Over the past few weeks, I’ve been noticing that, every time I get in my car, my cell phone reports my destination, along with the expected time of arrival and the density of traffic on the way. I didn’t really pay much attention to it until I realized that the destination pops up even when I haven’t entered it in my calendar or anywhere else. With the cloud systems it’s linked to, my cell phone can predict where I’m travelling to at a specific time! And because it wants to be nice, it also offers me some addition useful information to make my travel more convenient. I haven’t decided yet if that’s great or scary.

If you can capture and analyze large quantities of data, you can detect specific patterns of behavior.

I started wondering and investigating how my cell phone can know where I’m heading at a given moment, even if I haven’t entered that information anywhere. I soon found out that it makes predictions based on my past travel or behavior patterns. The computer to which my cell phone sends data on my movement predicts the destination that I most often travel to at similar times of the day from the location where the notification pops up. Apparently, my life is so routine and predictable and the patterns I leave behind are so reliable that the computer knows exactly when I’m going somewhere, either because of my routine behavior or the things I put on my calendar.

My phone knows that I play golf Thursdays at 4 pm. So it automatically sends me there. Scary? Click To Tweet

We’re most willing to give up privacy for the sake of convenience

If I had to decide whether that’s great or scary, I’d say that for now it’s still great. By taking a single glance at my cell phone I can see when I’m going to arrive at my destination and how heavy the traffic is on the way there—because the speed is being communicated by the cell phones of all the users that are travelling that same route.

Before, I had to open Google Maps and enter my destination in order to get info on the time of arrival and the traffic jams. For someone who’s always late, info on how late he’s going to be and where the traffic jams are is extremely important because he can use it to apologize to all those who are waiting for him. 😉 It’s great if from now on I don’t have to do a single thing in order to get this info.

Well, while I was thinking about how even just a month ago I was using the Google traffic services and how I no longer have to type on the phone and enter the address while driving, and how good this new solution is for me and other road users who no longer have to type in the addresses, I came to the conclusion that this may only be leading me to the point where I’ll also give gradual consent for my behavior patterns to be used for someone else’s benefit, not just my own.

Is the Amazon Dash Button just a cover-up for something that’s not socially acceptable yet?

If my rides are repeatable to the point that they become predictable, certain predictable patterns can most likely also be derived from my daily purchases—probably even more easily. I imagine the moment is not far away when there’ll be a cart waiting for me at Mercator with an integrated tablet that will recognize me and show me my shopping list, which for the time being my wife still emails me every time I go to the store. Alongside my typical shopping cart, the tablet will also suggest products that I’m statistically most likely to grab and add to those that make up my typical purchase. If nothing else, such a shopping list will seem great to me because the items on it will be listed in the logical order of my route through the store. My wife only writes down what we need on the list, but not where to find it in the store. Another advantage for me!

Increasingly more convenience, increasingly less privacy. So what? I’m lazy. Click To Tweet

In a physical store this will probably remain difficult to accomplish for another few years, but it seems that progressive online merchants are actually already doing something similar, but in a “soft” way. I’m starting to believe more and more that in the long run Amazon doesn’t really need its Dash Button at all. It’s probably more of a cover-up for making people feel that they are deciding or communicating their needs on their own, even though Amazon is probably pretty good at predicting them and could prompt people to confirm an order at its own initiative. If it doesn’t make too many mistakes, we’ll probably grow to like it eventually. Convenient and inexpensive easily beats privacy concerns. Instantly. Always.

Technology is slowly but surely winning the battle for customers.

I could present lots of other examples and similar practices, but they all have one thing in common: technology has started to change the approaches established in the physical world. It’s winning the battle against the physical world incredibly quickly, taking advantage of our big weakness: human laziness and desire for convenience. The companies that are aware of this are introducing innovations to their sales strategies and customer service by investing in technology and new approaches that gradually erase the borders between the physical and digital worlds. Other companies only watch from the sidelines and pretend that nothing’s going on or, even worse, they really don’t see anything at all. We can help you win their customers.

