by scott.gillum | Aug 13, 2012 | 2012, Observations
Big data is about to get bigger. Deliotte predicts that by the end of 2012 more than 90 percent of the Fortune 500 will likely have at least some Big Data initiatives under way. Companies will likely spend $1-1.5 billion to enable their organization to collect, analysis and use “big data” with the intent of gaining a better understanding their customers. But according to Doc Searls author of the new book Intention Economy: When Customers Take Charge that may be a waste of money.
Searls points out in a recent article in the Wall Street Journal, that as fast as companies are configuring systems to capture data at customer touchpoints, consumers are disabling collection sites. In May of this year, ClarityRay reported that the overall rate of ad blocking in the U.S. was 9.26%, and even higher on certain types of site and browser (download the report on ClarityRay’s website).
In May, Microsoft announced that the “Do Not Track” (DNT) feature will be turned on by default in the next version of Internet Explorer. Add this to Dish’s ad skipping product, Hopper and you have an increasingly less assessable consumer. What does this mean, well according to Searls it’s leading to a point where the supply side will yield influence, and ultimately power to the demand side, the consumer.
Searls book explores how customers will transact over the next 10 years, and the rise of Vendor Relationship Management (VRM), think CRM built for consumers to aggregate personal information and signal their intention to vendors on their preference, terms and desired price. As Searls points out, sites like Priceline and Travelocity, have started this movement but they are still “siloed.”
The tipping point for the next wave is fully empowered consumer, untethered by restrictive contracts, and siloed information. In this new world, consumers will have software that can integrate apps with the services offered by companies, saving time for consumers and creating commerce for companies in real time.
Imagine a business trip in which your phone apps for travel, budgeting, mapping, all work together to compare offers, make reservations, and filling out expense reports along the way.
What will it take to enable this revolution? Ultimately, it comes down to the recognition that a free customer is more valuable than captive one. Companies who will thrive will identify opportunities that take advantage of consumer’s freedom that they have, or want. A mindshift from thinking of consumers as “targets” that live in “populations” who need to be “acquired” or “locked in.” To an empowered individual buyer who will signal their intent to a company, as long as there is a trusted relationship.
In this personal empowerment revolution outlined by Searls, the future of buying lies not in investing in big data systems to figure out consumers, but rather by integrating apps that enable “small data” to be used by consumers.
Big changes for big data are looming on the horizon…
by scott.gillum | Aug 1, 2012 | 2010, Observations
Original post date November 22, 2010
On Wednesday November 17th, I attended the Corporate Executive Board’s Enterprise Council on Small Business member meeting in Philadelphia. The meeting entitled Selecting and Building Channel Partnerships included attendees from about 10 member companies such as; Xerox, Symantec, Experian, Erie Insurance and Comcast, who hosted the event.
ECSB practice leaders opened the meeting reviewing recent research on enabling channel partners to effectively sell to small business (title of the post). The research compared the performance of high and low performing partner programs. The meeting also included a review of best practice case studies. Highlights from the research include:
- How small business owners want to buy – business owners stated that the type of supplier most preferred was a local supplier (34%), followed by a sales rep selling multiple lines (26%). Top 3 reasons they buy from a local supplier; 1) location, 2) know them personally, and 3) responsiveness (immediate answers to questions).
- What high performing partners want from companies – 1) Training (all types), 2) Evaluation (compensation related), and 3) Resources (access to information, additional infrastructure, etc.) This was interesting because low performing partners ranked Leads as #1.
- High Performing vs Low Performing Partners – the size or maturity of the partner’s business did not impact the findings, however the age of the ownership team did; younger partners performed better than their older peers.
- Partner Compensation – the preferred plan was overwhelmingly “percentage of sales” 38%; flat $ per unit commission 17%, and discount (either dollar or percentage) was 13%.
Highlights from the case studies and discussion:
- Measuring Partner Performance – 61% of partners said that they are evaluated on a single metric. Number one metric “Volume of Sales”. Most of the attendees also agreed, only one had used an additional measurement for performance.
- Net Promoter – the additional metric used was a net promoter score to measure the performance of partners…really interestiing application of this tool
- Using a Third Party Facilitator – the use of a third party mediator was highlighted in one of the best practice case studies. The company used an outside facilitator to help the two companies negogiate a partner agreement. The goal of the mediator was to encourage honesty, and bring about an accurate appraisal of the relationship potential. Really interesting process to get at what’s in it for both parties, and for getting everyone aligned on expectations.
My key takeaway was that there is a significant opportunity to improve partner performance that is being missed. The opportunity is directing partners to desired customers and/or market segments. Granted some partners are selected just for that reason, but in general, companies do not typically articulate what customers they want or who are best for their products. A couple of members mentioned that they organize products against customer segments and assume that points partners in the direction of those customers.
I don’t think that is enough. At the end of the day, manufacturers know how to sell products better then partners. As a result, they should know which customers/type of customer will most value their product or service, and those customers that will be most profitable and loyal. Use this information to help partners understand, and identify what a good customer looks like, and why. Give clear direction on what you want. If there is one thing we’ve learned from previous research, it is clear communications with partners is highly valued, that in itself might be a wi
by scott.gillum | Jul 31, 2012 | 2011, Observations
Original post date February 17, 2011
On the flight to LA the other day I read an article about Evan Williams, founder of Twitter and Blogger.com. In the article, Williams was asked what the difference was between Twitter and Facebook. He said, “Twitter has information about what’s going on in the world that you care about and that’s different from Facebook’s value proposition, which is a way to stay in touch with people you know.” Coincidently, The Social Network was the in-flight movie.
As I thought about those comments, and the movie, it exposed an area of our lives that seems to be missing from social platforms. If Facebook connects us with our friends and family, and Twitter to “the world we care about,” what connects us in our daily lives? I’m talking about our local area, city and neighborhood, our offline community, the world in which we live everyday.
The more I thought about the need the more it seems like it’s not as much a social platform as it is a functional tool or in other words, an enabler; how can a platform make our lives easier by linking our social network with practical and time saving tools.
For example, my wife is a “room mother” at one of our child’s schools. Her role is to plan, organization and host class events…and chase other parents to contribute time, money, food or all of the above. She uses old Web 1.0 tools like email, a group mailing list, and the phone to accomplish her tasks.
In addition, our kids are active in sports, which requires carpooling, registrations, getting directions to games, status updates on field conditions all done via separate web sites or portals. On top of that our lives – thanks to mobile devices – now mix personal and business hours all throughout the day, and they often collide.
My hope for Web 3.0 is that it will evolve as specific applications of Web 2.0 tools that provide efficiency. These applications will be developed through the greater understanding of how we live our daily lives. The paradigm shift is moving from investing time online to maintain our presence (through FB, etc.) to having online tools that enable us to be more present in our offline world.
What might that platform look like? It’s mobile, and it could include any or all of the following:
- Reviews become Recommendations – components of Yelp, Tripadvisors, etc. for local restaurants and merchant, but also, reviews, recommendations and contact information for teachers, coaches, babysitters, etc.
- Groups become Communities – like a Linkedin or Facebook group organized around local groups/clubs you participate in, including church, school, athletic teams, etc. Communities are built automatically when you register to join.
- Discounts & Loyalty Programs become Active– a Groupon.com like application for local merchants, GPS and mobile enabled to pop offers in the store and automatically tracks your spend. Additionally it would allow us to pool and direct our points to local groups (see above).
- GPS locator becomes an Status Alert – a mash up of GPS and Foursquare, alerting us to movement and activity of family members (especially teenagers) at any moment.
- Lists with Automated Fulfillment – this is a big one, a digital list builder that sync’s with Peapod (or other Grocery Store home delivery service), with a shopping cart threshold that will automate trip deliveries and credit coupons.
- Reminders become Personal Assistants – voice activated and controlled, adds and reads calendars. Helping us remember school plays, play dates, birthdays and especially anniversaries.
In the movie, Zuckerburg asked Sean Parker (co-founder of Napster) his advice about monetizing the site by selling advertising. Sean tells him not to because FB has a coolness factor about it and advertising would kill; “like going to a really great party and telling everyone it ends at 11 pm.”
I’m sure that if I spent enough time on Ioogle or looking in various Apps stores, I could configure solution for my need, but that would take time, rather than give it. What we “35-50 years olds” want is a time machine. Hell, it could include advertising and it would still be cool. Now that’s a great party…and we might even have the time now to attend.
by scott.gillum | Jul 25, 2012 | 2009, Observations
Original post date April 1, 2009
A few weeks ago, my wife and I got a chance to get away for the weekend. On our way to the hotel I realized that I had forgotten my razor. We were passing a shopping center at the time so we pulled in and I spotted a Dollar General store. I went in and bought a $1 pack of razors. A commodity product, down economy, it was necessity; so I figured it was a good decision… until I used it.
The only way I can describe the experience is to say that I couldn’t tell if the razor had a blade on it until it sunk deeply into my skin. It skipped over some parts of my face and dug in on other areas. I had nicks and cuts everywhere; I looked like a schoolboy after his first shave. The lesson I took from this is that sometimes I think you have to feel the pain to understand and/or appreciate the value of quality.
From what I have observed lately, I believe companies are starting to, or will come to this same realization. We’ve all cut back to weather the economic storm. Are companies doing a much better job at managing costs now? Absolutely. Have they finally made the cuts they should have made a year ago? Yep. Have they perhaps gone too far with some of their cost cutting? We’ll see.
What’s important to remember about this economic downturn is that it started in 2007. It’s only gotten dramatically worse in the past six months, but many companies started cutting back long before the current “crisis” hit. As a result, three or four rounds of adjusting cost to meet declining revenues have already occurred.
The fat got cut a long time ago. They cut into the muscle around mid-year last year and now are cutting into the bone in many industries. If you’re a vendor or service provider like us, you may have experienced this first hand. But hang in there; I believe that companies will return to quality providers. It’s only a matter of time before the results of the “nicks” and “cuts” really begin to hurt.
Each company has a different tolerance for pain, but when, for example, the “cost saving” decision to change your outsourced customer service provider leads to rising customer attrition and declining service levels, those “cuts” will begin to sting. When this happens, and customers can see recovery on the horizon, they will come back to quality.
The question you need to ask yourself is; has your organization created the $1 razor? With all the cost cutting, is your product/service at the same quality level and/or can you deliver the same customer experience. When customers do return…so do their expectations.
Be careful, during an economic downturn the price/value equation can become unbalanced. Like many companies, you’ve probably created a lower cost, stripped down model, hoping to gain or hang on to market share. If customers return with smaller budgets, will they adjust their expectations of value as well? Should they expect less? Probably, but will they? Not unless you manage their expectations.
Adjustments will have to be made, and it will not be a smooth shave. You may already have the “nicks” to prove it but don’t let your customers end up feeling the pain.
by scott.gillum | Jul 16, 2012 | 2008, Observations
On my flight home the other night I sat beside a woman who headed a line of business at an Environmental Waste compnay. She mentioned how they recently realigned the organization to a Verticals, LOB’s and Services model and that they are struggling with the transition…it sounded like I was talking to myself.We made the same decision this year. After advising and helping companies transition their organization to this structure for years, it is only now that we are beginning to feel their pain. And boy, are we feeling it.Some of the common challenges:
- Everybody Will Be in EVERYBODY’S business – early on in the transition you’ll experience the “blob.” Everyone involved in the reorg will pretty much be stuck in the same place. Vertical guys will want to define products, LOB’s will want to do their own sales and marketing, etc. It will take time for the “blob” to spread out. Give it time.
- Lane Violations – as the “blob” starts to spread out people will begin to find their lane. The challenge will be those who refuse to stay in their lanes. Lane owners will need to be protective of their space and tell others to “get out”…easier said than done.
- Learning Curve – just because you’re the new head of a Vertical or LOB doesn’t mean you know how to do the job. You’ll find that it will take time to truly understand what you are supposed to do…try 6 to 12 months.
- Marketing, Selling, Scoping Work, Pricing, etc. – all these functions will be debated over and over…where they best fit, who should do what, at what point in the process, etc.
- Compensation – the elephant in the room. Yes, it will look easy on paper…Verticals = revenue…LOB’s = profit and/or contribution…Services = customer loyalty/satisfaction, but boy does it get messy. It should create a healthy tension in the organization as long as its proactively managed. This one will take time to sort out and all those lane violators will want to make up their own rules and/or change the ones that exist. At the end of the day, err on the side of the customer and/or what makes best sense for the organization.
