Trust Issues – We All Have Them

Recently, when I was writing about the Elon Musk/ Twitter deal  – currently headed for court, with Twitter blaming recent revenue drops on uncertainty regarding the acquisition – I mentioned that every organization has vulnerabilities. Some people took exception to this, in the sense that they felt Twitter was being somewhat unethical while they themselves worked hard to operate their business in a more morally correct fashion. 

With that in mind, I think it’s very important to explain that a company can quickly lose customer trust while operating according to its values and standards. For example – Your brand is vulnerable to several factors entirely out of your control. 

The Hacker Steals the Credit Card, You Pay the Price

Let’s say there’s a data breach of the sort Neiman Marcus suffered in 2021 – 4.6 million customers had to be notified that their personal information, credit card numbers, gift card numbers, and other sensitive data had been stolen by hackers. While the luxury retailer immediately took action to mitigate the situation, including mandating all customers change their online passwords, the brand did become less trustworthy in the eyes of some customers. Perhaps the loss of trust was greatest among the brand’s long-time customers, who’d been through previous major data breach issues with Neiman Marcus. 

Bad Things Happen To Good Brands: Be Trustworthy Throughout

Can you ever be completely confident that your brand will not fall victim to a criminal? Of course, you can’t. While brands take precautions, there are no guarantees in this world that your brand will ever be completely safe. In much the same way, brands are vulnerable to failures of the merchandise they sell, the customer experience employees provide, and even interactions your customers have with other people while in your business. 

None of these vulnerabilities arise out of a morally questionable stance, such as Twitter’s choosing to be less than transparent about business operations. However, they all can result in the customer having an emotional experience that causes them to view your brand as less trustworthy. 

If trust is important to you – and in the work we do, we’ve found it’s the brands who are the most loved and trusted that are ultimately the most successful – then it’s essential not to overlook the vulnerabilities your organization does have. Eventually, something will go wrong. Trustworthy brands have put systems in place to maintain and even strengthen customer relationships during problematic events. From a moral perspective, thinking ahead in order to best serve the customer is the right place to be.

August 2, 2022 by

What Happened To Twitter Can Happen To You: Elon Musk Just Taught A Master Class on Exposing Vulnerabilities

He’s in, he’s out – Elon Musk’s decision whether or not to purchase Twitter has dominated headlines for weeks. While there’s been a lot of talk about free speech and financial shenanigans, the largest part of the discourse has been around bots. Musk raised the question of how many Twitter users are actually genuine people, and what’s happened since then?

People now trust Twitter less than they did before. This change in sentiment appears to be occurring independently of individual’s opinions of Musk. By not being able to address the bot question in a way that satisfied Musk – or, at a minimum, was understandable to the general public – Twitter left a lot of people with a lot of questions. While many of these questions are relevant to the health of discourse, there are additional huge concerns for brand building professionals. 

If there’s no accurate bot numbers, how reliable is Twitter’s CPM pricing?  Are the reports of a liberal, affluent user base believable? Do users really spend five hours a week on the platform? Doubts are like potato chips – you’re never going to have just one. 

Doubts destroy brands. 

Troll or Truth Teller: Understanding Elon Musk

Elon Musk understands better than most people that brands rise and fall based on how people feel about them. Tesla is a beautiful case in point. Tesla owners buy more than a car: they’re buying into a specific vision for the future, with the idea that they’re participants in progress offsetting the growing pains that come with any emerging technology. 

Given the sprawling and complex nature of Musk’s business finances, I can’t say with any degree of certainty that he ever intended to complete the Twitter purchase. But there seems to be little doubt that Musk wanted to damage Twitter’s value. He did this by tactically attacking Twitter’s trustworthiness – specifically by raising concerns about the bot issue. 

You have a budget to work with as you’re building a brand. How much of that money are you willing to devote to Twitter now? What Musk really did is shine a light on the tendency to accept platform performance claims without question. Prior to this, discussion of bot presence on Twitter was definitely happening in tech circles – but it wasn’t a mainstream discussion. Now that the question has been raised in such a prominent fashion, the wider business community has doubts. And that’s not good news for Twitter.

It Could Happen To You: We All Have Vulnerabilities

It’s easy to say that our brands would never be in the position Twitter is in, but in real life, almost every organization has some aspect of their operation they’d rather not talk about. Twitter’s experience serves as a wake-up call for leadership to think about what can be done ahead of time to address those situations. 

