Unconsultancy

Information Overload

admin — Tue, 17 Jan 2012 14:23:03 +0000

I decided a little while ago (OK let’s call it a New Year Resolution) to read more – maybe polish off a book a week. This week’s offering is “Marketing Genius” by Peter Fisk which seeks to take the marketing discussion to a new level and to challenge some marketing traditions and established ways of thinking.

I was struck today by his section addressing information overload.

Data isn’t information
Information isn’t knowledge
Knowledge isn’t insight

We are surrounded by vast oceans of data and businesses are carrying out market research incessantly. We hardly need more data, but winning businesses do need more and deeper insights. The fact is that we obstinate humans rarely comply and fit neatly into marketers “segments” any more. We behave in different ways in different circumstances and depending upon our mode. How does traditional marketing theory cope with the owner of a brand new top of the range BMW 4×4 shopping in Aldi or LIDL and wanting the absolute best deal on weekly grocery shopping. Or those of us who will scour the internet for the best deal on flights and accommodation for the summer holiday whilst remaining with a poor value utility supplier?

One of the morals of these types of stories is that there is probably little insight to be gained from averaging lots of market research data. It is more demanding but look at the outliers and the aberrants and learn from them. Business decisions based upon the averages of large market research studies have a potential danger to “satisfy everyone whilst delighting nobody” – is that where you want your business to be? I expect not.

Social Media: Are You Teaching a Class or Hosting a Party?

admin — Mon, 09 Jan 2012 12:48:56 +0000

Over the last few years I have witnessed the almost exponential growth of “social media strategy consultants” and their highly elaborated advice to businesses about how they should engage with social media tools such as Twitter, Facebook, YouTube, LinkedIn and many many more. I have to admit to a certain degree of scepticism which starts from having “social” and “strategy” in the same phrase – because if you have to work out a strategy for the social aspects of your life then something has probably gone wrong and you are about as genuine as a US Presidential candidate’s false smile.

But in this month’s Harvard Business Review I was drawn to what I consider to be the most useful analogy that I’ve come across so far in relation to how we might think about an organisation’s engagement with social media. It was offered up by George Eberstadt, the CEO of TurnTo Networks who made the comparison between hosting a party and teaching a class.

In both cases all of the participants are physically in the same room, but there are very different dynamics at play. In the classroom setting the teacher (the organisation’s brand) dominates the conversation (if indeed it is a conversation at all as it might well be a lecture) and the flow of information is “hub and spoke” – from the teacher to the class and maybe with some flow back to the teacher.

Whereas in a party the guests (customers and potential customers) may have minimal or no direct contact with the host (the brand), preferring to spend most of their time interacting with other guests. But all / most of the guests know and presumably like the host and so when the conversation touches upon the host it is very likely to be favorable and positive. The host has no control over those myriad conversations but the guests at a party are at least as likely to go home with a warm feeling about the hosts as are the pupils in a classroom setting.

The learning point being that controlling the conversations isn’t a guarantee of those conversations being positive and people harbouring warm feelings about the brand. Sometimes letting go and allowing people to express their own opinions, in private and to whom they want, can be even more beneficial. The great news is that in the social media space brands can monitor much of what is being said about them, without needing to control it. The eavesdropping tools are numerous and well developed.

What is going to work best for your organisation in terms of social media – lecturing your clients and prospects or inviting them to an ongoing party?

New Years Resolutions for Leaders

admin — Fri, 06 Jan 2012 11:30:21 +0000

It’s January and it is the time of New Year resolutions – OK actually it is already 6th January and if you are anything like the average then the resolutions you made on 1st January are probably already ancient history! But it’s close enough to the beginning of the year to start again and here are a couple of suggestions for anyone who sees themself, or wants to be, a business leader.

