Marketing Doctor John Tantillo’s Winner and Loser of The Week
After so much government support and so much criticism, how could UBS have let it happen?
I’m talking about the news that yet another “rogue” trader has “lost” billions for a major bank – $2.3 billion to be exact at UBS.
But the fact is that with even the best controls in place, it will always be impossible for banks to completely prevent things like this.
After all, trading is a risk-taking activity and trying to curtail too much risk could result in much lower returns –the kind of loss of revenue that would make $2.3 billion look small by comparison.
The loss has caused the CEO, Oswald Gruebel, to step down. The UBS board apparently didn’t want this to happen, but Gruebel was insistent and they accepted it.
Gruebel has a great reputation and from everything that we know this substantial trading loss was not his fault, but his move is decisive and sends a clear and healthy message: even the people at the top can be held accountable.
Banks have suffered in the last two years from many things, but the worst thing they’ve suffered from is themselves: the unchecked perception of arrogant and untouchable management that sail through the disasters that hurt the little guy without so much as a scratch.
Starting with Gruebel’s resignation, UBS seems determined to do something different.
Sergio Ermotti who is replacing Gruebel in the interim and is likely to become the new CEO permanently has the right attitude: “We want to turn this disaster into an opportunity.”
Bravo. Finally, some straight talk.
The rogue trade was a “disaster” and for UBS to simply acknowledge it like this is refreshing and a confidence-builder. But it’s also Ermotti’s seizing on the idea of positive transformation that’s refreshing.
The bank is going further by outlining a review that would immediately reassess and aim to revamp risk controls, while also stepping up the pace of its restructuring.
The key to crisis management and brand-revitalization is to tackle the problem head on, admit mistakes and then deliver a clear process for fixing things.
UBS knows that its clients expect nothing less and they seem ready to deliver. What they did this last week is a good first step.
It might seem funny to choose one of the world’s leading technology companies as this week’s loser, but brands are made not born.
Each decision made by a brand that flies in the face of what its Target Market wants is a bad one. And bad decisions erode brands. A series of bad decisions can destroy them…
Unfortunately, there are bad decisions and then there are bad decisions.
That is why Facebook is our loser this week. Not only has it recently decided to launch another new layout that none of its users seem to have asked for but the reasons for this move are embedded in a core philosophy –founder Mark Zuckerberg’s philosophy— that may not mesh with the Facebook Target Market or with the way the Internet fundamentally works.
Here’s what I mean.
Apparently, employees at Facebook refer to something called “Zuckerberg’s Law.”
This “law” basically holds that the amount of personal information people share about themselves doubles every year. Facebook’s mission is to get their users to share as much personal information as possible. Obviously this information is very valuable from a marketing sense.
Mr. Zuckerberg wants his company to have greater insight into what he calls “the open graph” which is basically understood as the connections people have to other people and to the things they care about like books and movies and music.
To this end, Facebook is introducing a new profile known as “Timeline.” Basically it is a way for people to archive their lives online via Facebook.
Now, here’s the problem.
It doesn’t look like Facebook is introducing Timeline as a service as much as it is forcing its users to migrate onto Timeline whether they like it or not.
Bottom line, the company’s mission and Zuckerberg’s Law –and maybe even Zuckerberg’s commitment to a kind of lack of privacy that many don’t want— looks like its driving this change.
The might seem like a natural driver for ad revenue. Fact is, Netflix is joining forces with Facebook and seems to support the notion that only those companies that seize the opportunity of full-blown social sharing will prosper in the future.
But as The Economist points out, MySpace made the mistake of trying to become just such a central hub, but it failed because it force-fed content.
The magazine argues that Facebook’s “Timeline” isn’t force-feeding and, folks, that’s probably true from a mechanical point of view…
But it sure sounds like the company is force-feeding its philosophy. After all, you can’t help but think that Mark Zuckerberg isn’t too far from being that socially awkward boy depicted in the recent movie –I’m talking about someone who wants to be a part of something socially but doesn’t fundamentally know how.
Sometimes companies are driven successfully by personal philosophies. I’m thinking the early Ford Motor company and its founder’s relentless commitment to modernization.
But sometimes, personal philosophies can cloud the vision and mar the brand.
Isn’t it possible that Zuckerberg’s philosophy carried Facebook to this point but might not carry it farther?
After all, people are becoming increasingly concerned about the dangers of too much sharing. And, fact is, there are many people who like Facebook but simply don’t share Zuckerberg’s anti-privacy philosophy. And what’s this about people who are de-friended being able to see that they’ve been de-friended (see this Fox link for the story).
The point is this: great brands do two things: they anticipate a Target Market’s needs before the Target Market is aware of them and, more important, they respond to the Target Market’s needs as the Target Market understands those needs to be.
Where’s the market research backing up Facebook’s big move to “Timeline” and this kind of sharing? They have switched formats before to great outcry will it happen again?
Following a philosophy in the marketplace is fine; following a philosophy that’s contrary to what your customers what you do if you want to lose those customers.
How different last week’s winners: Google and Zagat –a pairing that was all about delivering what their Target Markets want with the openness and choice that the Internet is founded on.
And this just in… As I prepared to post this, the news came in that Facebook may have been tracking its users even when they’re logged out. This is serious if true, so stay tuned.
And, remember, it’s always easier when you keep marketing and branding in mind.
TODAY’S TANTILLO TAKEAWAY – Always check your personal philosophy against what your Target Market wants and believes.