Louis Columbus Bio/Archives

Former Senior Analyst at AMR Research, management at Gateway and Ingram Micro, published 15 technology books. Currently Cincom Sr. Mfg. Business Consultant, weekly columnist for CRMBuyer.com and Informit.com, gives graduate-level international business and marketing courses for Webster Loyola-Marymount University. Taught at University of California/Irvine, and California State University/Fullerton and onsite at Ford and Chrysler. Focus: global economic theory, international marketing strategies, global product introductions, and international expansion strategies.

The Mission:Make Compliance Sexy

Attending Pilgrim Software’s User Conference this week, on the shores of the emerald-green and blue Gulf of Mexico at the Don Cesar Hotel (a classic pink lady of a hotel build in the 1920s) I just can’t get over the ironies, the paradoxes of what compliance, in my mind, has represented and what is going on here.  In my mind, compliance, the use of audits, and all that goes with tracking non-conformance conjures up images of stern and sober folk who revel in sameness and predictability.  They want the world, I thought, predictable and pure in cause and effect.  I was prepared for many, many acronym drive-bys.  None came. 

Paradox of paradoxes, this user conference made compliance sexy tonight at a major blow-out of a Pirate Party that looked more a toga party.  And the presentations weren’t bad either during the day.  Linking how to measure compliance through dashboards – the ability to show in real-time how compliance is making a difference with customers – was analytical sexiness as well. 

The bottom line of all this was that compliance’s new face is all about taking customers’ requirements and expectations to the heart of what Quality Management and Quality Control Departments do.  The best paradox of all was the impatience many quality management professionals have with being even more aligned to their customers’ measurements and not their own. 

Posted by Louis Columbus on March 5, 2007 at 11:01 PM in Business Transformation | Permalink

Where Companies Are Getting Search Engine Marketing Results

By definition Search Engine Marketing refers to both paid search and Search Engine Optimization (SEO), where the former is based on a pay-per-click advertising model as companies bid on specific search terms or in the case of Google, AdWords, to get a more visible placement within search engine results.  SEO refers to a series of website design processes by which companies tailor the content, keywords, and messaging on a website to improve its rankings in search engines.  SEO by nature requires a commitment on the part of companies to continually compete for top rankings in their chosen search areas.  SEO is never a one-and-done proposition but a continual re-fueling of sites with fresh content to keep its rankings up in search engines.

Between paid search and SEO, many companies are hedging their bets on both, hoping on the one hand that paid search will eventually pay off but getting the majority of their hits and leads from organic searches, mostly from Google and Yahoo. 

Lessons Learned on Search Engine Marketing Strategies

From the small business owners I’ve spoken with on this topic, which include the owner of a local HVAC service company, charter flight service, a chain of retail stores, and a components manufacturer, here are their lessons learned in balancing both sides of the Search Engine Marketing spending equation:

  • The majority of marketing budgets for every small business spoken with is now dominated by paid search, with the average being between 50% to 70% of their online budget, and nearly 30% of total marketing budgets.  The smaller the company the higher the reliance on paid search and the higher percentage of total spending.

  • SEO is overtaking spending on banner ads for one manufacturer, as they focus on training existing Web team staff in these techniques and investing in education throughout Marketing on how to create content that is optimized for search engines in the first place.

  • The most aggressive company on SEO spoken with is devoting 10% of all marketing budgeting to becoming globally known in their specific manufacturing area.  They are a components supplier and are actively competing with Chinese, Taiwanese and European manufacturers, and have seen their best leads come through non-paid Google search results.  It’s interesting to note that this manufacturer also cancelled all banner ads on industry sites and didn’t see a drop-off in lead generation either.

  • One retailer said that unless they can get on the first three pages of AdWords ads in Google for their specific keywords, it’s a waste of money.  He said that when through both keyword inflation and competitor’s moves in AdWords their own company’s ad fell below 30th or 35th place, traffic dropped off quickly.

  • A charter flight service says that the majority of their website hits, and how people find them is 75% attributable to the hits from within Google search results, and only 25% come from the advertisements. This company uses WebTrends, and also has Conversion Tracking enabled in their Google AdWords account.

  • Conversion rates and other measures of performance in B2B companies often are not to the last mile; that is to say they don’t really capture sales.  For B2B companies their conversion rate is a white paper download or opt-in for a webinar.  Yet for the owner of a series of retailing outlets, they are measuring conversion rate by how many coupons available only online are redeemed in their stores.  Conversion rate for this retailer is visitors who purchase due to the Web-based coupon divided by total visitors.  The coupon is the call to action and is only available on their website. 

  • Turning clicks into leads is easier when the lead originated from a Google search versus an ad.  When I asked these friends who own these businesses to quantify it, they couldn’t, yet their pipelines have ongoing opportunities and pending sales based on prospects who found them through search more than ads or paid search.  For the components manufacturer it was on average a 2 to 1 ratio with less than 50 deals in the pipeline, a small sample size but a telling percentage. 

Paid Search and SEO Dispel Myths of Market Saturation

Finding telemarketing and other forms of lead generation sending them signals their markets are saturated, manufacturers especially are turning to the Web to get new leads.  Most troublesome about these existing approaches to lead generation is the mistaken perception of market saturation they give off from a lack of results, when in fact there are plenty of opportunities in their markets, the prospects are just using different means to find potential solutions to their problems and this is especially true in B2B markets.   

Finding prospects starts with a paid search strategy for many companies and evolves into SEO.  To get maximum results from these combined strategies companies need to commit to make SEO a part of their marketing strategies for the long-term; there is no one-and-done approach but rather a continual building of content that is relevant to prospects.

Consider the fact that Google spiders the web regularly with an emphasis on link popularity and freshness of content.  Google qualifies a site by the links the site has from 3rd party sites, the popularity and surrounding text of these 3rd party sites, and only views the visible text on a page.  Search engine results shown in blue at the top of each search page are driven by the top bidders for specific keywords. 

