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Jan. 7, 2020

143: Fanocracy: The Next Evolution in Marketing? [David Meerman Scott Interview]

143: Fanocracy: The Next Evolution in Marketing? [David Meerman Scott Interview]

Join me for an insightful interview with the bestselling marketing author David Meerman Scott, who's The New Rules of Marketing and PR has sold more than 400,000 copies worldwide. David joined me for an interview where he revealed the background and a preview of his new book: Fanocracy: Turning Fans into Customers and Customers into Fans. While the theme of "fans" has been something covered by others, David offers a unique approach backed by case studies and neuroscience which I believe you will find quite insightful. Once you hear the scientific background behind Fanocracy, you might join me in believing that it really might be the next evolution in marketing - for those forward-looking companies who empower their marketing and customer experience teams to push forward on a "fanocracy" initiative. For my listeners, even if you are not a large enterprise, the same concepts that David discusses can be leveraged by any entrepreneur, small business owner, or marketer. You can purchase your own copy of Fanocracy here.


spk_0:   0:01
This is the Maximize your social influence. Podcast with Neil Schaeffer, where I helped sales and marketing professionals, entrepreneurs and small business owners build leverage and monetize their influence in digital and social media. Everybody welcome to another episode of the Maximize Your social influence, podcast. Every once in a while, I'd like to do interviews with other leading people in space. And today I'm really honored to have no other than the author of this book. Now, this book has gone to a lot of generations. A lot of revisions. Hopefully you've all read it. Maybe university. You've seen it. You've heard about it. I know. It's absolutely one of the best selling books, if not the best selling book in our space. The new rules of marketing PR with the author that David Merriman. Scott. David, thank you so much for you. Time is truly an honor to have you here.

spk_1:   0:51
Of course. Now I'm happy to be here. Thanks very much for having me on.

spk_0:   0:55
So, David, without further ado, you've been in the space since when a lot of current marketers were intensely in their diapers. You see, You see, things change and, you know, tell us for those that don't know the story of how you how you came to first write this book in the first place?

spk_1:   1:12
Sure, so with New York, New Rules of Marketing and PR I I got my start in a bond trading desk on Wall Street, and then I worked in the financial information business. I worked for companies like Dow Jones and Reuters. So I before the Web, I worked in the business of understanding riel time content. And so that gave me essentially a head start in 1995 when the Web came around and pretty early on late 19 nineties, I recognize that everyone was getting it wrong. Everyone was talking about marketing on the Web is being like advertising, you know, is banner ads At that time on. Then Google came around with their AdWords. Everyone's all about advertising with Google AdWords, and I'm like, No, it's about creating content. You're wrong, you're wrong and like and I was like a heretic. Nobody was believing me. So I started blogging in 2004 started writing about these ideas on my block, which was getting a lot of traction back then and then I was, I wrote in 05 No. Six. The new rules of marketing and PR came out June of 2007. And, yeah, I think it probably is the best selling book in this space. It's now in the sixth edition. It sold 400,000 copies in English over all the additions, and it's in 29 other languages, from Albanian to Vietnamese. So, yeah, it's done. It's done pretty well. And I think, though, Neil, that too many people and I know you see this to too many people are abusing these ideas now. Too many people think they know how to use these new rules of marketing and PR, but they don't use them in the way that you and I talk about it. Instead, what they're doing is, for example, you buy something from a company. They add you to the email list without permission, and then they send you 3456 emails a day or on social networks. Somebody will connect with Ewan linked in and then all of a sudden turn around, try to sell you something. The social networks themselves are part of the problem because there's in the beginning you know, you would put out a piece of content, it would go to your network. Now, unless you pay, it doesn't go around. It doesn't get out to that many people when you put out an update on the social networks. Also try toe polarize people into political spaces. And based on what you've purchased, they show you other stuff in there just like that. So I think the pendulum has one too far into the direction of superficial online communications at a time when all of us are incredibly hungry for a a true human connection. And so, Phil, Last five years I've been researching and right in with my daughter. She's 26 years old, this new book fan ocracy, and it comes out in early January January 7th. And the idea of Finn ocracy, I think, is as groundbreaking today in 2020 as the new rules of Marketing and PR was in 2007.

