Archive for the ‘Best Practices’ Tag

Why do smart executives make bad decisions?

Why do seemingly intelligent and well-meaning executives make bad business decisions?

As consultants, it’s a question that organizations task us with answering, often through postmortem reviews of failed strategic initiatives. The idea is to develop a better understanding of how and why pivotal (and ultimately poor) choices were made in hopes of not repeating the mistakes.

We look at the analysis undertaken, the managerial deliberation and how the final decisions were made. In each case, we discovered that the root cause of the bad choice(s) was not the decision-makers themselves — i.e. stupidity on the part of management — but rather a dysfunctional process for making decisions.

Optimizing the decision-making process can go a long way to improving the level of analysis, managerial buy-in and the quality of the decision. And — perhaps most importantly — it could spare your organization from being responsible for the next Edsel or New Coke.

Worst practices

Rigid silos
Whether purposefully, a product of geography or a matter of culture, employees in many organizations are “siloed” in discrete units or departments. Rigid silos restrict the flow of ideas, hampering the collaborative process required for developing sound analysis and making informed decisions.

Executives who possess a siloed worldview — i.e. “empire builders” — can be particularly toxic. Unlike lower-level managers, these individuals have the power to inhibit the allocation of necessary resources and the development and implementation of strategy that serves the interests of the larger organization.

Excessive politics
Politicking is inevitable when any group is gathered to make an important decision. The trouble occurs when politicking gets out of control and supersedes sound logic. This sort of dysfunction breeds and emboldens bias and ago, which can hijack the process and lead to lousy decision-making.

Common examples of excessive politicking include: prioritizing departmental or career goals at the expense of corporate ones; keeping key stakeholders in the dark through the widespread use of back-channel communications; and overemphasizing consensus building or “what will fly” over what makes the most sense.

Muddled processes
Most large organizations assert the importance of strategic problem solving and retain scores of managers who possess this skill. However, many of these firms fail to create and follow the right practices for guiding and empowering these individuals to reach their full potential.

The process — if it even exists — often follows inadequate preparatory work and is too brief, under-resourced and devoid of key stakeholders. Worse, the individuals who are in the room often possess a shared analytical framework thus and lack the skills, expertise and vision required for distinguishing between a good idea and a bad one.

Best practices

There is no silver bullet for creating and sustaining an effective decision-making process. Every company and situation is unique. However, getting the organizational fundamentals right can go a long way toward mitigating and eliminating many of the aforementioned issues. Generally speaking, best practices include:

  • Developing and implementing a systematic decision-making methodology and process
  • Encouraging open and frank discussions about all options, assumptions and scenarios
  • Providing access to high-quality and actionable data
  • Using practical and coherent criteria for evaluating decisions
  • Having engaged and impartial leaders overseeing the process

For more information on our services and work please visit Quanta Consulting Inc.  Follow me on Twitter @MitchellOsak or connect through email at mosak@quantaconsulting.com

Maintaining a winning customer experience

A customer experience strategy is an amalgam of practices, systems and values that guide interactions with customers and prospects across different sales channels, platforms and geographies. In an increasingly competitive and commoditized marketplace, creating a ‘wow’ customer experience is one of the few tools left for companies to retain customers, sustain margins and build a long-term competitive advantage.

Elements of a good customer experience strategy include customer-centric process design, passion-driven employee engagement, coherent interactions across multiple touch points and operational integration. Companies as diverse as Nordstrom, Lexus, Disney and Singapore Airlines have built industry-leading market share, profitability and shareholder value by consistently delivering ‘wow’ (i.e., higher than expected) customer experiences at every interaction.

In many cases, however, designing the ideal experience is the easy part, particularly if it is built on a foundation of product, brand and service excellence. The tougher challenge is maintaining this capability over time. Companies can preserve their winning customer experience by (1) developing real-world measurement systems, (2) institutionalizing key values and (3) staying close to changing customer needs and requirements.

Dropping the ball

Ten years ago, my company worked with the functional teams of a large IT solutions company to develop a customer experience strategy for their sales, support and professional services. The model was developed by working backward from their desired client interaction, and tailored to their different segments, customer types and channels. The new customer service strategy embraced every touch point, from the sales teams scripts and customer on-boarding practices to support triaging and billing processes. After only 12 months in market, the new model was credited with boosting loyalty as well as cross selling rates.

Three years out, however, the firm’s growth stalled. The metrics showed declines in customer satisfaction, online engagement and service levels. A deeper analysis indicated that their customer experience had degraded due to a variety of factors: changing client requirements and expectations (they went higher); a lack of organizational continuity (increased turnover of front-line staff prevented the inculcation of customer experience values into new employees); and clumsy integration of new enterprise software (which reduced service levels and complicated processes). Ultimately, a gap had developed between the initial customer experience strategy and its supporting capabilities.

