Walter Adamson

What Best Buy could learn from David Bowie

On the 10th of January 2012 The Next Web noted how "David Bowie’s 2002 predictions about the future of music were pretty close". Bowie predicted, in 2002, that "The absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it".

Furthermore, as he rounded out his predictions he said something which really struck me, just as powerful as the predictions themselves:

"But on the other hand it doesn’t matter if you think it’s exciting or not; it’s what’s going to happen".

The day before, in Forbes, Larry Downes wrote about Best Buy (The People vs. Best Buy, Round Two) where he described the reaction to his first article Why Best Buy is Going out of Business...Gradually.

The responses to my article could, in the hands of the right senior executives, form the playbook for a compelling new strategy for Best Buy, one that could do far more than simply preserve the company’s existing market share. But rather than drink in all that free advice, the company’s responses simply wish it away. It’s more denial, now tinged with a dose of anger. According to Dr. Elisabeth Kübler-Ross’s classic psychiatric study, for a patient with a terminal diagnosis those are the first and second stages of grief.

In many years (OK, many, many years) as an entrepreneur, investor, and consultant working with Fortune 500 companies, I’ve found there are two kinds of senior executives. There are those who see mistakes as an opportunity to improve their business and those who waste their energy explaining away real problems.

Downes outlines reason after reason why best Buy needs to change, and how nothing they can do can change the progressions which are happening, for example:

• Online competitors are certainly part of Best Buy’s problem, but not for the reasons it thinks. What’s really going on is more basic. Best Buy just doesn’t understand its customers’ point of view.
• What I meant was that consumers easily adapt to alternative retail channels.  Before the Internet, there was catalog shopping and home shopping from television. For consumers, buying online was just the next step in an obvious progression of more convenient ways to buy.
• For brick-and-mortar retailers, however, the shift was jarring.  Moving online required new thinking, new management structures, and new strategies.
• To compete successfully against new online retailers, traditional retailers would also need to find ways to transform the expensive liabilities of physical locations with limited hours and high labor and inventory costs into assets that complemented rather than competed with the online experience.

Best Buy's leadership team's reaction, from what we see, is to create PR "crisis management" scripts for its staff, respond in rote, dig in, and deny. Nothing usual I suppose.

What is unusual is that David Bowie saw beyond his entire livelihood, his total current world view, and was able to articulate and to acknowledge its demise:

"Music itself is going to become like running water or electricity. So it’s like, just take advantage of these last few years because none of this is ever going to happen again".

Astounding really. Best Buy need David Bowie's help, don't you think?

Let's run over that quote from David Bowie once again:

"But on the other hand it doesn’t matter if you think it’s exciting or not; it’s what’s going to happen".

How do you break strong leadership teams out of their mindsets?

How do you demonstrate the "reality" which they cannot see?

What are the keys to action and follow-through and not just acknowledgement?

Please comment below.

Walter @adamson
http://xeeme.com/walter

Owning the customer relationship doesn't mean owning the customer

Do companies honestly think that they can "own the customer" these days? I'm astounded to say that some behave as if they do, in such ways as lack of transparency, creating false expectations, and creating artificial exit barriers. Mistaking owning the customer relationship with owning the customer may be part of the problem.

In the last two days I have had cause to ponder how significant organisations can be so backward and outmoded in their behaviour towards customers - it seems to me to be such a serious disease that it may even signal some early signs of corporate decay.

I say that because in the era of the transformation to social business, those businesses which cling to such outmoded behaviours will become increasingly more exposed, and vulnerable to their competition.

Case 1

At a small meeting with a team from a leading global IT business, a household name and a monster company, pricing models were being discussed for a new software product. The visiting US expert was here to explain that there are three customer segments - 1-100 seats, 100 - 1000 seats, and 1000+. For each segment there are three pricing models. These took some explanation, with lots of notes taken.

The bottom line is that the very small customer actually gets the same deal as the very large customer because there is a marketing strategy to try to capture more of that market. And in fact one of the pricing models for the very small customer just actually states the price - that's the formula - couldn't be more simple.

Whereas the formulas for the large customers are very complex, they have bonuses for current licenses and discounts for volume and then a killer "inverse bugger factor" at the end which magically brings their price down to the same price as the super small buyer needing only ONE seat.

One of the local sales staff asked - why this complexity, and why this magic wand thing at the end to come at with that number? The US expert blandly stated that all this was simply a ploy to make the big customers feel as if they are getting a good deal. It's just negotiation tactics.