The choice to keep maintaining trustworthiness at the core of a brand’s decision-making impacts every facet of the organization, from operations to communications right on up through mergers and acquisitions. Twitter had every opportunity to handle this bot question differently, but they didn’t. We’re going to see how the brand moves forward in the days to come. 

I’m very interested to hear what you think about the situation. Did Elon make the right move? Will Twitter emerge triumphant after all? Let me know what you think.

July 18, 2022 by

Three Vitally Important Lessons I Learned About Trust While In a Filthy Gas Station Bathroom

I’m blessed with healthy young children. The family’s on a road trip. You know what that means – someone always needs to use the bathroom, right away, right now. And that’s how I wound up in one of the filthiest gas station bathrooms I’ve been in in a long time. 

We’re not talking rats in the trashcan and overflowing toilets nasty, but this bathroom was rough enough that I felt bad about having my son in that environment. Had I known things would be this dirty in this establishment, I would have dealt with whatever the consequences might have been for driving to the next stop – no matter how distant that might have been.

Once we were out of there and back on the road, I found myself surprised about how emotional that experience had been for me. This is a tiny minor interaction with that business, yet I was angry with them. Why was I angry? 

Here’s Trust Lesson #1: We All Have Trust Issues.

I was angry because I felt betrayed. I stopped at that gas station in the expectation that it would provide facilities in keeping with its branding. I knew not to expect a luxury experience, but there’s a certain basic level of competence I trusted would be in place. 

Based on this trust, I brought my child into this setting. Parenting is a serious responsibility, and we all try to shield our kids from things that could make them sick or distressed. I wouldn’t stop at the sort of sketchy looking place where this filthy bathroom would be unremarkable because I don’t bring my kids to places like that. 

My kids trust me to take care of them. Being in this nasty bathroom, I felt like I’d let my son down. Who was responsible for these bad feelings? The gas station that failed to live up to its brand promise. They showed me I could not trust them. How do you think I feel about that gas station now?

If this seems like an excessively personal take about a brand, you should know that every single customer interaction is like this for customers. Trust is won and lost when people interact with your brand as part of their everyday life. Everyday life is intensely personal.

In everyday life, people are much more than customers. They’re parents. They have parents they’re caring for. They have romantic partners, friendships, and countless other connections with people near and far. Every single one of these relationships is much more important to your customer than the relationship they have with your brand. If your actions – or lack thereof, in terms of bathroom cleaning – violate the customer’s trust in you and introduce negative elements into their much more important relationships, the bond you may have had with them is over. 

Key point: as much as we measure our customer behaviors, it’s very easy for brands to lose sight of the customer as an entire human being, who does much more than shop. It’s only when we develop a multi-faceted understanding of our customers that we can truly prove ourselves worthy of their trust. 

Trust Lesson #2: When You Trust, You’ll Be Willing to Try.

Of course I couldn’t help but contrast the experience I’d had in this gas station with what I knew I’d experience at Buc-ees. I’ve written before about how this successful chain thrives in part because it lives up to its promises – including the promise that if you bring your child there to use the bathroom, you will find clean facilities for them!

Buc-ees does more than provide clean bathrooms and gas. They also have great food. Food & Wine Magazine once wrote an ode celebrating their brisket. I have had it and I have to agree that it’s one of the best things I’ve ever eaten – but how do I know that?

Before you eat food, you have to trust that the food is safe to eat. This is a very primal aspect of being a human being, but in the modern world this plays out most often in choosing restaurants or takeaways that are suitably hygienic. 

Having seen Buc-ees billboards about their bathrooms, and then the bathrooms in question, I had no hesitation in trying the food they serve. This is a brand that does a good job in rapidly establishing the fact they are trustworthy. The competence and attention to detail that goes into the restrooms made it easy for me to trust that the kitchen would be equally well-run.

They sold food in the place that had the filthy bathrooms too. And remember that I was there with my young son, who is not too old to want a giant slushie. But after the bathroom experience, I didn’t trust the cleanliness standards of that kitchen. We left that place without buying any food whatsoever!

Key Point: Being trustworthy increases a brand’s earning power. Customers buy more – and they buy more often – from brands they trust. It’s a smart strategic move to begin demonstrating your brand’s trustworthiness early in the relationship. 