Sustaining your customer experience strategy

Companies can preempt these issues by better institutionalizing their customer experience management practices and values. Some ways to do this include:

  • Frequently research your customers to stay in sync with their dynamic needs and requirements as well as ensuring your customer experience is consistent through new sales and support channels.
  • Make cultural fit and internal alignment a priority. Every customer-facing employee must inculcate customer experience purpose and values (e.g., ‘the customer is always right’). Rotating customer ownership through senior leaders in key departments is a good way of keeping focus and alignment.
  • Develop early warning systems to track progress, identify problems and generate learnings that can improve existing programs. These systems should track actionable metrics that align to each department’s and individual’s performance goals.
    A Canadian leader

One company that does a good job of maintaining a compelling customer experience is Sun Life Financial. The insurance and wealth leader did all the right things when they designed their customer experience in 2012, such as linking the program to key business metrics and adopting a global and holistic business view. Moreover, Sun Life Financial did not leave the program on auto-pilot.

To ensure focus and follow through, Sun Life Financial created a global working group made up of senior leaders from many departments, including marketing, finance and operations. This group meets often to track and review a variety of customer metrics, including net promoter scores and how they are tracking against improvement measures across all lines of business, as well as to review the latest customer and brand research. Importantly, they are not a corporate rubber stamp body: Their strategic mandate includes exploring opportunities for scale economies, sharing learning between regions and businesses and recommending changes in tactics (if necessary) so that customer needs are placed first and foremost.

“Our customer experience program reinforces the philosophy that the customer is at the centre of everything we do,” says Mary De Paoli, Executive Vice-President, Public & Corporate Affairs and Chief Marketing Officer, Sun Life Financial. “Delivering exceptional customer experiences requires a commitment to asking your customers, regularly, how you can improve the products and services they depend on from you. We believe this is the number one driver of the long-term success of our business.” Although it is still early days for the working group, the program has been credited with creating a winning online experience and better enabling the channel (e.g., plan sponsors, brokers and consultants) experience.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

How winning companies go digital

Whether it is creating a winning online experience or enabling mobile commerce, digital marketing is a hot topic, with most companies either revamping or implementing new strategies.

Through consulting experience and research, Quanta has uncovered some industry and technology-wide learnings that can improve your odds of market and financial success. Consider the following best practices in your digital design and planning:

Power to the people

“In the next five years, traditional marketing will shift to digital channels to capitalize on the ‘power of the people’ phenomenon to displace brand-centric strategies in favour of buyer-driven everything,” research firm Gartner says. Buyers can control the marketing messages they receive and are only a click away from a competitive product.

That means the onus is on companies to provide a digital experience that powerfully delivers on their customer’s needs. All technology choices must be driven by customer needs and their desired experience as opposed to organizational or IT considerations.

This buyer-driven world requires personalization and location-based services. Consumers want to be treated as an individual with bespoke interactions and services based on their past experiences with the firm, the device or platform they are on, and the information they require at the moment.

Social not transactional

The buying journey is no longer linear — i.e. build awareness, generate interest and trigger purchase. Now, consumers rely more on peer recommendations, are less iterative and more information-driven.

Knowing that, companies should carefully consider what information, tools and functionality are needed. For example, to leverage the power of word-of-mouth endorsements, marketers need to understand how and when their customers are using social media and target them differently by platform at each stage of the customer life cycle — from awareness building and information gathering to seeking out peer recommendations and finding timely support.

One brand, many channels

Market researcher Forrester reports that companies in 2014 “overwhelmingly plan to continue investing in DX [digital experience] technologies, with a clear emphasis on multichannel delivery and analytics.”

New technologies, applications and platforms have dramatically increased the number of channels between customers and firms, and the potential for misaligned strategies and programs. Marketers are challenged to offer a compelling omni-channel experience that delivers a consistent and competitive brand message, price and service experience. This requires management to view their businesses in non-traditional ways, master new skills sets and define new organizational structures.

Structure follows strategy

From the outset, senior leaders will need to acknowledge the traditional marketing model may no longer be ideal for a digitally driven organization. Where the function is going is difficult to say. IDC, a research firm, contends that “by 2020, marketing organizations will be radically reshaped into three organizational systems — content, channels, and consumption [data]. The core fabric of marketing execution will be ripped up and rewoven by data and marketing technology.”

The best practice marketers we see are: team-focused incorporating a variety of skill sets including data analytics; tightly integrated with other functions including IT and operations and; are intrapreneurial in nature with free-flowing data, flat decision-making and rapid experimentation.

One common barrier to going digital is the need to satisfy the traditional business case. It is often difficult to generate sufficient return on investment when quality market and costing data is unavailable, revenue and usage is unpredictable and senior managers lack the technical confidence to place important bets.