Case 2

To move a domain from an Australian firm who describes themselves as a "global publicly-listed IT firm" I had to get an unlock key. Other registries list this for you in the domain details, and you just cut and paste. In this case it was only available by clicking a link and requesting it - and it then said "this has been queued and will be delivered to you in up to 72 hours".

Having to wait 72 hours was bad enough, given that it's readily available and should be visible within the account. Then I had a call, it was from their Support team. Why was I transferring? they wanted to know!

Needless to say I was annoyed to get the call, since whenever I wanted support it's very hard to get - which is exactly what I told them and the actual reason I was leaving, plus their prices were outrageous and up to 5 times what others were charging. Immediately I was offered a much cheaper deal. They know this story.

I declined the offer and went on to use the example that I could not even get my unlock online, that I had to make this request. "Oh I can give that to you right now if you like?" Yes, I like, that's the reason I clicked the request. So if you have this there online then why don't you publish it in my account console? I asked.

"It's a customer retention strategy - so we can call you" !!!! 

Where ARE their minds at?

It's beyond belief isn't it. The leaders of these organisations have strategies to deceive their customers, to mislead them, to falsify intentions, and to aim to retain them by brute force.

Not only do these behaviours indicate disorganised organisations which are extremely short-term oriented and with noone accountable for owning a customer relationship, but they think that they can "own" customers by keeping them hostage.

It's a clear symptom of conflicting goals withing the organisation - also a lack of clarity of purpose, lack of mutual commitment across the teams and business units and to the customer, and most of all a lack of respect for their customers. In other words the organisation is misaligned in terms of managing their relationship with the customer. Or maybe they ARE aligned - to short-sighted short-term goals?

I think that it's also even deeper - it's a sign of a corporate sickness. An entrenched malaise of the culture and the leadership.

What's the result with customers

The outcomes of this behaviour are "obvious", even if not so to the companies:

1. Customers are going to find out - this is the way things are in these days of social media;
2. Customers are going to feel cheated and disrespected - I did;
3. And they are going to tell their friends and colleagues - in an amplified social media way.

It's not always the case that they will cease buying from the supplier, because they may be hostage customers.

For example, take me and Qantas. I have 1 million frequent flyer miles, yet I dislike Qantas and their attitude in a multitude of ways. Why do I continue to fly with them?  Because the others are not much better (we have little choice anyway) and because I have the 1 million miles!

I'm a hostage customer of Qantas (not to mention my telco provider and my electricity retailer!).

Customer equity is destroyed

Whether I stay with Qantas or not, or whether people stay customers of my two case studies or not, it does not mean that staying with them retains their customer equity.

Thinking of customer equity in three parts explains how this is destroyed in these cases:

• Value equity - the perception of value is either betrayed, or it comes out to be nothing but neutral and an non-advantage in my examples. So there is negative or zero value equity, despite the fact I might remain a customer;
• Brand equity - the perception of their brand. It's bad, and made even worse when the deceptions are discovered, and even worse when a customer feels like a hostage;
• Retention equity - if a customer is staying a customer despite their feelings above, then they are definitely going to resent it. They'll be telling the 15 other friends how they resent it, as opposed to the satisifed customer telling 1 other person.

So on all counts the customer equity is destroyed, even if the customer's business is retained.

When businesses try to own customers, instead of focusing on how they can internally optimise and manage the total relationship, then they will always destroy customer equity.

Continual erosion of customer equity can only lead to one thing, provided competitive forces are in play - which is an eventual reflection of the total decline in customer equity in the valuation of the company.

It takes time to pass, but even companies with hostage customers can't destroy customer equity forever and remain unscathed. Hopefully these two companies can pull themselves up and with a bit of reflection get truly focused back on the customer.

Have you experienced "customer control" - how did you react?

Do you still buy from organisations who you disrepect - as a hostage customer?

Is owning the customer verus owning the customer relationship the root cause of these issues?

Walter @adamson

Social business and enterprise agility

There is always a danger in birds of a feather flocking together, because it can lead to group-think - a lethal corporate disease! But the connection between the social business and agility is a pet theme of mine and I was therefore immediately attracted when I saw that Ray Wang retweeted this, this morning:

rwang0 R Ray Wang RT @rossdawson: How the social enterprise drives differentiation

THAT caught my eye, and @rossdawson's post even more so because he recounted that although he had been saying for a considerable period that differentiation was the outcome, he was now focusing more on flexibility as an outcome of social enterprise.

