Empirical Rationalism and Other Oxymora
Management
How Has Marketing Evolved Over the Past Year?
Sep 2nd
The second-annual Aberdeen Group CMO Summit is next week (Sept 9 & 10) in San Francisco. In preparation for my opening remarks, I thought that it would be interesting to review my notes from last year’s event – one year and (in marketing/dog years) a lifetime ago. Below are some of my observations and key takeaways from last year’s event: More >
Keeping Sales Motivated in Hard Times
Feb 2nd
I participated in a good LinkedIn Q&A last week with 1to1′s Elizabeth Glagowski that resulted in this article on keeping sales people engaged during hard times. Her original question was: How do you keep salespeople motivated in this economy, when clients are increasingly saying no? More >
The Innovation Paradox
Feb 26th
Pete, author of Share Tactics, sent me an article from the NYT suggesting that “The Magic is in the Tweaking” when it comes to developing new products and services. The premise of the article is that “companies reach success by discovering different uses for their original technology, changing their sales philosophy or repositioning a product, among other tacks”. According to the cited expert, “many entrepreneurs learn as they go along. With each lesson, they find out a little more about what new direction to take.”
In a separate article in today’s WSJ, a different expert asserts that:
In any business, innovation is at least as critical for old companies as for start-ups, and more complex. It requires two steps: “upgrading, leveraging and extending old and still-popular brands while also looking for new ideas,”
However, he goes on to suggest that “the biggest roadblock is risk-aversion.”
As companies become more and more comfortable in delivering incremental innovation, diverting funds and resources to risky new product development efforts becomes increasingly difficult. At a start-up, the product designers generally have a blank sheet of paper when starting out; that is, they are not constrained by the expectations and demands of an established customer-base looking for (often long-promised) features and product enhancements. Over time, as the company focuses on delivering incremental innovation to satisfy its customers (and deliver on modest, but achievable, budget goals), its new product development capabilities may begin to atrophy. Their customer-base gets what it wants, but the products begin to appeal to a narrower target audience as they become more and more tailored to the needs and demands of long-standing customers. Before long, the company is stuck with a maturing product set or a high market-share in a narrowly defined market. To sustain (or even achieve) growth targets, the company will will compelled to introduce new products. However, by now, they may no longer have the skills or competencies to develop a new product from scratch. As a result, they are generally left with a choice — source innovations externally (through either a partnership or acquisition) or to develop in-house new product development capabilities. Either way, there are usually some tough cultural battles that have to be fought and won before any of these approaches can work — overcoming “NIH” (not invented here), revamping compensation and reward structures and addressing the inevitable skills gap to name a few.
So, how does a company break this cycle? A few weeks ago, I suggested that you would need to put four things in place to Identify and Exploit Alternative Uses of Technology, including:
- A “sensing” mechanism that is attuned to the customer’s wants, needs and challenges.
- A way to capture and organize information so that it can be shared and re-used throughout the organization.
- An adaptable product platform.
- Robust business development capabilities that augment your development, production and marketing capabilities to rapidly pursue new opportunities
In the past few months, there has been a lot of discussion about how CRM needs to change to reflect the collaborative nature of customer relationships. Although there are a few companies out there that are building “CRM 2.0″ tools already (e.g. Communispace and Feedback 2.0), a CRM “1.0″ system can be modified to address the first two of the above requirements. Coupled with a robust business development function, this customer sensing mechanism will help the company spot and respond to new ideas and opportunities quickly. And, as discussed over the past few days, adaptable platforms gives the company (and its partners) the means to upgrade, leverage and extend those “old and still-popular brands” to satisfy the existing customer base.
Bad Apples Rot From the Head Down
Feb 23rd
Although we’ve discussed it here before, Pete over at Share Tactics has stumbled on one of the littler known aspects of customer satisfaction; that is, employee satisfaction. As the as the eyes, ears and (for better or worse) the voice of your organization, your employees are one of the single biggest factors contributing to the success or failure of your customer initiatives.
Recent research indicates that employee satisfaction does have a direct impact on customer satisfaction. For example, in The Ultimate Question, Reichheld correlates strong employee centric cultures to high net promoter scores. Additionally, new research published in the Journal of Organizational Behavior suggests that a single negative employee can have a serious impact on the entire team. According one of the studies author’s, William Felps “group members will react to a negative member in one of three ways: motivational intervention, rejection or defensiveness.” If the first two strategies are successful, the problem is self-correcting. However, these resolutions require that the team feel and act empowered. Un-empowered teams can become “frustrated, distracted and defensive”. According to Felps:
Common defensive mechanisms employees use to cope with a bad apple include denial, social withdrawal, anger, anxiety and fear. As a result, trust in the team deteriorates and as the group loses its positive culture, members physically and psychologically disengage themselves from the team.
