Cognitive fluency and the bottom line

27 07 2011

“Simplicity works wonders. It’s satisfying, motivating and seductive.”

So says Ken Segall, the advertising whiz who is responsible for many of the campaigns that have played a huge role in transforming Apple into one of the most successful and influential companies on the planet.

Nearly a year ago, I wrote a piece on Segall and the power of simplicity in marketing and business in general.

Since then, the term “cognitive fluency” — which goes hand-in-hand with the power of simplicity — has been popping up more and more in the media and business circles.

Cognitive fluency became a hot topic among psychologists in 2009. In its simplest form, cognitive fluency means this: people prefer to think about things that are easy, rather than things that are hard.

Seems like an obvious idea.

But where it gets interesting — for psychologists and for business — is the extent to which cognitive fluency influences people’s behavior.

A recent study compared the stock returns of public companies with easy-to-pronounce names with those of companies with hard-to-pronounce names. Tellingly, the companies with easy names significantly outperformed those with difficult names.

The study’s authors concluded that just the complexity of a company’s name influenced people’s willingness to invest in the organization. Simple names attracted investors. Cryptic names turned investors off. And it’s not even a conscious decision; it’s just the way the human mind works.

Another widely cited example involves 401(k) offerings. Conventional thinking among companies used to be that the more investment options they included in their retirement plans, the more likely it would be that employees would enroll. Not so.

The data shows that when consumers are faced with an overwhelming array of investment options, they’re basically paralyzed by the sheer number of choices, and many end up not enrolling at all. By simplifying their offerings and making their plans easier to digest, companies have seen increased participation in 401(k).

The power of cognitive fluency applies to all facets of business: your products, your services and your communications. When you are trying to influence the behavior of consumers, employees, shareholders, or any of your other publics, substance and simplicity are key.

Your website should be simple, clean-looking, and easy to navigate. Your sales proposals should get right to the point, making clear your value proposition. Your employee communications should be focused and free of complexity.

Human beings crave simplicity, and they recoil from complexity. By applying cognitive fluency to all facets of your business, you’ll do a better job of connecting with your audiences, you’ll avoid sabotaging your ideas, and you’ll reap the benefits in profitability.


Thought leaders getting ahead

20 07 2011

Thought leadership marketing is not a new concept, but the importance of it in the B2B sector continues to grow at a rapid pace.

More and more, suppliers are getting ahead of the sales process by making themselves known in the marketplace and facilitating conversation, which in turn leads to customers contacting them — rather than the other way around.

Effective thought leadership marketing (TLM) provides potential customers with information or advice that is useful to them, which:

— Makes customers aware of who you are, what you do, and how you add value
— Demonstrates (rather than simply states) that your company is an expert and leader in your industry
— Illustrates that your company understands and can address the specific needs of the potential customer

TLM can come in the form of a blog post, a newsletter, a speaking engagement, or a webcast, to name a few. Again, the key is to provide information or advice that’s useful to potential customers and, when possible, breaks new ground in the industry. Straight self-promotion that doesn’t provide the customer any value or insight is not thought leadership marketing.

The ultimate goal is to reach the point where customers view your company as a trusted adviser. The term “trusted adviser” is talked about a lot these days in business circles, but don’t mistake it for simple jargon. The data shows that “trusted adviser” is an enviable position for a business to be in.

A recent study published in the MIT Sloan Management Review reveals that customers that gain insight from an organization through thought leadership content exhibit higher loyalty scores, place greater value on the organization’s complete suite of services, and ultimately value the shared wisdom of the supplier as part of the overall value equation.

Thought leaders and trusted advisors begin to benefit from “pull marketing,” which means they increasingly are sought out by companies who want to do business with them because of their ideas, willingness to share, and transparency. In the publication, How To Become A Thought Leader, several interviewees attest to having seen their recognition in the industry increase, their “push marketing” expenses drop, and their revenue grow as a result of thought leadership.

Even when there is some direct selling to be done, companies that have earned trusted advisor status are at a huge advantage. In his 2006 book Lead Generation for the Complex Sale, Brian Carroll discusses a research report that revealed that salespeople who had reached the status of “trusted adviser” were 70 percent more likely to come away with a sale.

Add it all up, and it’s clear that thought leadership marketing is a wise move for just about any B2B supplier.