Yahoo on the other hand also spiders the web to create an index and also uses a human-edited index, and sells the spaces at the top of search pages through Overture, and organizes entries by placing them in subject categories.  Yahoo also visits sites and evaluates user suggestions as well.

Bottom line:  Generating leads and closing sales is the ultimate measure of the success of Search Engine Marketing, and those companies getting results are balancing investments in paid search and SEO to find prospects that were unreachable through traditional lead generation techniques. 

Posted by Louis Columbus on June 21, 2006 at 08:45 PM in Business Growth, Customer Dialogue | Permalink | Comments (2) | TrackBack

How Marketing Is Getting Its Groove Back

In many companies, marketing is experiencing a resurgence and new relevance, a rejuvenation if you will towards aligning closer to customers than ever before.  What’s most encouraging about this is the fact that strategies based on dated cause-and-effect relationships with clients are, through the use of blogs, more focused communication with customers through research, and Voice of the Customer (VoC) programs, finding entirely new meaning in marketing departments throughout many companies, especially those in manufacturing.  What’s happening is tantamount to an entirely new and more focused set of cause-and-effect relationships being found with prospects and customers.  Marketing is getting its groove back as a result. 

Step 1: Switching off Marketing Auto-Pilot

For years marketing departments in manufacturing, and even a few in enterprise software, are like a 747 cruising between continents on auto-pilot.  Set the budget, set the strategies, set the events, all anchored in assumptions about customers from maybe five years ago or more, and the year is set.  Everyone loves this because life is predictable.  The hardest work is wining and dining existing clients to keep them buying upgrades and in the fold; and marketers the world over clamor to get into sales forces where this is the case.  Yet today existing customers don’t want to be wined and dined anymore, they want to know how manufacturers will get them to their goals, save their jobs and others’ in their company and in some cases community.  In enterprise software this is definitely the case, as “new” doesn’t sell nearly as well as “needed”, as in “I need this to get to my objectives for the year and earn my bonus” or “I need this to get that peskity CFO off my back”. 

Step 2: Find the voice of your customers in blogs

Let’s face it, blogs have overtaken many other more traditional forms of media as the primary trusted source of news and opinions on products.  At a minimum everyone in a marketing department needs to be using a news aggregator to track what’s being said about topics of interest in blogs, and this includes all the way to the VP level of any department.  While some members of the marketing elite come out and blast blogs as being nothing more than a stream of consciousness on a collective scale, the voices there are after all prospects, customers, and a few bloggers are now more important than industry analysts, so listening to what they have to say is important. 

SAP for example brought in a group of bloggers to their Sapphire Conference in Orlando last month.  The good, bad and ugly of the event was delivered; and after reading some of the accounts of the event, it was more immediate than reading the traditional round-ups that the larger media outlets deliver.  Both are interested, yet the bloggers have a voice of immediacy and sense of being there.  Vinnie Mirchandani’s account of Sapphire is here for your reference. SAP’s Jeff Nolan worked to make this possible.  It was a bold move to bring in bloggers, and one that Oracle or Microsoft needs to imitate.  Even if you’re not a multi-billion dollar infrastructure player, consider bringing in bloggers and letting them loose with your executives.  Consumers crave credibility and transparency.  Blogs are so popular because they deliver that, and more.  A final note on blogs: there is this interesting dynamic emerging of competing companies starting blogs with the express purpose of waging a blogosphere battle with their competitors.  This is a waste of time and doesn’t get to the goal of serving the reader, the prospect and your customer. 

Step 3:  Become a Survey Junkie Now

I am partial to this because I love primary research, I think it is pure and if done right, generates new knowledge and insights, and best of all, shoves the old assumptions about your prospects and customers out the door.  And that is reason enough to become a survey junkie.  The Voice of the Customer (VoC) strategies are the lifelines the best companies are using to stay in touch with customers and also blow up old assumptions that aren’t relevant anymore.  What has to be at the center of customer research is how to keep staying relevant and not lose focus through being too complacent about serving customers. One of the best assumption-breakers coming out of VoC research in Marriott for example is that just because a business guest stays with you once, there is no guarantee they are coming back. 

Step 4: Would you trust your company as a customer?

Get outside your company figuratively and look at how you interact with customers at all levels, from prospects, to new customers, to long-standing customers.  Ask yourself “Would I trust my company to do business with?” Because trust is so critical today and such a major component of building out on the commitment of listening to customers, it is the currency that marketing departments are trading with today that “get it”.  The slamming of thousands of product features is a waste of time, but selectively building value propositions that align with customers’ most urgent needs is critical.   Much has been said about trusted advisors in service industries, yet in all industries marketing departments need to ask themselves if they are either contributing to or detracting from how much customers will trust them.

Summary

There are many other areas to cover in this discussion but just to crystallize it, marketing is getting its groove back by throwing out old and no longer valid assumptions about customers, and moving away from the “let’s bribe them to be our customers” to “let’s get them to their goals faster than our competitors”.  There is a huge difference and in those strategies to generate trust is where marketing is getting its groove back.

Posted by Louis Columbus on June 8, 2006 at 01:53 PM in Customer Dialogue | Permalink | Comments (0) | TrackBack

Putting the Value back into Value Propositions

The recent article, "Customer Value Propositions in Business Markets," published in the March 2006 "Harvard Business Review" by James C. Anderson, James A. Narus and Wouter van Rossum, has some great insights into how to rework value propositions. Throughout this column, I will share some of the highlights from that article as they relate to CRM software.

Three Types of Value Propositions

There are three kinds of value propositions, the authors observe. The first, "all benefits," is what is also known as the Chinese menu approach to delivering value, which is to overwhelm prospects with the list of features an application has.

What's lacking is the benefit assertion, or how the many features of a software application actually translate into benefits. With so many of the companies that are buying software today looking for guidance through the painful task of redefining processes, vendors who list features look out of touch.

