Lots of organizations talk about revenue goals and plans and pipelines.  Salesforce.com is counting on it.

Today, for an increasing number of companies, it’s less about relationship selling, or even what’s described in The Challenger Sale – sales happen at the point of enrollment, and in growing numbers, that’s online.

What’s shocking is that if you search on customer conversion rates, 25% is a common statistic you will find for the rate at which customers give up, abandon, or balk while trying to become a customer.  As you might expect, there are a lot of reasons for that – one of them is that it just takes to long.  People get tired of entering their name and address and credit card and verifying their e-mail and all of that.  Here’s a graph of an anecdotal experience of how long it took to enroll in Lyft, Uber, Grubhub, and Avis.

Lyft is a great experience.  They ask you to verify your cell phone within the enrollment application (so you don’t toggle over to e-mail and risk getting distracted).  Grubhub is very smart because they start with a food order – so if you are hungry, even though it takes a while, you are probably very motivated to stick with it.

An important thing to note on this is that with all of these common consumer services – whether you use them or not – they are setting the standard for what people will expect in their next enrollment experience.  That’s one of the big shifts that is going on – whereas people used to have their expectations set within a given industry – comparing restaurant to restaurant or airline to airline, or what have you, online experiences set expectations that often traverse industries.  So you might not think you need to compare your enrollment with Lyft because you aren’t in the transportation industry – don’t be so quick to dismiss that comparison.

Here’s some simple math on the value of boosting conversion rates (happy to send you the Excel calculator if you would like it).

A $400,000 boost in top line revenue for every 1% lift in customer conversion on a $10million target – it’s all simple math you can adjust for your own target.  There’s another chart that compares all of the different things organizations “need” to finish your enrollment – and that’s also an interesting comparison which I am happy to share.

The important point here is that speed is critical.  It’s not the whole pie chart of why customers walk away – but it’s a big slice of the pie.  There are three ways to change your enrollment process to speed it up.

1. Make it more fun.  If something is fun – people don’t notice that it takes time.  People have had it with IDs and passwords – and younger customers love taking selfies all day long.  So as facial recognition software has matured, we are finally starting to get away from the tedious ID/password, and places like AuthenticID have great solutions for that.
2. Reduce what ask for.  One of the reasons Lyft is so fast is they are smart about what’s required to enroll.  Do you really need their mailing address and their credit card and their birth date right now?  Some do, but most do not.  Even if they are buying a product from you – you could wait until you are ready to ship it before you make them pay.  Smarter companies think this through.
3. Do what Redbox does – break up the things that take time.  Redbox is the instant $1 movie rental kiosk in many grocery stores (usually next to the Coinstar).  They have you choose your movie first because it creates a sense of reward right away – and then they ask for your credit card information.  One of the reasons they do that is because it takes them some time to pull the movie out of the back of the machine to present it to you.  So instead of having you wait for that – they have you do something else so you aren’t standing around looking at an hourglass.  So look at the tasks that take time and break them up where you can.
4. Commit them emotionally right away.  The Grubhub example of having people place an order is the best.  It creates the sense that someone has already started making your pizza or sandwich or wings – so you have to finish or you will disappoint someone on the other end.

That’s four things you can do.  We are collecting research on these before/after customer conversion boost efforts – send me your data and your anecdotes and I will do a follow up post on this later in the year.

 

 

 

 

One of the struggles with blockchain today is that as the system gets larger, you have to have increasing numbers of agreement or consent to add a new piece of information to the blockchain.  This additional “friction” slows transaction speeds and can thus slow the performance of the system.  When you have three participants in a blockchain, waiting for three verifications can be trivial, but when it becomes 3,000 or 30,000, that adds up to a lot of friction.

At the heart of this is whether an item is trusted and how much you can trust the network or group of participants to verify its authenticity.

Many systems are assuming the extreme – that everyone needs to approve/consent of the trust of an item before it is added to the blockchain, but that does not make sense in many areas, in part because the risk if the item being “bad” is not very high in many instances.

Some have suggested that Byzantine Fault Tolerance is an effective method for managing this friction.  The Byzantine Fault Tolerance model has the underlying assumption that you have to design for bad actors – people who intend to commit fraud / forgery – and in many instances that assumption is too extreme.  Byzantine Fault Tolerance gets back to the Byzantine General’s problem which is when you have many generals and they ultimately need to decide whether to attack or not attack, you need 100% agreement on a decision, but when their are traitorous generals, they can mix up the vote and get a portion of the generals to vote attack, while some other portion votes no-attack, which creates enormous risk for the operation.

AuthenticID is a company that sets up a set of configurable rules that allow the organization to map the risk level with the level of friction for the transaction (in their case identity proofing, but the model can and should be applied to any situation).

I don’t think there’s any one solution to this issue, but it seems that as blockchain becomes an increasingly hot topic – having a set of rules or standards that indicate the level of rigor needed to achieve a certain level of trust makes sense so organizations don’t add too much friction to their respective models.

No matter what an organization is doing, whether a global software company or a small non-profit they need to maintain some level of momentum or velocity to function.  If they can set up a simple matrix to score trust on a scale of 1-10 and risk on a similar 1-10 scale, they ought to be able to define a model where if you score Trust over Risk, as long as the result is 1.0 or greater, then it should pass or get a green light to move forward. If the velocity of the organization is too slow, then they probably need to ease up some of the risk scoring – they are probably too stringent, and if the velocity is too high, then you need to look at how many problems are occurring.  If there are not too many failures (things got through the system that should not have), then it probably makes sense to revisit the trust scoring.  On the other hand, if the failure rate is good, then that may be an indication that it is time to plan for growth.  It could be set up as a simple formula that Trust/Risk=Velocity and that formula could be applied to the growth strategy of the organization.

 

You wouldn’t want your bank to leave the key to the door under their welcome mat, would you? The ID/password you use to authenticate, to pay your bills or even access the ATM isn’t too far from that in terms of mitigating the risk of someone seeing something private, or taking something you value.  And very soon they may not meet legal requirements (more on that later). Identity Proofing is here and it solves the security problem of authentication.  Identity Proofing is proving you are who you say you are. Only biometrics – your face, your voice, your fingerprints – prove you are who you say you are.

Most of us are faced with an ID/password authentication screen that looks like this several times a day.  We use them for everything from tracking our workouts to viewing health information and updating our financial information.

It’s familiar and we don’t think twice about it.   But we should.

That’s because we use that ubiquitous ID/password authentication for things it was never designed to be used for, and as a consequence it is applied every day in ways where the “security” does not match with the risk.

The critical component – which is obvious when you think about it – ID/password authentication doesn’t have anything to do with checking to see if you are who you say you are – it’s simply a matter of whether you know an account name and a password.  Like knowing the key is hidden under the mat.

Identity Proofing accomplishes everything ID/password authentication does, and it goes that next step of verifying the person is who they say they are. The value of that is pretty obvious when you say it that way.

ID/password level security is fine for something like your fitness tracking app (not private, but you don’t want someone else updating it), confirming the identity of the person is important any time what is being accessed is private (like health records or financial information) or of value (like money, or the car you are renting).

In person Identity Proofing has existed in some places like airport security for a long time, but only recently has it been possible to identity proof electronically, often faster than ID/password authentication.  With a couple of simple steps to capture a government issued photo ID, and then a selfie, your photo can be matched to your ID almost instantly.  Once it’s known you are who you say you are, different use cases can be mapped to the desired level of security.  Sometimes you might just want the same fingerprint you use to unlock your phone to be used for security and in other cases you may want to do another selfie.

Today there is software that will do Identity Proofing for you, both at the point of enrollment where you need to establish that someone is who they say they are (AuthenticID’s CatfishAIR product is a great example of that) and when the person comes back – you want to do the identity proofing with as little hassle and friction as possible (TrustedKey is a great example of a product for that).  These solutions produce transaction signing to authentication events. This signature includes the “when, where, and what device was used” of every transaction, and is stored on a secure server using block chain for compliance audits. This provides legal non-repudiation, which means no one can deny your claims, a critical security function for financial services firms that need to be PSD2 or GDPR compliant.

PSD2 (The Payment Services Directive – aimed at protecting both financial services organizations and their customers) and GPDR (General Data Protection Regulation) are now law in Europe.  Because there are two factors of authentication and one is biometric, the transaction holds up in court (no-repudiation).  If governments say it’s that strong we can too.  The value of that is pretty obvious when you say it that way.

That’s what identity proofing is – the benefits are real, and measurable, and in most cases, obvious.  What might be less obvious is where to start with it.

One key benefit, and place to start, is where your customers start with you, when they are getting your app for the first time.  Everyone feels busy these days, and we are all getting used to things being fast and simple.  So when people get a new app and they have to go from screen-to-screen-to-screen, they get frustrated and lose interest – and abandon the process.  When people abandon – that means they don’t become a customer – and you run the risk that they will never come back. Because Identity Proofing is so fast (in addition to being legally compliant) it increases conversion rates and reduces the number of people who abandon the application/enrollment step.  Less abandonment means more customers, and more customers means more revenue.

Soon our lists of IDs and “secret” passwords will seem as old fashioned as fax machines.

-Ric

Don’t miss this TEDx talk about data privacy https://www.youtube.com/watch?v=fYdA7IPfEKA

I think we have all heard enough about unicorns for a while, companies with ridiculously fast growth valued at over $1 billion.

 

The Wall Street Journal Has this graphic that’s pretty cool – it’s animated to show you how we go to the 157 unicorns we have today:

As people talk about cloud, and IoT, the Sharing economy, the Gig economy, Agile, DevOps, and other areas, it seems that some of the more meaningful macro trends are not getting their due.

