Transcript of Building a Fanocracy Around Your Business
John Jantsch: This episode of the Duct Tape Marketing Podcast is brought to you by Zephyr CMS. It’s a modern cloud based CMS system that’s licensed only to agencies. You can find them at zephyrcms.com, more about this later in the show.
John Jantsch: Hello, and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch and my guest today is David Meerman Scott. He is an online marketing strategist, an author of a number of books on marketing including the classic, The New Rules of Marketing and PR, one of my favorites, Marketing the Moon, there are countless other books he’s going to share with us how many there are. And we’re going to talk about his new book Fanocracy: Turning Fans Into Customers and Customers Into Fans. Depending upon when you’re listening to this, it’ll be out in January of 2020. So, David, welcome back.
David M. Scott: Thank you, John. It’s always, always, always great to speak with you.
John Jantsch: I lost track, but this is probably at least your third or fourth appearance on the show.
David M. Scott: I think so, I think it’s the third. Yeah, I’m pretty sure it’s the third.
John Jantsch: You did a fun thing with this book, you have a co-author.
David M. Scott: I do. My 26 year old daughter Reiko is my co-author. And it’s been fabulous because it’s a book about fandom, and I was talking to Reiko starting five years ago, just geeking out about the things that we love. And I’m like, “Reiko, I’ve been to 790 live music shows, including 75 Grateful Dead concerts. What’s up with that?” And she goes, “I know, daddy, I’ve not only read every Harry Potter book and seen every Harry Potter movie, I’ve gone to The Wizarding World of Harry Potter theme park in Orlando twice, and I’ve been to London to the studio tour, and I wrote a 90,000 word alternative ending to the Harry Potter series where Draco Malfoy is a spy for the order of the Phoenix, put it on a fan fiction site. It’s been downloaded thousands of times, commented on hundreds of times. I’m a Harry Potter geek. You’re a live music, Grateful Dead geek. What’s up with that? And that was the catalyst of us to dig into the idea of how and why people become fans and how companies can tap fandom.
John Jantsch: Well maybe let me back up a little bit. How would you define the term fanocracy?
David M. Scott: So fanocracy is a term we made up, and it’s essentially playing off the words other ocracies out there. So for example, democracy is rule by the many, ameritocracy is ruled by the most worthy, and a fanocracy is an environment where the fans rule. It’s a way that people come around a tribe, take ownership of that tribe and then that becomes a force for helping organizations succeed.
John Jantsch: Yeah, and plus the URL was available, right?
David M. Scott: Yes. And you and I have spoken on the podcast before about the concept of newsjacking, something I invented. And newsjacking, I also own the URL. And I did something that a lot of people think is nuts, which is I don’t try to assert copyright control over it. I don’t try to assert that I own it. Yes, I own the URL. Yes, I’m the first person to talk about the concept. But I want it to become, to use the word, a fanocracy. I want people to say, “Wow, this is a cool concept, this idea of a fanocracy, or in the case of newsjacking, this idea of newsjacking.” And in newsjacking it worked because it’s in the Oxford English dictionary now, and my name is attached to it. So you can imagine creating something so popular that it’s in the dictionary.
John Jantsch: Well and we’re going to get into this, but that’s one of the principles of fanocracy isn’t it? To give it away, or-
David M. Scott: It is, give it away for free, exactly right. Give it away, because if you give more to the universe, you’ll get more back. And if you give to your fans, your fans will give back.
John Jantsch: So while this may have started, the actual idea for this book started maybe with this conversation you described with your daughter. I mean, you have a long history with fanocracy yourself. I mean, you and Brian Halligan wrote a book called Marketing Lessons From the Grateful Dead. And probably would you say that they are the quintessential model of building fanocracy?