In a recent survey, roughly one-quarter of respondents named “inability to prove ROI” the top barrier to budget increases, outpacing other concerns such as lack of overall revenue (18%), lack of buy-in from management (15%), and lack of clear strategy (15%),” web research firm Marketing Charts said. Digital pacesetters, on the other hand, make greater use of lower-risk market experiments, as well as employ more advanced approaches to evaluating strategic, time-sensitive investments.

Get it right and fast

In high-stakes industries such as banking, airlines and retail, the days of introducing beta-level technology and fixing it on the fly is quickly coming to an end. Most consumers will not tolerate shoddy products or a confusing online experience; product alternatives are often well-known and immediately available and; serious threats such as cyber crime are no longer rare. To cope, firms are adopting a variety of methods to improving digital quality, performance and agility including co-creating products with customers, integrating development and testing activities and; bringing in-house strategic parts of the value chain.

There is no magic bullet to digitally enabling marketing. Successful firms are choosing their technologies and channels based on consumer needs and habits, leveraging the power of social influence, developing the right organizational alchemy and learning from their pilots and other’s experiences.

For more information on our services and work, please visit the Quanta Consulting Inc. web site

Improve your sales close rates

Selling excellence has never been so important as it is in this low-growth world. In our experience, high performing sales representatives employ simple but powerful techniques to overcome buyer reticence and differentiate their offering. Some of these methods have been the subject of academic research, recently published in the Harvard Business Review, and summarized below.

Ask for advice

High performers pursue two important objectives in a sales relationship: 1) gain vital information on the customer’s business and personal needs, target price and decision criteria. Securing this information allows sales reps to link their products with high value and justify their price points and; 2) build trust with the buyer, especially when the seller has no previous sales relationship with the organization. Satisfying these objectives is not easy when buyers are reluctant to share information or are not accessible.

Successful sales people secure key information and develop trust using a simple approach: they ask the buyer for advice on how to overcome barriers or solve problems. Some sellers may be reluctant to do this; they may perceive this as pandering or displaying a lack of skill. In reality, the opposite is true. In their research, professors Katie Liljenquist and Adam Galinsky found that asking an opponent for advice made the seller appear more warm, humble and cooperative, improving the chance of closing the deal at a desirable price.

Asking for advice provides three key advantages (in addition to getting valuable information). First, it makes a sales rep appear more likeable, warm and cooperative. Furthermore, the buyer may be flattered because the request is an implicit endorsement of their expertise and status. Second, through conversation buyers will be able to see things from the rep’s perspective leading to more creative problem-solving and solution alignment. Finally, asking for advice could turn the buyer into an internal advocate. Providing advice is an investment of their time and effort making them more likely to follow through on their recommendations and become the seller’s champion.

The beauty of asking for advice is that it is simple, low-cost and works with most people. Sometimes, however, sales reps face a head-to-head selling situation where they need to stand out from the competition.

Give the buyer something extra

Most large organizations employ skilled buyers and rigid procurement processes to minimize purchase costs, eliminate rogue buying and qualify vendors. This creates special challenges for companies who have little or no previous selling history at the company or offer a relatively undifferentiated product. Often, at the end of the process buyers will go back to the finalists and tell them the bids are equivalent, asking them to provide “something more” to break the tie.

The typical seller will respond with the well-worn tactic of stressing the bells and whistles in their product that may be lacking in the competitors’. When that doesn’t work, sellers will usually default to price concessions, added features or better terms. According to research by professors Anderson, Narus and Wouters, most buyers are not looking for these things. Our experience is that offering late-stage price concessions can signal desperation, reduce trust (since the best price was supposed to have been submitted earlier), or introduce concerns that quality and service will be shortchanged with lower prices. The researchers assert that when buyers ask for additional value, “they are actually looking for a justifier: an element of an offering that would make a noteworthy difference to their company’s business.”

A “justifier” helps buyers visibly demonstrate to management that they are making a contribution to the overall business — without sacrificing quality, service or delivery — helping enhance their status and providing psychological validation for their choice. Providing justifiers delivers many benefits for suppliers. Firms are better able to differentiate their product, powerfully link it with the prospect’s strategic goals, and price their offerings at or near the upper end of each customer’s acceptable range.

Identifying and leveraging justifiers comes from deeply understanding how a company really uses the product and what their larger business priorities are. These differentiators could improve ease of use (and lower overall cost) through the use of special sizes, bespoke logistic services or seamless integration with complementary products. As an example, a real estate-developer client used the tactic of paying a prospective tenant’s moving costs to fill buildings. In another case, a robotics company we worked with secured a major project with this justifier – integrating two different components (one of them from another vendor) into a sub assembly, reducing the customer’s labour and inventory costs, and ensuring seamless interoperability.