Trust Lesson #3: We talk about who we trust – and who we don’t.

Word of mouth and reputation management are not exactly new concepts, especially in the branding and marketing world. But what struck me most about this filthy bathroom experience is how strongly I felt the need to warn other parents away from that particular gas station.

I’m not going to name names here, because there’s already more than enough negativity online. But in those instances where I have strong trust-based relationships with people local to the area, you’d better believe I mentioned to them that there are much better businesses to visit when the kids need a potty break.

Again, we’re talking about some very deep social conditioning here. One of the ways we strengthen the bonds we have with other people in our communities is by sharing information. The impetus to do so is especially strong when we experience or perceive that our trust has been misplaced. When we care about people, we take action so they might avoid being similarly disappointed. When our trust is broken, we talk about it. 

This is where social listening and artificial intelligence can be useful tools for brand building. Monitoring the conversations people are having about our organizations and using the right tech tools to filter out some meaning from the unstructured data gathered can help identify problems as they’re happening. Addressing these concerns may not restore lost customer trust, but it may be possible to strengthen relationships with your existing customers and start relationships with new customers from a better position. 

Key Point: Brands need to consider their reputations as viewed through the filter of trust. Where are customers feeling let down or betrayed? How do these feelings align with the experience the business provides? Ultimately, each brand determines how trustworthy they are. Be clear about what promises your brand is making, and what operational decisions are required in order to keep them.

July 11, 2022 by

7 Questions to Consider When Building a Pricing Model

Setting the right prices for your audience and revenue goals is important when taking a product to market. The following questions will help you clarify your pricing model.

To develop your pricing model, consider:

  • What is the value you’re offering to your target customers?
  • Are there existing price expectations?
  • How do you price your product relative to your competitors?
  • Is there a way to create a competitive advantage with your pricing model?

Channel economics is important to consider. For example, most airlines, like JetBlue, charge a $25 booking fee when you book a flight over the phone while charging no fees for online booking. There is little variable cost for web transactions, but call center representatives are expensive.

Your goal might be to develop a revenue model based on anticipated market penetration, average transaction size, number of transactions, and so on.

Consider:

  • What are your primary goals for market share penetration?
  • What are your estimated margins over the next one-, two-, and three-year horizon, factoring in startup and ongoing expenses?
  • What are the human resources requirements for the first year of execution?

To help mitigate risk, it is advisable to identify the economic, competitive, and internal risks associated with executing this strategy. Outline the biggest risks that may affect your ability to reach your goals and develop strategies to address how to overcome them.

June 27, 2022 by

How Is This Good for the Game We Love? The PGA & the Saudi Boogeyman

Have you heard? Phil Mickelson has sold his soul. That’s the news coming out of the usually relatively restrained sports section of the IndyStar, in the aftermath of the top PGA star and 16 of his colleagues choosing to participate in a non-PGA tournament. 

Never heard of the LIV? Let me bring you up to speed. Sports are huge in the Middle East, with Saudi Arabia, Dubai, and Qatar hosting numerous top-tier events in track and field, tennis, horse racing, rugby, cricket, Formula 1 racing, motocross, football, and even basketball – the NBA will have two exhibition games in Abu Dhabi this year for the first time ever.  

LIV is one of many golf tournaments to take place in the region. The name is 54 in Roman numerals, indicating the score a golfer would have if they birdied on every hole. With exceptionally attractive prize money available, many professional golfers have chosen to take part. And the PGA, the league in which most of these golfers have built their careers, is furious.

You Need Us: How Does the PGA Feel About The Golfers?

Of course, I’m interested in the decisions the PGA is making as a brand as seen through the dual lens of love and trust. Barring 17 top players from PGA competition because they played golf somewhere else certainly doesn’t seem like a loving act. There’s definitely possessive language floating around, with the PGA Tour Commissioner calling LIV players freeloaders who only achieved this position because they came to prominence in the PGA. 

The hostility level is incredibly high, with lots of very thinly veiled racism masquerading as concern for the sport. While it is inarguably true that the money of the Saudi government has been used for evil things in addition to funding sports events, it is also inarguably true that the evil actions of other governments have not stopped the PGA from happily hosting events where they felt conditions were favorable for them. Most notably, of course, was the choice to play Sun City during the nearly global boycott of South Africa’s apartheid regime. 

