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Transcription of interview with David Meerman Scott on August 20, 2012.
Douglas Goldstein, CFP®, Financial Planner & Investment Advisor
David Meerman Scott is a marketing strategist.
He is the g author of eight books, including three international bestsellers, and the book
called New Rules of Marketing and PR.
He is a professional speaker on topics including marketing, leadership, and social media.
He started his career on Wall Street at Dean Witter.
Douglas Goldstein, financial planner & investment advisor, interviewed Scott on Arutz Sheva
Radio.
Douglas Goldstein: You’ve done some research about how Fortune 100 companies who do good
public relations actually perform better.
Can you tell us a little bit about that?
David Meerman Scott: It was fascinating.
I learned about it in preparation for a book I wrote called Real-Time Marketing and PR
that came out about a year and a half ago.
I’m fascinated with companies that engaged their marketplace using the tools of instant
communications, things like Twitter and blogs, companies that get back to customers if they
email them, very quickly.
I did a little test where I reached out to each one of the Fortune 100 companies, and
there were a couple of different methodologies to find out if they would get back to me.
It turns out that only 28% of the U.S.-based Fortune 100 companies actually ended up engaging
with me as a writer who wanted to find out more information about them.
Then I looked to see if they have online ways to contact them on their website, and that
was only 28%.
But the thing that was fascinating was that the 28% of the Fortune 100 companies that
did engage with me had a 3% on average increase in their stock price during the period of
time that I measured, which was roughly a year.
The companies that did not engage had a stock price that went down on average by 2% during
the same period, and the market as a whole during this period went down a little bit
less than 1%.
The other thing that I wanted to measure was if that was just because there were a couple
of outliners filling the average.
So I looked at the numbers of companies that went up versus the companies that went down,
and it turns out that two-thirds of the companies which do engage instantly with their marketplace
had stock prices that went up during this period of time that the overall market as
measured by the S&P 500 went down.
And it turns out that two-thirds of the companies that do not engage instantly had stock prices
that went down during that period.
What I conclude from this is that it is really important for companies to engage their marketplace,
to respond to customers, to provide ways for people to contact them, and the companies
that do that tend to be more successful.
I think we can learn something about that as personal investors, or certainly even professional
investors.
I was almost going to figure out how to buy a basket of stocks of the 28 companies that
were successful on average.
So what does that tell you about how to pick up a stock?
Douglas Goldstein: You could almost create your own index of the top Fortune 100 of companies
that had good communication.
Would you consider this communication, or public relations, or are they the same thing?
David Meerman Scott: It’s a combination.
Are they responsive on email, do they even publish the way to reach them on email, do
they have ways that you can reach them through social media, do they have a Facebook page
and Twitter profile?
These sorts of things are all interrelated and they all go back to how willing this organization
is to engage with their customers to engage with the marketplace.
You have a lot of organizations, and certainly the vast majority of Fortune 100 companies,
that put up a barrier or a wall.
These are the companies that when you call them on the telephone, you end up in voicemail
hell and you can’t get a person to pick up the telephone.
It’s all interrelated, and I think it shows that the companies that are willing to engage
with their customers are the companies that are more successful.
Douglas Goldstein: It sounds like it’s the old corporate culture there, which is about
dealing with people and caring more about the customer, which I guess ultimately would
lead to hopefully an increase in stock prices, and the difference is huge if you’re talking
about 500 basis points.
David Meerman Scott: It’s a huge difference and it was just fascinating to see that huge
result.
It’s really funny when I’m on a speaking circuit, I pop up a list of 100 companies,
and whether they are part of the 28% or part of the rest, and you can see people who work
for these big companies
and they were like, “Oh my God!”
Douglas Goldstein: You’ve made a number of comparisons to the Grateful Dead, which
was a very popular band a few years ago, and they were around well before the internet.
How is that you use them as an example of good PR?
David Meerman Scott: It’s really interesting that the Grateful Dead created a social network,
a network of fans, even before Mark Zuckerberg was born.
What they did was, among other things, allowed fans to record their concerts.
Every other band , whether it was the Rolling Stones, The Who, or whoever it was, on the
ticket, and signs up at the venue would say no cameras, no recording devices allowed,
but the Grateful Dead said, “Sure why not?
Bring your camera, bring your tape recorder,” and they even provided people who wanted to
tape the concerts with tickets that were in the best place to get the best sound quality,
and they allowed them to bring in all this elaborate equipment with microphones.
They stuck it into the air and what not.
As a result, people like me learned about the Grateful Dead through this huge collection
of bootleg tapes, cassette tapes back in the day, now they are all mp3s, that people would
circulate around.