My own hobbyhorse whenever I came in contact with execs or teams implementing "knowledge management" was to ask them why? Nine out of ten times they only had internally-focused answers, usually self-serving and mostly products of the project generating a life of its own.

I was always searching to see if they considered the prime outcome as organisational agility - giving the ability to move faster and to beat the competition. That's what my narrow-minded view saw as the only useful outcome of "knowledge management", but it never came up in these conversations.

Social enterprises can achieve that flexibility, and perhaps that's what I mean by agility. The ability to act in response and anticipation of the market. Even if that comes down to "just" effective continuous improvement I think that would be a huge advantage for most businesses.

We know that social business transforms relationships with customers, and that's about getting closer, better feedback, better service etc, and also about the company being able to use that information to actually change - being agile. So this idea of flexibility/agility through the social enterprise is very plausible. Whereas to me I never, in all my contacts, found it plausible or at least not achievable that "knowledge management" was going to be anything except another burden and overhead.

Coincidently, the same @rossdawson post has a paragraph about gathering and responding to feedback. Perhaps the subject of another post but only this morning I was laying out the case to a client as to why they should be using something like Get Satisfaction as opposed to their web developer's old FAQ system - I call it FAQ 1.0. My argument was essentially that Get Satisfaction isn't about FAQs, it's about customer service, connection, interaction, crowdsourcing, involvement and engagement. That's not what you get from FAQ 1.0 - not unless you have at least the $8.2m and 30 people that Get Satisfaction has focused on this one issue.

Of course if you have an inflexible organisation then FAQ 1.0 will be sufficient. But if you are a social enterprise then your systems need to support your transformation to agility.

Do you see any difference between agility and flexibility?

Is active continuous business improvement within a social enterprise enough to keep it on top?

How strong do you see the connection between the social enterprise and agility?

Walter @adamson

Vodafone kills complaint form because too many complaints !!!

Would a company in crisis management choose to disable it's online customer contact because it is getting too many complaints? If the company is Vodafone then the answer is yes! I know that's almost beyond belief but it is true.

Yesterday Vodafone Australia reinstated its online contact form which it had suspended while it "while it worked through a backlog of customer inquiries".

Vodafone Australia is currently the target of a class action with over 15,000 participants. This action is due in total to Vodafone Australia's appalling service delivery - customers basically claiming they were swindled and wanting out of their contracts and Vodafone refusing to release them. It's also in the midst of a privacy scandal, first denying and then yesterday sacking staff after being "tipped off by a newspaper reporter".

The class action and the lead up to it have undoubtedly reached the highest levels of Vodafone Corporate - this isn't just a Vodafone Australia fiasco. You just wonder on what kind of magnets the Vodafone executives have been sleeping?

Australia is in the midst of a series of El Niño events, including flooding across most of Queensland - an area bigger than combined Germany and France under water (but 1/4 the population of Switzerland). These unusual events seem to include the Vodafone PR disaster plus a couple of other monsters as we start into 2011. One other was specifically in relation to the floods, where retailer Bing Lee decided to donate to the flood relief fund but only on the condition that people Liked their Facebook page!

This was slammed by the very social media to which Bing Lee had appealed. (But, surprisingly their Facebook page remained unapologetic and actually accelerated their Fans and Bing Lee then donated $10,000 to the relief fund.)

The whopper, before Vodafone, was a loud and high-profile campaign by Australia's most renown troglodyte businessman Gerry Harvey condemning people who buy online as "unAustralian"!!!

Harvey runs a very successful retail chain, but he's most known for his head-in-the-sand on all things Internet most famously declaring in 2000 that online retailing was a fad and would die. In fact he's continued on that theme for a decade, being quoted as little as a year ago saying that "online retail sales were a dead end".

Harvey was upset that overseas online purchases of less than $1000 do not attract any sales tax for Australia buyers. The Australian Tax Office says that collecting the money would cost more than they gain.

The result of Harvey's ferocious campaign is that more Australians than ever are aware of the money they can save by purchasing online, and that Harvey now faces a monstrous backlash from store shoppers. Survey's showed up to 97% of people disliked Harvey's conduct of this PR exercise. Even Harvey himself expressed regrets, having been vilified across the nation, and remarkably said that "getting involved was 'suicidal'." PR agency FD Third Person were the geniuses behind the campaign, I wonder if they were paid on press clippings as they surely would have received a bonus!