David M. Scott: They built a social network before Mark Zuckerberg was even born. Yeah, they’ve created an incredible tribe. But people have been putting groups of people together well before the Grateful Dead. The Grateful Dead is the one I’m most interested in because I started going to Grateful Dead concerts when I was 17, and I’ve been now to 75 Grateful Dead concerts, or the bands that followed the Grateful Dead with original members of the Grateful Dead because Jerry Garcia died in 1995. And you’re right, Brian Halligan and I, we actually met each other because of the Grateful Dead. I was invited to HubSpot, Brian is the CEO of HubSpot, to their office back in 2007. They had just started the company, they only had eight employees and no customers yet. And Brian said, “Please come, you wrote this book, we’re interested in it. We have a company, we’re doing similar stuff, we should chat.”
David M. Scott: And I opened up my MacBook Pro computer and I had a Grateful Dead sticker on it. And within the first minute we knew we were part of the same tribe. We knew we were both fans of the Grateful Dead, and that’s what this idea of fandom, or as I call it, fanocracy is, is you are part of a group of like minded people. And so Brian and I became fast friends. He invited me within a couple of days to join to be the first member of the HubSpot advisory board, and I’ve been with them ever since. And we’ve probably gone to 30 or 40 Grateful Dead shows since then together.
John Jantsch: Well, I am nowhere near the Grateful Dead fan that you are. But I still think Working Man’s Dead is my-
David M. Scott: It’s an amazing album, amazing album. But that’s just one thing. Typically, almost everyone is a fan of something, whether it’s your local sports team or you love to participate in triathlons, or you like classic cars, or you’re into birdwatching, whatever it is, we’re all fans of something. And no matter what business you’re in, you can use the techniques of developing fandom to grow a business. And that’s what I think is so cool is that it’s … As we dug into it, it’s not just for rock stars, it’s not just for athletes, it’s for any organization. And one of my favorite examples to prove that is we talk about an insurance company called Hagerty Insurance, and everyone hates to buy auto insurance. There’s not a single person on the planet that likes to buy auto insurance. Furthermore, people hate to use the product because it meant you crashed your car.
David M. Scott: And McKeel Hagerty founded Hagerty Insurance a number of years ago. And I spoke with him, he says, “David, everyone hates my product category so I can’t market like everyone else does. I had to figure out how I could tap into fandom.” And they actually insure classic cars. And so he and his team go to over 100 classic car events a year and they meet with people who are classic car fans, and they become part of the tribe that way. They have a YouTube channel where they provide valuable information, they have a Hagerty Driver’s Club that people are members of, they get all sorts of great benefits. And they’re the largest now classic car insurance company in the world, double digit compound growth every single year. They’re going to grow by 200,000 customers this year. Fabulous, successful on all levels, in a category everybody hates auto insurance,
John Jantsch: Well, I think that’s a great example too of the fact that it’s really not about the product or the service, it’s about the experience, it’s about the brand. It’s about what people get to feel and think about the brand. And that often isn’t about the product. You talk about a category where people hate the product, hope they never have to use it. I mean, that’s an almost an extreme example. But I think that that’s, isn’t that true across the board? That generally the companies that do this, it’s not about the thing they sell, it’s about how people feel about doing business with them.
David M. Scott: Exactly right. And when we really dug in to boil down 70,000 words in the book and five years of research, building fans is simply about creating a true human connection. And you and I, John, have been talking about social media since the very beginning. That’s how we met actually, is we were among the first people on the planet to articulate this idea of how you can use social media to market a business. And I’m not sure about you, but I’m now feeling like the pendulum has swung too far into the direction of superficial online communications. We’ve got a polarized political world online where the social networks, Facebook and the others optimize for polarization because they want to put you into a tribe. You’ve got people doubling down and sending, if you get on an email list they send so many emails that it drives you crazy and you opt out.
David M. Scott: Someone will connect with you on LinkedIn, immediately try to sell you something, and you don’t even know sometimes if you’re communicating with someone, it’s a robot or not. So I think that when you and I started talking about social networking and marketing, it was like, “Wow, this is awesome. We can communicate with our friends.” And it really was awesome at that point. But it’s become a dark and cold world for many of us. So I think the pendulum is now swinging back in the direction of true human connection. And it’s a lot about what your new book is about too, is really getting back to humanity and what’s important to life. And social media is not going away, it’s still valuable, but it’s not really what we thought it might’ve been 10 years ago.