The "all benefits" approach also inadvertently stresses the fact that applications are more comparable than not with competitors. The net result is that the "all benefits" approach is a boil-the-ocean value proposition that invites more comparison and competition rather than distancing it.

The second type of value proposition, "favorable points of difference," focuses on defining a competitive position relative to alternatives. This is tricky to do well; in many software sales cycles, the strongest competitors are homegrown, are legacy systems, and have the option of doing nothing. These homegrown legacy systems and processes are substitutes that prospects hold onto because they're known -- even if the systems and processes to use them are known to be inefficient and costly.

Building value propositions to compete with substitute systems and processes takes strong insight into the value of just exactly what the targeted systems and processes are delivering. Many times, software companies stress personalized service and, when pressed, sales reps say that they themselves and their commitment to the prospect constitute the value proposition. This rarely works.

Instead, it's important to first get a very clear idea of what the favorable points of reference are that keep the inefficient and costly processes in place, the authors suggest. Resorting to price or promises of heightened customer service are often irrelevant to buyers who have functioning substitute systems and processes already in place.

The third type of value proposition the authors mention -- and the most successful in influencing prospects, according to their research -- is "resonating focus." The basis of this type of value proposition is to stress only one or two points of difference between competitive and substitute solutions or products. The one or two points of difference are selected because they represent the highest payoff for prospects.

Bottom Line: What truly differentiates one vendor from the next is not the length of its features list -- it is the insight needed to effectively sell against substitute systems and and processes with proven points of difference in the value they deliver.

Posted by Louis Columbus on March 20, 2006 at 03:13 PM in Customer Dialogue | Permalink | Comments (0) | TrackBack

2006: The Year Services Become King and other predictions

It's going to be a very busy 2006 and one that will truly be transformational.  Predicting the future is always risky business, yet here are predictions for the coming year, foremost being a shift from a purely-oriented product focus in many software companies to service first.  At the center of this transformation is that selling with a transaction mentality will continue diminishing, and selling through educating and by earning the trust of prospects and clients will flourish. 

Here are predictions for 2006:

  • Selling services based on being a trusted advisor makes transaction selling obsolete.  This ties back to the services-oriented approach many best-of-breed companies are going to adopt in 2006.  Transaction selling ignores relationships and focuses purely on closing deals on incentives and price.  Trusted advisors will outsell transaction-oriented sales reps by a wide margin in 2006.

  • The biggest CRM spending category of the year will be on integration and services.  A few of the CIOs I know are holding onto their decision making responsibility due in large part to this point.  They own the customer data and maintain its many integration points.  Look for the vision of a unified customer to be a major focus during the coming year throughout CRM. 

  • Software-as-a-Service (SaaS) breaks out of CRM and into the rest of the enterprise.  Credited with the rejuvenation of CRM, SaaS continues its torrid growth pace anchored by Salesforce.com and RightNow Technologies in 2006.  In keeping with a services focus into the coming year, SaaS will find its competitive strength in the greater depth of functionality relative to licensed applications and more affordable pricing.  Expect to see the option of single- versus multi-tenant SaaS models in 2006 depending on the feature refreshes required by customer.  Ultimately SaaS will find its way into providing supply chain visibility back to channels through CRM systems so orders, quoting and pricing are in synch with each other constantly. 

  • Service-Oriented Architectures prove they are ready for prime-time. In keeping with the dominant trend for 2006, Service Oriented Architectures will prove themselves ready for the more complex business processes including consolidated order management and fulfillment and pricing integration.

  • Measuring Marketing and Voice of the Customer Programs using analytics and dashboards gains momentum globally.  Marketing in many companies is constantly fighting battles related to the results of their strategies and debates of whether their efforts are making a contribution to Sales.  Look for Marketing departments to champion hosted analytics apps like Sales is championing hosted CRM and SFA apps today. 

  • Indian outsourcing companies start acquiring software companies.  Infosys and HCL are two specifically who could make an even deeper move into the retail by acquiring retail software companies who focus on order management, pricing or data management.

  • Google acquires at least four more companies and firmly establishes itself as a enterprise platform.  The names of these four companies may or may not be publicly shared, yet Google is well on its way to be an enterprise platform due to the constant contribution of content from both indexed sites and new initiatives including Google Base, reliance on advertising by smaller companies that can’t afford more expensive advertising strategies, and the fact that search engine technology is the quickest fix for the most broken of content management systems.   Look for Google to be the first out with video Instant Messaging and other collaboration applications that will serve as on-ramps for entire content management taxonomy support.

  • AdWords sparks an industry of optimization tools due to lead generation successes.  The technology behind constraint engines could easily be applied to Google AdWords to further optimize word selections and the optimal allocation of budgets by keywords chosen.  Google offers a Budget Optimizer today yet it doesn’t allow you to see the median bid for a keyword network-wide.  If a constraint engine could define the median value for a key word, its optimal performance for your subject by time and location then the economics of buying them would change drastically and greatly improve individual companies’ performance.

Posted by Louis Columbus on December 22, 2005 at 02:08 PM in Business Transformation | Permalink | Comments (0) | TrackBack

The Fifth P of Marketing - Passion

Nearly every business school teaches the traditional 4Ps of Marketing including product, price, promotion and distributon or place.  The key is to sychronize strategies to take each of these aspects into account and create results, either in terms of great channel growth or direct sales.  These are the core concepts of Marketing.

In the graduate-level courses I ocassionally teach on Marketing one more P sneaks into the conversation - Passion.  Nothing happens in Marketing without passion - and that's a passion to be the change agents of a company, not the holders of the status quo or worse, the historians of the past.

As my class goes through case studies and examples of exemplary marketing one fact emerges: Marketing is as much of a calling as it is a career.  Call it an avocation. 