So in summary El Niño has left a trail of rain and PR disasters in its track down under. Vodafone takes the prize for the most amazing customer relations exercise of the decade - suspending their complaints form - and Gerry Harvey's unAustralian online shoppers runs a close second.

What is your biggest customer relationship disaster story, or success story, for 2011?

http://xeesm.com/walter @adamson

Why PR and social media don't mix - Qantas culture #fail

A Qantas spokeswoman said there was "no suggestion it's come from our aircraft".

That's PR.

At the same time, no actually quite a way ahead of that time, Facebook readers already knew that the engine that exploded and fell into Indonesian houses and parks was from Qantas. They didn't even have to speak Indonesian, they just had to look at the photos.

• 
• 
• 
• 
• 

That's social media.

When an engine exploded on QF32, a Qantas A380 heading out of Singapore, their PR machine swung into full mode of mouthpiece to send the messages and defend the organisation. That's how we've traditionally viewed PR, so no real surprises.

In the meantime, in fact not "in the meantime" but a little ahead of the Qantas auto-responders, Indonesian Albert Fan among others on Facebook had already posted photos of the Qantas parts and how they had landed in parks and ripped apart a house wall. All with the nice new modernised "flying kangaroo".

Qantas always plays to an incident management auto-cue which reads "there was no danger to passengers" and they were "on message" for this incident as well. The Twitter pics show the shafts of metal protruding through the main wing, and we've seen aircraft go down with less apparent damage, so the incident control mantra just seems completely out of sync with transparency. In fact, a week after the event it came out - through media investigations - that there was severe damage that went within an ace of being catastrophic and which by any account posed an extreme risk to passenger safety.

Of course a single swallow doesn't make Spring. But it typifies it. I know Brian Solis and other PR thought leaders have views which eclipse the PR autoresponder role, but the example shows that culture plays a big role. Qantas is typically arrogant and self-righteous, but this time social media has really hung them out to dry.

While Qantas has never had a jet fatality, research company UMR found in 2008 that 66 per cent of Australians believed the airline was not safe. But people's faith in the airline had jumped to 83 per cent in September 2010, the research found.

What's the answer to these cultural roadblocks, in this case to using social media to connect and inform people - as part of PR?

I think it's the old story. You educate and motivate and train the ones who are willing to change - you do your best - and you sack the rest. There's a bit of culture change going on at Qantas, but clearly it hasn't touched on PR yet!

How do you think Qantas missed the Facebook photos - pure arrogance or just incompetence?

What's the hardest thing for PR to change to accommodate a social media participation?

http://xeesm.com/walter

Related articles

• Qantas plane in emergency landing (bbc.co.uk)
• Qantas jet engine fails (theage.com.au)
• Report: Qantas plane makes emergency landing (sfgate.com)

Banks behaving bravely - ASB Bank's FaceBranch

ASB Bank's Facebranch, said to be "the first 'Virtual Branch' application of its kind to be launched by a bank on Facebook", isn't especially interesting to me for its Facebook functionality but rather for its fronting up to the usual corporate fears of social media.

The three most common themes among business executives hesitant about social media are still:

• How do we "protect" the brand?
• What control do we have over people saying bad things about us?
• How do we control what our staff can say?

Bad Banks recently nominated ASB Bank for the 2009 Roger Award, given annually to the "Worst Transnational Corporation Operating in Aotearoa/New Zealand". Bad Banks also has ASB prominent on their Bad Banks Facebook Page. So in the face of the flaming in social media and on the street against the ASB Bank you'd think that their executives would be reluctant to open up for more.

But not so, and good on them.

Even more surprising since they are wholly owned by the Commonwealth Bank, one of the big four Australian bank oligopolists (Commbank, ANZ, NAB and Westpac) where service innovation is an oxymoron - in the main comprising waves of PR campaigns masquerading as consumer service and information. (Through I have to admit the ANZ's Barbara the Banker campaign and ASB's Goldstein are cute PR.) 

There's a good review of ASB's Facebranch on Christophe Langlois' Visible Banking blog, where he calls labels it Facebook Branch 1.0  because of its shortcomings, while giving it couple of stars for effort.

