No amount of tweeting can save you now.

It’s feels like déjà vu all over again. I remember standing in that mediocre office in a drab North Atlanta office park and thinking to myself at what point would this client stop pretending to be a viable business and start trying to actually be one. “This website needs to make us look very big and very credible” he said through a grunt while moving the hard top to his Carrera from one side of the office to the other.
There could be no doubt everything I was involved with; all the photos, headlines, designs and this new fangled website thing (It was 1998) had a single aim- sell the company at a higher price. This company was not unlike many I was working with. There was energy in the air. Everyone was buying and expanding and visioning. There was only one problem- no one was actually making anything. The entire economy was virtual. It’s was taboo to point this out, of course. You wouldn’t want to say anything that might begin the inevitable avalanche of falling confidence.
The late 90s dot com era seems like a lifetime ago but it came back to me, in a sense, when I got an invite from the my local Chamber of Commerce indicating that their annual meeting would have some sort of Twitter theme. Now, I’m not too proud to admit it. I tweet. Perhaps it was my desire to find connection with the younger generation much like when I grew my hair out long despite being over the age of 30. Those poor souls who follow my tweets will probably complain to you that 90% of my dispatches are updates as to the growth and proliferation of my garden. But for you non-tweeter, let me explain the magic of twitter.
Imagine sending a quick e-mail to a select group of friends where the message will also reside on a page where people can see your other messages. Also, people can sign up to receive your messages and you can sign up to read other people’s messages. The messages must be 140 characters or less. Yes, that’s what this whole mesmerizing phenomenon really just comes down to. I know, you could have done much of that with e-mail and a website years ago. Now, that’s what twitter is in a functional sense, here’s what it is in a practical sense. Take the aforementioned technology and try to use it to either make yourself seem more attractive, hip, intellectual, popular or “plugged in” or try to use it to hock worthless junk either blatantly or in a seemingly innocuous message that is a bit like “Just got back from a jog. Time to make millions assembling products from home”.
I won’t lie. I have enjoyed keeping up with the tweets of a few folks. But here is my fear. There are at least a few businesses who believe the sheer magic of social networking tools (like twitter) are going to reverse the fortunes of an otherwise fundamentally flawed business. Even worse, there has been a meteoric rise of social networking “experts” who will promise you that you are just one tweet or face book update from windfall success. Where this gets really scary is the remarkably similar pattern all this has to virtual economies, bubbles and implosions of our recent past. Again, businesses are flocking in droves trying to find a quick cure-all rather than resolving fundamental problems of strategy.
When I lecture about this subject to groups, my favorite metaphor for economic transaction is the miller, the farmer and the blacksmith. Think of the very basics of transaction. Each of our medieval friends has some things the others need. The farmer grows grain but needs it milled. Both the miller and the blacksmith need grain to eat by way of the miller’s preparation. The miller and the farmer both need tools and parts from the blacksmith.
We know needs exist and the progression of an exchange is based in some pretty basic motivations. In the acquisition of that which is needed, the purchaser seeks reassurance that the expectation of that which they are acquiring will be fulfilled by that which they acquire. Put simply, if the farmer is exchanging two sacks of grain for a new plow, his intention is that the performance and ownership experience of the plow will be worth the exchange of his grain, time and energy. The deliverable of how a product, service or concept fulfills a set of needs is what a few of us in the marketing world call the promise. And it’s the promise where many companies fail strategically.
In my book The Promise and The Trust, I outline the things that distinguish good promises from bad. Good promises are differentiated in that they don’t simply promise something you can already get elsewhere. Good promise appreciate the whole value and experience of that which is to be acquired vs. that which is used as payment. The rise of CarMax proved that the too often gut wrenching experience of buying a car from a traditional dealer is a factor beyond the mere price. Good promises also resonate with actual needs instead of seeking to solve needs that don’t really exist at a commercially viable level. Finally, good promise are those in which it is believable that the organization making the promise can fulfill what is claimed. GM can claim they’re driving the American Revolution all they want. We still know they’re making a ton of cars in Mexico.
Until a company understands and can articulate a solid promise, no amount of any marketing tactic is going to help. It’s does not matter if they are featured in “100 great places to work” or if they have a new I-phone game, without a good promise it is all window dressing. With a good promise, the trust-building can be relatively easy. BMW’s advertising is by no means groundbreaking. They don’t send me tweets or connect with me on linked-in. I imagine their press coverage might be nice but I hardly have read it. Yet the position of a car, which is truly thrilling to drive, is firm in my and so many other minds. Their promise is solid and enduring and it has paid off. For comparison, what do you supposed GM’s promise is. Yeah, they don’t know either.
After a company’s promise is firm all the other activities intending to build credibility that the promise will be fulfilled begin to occur. This is the tactical side of marketing rather than the strategic and it is where most people in marketing concentrate their thinking. Things like websites, newspapers ads, radio spots, infomercials, sponsorships, news articles and yes, twitter- all aim to build trust that a promise will be fulfilled. However, without a solid promise in which to build confidence, all of these tactics are futile. Think about it, what exactly are you asking people to trust? That you are really, really, really cool or important or successful? Look at most ads- that’s exactly what they are asking consumers to do. When you boil it down, the reason most companies give for why you should give them money, time and attention is that they are cool, important or successful. Nothing about how they meet needs- just that they are more awesome than everyone else. Hardly compelling.
Instead, trust should be built by explaining how you are meeting needs, indentifying with consumers and getting the individual or organization endorsement needed to allay consumer’s mistrust of claims. Take note, I’m am not saying do one of these things. Your marketing should do all of these things. The goal is to tell a story as to why you can be trusted to fulfill consumer’s particular needs.
The world of commerce is at an important crossroads. The shrinking of incomes and credit is making people a bit more tight-fisted with their resources than they were in the past. This could mean great things for the companies that are clear about their promise and do the kinds of things that help people trust that promise. However, this next era in our economy might spell disaster for the aimless, untrustworthy and hapless huckster who cannot muster a sales pitch beyond “hey everyone, look how cool and zany I am”.
The phenomenon of social networking is about to exit its honeymoon and people will begin to ask if it really did all the things that were promised. I suspect, much like the remnants of the dot com era, some of the applications will be around for a while albeit in a more realistic commercial use. Meanwhile, the peddlers of marketing cure-alls will move on to some other bubble and the rest of us will sift through the remains looking for the lessons.
Perhaps if we all stop and think rationally, we might be able to see some of the telltale signs that ignoring the strategic in favor of the tactical has already begun to erode value and confidence. Perhaps we might look back just a few short years and remember the lessons from an economy that also had no real products but plenty of empty promises. If so, we should really start to warn each other. Let’s tell people to focus of fulfilling needs and keeping promises. Let’s spur business to think about what they really do and get them to tell everyone else about it in a compelling way that encourages trust.
Of course, they’ll need to do it in 140 characters or less.