Marketing is an act of agresssion against the status quo and it is definitely about making an impact in the market, all in the name of advancing brands, awareness and eventually Sales.

Passion truly is the fifth P of the Marketing mix. 

Posted by Louis Columbus on November 16, 2005 at 10:49 PM in Business Growth | Permalink | Comments (1) | TrackBack

Giving Good Webinar

Here are lessons learned that any company looking at this approach to communicating with prospects and customers needs to keep in mind:

·         No Wimps on Webinars.  Don’t torture your audience with a terrible speaker just because they have an impressive title, even if that title has a “C” in it – yes even your CEO may stink at Webinars and he or she needs to know that.  Monotone speaking, and the cardinal sin – lack of passion – means that person should be not giving a Webinar.  Be strong and tell the truth, because your prospects will eventually hand you the truth anyway. Respect the attendees time and only put your best presenters on these Webinars.

·         Don’t live just for the A Leads.  Any given seminar will get only 30% attendance from the registrants and of those attending 1 in 10 are typically ready to buy.  If you get 200 registrants and go through these assumptions you will end up six solid A leads.  Too often the 194 other registrants are tossed. You can gain a competitive advantage by going after that other set of registrants and mining them.

·         You are there to solve the customer’s pain not talk about how great your company, your product or you are.  Put company, product and self-promotion in the backseat and focus on your participant’s pain and talk in their terms.  Honestly focus on how to solve their problems, even give away insights that will help them with their problems that they dialed in looking for assistance with.  You may recoil and say “why will they buy then?” but in building a relationship with prospects begins when you realize you get what you give, so why not overbalance the scales in service to prospects and customers?  Makes sense and works.

·          Offer a recorded option quickly after the Webinar is done.  This is critical for the other registrants that may have had something come up at the last minute and they could not attend.  Be sure to include the visual portion of the Webinar as well, even an Adobe Acrobat PDF file of the slides as well. 

·         Evaluations and ROI.  Many companies quickly do the math of cost per attendee when cost per cost sale is the most important one.  The focus on solving pain is critical and will grow future attendance because you’ll be earning the trust of prospects.  All things being equal get in the mindset that a Webinar is not a closing event but one that feeds the beginning of your pipeline and most importantly, educates the prospect.  In that vein do evaluations using SurveyMonkey.com or any other web-based survey website to get results quickly, within 24 hours would be best as the Webinar is fresh in the minds of the attendees.

·         Webinars and Weddings: Timing Is Everything.  A short-sighted friend gave two weeks notice to everyone, including immediate family, for his wedding. We were all bachelors at the time and noted that he was really giving his free-wheeling and wild oats days two weeks notice.  The same holds true for a Webinar. Give 30 days notice and avoid Mondays, Fridays and anytime around a holiday or trade show.  Common sense but planners get so close to their events they forget about the rest of the world.

In summary, Webinars are a powerful way to connect with prospects and underscore your companies’ credibility.  Focus on educating and delivering insightful content and you’ll win fans in the pipeline and in your customer base alike.

Posted by Louis Columbus on November 16, 2005 at 10:37 PM in Customer Dialogue | Permalink | Comments (0) | TrackBack

Marketing Imperialism

Blogs are the 21rst Century equivalent of one of the greatest freedoms the U.S. Consititution conveyed, which is Freedom of Speech.  Sure, there is a deafening wave of voices in blogs, but in that diversity is the strength of the medium.  Content is king, not delivery method. 

Our love of freedom of expression in all nations, and the accentuated tone of patriotism in the U.S. right now specifically, makes Lew McCreary's column in CMO Magazine look so imperialist I wonder where Mr. McCreary is spending his time.Here's Lew's column for CMO  Magazine: http://www.cmomagazine.com/read/080105/coming_clean.html

Most irritating of all about the condescending tone of the article.  It shows the worst arrogance anyone can have; thinking the title, position or degrees make one person better than another.  Having grown up lower middle class, that kind of arrogance personally grates on me - everyone deserves a voice - and some of the best ideas in companies come from the cleaning crew and not the C-level execs. 

One wonders why Marketing worldwide is losing credibility.  Putting a "members only" sign on blogs is exactly the type of thinking that robs Marketing of the creativity of working class heroes - not the pedigreed and pampered - but the marketing folks that come to work with a lunch pail and their shirt sleeves rolled up ready to get to work.  Given a choice between a high pedigree or a strong work ethic from a common degree, give me the latter any day. 

Apparently Mr. McCreary forgot about what makes Marketing work in the first place: a strong work ethic and a no-nonense view of results where effort and not pedigree alone gets the job done.  Add in freedom of speech and you have an unbeatable combination. 

A final note: one of the "rabbit holes" that Lew chides single-handedly changed Dell's policy on blogs.  Check this out http://www.buzzmachine.com/?tag=dell

Bottom line: CMOs everywhere would do well to deliver honesty and transparency in their own blogs, and not consider the many voices out there "the great unwashed". 

Consider this point as well: Going back to the 18th century when the American colonies first started using the printing press there was a illegitimate child born who had a reputation for a good joke and a witty mind.  He helped pen the Declaration of Independence, and by any measure he was the very picture of the "great unwashed".  His name: Benjamin Franklin.

Posted by Louis Columbus on August 30, 2005 at 01:38 AM in Customer Dialogue | Permalink | Comments (0) | TrackBack

Customers Are Redefining What Intimacy Is

By Louis Columbus

It’s good to question assumptions about your customer base from time to time and test them just to make sure they are still accurate. One of the strongest lessons learned from the Internet is just how much many manufacturers don’t know about our own channels, customers, pricing, and products.  The Internet’s immediate ability to deliver feedback is showing many assumptions about nearly every customer-facing aspect of a business to be incomplete at best. 