To borrow a quote from former presidential speechwriter James Humes: “The art of communication is the language of leadership.”

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Storytelling for engagement: the Idol way

30 06 2011

What happens when a communications department passes the mic to the employees, asks them to tell the company’s story, and sprinkles in a little Ryan Seacrest?

Employee engagement, that’s what.

Melcrum recently shared a fun example of how one organization called on its workforce to promote engagement through storytelling, with an American Idol twist.

In October 2010, tech giant Neustar wanted to educate its employees on how to tell the Virginia-based company’s story to various audiences: potential customers, friends, family, etc. Research had shown that many employees didn’t have a complete understanding of all the services Neustar offered or how to pitch the company.

Rather than have the comms team produce the campaign or hire outside talent to illustrate the message, Neustar decided to provide the base messaging and let its 1,000+ employees take it from there. To ensure that employees in locations across the globe could participate, the campaign would have to be video-based.

In his project report, Neustar’s David Carson explains:

“We decided to hold a ‘We Connect Everyone’ Neustar Idol Contest. Employees anywhere throughout our global locations could participate by submitting a video recording of their 60-second Neustar pitch.

“We provided messaging documents as well as recorded a somewhat tongue-in-cheek training program in our Learning Management System. Employees had approximately a month to develop their videos.”

Once submissions were accepted, they were posted on Neustar’s intranet, where employees had two weeks to vote for their favorite video(s).

Carson continues:

“We received a total of 10 video submissions, with entries from Virginia, Kentucky, California and the United Kingdom. The entries were creative and varied in terms of style and tone, including compelling, lecture-style pitches, cartoon/animations and fully-integrated departmental collaborations.”

The top five vote-getters would be shown at Neustar’s December 2010 All Hands Meeting, with the winner receiving a trip to the Caribbean and the honor of being crowned 2010 Neustar Idol.

In keeping with the Idol theme, the five finalists presented their videos at the All Hands Meeting with a Seacrest-like host moderating. There was also a panel of three judges on hand: a correspondent from a major news organization, Neustar’s messaging expert, and a teacher/performer from the Washington (DC) Improv Theater. After each video, the judges provided humorous and critical feedback.

Once all the video were presented, employees were able to text their vote in real time by using one of Neustar’s products, Common Short Codes. When all the votes were submitted, the organizers tallied the results and announced the winner.

After rewarding the contest winner with the trip to the Caribbean, the Neustar comms team got its reward with some very encouraging results:

— A record 400+ employees (virtual and in-person) attended the All Hands Meeting.

— Neustar hit capacity on its phone lines (200+ on the dial-in) and had to increase the number of open lines.

— 87 percent of survey respondents Strongly Agreed or Agreed that the Idol contest increased their understanding of what Neustar does.

— 84 percent of respondents Strongly Agreed or Agreed that the event was engaging.

Despite the relatively low number of video entries, Carson said that was plenty for the campaign to be a success:

“We were more interested in providing varied examples of our ‘elevator pitch’ to a wide audience of employees and less concerned about the actual number of employees who submitted entries.”

The qualitative data also points to success:

“The Neustar Idol contest was very informative in letting us know how we CONNECT.” – Survey Response

“The perfect balance between providing structured information and open forum. This is the best way to provide employees a sense of common goals and objectives.” – Survey Response

The judges have spoken.

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The dawn of the ‘zero email company?’

20 06 2011

The announcement earlier this year by global software company Atos Origins that it plans to become a “zero email company” by 2014 has sparked much discussion about email and social media as internal communications tools.

In an effort to combat what it calls “information pollution,” Atos will replace its email system with tools such as Microsoft Lync (instant messaging, voice over IP, video conferencing) and Yammer (basically, Twitter for the workplace), as well as social community platforms to share and keep track of ideas from management through to sales.

As it relates to email, it’s unclear what exactly “information pollution” means. But Atos reports that it has been encouraged by the early response to its campaign. William Rice, who heads the team that’s overseeing Atos’ zero email initiative, told Melcrum that the company’s 50,000-pus workforce has begun making better use of instant messaging and other technologies in place of email.

There’s no doubt that internal communicators should take advantage of social media in their efforts to cultivate an inspired, motivated and engaged workforce. Tools such as YouTube, Yammer or a customized social networking site promote community, conversation, and an exchange of ideas.

