Wednesday, March 26, 2008

The Cost of Passionate Consumers

I am not a pile on blogger. I write what strikes me when it strikes me, although many of my friends and colleagues know that I spend a lot of time studying and then regurgitating my opinions and findings about the implications of social media and virtual worlds. Which, today is about the hidden but real cost of passionate consumers.

To that end, I am not going to waste my words reporting on the new Second Life Brand Center announcement except as background:
  1. On March 24th, Catherine Linden announced the Brand Center on the official Second Life blog.
  2. There is a new affiliation trademark and license entitled "inSL Logo Progam".
  3. There was a new Terms of Service update on log in to call attention to the recent changes and weighty legalese buried in: "4.4 Without a written license agreement, Linden Lab does not authorize you to make any use of its trademarks" which points to the numerous sub pages within the Guidelines for Using Linden Lab's Trademarks.
As a result of the above, there was and still is a resounding uproar and panic across the Second Life resident community that embraces many new media forms (blogs, podcasts, fan sites, etc) about the implications of the changes including the equivalent of "arm bands and berets" protest symbol. This afternoon, a twitter-rama of discussions about a boycott:
"flickr is a good idea for a strike. we should have buttons too"
"Just adding a blog entry: "this blog is closed until LL clarifies how fansites are allowed to use their trademarks"
"yes, Blogger's Strike. No more links to Second Life® until we know we can use the trademark without fear of getting sued!
"Beside SL blogger's strike... how about mentors going silent as well?"
So what's going on?

Do die-hard Second Life residents begrudge Linden Lab for moving to protect the strength of the brand? No. In fact many of them are the most vocal when it comes to otherwise inaccurate or marginalized press coverage that may damage the brand.

Are they simply uninformed when it comes to the importance of trademarks and brand management? No. Some are IP lawyers, several are marketers/brand managers and some have even registered their own personal trademarks.

So what is it?

It's simple. The product Second Life and the company Linden Lab have benefited greatly from the explosion of creativity and passion of its growing community and the recent changes combined with the way (once again) the changes were communicated is not congruent with what this community expects, and they are outraged at the implication that they have not in some tangible way contributed to the heretofore success of the Second Life brand recognition.

From Jennyfur Peregrin's blog:
For now, I view this action as a slap in the face to all of the enterprising individuals who helped to build Second Life into what it is today. Linden Lab developed the product and platform, but without the countless enterprising residents engaged in forging the vision for virtual worlds far and wide since late 2002… Second Life never have grown to its current size and popularity.

From Gwyneth Lleweyn's blog:

We’ve been the ones ultimately promoting that vision, spreading it around, and making sure that the world noticed your product and your brand. We were very successful — thanks to your gentle and encouraging former policies.

And for four years, you have been thankful enough to allow us to do that promotion, by establishing very reasonable and clear guidelines of the terms of usage of your trademarks.

And Gwyn's personal request for clarification and implied call to action:

We consider that an appropriate response should be forthcoming in the next few days, or we will be forced to shut down our own blogs, websites, forums, community portals, and other 3rd party sites to avoid litigation — and thus deprieving (sic) Linden Lab® from the traffic generated by millions of direct links and millions of viewers that learn first about Second Life® through all those sites.

Personal note: This blog will enter on strike on April 15th, 2008, for a period of 3 days, if no clarification by Linden Lab is published before that date.

As androids dream of electric sheep, so do most companies dream of passionate consumers. The discipline of embracing your passionate consumers, coined recently as "net promoter economics" can raise the value of your company to new heights. The nightmare, of course, is when you alienate them they can resist and revolt with equal fervor and become detractors. Detractors are costly in several quantifiable ways including retention, margins, annual spend, cost to serve and negative Word of Mouth. If you want more information, go read The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld.

So you have a large base of passionate consumers (how many blogs do you think there are about Second Life?), that's a great thing, right? Well, sure it's great but there are a few costs.

1) Learn to communicate and do it really well
In this new age, we talk about dialog as if it were merely the institution of two-way communication such as opening comments to the floor. It is, however, more about understanding each other and developing norms for communicating that are consistent with a shared set of values and community norms. This means you have to work at communicating, constantly adapt and improve.

2) Spend time knowing what the Passionates are doing to help you
You cannot sit idly back and let the minions come to you. You have to actively seek out your passionates, engage them, and learn from them. They often know far more about your product than you do. The value of this is directly proportional to your willingness, your time and your creativity to engage. The key is to be pro-active, not passive or re-active. For example, office hours are a passive. The Second Life Views program is moderately pro-active. Seemingly arbitrary institutional changes in policy so long after the establishment of wide spread adoption is reactive.

3) Allow Passionates to have some influence over your policies
This sounds terrifying, but if you've done #1 and #2 correctly, the terror resolves itself. If you've made a mistake and need to make a policy change that is distasteful to your passionates, admit you were wrong, explain the change using #1 and #2 and move on.

These are just three points, but each carries a cost. It can be manageable, but it cannot be avoided. You can pay me now, or pay me later.

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