CRM - Doing it Right

From a retail perspective, Customer Relationship Management (CRM) will be a critical part of any successful omni-channel strategy.  The ability to provide a great customer experience in-store, online, and across geographies will require knowing who and where your customer during any interaction – before, during, and after a transaction has occurred.

Though it’s not a retail-specific paper, Maklan, Knox and Peppard offer some tips about “Why CRM Fails and How to Fix It” (Sloan Review-MIT, Summer 2011). 

One of the seemingly obvious yet often overlooked issues is that managers see CRM as a technology solution and fail to recognize that IT is just an enabler.  Investing and implementing new systems while running a business the same way it’s always been run is about as useful as a buying a fishing rod in the desert – failure to think about how new tools will be used or by whom is the surest way to see that those tools end up buried and forgotten in a back office without making any impact other than showing up on the wrong side of a balance sheet.

Yet part of this failure to successfully implement new CRM “solutions” is due to unclear or non-existent metrics for success, training that teaches features of the software rather than how to change processes, and abdicating responsibility to the CIO rather than identifying a relevant champion from marketing/sales to take ownership of the project.

Identifying and updating key capabilities and learning processes is an important starting point to ensure a proper needs assessment is conducted before evaluating a CRM system’s features. Making sure to involve key stakeholders including sales reps, HR, and more will help create buy-in and ensure that a solution fits the company rather than trying to make the company fit a solution it just purchased. 

Finally, considering the customer in all of this should be a starting point rather than an afterthought.  Remember, whatever a CEO, CIO or CMO may think their customers want could be entirely based on the results of only offering a select set of options.  Instead of demanding customized offers and coupons, perhaps what they really want is more efficient and unobtrusive service – wherever or whenever they need it. 

To Be or X-Be, That is The Question

Academic frameworks about sales and selling is an area that is sometimes overlooked, thought to be an innate skill, or simply considered by some to be unworthy of "serious" study.

Yet the ability to approach sales and sales management, or at a more basic level, to develop relationships and influence others through a formal process is something that has been of interest to businesses probably since the word "business" was invented.  One such example is Dale Carnegie's original 1937 text "How to Win Friends and Influence People" showing that the study of human behavior and the importance of developing one's people skills in an authentic way are critical to success in many fields but especially sales.

More recently, the publication of Exchange Behavior in Selling and Sales Management (2008) by Sheng and Guergachi attempts to develop a real framework that managers can apply and measure.

Exchange Behavior (X-Be) introduces some interesting indexes including:

• The Relating Status Index
• The Attitude Index
• The Confidence Index

In developing/measuring one's "Relating" status, the ideal path would be to progress toward a "partnership" stage where a company rep and client can work together after building some degree of trust with each other.  The "Attitude" we are interested in is that of the client's interest in buying and happiness with past purchases through the company.  While sales reps may find informal ways to measure their own "confidence" that a client is committed to making a purchase by tracking things such as public acknowledgements of the value of the product.  

Each of these areas provide important insights about how to measure what may often be considered intangible elements.  This in turn should help sales teams and managers plan customer relationship strategies, their selling process and deliver better results.

Will MOOC's Disrupt Traditional Education?

The MOOC concept (i.e. Massive Open Online Courses) has been around for a while now approaching a decade according to Stephen Downes' guide on the subject.

Like many new Educational Technologies - can you say Khan Academy 5 times fast? - MOOC's were hailed by some as the future not just of e-Learning but of education itself.

Just as radio, television, and even the World Wide Web were considered potential education game changers in the past, I would argue that MOOC's haven't quite lived up to the hype in the sense of replacing the need for traditional schools and academic institutions.  Yet they may be transforming education and influencing instructional design in new ways.

This is probably as it should be.  When it comes to teaching and learning, apart from perhaps the printing press, new technologies rarely "disrupt" established institutions (in the Christensen sense).  They do however provide new methods, resources, and change the way we may learn through formal or informal processes.

A recent publication "Five Ways Moocs are Influencing Teaching and Learning" by Contact North suggests that Moocs are impacting education by "encouraging unbundling... changing the nature of credit granting...accelerating the development of blended learning... e-portfolois... learning communities and peer tutoring" (p.4).  In many ways, these should each help improve teaching and learning in established schools.

For more about MOOC's, I encourage readers to start at http://www.mooc.ca/resources.htm by Stephen Downes and George Siemens.

Disrupting the Theory of Disruptive Innovation?

Clayton Christensen's theory about disruptive innovation has been studied by many researchers from many different angles and this week we look at an earlier article by Christensen and Michael Overdorf titled, "Meeting the Challenge of Disruptive Change".