spk_0:   4:18
Wow, I want to get into that. But I I also you know, I agree with what you're saying and for me I launched my company. I wrote my first book in September of 2009 and I launched my consultancy in January 2010. So for me, we're now entering the second decade of social media marketing. And yes, we already ended it a few years ago. So yes, there was some evergreen rules. But there's also been a lot of changes, and I believe that there's a need for a new mindset. And my reaction, obviously was, was right in the age of influence, as yours is right now. So based on that, then tell us, you know, when I hear the name fine ocracy, I think brand advocacy, and I'm sure it's a lot more than that. So tell us what you've seen as you researched over last five years. That led to this idea.

spk_1:   4:58
Yeah, so brand advocacy is a 1/10 of the book is one chapter. As I mentioned, I wrote it with my daughter Rico. She's 26 now. When we started the journey, she was 21 it came about because we're driving in the car on dhe. She knows I'm a huge life music fan. I've turned her into a live music fan like this Crazy. You know, I've been to 780 live music shows have been to 75 Grateful Dead concerts. What's this all about? And she goes, Yeah, you're a massive music fan, Daddy, and I'm a massive Harry Potter fan, she said. I knew this, of course, because I introduced Harry product to her when she was six by reading the first book to her. But she's read every book multiple times, seen every movie multiple times gone to the wizarding world of Harry Potter in Orlando. I think twice went to the UK to go on the studio tour, where they filmed the movies, and she wrote a 90,000 word novel, which is an alternative ending to the Harry Potter series where Draco Malfoy is a spy for the Order of the Phoenix and posted that on a fan fiction site. And it's been downloaded thousands of times and commenting on hundreds of times, and so what we recognized is that for us, these fandoms that we participate in our incredibly important parts of our lives. And so he said, You know, there's something there, and I asked her to collaborate with me on this book that's now out coming out. Fan ocracy, turning fans into customers and customers and defense because we wanted to investigate. Can any organization create the same kind of fandom as the Grateful Dead and Harry Potter did? And the answer is 100% Yes, We looked at all kinds of different organizations. Nonprofits, government agencies, insurance companies be to become his enterprise software companies, doctors, lawyers, dentists. In every category there are people who are developing fans, and so that's what we were. That's what we studied. We spoke with hundreds of people about what they're a fan off. We spoke with hundreds of companies about how they develop fans on. We've come up with a prescription for how that's possible.

spk_0:   7:10
So is there an intersection in some way with officer top of mind that I hear from a lot of marketers, its customer experience? And I'm assuming that there's a really, really good intersection here with customer experience and Finn ocracy? Yeah, there

spk_1:   7:23
is. But I think it actually goes deeper. I think it goes, and I think if I were to boil down the ideas of this book into just a sentence, it's a true human connection, and that's the thing that is often lacking in the ways that organizations are doing business now and let me just give an example. So, um, some people say, fans, Yeah, maybe that's fine for Harry Potter, Apple or Patagonia, but I can't build fans. So let me ask you a question. Neal, Do you love auto insurance? No, No. Your fans, right past thousands of people that every single person says no. I interviewed McKeel Haggerty. He's the CEO of an auto insurance company called Haggerty Insurance. He founded the company's entrepreneur. Really interesting guy on he said. David, everybody hates my product. Everybody hates insurance. Nobody likes to buy auto insurance. And furthermore, nobody wants to use auto insurance because it means you've crashed your car. S o. I couldn't market and create customers the way that everyone else does. How does everyone else do it? Either they become the low cost provider, or they spend a massive amount of money on advertising. And there's no way I'm going to compete with Gecko's and lizards or whatever those green things are that others are advertising with. So what he told me was he specifically went out to develop fans for his business on DSO. Haggerty Insurance specializes in classic car auto insurance So first thing they realized is that there's already a massive fandom around classic cars. So he and his team goes toe over ah, 100 classic car events in North America a year. They set up a booth. They provide educational seminars for people who are there. They, they they be, have become part of the classic car community. They have a YouTube channel with over With approximately a 1,000,000 subscribers, 650,000 members of the Haggerty Drivers Club. They do a bi monthly magazine. They have evaluation reports where they they have graphs of the value of classic cars. Over times, you can see either the car you own or car. You might think about owning what the value has changed over time. And I am a fan of Haggerty. I've been a customer of there since 2005. I can say I'm a fan of my auto insurance company, right, and here's where this has led to them. They've had double digit compound gross every single year since their inception. They will grow by 200,000 customers this year on Air, the largest classic car insurance company in the world. And it's

