Are you a worthy customer?

Some businesses aren’t worth worrying about as customers.

“Those companies are not going to be winners in the long term. We’re very happy to work with the fastest growing companies in the world; the companies who understand that people are core to who they are,” says Daniel Debow, Vice President of Salesforce’s Work.com at the recent Dreamforce conference.

Debow was talking about companies that aren’t interested in social software, or those who don’t have the infrastructure or management culture to implement changes which reflect the modern workplace.

When writing about social and cloud services one thing that jumps out is just how unprepared many businesses, big and small, are for changes that are happening in both the workplace and the market.

The story of Work.com reflects those changes – the idea behind Rypple and Work.com, which was born out of Salesforce’s 2011 acquisiton of Rypple, is that workplaces are inherently social.

“We spend as much more time with the people we work than with our families. It matters to us what our workmates think” says Daniel so Work.com gathers the social intelligence within the business to give people real time feedback on their performance.

The Rypple idea lies in the inadequacy of existing HR software and management practices. Daniel says, “today this model we have it’s totally not reflective of the reality of how people work; people are more connected, they’re collaborative, more realtime.”

This collaborative and realtime way of doing business challenges the structures in many businesses and the methods of a lot of managers. Many are ill-equipped to deal with a more open and transparent way of managing their teams.

In fact, software like work.com and its competitor Workday make some of those older style managers redundant, particularly those whose roles involve little more than box ticking and following the strictures of the company’s procedure manual as this can be done better by a computer program.

The problem for many organisations, both private and public, is they have become more focused on cossetting and protecting the box ticking bureaucrats of middle and upper management rather than delivering service to their customers and supporting their staff responsible for keeping clients happy.

Something that jumps out when you talk to entrepreneurs like Daniel Debow and others building new social and cloud companies is their lack of interest in selling to those organisations, their view is the old school companies are dinosaurs on the path to extinction.

Dinosaurs though lasted a lot longer than we often think and the same is true of the current generation of zombie companies being kept alive by government or investors too scared to book the losses which the failure of these enterprises would entail.

While those dinosaurs are going to be a drag on our economies for the next decade or two, the real opportunities – and rewarding work – is with those businesses who want to change and aren’t run for the administrative convenience of their managers.

The question for many business owners and managers is whether companies like Rypple or Workday could be bothered selling to you. If you’re not, it’s time to consider your exit strategy – or lobby your local politician for some subsidies.

Paul travelled to Dreamforce courtesy of Salesforce.com

Similar posts:

Towards the social media enabled jet engine

General Electric’s GEnx engine illustrates how social media is changing business

“What if my jet engine could talk to me and what would it say?” Asked Beth Comstock, General Electric’s Chief Marketing Officer, at the Dreamforce 2012 conference.

The idea of social media connected jet engine is strange, but the idea that a key piece of technology can talk to engineers, pilots, salespeople and management makes sense.

At the Dreamforce conference, Salesforce.com were showing how their Chatter social communications tool can be applied to more than just salesteams, in GE’s case by giving their new GEnx engine the opportunity to talk to its support teams.

In flight telemetry is nothing new to the aviation industry, ACARS – Aircraft Communications Addressing and Reporting Systems – have allowed airlines to monitor the performance of their aircraft over high frequency radio or satellite links during flight since 1978.

The difference today is the sheer amount of data that can be collected and who it can be shared with. If relevant data is being shared with the right people it makes managing these complex systems far easier.

More importantly, it helps teams collaborate. The GEnx engine is a new design that’s fitted to Boeing’s latest airlines including the troubled and late Dreamliner 787 so streamlining the design process of a new, high performance piece of technology pays dividends quickly.

Although things can still go wrong – one wonders what the final tweet from this engine would have been.

We’ve been talking for a long time about how social media and cloud computing services improve collaboration in a work place, the GEnx jet engine illustrates just how fundamental the changes these technologies are bringing to organisations.

If an industrial jet engine can be using social media it begs the question why service based companies and workforces aren’t. It’s where the customers and staff are.

These tools are radically changing the way we work right now – the question is are we, and the organisations we work for, prepared for these changes?

