A sample from the book, ‘Influence Marketing’ by Dean Shanson
Understanding What You Want From Influence Marketing
In 2014, lobbyists spent more than $3.24 billion trying to influence the decisions of lawmakers. The effects of that influence—and their benefits—are clear. Big companies have long been able to count the costs of chauffeurs and private jets as security expenditures. In 2015, bills presented to Congress included tax breaks for horse racing and for motocross, and would have allowed Hollywood to write off film studios’ first $15 million in expenses. The exercise of business influence can save companies millions of dollars a year in tax payments.
But pushing a tax break into a spending bill is only one way in which businesses get to benefit from the influence they’ve managed to build. Influence can deliver four different kinds of benefits.
The Power Of Being A Brand Evangelist
Lenn Pryor used to be afraid of flying. Now a Product Manager at Facebook, in 2005, he was the Director of Platform Evangelism at Microsoft, a job that would have required a fair amount of travel. In an interview with TheEconomist, Pryor described how he was able to cure his fear of flying after a conversation with a United Airlines pilot. The pilot told him to tune into Channel Nine from his plane seat and listen to the conversations between the pilots and air traffic control.
Hearing staff talk honestly and calmly about their work removed Pryor’s irrational fears. He understood how the airlines worked, recognized that they had nothing to hide, and he felt confident enough to give them his trust. He now felt that he had a whole new relationship with the airlines.
He also understood that Microsoft, a company that was a constant victim of equally irrational attacks from critics, could also benefit from broadcasting real conversations from within the company.
Pryor hired Robert Scoble, then a blogger for Japanese technology firm NEC. While other corporate communications staff might write press releases or white papers, Scoble would write a blog post about NEC’s early tablet computers then stick around to answer comments and continue the discussion. He’d give tech support and he’d be remarkably honest, discussing a product or the industry’s shortcomings as well as their benefits. He soon built a following among technologists.
At Microsoft, Scoble continued to work with the same degree of frankness. He wrote blog posts that sometimes touched on personal matters, but more usually he talked about Microsoft’s products. He had free range. If he saw that Google or Apple had produced a better product than Microsoft had done, he’d point out where Microsoft had got it wrong and where they needed to improve. Even though Microsoft was paying him, he wasn’t a shill for the company. That gave him the trust to push back against critics who he thought were being unfair. For Microsoft, it was a lot like owning their own popular technology blog and giving it access to what was happening behind the scenes of the company.
Scoble then did the same thing for Rackspace, a server company that few people outside the technology industry had heard of. He helped a firm that offered a very similar service to that offered by its competitors—a warehouse full of server racks with space to rent—to stand out in a crowded industry. He was still free to write and blog and speak as he saw fit. He could still be critical if he wanted to be but he became a regular sight at technology conferences and a respected pundit on a broad range of hi-tech topics. Every time someone checked out his blog or took part in one of his Facebook discussions, they’d see the name of Rackspace and wonder what made that server company so special.
When Scoble announced in early 2016 that he would be leaving Rackspace for a virtual reality company, the move wasn’t just seen as another shift up the career ladder for someone with an unusual job description. It was seen as a vote of confidence in Upload VR, the company he was joining.
Scoble is unusual in that he has turned the influence that he has built into an asset that brands can rent. In return for a salary, Scoble persuades tech buyers to look in the brand’s direction, and enables them to regard the brand with the same kind of open mind that he represents. But the influence remains with the influencer and he is free to take it with him, and to another brand, if he wishes.
Most brand evangelists however work only for their own brands. Steve Jobs represented Apple, then Pixar, and then Apple again. Each time, he was using his charisma to influence the way people thought about his own business. It’s the same approach taken by many chief executives, including Mark Zuckerberg, Bill Gates and Tony Hsieh of Zappos. By building successful businesses, they acquire influence. They then use that influence to make their businesses even more successful.
It’s not an approach taken by every business leader. Walmart is America’s biggest company and while everyone might recognize the logo, few people would be able to identify the chief executive. The same is true of a host of other businesses. People who drive a Tesla can associate their purchase with someone as innovative, bold and cutting-edge as Elon Musk, the personality who made it happen. Drivers of Ford, however fanatical they might be, would struggle to attach it to any individual.
