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User Distrust at Heart of Facebook Troubles

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Satisfaction with social-networking powerhouse Facebook has slumped, according to the latest survey from the American Customer Satisfaction Index — hitting a new record-low score in the social media category that placed it in the five lowest-scoring companies out of more than 230 surveyed. There are several immediate factors that undermine user trust:

  • Inconsistency. Facebook’s user interface changes constantly (think Timeline) and this inconsistency leaves users feeling like they don’t know what to expect next from the social media site. Consistency builds trust, but Mark Zuckerberg doesn’t seem to have much vision for consistency.
  • Lack of Transparency. The average user has very little comfort with or knowledge about how Facebook is collecting, analyzing, using and selling their personal data. While Facebook has a range of privacy and security settings, most users still don’t comprehend the enormity of the information that Facebook collects on them. This lack of transparency leaves users with a bad taste in their mouth, like they are being cleverly deceived for the sake of profit.

Facebook is staring down some potentially unnerving obstacles when it comes to key areas of monetization and growth: public distrust and display ad apathy.

Look at these highly revealing statistics:

  • 59% of Facebook users said that they had little to no trust in Facebook to keep their information private according to a recent AP-CNBC poll.
  • Despite these ongoing concerns, the number of users continues to increase. Facebook has grown to 900+ million monthly active users worldwide. This paradox (that Facebook continues to add users even though most of us don’t trust them), suggests a level of reliance bordering on addiction.
  • 54% of Facebook users declare that they don’t trust Facebook using the platform for financial transactions like purchasing goods or services.
  • 83% of Facebook users say they never, or rarely ever, click ads or other sponsored content when they use the site.

Facebook is facing a crisis of trust. For now, they are masking it well and continuing to grow, unless that is, if you judge their success by revenue rather than users.

John Sileo is an award-winning author and data security speaker on social media over exposure. He is CEO of The Sileo Group, which advises organizations on privacy strategy, data security and fraud prevention. His clients include the Department of Defense, Pfizer, the FDIC, and Homeland Security. Sample his Keynote Presentation or watch him on Anderson Cooper, 60 Minutes or Fox Business. 1.800.258.8076.

Zappos Breach: 5 (Foot)Steps for the CEO, 6 for Victims

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Let’s say you ordered winter boots for your spouse on Zappos.com (now part of Amazon), which has world-class customer service. You don’t really even shop the competition because someplace in your brain you already trust Zappos to deliver as they always have. Your unquestioned confidence in Zappos is worth a fortune.

And then hackers break in to a server in Kentucky this past weekend and steal private information on 24 million Zappos customers, including (if you are a customer) your name, email address, physical address, phone number, the last four digits of your credit card number and an encrypted version (thank goodness) of your password. Consequently, your junk email folder is overflowing (your email has been illicitly sold to marketing companies), you receive the doom-and-gloom breach notification from Zappos (just like I did), and suddenly, you don’t have quite the same confidence in this best-in-practice business any more. Your shaken confidence in Zappos costs them a fortune. For the foreseeable future, you will pause before using their website again.

“We’ve spent over 12 years building our reputation, brand, and trust with our customers,” Zappos CEO Tony Hsieh said in a note to employees Sunday. “It’s painful to see us take so many steps back due to a single incident.”

In a smart move, Zappos reset the passwords for all affected accounts and notified victims on how to create a new one. But their efforts to recover customer trust are just beginning. Here are 5 Core Concepts of Trust that Zappos leadership should weave into their breach recovery process:

  1. Ownership. Leadership at the company should take complete responsibility for the loss of data and not make excuses as to how it was someone else’s fault (remember the BP oil spill finger pointing?). The last thing victims need is to become more victimized by a corporate spin cycle that further erodes trust. Authentically respecting their customer base (which they do), even when it costs a few extra dollars to maintain, is a sound investment strategy.
  2. Transparency.  Zappos customers have the right to know exactly what was stolen and how it might be used. They deserve to know what the company knows and what law enforcement knows. Sharing their failure (as opposed to covering it up in any way, which they don’t seem to be doing) is a painful process with high short-term costs, but it is the first step in taking responsibility.
  3. Expectation.  Zappos needs to set customer and marketplace expectations early and often about how they will make it better. Forcing users to change passwords does little to ease fears that it will happen again. What tangible steps will they take to repay customers for the trouble they have caused and what measures will they implement to better protect users in the future?
  4. Delivery. Zappos must deliver on the expectations they set with the victims, with the media and with the marketplace. False promises (pretending to implement better security but underfunding the budget) are cheap Band-Aids but only further infect the inflicted wounds when nothing actually changes. To regain trust, Zappos must set impressive expectations and deliver on them flawlessly
  5. Competence. Zappos is not in the business of recovering from identity theft or data breach. They need to aid their legal department by bringing in breach mitigation and recovery experts. Saving a few dollars up front keeping the efforts in house will raise downstream recovery by multiples.