You’ve been in relationships before. When you have someone who acts like they own you, who tells you you’re nothing without them, and that none of the people you’re currently talking to can be trusted, how do you feel? Probably not great. These are the characteristics of an abusive relationship, where one party does not have the freedom to act in what they feel are their own best interests. 

Why Does the PGA Want to Be Seen This Way?

There’s no doubt that the PGA feels threatened by the LIV tournament. They’re acting out in ways that demonstrate a lot of hurt and anger. But in situations where you want to build love and trust with your stakeholders, making them the target of your least-pleasant feelings isn’t necessarily wise. It’s also a questionable decision to put these emotions in front of your fan base: while some will certainly toe the PGA line that the players have done wrong by participating in the tournament, others will feel that the players, like all athletes, have the right to compete when and where they want to. 

Is there a last-minute hole-in-one that could change the entire game for the PGA? I hope so. International competition is not going away. If accommodations are to be reached between the parties, it’s going to need to begin from a position of greater love than what’s currently on display. What do you think? Can leadership play it where it lays? Is it possible to force loyalty through sanctions and bans? I’d love to hear your thoughts on this.

June 20, 2022 by

How to Define Your Brands Marketing Channels

Choosing the correct channels can help your organization expand its offerings reach and revenue. You might include your retail store, Internet, a customer service call center, face-to-face salesperson, a trade show, a seminar, or a direct partner. Having a strong foundation in your channels can give your marketing an edge.

Amazon.com’s primary channel is its website. Walmart’s primary channel is its retail chain. BWM’s primary channel is its dealerships. AT&T’s channels include its authorized dealers (partners), independent retail stores, and website.

Your goal isn’t just to identify your channels but to ensure that each channel is as seamlessly integrated with each other as possible.

Customers should have a consistent brand experience no matter what channel or touch point through which they interact with you.

The key questions in your channel analysis are:

  • Where do you reach your target customers?
  • Where do your target customers buy?
  • Where will you promote your products?
  • What is the right distribution model?
  • How do you develop the right distribution channels?
  • Does the channel fit your offering?
  • How does your offering fit with your target markets and channels?
  • How would customers desire to interact with you?
  • What level of interaction do your target customers require?
  • Can you create a competitive advantage?

You want to make sure your offering fits your channel. For example, it is difficult to sell complex services or certain high-priced products over the web.

When our clients want to build best-in-class plans they bring together their smartest folks and the relevant information. These questions are perfect to discuss offsite with your leadership team and relevant data. Try setting aside time for your leadership team to discuss and prioritize your channel strategies for 2022 and beyond.

June 13, 2022 by

Defining Your Offering

Understanding your product’s key features and benefits is the first step in defining your product’s unique value proposition. You must understand exactly how your product connects with your customers: the context of their use, the solutions it solves, and the benefits they derive.

Here are some key questions to bring clarity to your offering:

  • What needs or tensions do your target customers need solved?
  • Which features in your offering best address these needs?
  • How will customers use it?
  • What are important attributes or benefits of your offering?
  • How is your offering differentiated in the marketplace?

To help determine the product’s unique value proposition, put yourself in your target customer’s perspective when you think about presenting your company’s offering. Consider:

  • What do you want your customers to think?
  • What do you want them to feel?
  • What do you want them to believe?
  • What do you want them to remember?

The better insights you have about your customers, the more effective you can be at defining your offering. This means you need to get to know your customers, to obsess about your customers.

Talk to them, listen to them, and get to know them. Defining your offering will also help you create more effective marketing messages.

June 6, 2022 by

Bringing Trust to Twitter: Can Elon Do It?

I don’t need to tell you about the many incredible things Elon Musk has already accomplished. Tesla, SpaceX, STARLINK, and The Boring Company – are all groundbreaking brands, each is operating at the frontier of possibility. Now Elon’s buying Twitter with the stated goal of making the site a more trustworthy, functioning digital town square. Do you think he can do it?

Begin with Bots: Can Science Make Twitter More Human?

Having made an offer to purchase the never-profitable social media network, Elon then brought up the issue of how many site users are actually bots. It’s easy to view this as a negotiation tactic, in much the same way a potential home buyer says they love everything about the property except for the roof needing repair: pointing out flaws can lower the purchase price. 

