If you are a business owner using traditional advertising, you have seen your advertising ROI decline over the last few years. Not only are your ads generating fewer leads but many business owners are experiencing lower prospect conversion rates, longer selling cycles and increased competitive pricing pressure. This is not a healthy business climate for sure.
OK, so the poor economy is the obvious cause and until it recovers their not much that can be done, you just have to batten down the hatches and ride it out, right? HELL NO! Currently there is a unique window of opportunity for innovative businesses to not only achieve substantial gains but also create a sustainable competitive advantage by creating natural online reputations. Let me explain.
Many of the root causes of our current economic calamity are also eroding consumer confidence and driving skepticism to record heights. In this era of high consumer skepticism, businesses who can give their prospects a tangible reason to trust them will stand out and excel.
Currently, two of the biggest drags on our economy are the home mortgage crisis and the global warming crisis. As people are loosing their jobs and feel the economic pinch at home they are starting to look for answers. What many people are discovering is both upsetting and fueling increased skepticism which colors all of their decisions including choosing to buy from you.
We are told that the financial meltdown is a result of insufficient government regulation of lenders when in fact the government played the key role in creating the housing mortgage disaster in the first place. It started with the Community Reinvestment Act going back to 1977. Although it set out with the good intention of expanding the American dream of home ownership, it has had the complete opposite affect. It created the housing bubble and when market forces came into play as they always do, it burst. This affected every home owner by greatly reducing or completely wiping out their home equity. By 2011 it is estimated that 48% percent of home mortgages will have a negative value. This is huge! John Carney gives an effective non-partisan explanation in the Business Insider – Here’s How The Community Reinvestment Act Led To The Housing Bubble’s Lax Lending.
The collapse of the housing market has had a major impact on our economy and will continue to do so for some time until the market fully corrects itself. The more intervention the administration takes the longer it will take for the correction to complete and the more difficult it will be to recover. In addition to the massive personal hardship that this has created for everyone it has also raised our skepticism as there has been no accountability by the system or the media. People know and feel that something is wrong – but most of the “news” fails to address their concerns. Perhaps this disconnect with the American public is the reason behind the falling numbers in network news.
The global warming “crisis” is way more insidious. The policies that have been implement as a result of one of the biggest hoax’s in the history of the world has had the effect of 1)Exporting high paying manufacturing jobs to other countries. 2) Increasing our energy dependence on countries, many who are not our friends. 3) Transferring of trillions of dollars to these same countries to purchase energy that we have here in the U.S. 4) Increasing global pollution by transferring manufacturing from the cleanest producing countries to countries that have little regard for the environment and employ very dirty processes. 5)corrupting science.-try to get a grant for research that doesn’t support anthropogenic global warming. 6) Increasing the tax and risk of manufacturing in the U.S. with the cap and trade (Tax). This is creating a huge disincentive to for businesses to build manufacturing plants here without large government subsidies. (Subsidies are just another euphemism for tax- someone has to fund the subsidy, right?) Subsidies also mean that the business can not compete on its own merits. This has resulted in higher energy prices, lost jobs, reduced tax revenues, increased global pollution and a dramatic increase in our debt.
Before you start to through stones at me I would suggest that you look at the documents that were publicized as part of climategate. Here is a great summary with complete links to sources. It is simply impossible for any rational human being to read the volume of deception over such a long time period and not at least be slightly skeptical! What ever happen to objective reporting. I don’t care how much Kool-Aid you’re drinking, when the authors of this piece of fiction are unable to support their theories without distorting data and suppressing dissenting views you have to wonder why their stated “consensus” can’t stand on its own merits, be defended in public debate or even be open to public inspection! Again this is the most costly scheme in the history of the world and the science supporting it is amateurish at best. As the tide of public opinion shifts away from the purported consensus people their skepticism continues to rise.
My point is not to change you view on either of these important topics. I use them because they are issues that people have a very strong emotional buy in on for a long time. As their knowledge increases, many people are coming to their own “consensus” which is a good thing but at what cost! Increasing numbers of people are far more skeptical of government and media.
Let’s bring this discussion back to growing your business. Today we are at a tipping point. Traditional push advertising or interruption advertising is becoming less relevant and more of an annoyance to consumers every day. Consumers know when they have a need and simply search the Internet at their time of interest to find a local business. Consumers are more influenced by what you your customers have to say about your business than what you say it. Search engines like Google know this and they have been combining social media in the form of ratings and reviews with their organic search results which you see with their bubble maps.
The demand for consumer reviews is huge and today there are some 8,000 rating and review sites and over 300 million blogs. Although consumers trust authentic consumer reviews, the reality is that it is impossible to tell an authentic review from a fake review. The very openness of social media also makes it very vulnerable for abuse and manipulation.
Today we have a new class of services that provides reputation management solutions for businesses. The goal of reputation management is to enable businesses to craft an online reputation that creates a “managed” image by which they want prospective customers to view them. To accomplish this they create and promote a constant stream of positive content to control the “image” and to bury negative content deep in the search engine results.
Ultimately this practice will render social media as useless as traditional advertising which 75 percent of people are skeptical of.
At Trust FX, we believe that social media is the most value source of information for consumers to help make local decisions, but only if it is authentic. We call this a natural online reputation or NOR. A natural online reputation is one that is unfiltered. It reflects the average customer experience and is the single best predictor of future customer satisfaction. Because natural online reputations are authentic and unfiltered they work best for business that consistently set proper expectations with their customers and then consistently satisfy those expectations. Since this is what consumers are looking for businesses that develop a natural online reputation quickly will dramatically increase their ability to attract, convert and retain high value customers more efficiently than currently possible today using alternate forms of advertising.
Now there are thousands of rating and review sites on the Internet today. One of their key limitations is their inability to authenticate individual customer reviews. This means that as a consumer you have no way of discerning which reviews are authentic from those that are fake. Unless you trust the rating engine it hard to place much value in their scores.
Trust FX has developed a patent pending service that addresses the gaming issue from both the user and the business perspective producing reviews whose authenticity are vastly superior to those of our competitors. We believe that our unique process and the transparency of our rating engine will give quality businesses a marketing tool that truly differentiates them in the eyes of their customers.
There are a number of elements that comprise a natural reputation. I will describe each of these elements and their trade offs right here over the next few days. I look forward to your comments and criticisms.
Andrew Ward
Chief Trust Officer
Trust FX