There’s no reason why firms like Walmart and Ford, or Sears and Chevrolet, couldn’t benefit from the influence enjoyed by Amazon and Tesla. Like too many businesses, they’re leaving those benefits behind.
One way to see just how effective brand evangelism can be for an influencer’s own company is to watch what happens when that influence is spread too thinly. Jack Dorsey was one of the founders of Twitter. He left the company to create Square, turning the influence he had built creating Twitter into a force strong enough to generate investment income for his new business. When Square, an app that turns a mobile phone into a cash desk, became a success, his influence grew. It wasn’t only strong enough to persuade investors to put money into his business ideas; it was also able to persuade Twitter’s board to bring him back on an “interim” basis as chief executive of Twitter. He would be the chief executive of two multi-billion dollar firms at the same time.
The story should have repeated Steve Jobs’ tale of the founder returning to save his damaged firm. It hasn’t worked out that way. A year after taking over from Dick Costolo at Twitter, the company’s share price had fallen 60 percent. Whatever influence Dorsey might have had over Twitter’s board didn’t reach as far as Twitter’s users—or its staff; the company lost four of its senior executives six months after Dorsey’s appointment. At the same time, in the seven months following Square’s IPO at the end of November, that company’s share price fell 30 percent.
Founders, chief executives and even key individuals have influence that can affect how the public sees a business. That influence can improve the business. By associating their own characteristics—whether those characteristics are success, honesty, intelligence, or a combination of all of them—with the company, they influence the likelihood of making a sale or winning investment.
But not all businesses make use of that influence, and the influence isn’t a complete panacea. Its strength is limited and while it may be able to help to brand a business, the trust that underpins it still relies on quality products and strong business planning.
The Power Of A Personal Brand
The previous section showed how the influence that individuals build can power the success of a business. It’s probably the most common use of influence. But often, an influencer will keep the value of their influence for themselves. Instead of using it to build up a brand, their influence turns them into a brand themselves, helping to sell their own products and land larger fees for addressing larger audiences.
The source of that influence varies. Often, it comes from success in one field that proves that the influencer has valuable knowledge. Big Speak, for example, is an agency for speakers whose roster of celebrities include Richard Branson and former basketball player Magic Johnson. Other agency speakers, though, include conquerors of Everest, a former Navy SEAL, a record-breaking, long-distance swimmer, and the youngest woman to fly around the world in a single-engine plane.
What unites all of those people is achievement. They’ve all set themselves a goal, put in the effort and the training required to meet it, and they’ve stepped up to the challenge.
That’s valuable because it’s what everybody wants to do. Everyone has targets that they’re hoping to meet. Everyone has life goals that they want to reach, and they know that reaching those goals isn’t easy. If it wereeasy, they’d have reached them already! When they see someone who has accomplished something, they want to know how they did it. They want to know about the mental discipline required to put it into practice. The want to know about the resilience required to get through the failures and the rejections that every successful person feels on the way to their success.
Sure, they’ll also want to know about the practical challenges involved in fundraising and planning and organization. But mostly people will want to know about the requirements that are universal, the skills that they too will need if they’re to achieve their own life goals. It doesn’t matter whether someone has climbed Everest with one hand tied behind their back, built a billion-dollar business in their basement or just rolled over Niagara falls in a barrel and lived to tell the tale. If they set themselves a challenge and met it, they’ve achieved something that lots of other people would like to do… and that creates influence.
People willlisten to them. They’ll pay for knowledge forged by success.
Sometimes even failure can create influence.
Everyone fails. No business leader ever turned everything they did into an unqualified success. Businesses collapse, investors aren’t persuaded, and ideas that were great in the shower turn out to be duds on the factory floor. It happens. It happens to everyone. When was the last time you bought a bottle of Virgin Cola? Or mixed it with Virgin Vodka? Or took a ride in a Virgin Car, flew Virgin Express or put up a post on VirginStudent, an early social media site that was knocked out by the rise of… ahem, MySpace. All of those products were created by Richard Branson’s company, and all of them died a quiet death. Even Virgin Megastores, his company’s flagship outlet, was eventually sold to management long after the business had stopped being a financial success.
