Showing posts with label Money. Show all posts
Showing posts with label Money. Show all posts

Tuesday, March 6, 2012

Breaking Guitars & Making Money From a Viral Video

Everyone wants to create the next viral video, but once you reach that Holy Grail, the question becomes, how do you make money off of it?

This is your guitar. This is a baggage handler breaking your guitar. Any questions?!

Ask Dave Carroll.

You probably know him: He’s the guy who flew United Airlines, found out when he landed that his $3,500 Taylor acoustic guitar (he’s a professional musician) had been broken and got no help from the air carrier’s parent, United Continental Holdings [UAL  Loading...      ()   ] , to pay for the repairs.

So Carroll uploaded a video to Google’s YouTube called “United Breaks Guitars” that has been viewed more than 11 million times. (Watch the video.)

It’s got a catchy chorus that really sticks with you:

United United —
You broke my Taylor guitar.
United United —
Some big help you are.
You broke and you should fix it.
Your liable just admit it.
I should’ve flown with someone else or gone by car…

And it stuck with United, too: He got nowhere after haggling with them to cover the $1,200 repair for nearly a year, but two days after the video went up on YouTube he got a call from United offering to pay him double that amount.

Not to mention, it stuck with Taylor: The company sent him two guitars to use in his next YouTube videos.

But by that time, it was a full on media frenzy and Carroll’s inbox was blowing up.

“People were coming into my house like it was election night for a winning politician. Everyone was hugging and everyone was bringing finger sandwiches and casseroles,” Carroll said.

He got 10,000 emails in those first few weeks, with people sharing their own customer-service nightmares.

“It wasn’t just the millions that showed up to watch the video. It was the reaction and the energy behind it,” Carroll said. “I realized that if I could get 10,000 emails that quickly, I could get a million.”

So, he decided to launch a website to aggregate all of those complaints, called RightSideofRight.com.

Carroll was tapping into the growing resentment over bad customer service, but just aggregating the complaints wasn’t a viable business model.

“It was well-intentioned, but it wasn’t very effective. We just ended up asking people to share their stories,” said Carroll. “I didn’t have the time or expertise to do much about it.”

About a year ago, he was approached by a venture capitalist and a web developer who had seen the video and saw potential for the business.

So, they teamed up and transformed RightSideofRight.com into a new venture, Gripevine.com, a site that caters to customers as well as businesses. For customers, it offers a national forum for them to log a complaint — or a video of their own — and Gripevine connects them directly with the decision makers at the company they have the issue with — to save them having to go through the same story 20 times without reaching the right person.

The other side of the business, the money-making side, offers businesses a dashboard for managing all the facets of their customer service, including monitoring all the conversations and complaints about its business on Gripevine, Facebook, Twitter, and other social media, and managing the resolutions.

Now, Carroll is not only is a co-founder of Gripevine, he also travels all over the world speaking to companies about his experience, customer service, and Gripevine. He’s also got a book due out in May, called “United Breaks Guitars: The Power of One Voice in the Age of Social Media.” He still plays and records music — his latest album, along with the “United Breaks Guitars” songs (there are now three) are available for download on Apple’s [AAPL  Loading...      ()   ] iTunes.

Customer service has really taken a hit since the recession [cnbc explains] — everyone, it seems, is focused on money, which has brought more surly reps, more automated systems, and more groans from consumers. The phrase “the customer is always right” is going the way of the dinosaurs.

“It’s not because people stopped caring,” Carroll said. “Companies are just trying to trim their workforces so much...they’re overworking employees or trying to shave on service. The quality goes down and for whatever reason, I think people have given up on customer service too easily,” he said. “And really, it’s the one thing they should be holding on to.”

With the rise of social media and the growing connectedness, the power of one complaint, like Carroll’s YouTube video, can become a gigantic public relations headache for companies.

Remember that video of the FedEx [FDX  Loading...      ()   ] guy throwing the computer monitor over the fence just a few days before Christmas? Yep, that one was viewed more than 8 million times.

“It’s very difficult to argue when guitars or packages go flying over fences — there’s a tremendous amount of evidence!” said Randy Jones, the creative director of marketing firm MindZoo.

And Gripevine isn’t the only business to capitalize on the big business of gripes: There’s ComplainApp, a complaint-logging app for consumers; GetSatisfaction.com, which focuses on the business side of managing complaints; and Consumerist.com, which aggregates stories about customer complaints. There are also companies on the rise, such as TOA Technologies, which makes software that helps businesses better track their service people to narrow down the maddening window of time that customers have to wait for everything from the cable guy to the United Parcel Service [UPS  Loading...      ()   ] guy to deliver your new Apple computer.