In the meantime, if you are a victim of the Zappos’ breach, begin with these steps:

  • Immediately change your password according to Zappos emailed instructions.
  • Use an alpha-numeric-upper-lower-case password that has nothing to do with your personal life and can’t be found in a social networking profile or dictionary
  • If you use the same password on other sites (webmail, financial), change those as well
  • Implement identity theft monitoring services.
  • Monitor your credit profile for suspicious activity at AnnualCreditReport.com
  • Don’t click the links in that email. Zappos is sending every one of its affected customers a warning e-mail. However, more often than not such “official” e-mails are from hackers (for example, “We’ve had a security problem. Please change your password.”). These fraudulent e-mails can be virtually indistinguishable from legitimate communications, including identical graphics, logos, and authentic looking return e-mail addresses. Instead of clicking, type the URL (in this case Zappos.com) directly into your address bar. If there’s an important notice on your account, you’ll find it there.

John Sileo is an award-winning author and international speaker on the dark art of deception (identity theft, data privacy, social media manipulation) and it’s polar opposite, the powerful use of trust, to achieve success. He is CEO of The Sileo Group, which advises teams on how to multiply performance by building a culture of deep trust. His clients include the Department of Defense, Pfizer, the FDIC, and Homeland Security. Sample his Keynote Presentation (he shares how he lost $300,000, 2 years and his business to data breach) or watch him on Anderson Cooper, 60 Minutes or Fox Business. 1.800.258.8076.

 

What Larussa's Botched Bullpen Call Teaches About Trust

St. Louis Manager Tony La Russa changing course mid-stream (Dilip Vishwanat / Getty Images)

During Monday night’s World Series game, Tony La Russa, the coach of the St. Louis Cardinals, failed to warm up the right-handed relief pitcher he desperately needed to face the Texas Rangers red-hot right-handed batter, Mike Napoli. Napoli, with the games announcers in complete disbelief at the oversight, took advantage of the mistake, drilling the pitch into right center field for a double. The Texas Rangers went up 4-2 and won the game.

Directly following the game, La Russa blamed the dugout phone, the bullpen coach (indirectly) and the noisy crowd for his failure to warm up the right guy. Within minutes, you could almost hear the simultaneous guffaw of the entire sports world, “It’s the phone’s fault?”. Our collective BS meters went off because in some way, we sensed he was covering something up.

Suddenly, a coach with a glorious 30 year coaching reputation, a man known for his intricate patchwork of relief pitching to pry out of tough situations, had lessened his credibility. What actually happened to cause the mistake is immaterial; how La Russa addressed the blunder is what matters — his credibility was eroded more by his response and less by his mistake.

Look at the foundation of La Russa’s reputation:

  • He’s earned the trust of his players and the respect of fans, opposing coaches and the media over 33 years of successful coaching
  • He ranks 3rd on the all-time winningest coaches list and is the 2nd winningest playoff coach ever
  • Baseball professionals commonly refer to him as one of the smartest, most capable coaches in the game
  • He’s proven time and again that he knows how to maximize his pitching staff to its fullest potential (he just set the record for the most pitcher changes in a World Series)

In other words, his overall capability wasn’t really in question. But when he made the mistake, he tried to cover it with an excuse so as not to look incapable. Capability is commonly mistaken as the primary measure of our professional success. But even the most capable professionals make mistakes and we all know this. On top of that, we are very forgiving beings when people own up to their failures (Bill Clinton’s approval ratings have never been higher).

By covering the pitching snafu with excuses, La Russa damaged our perception of his integrity, which is just as important as capability to reputation and trustworthiness, but harder to quantify and more difficult to regain. Even if the call was someone else’s fault, La Russa is in charge and it happened on his watch. Something stank about his explanation and we could all smell it through the cable wires. What if, instead of blaming the phone or the bullpen coach or the noise of the crowd right out of the gate, he had said this:

“In a coaching career as long as mine, you’re gonna make some mistakes. Some are bigger than others. This one was BIG and I’m going to do everything in my power to make good on it. My bad. Please forgive me.”

Eventually he said something like that, but by then, the talking heads had begun their wording frenzy. Reputation that grows out of capability takes years to destroy (think Brett Favre), but the same reputation can be destroyed in a single act that lacks integrity.

Have you ever forgotten to go to the bullpen when you should have and then made excuses? I sure have. The more quickly we admit our errors, express our regrets and work to overcome the deficit, the less damage we do to our character. In fact, strategic admission of failure can actually increase credibility, because it lets others know that you are both human and honest. While this lesson seems to be lost on politicians and the occasional celebrity, it needn’t be on the rest of us.

There is a highly powerful lesson in his example, especially for leaders:

Own your failures, use them to fuel positive change and allow them to improve your future decisions. You will gain trust, respect and credibility.

John Sileo speaks and writes on building trust and defending against dishonesty. His clients include the Department of Defense, Pfizer, FDIC, Homeland Security, Experian UK and Blue Cross, as well as individual leaders committed to building power and influence from a foundation of trustworthiness. Learn more about his keynote speeches or contact him directly for Trust Coaching on 800.258.8076.