Posts Tagged ‘Business’

Recent Social Executive Council Post: Open Letter to Buyers

November 7th, 2011

Recent Social Executive Council Post: Open Letter to BuyersWe owe you a mea culpa…. We’ve been seller driven, not buyer driven. We’ve focused on selling you what we think you need (what we sell) versus helping you make better decisions.  We haven’t helped you make the business case for why this is a significant problem.  We’ve automated our marketing systems to better reach you, but never asked if or what you’re interested in.  We’ve treated you as a company, not as a group of individuals with different needs, perspectives, and roles.  We don’t know what a “day in your life” looks like to give us context as to why you don’t have the time to sit through our “canned” presentation, educate us on your business, and sift through all of our market claims.

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Is Your Business Over-Automated?

October 6th, 2010

I have never heard anyone tell me that a business is over-automated, but I think it should be a term and concept that should enter into the business lexicon ASAP. I would define over-automation as the mechanical, impersonal, and crappy customer experience that I get when I have to engage with a large enterprise with lots of customers and too many bright people thinking about the bottom line.

I will pick on Blockbuster for a minute. Blockbuster, in its heyday, was a powerhouse in the movie business that is, as of this week, in bankruptcy. As a customer, you could tell that the company designed their customer experiences to maximize profitability; hence the late fee model that made more money than the original rental fees.

On paper, this is a great idea. In execution, it pissed off a lot of customers and, I would contend, led to the gap in trust that opened the door for Netflix. I really like the visceral experience of browsing isles looking at the sea of titles and seeing which one stands out. I like doing the same in bookstores. Online doesn

Trouble Justifying the Social Business Impact to Organization

October 4th, 2010

If you are like most business executives, you are struggling to justify the value of all this social business stuff in your heads let alone across the table from the rest of the management team. Don’t get me wrong, there are folks getting some good wins from the social media marketing on Facebook, LinkedIn, etc.; but we all know that mainstream business isn’t buying the “build it and they will come” in a recessionary economy. Most senior executives bought the farm on the “web” and realize that much of the hype needs to settle before setting sail on the good ship “social business”.

All true… however, justification is the least of your problems. See, the customer isn’t waiting for your organization to figure it out. The problem for your organization is that the customers are still figuring out what the social business impact is on their buying process and how that will translate to their customer experience and perceived value. The savvy ones are already leveraging the social technologies to become “smarter” and to club the crap out of brands that provide crappy service. But, this is still in the realm of anecdotal. When buyers punish a major brand with rapid market share loss, then we will all wake up to real value of social business. The problem is that it may take your organization a while to do something about it.

I don’t think behavior changes well based upon fear. I believe that change comes from real desire of the perceived benefits. Let me share the opportunity side of this equation. Social business, if done right, has the potential to bring large numbers of customer opportunities at a fraction of the cost of traditional customer acquisition. You have the ability to significantly lower costs throughout the customer delivery process, and drive a huge impact to the bottom line in terms of organizational productivity. The web gave a huge boost to organizations. Remember how many administrative assistants used to run around organizations?

Here are some of the areas of impact as examples:

  • Customer Acquisition - if your cost of customer acquisition via traditional marketing run in the $XXX per customer, we can assume that number is based upon a large number of false leads along with a large number of abandoned ones along with the fact your staff can only handle Y amount of leads comfortably. The challenge is that you cannot figure out who is a shopper who will lead to a buyer versus a browser who will lead to nowhere fast. The problem is we can’t tell which is which. We also assume that we can’t, but what if we could? What if they were encouraged to self-identify? What if we spent very little money until they did? Would your marketing and customer acquisition costs become much more streamlined?
  • Distribution Channels- there are only a few real reasons to partner with a distribution channel; 1. cost of acquisition can be much lower because they already have a relationship and 2. see #1. So, the problem most organizations have with channels is that they are inefficient and not aligned with our mission. They carry multiple products (many of their own) and don’t have the same level of training and expertise as our own. For many channel organizations, the partners still bring more sales and better market positioning. Many organizations are struggling on how to drive more leads through channels, convert at a higher rate, and train their people to do better. A little fix could go a long way to producing better channels. Social has the opportunity to build better channels if done correctly; better, faster, cheaper, and easier.
  • Customer Experience – Conventional wisdom is that it is less expensive to maintain customers than to acquire new ones. Unfortunately, for many organizations they do such a mediocre job of managing the customer experience, you have to wonder. I suspect that 20% of calls into a call center account for 50% of the costs. When a customer gets off the script, there isn’t a computer system smart enough in the world to solve that problem. However, what if you could go to a semi-automated system that could cost 20% of your costs? What if you could improve the customer experience at the same time? What if you didn’t require them to log into your website or sit on hold for 20 minutes? I know the customers are saying “bring it on.”
  • Organizational Collaboration- a lot of organizations are trying to make themselves more productive – say just 5% savings in resources has a huge boost to profits and market value. Unfortunately, many organizations are trying to work harder by doing what they are doing a little more efficiently. But, the fix isn’t do what we are doing better, but rather starting with “why are we doing it?” Many of our current business systems are designed to make the organization scalable, but not necessarily make the customer experience better for the users or the customers. If your systems are 5-10 years old, much of the latest generation of business systems are rethinking the idea of collaboration. Many of the latest business systems have moved to reuse-able, re-purpose-able components that enable users to assemble solutions in real-time based upon their needs. Social business systems; social networks and online community applications have the ability to allow organizations to bring the right information to people based upon their needs, not a generic web template. How much time is spent looking for information or the right people who know an answer? How many business processes have been broken by a frustrated customer? How many exceptions do you have to allow?
  • Hiring and Maintaining the Right People -Anyone who has gone through a hiring process lately knows that the recruiting process is broken; job boards, applicant tracking systems, deluge of resume cramming recruiters, managed service providers, resume services, etc. all are seeing the commoditization of the hiring process. When did hiring the right people become a commodity? When we move away from getting our people to find and connect with the right employees to protecting their time from the volume of crappy candidates; you know that the systems are broken. Used to be that hiring was a competitive advantage and that hiring the right people was seen as a “must do”, now seen as a luxury. What if we could screen out the masses and allow our people time with the right potential hires? What if we could empower our employees to bring in other people who share their values and work ethic? What if we got the organizations to support employees the right way by empowering them as individuals and not “risks” and “costs.”

