Archive for October, 2009

My friend George Murphy who runs the marketing, branding, and strategy firm Modo-Group has been talking for years about how ineffective traditional advertising has become in terms of actually causing customers to buy products and services.

I was reading an article in the New York Times this morning about how Unilever has reached out to bands and street musicians (also known as buskers) and bands, offering them $1,000 to have a sign promoting there AXE deodorant.

It reminded me of an article that appeared almost two years ago (graphic to the left) that talked about advertising spending, and the article made a huge impression on me on several fronts.  First, the fact that organizations like P&G have marketing budgets approaching five billion dollars really shocked me.  Then to learn that most companies like P&G have no idea which of their ads actually works in terms of getting people to buy their products, let alone who is buying them.  The thrust of the 2007 article was that companies are entering an experimental phase where they are not only trying new ways to reach customers to get their brand and their message in front of the right crowd (like busker supporters . . ), but they also want to know who is actually responding to those messages.  Obviously the internet is making a lot of that information more capture-able, but companies still seem to be slow to move on that opportunity.

Related to that, I was talking with a friend about services like Tivo that let people record programs and watch their shows when they want to, and also skip through the ads and the person commented that advertisers must hate that.  In fact I think that any hate that exists will be short lived, because what is already increasingly common is product placement in the TV show itself.    Recently I was watching an episode of the Showtime series Dexter, about a serial killer who works in the Miami crime lab, the name of the character is Dexter Morgan, and in one scene he was making margaritas in for about 15 seconds, a bottle of Captain Morgan’s rum was prominent on the TV screen.  Dexter also uses an Apple laptop, which is made known on every episode.  Another series I watch Californication, the very funny series with X-files alumnus David Duchovny, features a down-on-his-luck author who ends up teaching a class at the local university and he learns that one of his students works nights as a stripper  – one night he takes his friend Charlie Runkle to the strip club to see her and he asks around for his student and no one knows what he’s talking about and then she shows up and says she works under the stage name “Ashley Madison” and she says the name at least three times, which seemed excessive.  So I did an internet search on Ashley Madison, and sure enough, it’s the name of an internet site for people already in relationships, who want to have a secret fling.  Very clever product placement, though because of services like Tivo, since people can be watching the show at any time, it can be hard for Ashleymadison.com to figure out which of its customers came from Californication.

So it’s going to be very interesting to see how companies rethink the ways to connect with customers, while at the same time collect data about who is, and isn’t buying it.

-Ric

Waiting Room Promotions is one of those slap-your-forehead I wish I had thought of that ideas.

One of the reasons I love the idea of having wall mounted flat panel screens with educational and entertainment programming for doctors’ offices is because I need it.

I distinctly remember sitting in the waiting room a number of years ago, looking at the stack of People magazines that had historically been a secret indulgence of mine (it was the only place I would pick up that magazine).

It dawned on me that the waiting room is, by definition, mostly full of sick people and if sick people had been holding the magazine, then it was covered with their germs and there really wasn’t any amount of Purell that would make me feel comfortable picking up one of those magazines.  So in recent years (I have high cholesterol so I have to get that tested pretty frequently), I have resorted to staring at the fish tank or doing busywork on my iPhone, trying to avoid so much as even looking at the magazine stack.

So Waiting Room Promotions (WRP) solves that problem.  I don’t have to touch anything (though someone probably has to control the remote. . . .) and I can sit there and watch the screen and relax and learn.

Problems solved:

1) Health – people don’t have to touch anything

2) Boredom -no more staring at (blank) walls

3) Education/awareness – whether basic hygiene or the latest research, there’s all sorts of information to share

Great idea!   I look forward to seeing the WRP screen the next time I go to see Dr. Smith.

-Ric

While branding and marketing are more the fields of Scott Bedbury (A New Brand World) and George Murphy of Modo-Group, in the book Rethink I do have an entire chapter about business value and one of the three pieces of the definition of business value has to do with brand and identity to test  which aspects of your organization are why customers, partners, and even employees like do do business with you (the other two relate to key performance indicators and the value of improving the performance of something).

Something I don’t talk about in Rethink is something that I will call “brand illusion” where companies build their brand based on something REALLY misleading, and they succeed mostly because the customer just doesn’t know any better.  It’s a very risky thing to do, but it often works well.  The case of payroll giant ADP is especially clever but I am going to work my way up to that one.