Some 15 years later Christensen along with Michael Raynor and Rory McDonald were compelled to post a rebuttal to explain exactly, "How Useful is the Theory of Disruptive Innovation?" in response to another piece published only a few months prior called, "How Useful is the Theory of Disruptive Innovation" by Andrew King and Baljir Baatartogtokh.

Slaying sacred cows is an important part of the scientific process and King and Baartartogtokh raise some relevant points in their article; yet, in some ways they appear to be trying too hard to poke holes in an established theory.

One critique appears to be simply that "disruptive innovations" are rare.  I would argue that goes without saying but their point appears to be that it is even rarer than Christensen himself would believe as many of his original case studies don't appear to stand up to his model as well as it seemed.

However, there are a few points that King and Baartartogtokh suggest that seem to miss their mark. They cite legacy costs of established firms as being one of the problems with the original case studies but the idea that a firm is unable to respond to disruption or to develop a disruptive innovation themselves due to legacy costs is precisely the point.  Christensen explains that a companies capabilities and expertise in specific areas may actually hinder it's ability to shift directions and leaves it vulnerable to disruptive innovators.  The critique point of view seems to miss this by suggesting that companies who have the capability to respond but do not follow through for whatever reason seems to confuse "capability" with resources, which on their own are not enough to help a company break out of an old mold.

On the other hand, Christensen would argue that:

• Being "transformative" is not the same as being "disruptive" and that
• "Disrupt or be disrupted" is the wrong way to look at innovation as established firms can survive "disruptive innovations" (according to him) without being the disruptors themselves.  

There are many more questions we could raise about each of these 3 articles but I believe one of the real points Christensen is trying to make is that established firms can co-op disruptive innovations.  Although he doesn't consider the iPhone to be a disruptor, it may be said that Apple stole the momentum from Research in Motion's Blackberry, which may be the better example of a disruptive innovator in that market.  (Although, Blackberries may not fit the disruption model of entering at the low end of the market either, so this too may not quite be accurate.)

All-in-all, innovation is a hot topic that is likely to continue receiving a high degree of interest among academics and businesses alike.  Disruptive innovation is one piece of this puzzle that may prove to hold up in some ways while requiring some modification in others.  Regardless of it's accuracy or "usefulness" as some researchers question, it serves as a great starting point from which to debate, build new theory, and test hypotheses that have real world implications.

Artificial Intelligence and Consumer Product Development

In a recent discussion about Lean Startups (see Steve Blank – Why the Lean Startup Changes Everything) and developing “minimum viable products” (MVP) as a way to get to market and learn quickly from real customers in order to revise or pivot as needed,  Dr. G. proposed that Artificial Intelligence may help predict validity of an MVP before building it.

This topic bears further exploration but a few initial thoughts that come to mind include the following:

• Could A.I. be part of the quality testing process?  By this I mean it might reduce human interface design to the various paths available through the navigation and match it to consumer decision trees?

• Comparing the MVP’s features to the wants/needs of consumers as captured by tools such as Google Trends could help tailor product features to market demand.

• AI may even be able to plot an outline for a pre-launch advertising campaign, teasing/alluding to the eminent arrival something that will fulfill the needs that many have already expressed through keyword searches rather than by sifting CRM databases of personal information and past purchase history.

Perhaps a search of Google Scholar, (keywords "predictive analytics", "artificial intelligence", "consumers", etc.?) is in order.

Weightlifters and Figure Skaters - Winning at one often precludes success at the other

Welcome to Thoreauly Confused 2.0 where we'll attempt to make some sense of various theories and ideas about innovation, business, consumers and more.

To kick things off, let's start with a quote by Dr. G who suggests that, “As you become excellent at something, you will suck at other things.” 

He goes on to offer the example of a weightlifter who trains for years to become a world class athlete. Such focused training and the skills that lead to success in a field like this in turn makes it difficult if not impossible to change direction and become great elsewhere as a gymnast or a figure skater for instance.

This line of thinking may help to explain why large established firms have difficulty with radical innovation - developing or even adjusting to them. Going one step further, they might not even be aware of emerging trends that don’t have obvious connections to their business model just as one may not expect an Olympic weightlifter to know anything about the world’s top figure skaters.

Gans and Sterns (2003) refer to this as "blind spots" that large firms have when they are so focused on their current business (already a proven success) that they fail to even notice new opportunities or threats that don't resemble their expectations about what deserves attention.

Yet even if they do take notice, the effort and energy required to succeed at what appears to be an unrelated area of expertise would be challenging at best and perhaps impossible.  The amount of time (i.e. practice) required to excel at something new is impractical for an individual or business that is already focused on what they do well.

