Part 1 Video start 0:13 - Amazon’s Earth Day promotions damages their reputation
Part 2 Video start 10:09 - Customer feedback & reviews can be so much more than just a number
Part 3 Video start 21:13 - With in store being up & e-commerce driving expectations, SMBs need an integrated digital approach
Transcript Ep 63:
Greg: Hey everybody here we are with Episode 63 of the Near Memo, not the new memo. It's the new near memo in which we talk about search social and commerce with a kind of local lens. And as always as David, Mike, and me Greg talking about the weeks big stories and things that are on our minds, and this was officially small business week in case people didn't know that.
Um, and so I'll be talking about that, but Mike is going to lead. First with an interesting, kind of the similar sort of, I don't know what you call these things. Like what is, what is small business week? How would you characterize.
David: Um, a hallmark event for commerce.
Greg: Okay. There we go. And so another hallmark event for commerce was earth day, which we didn't start out that way, but which has been sort of appropriated by a lot of brands and companies that want to promote their sustainability bona Fides or bone fides, depending on how you want to say it.
And Mike did some consumer research to understand whether this was kind of an effective tactic for Amazon and for two.
Mike: And I started because you accused me of being cynical after having received an email from Amazon.
Greg: I revised it
Mike: Okay. I'll, I'll accept skeptical. I received an email from Amazon touting the ability to buy sustainable goods in an email on earth day, and then right below it, they had TVs and remotes and monitors, and I thought it was just, it just struck me as bad tactics on the part of Amazon to try to burnish their image. You know, everybody knows that you go there to buy stuff and everybody knows not everybody, but many people know that when you send stuff back that it ends up in a landfill, and it just struck me as not great marketing that they would be marketing their Bona Fides to me. And so I was just curious if I was alone in that attitude or if it was more broadly based.
So I did three consumer surveys where I asked cohorts of 500 people. One was open-ended “when you see ads like this, what do you think?” And I let them put anything they wanted in it for an answer.
And I got answers on the positive side, “ways to keep earth clean and a healthy place”, and they're drinking the wrong Kool-Aid. And then on the negative side, “there's nothing really sustainable about these products. It's a scam”. So, and interestingly about 33% didn't care one way or the other in this, in the general surveys and about 40% thought in a general sense, it was positive and 27% thought it was negative. When I did the same advertisement or the same survey around
Greg: quick question. Did you show them the ad, physically show them that?
Mike: I did show the Amazon ad in each case, but when I specifically made the question about Amazon and showed them the ad significantly more people, almost 33% said they were much less likely to do business with Amazon as opposed to say 25% who didn't like it in the previous two surveys. So it just struck me and then it skewed fairly evenly. 32.2% were less likely to do business 34.4% in care and whatever 33 and change, we're more likely to do business.
And it just struck me that, that events like Christmas that have been so commodified that hardly anybody notices, although in this area, neck of the woods, we do see the occasional billboard about putting the Christ back in Christmas. Most people don't view the commodification of Christmas, quite the way they view these special events and particularly new newish events that aren't, haven't been around for 200 years, like earth day, or like black history month or Martin Luther King’s Birthday. And I think companies that are going to dip their toe in marketing around those events have to be triply careful to not be seen as glad-handing.
Greg: And I think it's which I think Amazon is in this case, but I think it's a really tricky problem because there was, you know, the, the gen Z in particular sometimes called the tic-tac generation Once companies to stand up for certain kinds of values, they want to shop with companies or from companies that, that are paying attention to the environment that are paying attention to gender equity and diversity and all these things.
And that that's, that's a genuine value. And so, and other people do too. But in response to that, companies feel compelled to put out these messages and to embrace progressive. Policies, you know, earth, day and sustainability, but then what we found from a survey that I think I linked to last week a survey of CMOs and internal executives that almost 70% of them said, we're not delivering against our promises around sustainability.
You know, whether it's on one extreme, just manipulative greenwashing or in another, or, or. Uh, less intentional behavior and just not being able to somehow fulfill what their objectives were. Um, you know, they're kind of caught in this there's public and social pressure for them to do this. But there's some way in which that's at odds with their larger mission to make as much money as they can in a public company context,
Mike: I would contend that let's take Amazon is a specific example of 33% of the recipients of that ad are going to do less business with Amazon.
How should they feel compelled to create. Cognitive dissonance in me looking at them, trying to sell me TVs and telling me how it's sustainable. I don't see it as an effective tactic. So
David: you another, if you just had a tile and that just had the Amazon logo, theoretically, that would be more effective than turning off 33% of your customer base.
Mike: that's what I'm saying here. I mean, removing all of the other things from this question. They are there, they're making a mistake by trying to fit themselves into this crazy box that they don't fit in. Right. It's one thing for Patagonia who builds better products consistently, who has a long history of environmental activism to maybe do it, but it isn't on earth day.
And I think that businesses have to be careful that they pick events that are truly compatible with their mission. And aren't just, you know, slapping on a label to look cool temporarily. Because I think they will do what Amazon did, which is piss off 33% of the world.
Greg: So you think it's much worse to be a perceived hypocrite than it is to, you know, I mean, what if Amazon, they do have a line of plan.
I forget what they call it. Planet friendly or climate friendly pledge. It's worse for them to sort of hold that than it is for them to say nothing, even if they're actually trying to do something, because it, it, it makes them vulnerable to perceptions of hypocrisy.
David: I think it has to be a sustained commitment to whatever you're marketing.
Right. So I don't think that you can actually just like put out a flyer about a, you know, whatever hallmark holiday is coming up, that it has to be something that you do for several years, and then you have a track record to actually be marketing them. Uh, which is Mike said, you know, Patagonia, REI, you know, there's plenty of brands out there that do have this track record where this kind of advertising.
Effective and not phony. So that's what I, I just think it needs to be, it needs to be more than just, this is you know, this was on our social media calendar to promote, you know, this on
Greg: for sure. Absolutely. But I mean, I want to encourage the trend to at least do something in this direction. Not market it with no substance behind.
But to embrace this, this is an important thing that companies should be paying attention to,
Mike: but long before they talk about it, they should walk it. They should do the walk before they do the talk and talking, it just opens you up to these kinds of criticisms because it is, it is so obviously hypocritical and not a sustained effort.
Greg: That's the same right now, but maybe in a few years it will be sustained as your well
Mike: then Amazon should be vetting products for durability and for quality and making sure that their return process doesn't end up in a landfill, right? They should be doing these things, should be going farther
Mike: And maybe, but even then, I don't think a company that sells products should use Earth Day as a way to sell more. Even then, right. I think that there is a misalignment that they don't even perceive. They're crossing that they're crossing
Greg: well, you know, it would be interesting to see if you were to do that survey again, I'm not suggesting that you should with Apple, right?
Because Apple has been, has been over time, ever since really, since Tim Cook, I think has been trying to build more sustainability into their supply chain and they have in fact compelled, many of them. Suppliers to use renewable energy. And so they're able, because they have so much market power to do some good.
Now, you know, there's a question about auditing and are people really doing it, but it would be interesting to see whether that view exists across the board with all these big companies, you know, Google, apple, et cetera.
Mike: Yeah. The skepticism, you mean where a third of people think it's inappropriate. Yep.
Greg: Okay. So we're going to move on now. That's a fascinating topic. We could talk about it for a lot longer, obviously, but we're going to move on now to. A completely different topic about yeah, that's, that's how I segue smoothly. Now we're going to talk about something completely different and now for something completely different.
So David , one of our contributors, Adam Dorfman from reputation used to be called reputation.com. Now just reputation wrote a piece this week that went up this week on unstructured data and how you should be. Collecting consumer feedback from all these different sources, not just focused on your outbound survey or your NPS score, because you're going to get a much better view of what your brand stands for and how people think about it.
That was the segue perception of the brand there. I missed it retroactive after the fact is better than none at all. Okay. So take it away. So
David: Adam's excellent article sort of dovetailed with a couple of other items that came across my desk this week and the conversation I was having with a client thinking about implementing a fairly significant change to their reputation management process internally.
So all these things sort of came together for me this week. I think first of all, I want to highlight the, the value as Adam calls it, the value of unstructured data around consumer experiences. I think that. The number of, particularly on on social platforms like Twitter and even points out on Tik TOK.
Um, the, the number of consumers who are organically talking about their experience with you outside of any actual process of the company, gathering feedback, number one, number two, outside of any. Any effort to gather that feedback on a review platform like Google or bizarre voice or whatever, whatever review platform you're using as a brand.
I think that the, the importance of just listening is, is really, really important. Um, one of the things it also drove home for me is something that Mike's been talking about for years, even since I think even since, before he was involved in gather up, but you know, that. The, I don't even know if it's inability, but just the trend or the reality of so many companies soliciting all this feedback just for the score, right?
Like that they, they are, they are just oriented so far around. How many stars do we have on Google or what's our NPS? is our NPS. 65?
Greg: It's an important it's a metric that people track for internal purposes often around you know, employee bonuses and other kinds of things.
David: Right, but there's no, there, it's like, you're totally missing the forest for the trees because you're not actually taking that feedback and trying to improve your business.
You are just looking at the number. And I think that that's, you know, it's. Not only are you not listening sort of broadly and widely enough, but you're not even listening to the customers who are giving you this feedback in a, in a structured way. Um, you're just sort of looking at the number and, okay. So that, that was sort of the PR piece of, of Adam's article that got my attention.
And then that also dovetailed with this, another article that we'll share probably next week. And the near media newsletter from a company called growth design. And I absolutely hated their presentation of this article. They did it in sort of a comic book, strip format, which I just found incredibly annoying.
I would rather just see it in text, but the takeaway was, I thought really valuable, which is. We have gone so far down the NPS track that, you know, so many companies are now using this as a metric for, for tracking things internally. Uh, it's even something that all of the review platforms in our space are using.
Thanks in no small part to gather up sort of being at the forefront of this, but the whole notion of NPS actually makes it more difficult to. Uh, get feedback from the largest sample of customers. So this growth design article highlighted an email that came from, I think, the guy's bank about how the, how his experience was when he was making a deposit in the last week or whatever.
And then all these, all of these solicitations. You know, start with this big block of text and then they ask you to sort of, you know, look at a specific question and then pick a number on it on a 10 point scale and the point of this article. And I think that the one that resonates with me is that a better email is simply to have a sort of frowny face neutral face or a smiley face.
And then to ask someone to sort of follow up with more granularity about their experience. And I think. This is, this is something that could be true for businesses of all sizes to sort of take their time to simplify their review, ask in an effort to gather more feedback. Number one, number two, it seems particularly problematic for a lot of these big enterprises that are implementing very complicated consumer feedback software along the lines of Qualtrics, which I think is one of the worst offenders that create these.
10 step, you know, 10 page surveys where they're asking about, you know, every possible with grids, exactly every, every possible data point of your entire experience with that company. And then asking you to rate that on a particular particular numeric scale. And, and I just seems like they're missing the actual, you know, the, the.
For customers who are going to fill that out are the ones who are really, really motivated. So did they have an incredible experience or was it a terrible experience? And so they're actually missing most of the feedback that they should be gathering. So I think both of these two articles sort of point to the need to take a wider view of what the experience is at your business, and to try to actually listen to what that wider set of consumers is saying to make a difference in how you're doing business moving.
Greg: I think the point that you, I'm sorry to cut you off, Mike.
Mike: Okay. Which is the critical point, which is make a difference on how you do moving forward. Is that letting it sit there and not taking any action on it is really wasted energy all the way around.
Greg: I would, I would make two points one. When I think that it's really important that you made David is the, the very myopic focus on, on ranking or, or scores or whatever and not, and not.
Absorbing the information, the genuine customer feedback information in terms of how to improve the business and about the unstructured versus structured data. When you send out a survey, I mean, we were, we were working on a survey for agencies digital agencies, you know, you have certain biases and assumptions that you go in with and you have you formulate questions.
Uh, then drive certain kinds and you create multiple choice answers. And so you, you skew things. You're not getting true organic feedback. You're getting a kind of a directional snapshot of something. But if you are capturing data from unsolicited feedback across the internet, then you're getting.
Feedback that you can supplement with your own structured feedback and kind of get a sense of what's going on, or it can inform your structured feedback, but you really need to, to, to not rely on exclusively unstructured information, because it may be, it may miss things entirely.
David: And even on a structured front, I think, you know, we've seen apple go in this direction with its new, relatively new reviews feature where, you know, they may ask about six or eight different attributes specific to a business, but it's a thumbs up or thumbs down scale.
And it's like, it's quick and easy for a reviewer to actually fill out. So I think yes, using, using the vast amounts of unstructured. Uh, feedback about your business to potentially identify what the six or eight things you're asking about in a survey is definitely a good thing to do, and then make it really easy.
And don't create these sort of multiple level levels of cognitive friction for the consumer to actually rate you on those six or eight data.
Mike: Right. Yeah. I mean, I gather up Aaron Waikiki, various stupidly when we added surveys, limited to five questions, zero to 10 answers so that the scale matched the NPS scale.
So there was no cog, no huge cognitive lift. It was very lightweight. And a text box was more prominent than all of that. So, but I think you have to, I mean, I think. That there is a way to not throw the baby out with the bath water. NPS does have value because it is standardized across so many industries, but it only has.
Uh, when it is combined with full-text understanding and the ability to fix these things and not burdening the customer with all of this crap. I mean, there is some value to MPS and, but it isn't, it isn't the end all be all endo, whatever.
Greg: Well, I always, I always, I always think about, I mean, classic NPS is, would you recommend this business?
Or how likely are you to recommend this business? And I, and I always wonder, right. I always, I always wonder, like on the outside of the extremes, let's call it, you know, one to three and seven to 10, like in the, in the middle, which is sort of going to be, as your survey indicated where a lot of people are gonna are gonna be.
How do you interpret those results? Just that's bland mediocrity and people are ambivalent
Mike: well, NPS divided into detractors supporters and everybody else, and supporters are only nines and tens. Detractors are zero through six, or they w they analyze the scale and reallocated it so that it is D tractors.
And ultimately the measurement is a subtraction of the detractors. Uh, promoters. So they they've skewed it. They don't skew it. The way of five scale is skewed only nine and 10 is, are
Greg: promoters, I suppose. I suppose it shows you if you're improving over time, you know, if you benchmark your own Ms. Yes.
Mike: Although it's a trailing indicator, right? You have to be careful the, the way the averages work with it's very difficult. Once you have a low number to build it higher. So you have to be sure to segment and under. Plotted over time so that you can see if improvements are being made, but it does have some value.
My point is that it shouldn't be the primary thing and it shouldn't be part of a grand 20 question survey. I mean, people should be able to give their feedback to externally and a business should be looking everywhere for feedback. I think all that, both of those things can be true. You just have to limit your desire to get 30 questions answered.
Isn't going have. Yeah, well, that's
Greg: all for this week on survey design. Welcome. Join us next week when we'll be talking about no. Um, so I'm going to, I'm going to conclude today with kind of a composite kind of story, because I couldn't quite zero in on any one thing in particular. So there's some interesting things going on.
First of all. Shopify bot deliver for 2.1 billion and that's designed in part to compete with help them better compete with Amazon for around logistics and fulfillment and, and beef up their own Shopify fulfillment network. So in theory, I guess they are going to entirely take care of fulfillment for their customers.
E-commerce customers door to door. And so that, that, that really bolsters in and supports their sort of broader mission and, and positions them really, truly as a counterweight to, to, to Amazon for independent retailers. Um, then it was also small business week this week. Um, and so that I, I wrote a few different pieces in the newsletter about the kind of state of small business based on some survey data and some other information.
In general small businesses are doing okay, they've come out of, most of them have come out of COVID, even though COVID is still very much with us. And you know, there's, many of them are sort of back toward the pre pandemic levels, but not all of them. And, but now they're facing all these sort of macro economic problems, which supply chain, which persisted, you know, it was kind of still, inflation, although that hasn't really impacted consumer spending so far and labor shortages, which are a perpetual, you know, hiring problems, which are perpetual small business problem, but they're particularly cute right now. And so this there's a kind of perfect storm of things going on. That may be even more difficult for them than, than the lockdowns we're in some, in some respects, but many small businesses survived the lockdown, according to a Salesforce survey done by Harris by adopting digital tools and digital capabilities in e-commerce, which is something that lots of people talk about. We knew, but in that particular survey 71% of the respondents, and it was an international survey of about 2,500 businesses. 71% said, the reason we survived is because of.
We invested more in digital capabilities. And I, that was actually 71% of the growing businesses in particular. And yet now what we're seeing this week is a lot of companies reporting earnings, Amazon and Shopify, and overstock and eBay and Etsy and, and wish and Wayfair. And they're all.
Disappointing investors with, with weaker than expected results or providing weak guidance, guidance, and their, and their share prices have all declined. And so the whole e-commerce sector right now is being hit by a lack of, or loss of confidence rather. Um, and what we see in terms of spending is that e-commerce is now down sequentially about 2% from where it was.
And I think that's, that's. Um, the previous month, I think it was down even more. And then in store spending has gone, is up according to MasterCard in April 10%. So we're seeing people go back into stores. They're spending less money online. This is contributing to this sort of loss of confidence. So where does all of that stuff now?
Um, you know, because I think there's, there was, there was an overemphasis on digital sort of taking over traditional shopping and everything was going to be online. And now we're seeing a kind of correction back to, to something that doesn't exactly resemble the pre pandemic period, but is more consistent with it in the sense that people like to be in stores and they, and they, they, they rely on stores.