Paul travelled to Dreamforce 2012 courtesy of Salesforce.com

Similar posts:

Empathy and the genius salesman

Apple’s Genius training manual shows the importance of empathy and investing in staff.

One of Apple’s great successes has been in delivering services through its stores. Tech site Gizmodo managed to get a peak at Apple’s training manual for their in-store ‘Genius’ technicians.

A word that keeps popping up in the manual is ’empathy’ – as Gizmodo says;

The term “empathy” is repeated ad nauseum in the Genius manual. It is the salesman sine qua non at the Apple Store, encouraging Geniuses to “walk a mile in someone else’s shoes,”

While the Gizmodo writers and many of the site’s readers seem surprised or cynical about this, it’s not surprising for anyone who’s worked in sales or tech support, and the Apple Store Geniuses are doing both.

Empathizing with the customer or caller gives them confidence and builds trust. For someone in sales, listening and emphasizing is how one finds out what the customer really want. On the support desk, putting yourself in the customer’s position makes it easier to diagnose the problem.

That empathy a real return on investment – US Apple Stores earn 17 times more per square foot than the average retail store. The next most profitable retailer is Tiffany & Co who only boast have the revenue.

What Apple again show is that training matters. Every surly computer store assistant, every grumpy flight attendant or bored call centre worker can, with the right training and incentives, be just as effective as an Apple Store genius.

Sadly too many businesses, particularly retailers, see training as a cost and their employees as naughty children. Those businesses have a serious problem.

Without empathy – the ability to put yourself in your customers’ shoes – your business is working with a distinct disadvantage.

Similar posts:

Fleeing the group buying market

The air deflates from the group buying bubble

As Apple becomes the highest capitalised stock in US market history, former daily deals site and market darling Groupon continues to sink into misery.

Groupon led the group buying mania of 2011 and its stock market float in November of that year valued the business at 13 billion dollars, ten months later the business has a capitalisation of three billion, wiping out three quarters of its IPO shareholders’ investment.

To make matters worse for the daily deals site the New York Times features a story looking at deal fatigue, where customers tire of the daily emails offering discounted cafe meals or personal training while businesses find the deals just aren’t worth the trouble.

“I pretty much had to take a loan out to cover the loss, or we would have probably had to close,” the Times quotes Dyer Price, owner of Muddy’s Coffehouse in Portland, Oregon. “We will never, ever do it again”

In a straw poll, the Times correspondent visited neighbouring businesses who had similar stories.

The common factor with all the business horror stories surrounding group buying or deal of the day sites is high pressure sales tactics that blind the merchant to the downsides of these offers.

For these services, it’s essential to move through as many deals as possible so salespeople are driven to sign up as many merchants as possible. When you put pressure on sales teams, they tend to behave in ways that aren’t always good for customers.

Most of the customers Groupon attracts – or those of other deal of the day sites – are price sensitive and fussy. Having demanded their deal, most of these customers are not coming back so it may well be that daily deals are the most expensive, disruptive and pointless marketing channel ever invented.

The results of the high pressure tactics are shown in a Venture Beat story which claims Groupon is now threatening to sue unhappy merchants as payments slow and the daily deals struggle to attract customers.

What was always misunderstood during the group buying mania was that Deal Of The Day sites weren’t really technology plays – they were reliant on good sales teams driving deals. The technology being used was incidental to the core business concept.

In this respect, services like Groupon had more in common with the Yellow Pages or multi-level marketing schemes. It was about salespeople delivering orders and taking a percentage off the top.  To compare Groupon with Google, Facebook or any tech start up was really missing the point.

This isn’t to say that group buying or deals of the day services don’t have a role in business. For retailers clearing inventory, hotels working around quiet periods or new businesses wanting to get attention in a crowded marketplace, there’s an argument for offering a deal on one of these sites.

For most though it was an expensive and pointless exercise that attracted the picky, price sensitive customers that most business would avoid rather than encourage. That’s the harsh lesson learned by many of the businesses who fell Groupon’s fast talking salesteams.

Similar posts:

Overselling technology

Do technologists promise too much?

“We’d like to allow remote band members – say a violinist in the Australian outback – be able to participate in an orchestra as if they were there. We hope the NBN will be able to do this.”

