Ebay, I have seen your future

Ebay now squanders the brand as Microsoft did.  In the process, they are in the verge of surrendering share to Google, as Microsoft did.  Here follows a lesson in brand stewardship and consumer centricity. 

For several years, Microsoft owned my email system.  As a user of modest sophistication, I clung to the brand and its software, as if to a parent's hand.  Microsoft and Outlook were my guardians in a strange land.  Ok, let's be honest.  Microsoft didn't just own my email system, they owned me.

But I migrated from Outlook, and I did so for precisely the reasons that Pip Coburn makes clear in his new book, The Change Function. (Conflict of interest declaration.  I am a "Change Fellow" at Coburn Ventures.  I don't think this changes my attitude towards Pip's book, but now you know.)

In The Change Function, Pip says that we adopt new and potentially strange innovations only when perceived benefits outweigh the perceived pain of adoption.  In Google's case, this means I heard the siren call of gmail and I liked what I saw.  The "pull" was in place.  But I did not adopt, because the idea of switching email addresses and moving to an alien system really, really intimidated me. There was no "push" in place.  In Pip's formula, the pain of adoption was greated than the benefits of adoption.

Happily, Google didn't have to do anything to supply the "push."  It just had to wait for Microsoft to do nothing.  And that's precisely what Microsoft did.  In the last several months of Outlook use, I must have received thousands of spam emails.  I was sometimes spending 15 minutes a day routing them out.  Spam was to prove an immense push. 

For some reason, Microsoft thought that spam was my problem.  How cavalier.  Apparently, the author and vendor of my email program was quite happy to expose me to daily difficulty.  Maybe Microsoft thought that spam was a third party opportunity they were obliged to leave to the likes of Symantec.  To which the answer is, of course, "so just buy them."  Certainly, there were work arounds to the spam problem, but these too were apparently my problem. 

Plainly, Microsoft is not a consumer centric organization.  A consumer centric organization would have said, "Good lord in heaven, we have exposed the consumer to misery.  Let's fix it."  Instead they were sometimes mute on the problem and sometimes cavalier.  The outside chance, the last stand for brand credibility, was this: Microsoft wasn't doing anything because nothing could be done. 

Enter, Google.  The first time I heard they were serious about spam control was the moment I began to move.  Apparently, Google is consumer centric.  They believe spam is a problem that belonged to them.  (I don't want hear comments that say Google a "central server" advantage that Microsoft does not.  Microsoft was smart enough, rich enough and big enough to make or buy any number of solutions.  Someone surely ran a Google scenario and asked tough questions.  I guess no one ran the consumer centricity calculation or the Coburnian one.)

My shift was difficult but advantageous.  In Pip's language, the pain of adoption was not anything like the benefit of adoption.  Or to put this in the language of the consumer: "Boy, it was hard to change. Boy, was it worth it!"

And as if to reward me for the move, Google gave me a "report spam" button with which to notify the world when spam does make it into my email basket.  I know it's juvenile, but I can't tell you how much pleasure it gives me to click this button and dispense that message from Lagos that promises the proceeds from an abandoned bank account.  Now I can fight what I was once helpless to prevent.  I have joined a smart mob of Google emailers so to take action against the mere mob of spammers.

The brand effect is not just the augmentation of brand meaning and consumer gratitude.  The move to Google email drove a cascade that took me away from the Microsoft suite.  The man who was a Microsoft villager (medieval vassal trading loyalty for protection in a hostile land) is now prepared even to consider installing a nonWindows operating system.  That means I moved from blind-brand-loyalty to "take it or leave it" indifference in less than a year.  The price of failing to be consumer centric can be astonishingly high.  A year ago, any marketing researcher would surely have said, "McCracken and the millions of consumers like him, they are yours for the duration.  They will buy Microsoft to their deathbeds.

So to Ebay.  It's a slightly different problem but it manifests the same way.  Everyday, even with Google filters in place, I receive phish and faux emails from Ebay, insisting that my account needs reviewing, that my orders have been lost, that payment was not received, that my account will be suspended!  (Hmm, you don't suppose that Google has a vested interest in letting these emails through, do you?)  Some of these email are fiendishly clever.  So much so that I never open anything from Ebay.  (The cat who jumps on a hot stove never jumps on a cold one.  I remain an unsophisticated user.) 