John Jantsch: Yeah, I remember when I was first on Twitter. I hate to sound like an old fart here with this stuff, but I’d be going to a new city and I’d put on Twitter, “Hey, anybody know any good restaurants?” I’d get 10 great recommendations, and now I could put that same thing. I’ve got 10 times the followers, now you put that same thing on there and not get a single response because just as you said, I mean we’ve gotten to the point where true connections that are going on in very small places again. And probably to me, the most useful social media place right now are a couple of Facebook groups I belong to because they are people that are very engaged and nobody’s selling anything, and it’s all about helping each other. And I think that’s-
David M. Scott: And frequently those, because I’m in a couple of those too, and frequently they’re closed groups.
John Jantsch: Very much so, yeah, yeah.
David M. Scott: Yeah. And I remember doing, remember tweetups? Remember that concept? And I remember, this is again, I don’t want to be the old fart either, but 10 or 11 years ago, I would roll into a city. I remember doing this in Bombay, India. And I said, “Hey, I’m here. I’m going to be at this hotel bar. If anyone wants to come and chat.” And like 30 people show up. I wouldn’t do that now. First of all, I don’t know if anyone would show up and second of all people would show up and try to sell something or try to infiltrate the group. I don’t know, maybe we’re old farts, but-
John Jantsch: Yeah, let’s just bitch for another 20 minutes, shall we? All right.
David M. Scott: But at the same time, people do want to have a human connection, like what Hagerty did, be a part of a tribe, be a part of like minded people, speak the lingo, make a fast friend because you share this same love.
John Jantsch: And I think that the opportunity in that is that people are hungry for it, so people who get that, who take the time and the intention to nurture that, I think are going to benefit. In fact, let’s jump to part two in the book where you really get into the nuts and bolts of how to do this.
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John Jantsch: So I mean, I can read the list, but if you want to jump in like the first one, get closer. It’s just what we’ve been talking about. So maybe unpack the five or six tenets of this idea of how you actually do this.
David M. Scott: Okay. I’d like to dig in deep on one or two and then talk real brief briefly on a couple of them. So, get closer than usual is fascinating. We interviewed … We, my daughter Reiko and I, my coauthor. Reiko did a neuroscience degree at Columbia university. She’s now in her final year of medical school applying now for residency programs in emergency medicine. And we interviewed a bunch of neuroscientists about what goes on in our brains when we become fans of something. And essentially it’s about human connections, about proximity. And it turns out that our brains are hardwired to have the most emotional connection with people the closer we are physically to them. And this is a survival technique, because the people that we know and trust, when we’re in close physical proximity to them, our brain lights up in a very positive way. But if we’re in close physical proximity with somebody who we believe might do us harm, our fight or flight mechanism kicks in. And so that’s hardwired in our DNA, we can’t help it.
David M. Scott: And so one neuroscientist named Edward T. Hall identified the four levels of proximity, the furthest one being further than about 20 feet. And we humans don’t really pay that much attention to people that were that far away. Once you get within 20 feet, we begin to track those people, that’s called the furthest away is called public space. Then social spaces is within about 20 feet. We begin to track people who get that close to us within 20 feet because we want to know are they people we can trust. That’s why when you go into a room that’s filled with people, you immediately begin scanning that room to find out if there’s people you know or if there’s danger. Then further in is within four feet, that’s called personal space. And that’s when cocktail party distance. And if you know somebody, you’re part of the same tribe or they’re your friend or they’re your family member, that’s where their most positive human connections happen.