In many cases, the best product, service or price will not secure the business. A skilled sales representative can still provide the edge in a competitive situation through employing proven relationship-management techniques, as well as other successful practices while creatively addressing fundamental client needs.

For more information on our services or work, please visit the Quanta Consulting Inc. web site.

6 Big Data Mistakes

Big Data is all the rage across many enterprises.   The potential payoffs are compelling.  For example, research out of MIT found that firms leveraging Big Data  achieve, on average, 5-6% greater productivity and profitability than their peers.  McKinsey calls Big Data a game changer for sales and marketing along with other areas of the business. But like anything else, getting the most out of data means knowing what not to do. Companies looking to extract value from their terabytes of data should make sure they avoid the following 6 mistakes.

Boiling the ocean

Big Data can be big work. It is easy to burn through a lot of time and cost finding insights that don’t materially address major business challenges like getting closer to customers or improving operational performance. One way to ensure value is to ask research questions whose answers will directly impact key corporate goals. This focused method also enables your company to ‘learn as they go’ and develop quick wins that justify further effort and investment.

Only considering data in silos

In many organizations, the majority of data resides in functional areas or business units — not in an enterprise-data warehouse. Only analyzing siloed data reduces your chances of finding key insight that can affect a company because you are limiting the number of variables and quantity of data under consideration.  However, bridging these silos is easier said than done; organizational and data issues may hinder an enterprise-wide data mining effort. In other cases, managers often limit their analysis to existing digital data. This approach could miss out on insights that are discovered when analog data (such as social feedback and qualitative research) is ‘datafied.’

Ignoring bias

There are good reasons why Big Data resembles science. The analytics can be challenging and methodological errors are not uncommon. “There is significant risk of the analytics being wrong,” says Neil Seeman, founder & CEO of global online data collection firm, The RIWI Corporation. “Systematic bias can easily slip into enormous data sets. Or, not understanding unknown bias in the data set results in false conclusions. Case in point was the early analysis of large HIV data sets; this did not consider the influence of intravenous drug use.”

Focusing on cause instead of correlation

Understanding precise cause and effect is difficult and impractical. What’s more actionable is uncovering correlations — patterns and associations that help predict what will happen next time. Managers should be mindful of looking for and expecting data perfection. For example, the shelf life of market-based insights could be measured in days or even hours. Often it is better to quickly make decisions with 80% confidence in the data than to wait for perfection farther out in the future.

Disregarding qualitative knowledge

Data analytics can deliver many insights but it often cannot tell the entire story. Take the drivers of consumer behaviour as an example. It is difficult to comprehend what drives action without looking at qualitative research tools like behavioural psychology or anthropology as well as expert opinion. These tools should be used to fill in knowledge gaps.

Forgetting about instinct and creativity

At a certain point in the future, the leaders in each sector will have comparable Big Data capabilities and access to the same data. To wit, the Open Data movement is making terabytes of the same data available to everyone. Like other innovations, the greatest returns will flow to those who use the tools and methodologies in the most creative way. As well, management instinct will continue to play a key role in setting Big Data priorities and figuring out how to combine disparate information into more powerful conclusions.

A dangerous assumption made by some companies is to think your entire team should be made up only of credentialed “data science” experts. According to Seeman, “Experience in this fledgling field of data science often eclipses the value of fancy degrees from prestigious universities. What are needed are curiosity seekers with demonstrable experience in pattern recognition and exploiting data for real value. In my case, everything I learned about Big Data came through experimentation, failure, and asking really dumb questions — through efforts to solve the problem of how to collect a unique data stream from every country and territory in the world.”

Big Data is still in its infancy. The first cases studies are still being written. Of course, success will be a product of a strong top-down mandate, having sufficient resources and working with competent partners. At the same time, managers should be mindful of hamstringing themselves by not following a common-sense and continuous-learning approach to project design and implementation.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Dos and don’ts of content marketing

It has never been more difficult to connect brands with customers. One of the best ways to break through the clutter and add value is through content marketing.  Content marketing (CM) is the creation and sharing of relevant and unique content to attract consumers, promote engagement and build brands. Billions of dollars are being spent every year on content marketing.  Are companies getting adequate returns?  If not, what must they do to get their programs right?

These days, consumers are shutting off the traditional world of sales and marketing, and shunning much of the digital variety. For example, their PVRs enable them to skip television advertising; they often ignore magazine and newspaper advertising and; email filters and online surfing habits allows them to avoid banner ads and pop-ups.   Sales reps that don’t add unique insights are being shunned.

Ron Tite, CEO of content marketing agency The Tite Group says, “Consumers are skipping advertising that interrupts or gets in the way. You know what they’re not skipping?  Great content.  If it’s worth watching, they’ll watch it.  And they don’t care if a brand paid for it, either.”