Tips on how to survive:
- Clear Definitions on the Role/s – almost everyone will get the logic and/or rationale for the change and intuitively understand what they are suppose to do. The challenge is they may not, or most likely will not, know how to do it. I’ve seen this story a dozen times….create the org chart, make the announcement to the company; lay out some targets…now go. The missing piece? No one has given anyone instructions on how to do their job. Invest the time to be crystal clear on what and how you want the job to be done. It will go a long way in keeping the “lane violation” from causing problems.
- Hiring From the Outside – it’s taken me a while to come to this but I think you may be better off hiring new blood to run the Verticals, especially if they are new. If your business is product focused and has been aimed at one or two specific industries consider hiring in talent from the industry you want to penetrate.
- Verticals Go Forward – the role of the vertical should be to understand the needs of the industry/customers (market sensing), the positioning of competitors, manage pipeline, and position the organization/product/services value proposition to be successful. They may also own account management activities. If they do, a line should be established on how big an account should be to warrant that type of coverage (more on that later). Notice I didn’t say develop products and/or services because they shouldn’t! Vertical folks will be invaluable resources for informing new products/services and adapting existing, but they should not drift into the LOB lane…they own products. If done right they should have an idea of what customers will be 2-3 years out and should challenge the organization to catch up with offers.
- LOB’s Go deep – the role of the LOB should be to develop a standard set of products and services that fit common needs of customers across industry and meet a defined profit target. They may or may not own the P&L, it depends on the industry but they should control PRICING. Enabling the sales organization (the Vertical) with good content to support their business development efforts and informing the services/solution organization on their needs is core to their role. LOB’s should also understand which channels support what products/services and provide them with the right funding/incentive model.
- Services and/or Solutions Go Long – this group may often feel like the orphan in this new model but don’t neglect their needs, voice or insight. Most likely, they know the needs of the clients as well or better than the verticals, and how well products/services/solutions actually work. This group should focus on serving the needs of existing customers and finding ways to improve, strengthen and expand that relationship.
- Not every ‘customer’ needs to be in a Vertical – small and some medium customers don’t need and/or fit into a Vertical. Their needs may not be that unique and/or warrant the type of coverage of other larger customers. Additionally, if you’re deploying a geographic coverage model it just doesn’t make sense in some areas. A dense concentration of customers like the Northeast can support a vertically aligned sales force but in the upper Mid-West…forgettaboutit. Run the territory models on what makes sense.
by scott.gillum | Jul 15, 2012 | 2008, Observations
Pick up any book on Customer Service and the first tip on how to improve or provide a good customer service experience is to “listen to the customer.” This advice is so incredibly obvious and intuitive that you shouldn’t need a book to tell you. Yet putting it into practice is incredibly hard to deliver. Why?
Recently, a transportation company set out to answer that question. Our task was to discovery the key to delivering a “good customer service experience.” We surveyed over 500 customers, conducted multiple focus groups and held one-on-one interviews. And after all that data collection, what did the customers say they wanted?
They wanted the company…are you ready for this…”to know them.” Know them personally and their business. Defined by having an understanding of their business so that you can anticipate their needs, and as a result, be a valuable partner. Doesn’t sound too difficult to deliver, right?
In this case, it was. The company had no customer service standards, and no rules to govern customer interactions. They also lacked a centralized customer database to capture and archive customer conversation and data. To make matters worse they delivered customer service in a decentralize environment with over 100 centers, all operating independently.
Given that scenario you would think that this company could implement some simple fixes that would have a big impact—some simple fixes. But first you must understand how the company got into this situation in the first place.
At its core, this is an operations driven company, and customers can sometimes get in the way of efficiency. Their culture and core operating model was to move a box as quickly as possible from point A to B without damaging it.
Customers who have special needs and/or require assistance slow down the process. In this environment, delivering good customer service can be too costly and/or too inconvenient. The insight was that the (logistics) process was found to be more important than the customer. Internal systems (or lack of), compensations, key performance indicators were all designed to move freight, not to measure customer satisfaction.
The feeling was that if a package made it to it’s final destination on time, and in reasonable shape, customers would be happy, and for the most part they were. It’s when that process broke down that customers wanted more. They wanted the customer service rep to know them, their company, their issue and have a solution.
And with that, the company had its answer. The challenge that remained was to change the corporate culture. Unfortunately, that turned out to not be as easy as going from point A to B.