The more music you listen to, the more you like the Grateful Dead, and then people would
say, “I want to go to a live show.”
As a result, they became the most popular live band of the era, selling over a billion
dollars’ worth of concert tickets during their career.
To me, I can draw a really interesting conclusion here, and that is a company should be putting
their information out there for free, with no barrier to be able to get the information.
I’m thinking about companies, for example, business to business (B2B) companies that
offer white papers, or consumer companies that provide guides to their products or whatever
on the web.
Typically, they offer those with a barrier, and typically that barrier is that you have
to give an email address to download the information.
That is the method that most bands use, “No, you can’t have this unless you jump through
hoops.”
The Grateful Dead said, “Sure, here take it.
We will develop a community,” and it turns out that the companies that offer stuff completely
free, with no barriers, putting that white paper out for free with no email requirement,
end up getting many more people who look at their information and talk about it and generate
high search engine results.
I think it’s related to what we talked about before, that the companies that are more engaged
with the marketplace online are the companies that are more successful, and it’s amazing
to me that we can thank as the pioneers of this sort of idea a rock band that started
in San Francisco.
Douglas Goldstein: What about companies who are in the business of actually selling information?
For example, we have a division of the company that does online investor education that’s
part of the business.
David Meerman Scott: That’s exactly what I do.
I write books, I have E-books and if you want one of my books, you have to buy it.
You can have a physical copy, Kindle or iPad for the virtual copy.
I also do speeches, for which I get paid, but I offer personally tons of free information.
I have a blog, a bunch of free E-books, and I have all kinds of information that I provide
for free.
I look at myself as a one-person publishing company and I think companies that publish
information and make their money by selling information should also give away parts of
what they sell as ways that people can learn about what it is that they sell.
It’s funny how few companies are really willing to do that, particularly in the professional
area.
You see a lot of it in consumer, where you go to a website of a publication, The New
York Times for example, and part of it is free and part of it is paid, and that’s
an interesting model.
I think that professional publications, financial information or whatever it might be, should
have a lot of information for free and have ways that people can then purchase the more
elaborate or more detailed information and then make money that way.
Douglas Goldstein: Let’s say that you’re a financial adviser or any sort of professional
and you give out a lot of free information to try to attract people to ultimately either
buy your books or your courses.
We say how wonderful the internet is, that it has democratized the field so everyone
can participate, but ultimately, don’t you think that people will just want to go to
the big names in order to get that information, and why bother going to the smaller people?
David Meerman Scott: No, because ultimately the best information wins.
What’s really cool about Google and the other search engines is that they really do
a very good job of surfacing the information that’s the best in a particular area.
What I mean by that is if a very small company has information on a particular topic that’s
better, that’s more thorough, that’s better written, or that has better graphics or a
combination of all those things, eventually over time, people will find it and they’ll
talk about it.
They’ll talk about it on Facebook, LinkedIn or Twitter, and they’ll blog about it, and
then the media might find and write about it.
Magazines, radio, television and newspapers might talk about it and as a result, the search
engines are very clever at then surfacing that as the best information in that category.
If somebody goes to Google and types in high-yield stocks in the Netherlands, and there’s a
very small investment adviser based in the Netherlands that’s doing a great job at
analyzing high-yield stocks, that information may come up first way above a company like
say Salomon Brothers or Barclays Bank.
Douglas Goldstein: Can you tell people how can they follow you?
David Meerman Scott: You can follow me on Twitter @DMScott.
My full name is David Meerman Scott and you can Google that and find me.
I also offer a bunch of free E-books and the easiest way to find my free books is to Google
the name of one of those E-books, and the name of the E-book is called The New Rules
of Viral Marketing, which has been downloaded in an amazing one and a half million times.
Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host
of the Goldstein on Gelt radio show (Monday nights at 7:00 PM on www.israelnationalradio.com.
He is a licensed financial professional both in the U.S. and Israel.
Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA,
SIFMA.
Accounts carried by National Financial Services LLC.
Member NYSE/SIPC, a Fidelity Investments company.
His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered
at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.
Disclaimer: This document is a transcription and/or an educational article.
While it is believed to be current and accurate, divergence from the original is to be expected.
The original podcast can be heard at https://sites.google.com/site/goldsteinradioshows/.
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sole basis for making financial decisions.
The opinions rendered herein are those of the guests, and not necessarily those of Douglas
Goldstein, Profile Investment Services, Ltd., or Israel National News.
Readers should consult with a professional financial advisor before making any financial
decisions.
Please see the complete disclaimer at https://sites.google.com/site/goldsteinradioshows/.