The closest I’ve come to liking Elon Musk was during his SNL opening monologue on May 8, 2021.
But it was never that close.
I admired his courage to appear on the show and willingness to mock himself. His performance humanized him. He was funny in some skits.
Yet my gut told me not to trust anything he said.
Too many shoot-from-the-hip statements and impulsive acts.
One of Musk’s impulsive acts was offering to buy Twitter for $44 billion in April 2022. Twitter’s board accepted his offer. He tried for months to get out of it and haggle the price down.
Advised a court would force him to honor the agreement, he changed tunes and completed the purchase.
New leaders often assess a brand by talking to employees and customers before taking action.
Musk’s due diligence during the purchase process and management style led him to act first, think later.
On October 27, 2022, Musk’s first day as owner, he fired Twitter’s CEO Parag Agrawal and three other senior leaders, making himself CEO.
A week later, Musk laid off 3,700 employees, about half the workforce. Many employees learned of their layoff by discovering they could no longer access their company email accounts.
Just days later, company leaders were asked to compile lists of employees they would ask back, with an emphasis on media engineering. Few wanted to return.
Subsequent layoffs have whittled Twitter to 1,500 employees.
On October 30, 2022, The Verge announced Twitter was raising the monthly price of Twitter Blue from $5 to $20 and requiring verified users to subscribe or lose their coveted blue check marks.
Twitter Blue subscriptions offered top articles, custom icons, and the ability to edit tweets.
Blue check marks signaled the user had passed a stringent verification process. You could trust it was really them tweeting.
After Stephen King balked, Musk dialed the cost down to $8 on November 1.
Musk then offered anyone willing to subscribe a blue verification check mark if they provided their phone number.
A deluge of impersonators and scam artists signed up. Twitter had to halt subscriptions to regain control.
Now with little real value, many celebrities declined to subscribe to preserve their blue verified-user check mark.
In April 2023 when Twitter began enforcing the subscription requirement, Musk decided to comp subscriptions for Stephen King, LeBron James, William Shatner, and Iced T.
Every other nonsubscriber’s blue check mark vanished.
On November 18, 2022, Musk ran a poll on reinstating Donald Trump’s account. It had been banned following the January 6, 2021 attack on the Capitol. Voters narrowly agreed 51.8% to 48.2%.
Twitter restored Trump’s account on November 20, 2022.
Musk’s November 23 poll asked if Twitter should offer a general amnesty to suspended accounts. Seventy-two percent (72.4%) of the 3.2 million users who voted said yes.
Twitter began reinstating suspended accounts the following week.
On December 15, 2022, Musk, a self-described “free speech absolutist,” banned journalists Donie O’Sullivan (CNN), Ryan Mac (The New York Times), and Drew Harwell (The Washington Post) from Twitter, and other journalists who had covered his actions aggressively.
He claimed they “doxxed” him, sharing his exact location in real-time, endangering his family. No proof emerged.
After an uproar, Musk polled Twitter that same day about unsuspending the accounts. Fifty-eight percent voted for immediate unsuspension.
Twitter made the suspended journalists’ accounts viewable on December 17, but required them to remove the “offending” tweets before allowing them to tweet.
Most surprisingly, Musk’s December 18, 2022 poll asked if he should step down as CEO. Fifty-seven percent (57.5%) of the 17.5 million voters said yes.
Musk’s initial reaction was to reconsider who gets to vote in Twitter polls. After a user suggested only blue check mark holders should get to vote, Musk responded, “Good point. Twitter will make that change.”
That did not happen, however.
On December 20 Musk said he’d step down after he found a replacement.
But he began undermining his successor by saying he needed to find “someone foolish enough to take the job.”
Brands exist in consumers’ minds as the sum of their experiences.
Twitter came into being as a place to get and share breaking news. It grew into a place for influencers and followers to meet and converse.
Musk’s impulsive management, policy changes, and reversions gave users and advertisers whiplash.
Twitter and Musk delivered tons of bad experiences that eroded trust in the Twitter brand, degraded it, and prompted many users to flee.
Only 43 percent of Twitter’s top 1000 advertisers in September 2022 were still advertising there in April 2023.
For many, the Twitter brand evolved to be more about Musk and his whims than anything else.
Making good on his promise to step down, Musk hired Linda Yaccarino, NBCUniversal’s head of advertising, as Twitter’s new CEO, beginning June 5, 2023.