Folgers -”It’s mountain grown”

Schlitz – “Our bottles are washed with live steam”

Lucky Strikes cigarettes – “It’s toasted”

Microsoft Windows 7 – “I’m a PC and Windows 7 was my idea”

What these ads did is take something that everyone does in their industry and make it sound like they are unique in doing it.  All coffee is mountain grown, live steam is a standard process in bottling, all tobacco is toasted, and customer feedback drives almost all products in almost all industries. Yet these ads were very successful (the Microsoft ad launched Monday, but feedback has already been positive).  Creating the illusion that something generic is something special.  Brand illusion.

In the other direction, there are companies that deceive customers with a message that clouds what is really happening.

Progressive insurance told customers that if you go out to their web site, they will not only give you a price quote for their own insurance products, they would also quote the prices of other insurers in case they had better rates for you the customer.  Isn’t that incredibly nice of Progressive!  Not so fast.  Progressive was actually being extremely devious.  Insurance is all about risk management, and when Progressive sees a customer that has a high risk profile, they send them away by offering a “better” rate from a different insurer.  The illusion of helping you when they are really selecting the customers they want.  Risky, but very clever.

Payroll giant ADP is my favorite though.  ADP manages over 50% of American payrolls, and for years the message has been that they don’t really make money from their payroll services, they claimed their profits came from the “float” the time between receiving funds from an employer and the time they pay them out.  The fact is that with current technology and regulations, the notion of float is all but nonexistent.  So why would ADP say this?  Because they are really expensive and they actually make a lot of money from their base services.  The illusion was to lead the customer to think they were getting a bargain and that ADP was generating the profits in some other way.  Very clever.

So circling back to rethinking, the notion of how you message your value to your customers is key.  These are just a few examples of companies that have successfully manipulated customer perception through a variety of different illusions.  Food for thought in how you connect with your customers.

-Ric

Today Microsoft launched a new advertising campaign featuring Ric Merrifield and the Rethink book. click this link to see it http://sharepoint.microsoft.com/businessproductivity/bpi/pages/whats-next.aspx?fbid=K5lLvdFwo3B

This morning I read an article in the paper that talked about how police officers have found a way around the statute of limitations.  As you may know, the notion of a statute of limitations is that if you commit a crime, there is only a certain amount of time after you commit the crime that you can be charged or indicted for that crime.  So if someone robs a bank, and there’s a five year statute of limitations on that crime, if they figure out who did it five years and a day later, that robber can’t be charged with it.

For some really nasty crimes, particularly rape, the police and the victims hate letting those crimes see their statute of limitations expire without an arrest.  One solution would be to extend the statute of limitations, but that gets away from the point of this entry.

What the police have done to get around the statute of limitations on these crimes, is when they have a DNA sample of the criminal, which is particularly common in rape cases, the police are indicting the identity of the DNA, which they can do, and then if they can figure out who that DNA belongs to, they can then arrest them even after the statute of limitations has expired, which I think is pretty clever.

My guess is that if police can start to assemble a large enough data base of criminal DNA, if criminals know their DNA is in the system, I bet that will have a noticeable impact on recurrence of crime in the repeat offenders category.

Enough about crime.

Even though the war on identity theft will go on forever, it strikes me that we will see many new and interesting ways to identify people whether they are or are not present.  I suspect that in the not too distant future we will look back and laugh at all of the passwords we currently use to identify ourselves with everything from bank cards to e-mail accounts.  Finger print and optical scanners will be very pervasive.   I also think there are some near term applications to things like licensing that can have broader business implications.

Currently I have to carry a driver’s license, and proof of auto insurance, and a fishing license (if I go fishing).  Right now my driver’s license is a pretty good form of physical identification for many things (from airports to gaining access to bars), but I know my state knows my social security number, and it wouldn’t be hard to renew my driver’s license electronically (linked to that number – but they would still have to take my photo and check my vision) and thus not have to carry a license (police cars have computers and they can bring up photos).  I should also be able to link my insurance data to my driver’s license electronically, so that I wouldn’t have to carry proof of insurance AND the state would have a better sense of who is actually driving without insurance.  Same thing with the fishing license – I shouldn’t have to carry that any more.

Beyond that, when a game warden is checking to see if all of the fisher men and women parked in the lot near the fishing hole have licenses, instead of asking for proof (and stopping the fishing) the game warden could simply look up all of the license plates to see who has a fishing license (and if it turns out that some of the fisherman don’t have driver’s licenses or insurance, he can notify the group that handles that).  I realize some of this is too “big brother” for a lot of our comfort levels, I am simply using this as an example to point out that there are some really clever, available methods to link a person to a piece of information for both security and enforcement purposes, and I hope people have an open mind about what’s possible and smart with these options.