Social business isn’t about social media. Just like the web wasn’t really about HTML. The real value is in the humanization of business. Social is about swinging the pendulum back towards the center. We automated our businesses for growth and efficiency, but we gutted the hearts right out of them. Nothing I described above is new in business, but is impossible in large businesses today. Or at least not consistently and beyond the exceptional; ie the employee who goes out of his/her way to satisfy a customer, a colleague who stays late to help you find the right information, the hiring manager who connects with a seemingly unqualified candidate, but who has the intangibles they need.

I am not into squishy business feel-goods, but I do believe that the social technologies will humanize business and I do believe that the organizations that can leverage these technologies to improve the customer, partner, and employee experiences effectively on an efficient basis will receive tremendous market opportunities.

We saw that 62 of the top 100 businesses get caught and passed from behind in a 10 year span from 1989 to 1999 in large part due to the web’s disruptive impact in distributing information more efficiently. I believe that we are in the current 10 year cycle that will see similar impact with the ability for the web to deliver better collaboration experiences at a fundamentally lower cost of delivery than traditional means. Those who can leverage these technologies to lower the costs of transactions and relationships will receive higher market share and valuations.

Call it “feel-good with an edge.”

Where are we in the Social Business Maturity Spectrum?

July 30th, 2010

I posted a discussion thread last week in the Social Executive Council and contiued with a blog post that outlines my belief that we are seeing social saturation in many markets. Nukes aren’t valuable if everyone has them and isn’t afraid to use them. The same with tweets…

I an not complaining, rather I think this is a part of the normal evolution of technology lifecycles. If you look at the web, we saw the same evolution from:
* Pioneers
* Evangelists
* Adopters
*Adapters
* Commoditizers

I think we are seeing the end of “first mover advantage” for many markets and seeing the transition to the adopters phase. We have had to tell several CEOs that we cannot broadcast message our way to awareness in their market as there are too many players creating too much noise. We have to do a different approach.

The analogy is that you are in the back of a tradeshow with a 1000 booths and 100,000 attendees with a rented 10X10 booth. How do you get attention when the front booths have rented Bon Jovi for their booth. Screaming doesn’t work, flashy colors seems great until you realize that the 9 other guys in the back with you are copying you. It now looks like a wall of color versus eye appeal. What do you do? We work on making sure that awareness, credentialling, and a relationship happens prior to the prospective customer reaching the floor.

Different stages require different strategies. What worked last year may be commoditized this year in terms of marketing or customer expectations; especially in fast moving technology maturity cycles.

Think about the web: 1994 and 1995 was a hyuge explosion for consumers, but 1996-1997 was big for first mover wave of companies. By 1998 and 1999, companies we moving into niches and adapting the technology for their markets and innovating new unique technologies. This has continued through the last decade. But when you have $29.99 ecommerce ready store front website – much of the basic website development is now a commodity and nas been for a while. On the other end of the specturm, social media spawned out ot his wave and is nolw on its own arc.

What do you think? Am I too early to declare some markets saturated? If you believe that your market is saturated, what are you doing differently to break through the noise? How are you integrating this back into a larger corporate strategy around managing customers, employees, and partners?

Or are you wondering how I can declare something saturated when you haven’t even started? Well, my suggestion is that if you look at your market and see everyone else doing the same thing over and over again, think outside the box and don’t just do it too. You are contributing to the noise, not adding value…. from a customer’s perspective, which would I appreciate?

