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CEO's Big, Bold Promise Backfires ... or Did it Really?
CEO's Big, Bold Promise Backfires ... or Did it Really?
Lessons learned from creating a Big Zig
Maybe he was asking for it.
CEO Todd Davis, who is famous for ads in which he posts his social security number (457-55-5462) for everyone to see on TV, on billboards, in magazine ads and on trucks in New York City, has been bragging for two years that his LifeLock company can protect consumers' personal information from being stolen and even offers a bold $1 million guarantee.
It appears he's now also a victim.
A man used his identity to get a $500 cash loan from a check cashing company, and consumers in three states are suing the company for misleading advertising and claiming that the company can't really protect them from identity theft. And the '$1 million guarantee is so limiting, we think it is almost worthless,' says Rob Carey, partner in the law firm Hagens Berman Sobol Shapiro, who is representing consumers.
Consumers are seeking a class-action lawsuit against him. Experian, one of the Big Three credit bureaus, is also suing him. And he's now launching a massive media campaign to try to set the record straight and answer charges that LifeLock doesn't live up to its promise.
Did CEO Todd Davis go too far?
As a reader of my Business GPS blog, you already know I talk quite a bit about how important it is to make big, bold promises and to offer the strongest guarantee you can. LifeLock quickly became the country's industry leader in identity theft protection by doing just that. But did Davis go too far?
He practically invited hackers and con artists to take his challenge. Many have.
There are more than two dozen fake driver's licenses under his social security number using names such as 'Joe Blow' and 'Jabba T. Hutt.' There's a driver in Carson City, NV with Davis's social security number on his license at '123 Fake Street.'
A total of 87 people have tried stealing his identity, Davis says. But only one has succeeded in using his identity to turn it into cash, he says, and that was because the lender didn't bother to check the man's identity or use one of the big three credit bureaus to run a credit report. The fact that 86 others failed is proof that LifeLock works, he says.
Does LifeLock live up to its claims?
According to the lawsuit, however, a total of 105 LifeLock customers have indeed had their identities stolen.
Is that more proof that the service doesn't work? Absolutely not, says Davis. No system identity protection service is perfect, he says, but when it does fail LifeLock works on the customer's behalf to correct the problem.
A con-artist or a David among Goliaths?
To some, Davis is a con-artist himself who is making millions off what some see as a scam. To others, he's a hero fighting identity theft and a modern-day David taking on the Goliath-like credit bureaus.
At issue is a critical part of LifeLock's business. To help protect a customer's identity, the company places a 'fraud alert' on their credit reports to prevent new credit accounts, credit cards or credit limit increases under their name without their approval. This is something anyone can do on their own at no charge.
In its lawsuit, Experian says it's illegal for companies to place a 'fraud alert' on a consumer's credit report. Only individuals are authorized to do so.
But the real issue, Davis says, is that his service prevents credit bureaus like Experian from selling customers' personal information. That's because a fraud alert blocks credit bureaus from selling most credit information unless they first get customers' permission.
For his part, Davis says he's not surprised by the lawsuits: 'When you're the leader in your field, it's to be expected.'
What would you do?
So should he have shied away from making a big, bold $1 million guarantee like he did? Should be have simply not posted his social security number for everyone to see?
Not on your life. He created a Big Zig. While others in the industry zagged with claims that they can help secure your personal information, Davis created a Big Zig by publishing his own personal information and said, 'I'm so confident my system works, I'll give you my social security number and I challenge you to steal it.'
He also created a big, bold promise by backing up his claim with a $1 million service guarantee.
Others in the industry offer similar guarantees or warranties but none of them show TV ads with their guarantee plastered on the sides of trucks in New York City and their CEO telling everyone about it with a bullhorn!
Davis did exactly what you should do: create a Big Zig that grabs your prospects' attention and makes them want to learn more. But there are some lessons learned to consider too. See Lessons learned from LifeLock to the right.
Lessons learned from LifeLock:
1. Never challenge a customer to do something you wouldn't risk doing yourself. What makes LifeLock's Big Zig so powerful is that Davis was willing to put his own system to the test and make public the one piece of information that everyone says you should never reveal ' his social security number.
2. Be prepared for the critics. The louder and bolder your promise, the louder and bolder your critics will become. Be sure you're ready for those who will try to discredit your promise. Of course, the smaller your market, the less exposure you have.
3. Be sure you can answer the question everyone will ask when they hear a bold claim: 'Does it really work?' Offer proof to support your claims. Although 105 of the company's 1 million customers (representing 0.01%) have been victims of identity theft, Davis says the number is just a fraction of the national average, which was 3% last year alone.
Essential Law #3*:
Make a statement with your Grand POOBA
Your Grand POOBA (Promise of an Obvious, Overt, Big, Benefit, Always) is a bold, obvious, relevant message that should stick with your prospects like a magnet. Your POOBA is a commitment that your clients can rely on from you. Keep in mind that it should also push others away that you're not interested in serving. In other words, your POOBA should pull and push prospects.
Make a bold promise ' Make one simple, specific, clear promise that guarantees you'll improve something or make a change. Example: 'You'll get 30% more miles per gallon with this additive'.
Make it obvious and obvert ' We are overwhelmed with ads. You must position your message so the benefit to your prospects is clear and it'll stick. Example: 'My social security number is ''
Give a benefit ' Your marketing must answer the question every prospect asks: What great offer do I get? (GODIG). What problem are you going to solve for them? Why would they want to buy from you? Instead of saying, 'We replace and refurbish kitchen cabinets', try instead, 'You can have new cabinet faces on your old cabinets in 48 hours or less'.
Make it big ' Your promise must stand out from the competition so it must grab your prospect's attention. What can you promise that's so bold it will stand out? Example: a tax service promises, 'You'll get the biggest legal refund allowed by the IRS ' guaranteed or your money back.'
*Taken from the 8 Absolute, Essential Laws of Marketing