David M. Scott: That’s also why when you go into a crowded elevator, you feel nervous because you’re with people you don’t know. And that’s hard wired into us. So what we can do as business people is figure out how can we create ways to have physical connections, close proximity, getting into the personal space of our customers or putting our customers into the personal space of other customers. And we talked about Brian Halligan a moment ago, but HubSpot for example, has done a brilliant job with their inbound event. And you and I have spoken there multiple times. They get 25,000 people there. And they’re not just their customers, they’re their fans because it’s a tribe of like minded people who are able to communicate. So all of us, no matter what kind of business we’re in, have an opportunity to bring people closer together. And there’s actually another form of neuroscience called mirror neurons, which are when our brain fires, when we see someone do something as if we’re doing it ourself.
David M. Scott: That’s why we get sad at sad movies, it’s our brain fires as if that action is happening to us. And we can use that in business by making use of photographs and video. You can put yourself in virtual proximity of somebody simply by using video on your website or using zoom to do calls instead of just telephone, putting images on your networks or your websites of you looking into a camera cropped as if you’re in someone’s personal space. And all of these are techniques to create closeness with people. And I find that this one, because it’s rooted in neuroscience, is fascinating. And that’s a deep dive into one of those concepts of fanocracy.
John Jantsch: Well let me ask you to go deep into another one. Sometimes brands find that they benefit from borrowing getting closer, in other words, influencers. So that’s become, you hear people talking about influencer marketing. I mean, that’s become a channel almost.
David M. Scott: Yeah, it has.
John Jantsch: So how does that aspect apply to … Because clearly, getting influencers, people who have a network already, or tribe already, getting them to love what you do maybe is a way to sort of wholesale get a fanocracy.
David M. Scott: Right. Well what we learned by digging in there is that the by far the best influencers or advocates, whatever you want to call them, are people who genuinely love what you do and want to share that with the world. And so the more you can cultivate that, the better. And we also learned that you can’t coerce enforce that because it just doesn’t work. And so there’s so many organizations that pay for it, like the classic is paying one of the Kardashians to talk about you. And so it turns out that if you cultivate influencers by making them your fans, and then they’re eager to talk about what you do, that that’s the ultimate. And that again, it comes back to that humanity, that true connection that people have. And just willy nilly, and I know you get them too, I get them from people who say, “Hey, David, I love your stuff. Please write about me on your blog.” That doesn’t work because that’s not someone who has a true connection with you and your brand.
John Jantsch: So we talked a little bit about this when we were talking about the Grateful Dead, and obviously a lot of people know the Grateful Dead encouraged people to record their live sessions and distribute them freely. And so that’s an element of this idea of letting go of control like you talked about with newsjacking. So that scares people, doesn’t it?
David M. Scott: It does. Letting go of control is a really important concept to develop fans. And what we learned, again, we talked with hundreds of people about their fandom and why, and we all also talked to hundreds of companies that have developed fandom. And what we learned to boil this one down into sort of a sentence is that, once you put your product out there into the marketplace, it’s no longer yours. It belongs to your fans, belongs to your customers. And a couple of examples that I love, one of them is Adobe. So Adobe has Photoshop software. And they actually do not practice this idea of letting fans take control. My daughter is a huge fan of Adobe Photoshop. She does art using Photoshop and she’s part of a bunch of different groups, Facebook groups and whatnot, of people who love to do art in Photoshop.
David M. Scott: All the people in the groups laugh because Adobe tries to control the way that their fans talk about the products. And they actually say, “You cannot say that you Photoshop something. You must say that you manipulated the image using Adobe trademark circle R, Photoshop Adobe trademark circle R, software. And you can never use Photoshop as a verb, you can’t say you Photoshopped something. And so Adobe is trying to control the way that people are using their products and services, and that is not letting go of their creations, it’s trying to control their creations. That ultimately doesn’t build fans.
David M. Scott: I’ll contrast that with the vacuum cleaner company, iRobot that makes robotic vacuum cleaners. One of the models is called the Roomba. And it turns out that people like to do videos of their pets riding on their Roombas. And it’s become a real big thing. There’s millions and millions of views on YouTube of dogs and cats and other animals riding on Roombas. Now what iRobot could have done is say, “No, that’s not a proper use of our product.” But they didn’t. They celebrated the fact that the fans loved to do that, and that’s a really big difference. So all of us need to recognize that once we put a creation out there, once we put a product or service out there, once we put an idea out there, it no longer belongs to us, it belongs to our customers, it belongs to our fans.
