Corporations are manipulative. Not all of them, and not all of the time, but it’s truly surprising how often corporations are drawn to manipulation. It makes sense, if you think about it: corporations are full of people who are paid to find innovative new ways to take money from its customers, and some of them stumble, eventually, on good manipulations. And since corporations are rarely punished for their manipulations, the penalty for indulging in some borderline behavior is very strong…
If we ranked the corporations from most manipulative to least, you’d have a fairly steep pyramid.
At the top, the few true Master of Manipulations. The Monsantos of the world (“Manipulating your food supply since 1901!”), the Goldman Sachs, the Electronic Arts. At the bottom, you’d have the great majority of everyday, non-manipulative companies, whose most manipulative move is a yearly risque ad (I’m looking at you, Sports Illustrated!).
But what about that sizable middle tier? Let’s take a quick look at three different companies who are not yet masters of the art of manipulation, but who are rising fast through the ranks…
Let’s start with Lululemon, the yoga apparel company.
On the surface, it’s a company that focuses on yoga, but with its own twist of California health / spirituality that has been wildly successful: the company has quadrupled its revenues over the past 4 years.
Behind the scenes, though, the company has more than its fair share of manipulation. Even the name itself is a manipulation: the founder, Chip Wilson, chose it because he thought it was funny to watch Japanese people try to pronounce it .
Beyond that, the company has had its fair share of manipulations. Its line of VitaSea, for example, was the flagship of the company’s values: it was a fabric made from seaweed, which “releases marine amino acids, minerals and vitamins into the skin upon contact with moisture.” Who wouldn’t want that sweet, sweet rush of marine amino acids?
Well, it turns out that the garments had no more seaweed than a steak.
After several tests, independent labs never found a trace of seaweed in VitaSea clothing. When the CEO was confronted with the results, he shrugged and blamed the supplier.
The company also skirts the fine line between manipulation and marketing. These initiatives range from the insane to the more inspired. On the insane front, for example, the company apparently printed inspirational messages on their bags, and then, underneath those messages, printed more… risque messages. Mostly about sex, orgasms, and getting high.
The idea, presumably, was that these messages would subliminally influence the Lululemon shoppers, which, if it worked, would have been the best manipulation ever. Some of their other practices, such as recruiting local yogis to teach yoga in their stores to recruit customers (and sell merchandise). Of course, it helps to recruit a type of yogi – less of the spiritual, disciplined yogi, and more of the merchandise-friendly, more capitalistic yogi, but that is probably more marketing than manipulation, frankly.
Lululemon has had its shares of scandals, from sordid murders to too-sheer pants, and has thus far survived them all. Folks who work there have pointed to its almost cult-like culture, which can often encourage manipulation: drive a company with a profit-above-all-else culture, for example, combined with sophisticated financial knowledge, and you get a Goldman Sachs or a Monsanto. Push a culture that emphasizes sales and new-age, kind-of-spacey ideas, and you get a Lululemon. I expect to see the company rise in the manipulation pyramid in the years to come as a result…
But of course, Lululemon is still in the lower ranks of the manipulative companies. If we go up a few ranks, we can stop at companies like… Yelp.
Most of you will know Yelp. It’s a site that reaches 80M people a month, where everything from restaurants to car dealers to sperm banks are rated by (ideally) people who’ve experienced them. Yelp has some interesting aspects to its business model: reviews are anonymous, the site uses a mysterious algorithm to decide what reviews to show and which ones to filter, and the site sells advertising space to the very people that are reviewed by those anonymous hordes. As a result, Yelp has long been accused of manipulation by both sides: restaurant owners can (and do) easily forge positive reviews of their establishments, and, more recently, Yelp has been accused of ‘hiding’ positive reviews unless restaurant owners pay for advertising. There’s 700 complaints in front of the FTC currently accusing Yelp of extortion, for example.