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P.S. Do you need some more ideas about how technology can help you raise your sales, marketing, and customer service to a completely new level?

We’ve written an interesting manual about this and I guarantee you won’t get bored reading it. Don’t put it off another day! Whoever learns something new first can exploit its advantages longer.

The more I think about it, the more I’m convinced that “great” things are only possible if you develop a new customer or user habit. If you focus your development efforts only on meeting an already familiar customer need in an already familiar way, you’re far from creating a global business megahit. Basically all your options rely more or less on the fact that you can provide a cheaper solution to a problem than all the others that are already offering one. That is an extremely high-risk strategy if you ask me.

Innovators have never had better conditions in all of human history

If we don’t seek business ideas in creating solutions to problems that may not even exist yet, it’s very unlikely that we’ll ever truly lead the game. Actually, we don’t even give ourselves a chance to. This doesn’t have anything to do with the next industrial revolution or better: the invasion of technologies that have an extreme effect on the individual and are changing society as never before. Just remember Henry Ford’s comment: “If I’d asked people what they wanted, they would have said ‘faster horses’.”

By 2025, practically all electrical devices will be connected to the internet. Click To Tweet

One of my last posts has generated lots of comments. There are two types of comment: that you don’t agree that practically all electrical devices will be connected to the internet by 2025 and that you see no need in also connecting people to the internet. This time around, I’d like to use a single example of use to explain that this may not be so absurd after all. You only need to look at it more gradually. Through gains.

We keep moving the line between providing assistance and creating solutions to problems that don’t even exist yet

Let me use a very specific and practical example. I like to play golf. I’m not interested in counting the number of times a year I take time to play golf, but I would like to know the statistics of all the games I play in a season. So some time ago I bought myself a smart watch that counts my steps and strokes, and tracks the elevation difference I cover, along with exposure to UV radiation, my heart rate, and calories burned. When linked to my mobile phone, the watch also gathers weather information during my golf activities. With a watch featuring several sensors linked to a cloud via my mobile phone, I can collect a range of useful data that allow me to keep track of my golfing fitness and physical activity throughout the year. Even my golf instructor would be happy to get such data (and most likely also my wife). In the future these two will probably be joined by my GP, insurance company, and many others. It sounds perfect. Almost perfect. If you have such a watch, you no longer have to manually collect data on how you play. All the statistics are available to you via the internet at any time and any place – as well as to anyone else you give permission to.

But the problem is I don’t like wearing a watch. Especially when I play golf. It really bothers me every time I swing my club (even if I wear it on my right arm). That’s actually why I never play with a watch, even though I bought it for precisely this reason. Sensors would be a good solution for me. This watch actually has them, but I don’t want them to bother me. So I started exploring and I found it. An almost perfect device, again.

Ralph Lauren has designed a sports shirt that captures real-time biometric information by measuring the amount of sweat, heart rate, breathing intensity, and so on, during a person’s workout. The company also sells golf clothes and so the sensors on this shirt will probably soon be able to measure golf strokes, too. Almost perfect. The shirt costs approximately the same as the smart watch I bought two years ago.
 

The key factor for the success of any business idea is . . .

Let’s be realistic. Wouldn’t it be great if we didn’t have to use such high-tech shirts, watches, mobile phones, and so on, and have a multitude of apps that capture data from various sensors? It would be much more “frictionless” to me as a user if I didn’t have to think about it at all. If I happened to be interested in my golfing statistics, I’d simply review the data that’s being collected in the cloud. If I weren’t interested in the statistics and weren’t looking for data, cloud data storage or use wouldn’t cost me a dime. In any case, various golf equipment manufacturers would most likely be interested in offering free storage of data on golfers’ activities and would even encourage us to use this service. They could most certainly use these data to improve their segmentation and target their leads more successfully, accurately, and in a timelier fashion. Over time we’d end up taking all of this for granted. But whether this is actually to happen in the next eight years already, as Klaus Schwab predicts in his Fourth Industrial Revolution, I can’t say.