This pivotal moment could have saved Twitter.
If Yaccarino had shown she would address users’ concerns, restore lost functionality, and stabilize the brand, Twitter users and advertisers might have exhaled and renewed their faith in the platform.
But Musk continued to speak and act for Twitter, undermining Yaccarino.
On July 15, 2023 Musk said advertising revenues were down 50 percent and cash flow was negative.
Though CEO Yaccarino said the company was “close to break even” on August 10, 2023, onlookers remained skeptical. Musk’s July statement makes this financial recovery questionable.
On July 23, 2023 Musk announced he was rebranding Twitter as X. He tweeted a request for proposed logos, chose one, and implemented it the next day.
Musk envisions X as an “everything app,” enabling users to make payments, get news, and order food, among other things.
X CEO Yaccarino tweeted about the new brand but it appears Musk is still leading it.
Some long-time Twitter users and influencers with substantial followings are hanging on.
The value they derive from X still outweighs the uncertainty, reduced visibility, and decrease in functionality.
But their patience won’t last forever. It’s waning for some already.
Ann Handley (@MarketingProfs, 453,900 followers) told me, “…I've been spending less time [on Twitter] in the months leading up to the rebrand...But I will say that I have been enjoying [X’s new competitor] Threads.”
Mark Schaefer (@MarkWSchaefer, 167,700 followers), author of The Tao of Twitter, said: “I've learned to navigate Twitter, er ... X, in a way where I experience minimal dysfunction. Follow the good people, block the haters, rinse and repeat. I observe and comment lightly. Not too much discourse these days.”
Arvid Kahl, (@ArvidKahl, 120,300 followers), creator of Find Your Following, a Twitter blueprint, said: “It frustrates me that a platform like Twitter that lives and breathes by the work of the people who use it can be intentionally and violently devalued by leadership like this.
“There are many things Musk could have focused on. Rebranding a beloved name wasn't one of them. I still love the community on there. Just not the fact that it is now X.”
Julie Van Ameyde, (@SimplySocialMI, 1,057 followers) owner of Simply Social Media, LLC, said: “For me, the most significant difference is the ability to monitor Twitter for clients on Agorapulse…I am now back to manually monitoring 15 Twitter accounts and their brand mentions/keywords, causing me to waste the time I need.
I also find it interesting that many automotive OEMs abandoned Twitter/X almost overnight when the Musk transaction was complete.”
Dhariana Lozano, (@DhariLo, 22,900 followers) Social Media Consultant and Speaker, told me: “I'm not the happiest about it [changes to Twitter/X]…My biggest concern is…it seems to be heading in a very ‘pay to play’ direction and I don't like that.”
Musk has made it harder for these influencers to enjoy the X platform and use it efficiently. That’s a recipe for contracting a brand, not expanding it.
From a strict renaming point-of-view, Twitter’s rebrand to X is at best premature.
Rebrands signal major changes. Musk intends those. But his changes remain aspirations.
Musk has tossed Twitter’s towering brand equity in favor of his beloved X with no strategic gravitas to show for it.
Meanwhile the platform’s real problem is eroding trust.
The name change seems to have expedited the erosion. I ran a poll on LinkedIn asking Twitter users how the rebrand to X affected their trust of the brand.
Of the 50 Twitter users who responded, 26 said they trust X less than Twitter, and 10 said they had left Twitter.
Though not statistically significant, the results flash like the early evening iceberg warnings the Titanic ignored.
To turn this ship, X needs:
To tame Musk. His impulsive acts drained his credibility, and took Twitter down with him. Though he installed Linda Yaccarino as CEO to help win advertisers back, his prominent voice continues to undermine her and the X brand.
To build on Twitter’s essence. Twitter began and grew as the place to get live news. While X may not be able to lure defectors back, keeping users who loved Twitter would be easier if they still felt that lure.
This means taking steps to ensure news is easy to find and reliable.
To talk to users and address their concerns. Management must understand users’ and advertisers’ concerns and address them to demonstrate they care. Policies and features need to encourage use of the app, not make it harder or waste users’ time.
To take cues from users. No one switched to x’s instead of tweets. Users are still saying tweets, and that term differentiates the X platform from other social media. Go with that!
To be transparent. Though Musk’s purchase makes the company private, advertisers and influencers don’t want to invest in a brand with a questionable future. Transparency about usage, finances, and issues they are addressing is the only way to restore credibility.
