New World + Old Data = Huh?

In a world where everything changes daily – why are you using the same old types of data you collected 5 years ago?

Name, address, phone number – these make sense – but only as a reference point.

Look at all the other information you collect. What assumptions was it collected on – and are they still valid?

Case in point: A few years ago I was advising a university on its prospecting operations. All their information cards and forms asked what sex the person was.

I asked – ‘What use is this?’. They didn’t know.

Its no use collecting information unless there is a use for it. Thats like buying food and never eating it!

We spent some time thinking about reasons why it might have been useful – Dormitories are all unisex now, no courses are single sex – mmmm.

Finally someone discovered that one of the universities community services departments used the information to feed a statistical model for predicting daycare needs. The reasoning was that females were statistically more likely to have children if returning to formal education, but the forecast was not accurate.

I suggested we replace the boring old ‘Sex’ box on the forms with ‘Returning to Formal Education’

This immediately opened up a whole bunch of different REAL opportunities for cross-sell/up-sell segmentation when combined with some of the other questions.

Check your data collecting assumptions – you may be surprised what golden opportunities are buried in the ‘Beacause we have always done it that way’

The Good Side of SPAM

Yes – there is a good side – spam filters also block a lot of  poorly constructed advertising.

Remember the laser printer and the ‘Desktop Pulishing’ revolution – DIY publishing – which simply subjected us all to poorly constructed in-house promo material. An 8:30am sales meeting is no place for 14 kinds of fonts on pink paper!

We put up with this situation until the world gradually realised the value in print media specialists, and went back to using them for the important stuff.

The SPAM problem means we are going to get to the point faster with Direct eMail.

Already I come across small companies that have learnt the hard way that spewing an offer to any old email list is not only ineffective, it flags their precious eBrand as a spammer and makes it harder to get real mail to real customers! Hooray!

As spam filters get ever more sophisticated you can look forward to seeing less and less unsolicited offers of any kind!

What does this mean? True Relationship Marketing. More on this over the next few days.

Why Reporting Tools Struggle with Client Data

“Gimmie a report on the senior management of our top 50 clients that haven’t been to lunch in awhile”

You struggle with the data – its so precise and specific. Should ‘Senior Management’ include IT managers as well as CIO’s? What about Financial Controllers or Non-Executive Directors? And does Top Fifty mean this month, this year or of all time? What about lunch – how can you get the appointment diary information over to the customer database?

Reporting tools often get the blame for not being flexible enough, yet we ask them to do the impossible:- give us generalised answers on excruciatingly pedantic data.

Why is this?

To answer we have to go back to the original users of computer technology in business – the accounts department. Database structures were invented to hold data in very precise ways. After all a Ledger that more-or-less balances is of little use to anyone. It was an enormous success.

Not surprisingly when companies needed to hold information about clients the tried-and-true designs were applied. Data was defined at the smallest unit necessary to contain the context. Job Title is just that – the field contains whatever the person called themselves – irrespective of their actual function or importance – either to their own organisation or yours. It is precise – but not a whole lot of use, (except when addressing the person concerned!). To You “VP of Marketing” might equate to “Vice President – Marketing”, but to a computer they are as different as can be.

In Short: Customer Data is NOT Financial Data and needs its own structures.

The structures it needs are broad, fluffy and inclusive – not exclusive. For example – in our opening scenario we would be better off including in our report a few people that are marginal rather than risk leaving off someone important. This is counter-intuitive to the way a financial ledger must operate.

During the ’90’s Customer Relationship Management applications realised this and introduced segmentation and grouping mechanisms to allow people to be grouped in ways that make sense, however, judging by some of the categorisations Website ‘forms’ demand – I would suggest this lesson needs to be heeded by many a company striving to service their customers with ‘new media’.

When Technology is the Wrong Option

I often get clients that are in a ‘between’ situation. Where they have outgrown their current methods and systems, yet aren’t quite big enough to justify the obvious next step. This leads them to the strategic growth investment discussion, they are unsure which way to go and I am called in.

Let me give you an example:

Lets say the company has gone from start-up to a size where a ‘proper’ Customer Relationship Management (CRM) system of some kind is suggested and proposed by one of the reputable CRM vendors. The cost of implementing CRM across the organisation and by the book is daunting, (there are cunning ways to reduce the implementation risk and cost however that is another story).

The decision appears to be an either-or:

EITHER we stay in the disorganised state we are OR we bite the bullet and do this project.

Draper’s Law of technology states: “When in an uncomfortable either-or situation – both options are usually false and there are other more viable options – you need to examine the basic assumptions to uncover them”

In this case we are talking about customer interaction and the false base assumption is that the answer has to be a technological one.