Simply put, CM is the art (and increasingly science) of communicating regularly with your customers and prospects without overtly selling them.  According to The Content Marketing Institute (CMI), 91% of B2B Marketers and 86% of B2C marketers already use CM in their marketing mix.  The premise is simple: firms that provide interesting and helpful content will deliver more value and a better brand experience, thereby generating higher awareness and purchase intent as well as stimulating word of mouth advertising and community building.

Firms are flocking to CM for many reasons.  For one thing, it works.  Julie Fleischer, Kraft’s Director of CRM Content Strategy & Integration says, “The ROI on our content marketing work is among the highest of all our marketing efforts.” Secondly, CM is meeting the needs of today’s demanding customers. Google research finds that consumers require twice as many sources of information before making a decision today than they did just  a couple of years ago. Roper Public Affairs, a research firm, found that 80 percent of business decision makers prefer to get company information in a series of articles versus an advertisement, while 60 percent say that company content helps them make better product decisions.

Some companies are using CM in powerful ways that deliver strong financial returns.  For example:

McDonald’s – Created an online Q&A site that has fielded over 10,000 questions (including all the tough ones), successfully educating consumers and delivering key corporate messages.

Open Text – Built a personalized new customer onboarding site offering a variety of assets and content to welcome new clients and provide upsell, cross-sell opportunities. Over 1,700 new contacts were identified along with 31 new opportunities worth $1.8M.

Xerox – Developed a premium magazine (in partnership with Forbes magazine) targeted at top 30 accounts, yielding $1.3B in new pipeline opportunities.

These success stories, however, are the exception and not the rule.  A CMI survey of 1,400 companies found that only 36% of respondents considered their CM initiatives effective.  According to Tite, “To be blunt, a lot of brands are just doing it incorrectly.  A content approach isn’t a campaign or quick hit viral video.  It’s something you do every day.  Marketing departments aren’t typically built to support that type of commitment.”

What separates the leaders from the also-rans?  The leaders really understand their client’s preferences, develop the right capabilities and track the right metrics.  To be world-class, content marketers should heed these Dos and Don’ts:

Dos

  • Focus on the objective – CM should be about inciting readers or viewers into doing something desirable like purchasing a product or requesting a quote.
  • Have a systematic process – Organizations should cultivate, track and engage customers through their CM journey. To drive efficiency, marketers need to ensure they are using and measuring the right metrics like leads by content, on page conversions and share ratio by content.
  • Maximize SEO – To maximize CM’s impact, companies should periodically refine their search engine optimization programs including keyword choice and site design.
  • Stress quality – Poorly crafted and executed content can detract from your CM program and brand image. CM benefits from an iterative approach that regularly explores customer preferences and tests out new creative executions.

Don’ts

  • Choose the technology first – Technology is an enabler not a strategy.  Get the right structure, people, and value proposition in place before choosing any CM tools.
  • Under-invest – Producing quality requires the right people and resources, as well as a creative license.  CM capabilities need to be nurtured for long-term success.
  • Ignore organizational implications – Leveraging CM requires the buy-in and collaboration of many parts of the company to unlock key knowledge.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Gamification 101

Over the past year, our firm has received more calls on Gamification than any other new business topic.  Two client questions stand out: What is Gamification? And, what problems does it solve? When answering, I begin with a tale of two employees, Mary and Greg.

Mary is one of thousands of disengaged employees working in a typical call centre.  Her year-old job is lonely and repetitive with little autonomy or creativity. Mary’s daily tasks have become so routine and measured that she vacillates between boredom and fear. Although she is supposed to receive quarterly performance reviews, her boss spends most of his time recruiting and fighting fires. Senior management regularly mandates her department to implement process redesign and change initiatives, many of which are divorced from what really goes on in her job. Most likely, Mary is monitoring online job postings, a prudent strategy given that the COO regularly muses openly about outsourcing her function.  The chances of Mary staying another 12 months are only 50%.

Ten months ago, Greg was fortunate to get a call centre job call in a firm employing gamification principles and technologies. Greg can’t wait to start his day by logging into his firm’s “gamified” workflow management system.  The first thing he sees is an Avatar — a virtual and personalized representation of himself.  His Avatar acts on his behalf, taking customer calls, going to meetings with other Avatars and updating his skills. Information about his team’s progress is fed to Greg in real time, including critical customer issues and company social outings.  Instead of the usual call centre metrics, Greg competes with his colleagues for badges and ranks.  Moreover, he accumulates a virtual currency (that can be exchanged for special perks) when he distributes best practices and assists co-workers with problem solving.  A combination of game-enabled fun, friendly competition and subtle peer pressure has helped Greg become a fully engaged employee.  Not surprisingly, he has developed new leadership, communication and collaboration skills that put him on track for a promotion.