Quit Ignoring Independent Content

The many forms of independent content spawned by the Internet need to be mined for the true voice of your customers. These independent forms of content include the following:

  • Blogs
  • Calls to customer support centers
  • Message Boards
  • Traditional voice of the customer programs including e-mail traffic and aggregating customer service e-mails
  • USENET
  • Websites
  • Wiki and Interactive Presence Efforts mostly by B2C companies

You’ll find a love/hate relationship between your customers and your company you may never known of before.  Anchoring the one extreme are the raving fans – those that just can’t say enough good about your products – like Apple iPod owners for example who create their own podcasts of how to get more out of their iPods.  That’s love. 

More often than not it’s to tell the world how angry they are.  Consider the impact Jeff Jarvis has made on Dell’s policies on blogging.  He’s been successful in getting Dell to at least pay attention to blogs now – quite a change from earlier in the summer when he was ignored. You can read about the entire situation here.  Be sure to read Shankar Gupta’s summary here as well.

Posted by Louis Columbus on August 24, 2005 at 01:42 PM in Customer Dialogue | Permalink | Comments (0) | TrackBack

RX for Marketing: Know Your Customers’ House of Pain

By Louis Columbus

There is a crisis of creativity in many marketing departments today, and that is affecting everything from how enterprise software gets sold to which airlines will survive or not.  Too many software companies are caught up in imitating competitors’ strategies, and others out of sheer complacency and the mistaken belief that working the same strategy year in and year out – doubling down on the past in essence – will deliver better results – yet fail to get to their goals. 

When it comes to product strategies, this thinking delivers yesterday’s products tomorrow. It’s been my experience that when manufacturing companies run out of new marketing, product, and sales strategies it’s a sure sign they have no idea what the pain points of their prospects and customers are. Instead of taking risks with innovative new products, these companies stay focused on what worked in the past – stuck in a holding pattern of building products for the same pain points, again and again.  The spiral continues until the Marketing department isn’t relevant anymore and eventually an entire company. 

The bottom line is that Marketing in many companies is inching towards being irrelevant and dragging the entire company with them because they have lost touch with the most excruciating pain points of their prospects and customers.

No Pain No Gain

It’s time for Marketing to quit judging and applauding itself by how it excels on inward-centric metrics and start being experts in their customers’ House of Pain.

In the many forms of independent content lurks the greatest pains any company’s customers face.  Yet it’s been the last place they look for feedback, and in the case of the highly publicized situation of Dell’s faceless and bureaucratic response to customer inquiries that were posted to blogs worldwide one can see how quickly pain points partially self-induced get noticed and now, promoted through blogs.

Marketing needs to map their customers’ House of Pain by putting all forms of independent, unstructured content at the center of how they listen to and interact with customers.  These forms of independent content include:

  • Blogs
  • Call Center Logs and Recorded Calls
  • Customer Service e-mails and Instant Messages
  • Message Boards
  • USENET
  • Website comment forms

Constructing Your Customers’ House of Pain

Let’s be honest, the customer service e-mail addresses end up in an account that your well-meaning Director of Marketing or Product Management set up four years ago and since then it’s been mentioned.  Sins of customer omission abound and it’s no one’s fault – the processes and incentives are in place to actually pay people more to ignore their customers, because they can make more slam-dunking internally defined goals.  In a sense, some marketing departments are incented to deliver a terrible customer experience.

Call to Action

Marketing departments need to re-evaluate how they look at their performance and realize that the path to long-term relevance starts by finding their way to the door of their customers’ house of pain.

Posted by Louis Columbus on August 23, 2005 at 02:36 PM in Business Growth | Permalink | Comments (0) | TrackBack

Think Soufflé Not Instant Pancakes When It Comes to SOA

There needs to be more truth said about the reality of what SOAs are and are not.  If you read some quick-and-dirty analysis of this area you would come away thinking the best approach to delivering SOA in your company is to “…just add Web Services” and you are there.  It sounds as easy as making “just add water” pancakes – and those of us who were bachelors at one point recall those well.

The bottom line is that SOA is definitely not like making “just add water” pancakes – it’s much more like creating a soufflé than soupy pancake batter with little thought towards the end result apart from basically being edible.  And again – from my bachelor days – a soufflé was a disaster in the kitchen waiting to happen.  Better left to more capable hands, soufflés are for the patient and practiced – and in a sense SOAs and Web Services are too.

Don’t believe the hype around SOA and Web Services.  Think “soufflé” and not “just add water” pancakes. Further, think of being a chef creating soufflés – and then you have a sense of the true challenge of creating a real, honest to goodness SOA.

Check out these links to see the truth about SOAs:

http://www.cio.com/blog_view.html?CID=10591 – Interview with Hossein Moiin, vice president of technical strategy for T-Mobile International.  This guy is a true chef of SOA soufflés.

http://www.zapthink.com/report.html?id=ZAPFLASH-08052004 

Seven fallacies of Web Services

Posted by Louis Columbus on August 23, 2005 at 02:21 PM in Business Infrastructure | Permalink | Comments (0) | TrackBack

How To Create Sales Warriors

By Louis Columbus

Extroverted, loud and direct, your sales force is a living case study about whether CRM drives sales excellence or not.  The high achieving sales people – I like to think of them as sales warriors because the really do fight to win business in every day – are the lifeblood of any company.  They bring the voice of the customer into any company.

Conversely anyone who has ever been in engineering, marketing, product development or product management realizes that there is a constant tension between what sales wants and what any given company’s products and strategies can deliver – obviously that’s because no product or service can be all things to all people.  Sales warriors learn how to sell using the knowledge of the entire organizations and instead of whining about what a product is or isn’t find creative ways to sell using all the knowledge in other teams.

To net out the pros and cons of sales, the best companies I have ever worked for or tracked for analysis are driven by sales and have a passion for measuring results.

CRM: Unfilled Promise or Over-promised solution?

With such a push to make their processes even more efficient, enterprise software vendors aim to sell the concept of giving everyone the chance to excel with their CRM systems.  Automating processes only goes so far however – and where the automation ends, the person’s ambition, drive, intelligence and talent begins. 