When the band organiser said this at a business roundtable all the technologists, myself included, choked.

There are many things the Australian National Broadband Network will deliver but the ability to teleport a violinist from the outback to downtown Sydney or Melbourne isn’t one of them.

One of the problems with technology is we tend to oversell the immediate effects; as Bill Gates famously said “The impact of all new technologies is overestimated in the short term but under estimated in the long term.”

Because we tend to sell the immediate sizzle, customers are disappointed when our promises don’t eventuate. In the decade it takes to win them back, those initial benefits we didn’t deliver in six months have become commonplace.

This is probably one of the reasons why businesses are reluctant to invest in new technology or online services; they’ve heard the promises before and they don’t trust what they can hear.

In the late 1990s businesses spent tens of thousands – sometimes millions – establishing websites that didn’t work. Those financial scars still hurt when they hear talk, some of them are still paying off those sites. So it’s barely surprising they are reluctant to return to a sector that has now matured.

Perhaps it’s best to underpromise; instead of cloud computer vendors committing themselves to 80% savings and social media experts promising millions of customers from their new viral video, it may be better to be more realistic with the expectations.

Customers have become deaf to wonderful promises, they are expecting us to deliver. Promising the world is no longer a business strategy.

Similar posts:

Channel blues

Cloud computing is changing the IT industry

“We do the pre-sales work then they come along and steal the customers. It’s wrong, just wrong” growled the sales manager of an IT integrator while talking about one of the leading cloud computing services.

The business model of systems integrators is to be a company’s, or home’s, trusted advisor on IT and make money from charging for their services and the profit in selling software and equipment.

In the last few years that model has become tough – the collapsing price of hardware has made the profits on selling systems leaner while the increased life of systems has meant the big lucrative upgrades have become scarcer.

At the same time services have become less lucrative as more participants have entered the market, many using offshored cheap labour to provide remote support. It hasn’t helped that computers have become vastly more reliable, particularly since Microsoft have largely solved Windows’ gaping security holes.

The icing on the cake has been the end of boxed software and corporate licenses. These were extremely profitable for the systems integrator – a big sale of Microsoft Office or Oracle licenses to a government department could see an IT salesperson pay for a holiday home or cover the kids’ school and college fees.

Cloud computing has largely been the driver of all of these factors’ decline and now it is really hurting those integrators and their salesfolk who were used to a very profitable existence.

While that’s good news for computer consumers – and even better news for hapless shareholder and taxpayers who’ve been largely dudded by big IT sales pitches to gullible directors and ministers – it does beg the question of how customers now get advice and support.

Largely cloud based services rely upon customer self service and many of the providers would struggle to include user support in their list of core competencies.

There’s a business model there for systems integrators, but it’s difficult to see how many those used to fat profits in the past can, or will, adapt to the new environment.

An interesting side effect of this change is how it affects companies like Microsoft where their channel partners – largely those big and small systems integrators – are one of the most important distribution networks for their products and probably their best defense against competitors like Google and Apple. That strength is being steadily eroded.

It’s tempting to think that change affects just “old” industries like retail, publishing or car manufacturing; in reality it affects all sectors and sometimes the most modern might be hurt more than the established players.

Similar posts:

Creepy business

There’s a place and time for business networking

In Entrepreneur magazine, writer Alina Tugend suggests we forget networking and become connectors and gives the reader some ideas on how to build connections.

One of the suggestions is, quite reasonably, to eschew networking events and join organisations you have a real interests in, like a sporting club.

Alina quotes Keith Ferrazzi, author of Never Eat Alone, who says he has never been to an official networking event.

“I have a friend who is the executive vice president of a large bank in Charlotte,” he writes in his book. “His networking hotspot is, of all places, the YMCA. He tells me that at 5 and 6 in the morning, the place is buzzing with exercise fanatics like himself getting in a workout before they go to the office. He scouts the place for entrepreneurs, current customers and prospects.”

Prowl gym locker rooms for business prospects? Sounds a bit creepy and you may end up with not quite the connections you expected.

I guess we could call it the Village People model of business development.

Similar posts: