Open - Networking

Hard Times For Big Vendors and Little Ones Alike?

In cold times it would seem mobile telecoms are still a Hot item (Tim Bray, Sun Microsystems, at FOWA London). People will give up that glass of wine, but not a $1.50 iPhone Application that gives them real value. And now that iPhone and Google have offline capability you can do a lot of great stuff. It is indeed a great time to build mobile applications, but I would also caution that 1998 was a great time to build a website, and building a website doesn't have a great reputation as a sure fire way to making you rich. Today the New York Times features Sun prominently as a company with big problems, so perhaps Tim's FOWA talk was from the heart. Some of these problems are good old fashioned competitive pressure in core product markets, and others are good old fashioned product development slippages. These are combined with the "slower than anticipated" update of its open source programs and initiatives (BTW: great piece from JP here on why Open Source may be stalling at the large enterprise level).

If you are thinking of building an application, Tim says "build it for yourself, its hard to understand the needs of others", there are others out there a lot like you and they will probably buy it. And watch out for the VC's, they don't understand 2.0, and they don't bring value (mmm, not sure of that one, know plenty of smart VC's). Gosh, this sounds like a sure way to end up on the bread line to me (but you will have your snazzy iPhone to keep you occupied). There is a reason people like "product managers" exist, just saying ye know. Its probably safer to think of Tim's comments as prods to get yourself multi-skilled, and to develop a "Career Portfolio".

The Elephant in the room is that most people are going to want to pay zero upfront to save money and are now being educated to "think like Google". I want it for free, or some version of it for free. I want it super simple. I want it to do one thing really really well. Agreed. One of my take aways from JP's posting is "the Enterprise has been trained to think like Microsoft", and this frames all enterprise adoption arguments in Microsoft's favour. What I particularly found interesting was the focus not on Excel, but on Excel Micros as a significant barrier to adoption of OpenOffice, and that the cascading effects this had on the need to redesign the Macro's, estimate the cost of the same, estimating the cost of failure. At the end of the day, the purchasing dept used the study to beat up Microsoft on price, and buy, uh hum, more Microsoft product.

What Do Tough Times Mean For The Enterprise?

Tim Bray was of the opinion that tough times might mean that companies look more to SaaS and to Open Source solutions. I do like the emphasis on "SaaS" and "cloud based" applications and services, of course I do, that's what we do around here. But the take away for me is the need to seriously look your "customers life right now" (i.e. the real life issues they are facing, the hard choices, the unpalatable trade offs). In my opinion, its easy to say "we are your partner" in good times and ask for some hefty integration and consulting fees to prove it. Lets see how good a problem solver you are now; lets see how flexible and adaptable you are now; lets see how your DNA shines through?. As a provider of SaaS you should now be looking deeply at some strategies for maintaining your value proposition. Tough times for the Enterprise customer means even SaaS entities need to bring a razor sharp focus on time to meaningful ROI.

I think its a great idea that Tim was encouraging developers to not only skill up, but look at legacy skills (Cobal etc), and cross-skilling. Companies can equally do the same thing.Taking charge of your own Identity by building your own personal network, blog, twitter, get into social networks, and social network at events are great personal brand builders. Get known, and get known for something. Now ask yourself, "what is Sun now known For"?

Some Cool New Media Business Models

Have you ever needed to read a children's book from cover to cover before you bought it because let face it, you will be reading it every night for a long long time. Lookybook lets you see the whole book before you buy it. And here's the one we have to buy (Its Not Fair), as we have a new arrival due in March 2009. Music sites like Ineem and LaLa have similar models for music in that they let you play the content, in its entirety, while you remain browsing on the site, no doubt hoping that the longer you hang around the more likely you are to buy a web song for 10c. I think a lot of companies are going to have to look at approaches that enable you to have a complete "experience" and that you may then proceed to commit to buying it, owning it, sharing it or some other upstream action that is predicated on shared value creation. It is a deep delayering of the digital value chain, with the understanding that some parts of the chain can better gather and aggregate data from multiple services and location, and that this will help them outpace offers that are more vertically integrated.

So here's the tie up: people buy experiences.

The enterprise customer is a person like you, and they want a great experience of your service, they want to be able to test and trial it and experience it and not pay for it until they know they like it, that it works. They want reliability, they want security, they want credentials, but these are "hygiene factors". The Enterprise's professionalised buying process will simply not allow them to buy in services that don't "stack up" in the traditional purchasing decision cycle. I personally believe that their will be an iTunes for Applications at the Enterprise level. Click Click Click. Done.

Let's Get (meta) Physical?

Linkedin goes Social: now you can add applications and collaborate with your contact network. This is so boneheaded it beggars belief IMHO. I can see social objects as being useful to Linkedin in that they are social evidence of influence, popularity, or expertise. Thus, your sheer volume of network contacts speaks volumes about your rolodex if you are a sales director; your online presentations show you as an expert marketing person capable of speaking to C-Level executives at conferences; your embedded Google Spreadsheets show a deep understanding of risk and analytics. I have begun to think of Linkedin as a good forum for social validation of a contact (hey, what do you think of John, did he really do such a great job at company x?) and an extendable element into other environments (Everyone on SAP could now have a linkedin directory of both internal and external experts and contacts through a linkedin mashup).

We are the Adobe Reader here, the Recruiters are the Adobe Acrobat. Give the recruiters the heavy tools, just make it 3-click easy for us to use.

(and what's with the Meta-Physical? Linkedin encourages us to only linked with people we actually know, ie. real contacts).

Update: RWW seems to present the LinkedIn Applications in the mode of being Social Objects, which is fair enough, but I still think Linkedin needs to BE THE SOCIAL OBJECT, not be the place where you can bring your social objects.

Insight - Interact - Improve

Super posting from SAS on Customer Contact Strategy, especially the problem of saturating the customer with customer contact (email, mail shots, phone calls, etc. etc.) You have to have a clear understanding when to contact, in what mode, and to make what offer. That may mean you need to segment your customers on the basis of how they want to be contacted. I think the SAS post misses some key points but they do get that all your communication to the customer needs to be planned and integrated into an overall strategy. Neat idea of "the recently rule", ie. you can't call your customer twice in 60 days with an offer. Also good example of not messaging cross-offers to customers that are "churn risk". This means you have to have a pretty solid view of what the "interaction rules are" for each segment. However, completely misses the idea to create real two way value through better interaction management.

Jeff Jarvis has a very nice piece on WWGD (What Would Google Do?) in terms of the downturn in the economy.  Such as look at how relationships in themselves signal value, or ARE value; making physical products is probably a decaying strategy or just plain ole very hard to make money at (Dell?); big companies are really networks of small companies; in a network driven economy you should strive to be the platform; transparency will drive trust; the more control you hand over to users the more trust you build, and the stronger your relationships. Most of these points come from his effort to deconstruct what has made Google so successful. Could Dell execute on being your "design to build" for IT & Consumer Media products? It has most of the business and technical infrastructure to achieve this.

John  Quelch over at HBS re-posts ideas on The Middle Aged Simplifier which basically says that this category (sic) of person is looking to de-layer their product ownership-positions (sic) in that they are going to happy to not own so much non-essential stuff, and will lease cars, holiday homes etc. in a variety of non-mass-consumer modes. I think the undertone of this piece is interesting none the less because it might signal an even older marketing lesson: if everyone else has your stuff (read 4x4 "landrover") then it has no social status, and no brand communications value. Perhaps "the experience economy" is going to truly expand.

Oh, and just in case anyone is dropping in here, and doesn't know, I am http://www.twitter.com/PaulSweeney

How We Pay

Buyer Behaviour USA

USA Today report people are using their credit cards "dramatically less" either because they are maxed out, or are worried about the cost of their credit card debt.  The customers of Wall Mart are also buying their baby milk formula early in the month, presumably when they are relatively cash rich compared to the mid month or end of month. People are also buying fewer brand names, and are decreasing the frequency of their shopping trips. Offering different payment options or times to pay might be a great way to overcoming being the "last bill of the month".

HT Pistachio and PKedrosky

Other take away's from this story:

- If your business is built on one known shopping pattern, think again. It might have changed. Specifically I am thinking about how customers weigh up categories (Food vs Travel; Car vs Bus, etc.)

- Broad based "scale competitors" like Tesco may have insights into the recession mega-trends. Maybe by following some of their announcements, add on's, technology adoptions, they might add as bell weathers for what other companies should do?

- Focus: there is lots of talk out there around the need to understand what you do as a business, and what core "benefits" you deliver. You probably don't need one more feature. But there is another element to Focus, and that is "strategic focus". If you are a higher end fashion store, selling "more economic lines" could blur your focus. Wall Mart is a cost leader, so these mega-trends expand its addressable base.

Break The Current Value or Activity Chain?

- If your customers are now increasingly cost conscious, how about making them a re-designed offer? Get 10% off if you buy completely online and NEVER call us :)

- Strip out the product offering until you are left with the core utility, and then give the customer option to re-bundle features "on demand"?

- Make some products "services" (i.e. buy the 24/7 totally connected office for $40/month, not a laptop, printer, and desktop?).

For sure I think that this is a market where the individual and the enterprise will go through their expenditures and those that are fixed, and with a big enough number next to them, will be asked to re-quote, re-justify, "get out or get real". How?

Creating Real New Value That Matters To People?

Umair gives an example of how Starbucks selling music and mouse mats is a classic example of selling product into adjacent segments (I'd argue that its a case of not knowing if its a product pusher/ service provider/ or meeting platform, but that's for another day). More importantly he points out that Starbucks has to become meaningful (again). The 'leap' Umair makes is that "being meaningful" has a social basis, in that it is a social meaning. We do not become socially meaningful  by "pushing crap" on customers.

I think it is probably a dangerous game to "tell customers"(sic) what is "meaningful" to them ("here have a freetrade coffee"), or even ("here, meet Paul, your overpriced coffee paid for his school"). I think it is going to involve

(1) extreme customer empowerment to define how, when and where they wish to interact with you;

(2) total customisation of the offer/product/service in a genuine atmosphere of co-creation;

(3) network orchestration not network ownership (by this I mean "be the go-to-guy", not the guy who said "we don't have it today, but we will have it tomorrow. The go-to-guy delivers you the solution, no matter who has supplied it, even a competitor).

Crunch Crunch Pixel by Pixel

Small Business

Via Greg at ScreenWerk an Amex survey in Oct 2008 shows that many small to medium sized businesses are now seeing a downturn in sales, and nearly 18% have real fears that they will go out of business. It also shows that nearly 40% of them will be late or unable to pay some bills. That's a lot of outstanding cash, and is sure to put even more pressure on cash flow. With this general lowering of the cash-level, we would normally expect the small business to go to their bank and ask for a little latitude, or overdraft. But I don't think we are going to see this happen in the next 12 months. Given that VoiceSage is in the business of helping you bring in your cash twice as fast you might expect me to plug that right now, but I am not going to (oops I just did). The real question here is putting predictability on your cash flow from all possible viewpoints. It is not enough to just sell, you have to "sell well", i.e. know how likely or not someone is to repay you. You then also have to collect well, and by that we mean be pro-active in your collections process.

Data and All It Can Do:

I love it when a service comes out and I go "now that makes sense, that's how people really think": Another HT to Greg Sterling : Homethinking matches a neighbourhood you know, with like neighbourhoods elsewhere. Doesn't this make a lot of sense? Isn't this what we want?; somewhere we understand and know as a baseline compared to a place we don't know that well. Truly excellent idea.

Customer Service: Call Transfer and Click to Call

Don't blind transfer calls. Just don't.  Managing click-to-call with better call whispering is something that you might also look at. To see a quick example check out the VoiceSage contact page. Thomas Howe has a short piece on how he misunderstood the power of click-to-call. Some follow up points here on why it might be good for finding keywords as well such as screening inbound calls  and gathering details prior to a call. Click-to-call needs a thorough overhaul and I for one am going to request a re-naming: how about "Click-To-Action"? All for that, vote eye (in your best pirates voice).

CrowdSourcing & Price Setting

Robin over at Bytesurgery is a neat example in progress of Crowdsourcing around the development of an entire application. Robin frequently shouts out via twitter and his blog to get feedback on everything from good names for products, to suggestions as to how his pricing model might be constructed. I happen to know that Robin spends a lot of time speaking with the real end users of his new product as well (Decisionsforheroes) but how he taps the community of web talent is pretty inspiring. And speaking of heroes, Sabrina Dent, well known and highly successful web designer, is also an expert in tapping the power of the social Internet. When she recently fell ill, she was able to "lay off"/ "outsource" a few projects to people she had trusted online relationships with.

(disclaimer: Sabrina did a rapid re-design of the VoiceSage website recently).

Eh, so what's so interesting about that Paul? Companies are not islands, they are networks, and the extent to which they are able to create collaborative, co-creating relationships, the more sustainable they will be. As analysts and planners we are often asked to challenge the assumptions but what better way to challenge them than to "publish them" and subject them to experiment? Crowdsourcing may not be good for all types of problems, in all types of situations, but it has certainly thrown open some interesting perspectives for Robin and his crew.

Ease of Use: The Data, The Presentation, The Influence.

Presenting The Data

Sometimes you see a thing or remarkable simplicity and you have to share it. The New York Times has an application that enables you to input some basic data regarding house price and rent movements and then create a visual presentation of what this means in terms of value creation or destruction for you. The pretty picture above shows a market with 5% growth in house prices and a 3% growth in rental income. In this scenario it makes sense to invest in a house. But change that house price appreciation to anything less than 3.5% and have a look at what happens. With Credit Today showing a 30 year low in UK house sales, you have to think that renting is going to become relatively more attractive, doubly so when the Irish Times reports today that there is 10% more rental stock coming on the market because houses are so difficult to sell.

Yahoo have a nice site showing a Politics Dashboard with up to date information on how each candidate is doing. What I like about this, besides from the big bold percentage numbers, is that the dashboard also presents "prediction markets" assessments.

I think some smart little company is going to come out of the woodwork with a neat way of building and linking these kinds of dashboards.

Research Happenings

Randy Saunders over at The Perfect Customer Experience blog has a nice reference to a recent Forrester Report on the fact that customers still want to speak to a live agent, and that they have certain expectations as to how well this process will be handled.

McKinsey Quarterly have a piece on Multi-Channel Marketing with a spin on Social Media: worth a read, particularly on the "fallacy of the final click". All customers move through many stages in their buying decision making cycle and both online and offline media often intermingle in their effects. We don't buy "entirely online" or "entirely offline".

Finally ! Social Media is Going To Be Of Some Value To Credit and Collections Professionals

Yes, a catchy title, not ! But the same McKinsey Study mentioned above quotes a very interesting use of social network analysis (SNA).

McKinsey research on telephone users’ social networks suggests that even they can be measured to allocate marketing budgets more successfully. One telecom company, for example, has learned how to retain phone customers by assessing the strength of the relationships among them. The company used call patterns, changes in call volumes, types of payment (prepaid or contract), handset types, and other traits to identify customers likely to leave for another carrier. Meanwhile, it constructed a diagram of their social ties, derived from the people they called, the people those people called, and how often. In general, the more closely anyone was tied to someone who unsubscribed, the more likely that person was to unsubscribe in turn. In this way, the telecom company improved its churn prediction model by 50 percent. Moreover, by identifying the most influential potential churners and working to retain them with new services and price plans, the company not only retained a quarter of them but also reduced the churn rate within their social networks by almost 40 percent.

I think that if you were buying a house, or voting for a candidate you too are likely to be influenced by someone close to you, probably someone on your social network. By giving people easy to understand, easy to share data, you could probably "turn-on" your influential customers

Enterprise Micro-Media

It's The Enterprise, Stupid

Great article on RRW on Twitter in The Enterprise, at BestBuy. What I take away from this:

• Short messaging is powerful and many will send and consume "micro-social content" while on the move; everyone understands texts.
• Social media will be made or consumed "around work", during breaks, before or after shifts; it may be made during "idle time".
• They are using "short codes" so people can text in ideas, responses, etc. Good idea me-thinks. Of course deploying short codes is an issue, especially in the USA.
• BestBuy initially went light on integration, but lingered on issues around authentication before considering deeper integration issues. If you are who you say you are, you tend to be a bit more careful though, so this one needs balance.
• People don't want to manage "multiple identities in multiple streams", i.e. Twitter, Jaiku, Yammer, etc. etc. Perhaps indicating the future fluidity between personal identity and work life identity. After all, someone only has to Google you to find out about you. That's why they are building "containers" within which conversations occur. Some containers will be open, some will be restricted. This is where Jaiku really messed up with not moving forward fast enough.
• Location awareness is something that they will be looking at, mostly because you want to see the people that are around you and near you for some types of questions. Watch this one go crazy as location awareness is embedded in the browser, and the browser goes to the phone (Firefox, and Chrome). Then watch it go mad when RFID hits it. 
• Trust is an issue when you begin to use social media, because you may not know who these people are, even within your own company. So you have to figure out how to provide social validation to get things started.
• Initiation and Consumption: BestBuy bought in the solution that worked best in Outlook because that's where all their employees live. Think about that. Now think about the price of MSFT stock. Early adopters may be all "net centric" but the majority of people live in Outlook, IE, and their phone.

Example of Enterprise 2.0 Communications Mashup?

A lot of these issues ring true to me. At VoiceSage one of the things that we have (behind the scenes) is the ability to deploy inbound SMS-codes, and also outbound SMS a part of a flow. We had a client that was a large university that posted different Short Codes in Printed Media and in Outdoor advertising with the advice to text the word "study" to the short code number. VoiceSage would then ring them, ask them a few qualification questions, and then patch them through to the appropriate knowledgeable staff member. Neat use of a call flow I think. And one that the client came up with, not us.

Between the Two, Governed and Ungoverned Mashups?

I am sure that in-store staff could come up with some pretty neat promotions if they could create and deploy them within some kind of overall policy. But that's not exactly "in the spirit" of the BestBuy story above. I think the spirit of the BestBuy story is more in the lines of increasing the information flow, releasing some control of its granularity, and opening up the enterprise to the power of weak-linkages. In this respect VoiceSage is more the "governed mashup" to the "ungoverned mashup" of Twitter et al.

The Nature of Credit & Trust

Credit is Social

Rob Paterson over on the FastForward Blog has a deep insight to share about the very nature of credit. In an industry that sees credit as an empirical, deeply-scorable entity, it is easy to forget that fundamentally, it is a social object. By this we mean that it derives its value from the social contract, driven by our fundamental belief that this person will pay it back, and not by any insight into our belief that they can or have the ability, to pay it back.

Mr. Hempton over at Bronte Capital (HT Mr. Kinsella) has a related point that its not a shortage of cash that is creating a credit crunch but a shortage of Trust. I did some research on Trust a number of years ago and from what I can remember it had an awful lot to do with irreversible investments and historical behaviors patterns. There was a whole lot more buried in the depths of the theory such as the existence of relationship specific assets, but I wonder if at route, an awful lot of this current mess doesn't lie somewhere between losing the social context, and losing the relationship-specific assets.

Trust-Thee The Cloud?

Some fairly big announcements this week around "cloud computing". The issue of how open or not the cloud was going to be was a talking point, and then Amazon goes and says he, we're like, Windows-Centric, and why not use BEA webserver, to like, totally port your application to the Amazon cloud? I think we are seeing a traditional bridging strategy here: don't abandon your old installed infrastructure, but if you need to build anything new into it, why not build it or buy it from the cloud? And now, with no improved windows-cloud, it will scale too :)

The Semi-Permeable Physical Digital Membrane

Cisco released a study that revealed "Reveals Consumers Trust Online Payment Providers More Than Traditional Banks". eh hum. Big throat clear. By facilitating connected commerce around the point of sale, financial institutions can become more influential, by connecting payments, merchants, and other "data" (one presumes). What it boiled down to is that if you get more "connected digital experiences" within the store (i.e. search - compare activity) then the opportunity arises to disintermediate the banks. After all, if I have a paypal account and so does the store, why not just pay through that? I actually do believe that digital technology and social media will play a much more prominent role in everybody's purchasing behavior, but I think we all may have to re-think what it is a financial institution does, and the role it plays in society, before it becomes truly possible for them to grasp this connected opportunity. Companies like Google "get this" and build "edge competencies" that lead them to become "market co-coordinators" or indeed, market platforms (For more on this topic I can recommend Sean over at The Park Paradigm and The 6th Paradigm ). John Hagel has more on edge economics here.

What would it take for banks and other financial institutions to develop Edge Competencies? I don't know, but I suspect it isn't in their DNA to do anyway.