The first story is illustrative of many companies.  The second tale is fictitious but will soon be commonplace. Firms as diverse as Adobe, Whole Foods, Nike, Microsoft and Duane Reade are using games to transform routine and mundane tasks into more useful, fun and financially rewarding activities. The business outcomes are compelling: improved consumer loyalty, increased employee engagement and higher levels of collaboration & information flows.

Gamification is hot.  According to a 2011 Gartner Report, more than 70% of Global 2000 organizations will have at least one gamified application by 2014. Even if you square root these numbers, Gamification is destined to be the next big thing.

Gamification defined
The most common definition is the use of on and offline game principles, techniques and technologies in an organizational context to improve business results. At their core, Gamification programs use stories, missions, incentives, and real-time feedback to change a person’s behavior over the long term. Stories can be anything that captivates and catalyzes a person’s interest over an extended period. Incentives can range from simple leaderboards, ranks and badges to the creation of virtual currencies that can be traded.

Problems solved
Gamification has been used in a variety of applications, including:

  • Improving operational productivity – Microsoft uses team-based competition and leaderboards to more quickly and thoroughly find software bugs.
  • Driving consumer awareness and engagement – Duane Reade uses location-based, competitive gaming to build awareness of their stores and merchandise selection.
  • Deepening product usage – Adobe has gamified their Photoshop tutorial to improve a trial user’s knowledge of core functionality.
  • Facilitating employee learning and participation – Deloitte uses Gamification to better address employee concerns and manage performance in areas like training, document creation and community engagement.
  • Increasing employee engagement – One of our pharma clients used a game to better align around corporate goals, teach workflows and promote cross department collaboration.
  • Triggering lifestyle changes – The Nike+ game promotes exercise by allowing people to track their results and compete against their friends and others.

Four pillars
Winning Gamification strategies artfully combine four elements:

  1. Business strategy – Powerful Gamification programs are tightly coupled to core business strategies and metrics
  2. Motivational science – Successful games leverage key precepts of behavioral and social psychology such as the importance of continuous feedback, competition and public recognition.
  3. Video game learnings – Popular video games have been shown to increase brain endorphins, which lead to higher levels of blissful happiness.
  4. Collaborative technology – A variety of companies like Bunchball and Salesforce.com have deployed enterprise-level Gamification platforms that can run different games

Both consumers and employees just want to have fun. Indulging them is becoming a sure path to business results (when the Gamification program is properly designed).  Ensuring this happens will be the subject of the next Gamification column.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Big Data 1-2-3

Taking advantage of the insights buried in Big Data is all the rage in many companies. An omnibus term, Big Data is the accumulation and synthesis of all kinds of customer data collected but lying dormant within an organization. However, exploiting its potential could be a daunting task for many managers. Here are three foundational steps to help kick off a high return, low risk analytics program:

Begin with a hypothesis

Big Data presents so many opportunities it’s often difficult to know where to start.  The journey can finish at many end-states, some providing real business value but others offering nothing actionable.  Moreover, data analytics competencies are not easy to assemble. Analytics experts are expensive and often difficult to find. You need to know where you are going if you want to extract value and not waste time and money.

One way to ensure you are on the right track is to create a hypothesis about your customers that is directly linked to corporate strategies and metrics. For example, an explicit hypothesis could be that the existing digital marketing plan is not effectively targeting the needs of the highest potential customer segments.   This hypothesis would then be tested against the insights produced from an analysis of the pertinent customer and operational data.

According to Casey Futterer, vice-president of  strategic new business at Nielsen Canada,  “Coping with large amounts of data with few analytical resources creates an imperative for laser focus — what issue to solve, what action to take.  Important issues will relate to questions of: who? (consumer/shopper); what? (proposition); and/or, how? (plan).”

Balance left and right brain thinking

Many assume Big Data is a mathematical and IT exercise based on customer relationship management data.  While these three drivers are critical to producing meaningful insights, they cannot tell the entire picture about the customer, particularly if the data is internally siloed or incomplete.  For example, firms can find in Big Data a link between nice weather and increased purchase behaviour but they often can’t tell you why these correlations occur.  Do people buy more because it’s sunny outside, springtime or because of a recent price promotion? Without knowing the ‘why’, marketers will have a difficult time turning the insight into something actionable that generates solid financial returns.

To get to root causes of behaviour and a critical 360-degree view of the customer, managers need to look elsewhere at non-quantitative factors — the right brain or emotional side of behaviour — through tools such as ethnography, neuroscience and qualitative consumer research.  In addition, managers should round out their quantitative analysis with a holistic examination of the customer experience including service, channel interactions and their actions with competitive offerings.