And bravo to New York’s finest for coming up with the DNA indictment, very clever.

-Ric

Is it wise to review process workflow to understand business requirements before embarking on a change? Yes

Are process workflows often misleading when it comes to understanding requirements?  Yes

How can this be?

Simple, for several reasons.

1) Process workflows are usually created through interviews with people who do the work.  While that’s logical, the problem it’s not their job to describe their job, so people often leave out “obvious” details and use company/industry specific jargon and acronyms.

2) If you go into a department to interview five different people who do the same work and ask them to document the steps involved in the work that they do, the odds that you are going to get five identical sets of steps are very, very low.

3) Most importantly, process is a depiction of “how” the work is completed today, and the “how” labels often mask the “what” that is being done, the why, the outcome of the work.  This is what I call the “how” trap that I talk about extensively in the book Rethink.

And yet process is be vital, but I will get to that in a moment.

This is a diagram of an actual process workflow map from an actual company that creates insurance quotes for its customers.  It starts out with a symbol of a fax machine with the label “Receive Fax” and there are other steps such as “Send Fax to Agent” and “Mail Agreement” and when I asked the people who do this work if those are requirements, the people all said “Yes” without hesitation.

But even though I had never set foot in this organization before, and even though I am not an expert in the insurance business, I could tell that it was very unlikely that those are requirements. Why?  Because “Fax” and “Mail” are “how” verbs.  When someone is sending a fax “what” they are doing is actualy something along the lines of “Communicate Status” or “Confirm Order” -  it is vital to separate “what” the work is from “how” it is done so that you can test whether it matters whether a fax machine is used to communicate the status of the insurance quote to the agent (in this case).  This company has been creating insurance quotes for over 50 years, and while I am confident they have always communicated the status of quotes to agents, it’s unlikely they have always used the fax machine.

I also often use the example of flight check in.  Is it a requirement that we go to the counter and talk with an airline employee to check in for a flight?20 years ago that was the only way to do it, but now we can check in using a kiosk or the web.  We are still accomplishing the same outcome, but we have three choices relative to “how” we go about it – it doesn’t matter who does the work, where it happens, or what the technology is as long as it gets done.

That’s where process comes in.  Once you have a clear understanding of “what” the work is, the outcome, why you are doing it, then you need to understand how it is being done.  That’s when it is so valuable to have those five different process workflows I mentioned above.   When you get all of those different views of the people doing the work, that’s where you learn about exception handling and best practices and who is accountable for what.  From there, understanding what’s most, and least, valuable and how things are performing, then you are well on your way to having clear and objective prioritization of the problems and opportunities that you face.

In the 10,000 plus hours I have spent helping organizations rethink their work, I have discovered what I call the 20/80 rule.  When you sit down with people and ask them what portion of their business is unique in terms of why customers, partners, and even employees want to be associated with them, most people come back with a number around 80% or even 90%.  Mapping the “whats” that make up the organization, the business capabilities, results in a business architecture, and when you have that, together with value and performance scoring, what the organization realizes is that the per cent of the organization that is really unique, is closer to 20%, often less.  Thus the 20/80 rule.  So what?  This is great news for everyone.

For executives – instead of focusing their energies and scorecards on 80% of the business, they can be far more focused

For managers and their employees – they can have greater confidence that they have the right metrics and prioritization

For the people in the information technology (IT) department, they now have the ability to have an objective dialogue with the business about requirements, and when it’s clear that something isn’t high value to the business (>80% of the work), there is no need for expensive customizations to software, duplicative work will be unmasked and people can share a common process and software, and as those savings are realized, the business can start to see more clearly where they need to invest in IT for differentiation and innovation.

So process is vital, but it can really hurt you if you use it at the wrong stage in your efforts.

-Ric

For so many years, the consumer was really controlled by the companies they bought goods and services from.  Little by little, the consumer has taken that control back.  Broadcast television is the most recent industry to experience that shift.

In the book Rethink I emphasize the importance of staying in touch with what your customers really value, which has become harder and harder in a lot of industries as it becomes easier for customers to find alternative products and services that meet their specific needs.

I am not an expert in television, but it seems like every year or two there is an article about a show that is a huge hit that wasn’t originally a huge hit, and because today the networks give shows such a short period of time to succeed or fail, many of the biggest hits of the past wouldn’t have survived the current scrutiny because it took longer for them to build their audience.  Specifically I remember this to be true for the comedy series “Everybody Loves Raymond” which ran for many seasons after a very slow start.