Customer Facing Technology is only a substitute for People – not a replacement.

Otherwise all the high class retail stores would have installed computers years ago!

Lets say our example CRM proposal carried a price-tag of $100,000 and that it will cost at least that again in reorganising policies and procedures, cleaning accounting data, gathering segmentation data, meetings, marketing strategy sessions, training and all the other upheaval tasks a new system normally demand.

You could employ several part-time people for that price.

Imagine sending a semi-retired person out to your clients on the premise of customer care/service/whatever makes sense in your industry. They TALK to the actual users, (not the manager or the purchasing officer), they hear about problems, they gather useful information that can be brought back to base – AND they can organise technicians to call, help reorder consumables etc. in short – they are a one-on-one personal marketing machine. You cant loose.

And when the time truly comes for that flash CRM system – you will have a richstream of customer information and bedside manner procedures all set to take advantage of the applications features.

There are always other options to technology, and exploring them helps put technology in its place – as a support tool, not the be-all and end-all.

Data: Its What you’ve NOT got

You go out for a meal, something about the place you choose is not to your liking. Its one of your regular haunts! Maybe the new menu doesn’t excite you or the service was slow, or a new waitress just doesn’t cut it.. No matter what the reason – the next time you are deciding where to go, you more often choose somewhere else. You go to this favorite place less and less regularly.

OK – so you vote with your feet, and they eventually loose a customer.

Your customers are no different. If you wait until they stop buying, then its too late, (churn – yuck – I hate that word, its so un-personal).

Most sales reporting focuses on just that, and customers who are buying less-frequently are buried in a maze of other factors until its too late.

This is just one of the more obvious scenarios – and there are many – where you should be looking for what data you DONT have as much as the data you do have. Becuase the don’t-have data is full of potential, while the do-have is just history.

How to make a BIG business act like a SMALL one

Why would a Big business want to act like a small one?

A small business knows its customers individually. The ‘management’ are close to the customer – they sell, deliver and clean up afterwards. A small business knows their customers likes, dislikes, knows how to truly look after their good customers. They don’t need saturation level advertising, mailouts or spam campaigns – so are effectively invisible to corporates – they just get on and focus on serving the customers they have, aquire new ones by word of mouth.

“Hello Mrs Jones – I’ve got some lovely steak – just like your Dennis likes it. Oh and I’ve put aside a few of those beef bones your dog likes so much”

Just look at this single line from a local butcher.  He’s recognised his customer by name (25 points). He remembers her spouses name (50 points) . He knows which of his products the Joneses really like – and irrespective of what She came in for – he’s already attempted to upsell! (10 points). Finally – he’s thrown in some bones for the dog – TRUE LOYALTY – not some complicated discount scheme! (15 points)

The points allocation you ask? – Thats the weighting I would put on the ability to carry off each of these tasks within the exchange. People LOVE you to remember their names, and things that matter to them. They will be blown away if you appear to care enough to think about their needs. But you cant do the ‘care enough to think about needs’ without the other bits first – and this is where Big Companies go wrong – if you want to know more – email me via www.richstream.co.nz

Big Companies can’t really know its customers individually. They are a fraction of each statistic at a board meeting. Half the companies staff may not have even met a real customer. Customers make their life difficult with their complicated requirements. The effort to attract and hang onto clients is enormous – Mass marketing, Loyalty schemes, Product ‘Facelifts’.

Big companies desperately strive to appear like small business, becuase it is the only way they have any relevance at a personal level. “We know you and we care”,  might be believeable coming from your local butcher, cafe or salon, but a multi-national bank? Gimme a break.

Big companies can only act like small business by either operating as a collection of small businesses – or assuming a hive mentality – where all information is shared across the organisation creating a collective ‘memory’, so that any one worker can appear to know and understand your needs.

Enter ‘Customer Relationship Management’, ‘Customer Database’, ‘Data Warehouse’, ‘Relationship Marketing’ or any one of a number of other terms  that effectively mean one thing:

Store data about each client so we can carry on a human level conversation that appears real

Therefore we can state “Technology is the sole enabler that allows Big companies to act like small ones”

Trouble is – few BIG companies know how to use the technology properly to achieve the effect they so desire.

Can you imagine an anonymous employee at the local Supermarket saying something like our small butcher example above? While almost laughable – it IS possible with clever use of technology and the proper training of motivated people.

Think about the staff of a very high quality hotel – they are trained to act friendly almost to the point of being familiar – and the effect is a pleasant experience. So it is possible.

It sort of sets the standard of achievement for larger companies sales and marketing support technology dont you think?