If you’re the homeowner in this situation, you have recourse. A building inspection will quickly clear up any questions regarding the state of the roof; it’s either OK or it’s not, and the price will move accordingly. 

On the other hand, Twitter can’t tell Elon how many bots there are. This raises several issues, all related to trust. How many bots are there? Twitter says no more than 5% of the user base; Elon’s experts put the number somewhere between 20-25%. Perhaps joking, Elon asked what if the actual number of bots is closer to 80%. 

There’s no home inspector in this situation. Twitter, while standing by the information in their public filings, declares that getting more precise information is, for some mysterious reason, impossible. This obscurity is in itself problematic. The validity of Twitter’s public filings is in doubt if basic details like the number of active users can’t be verified. 

Elon, approaching the issue from a scientific perspective, has concrete ideas for confirming the humanity of the user base. If he is allowed to put them into action, will Twitter become a more trustworthy place?

It’s not going to be a more civil environment, that’s for sure. 

Complicating the situation infinitely is Musk’s assertions regarding free speech and the need for everyone to have their say, free from any constraints beyond those imposed by the nation-states where the posters reside. Hate speech and misinformation may not be illegal, but their presence minimizes the value of discourse as the costs for participating in conversation are not equal for all. 

There are numerous other factors to examine, including Elon’s ability to significantly impact markets with vague Tweets and the reluctance of the SEC to hold him accountable to the same rules everyone else has to follow. The methods used to gain control of Twitter seem to be orthogonal to Elon’s stated goals for the platform. Can you create an environment full of trust while acting in untrustworthy ways?  The answer to this question remains to be seen, but I’m very interested in hearing what you think.

May 30, 2022 by

Create Strong Brand Positioning in Your Market

 

What is Brand Positioning?

Put simply, brand positioning is the process of positioning your brand in the mind of your customers. Brand positioning is also referred to as a positioning strategy, brand strategy, or a brand positioning statement.

Popularized in Al Ries and Jack Trout’s bestselling Positioning: The Battle for Your Mind, the idea is to identify and attempt to “own” a marketing niche for a brand, product, or service using various strategies including pricing, promotions, distribution, packaging, and competition. The goal is to create a unique impression in the customer’s mind so that the customer associates something specific and desirable with your brand that is distinct from rest of the marketplace.

Ries and Trout define positioning as “an organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances.”

Brand positioning occurs whether or not a company is proactive in developing a position, however, if management takes an intelligent, forward-looking approach, it can positively influence its brand positioning in the eyes of its target customers.

Positioning Statements versus Taglines

Brand positioning statements are often confused with company taglines or slogans. Positioning statements are for internal use. These statements guide the marketing and operating decisions of your business. A positioning statement helps you make key decisions that affect your customer’s perception of your brand.

A tag line is an external statement used in your marketing efforts. Insights from your positioning statement can be turned into a tagline, but it is important to distinguish between the two. (See examples of brand positioning statements and taglines below.)

7-Step Brand Positioning Strategy Process

In order to create a positioning strategy, you must first identify your brand’s uniqueness and determine what differentiates you from your competition.

There are 7 key steps to effectively clarify your positioning in the marketplace:

  1. Determine how your brand is currently positioning itself
  2. Identify your direct competitors
  3. Understand how each competitor is positioning their brand
  4. Compare your positioning to your competitors to identify your uniqueness
  5. Develop a distinct and value-based positioning idea
  6. Craft a brand positioning statement (see below)
  7. Test the efficacy of your brand positioning statement (see 15 criteria below)

What is a Brand Positioning Statement?

A positioning statement is a one or two sentence declaration that communicates your brand’s unique value to your customers in relation to your main competitors.

In Crossing the Chasm, Geoffrey Moore offers one way of formulating a positioning statement: For (target customer) who (statement of the need or opportunity), the (product name) is a (product category) that (statement of key benefit; also called a compelling reason to believe). Unlike (primary competitive alternative), our product (statement of primary differentiation). However, we provide a more simplified structure for formulating a Brand Positioning Statement in the following section.