If you think this sounds similar to the “10,000 hour rule” made popular by Malcolm Gladwell (in his 2008 book Outliers) you might be on to something.  This rule suggests that practicing roughly 10,000 hours at some skill will lead to excellence.  However, there are two important things to note about this.

First, this rule has been roundly criticized as Rachel Nuwer points out that 88 journal articles studied the topic and found that practice, “explains just 12 percent of skill mastery and subsequent success” (2014, para 2).

In addition, as Dr. G might point out, established businesses have far more invested than just “practice”.  Physical assets, human resources, and current capabilities are all geared toward their existing business and are not easily re-directed to new purposes.  New firms on the other hand are building from scratch and can tailor their hiring and resources to succeed with emerging trends or “fail fast” at minimal cost.

Going back to the well one last time with our fictional weightlifter – he may not have much to fear on his path to a gold medal from an upstart figure skater attempting to compete in the clean-and-jerk.  However, when it comes to sustaining long term opportunities and income from the professional circuit, he may wish to re-consider learning to perform a triple lutz.    

References:

Gans, J. S., & Stern, S. (2003). The product market and the market for “ideas”: commercialization strategies for technology entrepreneurs. Research Policy, 32(2), 333–350.

Nuwer, R. (2014, Aug 20). The 10,000 hour rule is not real. Smithsonian.com  http://www.smithsonianmag.com/smart-news/10000-hour-rule-not-real-180952410/

Hyosung GV650 Aquila Review

Ah, the autumn air is here again and it's time I should do a review of my summer on the new motorcycle.

After waiting a year to get one, I finally purchased a 2008 Hyosung GV650 (silver) sport cruiser at the end of May.

In the 4 months since, I've managed to ride about 5,500 km including a trip from Toronto to New York, through New Jersey, Baltimore, Washington, Virginia Beach, and back home through Pittsburgh and Buffalo. I rode through hot sun, heavy rain, and even a brief hail storm one day. Thus, I now feel qualified to offer my initial comments on what this machine is really like.

Let me tell you first off - it's fun! It also inspires confidence with a low seat and easy steering along with lots of room for my 6-foot frame thanks to the forward foot peg position. (These are adjustable for shorter riders.)

The bike is "only" 650cc's but just like the MHz game that is played by computer CPU manufacturers, this is a prime example of how displacement numbers don't tell the whole story. The Aquila (named Avitar in other countries) produces 72 hp and 42 ft-lbs of torque. Add the fact that it's dry weight is only 485 pounds and you are talking performance similar or better to a Harley 1200 Sportster!

(By comparrison, the Honda Shadow 750 Ace weighs 500 lbs and tops out at a mere 40 hp.)

In terms of fuel capacity/consumption, the first thing to keep in mind is that it requires 91 octane or higher, so you'll have to look for the premium pump when you fill up. The bike has a 17 litre tank and one of the first quirks I found was that the fuel gauge consistently displays empty with 6 to 7 litres still remaining.

That first 10 litres tends to last about 160km for a combination of city and highway driving or 16 km per litre. (Highway-only riding tends to be upwards of 20 km/l.) A full tank should last 270km and some people report close to 300km but I've never done more than about 230km on a single tank - deciding to always fill up when I still have at least 3 to 4 litres of fuel left.

Some other basic specs include belt drive, dual disc (front) and single disc (rear) brakes, digital speedometer with clock/fuel/trip/temperature guage, and added accessories including a short windscreen, backrest/luggage rack, and engine guards.

One omission that I wish Hyosung would include is a tachometer. You can always shift by ear/feel but when getting to know a new bike, it would be nice to know how fast the engine is actually rev-ing. From the video review I saw, the rider seems to shift from 2nd-3rd-4th at about 25-35-45 mph respectively. (In metric, I tend to go from 2nd to 5th at 30-45-60-80 km/h myself, give or take 5k either way.)

The seat is very comfortable for short rides, yet after 1.5 to 2 hours with the foot pegs in the forward position you really need to stop and walk around for a minute since you can't lift yourself while riding - the way you might on a standard or sport bike.

A few quirks and minor annoyances include surface rust already appearing on some of the nuts and bolts of the frame along with squeaky brakes and suspension. These are things I've noticed in some other reviews as well, so perhaps Hyosung still needs some work on the fit and finish of their bikes.

Overall I'm very happy with the bike after one summer. It's eye catching and still fairly unique here in North America. Everywhere I go people ask what it is or give the thumbs up as they drive by - including a group of Harley riders I passed last week.

It felt more comfortable than a Triumph even in the showroom, is less expensive than a BMW, and as long as you don't need that fancy "other" brand name that starts with an "H-" on the tank, you should easily enjoy riding your GV650 as others watch with envy.