So, what you do about it when it occurs in your organization? For example, you have a REALLY smart employee (perhaps she is the only person who knows a particular section of code or is tight with a key customer), but she is a misanthropic pain-in-the-butt. No one wants to work with her, no one wants to manage her, no one wants to open their mouth when they are around her… what do you do? The authors suggest that you can try to isolate her from the rest of the team, but “you may have little alternative but to let [her] go”. This can be a tough decision, but you really need to balance out the risk of not doing anything. If left unchecked, there could be a serious and lasting impact on employee morale and, ultimately, customer satisfaction will suffer.
A word of caution though, the authors do warn that there is a difference between negative behavior and employees that constructively “rock the boat”. Is it really bad behavior, or do you not like what you see in the mirror that your “misanthropic pain-in-the-butt” employee is holding up to the organization? After all, that “bad apple” may have taken its cue from management.
The Kids Are All Right
Feb 13th
It might be easy for some people to dismiss social networking, blogging and other web 2.0 technologies as slightly tired buzzwords. It may also be tempting to think of this “2.0″ stuff as innately technological in nature. That is certainly one way to look at it, particularly if you view the customer landscape through the lens of yesterday’s social norms and demographics. Since we’ll probably see a backlash against web 2.0 investments later this year, there are some significant underlying demographic trends that are worth considering as we inevitably respond by rushing to condemn everything “2.0″ as a “madness of crowds” phenomenon. Let’s explore…
The WSJ reported earlier this week that “young people’s openness on the web stirs the biggest generation gap since Rock ‘n’ Roll”. In a world of constant surveillance and easily traceable ‘digital footprints’, kids just don’t get embarrassed as easily as their parents do. They know that the intimate details of their lives are just a few mouse clicks away for anyone who is interested enough to look. As such, they’ve come to the conclusion that privacy is an “illusion” and have learned from celebrities and politicians to generate their own publicity before someone else does it for them — the proverbial childhood diary has shed the easily broken locks and has gone online for the world to see (and comment upon). Whereas their parents sat and watched TV, listened to radio and later learned to use the web, the “net generation” (born between 1977 and 1996) grew up as “digital natives”. As a society, we are no longer passive recipients of messages pushed out by advertisers, but instead actively participate in the collaborative development of content exchanges (i.e social networks, blogs, P2P, etc). At two billion strong, the net generation is bigger and more influential than the baby-boomers who helped shape the fading social norms and attitudes of the Rock ‘n’ Roll era. Like it or not, the genie is out of the bottle — the net generation is already beginning to change the way that we interact with each other and, consequently, is forcing us to rethink the way we communicate with our customers. As a result, we’ve all become more discerning consumers and we’re beginning to demand more of a collaborative experience in return for our loyalty.
Many organizational business processes and supporting information systems were designed with the old ‘push’ methods in mind. Invented as a category over 15 years ago, CRM “1.0″ dealt with the inputs and outputs of linear functional processes (i.e. sales, marketing and support). Today, these processes are no longer as linear as they once were. If anyone bothered to draw one, the data flow diagram of the modern customer system would be a squiggly mess of circles and loops — is an angry blogger a customer care issue, a marketing problem or a sales opportunity? All of the above if you understand the problem and are equipped to handle it properly. Forward looking companies understand that the “2.0″ principles are here to stay and are looking at ways that they can harness the power of networks in their customer initiatives. Once example cited by Paul Greenberg in a recent article is P&G’s VocalPoint, whereby:
600,000 moms are given product samples for distribution among their social networks. The lead moms then give the samples out in their informal environment to the identified groupings. They are responsible for gathering feedback on the good and the bad about those products and getting that feedback to P&G. The best of them are called into meetings with P&G to discuss how to modify, add, subtract, etc. from the product that they distributed.
Each of the moms has to have at least 25 people in their network; this equates to a potential focus group of 15 million people! Although the definition is still in the works, the next generation of customer relationship management is going look vastly different than the CRM we know today and I suspect that the “R” part of the acronym will be held in a lot higher regard than it is today.
