Stop the Presses

Does your company need another reason to start paying attention to the blogosphere?  Here’s a big one: mainstream media journalists monitor blogs on a regular basis. In the latest research studying the connection between traditional reporters and online citizen journalists, global communications group Brodeur found the following:

• Nearly 70% of all reporters read blogs on a regular basis
• More than 20% of reporters spend more than an hour a day reading blogs
• Fifty-seven percent said they read blogs at least two or three times a week
• Nearly three-quarters of journalists surveyed have a list of blogs that they check on a regular basis
• More than a quarter of all journalists have their own blogs
• Almost 75% of reporters find blogs helpful when it comes to helping them develop new story ideas and angles, and to getting a good idea of the tone of a debate or issue

Savvy companies understand that catching a story in the blogosphere–before it’s had the chance to bubble up to the New York Times–can have an impact on a company’s credibility, public image and even its stock price. We recommend you share these latest stats with those in your organization who insist a blog strategy isn’t necessary.

Abundance mentality is the belief that the more we give, the more we get. Scarcity mentality, on the other hand, is all about keeping score. In business–particularly among the staff that’s in the proverbial trenches–great customer service is about being empowered, a common understanding of flexible principles, and ensuring an unwavering focus on the customer.

I read a news story that epitomizes the benefits of an abundance mentality as it relates to customer service.  The story was about a man named Joe Nocera who had ordered a Playstation 3 on Amazon.com as a Christmas gift for his son. The PS3 was delivered to his apartment building but, through a series of errors, having nothing to do with Amazon, never actually made it to Joe. Joe called Amazon.com and explained the situation to them.

Now, I find it highly unlikely that the Amazon customer service representative who trusted Joe and decided to replace his missing Playstation 3 free-of-charge knew that Joe Nocera  was a New York Times columnist.  Somebody needs to give that person a raise–he just netted about a million dollars in free, credible publicity for the Internet retailer. Kudos to Amazon for empowering their customer service reps–the people on the front lines dealing directly with customers–the autonomy to make customer-focused decisions based on common sense rather than on inflexible policy.

Amazon has long been praised for its customer-first attitude; Nocera’s column is the latest in a line of accolades. It’s this kind of credibility/likeability factor that will help Amazon in any crisis.

When companies consistently treat customers with respect and caring service, it always pays off in the end. Those deposits in the ‘goodwill’ bank only seem to take away from the bottom line at first. Ultimately, they pay off in happy customers who refer more business and who come to a company’s defense in a crisis.

Paul Steiger, former Wall Street Journal managing editor, did a brilliant job of chronicling the recent history of print media, capturing what’s happened and what’s going to happen with this medium. At the end of his article, he announced his move to Pro Publica, a nonprofit organization “dedicated to reporting on abuses of power by anyone with power: government, business, unions, universities, school systems, doctors, hospitals, lawyers, courts, nonprofits, media.”

I predict Pro Publica will be one of the most important and aggressive investigative journalism efforts in years. With $10 million pledged in yearly funding, and soon, 24 investigative journalists, this organization will provide a valuable public service that few newspapers and hardly any broadcast outlets can still afford — original investigative journalism. Keep your eye on Pro Publica — it represents a tipping point in the shift from traditional media to “new media” — and make sure that your company or country is not within its journalistic crosshairs.

Last week, State Street Corporation ousted its investment unit chief and set aside $618 million to cover future legal claims against the company, according to Bloomberg.com. And then something very interesting occurred– the company’s stock went up. 

Why?

There are few things that Wall Street hates more than the question mark. By defining a beginning, middle, and end to the story, State Street made the story ‘old news’–and for this kind of definitive action, they were rewarded. The lesson here is that whether you’re talking about toy recall or an SEC investigation, moving expeditiously (when it is within your power to do so) almost always pays off.

State Street is a textbook case study in the right way to handle crisis communications:

1. They talked about it: Instead of trying to sweep the issue under the rug or issuing a terse ‘no comment,’ State Street talked about the issue, speaking openly to the media. 
2. They took action and made a sacrifice: The company set aside money to cover future claims–money that comes right off of the company’s bottom line. They showed that they were willing to do the right thing, not just the easiest thing, to rectify the situation.
3. They put a face on it:  Every story that includes conflict needs a villain. State Street replaced those individuals who were ultimately responsible for the subprime mortgage miscalculations, thus ensuring their particular misjudgments would not reoccur.
4. They sent a strong message: All of their actions sent a message to employees, media, analysts, and shareholders–we admit that we had a problem, and now we’ve solved it.   

State Street’s swift and definitive action allowed them to successfully stem the potential tide of bad media and even worse shareholder reactions. Other companies in similar situations would be wise to use the State Street situation as a crisis template.