In watching the best salespeople work, here is what becomes apparent:

  • Relationships rule over process.  Call this heretical versus the latest push to make all things process-centric in enterprise software, yet it is very true.  Travel with your company’s best salespersons and you’ll not see rigorous effort at synchronizing with mountains of data in the CRM records but a genuine concern for their customers – the relationships they have are why they are successful.  So fundamental and so true – but so overlooked in the haste of making processes the core focus of re-engineering any company.

  • The best salespeople have simple, manual systems that have relationships in the center, not just transactions.  Again, this is clear in the highest achieving sales people I’ve met.  They know how to track relationships already and don’t need a state-of-the-art CRM system to do it.  They could use help with the drudgery of entering names, doing mailings and tracking changes electronically to customer status.  Enter integration.

  • Integration rules. As you travel with any of the top salespersons the biggest complaint you constantly hear is being too disconnected from corporate.  In pricing, in customer shipment data, in backlog reports, in just about anything sales reps struggle to stay informed.  So instead of needing a CRM systems with enough features to land an astronaut on Mars they just need one simple to use that melds to their relationships instead of transactions.

Bottom line:  Salespeople who excel have found a passion in enriching their customers and the relationships they have with them.  They honestly care about the people they serve, and that is much more powerful than any compensation program.  If CRM systems are to grow sales warriors the systems have to find a way to engender trust and respect in selling relationships, not just pure efficiency of transactions.

Posted by Louis Columbus on August 4, 2005 at 09:05 PM in Customer Dialogue | Permalink | Comments (0) | TrackBack

Demystifying ROI by Measuring Marketing

By Louis Columbus

In good times marketing and sales get all the credit for increases in sales and profits, but in bad times, IT gets the brunt of the cost-cutting pressure. What have been missing are truer measures of Return on Investment (ROI) for companies adopting customer-facing strategies.  What’s really needed is a more focused approach to quantifying the contribution of marketing, while at the same time questioning some long-held beliefs about ROI.

The best way to get started on truer ROI measures of performance is to start quantifying the performance of marketing – which in many companies is seeing rejuvenation in spending thanks to more targeted program focus and the ability to tie back results accomplished with sales, all underscored by a recovering global economy.  Today the better you can quantify your departments’ contribution, the greater the chance you get to spend more on projects your department sees of value; the converse is also very true, where lack of measures quickly lead to a lack of funding.

Arm Yourself with Marketing Metrics First 

It’s critical to get a solid return on customer-facing strategies – quite frankly if these strategies are fully automated and rely on CRM, order capture, or service-based applications or not isn’t at the heart of this point – the ability to execute and accomplish the quantified goal is.

So before your company starts layering in technology for streamlining marketing and sales tasks, get a handle on the metrics listed here first.  Sure, there are many more, but it’s better to have a solid handle on these to feed the knowledge in your company of just how effective you are being with customers.

The following metrics are a must-have list for any marketing organization:

  1. Cost per lead.  This applies to every marketing activity, from advertising to direct mail and trade shows.  Be sure to capture this on each strategy you use for generating leads – one high tech manufacturer found the cost per lead from television was US$110, yet the close rate was the highest of any lead generation strategy.

  1. Lead-to-close ratio.  This is a measure of how many leads in your pipeline have closed relative to the total leads generated.  From the leads that didn’t turn into sales, consider doing a win/loss analysis.

  1. Cost to fulfill an order.  There is a tough irony in this figure for many companies.  They find their average cost to fulfill an order is over $200 – especially those with disconnected, yet distributed order management systems – and find that their average order size from smaller customers is below $150.  So these companies have found they are actually losing $50 per order from their smallest and highest maintenance accounts.

  1. Renewal rates by customer segment. Just classifying your customers and then capturing their renewal rates is easily enough done in a Microsoft Excel spreadsheet.  This can give you great insights into how to capture even greater business throughout your customer base.

  1. Event-based ROI.  Trade shows, webinars, even regional sales events have many useful insights to be gained by measuring their ROI.  For many companies who have CRM systems they have the chance to see the history of the event coming together in the targeted prospects’ histories – and can see which incentives worked and which didn’t to bring prospects out to the event.  The bottom line is that event-based ROI has many surprises waiting to be discovered for the benefit of your company.  If you aren’t doing this today get started.

Dispelling ROI Myths with Marketing Data

Once any company is armed with just the metrics above, they can better negotiate with CRM vendors, system integrators and consultants to get to the performance they want.  Let’s take a look at many of the myths that start to fall apart when there’s better metrics in place from marketing’s contribution:

Myth: Various vendors’ ROI assessments are useful for comparing their applications’ contribution.  In reality, payback period is a much more effective relative measure of a given application's ability to deliver value.

Myth: Hard numbers are all that matters in defining ROI.  It’s a safe assumption that 70 percent of the total cost of any CRM implementation is going to be training and assisting people to change how they work today.  For every dollar spent on CRM, at least two or more additional dollars needs to be spent on assisting the people who actually use the application change how they work.  It’s the numbers spent on “soft” strategies like changing how people work where the true ROI gets earned – and when marketing has an idea of their performance on processes with the metrics above, this myth gets exposed quickly.

Myth:  You can predict ROI using industry-specific averages.  One company’s best practices can be another's worst.  Too often companies buy into the vision of ROI by proxy instead of performance.  When a company is armed with marketing metrics, this is much easier to refute.

Myth: When all else fails, cost-reduce your way into a positive ROI. A hold-over strategy from the recession, this rarely works and as many have said, it’s impossible to cost-reduce your way into market leadership.

Myth: Sustainable ROI is possible without integration.  The most dangerous of all myths, because there is evidence everywhere that the exact converse is true.  In the case of marketing, the more integrated the processes the higher the ROI of the systems added to automate the information required to complete the goals the processes were designed to achieve in the first place.