I'd think ASB is well aware of the basic state of the current initiative, but it still serves them well, and it opens a channel and a challenge for them to now get to more fully understand. There's quite a lot of design thought gone into this effort and it all hangs together quite well, including the avatars.

Let's face it, if more businesses took this first step of getting Facebook integrated into their customer service in a well thought through way, as ASB has done (they're running a dedicated team of 8 staff in FaceBranch) then it would a huge step forward.

"We believe this is the first 'Virtual Branch' application of its kind to be launched by a bank on Facebook, anywhere in the world," says Anna Curzon, ASB’s general manager of internet banking. "It's really exciting for us to be able to run this application on Facebook and we're working closely with our customers to understand more about what they want from us in social media."

Just as a quick comparison to other banks and their social media efforts, Citi and 1st Mariner and USAA® (USAA Federal Savings Bank) and Mechanics Bank are among those recently quoted as having advanced digital and social media efforts here are some factoids:

• ASB Bank's FaceBranch has nearly 5,000 fans now, a few weeks after its launch;
• Citi, for all its marketing might and global presence has 3,500 fans of its Facebook Page, which is just a Wall and with only 2 entries since March 2009;
• 1st Mariner, "proudly located in Baltimore" home of The Wire, has a much more active Facebook Page than Citi and provides more content - such as branch locations complete with FourSquare links (neat!) and videos from the managers - but has only managed to attract about 1100 fans;
• The USAA Federal Savings Bank prides itself on being innovative, and according to it's Facebook Page was just named the was named Best in Class for mobile banking "for the second year in a row".  There is no doubt that their FB page is far more advanced than ASB. Its My USAA tab/app is the whole box and dice of Internet banking integrated into Facebook.  There's lots of activity, with the exception of Discussions which seem to have fallen through the cracks, and there are over 100,000 fans of this bank! Impressive. But in any case let's take ASB's FaceBranch claim at face value, there is room for everyone in these innovations.
• Mechanics Bank is a little off the Facebook scene, as I found them hard to find and that they have not even taken advantage of their potential short name facebook.com/mechbank (as in www.mechbank.com) but they do have a Facebook Page with 28 fans. It has 3 posts for this February and none since. I would think that a business like Mechanics Bank would really be able to capitalize on their community connections and make their FB Page a real source of connection and business. They have plenty of content on their website.

As far as other Australia NZ banks go, just as a quick comparison, I couldn't find any Facebook Page for ASB's owner the Commonwealth Bank; Westpac has 74 fans; the ANZ doesn't appear to have a Page although their "Barbara the Banker" PR campaign has a user page with 166 fans; the NAB doesn't appear to have a Page but it's wholly-owned U-Bank has nearly 5,500 fans - U-Bank has a strong social media presence since it is an Internet-only bank. In New Zealand none of the ANZ National Bank, the Westpac NZ or the Bank of New Zealand appear to have any official Facebook activity, at least none that appeared in my searches.

So the ASB Bank stacks up very well considering their FaceBranch is only a few weeks old.

Hat's off to ASB, I like the effort and it's part of a shift which is important for business.

Rather than inventing a whole lot of "Facebook Branch 2.0" ASB is going to listen to their customers, from the perfect vantage point of their Facebook Branch 1.0, and develop what customer's feel is most useful.

To me, businesses are severely underestimating the power of Facebook as an adjunct to their digital engagement, especially services businesses, and I can only say again that if they got their minds around the step that ASB has taken then they'd see potential for themselves. I'm especially interested in how small and medium businesses can use Facebook for eCommerce and migrate that aspect from their current websites.

Which bank have you seen with the best Facebook presence?

What is the best use of Facebook for SMB and eCommerce/Customer Service?

http://xeesm.com/walter

Related articles by Zemanta

• USAA Bank Named Best-in-Class for Mobile Banking (eon.businesswire.com)
• ASB launches First Virtual Branch on Facebook (flitter.co.nz)

McKinsey - social media critical issue for business leaders

With the announcement of the Neilsen McKinsey Joint Venture NM Incite, the global managing director of McKinsey, Dominic Barton, said: "Social media is an increasingly critical issue for business leaders and an area of untapped opportunity for many of our clients. This joint venture will equip institutions with real-time insights to help their leaders drive better results".

I guess that statement just might be the last nail in the coffin of the "passing fad" brigade of social media for business doubters!

So where in particular does McKinsey see social media providing insights? They mention three in the press release:

1. measuring and improving marketing effectiveness,
2. product-launch optimisation and
3. customer service experience.