What’s at the bottom of cocktail cove?

Outside Atlanta, on Lake Lanier, sits a special little cove with a notorious reputation that could make Charlie Sheen blush. Cocktail Cove has hardly any road access, so it became a destination for crazy hillbillies, dot-com millionaires and the girls who seek them out. The bands of boozers would tie their boats together, knock back boxed wine and wander boat-to-boat, helping contribute to Georgia’s population of children in State custody.

You could call Cocktail Cove picturesque, just as you could call a retaining pond picturesque right after its construction is completed. Lanier’s water bears striking resemblance to the water in a port-o-potty (it does smell better), and the beaches were stuffed so full of shirtless rebels that it looks like a Jimmy Buffett concert at a prison. The only thing that really elevated the level of the place were the yachts, houseboats and cigarette boats all tied together, despite the occasional over-served partier ending up in the water.

Cocktail Cove was legendary in its heyday, but the drought drained Lanier so much that Georgia almost declared war on Tennessee in the course of an attempt to siphon water out of the Tennessee River. Lanier’s water dropped so low that many boats sat stranded on docks up dry streams. The water receded, and secrets were discovered. The farmsteads that lay underneath Lanier began to poke chimneys above the water. The trees that had laid for decades under the water lay bare on sand. And beneath Cocktail Cove lay a mountain of garbage that would make Wall-E commit suicide.
The never-ending party had created a mountain of beer cans, full garbage bags, grills, boat equipment, chicken bones, prophylactics, and pretty much any other piece of garbage you would expect to come from decades of partying. It looked like someone had put twelve full dumpsters in a blender and dumped the result in a pile 10 feet tall and 40 feet across.

I might be the only person who looked at what was beneath Cocktail Cove and thought about corporate management.

There is an old saying that often gets used in economic development to describe large, positive economic events: “a rising tide lifts all boats.” And it’s true. A strong economy or economic force lifts plenty of ventures. If a large manufacturing facility comes to a small town, it creates ripples that lift the entire town’s economy. A strong economy can lift all businesses, even those with less than watertight strategies.