Get a mentor. I don’t necessarily mean paying a professional mentor – it could be anyone who you respect and who you can talk to about your career and business matters throughout the year. Someone who is probably sufficiently detached from your day to day work to be able to see the wood from the trees. Someone who you can trust and have some “chemistry” with. Someone who will at least occasionally challenge you and your ideas.
Ask more questions than you answer. The rate of change in the business world is increasing all of the time. Nobody knows all of the answers, not even you. You will get to higher quality “answers” if you ask probing questions, of yourself and those around you. OK if you are a time served manager in an industry that is static then maybe you do know the answers – but how many of us does that apply to? Asking questions doesn’t need to lead to lack of decision making but if it is an important question then it probably deserves rather more than a “stock, shooting from the hip” answer. Ask some quick probing questions. as ever the Pareto principle applies. Do at least the 20% of research that will get you to the 80% answer.

Happy New Year.

You Can’t Out Amazon, Amazon

admin — Wed, 21 Dec 2011 15:04:27 +0000

Another great potential business model innovation from Amazon.

If you have an iPhone have you seen the app “Price Check by Amazon“? Whilst browsing physical bookstores (or indeed any store selling anything that Amazon also sells, which is pretty well most things these days) and you spot something that you might be interested in buying you just take a snap of the barcode using your iPhone’s camera and the app will tell you what the price is on Amazon and of course as they have your account details already make it really easy to order from Amazon and have it delivered to your chosen address. For your “effort” you are rewarded with 5% off the price and at the end it asks you how much the bookstore you spotted it in is selling the book for.

So:

Every bookstore in the world is now a physical place where you can see the goods and order from Amazon!
Amazon gain huge market knowledge about competitor pricing and can adjust their prices in response, in near real time.

NB: Currently only available in the USA (but that is sure to change soon)

Business Plans vs Business Experiments

admin — Thu, 17 Nov 2011 12:45:14 +0000

If you are planning a new business, thinking about a new product or service launch, or just plain interested in innovation then please look at these slides. I am a firm advocate of the design thinking around business model redesign and the customer development process

Burn Your Business Plan

Pricing Experiments (Part 2)

admin — Mon, 07 Nov 2011 10:23:01 +0000

So last week I explored how asking customers what they might pay (with their hypothetical pounds) for your product / service was unlikely to yield much of value, and how “decoy pricing” can be useful (advertising a product / service alongside your others that very few people actually buy but which can aid your customers decision making and guide them towards a profitable sale). This week I want to take a look at that old chestnut the value of “9″.

Surely we aren’t taken in by £9.99?

Well in his book “Priceless: The Myth of Fair Value (and How to Take Advantage of It)” William Poundstone analysed eight studies conducted between 1987 and 2004 which looked at the effects pricing with the “magic 9″ (ie £9.99, £19, £99 and so on) and he found that their use boosted sales by an average 24% compared to nearby almost identical prices (ie £9.99 versus £10.00). In a study conducted jointly by The University of Chicago and Massachusetts Institute of Technology (MIT) a mail order catalogue was sent out in three versions, identical in all respects apart from the pricing of a single item of women’s clothing. The catalogues were mailed to identical sample sized groups with no difference in any of the average group characteristics. The item was variously advertised at the “magic” $39 as well as $34 and $44. The result was significantly greater sales at the $39 price point compared to both the $34 and $44 price points. So we consumers aren’t as clever as we think – we prefer $39 over $40 and even over $44 (although of course those other prices were not displayed alongside the $39 item like some type of “decoy”.

What outsells “magic 9″?

Researchers have conducted experiments “split testing” price tags along the lines of the three versions below (which I have marked A, B & C).

So what were the results?

In A versus B: A wins (because in B there is no indication of how much the item has been reduced (no initial reference price) even though B was offering the same item at a lower price than A

In C versus A and C versus B: C wins (the power of “magic 9″ and the initial reference price is available).

So lessons learned?

The power of “magic 9″
If reducing the price then let customers know the original price as a reference (all those sofa retailers have done their research!)