The most important success factor for carrying out business ideas is their timeliness. Click To Tweet

What I do know is that this is the direction we’re heading in and that the limits of what is acceptable are now changing faster than ever before. And I know something else. The most important success factor for carrying out business ideas is their timeliness. Arriving somewhere too early hurts even more than getting there too late.

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My last post, “Digital transformation isn’t what you think it is,” has been met with exceptional response. I took that as a hint that I need to write more about marketing and sales technology and the opportunities for new business models that new technologies offer, and to keep publishing stories about digitalization in practice. So, this is the start of a specific series of posts on using technology to win new customers.

Can technology be your competitive advantage?

From the business perspective I see technology as doping, but without the limitations and restrictions. If you can afford technology early enough, when the competition doesn’t have it yet, you can create a competitive advantage for yourself. If you’re too late, you’ll have to introduce it anyway to keep from lagging behind the competition, which has broken away from the pack and increased its lead in the meantime. Of course, the technology has also gotten cheaper and easier to introduce effectively. Unfortunately, when introducing new technologies, the late adopters usually only try to minimize the pain and hardly ever make any progress on the market in the absolute sense. It seems to me that the global economy works this way.

The most technologically advanced environments create the greatest added value and reinvest in technology the most. We’re in some sort of a vicious spiral in which followers can only become leaders if the leaders make a big mistake or if the followers produce an innovative new product and use it to create a temporary monopoly or gradually change their rivals on the market. I don’t want to go too much into limiting the use of technologies as a survival method of “traditionalists” here. I find this approach pretty narrow-minded, bureaucratic, and European.

The “wow” moment: from automated to intelligent processes in practice

In addition to the feedback I received on my last post, this time around my reflections on technology were also prompted by a few other things that have happened to me recently. At work I suddenly became aware of a new technology that has crept into my business life uninvited—that is, on my smartphone and PC, and as part of the services I use on both these devices and get from my current cloud computing provider.

Automated intelligent processes for increasing productivity are no longer science fiction. Click To Tweet

More than half of FrodX’s turnover comes from doing business with international clients. Even the few Slovenian companies we work for are actually subsidiaries of international corporations. Accordingly, a significant portion of our business correspondence takes place in English. So a couple of days ago, I received an English e-mail from a client that wants to expand our solution for the Adriatic region to some of its branches in Central and Eastern Europe. As they were preparing teams to roll out our solution onto additional markets, they asked us to send them some of our instructions, so they could add them to their in-house presentation. No big deal. But this was the first time that I noticed a new icon in my online e-mail client. Next to the icon for linking this e-mail to a person or sales opportunity in the CRM system, there was also an icon announcing that this email was very likely connected with a task I had to accomplish (an action item). Out of mere curiosity I clicked on the icon and a message popped up saying what activity the sender expects me to complete and by when. Yes, someone else had read my e-mail and the system automatically assigned me a task that it had inferred from the e-mail message. An even bigger surprise followed after I confirmed it. This task appeared not only in my Outlook, but also in the CRM system with the concrete customer and the related sales opportunity. It even included the deadline, which could be deciphered from the context of the message.

We gave up privacy long ago

At first this gave me a terrible feeling. But not for long. Yes, I do want someone else to read all those 300 emails I get every day and single out those in which the sender demands or expects something from me. And to put all the ones referring to current clients in order by priority (evident from our CRM system) and to rank those with reference to potential clients by their purchase readiness or sales potential (evident from our marketing information system).

Can you imagine how my efficiency would increase if someone processed all 300 emails I get on a daily basis? And how much the service would improve for our clients if the system selected priorities intelligently, based on mathematical criteria? If only it worked as perfectly in Slovenian, too!