I still use Ebay, but I can't help thinking, "do they not understand this is happening?  Are they being cavalier on this one? Do they somehow think that email and, by extension, the security of an Ebay transaction and relationship, is my problem?"  And the moment I heard that Google was creating a service called Check Out, I thought "thank heaven."  It is still in its infancy and it we will see if it connects buyers and sellers with Ebay's acuity, but my guess is that it will enable the transaction as well as Ebay and manage somehow to extract the confusion and risk now in place.

You can say, oh, well, Ebay can't control what spammers and phishers send out.  Really?  Do we know how much this company is worth?  This company had the resources to go after spammer and phishers with a ferocity that could have cut the number by 80%.  (And there are other solutions including a restricted communications airspace that would allow Ebay to say we will never send you another email through conventional channels.)  Would that have been worth an investment of tens of millions of dollars?  Of course, it would.  All Ebay is doing is protecting the brand.  All it is doing is serving the consumer.  All it's doing is taking a leadership position in the digital universe and marketplace.  Isn't that the corporation's job.  Isn't this the sort of thing should be able to expect from a graduate of the Harvard Business School and P&G?

Ebay and Microsoft got to enter the digital marketplace at a Cambrian juncture.  There was almost no competition and therefore massive brand building resources and opportunities.  (Coca-Cola had this opportunity in the early 20th century.  General Motors had it at mid century.)  Clearly, brand loyalty is the digital space is not enduring.  (Compare our attitudes to those of mid century when people often said they would never drive a car that was not a Chevrolet.) People can move relatively easy ,and as they become more sophisticated, and Pip's pain of adoption diminishes, they will.  This means the "stickiest" thing about the digital brand proposition is the extent to which it understands and responds to the consumer.  Consumer centricity and brand value are inextricably linked. 

Yes, these brands, Microsoft and Ebay, are technologically driven.  But finally, it comes down to this: you can't ignore the end user without paying for it, pal.

References

Coburn, Pip.  2006.  The Change Function.  New York: Portfolio.  [Order from Amazon here.]

Comments

[Auto]

But those Nigerian abandoned-money schemes that Outlook so kindly brings to my attention is how I'm planning to fund my retirement.

[Matt]

eBay's constraints on solving the phishing problem are technical (they can't prevent other people from sending you email claiming to be them), mathematical (phishers pop up and disappear far too quickly to sue them out of existence...the legal system doesn't work that fast, and hiring hit men would be too expensive...not to mention that it'd be illegal, and unlike a phisher, eBay is easy for the cops to find), and social (no matter how often a service provider tells you it will never do certain security-damaging things, a significant percentage of its users will always be fooled by con artists into believing that the legitimate service provider is doing those things). They haven't been conclusively proven to be 100% insurmountable, but they cannot be solved merely by the application of a sufficient quantity of money, nor by any other technique currently known to mankind. On the other hand, they're not crippling for eBay either, as demonstrated by eBay's continued brand dominance even in the face of viable pre-google competition in their core market (auctions).

Microsoft's problems are technical (they make phenomenally crappy software and rely on widespread ignorance to popularize it and then on lock-in to keep people addicted) and strategic (their only remaining application advantage is integration with their dominant OS...if they admit that service-oriented systems are a viable way to do email, there ceases to be ANY reason for people to keep using garbage like Outlook). It is safe to say that if spending money could fix these problems, Microsoft wouldn't have them anymore. And unlike in eBay's case, there's substantial evidence that Microsoft's near-monopoly in the application space is rapidly eroding on every front where a serious service-oriented player has come into the fore.

It may be that Microsoft can't survive (at least not in anything like its current form or at anything like its current size) the average user coming into contact with enough good stuff that "being shit" ceases to be part of their definition of what it means to be computer software. They've survived for over 20 years on the basis of controlling the OS. But the evidence is mounting that controlling the OS has lost its ability to limit average users' ability to learn about better options.

No amount of "better brand management" is going to change that, for a company that's always survived on selling people not what they want, but only what they'll tolerate as long as they don't believe there are any viable alternatives.