spk_0:   10:07
all built on fans in a category everybody hates. That is really fascinating as I think about it. You know, I'm not a fan for a lot of brands, but as you know, I spent time in Japan's I'm a big fan of mutant glow, and I was wearing uniquely away before they were out here.

spk_1:   10:21
My daughter is a massive Coke from an absolutely huge yeah, you.

spk_0:   10:26
So I mean, they don't have to advertise to me. I'm always in the shop by and stuff. And that's obviously how that year of Ellis is exactly that, right? You're a fan, right? Yeah, And that's really interesting because I'm seeing a trend of people in marketing. Say, Hey, brands need to be more human, and I think that's obviously I don't I don't know how much that's possible right now. Obviously, I'm assuming that fan ocracy also introduces maybe a formula or a system or rules that brand can follow to become part of the community that they want to.

spk_1:   10:55
Yeah, I mean, I I wouldn't call it rules per se, you know, new rules of marketing and PR youth. I used that word rule. What we did, though, is we came up with 10 different chapters. Each one is a prescription toe. Help grow fans in some way. So we recognized that there are many ways to create this true human connection. And that's really what every chapter is about in some way creating a true human connection between you and what we hope will become your fans. And so let me share with you one of my favorite of these 10 prescriptions. So my daughter Rico is a neuroscientist. She did a neuroscience degree at Columbia University. She's now in her final year of medical school. She's going to be an emergency room doctor next year. So one

spk_0:   11:45
of the

spk_1:   11:45
things that we wanted to do with this idea of fandom is to understand what's going on in our brain when we become fans of something, you know, we really wanted to understand this, to figure out if we could crack the code on what's happening. And so he spoke with a whole bunch of neuroscientists about how the brain works around this idea of fandom, and a lot of people never really thought about it. So we had to really dig to get getting into D into this deeply. And here's what we learned. It turns out that we humans are hardwired to be interested in becoming part of a truck. And that's because our ancient brain as a survival technique has to find people who are part of our tribe because that's where we're safe, as opposed to people who we meet, who are not part of our tribe, where there's potential danger. This is hard wired in our brains. And so, for this reason, if I go to a Grateful Dead concert I'm with, I'm with my tribe. I know the lingo. I could walk up to anyone in a Grateful Dead concert and have an instant bond. We can connect because we're part of the same tribe. And so one neuroscientist and it was Edward T. Whole identified the different levels of proximity between people, which illustrates this idea of being part of your tribe. Together with other people. The furthest away is called public space. 12 feet were further away. Our brains do not track people actively who are in our public space. We know they're there, but we don't begin to worry about them, but we do when they get inside of 12 feet that's called social space and then even closer is called personal space. It's inside of four feet. That's where incredibly strong emotional connections happen inside of four feet, so trophy to four feet social space. You walk into a room. You can't help the fact that your brain starts to track the people in the room because your brain wants to know. Are these people part of my tribe? Are they friends or they potential enemies? That's a survival technique. And so if you're with people who you trust, who you like who? Your friends, your family, part of the same tribe, part of of the fandom that you participate in. That's a very strong, positive human connection. If you get into a crowded elevator, a crowded subway and you're in the social or personal space of the people that you don't know, you can't help but feel nervous. It's hard wired into our brain is a survival technique because you're trying to figure out whether you need to put your fight or flight mode in, which makes, by the way, that Tokyo subway system is like, constantly stressful. Right? Right now, uh, s so So what? This means for developing fandom is that the more you can put people into your social or personal space, the more you can develop those true human connections. And so that means if you're gonna be to be company, can you create a client conference to bring people together? Can you do your sales calls in person rather than over the phone? Anyway? You could bring people in close physical proximity, but then some people have said to us, But David, you know, we were in a global business. We can't be in everyone's personal space or we have a virtual business we sell online. What can we D'oh? Well, there's another concept of neuroscience, which I find fascinating. It's called mirror neurons. The idea of mirror neurons is it's part the part of your brain, which fires when you see somebody do something or even hear somebody do something, and your brain fires exactly the same as if you were doing it yourself, which I will now demonstrate. I've got a women and a slice of lemon, and so if I take this a bite of the slice of lemon, it's really powerful, my gosh, and makes my eyes close. My mouth puckers up. It's really powerful on the end of my tongue, that tartness the my saliva glands were doing their thing because of this, and and so my brain is firing because of that bite of lemon. But my guess is that your brand fired a little bit too, Neil. Indeed, it's weird, right? And even people who might be on Lee listening to the audio track of of us talking, You might even feel a little bit of lemon on the end of your tongue, too. That's the power of mirror neurons. This is why, when you're watching television or a movie, you feel you know the TV stars of the movie stars. You've