Myth: ROI on a per-project basis is always traceable. This is certainly not true, and only happens when a process is owned from start to finish, and has clear boundaries.  Cause-and-effect happens when processes change first and technology gets selectively applied. 

Bottom Line: As global economies recover its important for many marketing organizations to embrace metrics first, before spending on technology.  Don’t let the budget for IT spending on customers force false urgency – stop and think about how you are doing on these strategies today first – and then make smart investments that get you to your marketing goals. 

Posted by Louis Columbus on August 2, 2005 at 01:26 PM in Business Transformation | Permalink | Comments (0) | TrackBack

Blog Mining Gets Real

By Louis Columbus

The torrent of facts, data, figures and insights that blogs deliver daily are random and chaotic, yet immensely valuable in the right context.  For companies committed to getting to the truth of where they stand with their prospects, customers, suppliers and many other stakeholders, blogs are becoming the medium of choice. 

One strategy is to cull through them and take snippets out and circulate them around the company; it is quite another to take the time to mine the blogs for usable and measurable competitive, distribution, product development, service, and support insights.  Capturing information from the chaos of all that data is the challenge.  That’s why blog mining is starting to get real.

In watching this area for some time – the intersection of text mining, data mining, linguistic analysis, statistical analysis, and latent semantic indexing techniques (Google uses latent semantic indexing for example in indexing web pages) on the one hand and the glaring need to interpret blogs on the other – looks like a problem many marketing, sales, and service departments grapple with daily. 

I decided to dive in and see what’s real and what’s not in this arena by visiting each vendor’s site and trying to find useful downloads that would give me the ability to complete unstructured content analysis from blogs on my laptop.  What I found out is the basis of this article.

Business Intelligences’ Perfect Storm Is Brewing

What immediately is apparent is that every vendor with any type of text mining, data mining, linguistic or natural language processing capability is quickly announcing text mining and unstructured content applications.  No doubt so many business intelligence vendors can hardly wait for text and blog mining to start taking off.  SAS and SPSS, two of the data mining powerhouses in the BI market, each have applications purpose-built for text mining.  While SPSS doesn’t offer a test drive of theirs, called Clementine, SAS does offer a download of SAS Enterprise Miner, which requires Base SAS or SAS/STAT be installed beforehand. Autonomy and Verity, two search engine vendors, have created text mining applications in addition to productizing their search technologies.  Companies specializing in text mining are Inxight Software and Stratify, Inc. SAP and IBM also have text mining applications.  Companies that are also worth keeping track of in this area are Insightful Corporation and ClearForest Corporation. 

Of all these companies, SAS’ downloads came the closest to making the goal of completing an analysis of blog content achievable without spending for an application.  If SPSS made Clementine a free download for trial it would have made the goal of analyzing a blog accomplishable fast.  SPSS does offer the complete SPSS 13.0 for Windows for download, yet there isn’t much in the way of text mining tools in that application.   

No search for applications to quantify blogs would be complete without checking out Wolfram Research.  They are the developers of the Mathematica series of quantitative analysis applications, and also have a free trial of Mathematica CalcCenter 3, which supports a wide variety of algebraic, statistical, data analysis and report writing functions.  They do have a download available for CalCenter 3, yet it is disabled of any computational functions.

Natural Language Processing Gets Major Attention

There is much working being done in this area that is worth watching. First, there’s IBM and their significant research efforts in natural language processing, you can read about here.  Microsoft also is investing heavily in natural language processing, and you can see their research page here. The best-of-breed vendors in this arena show much potential for taking the unstructured data of blogs and building linguistically significant relationships.  These include Attensity, which excels at taking unstructured data and not only quantifying it, but even monetizing the decisions surrounding the data.  Island Data uses natural language processing for organizing unstructured content in its Insight RT Suite.  There’s also Centor, which got its start using natural language processing to find linguistic patterns in unstructured content from the automotive industry and has since branched into high tech. Attensity requires a server component, Centor does as well.  Island Data is hosted.

MIT had the best download for completing natural language processing that is immediately available on the Web.  It’s a creation from the MIT Media Lab.  The ConceptNet Project is a shareware toolkit for handling natural language processing.  While free, to make the kit work it takes much reading of documentation and loading free prerequisite server components from the ConceptNet site.

Blog Mining as a Service

Yet another option for analyzing blogs comes from information services companies that monitor a select set of blogs and summarize them, or in the case of Intelliseek, their site BlogPulse.com has a set of tools worth checking out.  Included in the May 19th refresh of this site are clickable trend charts (called BlogPulse Trend Tool) and enhanced conversation tracking.  To get a sense of how often your company is mentioned in blogs use the Trend Charts to compare yourself to your industry or to competitors. Comparing the last six months of mentions in blogs of SAP, Siebel and CRM produced the result shown here.  Another company, Buzzmetrics, also tracks blog mentions of your company and also has a methodology for measuring the impact of word-of-mouth influences in purchase decisions. Relatives of mine who work in the financial side of the movie industry say word-of-mouth is the single biggest influencer of ticket sales, so no doubt Buzzmetrics will see some business from the studios this summer.  

What’s most interesting about techdirt is their open door approach to having anyone submit stories for publication on the site.  It’s more like an opinionated news feed than a collection of press releases and shows what a blog can become. See what the

Harvard Business School had to say about techdirt here.  In my effort to find tools for analyzing blogs without spending a bundle I found their site techdirt ci which is short for competitive intelligence.  The concept of techdirt ci is to scan blogs, web pages, and any other form of publically available electronic information and then deliver to your company a personalized blog of information on market information, competitive analysis and major news from your industry. 

Take-aways

Like unstructured content captured on web forms that never really gets used, blogs’ explosive growth is generating raw data sets that your company really can’t afford to ignore. Consider these recommendations for capitalizing on blogs:

·        Set up the necessary tools to analyze the blogs.