Pricing Experiments (Part 1)

admin — Thu, 03 Nov 2011 10:29:58 +0000

Every business struggles with pricing decisions. Last night I watched Channel 5′s (UK) “The Hotel Inspector” and the central point of that episode was that the hoteliers weren’t charging enough for their premium service and were soon to go under. A major element of the turnaround was to….raise the price.

Ask your Customers?

I am a keen proponent of Steve Blank’s “Customer Development Process” where, to overly simplify, the central mantra is to ask real people what they think. The trouble is that when it comes to pricing, asking what your potential customers think isn’t very productive because they don’t name the price that your product is worth, they name the price that they want to pay which will be less. If yours in an innovative product or service or at least highly differentiated from the competition then the customer has only a rather shaky frame of reference by which to judge pricing decisions. And (as Steve Blank would be the first to say) spending hypothetical pounds is completely different from spending your real hard earned pounds. Asking potential customers what they might / would / could spend on your product is not the best way forward – running experiments to see what they actually will spend is far more informative.

Irrational Decisions?

I recommend that you read “Predictably Irrational” by behavioral economist Dan Ariely, or at least watch this video of him at a TED conference

Whilst we like to think that our decisions, including what we will pay for a product or service, are rational infact there is a large dose of influence from whoever set the price, the way they display it and the context in which they place it. Let’s take a look at a few examples which you might like to incorporate as experiments into your business.

Decoy Pricing

The price people pay is very heavily influenced by what they see as the alternatives displayed alongside. So Dan Ariely ran an experiment with 100 students at MIT using a couple of different adverts for subscriptions to The Economist.

Firstly he showed them this one: The online subscription only cost $59 but there were two other options – the print version alone (at $125) or the print version plus the online version (again at $125). The result was that:

16% chose the $59 online subscription
84% chose the combined print and online subscription at $125
nobody chose the $125 print version alone

But then he created a second advertisement for subscriptions which left out the “Print only” option at $125. With these pricing options 100 MIT students chose as follows:

68% chose the online subscription at $59
32% chose the combined online and print option at $125

So the “print subscription alone” option in the first example (which nobody chose to purchase) was far from redundant – it guided people towards the “print plus online” option. The effect on revenues of the “print plus online” option being present or not would be substantial. Assuming 100 purchases in each case in line with the students choices:

The 1st advertisement would generate $11,444 revenue
The 2nd advertisement would generate $8,012 revenue (a 30% decrease!)

Of course the profit picture may be quite different (we don’t know the costs of producing & distributing the print and online versions), but these are not marginal figures. How you present your pricing options is key. The next post will look at further examples of the mysteries of pricing.

The Right Face for Leadership

admin — Tue, 01 Nov 2011 13:36:24 +0000

I love reading The Harvard Business Review and now that I have a Kindle it arrives automatically and is very easy to read wherever I am.

This month I was amused to read a piece entitled:
How Earlobes Can Signify Leadership Potential
by Carl Senior, Robin Martin, Michael West and Rowena M Yeats.

The basic thesis being that:

Highly symmetrical faces are viewed as classically beautiful (OK we’ve been told that for a while) and such people have higher self-reported scores for leadership ability (for instance considering others’ feelings, regognising others’ needs and inspiring others.
But the more asymmetrical the leader’s face in fact the better the team performance of their teams as scored independently.

The research was carried out at Aston University with firstly 80 students filling out self report questionnaires about their leadership styles and then a further 42 students actually leading small teams and being scored on their results. In both cases the students faces were measured for symmetry in the most minute detail. So the bottom line?

Beautiful people think they are brilliant leaders
The more aesthetically challenged actually tend to be better leaders.

The theory being that less beautiful people have over the years had to develop strategies to encourage others to like them and achieve results.

So here’s the fun part. You can upload a photo of yourself, your boss or anyone else to Anaface.com (best to be a straight on full face picture), it will make a set of measurements and give you a “symmetry score” – 10 being perfect a la Bo Derek.