The accusations are all very much alike: a Yelp salesman calls a restaurant whose reviews show several one-star poor reviews when users first search for the place. The salesman explains that, should the restaurant advertise with Yelp, those negative could get buried deeper in the site, allowing positive reviews to populate the top ten reviews (which is pretty much the only ones the majority of surfers look at).
Yelp, of course, denies doing this, but it is very difficult to understand how a Yelp can make the design choices that it does (anonymous, mysterious filtering, etc…) and NOT be a constant battleground for manipulation on both sides. Compare this with a smaller site, like TripAdvisor, for example, where different design choices make it a less inherently manipulative system: on TripAdvisor, for example, no review is filtered out, so users can see the entire range of reviews for each site. Also, it’s much easier for a business to respond to a review on Tripadvisor than on Yelp, lowering the impact of negative reviews (and the potential for sales extortion). This isn’t to say that Tripadvisor is better or worse than Yelp – just that Yelp’s design makes manipulation almost impossible to avoid, on both sides of the equation. And having restaurants throw special parties for the “Yelp Elite“, those reviewers chosen by the site for their influence, doesn’t help lower the manipulation-O-meter for Yelp, either.
Let’s run up the pyramid one final time, and what do we find? The Susan G. Komen Foundation.
“What?”, I hear you say (or comment? This is a blog after all). “The pink guys? The run for the cure people? How can they be manipulative??”
Well, as it turns out, in a number of interesting ways. The foundation is the largest cancer charity in the world, and has raised over $1B for its cause. In so doing, it has done a lot of good. But as it grew, it developed techniques that are quite manipulative.
Take, for example, what the charity actually spends money on. Around 80% of what the foundation takes in is disbursed in ‘programs’, basically the actual race to cure breast cancer. The rest goes to pay staff, with salaries that are generous (several over $500,000/year), but not completely out of line with other top charities. So far, so good. But what do these programs actually do?
It turns out that the great majority of these programs (over 50% of the spend) is on ‘awareness programs’. Less than 10% actually goes to support cancer research. Spending that much money on awareness programs for breast cancer, at this stage, seems odd – aren’t most people aware of breast cancer at this point? Why spend so much money on awareness?
Well, it turns out that the foundation has a copyright on the Pink Ribbon. In 1991, another charity, Visual Aids, started handing out red ribbons to bring attention to AIDS. The Susan G Komen foundation saw a good thing, and in 1992 began distributing pink ribbons in cosmetic stores in NY. When the foundation copyrighted that pink ribbon, later on, they decided to brand all the awareness events that they sponsored with… the pink ribbon.
In other words, every awareness grant that the foundation makes is branded with the pink ribbon, and acts as a de facto advertisement for the foundation as well. This is essentially fundraising in a different cloth: basically, the foundation spends most of the money it earns advertising itself, which allows it to raise more money. Some of that money goes to the executives, less of that money goes to actual research, and the cycle repeats.
It’s a neat system, but it can only work if the foundation retains the brand it has built. If people started associating those awareness efforts with other charities, the cycle would break down. So the foundation spends a lot of money suing other charities who try to use ribbons – or even the word ‘for the cure’. Ironically, the foundation in turns licenses that ribbon and that tag line to companies like KFC and General Mills, to the tune of $55M of revenues a year.
There is a lot more to discuss about the foundation, but that dynamic alone – that it can simultaneously such a huge proportion of what it raises not to actually cure cancer but to perpetuate itself – is fairly impressive. That it can do so without raising the ire of the donors is even more impressive. The charity worst PR came not from these types of manipulations, but when it announced that it would not fund Planned Parenthood mammograms anymore, a political stance that the foundation eventually had to reverse and which caused a lot of turnover within the senior management.
There isn’t much that these three companies share in common, other than they all stumbled on a good thing, grew fast, and in the process developed some pretty interesting manipulative practices that has gotten them fairly high on the Manipulation Pyramid. They are not at the top yet, but keep an eye on them – they are learning, and they may one day challenge the top manipulators for their spot at the summit.
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