But does that mean there’s no longer a place for email? Should it be an either-or proposition?

Critics of the zero email theory say there needs to be a channel for communication that is “authoritative” and “official.” They say that social channels carry with them an informality that is sometimes inappropriate. New channels are great, but there needs to be an information anchor that is simple and consistent.

One person who commented on the Melcrum story thinks Atos is making a big mistake:

“What on earth are Atos thinking? Social channels are absolutely terrible for formal, top-down communications, e.g., a note from the CEO on strategy — ends up with lots of chatter, lots of misunderstanding, lots of side discussions, and inevitably, the original meaning becomes muddied…Social media will spiral out of control many times faster than email. My advice to Atos would be to implement a channels protocol — define what channel should be used for what purpose.”

Another person who commented is more open to the idea of a zero email company.

“I think, looking to the future, that the working environment is becoming more flexible and social — companies are offering employees a lifestyle now, not just a way to earn money. So perhaps social media tools are the best channels to supply information to the future workforce as the world of work becomes less rigid and more social itself.”

What are your thoughts on email and social media as internal communication tools? Should companies begin phasing out email, or do you feel that is a mistake at this point?

Let your brand’s best advocates sing

26 05 2011

Don’t silence your best ambassadors.

That’s the message Text 100 — a global PR consultancy that has worked with dozens of leading brands, including Facebook, IBM and Cisco — sent in a recent post on its company blog.

In the post, Text 100’s Lance Concannon explains that many organizations are missing out on a huge opportunity when it comes to social media. Namely, they are not allowing some of their best advocates — creatives, IT professionals, research and development specialists, etc. — to tell the brand’s story.

Traditionally, companies have communicated with their audiences strictly through their PR, marketing or comms departments.

Even as many have “embraced” social media, they still funnel the flow of communication through their words people.

Concannon writes:

“Profiles are set up on channels like Twitter and Facebook for the PR and marketing teams to push out their messaging, and social media guidelines are drawn up to discourage employees from talking about the company online.”

Concannon acknowledges that, of course, social media should be used for PR and marketing purposes, but he says that businesses need to understand that it shouldn’t stop there.

He continues:

“At Text 100, we’re currently working with a global tech brand to identify superstars from all across the business and enabling them to actively talk about their jobs in social media channels. None of these employees are comms professionals, but they are passionate about the work they do and are excellent ambassadors for the brand.”

Rather than insisting that only the comms team talk about the business in social media, the tech company recognizes that the best stories about the brand come from the people who work on the front lines. A company can talk all day about what its brand represents, but real-life, first-person examples carry so much more weight.

To help these ambassadors tell their stories, Text 100 has developed a training program that gives them the skills to engage audiences online and to talk authoritatively on behalf of the company on industry blogs, forums and other social channels.

According to Concannon, the benefit to the company is clear:

“With these advocates taking the organization’s stories out to hundreds of different touchpoints across the Web, the opportunity for potential clients and other stakeholders to witness the brand’s expertise firsthand is far, far higher than if social media was left entirely in the hands of the marketing people.”

Social intranet nurtures innovation

11 05 2011

A quick rundown of Fast Company’s Most Innovative Companies of 2011 affirms that innovation is synonymous with success.

No. 1 on the list is Apple, an innovator in every sense of the word. No. 2 is Twitter, which has experienced five years of explosive growth by redefining communication. Also present in the top five are Facebook — you might have heard of it — and Groupon, a little coupon startup that’s suddenly worth billions.

It leads one to ask: How have these companies done it? If innovation breeds success in the modern marketplace, what breeds innovation within these modern companies?

There are of course a number of factors. A nondogmatic approach, willingness to fail, and a strong sense of what the company stands for are three that Fast Company identifies.

Another component that most, if not all, of the world’s leading companies have in common is an open internal culture in which knowledge sharing is celebrated. They actively encourage a flow of ideas among all strata of the organization, and just as important, they give their workforce the tools to share those ideas easily and without fear.

In the most innovative companies, those “tools” come in the form of a social intranet.

Monica Krake — Principal and Communications Director of The Social Agency, a PR and social media marketing firm — recently wrote a piece for Manufacturing Business Technology on the role a social intranet can play in the success of a company.