The odd thing about television is that historically it has been one of the most prescriptive experiences out there.  Until fairly recently, the networks decided what we would watch and when we would watch it.  It became the battle of the networks, where it was widely accepted that a lot of people watch television on Thursday and Sunday nights, so the best shows would air then and the networks would vie for your viewership.   This was somewhat mocked in the spooky show “The Outer Limits” when the voiceover would come on saying:

So when I read the article “Later Viewings of Shows on DVRs Brigthens Ratings” by Bill Carter in The New York Times, it struck me that the tables have completely turned and now the customer has taken control of the television.  While Tivo was the pioneer in the space, now the typical cable operator allows you to use the menu to select recent shows that have aired at their regular time, and you can watch them when you want to, and it’s pretty thorough.  I happen to like the new show “The Good Wife” and I have been watching it using this service.

What the networks have realized is that instead of measuring the success of a show based on the viewing of when it airs, they now need to wait a week or more to see how many people watch the show.  As the article points out, this new measure of success puts a very different lens on the success of some shows.

That’s what’s getting so complicated for so many industries, as consumer patterns and behaviors shift, organizations have to be very careful about using the same old measuring stick to interpret customer satisfaction.  I think this trend will continue in broadcast television, but I also think we will see the emergence of new, volatile, and immature ways of measuring these shifts because it’s all so new.

OK, it’s Tuesday morning at 11:10, I am going to watch the newest episode of “Two and a Half Men”

-Ric

What is an innovation?  Is it doing something new, or is it a new way to do something familiar?  Or is it both?

Recently Mary Tripsas of the Harvard Business School wrote an article that appeared in The New York Times.  The article “It’s Brand New, but Make It Sound Familiar” suggests that it’s more the latter, and that because of that, when people introduce the new way of “how” we do something, for it to catch on, people need to associate it with the other way of doing it.

Tripsas takes us back to the introduction of the automobile and says that people didn’t at first understand why they would want a car, until someone came up with the phrase “horseless carriage” as a way to explain what the car was displacing.  I guess it was a lot easier for people to see the value of air travel since there are no equivalently outdated expressions for that.

When I write about innovation, I describe it as coming up with a new way to do something in a way that doesn’t resemble the way it was done before.  In other words, you can change how something is accomplished, but if it’s still pretty much the same “how” it’s done, then it’s just a change, it’s not an innovation.  Checking in for flights using the internet as opposed to face-to-face with an airline employee at the airport meets that definition of innovation, as does renting movies through the internet versus going to a store location.

What’s the dichotomy?  You want to showcase this innovation, but in order for people to make the connection about why they care, you have to link it to the old, boring (current) way it’s done.

Renting videos over the internet instead of going to the store is a pretty good example of simply finding a much better “how”  to accomplish “what” the customer wants, which is to rent a movie.  An innovation in the simplest sense.  The car on the other hand is in a more complex category of innovation (and there are many others like it but I will stick with it for continuity) where the innovation did in fact do what the carriage could do, but it also enabled things that were impossible, even unimaginable in carriage days. Carriages were comparatively slow and as a consequence, people could only accomplish a limited amount of travel in a given day. Even with early models of cars, people were able to not only be more efficient with their time, they became able to make trips they wouldn’t have imagined making with carriages. On a typical day I will take my son to school (5 miles) ,drive to work (20 miles), work at my office for six hours, go back to the school (20 miles), go to a grocery store (5 miles), drive to have dinner friends (7 miles) and be home by 8:00 and that’s not even a hectic day.  Unless we lived in a small town, which we do not, nothing like that was possible with a carriage, and it gets into our heads when we think about planning our day – our notion of what is possible is radically different from carriage days.

I think it’s uncontroversial to say that e-mail (and to an extent instant messages) is a similar type of innovation where it did in fact replace some forms of communication such as memoranda, but it has also grown into so much more than that in a way that we can stay in constant touch with the people we want to.

I say this often, but I happen to think social networking is going to fall into this same category.  Facebook and Twitter have already had a transformational effect on how some groups connect and communicate, but my expectation is that it’s going to continue to evolve, in good ways and in bad in ways most of us can’t even imagine yet.   Can you imagine trying to explain a fax to someone who doesn’t know what a phone is – there’s nothing familiar to get them there?  I think that’s where we will be with social networking in ten years.  Today we are the ones who don’t know what a phone is.

-Ric