“There is no magic box that spits out the answer,” says Futterer. “Managers need to combine analytics with emerging tools and your team’s collective experience and brain power to extract insight and drive action.”

Test and scale

Once you know where you are going and have the right approach to get there, its time to put your strategy into action.  When it comes to high-impact initiatives like Big Data, prudent firms walk before they run.  This is often done for practical reasons.  For one thing, few senior managers have direct experience with complex analytical tools or methodologies. Secondly, Big Data programs can be costly to implement. Finally, organizational and IT challenges may initially limit data accessibility and quality.

Using pilots is a common sense approach when experience and investment are low, and uncertainty is high. By running a number of small tests, managers can identify resource requirements, learn by doing and build internal momentum behind quick wins.  Pilots could be structured around important questions such as which purchased products trigger the cross-sell of other items.  Or, they could be run in specific geographies, lines of business or with single products.

Finally, collecting and analyzing more data does not always lead to better results.  According to the former CIO of CIBC and McGraw-Hill Companies, Peter Watkins, “There is a common fallacy that more data is better. Best practice research shows that it is not the volume, rather it is the variety of data, and the better quality of that data, particularly on customer behaviour and characteristics, that enables smart analytics to produce rapid insight and speedy action.”

Properly executed, analytics has the potential to transform an organization. Tapping this opportunity need not be intimidating or unmanageable. Following an analytics strategy that aligns to marketing goals up front, adopting a holistic analytical approach and focusing on generating quick wins and learning will increase your firm’s chances of success.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Mobile marketing 101

You would have to be living on the moon not to notice the huge popularity of smartphones. Their ubiquity presents marketers with a rich channel or vehicle to build revenue, improve program efficiencies and enhance the brand.  Yet at the same time, this opportunity comes with its share of brand and investment risks.  To maximize ROI, marketers need to understand why mobile marketing is fundamentally different from traditional media and PC-based digital marketing and how best to engage consumers.

Strategy Analytics, a U.S. research firm, reports that the number of global smartphone users surpassed the 1B mark (1 in 7 people globally) during the third quarter of 2012.  In Canada, there are now over 10.5M smartphone users representing about 30% of the population.  Growth in both geographies shows little sign of abating in the short term.

This penetration has not gone unnoticed by companies.  It is triggering a significant shift in budget spend towards new mobile marketing programs. Companies dipping their toe into this medium regularly ask us to provide some key success factors to best leverage this new channel.  Below are 4 essentials that must be considered for any mobile marketing initiative:

1.        Mobile enables new brand experiences that go way beyond traditional advertising. Unlike passive advertising and promotion, mobile marketing allows brands to engage consumers in unique, personalized, ‘always on’ and location-based relationships. Mobile advertising is largely new to consumers often delivering new forms of engagement that other media can not offer, such as coupons that they can instantaneously redeem in stores or a Nike app that can help them with their workouts.

Pina Sciarra, former head of marketing for Coke Canada and ConAgra Foods, is one marketing leader driving the significant shift from traditional media spend to other mediums like mobile marketing.  “Mobile devices are the future, with a profound impact on education, consumerism, lifestyle management and program ROI. This medium has and will continue to change the way brands reach their consumers or more importantly how they reach us.”

2.        “Appvertising” is driving engagement.  Apps are the sine non qua of mobile marketing.  Consumers can easily download the app for their favorite brands and interact with them to make purchases, discover new information, and share with their friends. Though estimates vary, over 500K apps have been published with more than 15B downloaded. Apps are a form of advertising that many people actually welcome onto their phones, whether by downloading free applets or in many cases even paying for them.  Companies are using Apps in many ways, such as providing new services, tools or games to extend their brand; creating a mobile site so their customers have easier access to their offering or; serving up mobile banner ads to reach their target ‘on the go.’

3.        Mobile is essential for modern living. Canadians are using smartphones daily in every aspect of their lives. According to a 2012 Ipsos Reid study, Canadians rely on their smartphones for a variety of functions such as taking photos (70%), sending or reading email (70%), checking social networking sites (48%), and online gaming (11%). Canadian smartphone owners spend on average 2.5 hours per day on their mobile device. The majority (81%) of users feel they do not take advantage of the full functionality of their smartphones.

Some social networking sites are actually being designed around mobile devices, such a Foursquare, which utilizes the GPS location technology on smartphones. The phrase “there’s an app for that” rings true as smartphone functionality continues to increase, further driving market penetration.

4.        QR bar codes drive integration. Ubiquitous QR bar codes are now found in most traditional advertising vehicles like magazines, outdoor ads and newspapers.  Scanning QR bar codes with a smartphone reader enables consumers to more deeply explore a brand or promotion via micro sites, video, and audio tools. Leveraging these codes also drive stronger cross-program integration thereby increasing overall marketing effectiveness and efficiency.