The only way to achieve a lot of success is to create a lot of failures.
But failures teach. They tell you what not to do. Thomas Edison is often quoted as saying that “I didn’t fail. I just found 10,000 ways that didn’t work.” The quote might not be true but the sentiment is. Failures might not produce the result you want, but they do create the knowledge that builds the result you want.
And again, that knowledge is valuable. People will pay to obtain it. They’ll pay with money, they’ll pay with their time (which is even more valuable to them), and they’ll pay with their attention.
Few people, for example, have failed as spectacularly as Jordan Belfort. After dropping out of dental school, Belfort became a door-to-door meat and fish salesman, employing a number of workers and reportedly selling 5,000 pounds of beef and fish a week. The business failed, and he took a job as a trainee stockbroker. He was laid off from that firm, and set up his own trading company. The company, Stratton Oakmont, grew. At one point it employed over a thousand stock brokers. It arranged the IPO for Steve Madden Ltd., and the total value of its stock issues topped a billion dollars.
The head of a company like that would have acquired influence. If you had found yourself sitting next to Jordan Belfort on a plane in those glory days, you’d have peppered him with questions, not just about which stocks to buy but about what it takes to grow a successful business.
In 1989, however, it all started to fall apart. The authorities investigated the company for fraud. Belson was accused of training his staff to pump up stocks, using “boiler room” techniques that allowed the company to profit from worthless stocks at the expense of investors; clients were said to have lost around $200 million. After striking a deal with the FBI, Belfort received a four-year prison sentence and was ordered to pay back more than $110 million. The deal included an agreement to pay at least $10,000 a month for the rest of his life.
It’s hard to see Belfort’s career as a success but even as a criminal he had done something unusual, and that was enough to give him influence. While in prison he wrote his memoir, The Wolf of Wall Street. The book received an advance of $500,000 and was made into a film directed by Martin Scorsese. Leonardo DiCaprio, who played Belfort in the film, was nominated for an Oscar for his performance. People wanted to learn the lessons that greed had taught in the eighties without having to actually defraud people and go to jail.
Today Belfort is one of the world’s most sought-after motivational speakers. In 2014, The Australian newspaper described him earning speaking fees of AUS$75,000 per speech. One two-week tour of Australia that year is said to have netted him more than AUS$1 million, nearly three-quarters of a million US dollars.(The presenter introducing Leonardo DiCaprio to a business audience at the end of The Wolf of Wall Streetis Belfort himself.)
What the audiences who pay to listen to Belfort are hearing now isn’t stories of life in prison or about the drugs and fast cars of his eighties lifestyle. It’s what Belfort calls his “Straight Line Sales Theory.”
“Straight Line cuts to the core of human influence, what elements have to line up before people say ‘yes,’” he told The Australian. “It’s not just products, it’s about people— influence over kids to get them to make a bed, to get people to work hard for your company. Financial incentives are the least motivating forces, long-term. What really motivates people long-term is helping them understand their why; why do they want to buy into a certain culture, why do they want this, what are their greatest pain points and their greatest pleasure points.”
Belfort built a business that looked successful though it was actually criminal. That might have landed him a prison sentence but it also won him attention. By turning that attention into influence, he’s been able to build a new career since his release, pay back some of the money he owes, and earn more than he made during his Wall Street years by explaining how to use influence itself. It’s a remarkable example of the ability of influence to help an individual create a brand and generate a high income.
The Economist,“Chief humanising officer,” February 10th, 2005. http://www.economist.com/node/3644293
Cameron Stewart, The Australian, “Who’s afraid of Jordan Belfort, the Wolf of Wall Street?”, May 10th, 2014 http://www.theaustralian.com.au/life/weekend-australian-magazine/whos-afraid-of-jordan-belfort-the-wolf-of-wall-street/story-e6frg8h6-1226906434759