We gave up privacy long ago. Click To Tweet

Now I could also write about how surprised I was the first time my smartphone sent me a message based on a calendar entry in the CRM system that I should get going if I wanted to be at the meeting on time because there was some heavy traffic on the freeway. Or about a handful of other technological innovations that actually save me a lot of time and make my work environment much more comfortable. Ultimately, they allow me to be more efficient at what I do. But this only has an impact as long as the competition isn’t operating the same way or even more efficiently.

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P.S. What technology do your sales and marketing departments have at their disposal? Do you know what new advantages the “smart” sales tools offer compared to the CRM systems we’ve known for the past ten years? FrodX’s new manual presents key new technological solutions that can help companies win new customers. Check them out.

Let’s face it: most providers that develop software, sell servers or disc arrays, or offer web design services are not able to actually help you digitally transform your business. In most cases, these are actually just traditional IT service providers promoting themselves by riding on a wave of current hype.

Digital transformation entails much more than just digitalizing a process or two and introducing paperless operations. I think it first and foremost entails a key shift in business models and changing the relationships between the participants in a business ecosystem. This shift cannot take place without modern ICT and, of course, the consumer habits developed in this era of mobile and Internet-connected devices.

Digital transformation is not just an IT project. At least it shouldn’t be. Click To Tweet

Uber and Airbnb are usually cited as examples of effective digital transformation. Every time I hear this I wonder if they’re truly IT innovators or merely innovative solutions created by people that were first and foremost experts in the activities their two companies specialize in.

Slovenia also has examples of effective digital transformation

One of our own clients is a great example of effective digital transformation in Slovenia. It’s a bank that believed customers most valued quick, easy loan approval when they went looking for a consumer loan. At least for most customers, this was even more important than the loan costs or anything else. So in order to increase its competitive advantage, the bank had to be able to approve consumer loans faster than all its competitors. In order to do that, it had to use a completely different procedure for assessing customer creditworthiness than others were currently using.

The bank saw an opportunity for assessing its potential customers’ creditworthiness by relying on external sources linked to an online app, through which customers can obtain a loan within minutes without consulting a banker. After a few months of marketing this type of online loans, the bank’s share of consumer loans is significantly larger than its share of open transaction accounts, which may indicate that the product has been a success. In the long run, if it turns out that all the loans approved this way are also being paid off, this will definitely be a great example of digital transformation in Slovenia.

Why is digital transformation far more than just an IT-project?

At least to me, the above example proves pretty clearly that digital transformation is far more than just an IT-project. At least that wasn’t the essence of this project. In the end, of course, IT helped make it happen, but the first initiative came from an entirely different place. It is true, though, that the people promoting the project had to have very good IT literacy in order to identify this business opportunity in the first place.

Digitalization won’t get you wanted results unless you engage in some real conceptual reflection. Click To Tweet

If you turn to FrodX asking how to go about digital transformation, we’ll always suggest using a product/market fit analysis, at least as a first step.

First reflection, then digital transformation

To sum up, digital transformation of your business operations is primarily about seeking out the unique aspects of your product that make it significantly more attractive to the market and target audience. It may be enough for it to be cheaper, something you achieve through a more direct customer relationship that cuts out the middleman. Maybe you have to make it possible for customers to access your product faster and on a self-service basis. Maybe you need to lower the risk associated with making a purchase decision. In any case, you must first analyze or reflect on how you can meet your customers’ needs in a different and more customer-friendly way. Once you know what your uniqueness is, find a partner that will help you implement these ideas. Digitalization will probably be inevitable. But you won’t get the results you want unless you engage in some real conceptual reflection.

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P.S. We can help you figure out how you can be the solution your customers are looking for in a unique, customer-friendly way. Send us your particular challenge!

A few days ago, a high-profile international corporation informed us that it had selected us to work with them. We competed in a tender, which is usually a very poor starting point for us to win new deals, but we sealed this one anyway. I couldn’t wait to share this excellent news with a good friend of mine, who didn’t believe we could win a deal from a company that is also used as a major reference by what he felt was (had been) a provider very similar to us. I invited him out to dinner and of course expected that he would ask me “Why do you think you landed the deal?”

