Overall, I am glad that the situation was resolved successfully. I had heard about the power of customer complaints on the Internet. In fact, a fellow blogger and PR specialist Michelle Rogerson had documented such a situation with PBWiki. But it is not until I have experienced it personally that I truly feel and believe in the power. So what are the lessons learned from this whole event?

1. As Rogerson’s blog pointed out, a company should actively monitor the blogsphere (and I would add the websphere in general) for customer opinions. They are very valuable market research information that has been enabled by today’s participatory Internet.
2. Ignoring negative feedback carries grave consequences. But dealt with properly, negative feedback can turn around and become a blessing to a business. This is analogous to service recovery in the services research literature. No one is expected to do everything right 100% of the time. If recovered properly, a service failure may actually lead to higher customer satisfaction.
3. Email as a communication channel can be unreliable sometimes. Therefore, for important customer/public requests, companies should follow up through other channels of communication (online or offline). This would help avoid ill-will and negative word-of-mouth from happening in the first place.

It makes me wonder: is an academic project too ivory-towerish to deserve proper attention from SL or Linden Lab (the company behind SL) or Lewis PR? I did mention to the lady that the project will eventually turn into a journal publication. Is that not worth the same efforts as compared to, say, a prominent article in New York Times? I teach Integrated Marketing Communications (IMC). One of the main principles of IMC is that no matter whom a firm is communicating with, whether it is customers, internal employees, or the general public, the firm should always keep a consistent brand image. The fun and cutting-edge image of SL in my mind certainly does not match up with the disappointment and ill-will I felt during the recent encounter.

Ironically, the following quote from the SL marketing team was featured prominently on Lewis PR’s front page:

“It really does feel like our marketing team has four more members — I sometimes almost forgot that the LEWIS team isn’t actually part of the Linden Lab.” — Catherine smith, director of marketing and brand strategy, Linden Lab

Maybe that is the reason why we did not hear anything from Lewis PR. They are spending too much time functioning as Linden Lab internal employees and not giving enough attention to real-life external audiences…PUBLIC relations. Alas!

There may be many reasons to explain this historical difference. For example, one may argue that Microsoft was distracted by its anti-trust case when Google was quietly gaining its strength. In my mind, however, one crucial reason was the fundamental difference between Google’s business model and that of Netscape.

As a traditional software business, Netscape relied on making money off its software. Therefore, when Microsoft offered its Internet Explorer for free, it immediately crushed Netscape’s fundamental business model. Google, on the other hand, offered its service to the average consumer for free and instead drew its revenue from businesses/advertisers. By doing so, it defeated the advantage Microsoft had: the deeper pocket. No longer can Microsoft use its free bundling and distribution power against Google. As its service is accessible over the Internet at no cost, Google was able to start on the same footing as Microsoft, and the deeper pocket Microsoft had could not help the company in this case.

The lesson learned from this is that, when businesses face a formidable rival, too often it’s easy to focus on what the competitor has that one does not have. But as Google’s luck shows, the best way to take down a larger rival is by rendering whatever advantages the larger rival has useless. Of course, this is built on the assumption that the company can still find sources of competitive advantage in an alternative area. What essentially happened in Google’s case was that they changed the rule of the game, and by doing so, it diminished Microsoft’s market power.

The two avatars that I encountered in these situations were both in their mid-fifties. They were very adept at creating their own images and environments within Second Life, much better than a newbie like me is able to. Entering into the interaction, I never intended to find out about their real-life age, but it somehow just came out during the conversation. Both avatars were very kind and helpful, both were happy with their real life, and both expressed a newly found youthfulness in Second Life, as if they were taken back to that time when they were much younger.

These conversations made me rethink the value of SL to different age groups and the real-life demographics of SL participants. If we were to look at three generations of people: the baby boomers and above, the Gen X, and the Gen Y and younger groups, it is actually not that difficult to see the appeal of SL to the first group. As the idea of living a second life allows someone to create an ideal self that s/he cannot fulfill in real life, Second Life allows the older generation to either relive or recreate their life. Now that most of their kids have grown up, they also have much more time to enjoy the virtual world, once they master the technology needed to use it. For Gen Xers like me, in contrast, we are so busy dealing with our real-life responsibilities at home or at work that it is hard to find the time to truly escape to the wonderland. The even younger text-messaging generation may have more time but may not have the patience for the amount of time it takes for 3D worlds to load and function.

Of course, these thoughts came from only two recent encounters, and they are very likely to be biased. I do not have concrete data to support my argument. Digging around on the Internet only landed me on an older set of statistics on Second Life’s real-life demographics in early 2006, which showed a median age of 36. But I truly believe in the power of Second Life for the older generation. The sweeping Internet revolution has already brought this generation to be more on par with the rest of the population in terms of technology use, and it has prepared them for the even newer 3D Web. Once the technology barrier has been removed, these virtual worlds could mean great additions to their life that cannot be found anywhere else in real world. This may explain the findings I posted in a previous blog on how SL enhances individuals’ happiness in real life.

Second Life is most well-known for the ability of individuals to take on an alter-ego in the form of an avatar.  While this concept is appealing to some people, others also find the concept laughable.   But the much more universal appeal of Second Life comes from the 3D virtual reality of the environment.  Currently the Internet is dominated by textual information (such as this blog), with multimedia added here and there.  This is NOT a “normal” way of experiencing things or interacting with other human beings.  What Second Life demonstrates is a more realistic environment where individuals “walk” and “touch” like they do in real-world, if not quite yet, it will be that way soon.

The implications of this new way of presenting information in a connected Internet is huge, from new product development, marketing, to basic business operations.  Yes, many still complain that Second Life platform requires too much computing power.  But that’s similar to the difficulty of watching video online before broadband becomes popular.  As computing power increases according to Moore’s Law predictions, the platform will eventually become a piece of cake for most users’ computers to handle.  Or if the Second Life Grid (the platform underlying Second Life) is not the best way to support 3D virtual reality, someone else along the way will come up with a better way of doing that.  It’s just a matter of time.

For hi-tech companies, this potential shift represents another significant wave of change since the birth of the Internet.  The structure of today’s online environment may become obsolete under the new system.  Rather than being sitting ducks waiting for the wave to push them along, smart companies have already taken on this learning task and have championed in this yet unknown territory, on the surface for marketing reasons but deep down for much bigger revolution of business ideas and processes.