To rebuild trust. X may aspire to be an “everything app,” but why would someone who doesn’t trust the platform for social media use provide personal payment information? They won’t.
Before expanding, X needs to regain the trust from key constituencies and get people to want to spend time on their app.
It’s a tall order. Do you think X can succeed?
***
Don’t let your brand make Twitter’s mistakes. Hear about good brand practices as Matt Lyles and I chat about them on his SIMPLE brand podcast. We discuss:
Listen (36 minutes, 58 seconds) and get show notes here.
Watch Elon Musk’s SNL monologue. (5 minutes, 36 seconds)
As a mother of two young children in the early 2000s who worked from a home office, occasionally I would need a break.
A few hours out of the house on my own to remember who I was without any obligation to feed, clothe, wash, educate, entertain, or otherwise support someone else.
When possible, I’d go while the kids were at school. Most often my husband would take care of the kids for a few weekend hours so I could wander, shop, or just be.
During that me-time, I often found myself gravitating to a cavernous Barnes & Noble store in Framingham, Massachusetts.
I meandered the aisles. New Best Sellers! Staff Picks! Travel! Biographies! Historical Fiction! I picked up books or magazines that looked interesting, and nestled into one of their oversized armchairs to read.
Being among all those books buoyed my soul. My book and journal purchases were gifts to myself.
Somewhere around 2009, the store began to lose its allure.
First the toy section swallowed most of the front of the store.
Then the toys were displaced by two massive Nook e-reader kiosks. To get to the books you had to navigate around them.
I no longer exhaled in book zen upon entering nor felt the joy of discovering a book I wanted to read.
It made me sad.
Barnes & Noble went public in 1993 and launched their superstore concept. Their strategy involved besting competitors with their immense inventory and steep book discounts.
The strategy fueled the brand’s growth, from 520 superstores in 1999 to 726 in 2008.
More than 1,000 book shops closed between 2000 and 2008, though independent bookstores did not vanish.
And before long, the independents and Barnes & Noble shared a common enemy: Amazon.
In 1998, Amazon was 4 years old, and not yet profitable. Barnes & Noble did not see Amazon as a serious threat.
But Amazon proved better at the volume-and-discount strategy than Barnes & Noble were.
The Great Recession and Amazon’s rise forced a reckoning.
Borders bookstore chain succumbed in 2011, filing for bankruptcy and leaving Barnes & Noble as the sole brick-and-mortar counterweight to Amazon’s onslaught.
Barnes & Noble’s leadership made the mistake of trying to compete with Amazon where Amazon had decided advantages.
They launched the e-reader Nook in 2009 to compete with Amazon’s Kindle which came out in 2007.
They redid their website to stoke online sales.
A good website and an e-reader would be good for the brand, but these were catch-up moves required to compete in the industry, not pivotal forces that would turn the brand’s fortunes.
Barnes & Noble added toys, games, and other non-book related merchandise to stores.
They even tried opening restaurants adjacent to the stores to drive traffic.
To no avail.
Barnes & Noble began closing stores in 2010 and were down to 627 by 2019. Five CEOs cycled in and out between 2013 and 2018.
In 2018 the company lost $18 million and fired 1,800 full-time employees.
In 2019, the hedge fund Elliot Advisors acquired Barnes & Noble for $683 million. Elliot had purchased the British bookstore chain Waterstones the year before.
Waterstones’ CEO James Daunt had rescued that brand years earlier.
Daunt was a bookseller himself, having opened his own independent store in London in 2005, specializing in books for travelers. Daunt Books is still in business and has six stores.
Elliot named Daunt Barnes & Noble CEO as well. Daunt relocated to New York and got to work.
Daunt’s audit of Barnes & Noble yielded his assessment that the stores were “crucifyingly boring.”
In a 2020 keynote address to the Book Industry Study Group, Daunt said bookstores justify themselves in the age of Amazon:
“by being places in which you discover books with an enjoyment, with a pleasure, with a serendipity that is simply impossible to replicate online. And to do that, you have to have a good bookstore.”
For Barnes & Noble, Daunt sought to “create an environment that’s intellectually satisfying—and not in a snobbish way, but in the sense of feeding your mind.”
I felt seen when I read that.
Six months into Daunt’s tenure, the pandemic struck. All 600 Barnes & Noble stores had to close. Instead of panicking, Daunt initiated a transformation.
Stores were redesigned and refreshed.