We hadn’t even made it to the aperitif yet when this question was already on the table . . .

It’s best to use an example to explain it

As the parent of three children, I long ago realized that the most effective answers are illustrated with an example. This is the fastest way to reach my goal and I run the least risk of getting yet another “why.” I, myself, also seem to memorize abstract things most easily through examples. One way or the other, explaining through examples has become second nature to me. I realize that in the business world, too, I’ve become an advisor that has an explanatory example ready for every answer. If I can’t find an example, I doubt the accuracy of my own explanation. So that evening I also used an example to explain to my friend why our new client identified us as a unique solution among all the other providers.

It’s easiest to explain and memorize abstract things by using examples. Click To Tweet

 I enlightened him with a single sentence and a 30-second video:

“Look at this ad and tell me what Harley Davidson is selling*.”

When I saw my friend nod approvingly while watching the video, I knew I managed to yet again avoid another “why.”

Aha, I see. What your clients are actually buying is not the newsletter or a content marketing provider. They are essentially not looking for CRM or a marketing automation system. They’re looking for someone that understands how their buyers’ purchasing habits have changed and can help them find a (new) path to them,” suggested my friend immediately.

Exactly. All the rest is just finishing work for the remainder of the project, in which the client wants to limit the risks and simplify implementation (for himself) as much as possible,” I added.

Uniqueness lies in . . .

I nailed it again with this example: Harley Davidson is well aware that their uniqueness is not at all connected with bikes, just like we’re aware that clients don’t choose us as a content marketing agency. In fact, the last twelve clients we’ve won told us they had chosen us because:

  • We knew how to develop a strategic perspective on their activity;
  • We managed to help them see their customers’ new purchasing habits through different eyes;
  • We can provide comprehensive solutions with a flexible business model at the implementation level.

So what makes you unique? Click To Tweet

What about you? Have you already thought about what makes you unique as a provider and why you’re the best, most logical choice for your target group?

 

[email protected]

 

*For years Harley-Davidson’s CEO argued that they sold an experience, and the bike just happens to be a fundamental part of that experience. One of their execs is quoted as saying »What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid of him.« Eventually the board got on board the company concentrated on the goal of delivering this very specific experience and annual revenues grew from $1.5 billion in 1996 to $4.6 billion in 2003 and net income grew from $143 million to $761 million over the same period. Their bikes are technically unsophisticated and don’t represent good value for money compared to other manufacturers, but when you buy a Harley-Davidson it’s not just the bike you’re buying into.

In business (as well as our everyday lives) we can always find three types of people:

  • Those who aren’t afraid of technological advances and changes, who know how to adapt to them and use them to their advantage;
  • Those who stand firmly behind their view that the technologies that are permeating our lives are harmful (to something, anyway);
  • Those who haven’t decided yet which of the two groups above they would like to join.

But the fact is that technology is increasingly becoming an indispensable part of our lives and business. Those who don’t accept that are bound to fail. Let me use a practical example to explain what I’m trying to say. I’ll tell you a story of what was going on a few years ago in a village close to where I live.

Social listening in practice

For twenty years, a man (let’s call him Frank) managed a family business, a trade now known as “catering.” Practically no event took place without his catering services. He covered all larger weddings and other kinds of social events. He was a local monopolist because he was practically the only provider for all those years.

Frank had made a good name for himself in his local environment. He was known for high quality and also had excellent business skills for that time. He found the majority of his sales opportunities while having his morning coffee at the local pub. He also got plenty of hints from the local priest, with whom he had a drink every afternoon at that same pub. His business largely depended on the local gossip about upcoming parties.

The times to find good sales opportunities while having a coffee at the local pub are long gone. Click To Tweet

Then the economic crisis came. The volume of orders dropped in catering, too, and his clients were less willing to pay as much or even at all. To maintain his family’s standard of living, Frank had no other option than to expand his business to more remote villages and towns. But lo and behold, there he could no longer use his routine method to win new clients. Seeking sales opportunities through pub gossip and local priests was suddenly impossible without personal contacts. And he needed time to establish these. Lots of time, which he didn’t have.