Krake profiled Continuum, a global design firm that has helped create many well-known products, including Proctor & Gamble’s Swiffer Sweeper.

Krake writes:

“In order to help employees build connections with each other and share knowledge easily, Continuum realized it needed an inviting, collaborative intranet. In 2009 they started looking at different software options and decided on ThoughtFarmer, which actually coined the term ‘social intranet.’ Continuum picked the ThoughtFarmer social intranet solution because of how easy it made it for any employee to publish content and for its flexibility in moving content around.”

Modern social intranets make it easy to have top-down, bottom-up, and peer-to-peer communication. Social intranet software finds inspiration in the most popular social software like Facebook, blogs and wikis, and repurposes key social features for business-specific uses.

“It takes two things to make an intranet social,” Chris McGrath, co-creator of ThoughtFarmer, told Krake. “It takes authorship — the ability for everyone to create content — and connections — the ability to see the people behind the content and to connect with them in some meaningful way.”

Continuum allows any employee to post news to its intranet homepage. The intranet, called “Orange” after Continuum’s corporate color, has a homepage news section titled “Fresh Squeezed,” where any employee can add a post with just a few clicks. Continuum employees share news about projects, clients and ideas, and virtually every page allows commenting, which creates valuable dialogue and meaningful connections.

“Orange” also allows any employee to set up interest groups. About 140 groups have sprung up so far, focusing on specific practice areas or professional disciplines.

“Since Orange came online, more people have been able to access the knowledge residing in individuals, but also the contribution to that knowledge has grown in some really wonderful ways,” Continuum’s COO Chris Michaud told Krake. “And that means we’re better at doing our client work.”

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Communication means business

25 04 2011

Imagine a basketball coach who meets with his team in the beginning of the season, assigns roles to his players…and then hardly interacts with them again.

He doesn’t communicate with his team during games. He doesn’t tell the players what he likes and dislikes about their individual performances. And he certainly doesn’t share his overall plan for the team and where each player fits into that plan as the season unfolds.

Sounds absurd, right? Well, that’s essentially how many businesses today are interacting with their employees.

In his book, You Can’t NOT Communicate, corporate communications veteran David Grossman discusses how companies that actively engage their workforce are being rewarded with higher productivity and profits, and how companies that don’t are falling behind.

Grossman, the former head of communications for McDonald’s who now owns his own firm, advises business leaders to view communication as an instrument of strategy, and a strategy in itself. It’s important to remember that employees are actual human beings, and that human beings desire certain things at their job:

1. They want to know where the organization is going and the plans to get there.

2. They want to be informed of things in a timely, honest manner.

3. They want to be able to connect the dots between their day-to-day work and the overarching business strategy and goals of the organization.

4. They want to feel valued.

5. They want a feeling of community; that they are part of something larger than themselves.

6. They want a feeling of excitement.

7. They want specific feedback on their performance, whether that be recognition of a job well done, or guidance in an area where they can improve.

8. They want management that will listen to their input and make a sincere effort to follow through on that input.

By nurturing employees’ communication needs, companies create a real connection with those on “the front lines,” and good things follow:

— According to a 2006 report by The Conference Board, highly engaged employees outperform their disengaged colleagues by 20-28 percent.

— A 2006 report by Watson Wyatt Worldwide found that companies that communicate effectively have a 19.4 percent higher market premium than companies that do not.

— The Watson Wyatt report also found that shareholder returns for organizations with the most effective communication were more than 57 percent higher over a five-year period (2000-2004) than for companies with less effective communications.

Conversely, disengaged employees drain companies. A 2006 study by James Harter and Rodd Wagner titled “The Elements of Great Managing” found that:

— In a 10,000-person company, absenteeism due to disengagement results in roughly 5,000 lost days per year, which is valued at $600,000 in salary paid in which there is no work performed.

— Work groups with lower levels of engagement earn 12 percent lower customer scores than those on the higher end.

— Business units comprised of mostly disengaged employees have 31 percent more turnover than those made up of mostly engaged employees.

There are many in the business world who still view a strategic approach to internal communications as a “luxury” — something that’s nice to have, but not as essential as Accounting or IT. But, clearly, the statistics say otherwise.

“Savvy business leaders have seen firsthand the power of good employee communication and how it can drive business success from the inside out,” Grossman writes. “Quite simply, it helps people and organizations be even better.”

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