[Grant]

Auto, me, too. See you in the poor house. Grant

Matt, great comment, thanks, but it accepts the very assumptions that Microsoft should have been smart enough to break out. At the very least, Microsoft could have created Google. Yes, it would have cost them software sales, but, um, they could have sold advertising. Yes, this is a long way from their existing business model, but this is what big, smart corporation do. This takes back to Theodore Levitt's question. When spam proved an intractable problem, it was time to ask "what business are we in" and then to accept or pursue any answer necessary. One of the answers would have had to have been "pain free email" and one of the answers would have had to have been "a new email system [something like the not yet invented Google]." I think this tells us about how discontinuous and dynamic the world is, that a corporation that is doing roaringly well, who has capitalized brilliantly on the advantage of taking the lead, should have to change its model completely to quaranteed profit and standing. This is what brand management is to me. Not just prettying up the logo, but looking into the future and thinking about who and what the consumer is and who and what the corporation must be to continue to win his/her business (and if very lucky) loyalty. Thanks for a great comment! Grant

[jaywalker]

Actually, Google is not very customer-centric but a tech business (algorithms not relationships). If you listen to discussions about "click fraud", Google was and is not very responsive. Google is only customer-centric in having much knowledge about customers. It does not really care about an individual one. Just mail a question to Google and see how they respond: boilerplate.

Regarding Ebay, I think you have to distinguish two elements. Physhing attempts are beyond the influence of Ebay itself and can only be treated by educating users (a hopeless task, see Nigerian scams). Vetting buyers and sellers is an unprofitable and thankless task where Ebay certainly could do more. At best, it would outsource this task to a specialized institution just as S&P rate companies. The problem with Ebay is its natural monopoly position which will be difficult to attack. Probably, Google will pick some subcategory where it can efficiently take away business and grow from that (just as Eurex snatched derivative trade away from London).

[jens]

in case you have not - here is john maeda's post on the subject from a couple of days ago http://weblogs.media.mit.edu/SIMPLICITY/archives/000358.html

[jens]

btw spam... anybody noticed the trackbacks to this post?:)

[Sara]

It seems like eBay could have taken a page from Lexus when their first cars were shipped in the U.S. The cars had a problem that needed immediate fixing (or at worst, recall). Instead of letting the Lexus name be associated with poor quality, they literally sent people out to every new Lexus owner's home or business, to fix the problem on the spot.

This took a potentially huge image problem, and turned it into a fantastic bunch of buzz. eBay is getting chatter from the spam, but it's not the good kind. How might they turn this into the good kind? They could loudly take on the problem with a spam corps. They could fund the companies who DO fight spam for a living. They could work harder on consumer education, on and offline. Because able to fix it or not, it IS their problem.

I know that after almost falling for a Citibank scam, when they sent me a reassuring "Look for these clues, forward sketchy emails onto us, we would never ask you to change info in an email" message, I wanted to draw "I heart Citibank" all over my walls. I felt more equipped to fight the bad guys, and more trusting in that company, than ever.

[Howard Greenstein]

Hi Grant,
Great piece you've written.
(Full Disclosure - I'm another Coburn Fellow team member).

I continue to wonder why companies don't adopt "Signed" email. For $30 or something similar I got from THAWTE a certificate that almost every mail client I've ever used (Outlook, Eudora, Netscape Mail, thunderbird, AOL, Mac Mail and Entourage) recognizes as a "digital signature."

I've used it in cases where what I sent may be considered a legal agreement.

I had to have my identity verified by a bank manager and a notary before I got this certificate.
If you got mail from me and clicked the seal you'd see that Thawte/Verisign certifies that it was sent from me (or someone who broke into my computer). Not everyone will go through this hurdle, but those who need to will. And companies can issue their own certificates for employees.

Ebay and other companies need a verified sender seal so you know to open mail from them and not from spammers.

Companies like MS, Google, Yahoo, AOL and others have proposed technical solutions like this, but I've yet to see one implemented that was easy for customers/earthlings (as Pip likes to say) to understand and trust.

I don't think we'll ever sue spammers out of existance. If we do, however, make commercial senders of email prove they are who they are, and give customers the ability to ignore mail from those people they don't want to get mail from or don't trust, then the spammers will get moved to the spam box by default, and we make it less of an economic incentive to spam.

Also, enforcing some of the laws on the books regarding trademark infringement(fake R0l3x or V1agra anyone?) would also go a long way to stop spam.

- My .02 on a friday afternoon.

Howard