·        Take a competitor’s blog and using any of the tools mentioned here, analyze it.

·        Check out blogpulse.com at least once a week, if nothing else to watch the statistics of growth around blogging.

Bottom line: At the beginning of the year blogs were considered by many industry watchers one of the top ten trends.  It’s becoming very clear that blog mining is certainly part of that mix.

Posted by Louis Columbus on August 2, 2005 at 12:33 PM in Business Transformation | Permalink | Comments (0) | TrackBack

Your Customer’s Expectations Are Your Future

By Louis Columbus

Every day, manufacturing companies write their own futures.  Many do this formally, creating strategic plans and aligning resources to these long-term efforts.  Yet in the many moments of truth with customers, resellers and channel partners, the future is indelibly written by the service, support and guidance customers receive every day. 

It is in these moments of truth with customers where truly great companies emerge.  Reaping the benefits of meeting and exceeding customer expectations is where sustainable growth comes from.  With that growth comes confidence, and a passion for service.  Managing customer expectations in these thousands of moments of truth each day gives companies freedom to excel in their core businesses even more.

If you’re a publicly-traded company those expectations percolate to both investment and industry analysts, eventually influencing your stock price and valuation.  The best manufacturing companies look to these moments of truth as the building blocks of a strong reputation with the investment community and for future growth.

Expectations are a covenant with your customers

Changing a company’s culture to give front-line employees the tools necessary for delivering excellent service and capitalizing on these moments of truth starts with these strategies: 

Invite your channel partners and top customers to the development table.  These forums are called Advisory Councils, and are very useful for validating product roadmaps, reviewing potential channel strategies and making complex product decisions based on how it will affect your channels and customers.  In one Advisory Council and entirely new software application and service strategy was created based on reseller and customer feedback.   

Don’t ignore website-based e-mail and content from customers.  Don’t ignore e-mails and content from your prospects and customers visiting your website.  At the very least get a list manager that can provide an automated response.  The goal is responsiveness and recognition that your company has received the message.  World-class manufacturers are also using linguistic models to look for patterns in the thousands of messages and comments in this data.  Consider unleashing your IT team on this task; there are several excellent companies offering software for this linguistic analysis of customer’s unstructured data.

Be your own customer once every three months.  If you’re a manufacturer selling to consumers, be a customer every three months.  See what they have to go through from an ordering perspective, and be sure to go back and check your orders’ status, call and see if the same message comes from your call center – in short exercise your own systems as a customer would and look for areas of improvement.   

Get Impartial Win/Loss Reports.  Regardless if you have an indirect or direct channel strategy, selling to chains and distributors or directly to large accounts, you need to have impartial and honest win/loss reports to improve.  Too often manufacturers do these on their own and accounts lost to competitors either are too polite or just too busy to give the honest feedback needed to grow.  Get an outside firm that specializes in win/loss analysis to provide this information for you.  On the positive side, you’ll see where you are excelling and may not have known in, and on the negative, places where you have fallen short of expectations.

Index bonuses and compensation to customer satisfaction.  You have your choice of a carrot or stick strategy when it comes to making the moment of truth with your prospects and customers.  Of the two, the carrot of excellent service as recorded in a customer satisfaction survey is longer lasting than any strategy of negative reinforcement.  Get this data monthly and make sure it’s prominently displayed.  Set reasonable targets and index bonuses and salaries to customer satisfaction.

Grow Services Champions.  Practice these steps long enough and add your own, and soon you will have leaders emerge from Sales, Service, Support, Operations and nearly every other customer-facing organizations.  Turn these people into champions and make sure their exemplary performance to customers is visibly recognized. 

Bottom line: Manufacturing’s greatest challenge is to link the myriad of activities today with the growth required in the future.  While strategic plans are useful roadmaps, it is in the many moments of truth every day where world-class manufacturing companies are built.

Posted by Louis Columbus on August 2, 2005 at 12:10 PM in Customer Dialogue | Permalink | Comments (0) | TrackBack

CRM’s Odd Couple

By Louis Columbus

Home-grown ERP systems are the Oscar Madisons of the IT world.  Grizzled by years of service yet reluctant to change, set in their ways, and unwilling to embark on even a modest upgrade path, home-grown ERP systems are seldom changed by the revolving door of CIOs that look to attach their own legacies to these massive home-grown systems.  More often than not, the home-grown ERP system changes the CIO.  All the complexity and lack of clarity makes some CIOs yearn for hosted applications to increase responsiveness to prospects, channels, customers, and the precious installed base manufacturers are striving to capitalize on.  CIOs in search of closure are driving the adoption of hosted applications.

Hosted channel, CRM, analytics and OnDemand initiatives from Siebel and IBM are showing usability improvements, alignment of workflows to how companies work, decent analytics that actually tell you how your strategies are doing, and best of all, can be turned on and off like a utility.  Several of these applications have streamlined, efficient interfaces, forsaking the “more is better” mantra of previous CRM applications. The extreme make-over hosted CRM applications are getting would satisfy Felix Unger on even his most perfectionistic of days.

Hosted CRM and Legacy ERP: A Partnership Of Necessity

Legacy ERP systems change gradually over time, reflecting shifts in priorities at only the strategic level. There’s no sudden and dramatic changes here; only a gradual shift, over time, as the company’s business model requires extensions to support mergers & acquisitions, re-vamped production strategies, and getting back in touch with what is many times the forgotten installed base of customers.  In fact, so many people like to point out the war for ERP revenue raging between Oracle and SAP – but the alternative to do nothing at all and tweak the home-grown ERP system one more time is the most potent competitor of all.  Systems that have code structures that resemble the perfectly random and chaotic nature of the character Oscar Madison in The Odd Couple are all too commonplace. Spaghetti code with no comments saved more jobs from outsourcing in the last five years that any presidential ca