the general attitude. “Yeah, things could be better, but we are still making some money, running a tighter ship, and we will make it through.” 

New media is growing in the outdoor space. Tweet-ups, constant tweeting from the Show floor, and many of the major brands looking at or engaging in the blogosphere. Outdoor Retailer is embracing new media and supplying more portals on the Show floor. All good. 

I still strongly believe that the Show should open its doors to the public on the last day. It will happen someday. It is inevitable. 

Now, to the darker side. I heard from several very reliable sources that a certain large retailer threatened several large brands if those brand did business with online powerhouse Amazon.

Let’s start with this. After too many years in the marketing business I must emphasize again that retailers and brands can not fight the market forces. For example, I remember about ten years ago, medium sized specialty retailers were running around the Show telling the brands that they would drop any brand who sold online. Several brands sought my advice. I asked this question,” where is your growth?” And they replied, “Online.” And I asked why? And they said, “Because we think that is where a growing percentage of the consumers will be.” 

Right direction. Right thinking. 

YOU MUST FOLLOW THE CONSUMERS. YOU WILL NOT LEAD THEM. YOU CAN NOT BULLY THEM. THEY ARE TOO BIG. THEY ARE IN CONTROL. THEY HAVE ALWAYS BEEN IN CONTROL. AMAZON IS GROWING FOR A REASON. 

So, to this large retailer, I say, you must stop this nonsense. Brands will follow the money. They will sell to retailers who bring them customers and offer growth. They have no choice. Their shareholders have put a bulls-eye out there and told management to hit it. Unless, you, large retailer, want to guarantee the returns necessary to keep these shareholders happy, then you must do it the old fashion way.

You must compete. You must continue to create a unique position in the marketplace, buy creatively, attract more consumers to your doors and online, offer great customer service and sponsor customer loyalty programs. You will sell more, and order more merchandise. And the brands will support you more. 

And speaking of support…how can you, large retailer, threaten brands when almost 50% of your floor space is now your own branded products? You, at times, drive consumers into your stores using other brands as the bait, and then you offer your branded products at a lower price while your salesforce whispers that your product has the same quality only it costs less.  

So you are partners with the brands, you compete with them in your own stores, and now you threaten them because they want to grow their businesses. No wonder brands are confused and, at times, angry.

You are a retailer. A damn good one. Probably, the best.  You have been solidly on the side of “good”. You have helped grow the outdoor business. Now, others with a different business model, want to do business and help grow the industry. Invite them in.  And sure compete with them, hard. But also talk with them. Educate them about expectations. Talk to them about the environment, sustainability and participation. Show them how to be a force for good in the business. Both of you will profit. Why? Because you are both capable of bringing millions more consumers into our business. And everyone will profit. 

So, be the leader that you are, and stop baring your teeth.

Peace. 

Out.