Like it or not, every company and brand is being impacted by mobile marketing and the consumer dialogue it enables.  The corporate challenge is to figure out the best way to leverage this new medium while ensuring it integrates with the rest of the marketing mix. One prudent approach is to align your mobile programs against your brand strategy and value proposition, and begin modestly with a pilot project. Start with an app and mobile site, talk to your customers, learn from the experience, and expand from there.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Do you have too much IT?

These are heady times for technophiles.  New technologies like mobile computing, data analytics, social networking, and cloud computing has propelled IT back to the top of corporate agendas.  However, in the rush to exploit new applications, many companies can easily over indulge in IT with negative repercussions on cost, ROI and organizational performance.

In today’s competitive economy, IT exuberance is understandable.  Managers want to use breakthrough technologies to serve customers better, improve performance and ring out more cost savings from operations.  At the same time, nobody wants to go through the carnage of the early 2000s when firms threw away $130B in IT spending between 2000-2002 (source:  Morgan Stanley). Furthermore, CEOs can no longer ignore the high cost of IT in their search for bottom line savings.  In some firms, the IT budget is now approaching 12-15% of total corporate spending.

Managers are faced with a dilemma:  how do you take advantage of new technologies (if they are any good) without overspending and distracting the business?  Based on our research and client experience, we recommend the following maxims:

1.  IT must follow business strategy not the other way around – Typically, many managers look to get the latest applications, functionality and hardware before they understand how it would fit into the corporate strategy and workflows, or because they succumb to common phenomena like ‘feature creep’ or ‘keeping up with the Joneses.’  As a result, much of the IT purchased does not end up being deployed or effectively utilized.  There are a variety of reasons for this, including:  uneven management attention, insufficient employee training or poorly articulated requirements.

When strategy and goals dictates what resources are needed and when, less IT is inevitably purchased and more is utilized.  To make this happen, firms should tweak their cultures in two ways.  First, business sponsors should take the responsibility for better understanding existing IT assets and capabilities.  They should jointly propose with IT technical solutions that align to business needs and corporate strategy.  Second, the IT department must adopt an ‘inside-out’ approach to recommending technology.  To do this, they must be congruent with business goals, strategy and plans before seeking out the ideal IT solution.

2.  The organization is the focus – The role of IT is to support the organization, not the other way around.  It is common for impatient managers to throw IT resources at what appears to be a business problem, when in fact it is the workflows, structure and policies that are the issue.   Leaders need to first make sure the organization’s roles & responsibilities, decision rights and processes are optimized before considering new IT resources.

In addition, firms need to recognize that IT is an aid to judgment not a replacement for it.  A case in point is data analytics.  The potential of new DA technologies to better segment customers or identify operational improvements is hard to resist.  However, managers need to tread carefully to ensure their organizations have the capabilities, skills and focus to fully leverage the power of DA or implement its insights.

3.  IT simplicity should be the goal – Not surprisingly, the typical IT department is a mish mash of hardware, applications, operating systems, vendors and skills.  This complexity breeds more complexity when managers start to add capabilities while continuing to support legacy systems.   No wonder IT spending can quickly, quietly and unexpectedly spiral out of control.

Standardizing the computing platform across a company or business unit is one answer.  Many companies like Cisco and Zara have gained significant productivity improvements and enterprise-wide IT savings by standardizing on a limited number of platforms, applications and vendors.  In fact, firms can generate savings through scale economies and experience effects even when the individual asset is not the least expensive or the most capable.

Another way of getting more IT for less money is to move your computing into the cloud.  While valid security and technical concerns remain, there are enough case studies and organizational best practices to justify moving many IT operations and applications, particularly non-core activities.

4. Re-exert transparency and control – Mismanaged IT spending is a pervasive problem in large organizations, particularly where there are weak controls and spend opacity. We’ve seen companies with strict headcount ceilings simultaneously give free rein to junior IT managers to purchase hardware, software licenses and consulting services at their leisure.  A hospital we work with allows researchers to buy new hardware for every new project regardless of the presence of hundreds of under-utilized servers and licenses lying around.   In our experience, rogue purchases can account for up to 25% of an IT budget.

To counter this, management needs to apply the same spending rules and discipline to IT as they do with other functional groups and expense categories.  Furthermore, centralized purchase and finance departments should have more knowledge and visibility into existing IT assets and vendors in order to encourage the sharing of assets across business units and departments.

Many companies will flourish despite a minimalist approach to IT but to a large extent because of it.  A ‘less is more’ IT strategy can lead to lower spending, reduced business complexity and higher employee engagement. Achieving this is as much about strategic alignment and organizational optimization as it is about technology selection and resourcing.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.