Thanks to Cocktail Cove, I have a new saying to describe what happens when the boom years depart and you must confront the decisions made in better times. A rising tide may lift all boats, but a receding tide shows all the crap you threw overboard when you thought no one was looking.

As a country, we enjoyed a mighty party for a number of years. We grilled and drank and tied our yachts together. We partied in Cocktail Cove until the wee hours. But now the tide has gone out, and we’re left to deal with all the garbage we thought we could hide under the waves.

I have seen more than a few good businesses go down in this recession. I have seen some companies blind-sided by bad luck. But I have also seen companies convinced by their performance in a strong economy that they were invincible try to act on impractical and poorly conceived plans based on premises that no longer exist and probably never did. The water is gone, and all those great party plans are scuttled among years worth of garbage.
So what’s at the bottom of Cocktail Cove? Here’s what you’ll find and where you’ll find it.


Poor decisions that go unchecked by the market.

I remember once advising someone to reverse a dumb idea because it was sapping the equity from their other brands. The field sales organization knew it. The dealers knew it. Most of the customers I talked to knew it. But sales remained steady, so they thought it must have been a good idea. Never mind that the market was as robust as they had seen in decades. Never mind that the company had launched a new product and customers were eager for it even though they felt they had to hold their noses to buy it. Never mind that his brand led its category and the new brand was not even associated with the line of products. Never mind any of this because when the tide is up, who cares what you throw overboard.

But what happens when the tide goes out? A ferocious and well-armed competitor is preparing to foray into the market in a serious and capable way. The first organization will still have its pants around its ankles, trying to explain its strategy. Without being checked for bad decision-making by the market, the organization is sounding the all-clear and venturing down a terrible path.
In a less buoyed market, dumb decisions are checked more quickly and easily, and in a market when people are buying everything indiscriminately, it is tough to discern what is good strategy from what merely appears good on the surface. It was in the robust economic cycle that the camera shop I once worked ventured into selling custom framing and cell phones. In case you’re wondering, it eventually went bankrupt. Twice.


Impractical and impossible schemes.

The art of brand consultation became high art during strong economic years. Sadly, much of the consultation turned out to be worthless junk, and nobody cared because they were still making money. Believe me, GM cares now that they stupidly built one car and put four names on it, but when they were flush with cash, they were convinced they wrote the rules of marketing.

The activities associated with the high times continue to linger even after the tide goes out. It’s like a guy who shows up at the garbage pile where Cocktail Cove was and still wants to party. The utter tomfoolery of Atlanta’s dot-com scene was the finest example of this. Marketing numbskulls who made calendars with nude women holding microchips and idiots who commissioned paintings and then took out ads to brag about it continued to preach their failed marketing viewpoints to any business that would listen. The use of arrogance and pomposity as a marketing strategy lingered well after the bubble burst in a hangover that would rival anything anyone ever experienced at Cocktail Cove.

What’s really buried at Cocktail Cove is reality.

The thing that bothers me most is that what’s beneath Cocktail Cove is always there, even if you don’t see it. I think it’s rare that businesses don’t understand their fundamentals, but they become convinced that good times will never end.
If you look at what happened to real estate in 2008, you’ll see financial instruments developed with the assumption that real estate would never lose value. I told a friend I was concerned about what would happen when the proverbial music turned off and there weren’t enough chairs for everyone only to be rebuffed for “not getting it.” In truth, the scariest (and dumbest) thing to do when the tide is in is make plans as if it will never go out again.

While I write this, it has rained in Athens for more than a week. The state climatologist has said the soil is saturated and most reservoirs are at full pool. Even Lanier is starting to fill up. The water is starting to rise in Cocktail Cove. Before long, there will be yachts tied together, girls in bikinis and spray tans sunning themselves, and guys wearing chains with little golden anchors on them. Companies will chase after the unattainable and, more likely, undesirable. Consultants will peddle whatever fad they can with the same fever in which they peddled the last fad, now at the bottom of the cove.

What a party it will be. It will go on all weekend and then all summer; some will party like it will never end. They will laugh at those of us that stick to sound business fundamentals, saying we don’t have the vision or the guts to be successful. And even though the people who said that just before the last tide went out are on their fourth job selling condos in Buckhead, the water’s up and this gaggle will not be swayed into thinking things could ever change. So let’s get ready for the next party. Bring the little lights shaped like chili peppers, and I’ll give you my vaunted recipe for Texas-style margaritas, but I won’t pretend the party never ends. I know what’s at the bottom.