Why Social Media Really Matters to Business

October 18th, 2009

Now that my email is finally working, I can continue a theme that started as my big “rant” about customer service and apply it more globally to why social media matters to business. Lost at the bottom of that long post was a case example of why my hosting company did not get the impact social media was having on it market. They are the market leader in domain registration, but they were losing the war on market perception. They are opening the door for competitors.

It doesn’t really matter how many people will join a “I hate XYZ brand” facebook group. Nor does it matter that one exists. It is almost a badge of honor to have a “I hate” group. The larger point was that they did not have a group of their own. They had more employees on linkedin than their facebook group. What does that say for a leading internet company?

Additionally, I put a major “rant” post out there that was pretty brutal in the describing the poor experience. I heard nothing back. You would expect that even a counter post, or a message back on Twitter, Facebook, or Linkedin, or something, but the silence was deafening. That is the major point. If you realize that for all of the money that your company spends on “branding” can be balanced by the broadcast messaging from your disgruntled customers, what does that mean for marketing? It is becoming more telling that customer testimonials, good or bad, are displacing and discrediting marketing. All of that advertising dollars now go to getting back to a nuetral position, forget about creating a positive. That I think is the underlying issues with social media for business.

Additionally, couple customer messages with the employee or ex-employee messages out there. The most damaging Anti-brand sites are run by disgruntled employees or ex-employees. Not only are they pissed off, they have insider knowledge about your organization’s warts. The ex-employees have an axe to grind and they are using it.

So, what does that look like. You spend a lot of money on advertising, your website, direct marketing, search engine marketing, etc. At the same time, your prospects do a search and see all of the negative opinion of your service. Doesn’t matter if it is actually true or not, perception is reality…. if you don’t counter it, enough of it will be taken as a sign of larger problems. If you are a public company, it is even harder to counter that because of the communication restrictions. You have seen instances of short sellers creating rumors to drive stock prices down, right?

Well, how do you counter the negative noise? First, assume transparancy in your customer experience. What happens will get out. I would be looking at ways to strengthen my processes, bring my employees closer to the customer experience, and making sure that we are using the web 2.0/social media collaboration tools internally.

Second, I would make sure that I am systematic in my social marketing participation. For those companies that ban social media sites from corporate networks, you are running a race with one leg tied behind your back and are even farther behind.

The point of social media is engagement. The good companies are empowering employees to become ambassadors for the brand out on the web. They are anyway… everytime you tell someone who you work for socially or professionally, it represents the company. If the guy is a schmuck or arrogant, it reflects on the company. It is hard for business leaders to realize that it isn’t about them… companies are made up of people, cultures, and relationships.

The best companies are trying to tap into that internally and externally. What if you could take your internal employee engagement and extend that to ex-employees. There are tons of corporate alumni networks. Many of them are proud of their experience and would love to advocate on your behalf. Probably for self-interest reasons in that if the company has a good brand, it translates into better marketability to be associated with a strong brand.

Also, the best way to prevent disgruntled employees and ex-employees is to improve engagement and communication. If you lay someone off via email and cut off their system access overnight before they know themselves, then you are probably going to get the same level of respect that you give out. If they don’t have a forum for communicating their emotions regarding a layoff, they will create their own.

Additionally, a layoff or a firing is a reflection of poor management. As business leaders, we have to realize that separating an employee from a company is on us. We made a poor decision that led to this situation. It may be the right decision to separate them now, but we made a bad one before. Same with business decisions. Giving a voice to that and receiving the feedback will actually difuse the situation. Hiding behind the corporate veil only compounds that situation.

As we do research into social marketing, we are seeing a pattern emerge. Companies that engage employees and treat them with respect are the ones who are winning the war in social perception. Companies that assumes that employees will behave badly or who ignore customer complaints as annoying distractions, are getting hammered online.

If you are a large player, you have a lot more to lose. Public companies get nailed for missing forecasts when they are growing market share, they get hammered when they lose it. The average tenure of a CMO is something like 2 years. Part of it is the pressure to perform, but a lot of it is the speed of market conditions are accelerating.

You see the same in College Football Coaching. You don’t get time to have a “rebuilding” year in either case. If you are doing the traditional market development and branding model, it takes a long time to turn negative brand perception around. You don’t have it. You have to figure out how to first address the fundamentals, then perceptions, and then focus on growth.

Not spend more money on flashy marketing campaigns and larger budgets to drive more customers. Not that you will get bigger budgets in this economy. You are fighting inertia in that the more you spend against negative perception, the more desperate that you look. People are intuitively discounting marketing messaging.

There is a great deal of cynacism in the market when it comes to corporate messaging. It is perceived as self serving. That is why buyers are craving social media; it is perceived as authentic. A complaint from a customer is perceived as a natural response to a poor customer experience. It isn’t seen as self-servicing, but rather a natural response to an impotent customer service interaction. Other customers can relate to that more than they can relate to a canned advertising message…

This isn’t going away.