John Jantsch: This is probably completely off .it probably fits more in newsjacking than … But I just said I had a great experience yesterday. So I watched a clip of a Saturday Night Live, recent Saturday Night Live episode that had a podcasting segment on it and they were of making fun of … And it was the Father and Son Podcast Mike. And so the idea was that you can’t have a conversation with your son that’s deep and meaningful, get the podcast apps and then you can have this like podcasters.
John Jantsch: And then at one point they went into, “And this segment is sponsored by Squarespace,” and they gave some, “Get a discount by going to blah, blah blah.” Well the folks at Squarespace went, “Ding, ding, ding.” And so they actually lit that coupon code up and you could actually get a discount if you did it.
David M. Scott: Oh, how awesome is that.
John Jantsch: I thought that was so amazing.
David M. Scott: That’s totally newsjacking. Totally newsjacking.
John Jantsch: Yeah. I think you’d like that.
David M. Scott: Love that.
John Jantsch: All right, so part three of the book, if I can just wrap up here today, is a really you telling stories about, or at least that’s how I interpreted it, how you enjoy this idea of fanocracy. So you want to send us out on kind of one of your favorite stories?
David M. Scott: So what we learned in talking to a whole bunch of people is that passion is infectious. And that when you live a life with passion, when you celebrate the things that you love, number one, you have a more interesting life. But number two, the people around you want to be around you because that passion is infectious because you radiate that passion. And one of my favorite examples is Dr. John. [Rosh 00:00:25:03], he’s a dentist. He’s a dentist. And he’s a dentist in Southern California. And there’s so many other dentists in Southern California. But he’s passionate about skateboarding. On his Instagram, he’s got 13,000 followers because among other things, he posts images of him skateboarding. He’s the skateboarding dentist. And that’s incredibly powerful because when people are shopping for a dentist, they see that social media feed of him on Instagram and they’re like, “Yeah, that’s the guy I want working on my teeth. He’s a cool dude.”
David M. Scott: And unlike every other dentist who either isn’t showing what they’re doing or if they do, it’s just the before and after teeth shots. And so we learned that companies that employ people with passion do better. CEOs who hire for passion genuinely get better employees to work for them. And people who have passion live a better life. So that passion becomes infectious. And it in itself, the fact that, “Oh my God, I love to do this thing every day.” And you can get at this when you’re speaking with someone, even in a business environment, and you can ask questions like, “Hey, what do you love to do on the weekend?” And when you get someone talking about the thing they love about the passion that they love, there’s nothing better for a conversation opener. And then all of a sudden you remember, “Oh yeah, yeah, that’s the person who loves mountain bike.” I remember that. And that’s a really, really, really great way to build fans is to understand what people love and share that with them, even if you don’t share that yourself.
John Jantsch: Visiting with my friend David Meerman Scott, author of Fanocracy. It’s going to be out in January of 2020, depending upon when you’re listening to this. David, tell people where they can find the book and find out more about you and your daughter’s work.
David M. Scott: Great, thanks, John. So the book is out in hardcover and ebook, and Reiko and I read the audio book, which is exciting if you’re an audio book person. We have a site at www.fanocracy.com. Bunch of free stuff on there that you can check out. On the socials, I am DMScott, D-M-S-C-O-T-T. So hit me up, particularly on Twitter, which is my go to social media of choice.
John Jantsch: Well thanks, David, for joining us, and hopefully we’ll run into you soon out there on the road.
David M. Scott: I hope so, John. We do get in contact at an event at least once a year or so. I don’t know which one will it be this year, but it’s always great to see your crazy sneakers live and in person. Because I know, John, you are a fan of crazy sneakers.
John Jantsch: I am a fan of a particular brand of Converse Chuck Taylors.
David M. Scott: Yeah, I know you are.
John Jantsch: Take care. Take care, my friend.
David M. Scott: Thanks, John.
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