Charles Scwab’s face scores 8.43

Meg Whitman (early EBay CEO) scores 8.25

Jeff Bezos (Amazon.com founder) scores 6.93

What’s your score? Leave a comment if you like.

Maybe the best bosses are the least good looking ones (but keep them behind a screen so you don’t need to look at them)!

Top 5 Cloud CRMs for a Small to Medium Business

admin — Sun, 23 Oct 2011 21:40:14 +0000

Everyone needs some form of contact management system and as those contacts increase and you find that you want to keep track of your interactions with clients, remind yourself when to give then another call and track how much they have (and might) spend with you then a Customer Relationship Management or CRM system becomes the order of the day.

You can still (even in this day and age) spend a lot of money buying software and installing it on your PC or server, but unless you need super degrees of customization or you have an innate fear of people stealing your data if it is in the cloud (probably less likely if it is with a reputable supplier than if its sitting on your own PC or server) – then my vote is for cloud based CRM systems. There are tens, (probably hundreds) to choose from. I’ve tested many of them so you don’t have to.

So as at October 2011 here are my top 5 picks. I won’t give an extensive write up on each because what you really want to do is visit each one, take a look around, signup for a free trial and see which one suits you best. All but the most esoteric requirements are fulfilled by this selection.

1. Karma CRM	There’s no denying it this is my favorite. A very clean interface, highly customizable and fairly well integrated with Google email and calendar, as well as various other 3rd party offering. The online support from the founder is impressive – frequently within a very few minutes. Pricing to suit even the most frugal SME director. Give it a go.
2. OnePageCRM	This is a new one to me but a quick look around the free trial suggests a really impressive product – clean and simple interface and a simple neat solution for those of us using GMail or Google Apps mail and wanting ready access to a contact’s email history without having to bcc copies into the CRM. Definately worth a look.
3. Batchbook	After the free trial periodthe lowest level package is $14.95 for a single user but only double that for up to five users. Very full featured, it does pretty well everything you might want and a lot more besides. If integration with social media is important to you – then this is the “go to” solution.
4. AmoCRM	Not only a free trial period but you can continue free forever so long as you don’t mind keeping it down to 100 contacts. Or pay $10 / month to really start opening it up. Easy to setup and use and good at managing sales processes.
5. CapsuleCRM	It might be “No 5″ but it is right up there with the best as far as I’m concerned. After the full featured free trial you can keep going free if you keep it down to 250 contacts and no more than 2 users. A particularly full list of partner applications that it will connect with including of course GMail and my old favorite accounting service Xero.com

What are LEPs for?

admin — Mon, 03 Oct 2011 13:10:21 +0000

I popped into the Leicester Business Event briefly last week and wandered around most of the company / organisation displays.

At the “Better Business for All” stand I was engaged in conversation by a very helpful lady who explained that “Better Business for All” is a pilot scheme that has been catalysed by the Leicester & Leicestershire Enterprise Partnership. The aim is to provide a single telephone number whereby businesses can ring up, explain their situation and be guided to the appropriate regulatory authorities in the area (local councils, environment agency, health & safety executive, HM Revenue & Customs etc).

My initial reactions included:

Who is paying for this?
Is it public funding (in full or part) – presumably it must be as all of the “partners” were either public sector or quasi public sector to the best of my understanding (apart from the Chamber of Commerce).
Is this really the appropriate response to the problem of overcomplicated regulation?

Where in the private sector would the response to confused customers unable to satisfactorily navigate their way around the business be to create another layer of complexity, cost , salaries etc to act as signposters?

Surely whatever funds the local councils, HSE, Leicestershire Fire & Rescue, HMRC, Environment Agency etc are using to support the initiative might possibly be better applied (particularly in these times of austerity) to streamlining their services and making it easier for people to interact with them.

Is not the solution to overly complex and customer unfriendly regulatory bodies to simplify, streamline and become more user friendly at the root, rather creating a new layer of smiling, customer friendly tour guides who will, partially, engage with the unfriendly regulators on our behalf?