Bill George Go To
discoveryour
truenorth.org

Bill George

Harvard Business School Professor, former Medtronic CEO

Category: Emerging Media

Pepsi REFRESH: The Empowerment of a New Generation

I was very excited to hear about the Pepsi REFRESH project when it was announced at the beginning of the year.  CEO Indra Nooyi’s decision to allocate marketing dollars to a community-reinvestment effort deserves great applause as it stands as a prime example of progressive, conscientious 21st centruy leadership.  By shifting Super Bowl advertising dollars to philanthropy, Pepsi is making a smart investment in marketing and in communities. 

The program is simple.  Pepsi REFRESH invites anyone to submit a grant proposal for a project – all proposals are then judged by the Pepsi’s online community, from their dedicated Facebook fans and Twitter followers, and beyond.  Grants of $5,000 to $250,000 are awarded to dozens of applicants every month. 

This project is exciting on multiple levels.  First, it marks an encouraging departure from a dated era where corporate philanthropy and community empowerment was seen as a “nice-to-do,” only done to enhance a firm’s public image.  Over the past generation, corporate philanthropy has been impacted by Milton Friedman’s view that business is a “profit maximizing” entity, rather than an institution chartered by society as a steward of its financial and social well-being.  But now, the idea that philanthropy is better left to shareholders is fading away – and I am glad to see Pepsi reinforcing a new ideal.

Second, Pepsi Refresh represents a marketing innovation.  Indra Nooyi has long been at the forefront of progressive leadership, but green-lighting this project shows that she and her team at Pepsico are committed to exploring new ways of engaging customers.  Instead of bombarding viewers with Super Bowl advertisements, Pepsi is seeking out their customers where they live – offline and online – and delivering value to their communities.   Millions of Pepsi customers are engaging in social media and connecting online, actively seeking company engagement on this level. People want companies that seek out their advice and ideas, companies that talk with them in the way they want to communicate.

Third, this project is an investment in the next generation of leaders.  The Pepsi REFRESH project empowers community activists, students, small business owners, and non-profit overseers in an unprecedented way – with no-strings-attached investments in their projects and complete corporation-backed empowerment.  Not only is Pepsi providing funding for these projects, they’ve left the decision-making in the hands of the masses.  Votes online will dictate what project – what up-and-coming leader – receives funding, not votes around a boardroom.

The Pepsi REFRESH project represents a monumental effort to be a trend-setter by redefining corporate marketing and customer engagement.  If Pepsi is “the choice of a new generation,” then Pepsi REFRESH may well be “the empowerment of a new generation.”

$10 Twitter?

Social media can’t stay free forever. I may be new to the Twitter/Facebook arena but that much, from a pure business standpoint, I know.

It’s one of the most basic tenets of capitalism and free markets: at some point, you’ve got to charge for your services.  And your customers have to pay.  With no hard exchange of value, the entire operation is a mirage. 

PCWorld’s Phil Shapiro hopes Twitter takes that lesson to heart.

Mr. Shapiro’s article Time for Twitter to Charge Tolls, published in BusinessWeek this morning, argues that Twitter should adopt a modest $10/month membership fee:

In the case of Twitter, the service has proved its worth many times over to countless users. And now is the right time for Twitter to start charging a fee—a modest annual fee of $10, say—for every account. People would be given two months to register their existing Twitter account with a credit card or debit card. All Twitter accounts that remain unregistered after two months would be deleted. If you don’t think Twitter provides you $10 per year of value, you probably should not be using the service.

Mr. Shapiro asserts that a charge-for-membership model would affect two changes to drastically improve an already remarkable service.  First, it would allow Twitter to expand its employee base to accommodate a rapidly expanding clientele.  As Shapiro asserts, “No way can 60 employees respond to all the genuine needs of Twitter users and the Twitter ecosystem of hardware, software, and people”

Second, in theory it would weed out the spammers (and certainly would remove most disinterested Tweeters) thus enhancing the level of conversation.

Time for Twitter makes sense both from a user’s standpoint and a business management standpoint. 

From a user’s standpoint, the network shut-downs and spam messages are minor annoyances, but their respective removal would raise my satisfaction with Twitter significantly; certainly enough to warrant a modest monthly fee (I would likely pay that now, without those improvements).

From a business standpoint, it also just makes good, hard economic sense to charge customers for a service like Twitter.  It is a service that customers already know they enjoy – and many feel that they need

Social media companies are on thin ice if their economic model hinges on providing free services indefinitely, and only generating profits based on speculative, “some day” capitalization on popularity.  Companies like Twitter need to find a way to root themselves in traditional supply-and-demand, fee-for-service rules of economics if they intend to have staying power. 

It’s simple: Provide a service.  Make money.  Improve and expand the service.  Keep customers happy. Grow the economy. 

 

Extra, Extra, Tweet All About It

Recently, someone asked me: “would you recommend to a current CEO that he or she join Twitter?”  At the time, my jury was still out.  Now, six weeks in, I have an opinion. 

I would strongly recommend a sitting CEO utilize Twitter. 

Twitter makes you the spoke of a (potentially) very, very large wheel.  The caveat?  You must keep spinning, or the wheel goes flat.  Twitter has been a great communication tool for me, but I’ve come to realize that it requires as much output as I receive input.  And that output needs to be original, opinionated, and reflective of a unique personality and viewpoint; otherwise it’s just fluff.

Across the past six weeks, in 140-character bursts I’ve heard pundits, politicians, renowned bloggers, and steeped authorities weigh in with answers to questions I had never even considered (and those I’ve pored over many times).  As is the expectation, I’ve joined that dialogue, adding my expertise where I can and jumpstarting new conversations where possible.

All told, I’m 267 Tweets and 510 Followers in.  I’ve done the requisite article linking (thank you “bit.ly” URL) and my fair share of retweeting.  I’ve live-tweeted a Presidential address to Congress, held Q & A’s, and even promoted my new book

I’ve also learned several lessons – a few must-dos – that I would recommend any green-tweeter consider:

First, always respond to comments and messages.  It ensures the genuineness of the process, and is the best way to establish lasting relationships.  Plus, for those more high-profile of CEOs, to gain a reputation as an engaging, personal character on Twitter can earn you a loyal following.

Second, learn the lingo.  The shorthand and abbreviations took some getting used to, but it has made my Tweets far more effective at reaching people in a way they can understand.

Third, as Twitter is really free-flowing conversation pit, to be effective you must pose and respond to questions.  Bring fodder to the conversation.  I’ve tried to do this, so far (and thankfully have been told where I’ve succeeded, and where I’ve fallen short, by me fellow tweeters).

In reality, I would never need to recommend Twitter to an active CEO, as many of them are tweeting already.  But should one be new to the experience, I’d tell them to just ask @stevecase, @jack_welch, or @mark_cuban

They’ll tweet you all about it.