1. Identity-proofing – Logins and passwords are badly outdated and we are using them for things that don’t really make sense.  $16 Billion was stolen from Americans last year in identity theft alone partly because it’s so easy, it’s a surprise the problem isn’t much worse.   AuthenticID is a company that’s leading the way in a category called “identity proofing” and it’s going to make IDs and passwords obsolete very fast.  Facial recognition, fingerprints, and other simple non-invasive methods will help ensure we are who we say we are for everything from bank logins to car rentals.  It seems pretty obvious to say it, but it’s coming, and it’s coming fast.  The “so what?” here is it’s one of those technologies that in a couple of years we will be saying “remember when we had to keep track of all our passwords?”  UPDATED May 2018 – this is a really good piece by Bill Hess on Identity Theft, what it is, and how to protect against it (here).
2. Immediately Responsive– Speed, Continuous Delivery (Amazon, Google, Netflix).  Andy Singleton wrote this great piece on why continuous integration/continuous delivery works.  Massive testing models enables zero defects.  Some credit Amazon, Google, and Netflix for this, but what it amounts to the elimination of long term strategic planning.   You can be so responsive to customers and what they want and don’t want, that you deliver it in real time.  The not so secret trick to this from a software perspective is massive testing models – there is a picture of the Netflix model of integrated services is amazing (below). The answer to the “so what?” question is that you no longer need long term planning and strategy with this if you are that tuned into your customer right now – and the trust and security of point #1 is a key part of the long term success of this model.  
3. Automated Complex Decisions – Repetitive Things, DevOps, AI, Bots.  Automation is a really old word, but what’s happening with artificial intelligence, DevOps, bots, and other emerging technologies is seeing patterns work, from server management, to how people respond to call center questions and automating all of that.  Legal contracts are a great example – they are highly repetitive and usually only need a few word changes for specific needs of customers and regions.  There’s a new startup that has scanned piles of legal documents to make all of that more efficient.  The trend here that wasn’t here before is in practical day-to-day tasks.  Chef is the name of a big DevOps company, and LawyerRobot is coming.  Forbes did this piece on bots recently and it’s very insightful.  The “so what?” here is that people need to plan their career path in a way that aligns with this so they don’t get run over by it.
4. Everything Explicit/On Demand – Services with Tech – SaaS, and People – Gig.  Though a bit dated, the notion of SOA – a service oriented architecture, where a function or service is defined with explicit start/stop boundaries and they can be defined for highly specific things, that’s a big part of what’s at the heart of Software-as-a-service (SaaS) offered by Azure and AWS.  Those businesses are huge and growing.  The yin to that yang is what some call the “gig” economy, where people also do very specific tasks, often for short durations (an Uber driver is a decent example).  Because people are aligning themselves with these explicit functions that can be done on demand, we are seeing people doing more contract (as-a-service) work, and less full time employment, and when people do take full time employment, it’s usually for a decreasing average amount of time.  Again this model, trust is an important element and having a look friction way to authenticate people is key to helping get on with what they are doing.  The “so what?” here is that it is changing the way people think about just about everything – there’s a reason the big software company SAP appears to be going down fast – it’s architected for a different time – people need all of these discrete services, not some monolith.
5. Free (and not just for consumers) 25 years ago not much was free.  Napster had a bumpy road with music, but over time, many people have come to expect a lot for free. Adobe acrobat reader seems like it was a pioneer in the “freemium” model, but Google Docs is among the really big crossovers where Microsoft Office had a corner on the market until Google made a good-enough-for-most product and gave it away for free.  Whether or not that was the tipping point for free things for business users, most products from DocuSign to DropBox have a free service.  On the consumer end, Facebook, Twitter, LinkedIn, Snapchat, Youtube and other giants have figured out how to make things free for the end user while trying to monetize it in some other way on the back end.  The “so what?” here is how everyone will continue to make money.  Some of the sponsored ads behind Facebook don’t seem likely to live on forever, but if everyone has to have a core service for free, then what?
6. Transparent Supply – People have talked about increased transparency for years.  But when you look at services like Airbnb, the WOW there is the increased transparency in the supply chain.  That’s the big deal about the so-called “Sharing” economy – which is a terrible name for it.  Giving the buyer much greater visibility into what their immediate neighbors have available in terms of products and services is a real threat to bigger companies like The Home Depot and Lowe’s, in addition to hotels and other retailers.  The achilles heel for this is trust and security (back to point #1) and soon we will see better methods of authentication to reduce the risk of so-called “bad actors” in these interactions.  The “so what?” there is that several big industries are threatened.
7. Linked – Things like LinkedIn, Facebook, and even the Nest home thermostat (more in the realm of the Internet of things – IoT) are all examples of the proliferation of linkages that weren’t possible even 20 years ago with the speed and ease with which they happen today.  Now that we have the foundation for the links that people want and need, we will start to see some really interesting applications of these linkages. Slack is a technology that seems to offer some insight into how modern communications (e-mail and texting) are combining with this notion of linkage at a group level and it seems likely to see more A+B=C combinations like that.  There are a number of “so what?” here is that with these new linkages, which are largely in place, we will probably see the pendulum swing back toward privacy and security, or see linkage-layers emerge where the more trusted/authenticated are the most valuable.

Those are some of the big macro trends that are happening right now.

Let me know if you have other thoughts on this – or if you think I missed something.

And don’t forget to watch this TEDx talk about how tech will improve our quality of life – https://www.youtube.com/watch?v=fYdA7IPfEKA

There was an interesting article in The New York Times the other day by Michael Corkery “Is American Retail at a Historic Tipping Point” and I can’t help but think it’s the wrong question.

I think what’s actually going on with Amazon and jet.com is actually something more of a “first domino” and by that I mean what has really come before is really not comparable to what is starting to happen.

Sure there’s an element of us needing to get our stuff, from paper towels to birthday presents, where we used to drive, bike, or bus our way to a mall or store to get what we planned to get, and along the way we might shop for some other things.  Costco is probably the most accomplished organization in the world for people buying an order of magnitude more things than they went to buy in the first place.

God help us if Amazon ever buys Costco, by the way.

But as we no longer need to go shopping as a physical experience, and Amazon gets us things lightning fast – even Sundays (it makes a lot of sense for Amazon to take over the US postal service, it seems), we no longer go to those other places to buy those other things in the way we used to.

So it’s a first domino – it really is the first thing to happen in what seems an inevitable domino effect of other things.

More to come on this.