spk_0:   16:15
never met them, their images on a

spk_1:   16:17
screen, but you feel you know them. And here's how this comes into play for growing fans. It comes into play because if you can use video and photographs effectively on your website, in your social media, in your offline marketing brochures, or if you run a store the way you do the the advertising for your store, that has the possibility of developing through mirror neurons, a strong connection with like minded people and so one manifestation of this. Eliminate all the stock photos from your advertising from your marketing and use. Real people use real people cropped as if they're within four feet of the camera. This is why Selfies have become so popular and taken off because the humble selfie, which people dismiss is frivolous, is actually a really powerful technique to reach people because of this power of mirror neurons.

spk_0:   17:12
Which also explains Thea, which, one could say explains the growth of these visual social networks. And yes, really, I I I think it

spk_1:   17:20
helps to explain Instagram and Tic Tac and so on. And you know, this is really powerful and really strong. This is just one chapter in our book. This is the chapter we titled Get Closer than Usual the idea of understanding the neuroscience workers on our brain when we become fans. But I want to share one person who read an early copy of the book about a month ago. Part of the manuscript, she's, ah, famous novelist, and so she has an instagram and her novels are set in Europe, so most of her instagram feed our photographs of beautiful scenery in Europe on, and I'm sure in her Instagram is quite popular. But she said, David, I had never taken self in my life. I read that chapter in your book, and I decided it for the hell of it. Take a selfie. So I took a selfie posted on my instagram, and instantly it became the most engaged image on my instagram ever. And she said, I can't believe that s o And but to me it's it's it's clear after having done this all of this research, talking, nurse science and seeing how on most people's social networks, those kinds of images, people cropped close like that video or photos are incredibly active in terms of the likes of the shares. So so that's just one of the 10 ideas that we talked about at all 10. Equally interesting for how organizations could build fans

spk_0:   18:46
what you talk about their also ties into the popularity of some influence or content. We could talk about what what determines authenticity and what neuroscience behind that right? I'm

spk_1:   18:55
sure. Well know that. I think you're absolutely right. You know, people sometimes dismiss this so called influencers, but they are developing a relationship with their audience because of this concept. We just talked about it. And so, you know, you might dismiss It is frivolous, but they've done a good job with that.

spk_0:   19:13
Yeah, they're they're great content creators. And they get that. I think it's easier for them to do the selfie than a brand or even that author feeling embarrassed. Why would I do it? But people engage with people's faces, right? Yeah. People like them. Absolutely Well, yeah. David, you know, we could go on. We could do a marathon session here. Now, we could do like to keep these at a certain of it. I leave. I want people that have gone this part actually go out and three order or when this podcast that actually buy your book. So give him a little bit more information about the book before we go here is well as any. Anything else you want to tell people what's in here? Let me just