Because Frank was busy trying to grow his business elsewhere using the same methods as before, he paid less attention to his home village. After a while, his neighborhood competitor, who also wanted to win new clients due to the crisis, began to take the local priest out for drinks as well. This ended up with Frank losing a wedding or two in his home parish. But it was the local firefighters that nearly destroyed him: after twenty years with him they decided to go with the neighborhood competitor, who changed his business model and enabled the fire department to generate a larger profit.

The approach that enabled you to manage your business successfully in the past is no longer working. Click To Tweet

Frank gave up. Illness forced him to pass his family business onto his son. (Let’s call him Peter.) Peter knew his father’s business well because the entire family had to help out with larger projects. All of those years while Frank was actively involved in his business, Peter was a student. In addition to obtaining training in catering and hospitality, as required by the profession, Frank also had him go abroad to study tourism management and marketing. This ended up saving Frank’s business.

Peter understood his father’s approach to doing business. He knew that all of those years his father had used pub gossip about various parties so he could be the first one to go see the party organizers, offer help in organizing the party, and become their caterer. The approach his father had used to successfully manage his business for twenty years no longer worked for him. The problem wasn’t just the harsh times and the tougher competition. That wasn’t what destroyed his father. The problem was that Peter was not particularly fond of hanging out in pubs and, having moved away to a larger town, he also no longer had genuine contact with the local priest.

But Peter was a systematic and contemplative person. He knew he needed to find new clients that his father had never even tried to find because they just weren’t part of his social circle. Peter was well aware that gossip no longer circulated only at local pubs and churches. People had moved their gossip to the internet, social networks, and the media. All the rest is just a matter of how to intercept it first and continue his father’s old approach by offering assistance to party organizers in exchange for closing a catering deal.

Deals still depend on gossip; the difference is that it has moved from local pubs onto the internet. Click To Tweet

Peter went to see a few social network and media analysis specialists. He used the money that his company had previously spent on advertising for exploring new sales opportunities. He expanded his business across the entire country. Thanks to the sales opportunities that his business partner found by analyzing the gossip in the social networks and the media, Peter hired and trained seven other advisors to help clients hold and carry out parties and other events. Business picked up. Peter increased turnover ten times over what his father had achieved in his best year.

Frank’s health improved. Because Peter had modernized their service range, they again had control over all of the deals within range of their local pub.

 

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P.S. This is a story about Social CRM and has no connection whatsoever with my fellow villagers. Peter and Frank are made up. I’m sorry if I disappointed you or if you have identified with the story.

 

It’s part of human nature that we prefer to tackle something that is familiar, seemingly manageable, and comprehensible, rather than something that may be the actual problem that needs to be solved in a given situation. Even though we’re aware that we’re not solving the actual problem, most people tend to be risk-averse and prefer to put their energy into something they feel more familiar with – despite knowing that it’s very hard to solve the actual problem this way. But that’s how we are.

This past weekend I went to a birthday party, where I ran into an old acquaintance of mine that I hadn’t seen for nearly ten years. He just had to tell me that he’d read two of my manuals on CRM systems and that he’d been appointed head of the project for launching CRM at his company. Breathlessly, he told me that they had to do something about their sales and that this was their company’s “biggest” project this year. The added value of their flagship product was falling and sales of the new product ranges were not really taking off yet. He told me that in just a few years their customers’ buying habits had completely changed. “Interesting,” I thought to myself and listened to what he had to say.

Customers already make 75% of the purchase decision even before they contact you. Click To Tweet

This is roughly how our conversation went:

“Customers do their own research on the internet and make at least three quarters of their purchase decision even before they make a single phone call or contact us in some other way. Or any other retailer. Today customers know everything and can get all the information online. Almost everything. We don’t hide anything from them any more. Anyone who hides information doesn’t even make it onto their list.”