Daunt asked employees to scrutinize each book in their store and decide if it belonged there.
He decentralized book buying and empowered local store managers to craft their offering mix. He encouraged managers to curate selections based on their interests.
More shocking, Daunt ceased taking publishers’ promotional money. This amounted to millions of dollars, but obligated stores to push publishers’ favored books via displays and discounts instead of promoting what interested customers.
Daunt’s approach is working.
Sales in 2021 exceeded pre-pandemic levels and have continued to grow. Barnes & Noble opened 16 new stores in 2022, and expects to open 30 in 2023. Some new stores occupy locations where Amazon’s brick-and-mortar bookstores failed.
As I read several excellent articles on Barnes & Noble’s turnaround, I noticed writers dancing around the edge of the reason for Daunt’s success, but missing the bullseye.
Ezra Klein in The New York Times chalked Daunt’s success up to his focus on empowering local store managers.
Elizabeth Segran in Fast Company credited Daunt’s encouraging local managers to curate selection based on their own tastes as the definitive factor.
Ted Gioia got closest, saying “the key element uniting all of this is putting books and readers first, and everything else second.” He said the lesson here was if you want to sell books, you have to love them.
Loving books helps, but that isn’t the reason Daunt’s approach is working.
The real reason is common sense marketing: He focused on the target audience.
To do that, he had to know them.
He knew book buyers:
Daunt also understood:
It was not Daunt’s love of books driving Barnes & Noble’s turnaround. It was his courage to prioritize and protect the target audience, readers.
I suspect Daunt knows most bookstore managers and employees are also readers, making them part of the target audience. Their passion for books motivates them to work there.
You knew that too, right? If not, go rewatch You’ve Got Mail.
If your brand is struggling or underperforming, pull from Daunt’s playbook.
Focus on your ideal customers. Daunt isn’t refashioning Barnes & Noble for the guy who needs a technical manual on how to wire your house and makes a one-time buy from Amazon. He’s building around book-buying enthusiasts.
Understand your ideal customers. Daunt loved books and was already a bookseller in touch with his market.
You don’t have to be a prime user of the product your brand sells, but you need to know who your ideal customers are and what they seek. Lego CEO Jørgen Vig Knudstorp consulted both child and adult Lego enthusiasts as he turned the company around in 2005 and kept in touch to fuel the brand’s growth.
Ditch the old customer segmentation framework of starting with demographics.
Seek deep understanding of customers’ mindset, the needs and problems they have, the experience they seek, and the emotions that accompany that experience.
Localize your marketing. Daunt knew that each bookstore’s community differs in profile and tastes, even within the same city, and enabled managers to cater to their specific market.
When you tailor your offerings to the local community, they feel recognized and understood, and respond with their business.
Engage employees. Daunt empowered managers and employees because he recognized them as Barnes & Noble’s face to customers. Their direct contact positioned them to know their customers best.
Your sales people, account managers, customer service representatives – any brand team member who interacts with your audience – are the face of your brand.
Tap their knowledge. Empower them. Motivate them. Customers’ experiences with them become your brand in their mind.
Deliver a unique experience. Emphasize what you can deliver that your competitors can’t.
Barnes & Noble’s customers come for the experience of exploring and lingering, finding books that interest them, and consulting employees they get to know.
Amazon can’t deliver any of that.
Resist bad influences. Forget Jerry Maguire. If someone shows you the money, but requires actions that are off-brand or inconsistent with delivering your best customer experience, pass.
Daunt’s prioritizing customer preferences over publishers demand-laden cash offers was another way he helped Barnes & Noble say to their audience we get you.
You don’t have to love the product your brand sells to be an effective CEO. You have to focus on your key customers, serve them, and protect their interests.
Barnes & Noble closed their Framingham store in January, but are opening a new one in my town this spring. I’m looking forward to checking it out!
Do you have any book recommendations?
Where do you go for me-time?
How does your brand demonstrate your understanding of your customers?
Please let me know in the comments below.
***
I may have had a little too much fun searching SNL for related skits.
See how hands-off Amazon’s retail service got. (2 minutes, 30 seconds)
Watch Looks at Books author interview with original cast members Gilda Radner and Jane Curtin. (2 minutes, 53 seconds)
Visit The Scorched Corset bookstore. (4 minutes, 6 seconds)
Hear RuPaul’s different definition of reading at The Library. (5 minutes, 20 seconds)
Enjoy!