It's interesting, and perhaps insightful given the access they have to the C-level of the world's leading corporations, that those are the areas of the highest initial priority. Well I guess we can't be certain that they are really the most important areas, they may just be the most saleable areas, but at least we can say that of all the choices available to McKinsey these are the areas which most interested them for their corporate clients right now.

Presumably, for we lesser mortals, we should take heed and shape some of our own social media expertise into these themes which McKinsey has kindly hummed for us?

To wrap up, the JV and the firmness of the proclamations about social media and big business surely represent some kind of a tipping point? Dominic Barton goes on to say:

Senior executives of global companies instinctively recognize the possibilities of incorporating social media insight and capability into their organizations. They simply need help to make it a reality.

Aside #1: I find it refreshing that "innovation" wasn't thrown up as the catch-all for solving the ills of a corporation in the new realm of social media.

Aside #2: Interestingly Dominic Barton has a very thin social web presence, from what my googling turned up, or didn't turn up as it happened.

Aside #3: Most amazingly @servantofchaos predicted this outcome 4 years ago!!!

http://xeesm.com/walter

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Value is in the mind of a customer not a persona

Image via Wikipedia

At Social Business One Wim Rampen discusses value:

Most companies (their marketing departments in particular) are stuck in telling Customers what value for their money they get, based on the flawed thinking that the Customer derives value from the product itself. Yet, they are completely ignoring the Customer’s role in the process of value creation.

It's a theme which resonates with me as I've often found that people, even today!, don't clearly understand:

 

1. The difference between value, benefits, advantages, and features; and,
2. That value is in the mind of the ultimate individual buyer.

What I mean by the second point is that it is a person who ultimately creates a value equation, even if assessed by a team or group. The person who will wear the organisational results is the one who assesses the impact on their career, status, integration capacity etc etc. This is also the person who has to navigate the purchase and the implementation through their business fabric.

Value = Benefits - Cost

So while Value = Benefits - Cost might look like a dry equation there is not only emotion involved but also much subjective assessment of "benefits".  Even products/services with clear tangible benefits, and those which rank 1st in that regard, may not win at the end of the day because of the personal assessment of "costs" may exceed those which match the buyer's personal acceptance profile.

Social business and understanding value

Wim makes a couple of key points, namely that marketing messages and departments don't address value because they ignore the customer's role in creating value, and that "listening" in social business does not necessarily lead to participation in conversations which help you understand how a customer create's value from your product.

So energy directed at understanding a potential customer's use cases in important. Beyond that it is also important to listen and contribute to some additional factors. The buyer's buying process is key, to understand as much as possible is important, but even more important if you can suggest ways to help buyers through their own buying processes. The way buyer perceives their buying process adds to both the cost and the benefits of a product, so this is a crucial element.

You should also be listening for opportunities to understand the value landscape which the customer can potentially create from your product, as this will not only inform discussions about how value can be created, but whether or not you are capturing your fair share of that value.

In closing, I noticed one comment on Wim's post which said that social business "only works well for companies that deliver a competitively superior product". I don't believe that, or at least I believe something which I think is closely related but in disagreement.

Social business helps you verify and explore (discover) how customers are creating value from your product, and how much.

Can Marketing sell?

And I also noticed a comment which said, after having considered the post, that marketing "should and could focus" on "the customer's job" i.e. the value the product creates. I'm not sure that "marketing" can ever do that, because of the exact point that marketing cannot get close to an individual, and therefore cannot be aware of the final value = benefits - cost equation. That is Sales.

Marketing deals with features and advantages. Sales has to translate those into benefits with a value for an individual. That's the tough job which Sales always faces.

Personas

Often, "personas" are created to represent buying segments of people, especially where internet sales are the channel e.g. Software as a Service (SaaS). A persona is an approximation to a person and therefore an approximation to a value proposition. Creating personas and associated value propositions is an attempt to automate the sales processes, even though it will also shape the marketing messages. For example the "find" part of a website would be marketing, and the next step towards sales is all about Sales and creating personified value through clear exposition of benefits versus costs.

Because this online attempt to create "value" is devoid of buyer emotion and ignorant of their buying processes then it can never represent true value but is a representation of perceived value to a persona which, in the case of SaaS, can be "tried before you buy" and therefore tested by a real person.