How to Create a Brand Positioning Statement

There are four essential elements of a best-in-class positioning statement:

  1. Target Customer: What is a concise summary of the attitudinal and demographic description of the target group of customers your brand is attempting to appeal to and attract?
  2. Market Definition: What category is your brand competing in and in what context does your brand have relevance to your customers?
  3. Brand Promise: What is the most compelling (emotional/rational) benefit to your target customers that your brand can own relative to your competition?
  4. Reason to Believe: What is the most compelling evidence that your brand delivers on its brand promise?

After thoughtfully answering these four questions, you can craft your positioning statement:

For [target customers], [company name] is the [market definition] that delivers [brand promise] because only [company name] is [reason to believe].

Two Examples of Positioning Statements

Amazon.com used the following positioning statement in 2001 (when it almost exclusively sold books):

For World Wide Web users who enjoy books, Amazon.com is a retail bookseller that provides instant access to over 1.1 million books. Unlike traditional book retailers, Amazon.com provides a combination of extraordinary convenience, low prices, and comprehensive selection.

Zipcar.com used the following positioning statement when it established its business was founded in 2000:

To urban-dwelling, educated techno-savvy consumers, when you use Zipcar car-sharing service instead of owning a car, you save money while reducing your carbon footprint.

12 Examples of Taglines

Once you have a strong brand positioning statement you can create a tagline or slogan that helps establish the position you’re looking to own. Here are 15 examples:

Mercedes-Benz: The Best or Nothing

BMW: The Ultimate Driving Machine

Wharton Business School: The World’s First Business School

Miller Lite: Great Taste, Less Filling

State Farm: Like a good neighbor, State Farm is there.

L’Oreal: Because We’re Worth It

Walmart: Save Money. Live Better

Nike: Just Do It

Coca-Cola: Real Magic

Target: Expect more. Pay less.

Volvo: For life.

Home Depot: How Doers Get More Done

15 Criteria for Evaluating Your Brand Positioning Strategy

An intelligent and well-crafted positioning statement is a powerful tool for bringing focus and clarity to your marketing strategies, advertising campaigns, and promotional tactics. If used properly, this statement can help you make effective decisions to help differentiate your brand, attract your target customers, and win market share from your competition.

Here are 15 criteria for checking your brand positioning:

  1. Does it differentiate your brand?
  2. Does it match customer perceptions of your brand?
  3. Does it enable growth?
  4. Does it identify your brand’s unique value to your customers?
  5. Does it produce a clear picture in your mind that’s different from your competitors?
  6. Is it focused on your core customers?
  7. Is it memorable and motivating?
  8. Is it consistent in all areas of your business?
  9. Is it easy to understand?
  10. Is it difficult to copy?
  11. Is it positioned for long-term success?
  12. Is your brand promise believable and credible?
  13. Can your brand own it?
  14. Will it withstand counterattacks from your competitors?
  15. Will it help you make more effective marketing and branding decisions?

Repositioning Positioning

The unfortunate reality is that no marketer has the power to position anything in the customer’s mind, which is the core promise of positioning. The notion that positions are created by marketers has to die. Each customer has their own idea of what you are.

Positioning is not something you do, but rather, is the result of your customer’s perception of what you do. Positioning is not something we can create in a vacuum—the act of positioning is a co-authored experience with the customers.

Behind your positioning statement or tagline is your intention—how you desire your business to be represented to customers. Once the real role of positioning is understood, having a tagline or a positioning statement can be useful by clarifying your brand’s essence within your organization.

By examining the essence of what you are and comparing it with what your customers want, the doors open to building a business with a strong positioning in the mind of the customer. Why? Great brands merge their passion with their positioning into one statement that captures the essence of both.

Integrating Your Brand Positioning in Your Customer’s Mind

To position your brand in your customer’s mind, you must start from within your business. Every member of your organization that touches the customer has to be the perfect expression of your position. And, since everyone touches the customer in some way, everyone should be the best expression of your position.

Now comes the hard part: Put up everything that represents your brand on a wall. List all your brand’s touchpoints—every point of interaction with your customer.  With a critical, yet intuitive eye, ask:

  • How can I more fluidly communicate my brand’s desired position?
  • Does every touchpoint look, say, and feel like the brand I want my customers to perceive?

Many marketers don’t have the clarity and conviction of following through on their words. Without certainty, you default to the status quo. Turn everything you do into an expression of your desired positioning and you can create something special. This takes courage; to actively position your brand means you have to stand for something. Only then are you truly on your way to owning your very own position in the mind of your customer.