Jones said sometimes these incidents like the United guitar or FedEx guy tossing the computer, could be one-off rogue employees, but often it’s an indication that something is broken further up the chain.

In the same way that companies such as grocery chain Trader Joe’s or Nordstrom [JWN  Loading...      ()   ] have reputations for great customer service because they’ve made it a priority from the top down, so, too, can bad communications and customer service trickle down from the top.

“I swear, I could probably try to return a tire to Nordstrom — and they’d return it!” Mindzoo’s Jones said. “Or, at the very least, they’d say — let me see if I can find somebody.”

He added: “That kind of focus on the customer “absolutely comes 100 percent from management.”

Jones is so passionate about getting it right from the top down, so there are more Nordstroms in the world, he’s launched a program called Rediscover Courtesy to start a dialogue about improving how managers communicate with employees, how companies communicate with their vendors, and communications at every step of the chain. A dialogue that will include “a combination of rants, rhetoric, stories, and solutions,” he said.

“At a time when displays of good manners seem to be on the decline, my biggest fears are —does anyone even notice any more? Is ‘terse’ the new standard operating procedure in today’s over-stimulated business world?” Jones asked.

Well, if 11 million hits on YouTube and the rising cottage industry that’s sprouting up around the complaint business is any indicator, not for long.

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Monday, March 5, 2012

Banks Park $1 Trillion of LTRO Money Back at ECB

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Friday, February 24, 2012

Is Smart Money Finally Starting to Head for Sidelines?

Retail investors have begun to take the driver's seat in Wall Street's aggressive rally, an indication both that the surge could have some life yet and that it's likely nearing an end.

Mutual funds — the vehicles through which most mom-and-pop investors play the stock market — had lost funds for nine consecutive months heading into February.

But over the past several weeks the tide has turned.

Stock funds have seen inflows in three of the past four weeks, with another $1.04 billion coming in for the week ending Feb. 15, according to the most recent data from the Investment Company Institute. Unless there is a major shift in allocation, February is shaping up as a solidly positive month for stock fund inflows.

Trouble is, the last time retail investors didn't take more out of their funds than they put in was last April, which saw inflows of about $6 billion.

That move coincided with the end of a stock market rally that looked much like the current one — a big surge higher as the year began that preceded an ugly six-month skid that made sell-in-May-and-go-away the trade of the year in 2011.

What's more, institutional investors — often referred to as part of the "smart money" in the market because of their insider position — have been slowly heading for the exits.

After pulling about $100 million from zero-yielding money market funds in 2011, the folks with the deep pockets are heading back toward the sidelines. Institutional deposits have increased by $9 million in February — a relatively miniscule amount, to be sure, compared to a total of $1.74 trillion on hand, but a number that's been steadily rising.

Finally, corporate insiders are taking an increasingly cautious approach as well.

They've dumped $4.2 billion in stock this month, about double January's level and — here's that warning sign again — the most since May 2011 as last year's rally fizzled, according to TrimTabs.

Company stock buybacks, meanwhile, are at a healthy $2.1 billion daily level, but are mainly concentrated among a few big purchasers. The number of daily buyback announcements is at its lowest level since the October to November period of 2009.

"The best-informed market participants — the top insiders who run U.S. public companies — are taking full advantage of the stock market melt-up to unload huge amounts of shares," TrimTabs said in its weekly market analysis.

The fear here is an important one — that retail investors will be the last ones to the party, buying high and selling low as the smart-money guys get out when the getting's good.

"One thing we know is money goes to where it's best treated," says Quincy Krosby, chief market strategist at Prudential Annuities in Newark, N.J.

"The fact is, if the market keeps moving higher without volatility pushing the market down dramatically or upward dramatically, you're going to see retail investors put money into equities," she adds. "But what about the professional traders who take advantage of that?"

Continued inflows of retail money might push those who have been in the market to start cashing out as the late money drives up prices.

Insiders are considered the smart money, Krosby says, because of "the notion that they know more."

"The classic rationale for insider selling at the stage we're in now is they know more than the average investor regarding the company's guidance," she adds.

The bright side: Those institutional outflows could represent simple profit-taking and an anticipation that a modest correction is in the cards.

Standard & Poor's strategist Sam Stovall sees resistance for the "500" in the 1360 to 1370 range, where a pullback of 5 percent or so is likely, sending the average down in the 1270 or so range. For the full year, he expects the S&P to hit 1400, which would constitute a 9 percent or so run from the pullback levels.

In other words, a pullback here could make an attractive entry point, and retail investors might be better off waiting it out.

"March and April tend to be favorable in terms of seasonality," Krosby notes. "If we do have a pullback, I think it brings in more buyers."

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