What's your view of persona, marketing, sales - can Marketing rise above features and advantages?

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Social media a waste for banks

We know that social media, or what we now describe as social business, is great for improving the customer experience, building loyalty, improving retention, and for gaining really hot for new ideas for services - business innovation. But for some banks this is a waste because on the face of it they don't need to go to this trouble in order to continue to generously reward their shareholders (and executives).

Take the Westpac Bank, one of 5 banks of the banking oligopoly in Australia.

• On May 4 Westpac announced a record profit, "shatters record" - not bad coming out of the GFC
• On May 5 a survey found a full 43% of respondents to a national survey voted this same Westpac the worst bank in Australia for customer service;
• On May 14th it was reported that David Cunningham, general manager of marketing and products at Westpac in New Zealand, doesn’t believe there is such a thing as innovation in banking:

“We all offer very much the same thing,” he says. “The best approach to innovation is to arrive best dressed and last—then you can get your offer better than the others.”

And yes Lucy, this is the same Westpac which topped the list of Marketing Disasters 2009!

Bottom line

1. It shows the power of being in an oligopoly. For example Commonwealth Bank, one of the Australian oligopolist banks, just reported it is on target to produce a full year profit result of close to or above $6 billion. Not bad for a consumer bank in a total population of 22 million people AND over the period of the GFC; and,
2. It shows how insular the thinking in any organisation can become when it's just a matter of apparently turning up best dressed - again a function of lack of competition.

Social media investment not a priority

My byline was actually serious. While the demise of banks has been forewarned by many as we head into the full power of Gen-C, and in time it may be true, the impact over the next decade in markets where there is little competition will be small.

• Banks are losing the customer and innovation battle, Brett King
• Betting the bank, Jake Pearce

Of course my supposition begs the question of competition. How about the new forms of competition which will attract Gen-C's attention, the ones which allow them to control more of their own destiny?

I think that these new entrants will thrive, and they'll provide alternative options which will grow. But in an oligopolistic world as in Australia where the five oligopoly banks control 80%+ of all mortgage loans and 90%+ of small business loans to the entire country, then they are not going to be severely dented even over a decade.

Banking isn't like IT where the industry has to reinvent itself every decade. As Huub van den Berg , former corporate relationship manager at Rabobank in the Netherlands, says "Apart from shifts in technology, there aren’t really going to be any big challenges to banks".

Therefore, if you are a bank executive reviewing costs, and investment proposals, why in your right mind would you waste your money on social business initiatives when you can just raise your loan interest rates by say 25 basis points and cut back on customer service expenses?

OR?

Are there significant ROI opportunities for entrenched banks even where they can raise margins at will and provide poor customer service and return record profits? What do you think?

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Twitter is news, not social media, or is it?

Partick Stafford, a journalist at SmartCompany reports that "Twitter is news, not social media".

I think he's way off the ball. Sure, the survey he quotes says that, but simply reproducing the press release doesn't contribute much to the conversation. And sure the survey is correct, because it reports what the masses are doing but not what the most effective use of Twitter is in enhancing customer engagement.

I'm not saying that Twitter is not a good broadcast medium, for some it is a fantastic channel to reach very large networks. What I am saying is that this one use of Twitter, although it may be dominant, is not a guideline as to how Twitter should or can be used.

Here's what I commented at SmartCompany:

Hmm, pretty much a zero value piece of "news". Of course Twitter is mostly just picked up and used as a broadcast medium, that's what SmartCompany does for example. I've tried tweeting back to @smartcompany from time to time just to see if they are listening and never had an answer. The study is just reporting one reasonable use of Twitter, but more often than not this use is not a well considered and thought out approach it is usually a knee jerk reaction or a lazy way of "getting into" social media.

The smart firms are leading by miles with Twitter as a communication tool. It's a minority for sure, and this is all the research is reporting. Who would care what the research is reporting - it's about what you and your company can do to get ahead of the mass not be part of it. If you'd like to add $100 million a year on your valuation, like Zappos for the last 5 years, or be the #1 social media savvy company in the US, like Microsoft, you don't get there by using Twitter solely as a broadcast channel.

In fact more people are now coming to Microsoft's online support resources directly from Facebook and Twitter than from other parts of the company's own website.

Twitter is a tool in a broader customer engagement strategy, for most firms, not all but most. You don't get more engagement by more broadcast alone. Isn't that obvious?

htttp://xeesm.com/walter

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