spk_1:   19:47
wrap up with one thought, and then I'll give you how to reach us. So when we went into this, we had the thesis that any organization could build fans, but we weren't quite sure about that. And as we dug into it, There's no question at all. We found examples of all kinds of organizations that have been able to build fans, and I mentioned and surprising example with Haggerty Insurance, and we've found examples of doctors and lawyers and dentists. Enterprise software comes and it's incredible list of organizations. What are my favorites, though, is how the outward manifestation of fandom comes about. People wear a ball cap with a logo on it. They wear a T shirt with a logo on it. They put a logo onto their computer. They put a logo under the bumpers of their car, and that's an outward manifestation of fandom. And you see all kinds of different organizations where people are sporting the logo of the organization that they love. And I want to share a surprising example to illustrate that point. There's a A U. S. Government agency, a U. S. Government agency that has tens of millions of fans. You can go to weaken Goto. You know what it is. You can go to any city in the world. You see people wearing this T shirt. I was in the Seychelles, an island chain off the eastern coast of Africa, just above Madagascar in the Indian Ocean a month ago, and I was walking down a rural street and somebody approached me wearing a NASA T shirt. NASA is a government agency with tens of millions of fans. Oh my gosh, can you imagine on a U. S. Government agency with fans? And they do a

spk_0:   21:20
lot of the

spk_1:   21:21
things right to grow fans. So we're convinced that anybody congrats, fans, and it's a great way to, you know, is a fabulous time for us to be recording this Neil, because we're going from the teens. The 20 teens to the 20 twenties were going into a new decade, and I think like you, we both identify that there's something new coming, and I think it's this true human connection, the idea of fandom. And so I think it's it's it's cool that we're recording this right at the turn of the decade, and I am. I could be found on the socials at D M. Scott D M S c o T T. I use my middle name professionally because I'm the only David Merriman Scott in the world's If you Google me will find me, and we also have a website at www dot fan ocracy dot com. Lots of information There's a cool infographic around this idea of proximity we just spoke about. There's pdf documents you can downloads. We got a video channel up there, so all kinds of stuff on fan ocracy dot com

spk_0:   22:24
that's grated. I see now why you're like, this is sort of the next the next generation of of this book. Um, the landscape is something different than it was when

spk_1:   22:32
I think it is. Yeah. I mean, I mean, that book, the ideas were still valid, but But this is I think this is what's next. I think this is the thing that if you adopt these ideas, you create a fan base and a fan base as long you don't screw it up, will support you for a very long time.

spk_0:   22:50
Yeah, excellent. I know. Obviously go to Japan sometimes. But if you haven't

spk_1:   22:54
been for a couple years, my cash, you know, my what? I just booked a ticket for my wife. She's gonna be going in February. It's like I'm kind of jealous. Haven't been back in a couple of years.

spk_0:   23:05
Yeah, I go there quarters. You're going soon right? Yeah, going on Monday, actually. Good for you. It can be to be marketing circles there that the new sort of buzz word is community marketing now comes from a book that was published here. But it's really this the same aspect of bringing people that the guy who wrote it created the first user group for Amazon web service is in Japan, the power of that community, which basically sells. You don't sell your product, they sell for you through. So there's a lot of what you talked about here that's really at the tip of a lot of people's minds there. Yeah, and so I see a lot of these sort of trends in a second. I can't wait to get my hands on a copy and look forward to just the amazing things that are gonna come your way with the publications book.

spk_1:   23:47
I appreciate that, Neil. And and the other cool thing is that within about two months of each other, we both will have new books out there. So congratulations on yours too.

spk_0:   23:56
Thank you very much. Yeah. Yeah. So Hey, you all know where to go. You don't need to do in his by Ben Ocracy and learn from the master who's I think you are the only one I've never heard any of the marketing authors say. They've sold over 400,000 copies, so I know it's gonna be amazing success. I know it's gonna have a lot of value to all the listeners. And you heard it here before the book was launched. You go. There you go. You get a head start in the competition. So, David, thank you once again, particular time of the busy schedule. And wherever you are in the world, as I'd like to say, make it a great social day and we'll be back at your hopefully next week of everybody. And thank you again, David.