Onward!

May 23, 2022 by

Wikimedia & the Wild West: Who Do You Trust?

Obviously, there’s a lot happening in the crypto community right now. Events are developing very rapidly, highlighting many conversations individuals and organizations need to have about the role crypto plays in their finances.

That’s what we were talking about last week. 

At that time, our team was examining Wikimedia’s decision to no longer accept donations in cryptocurrency. To determine whether or not this is a good move, we asked two questions:

Would this decision make Wikimedia’s users love Wikimedia more?

Would this decision make Wikimedia’s users trust Wikimedia more?

Sometimes love is tricky.

There are people out there who are extremely passionate about crypto. Perhaps you’ve met one or two yourself. People who are passionate about crypto in a positive way believe that having an alternative currency helps democratize the world. They point to Africa, where cryptocurrency allows people to receive payment for their labor and services faster and more reliably than they’d been able to with traditional banking services. And they point to Ukraine, where cryptocurrency donations have been used to fund the fight against Russian invaders.

Surely Wikimedia, an organization that exists to democratize knowledge and make information available to everyone in the world, should be actively embracing the crypto community as fellow travelers.

Not so fast, the people who are equally as passionate about crypto, but from a negative perspective. Crypto mining has huge negative impacts on the planet and the people who live there, they say. China, hardly renowned for caring for the environment, banned crypto mining within its borders. Much of this business went to Kazakhstan, overwhelming the nation’s power grid and leading to chaos and political upheaval. 

Surely Wikimedia, an organization committed to sustainability, shouldn’t be involved with a crypto community that operates in such an environmentally harmful way.

But decisions have to be made. 

As much as organizations (and individuals!) would like everyone to love them, in real life, choices have to be made and decisions implemented. No matter what choice you make, someone will love you less as a result. 

Pragmatically, it’s a good idea to have some idea of the proportional size of particularly passionate people in your user base. We’re all familiar with the vocal minority phenomenon – a small percentage of customers who through volume and tenacity dominate the conversation. 

When this decision was made, cryptocurrency donations represented less than one percent of Wikimedia’s revenue stream. If this move alienates the pro-crypto contingent to the point where they’d no longer support Wikimedia’s mission, not much revenue would be lost. The love might be gone, but the wallet would still feel right. 

And meanwhile, the anti-crypto users who felt Wikimedia made this decision in order to better live their corporate values may now love the brand more. Walking the walk inspires lasting loyalty. 

Given the relative size of these user groups, it seems likely that this move will result in more love for Wikimedia. 

But what about trust?

Now, as I mentioned, this conversation happened last week. So we spend some time talking through how divesting from crypto meant missing out on future gains, and what did that mean to the trust Wikimedia’s users have in the brand. Was abandoning tomorrow’s fortune a violation of today’s trust?

Does avoiding a crash strengthen trust?

It’s very, very easy to debate this point at length, but before you do that, it’s good to remember what Wikimedia’s user base trusts them to do. And the answer to that, across the multiple platforms under the Wikimedia umbrella, is to be a repository for the world’s knowledge, accessible to everyone. That’s the primary mission. That’s the trust Wikimedia should be focused on building – certainly more than they should be focused on effectively managing a volatile asset during complicated times. 

So through this lens, Wikimedia’s decision built trust with its user base. 

Crypto and Trust: Welcome to the Wild West

Another of the primary reasons Wikimedia gave for no longer accepting crypto donations is the high risk of fraud. The perception that crypto is a high-risk, untrustworthy market had more than a few adherents last week. Now that there’s story after story after story of people suffering financial devastation, that perception will be even stronger.

Crypto’s trust issues are directly tied to the problems that make the alternative currency so helpful to people in tough situations: the lack of government oversight & regulation. Investor moves that would result in SEC penalties had they happened on Wall Street are creating and crashing the cryptocurrency market. It’s often characterized as a Wild West situation, where anything goes.

Will the crypto world stay wild and free forever? I have my doubts. Whether measures to create greater stability and accountability will be imposed by nation-states or financial institutions remains to be seen, but they are coming. The genie is out of the bottle: cryptocurrencies are here to stay. The challenge is making them more trustworthy.

What do you think? I’m very interested in what you think of Wikimedia’s choices, as well as the current challenges crypto faces in terms of the trust.

May 16, 2022 by