And so what I would conclude from this is that, you know, digital has advanced. Greatly you cannot succeed without it. And everything starts online. Absolutely. Everything starts online discovery contact, initiation, everything. And so you have to really be right there and you have to have an optimized presence, but e-commerce is not going to swallow up all of the traditional retailer, traditional shopping and digital and e-commerce are not entirely synonymous.
So, you know, especially in a. In a, a, you know, when we talk about e-commerce we think about products and retailers, but the services sector is much larger than retail, and there's a lot of stuff that they need to do digitally that isn't necessarily shipping things. And you can't ship, you can't fulfill in many service cases online.
So I don't know if that was coherent, but we're in this sort of post. Slightly post COVID period where e-commerce is not growing by triple digits, but you can't, you can't say, oh, well, that was just a, sort of a momentary fever dream. Everything has shifted online. Absolutely. Everything has shifted online.
You have to be there when people are looking for you. And so the stakes are even higher from a digital standpoint than they were in the past. Yeah.
David: You sort of ruined my follow-up a little bit by, by adding that service angle and at the end, which I think is an important thing. Um, I was gonna say that it, to me, it feels like the two things that the first of all, that COVID has shifted consumer expectations dramatically that we are now, we now all expect to be able to check out online, to book an appointment online, to have things delivered to us you know, within a 30 minute online pickup in store, right. Exact right. To put, put an order in and be at the store in an hour and it's ready for me and I don't have to shop. So we, I think it's definitely a fact that consumer expectations. The second thing is I just gave a presentation to.
Crew of folks I work with at prosper Portland this past weekend. Um, I actually think I'm, I'm sort of, I don't understand wall street a thousand percent of course, but like, I'm sort of surprised that companies like Shopify are getting. To the extent that they are, because I actually think that the Shopify in particular square Squarespace, there's plenty of others, but a lot of these platforms that either started out only as point of sale, or only as e-commerce have expanded their suites to such a level that they are now.
Omni-channel and that's really the thing that's. I think most important moving forward as you can't, as you said, you can't only be online. You can't only be in store, but man, what a pain in the butt, if you have two different systems for your website and your, your point of sale system. And so I, I think.
I think in the long run, it's probably better for these these sort of all-in-one solutions that have done a good job with product investment over these last two and a half, three years, or a good job with their MNA activity. You know, we saw Squarespace acquired talk as an example of that. Um, so I think that the overall outlook for digital platforms that serve small businesses, you know, should be positive in the longterm, it might just be you know, wall street doesn't seem to like anything right now. Cause inflation and well, there's a lot of, there's a lot of everything else.
Greg: There's a lot of fear and there's a kind of herd mentality. So when, when you know, there's this sort of domino thing that's happening
David: I, I,
Mike: the stock market was at record levels that had been there for awhile.
Greg: It's like sort of irrationally strange. You know, but I, I, I agree. I mean, these companies that are positioned, this is a slightly different conversation, but these companies that are positioned to enable small business commerce, broadly defined, including service businesses and appointments and online presence and all of that, I think that the, those companies are in a really strong position in Shopify too.
And I think this is a sort of a, you know, buy on the dip is what the cliche goes. You know, there's, there's just a, kind of a reflexive abandoned. Because they didn't you know, hit the numbers that they were expected to. And so there's this you know, fear that kind of creeps in, oh, the growth is over and we've got to, you know, we've got to sell, right.
But I think, I think a longterm view of the market supports what you're saying and that these companies will, will do well. And you cannot, you cannot succeed now without digital investment, as a small business, you know, I, or. Conversely you've got to be tied into a platform that is, you know, doing it on your behalf, which, you know, as you guys have argued is not a smart strategy to not have your own, your own website or your own capabilities.
You know, if you rely exclusively on Facebook or Google, you're going to ultimately get burned in some. But you know, we w we're, we're kind of at the 30 minute mark, so we need to go, I mean, that would be a segue into next door and what it could do for small businesses, but we'll leave that for another time.
So thanks everybody for joining us. Come back next week, subscribe to the newsletter be patient with us as we figure out how we're going to make money. We've changed our minds a couple of times. And ultimately we'll do something, something fun for you. But we're still working through that. So have a great weekend or rest of your week.
Mother's day. Happy mother's day in fact. Yes. The another, another opportunity for corporations to hallmark holiday holidays, literally in this case. Okay. Goodbye everybody.
Mike: All right.