“But the CRM system will only help you manage those processes that involve the interaction between the customer and the salesperson. You will only be able to influence the outcome in the final 25% of the buying decision process. Until contact is established with customers, CRM can’t detect and deal with them. Wouldn’t it make more sense to invest in improvements to the part where the customer independently makes 75% of the purchase decision? If you create a system for that and bring in twice as much demand, you’ll probably earn twice as much using the same methods. Are you really convinced that you can do that only by making improvements to the last 25% of the process, when your salesperson is already interacting with the customer?”

“I’ve never thought about it that way. What you’re telling me makes sense, but what kind of system can I create when the customer is doing research on the internet? Only Google could sort that out.”

“Well, how did you end up reading my CRM manual in the first place?”

“Completely by coincidence. I noticed your post on LinkedIn that three of my business partners had liked. About three weeks ago. That was also when I learned what you’ve been doing over the past few years and connected with you on Linkedln. Your post made sense and seemed logical, that’s why I went to your blog to read the rest. In one of the posts there was a link to the manual and one of the seminars you conducted last year. After I downloaded the first manual, I received the next one in my inbox a couple of days later. Since then, I’ve been receiving weekly newsletters from your company with new blog posts. I forward most of them to my colleagues at the company. We’ve been thinking we’d ask you to deliver an in-house training course on marketing, sales, and modern CRM systems for us after the holidays. Like the ones you’ve held at Hotel Mons. Do you also do private seminars?”

“Sure. Unfortunately, they’re not for free, but this way they are much more detailed and tailored to the individual client’s needs. Great stuff, you’ll see. I’ll send you an offer on Monday.”

If you care about the overall customer experience, CRM alone is no longer enough. Click To Tweet

“Do you have my e-mail and phone number? Do you know where to send it?

“Sure. I also know what you’ve read, when you read it, which colleagues you recommended our blog posts to, what they’ve read, and so on. I also know basically what else you should read in order to become our client. You’ve been served specific reading material by a system that has been monitoring your purchase readiness and area of interest. The website, too, has gradually changed for you based on what you’ve already read. The purpose of all of this is to approach you with topics of interest to you, in an increasingly targeted way. Everything is done automatically, without anyone in the company having to deal with you at all. In addition to the CRM system, the marketing IT system we have in place deals with clients with whom we haven’t had one-on-one contact yet. This is referred to as Marketing Automation.”

(He looked at me, horrified, pausing for a few seconds.) “So why haven’t you called me if you already knew all of this?”

“I saw you on the mailing list among those invited to this party. I thought it would be easier to talk to you in a more relaxed environment. But you’ve beaten me to it.”

“Amazing … You’ll really have to show me this. I thought only Google knew what I was browsing on the internet. If our sales people knew this, it would definitely improve their approach to customers. I can’t believe you can actually watch customers look at your display window and see what products they’re comparing … That’s what we need, screw CRM!”

“You also need CRM. You’ll see. That is, if you truly care about the overall customer experience …”

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P. S. For more information I recommend reading these two quick guides. They’re free. 😉


Have you ever heard a salesperson say he closed a deal thanks to his company’s fantastic marketing? Neither have I. Unfortunately, marketing gets a medal only for deals that are closed entirely over digital channels, without any mediation by the sales staff. In all other cases, “everything is done” by the sales personnel. Without them . . . well, when I’m selling, there’s always some kind of drama going on. Even when there actually isn’t any. Just ask Miha.

The warmer days have encouraged me to buy new outdoor furniture. Ads had nothing to do with it.

Yesterday I went and bought some new outdoor furniture. At the store. I refused to do it online. Those who know me in person know why I want to actually sit down in a chair before I buy it. After spending an afternoon browsing the internet, I chose the furniture I liked. Even though I could have ordered it online, I wanted to see it in person. Not just see it, I wanted to sit down in the chair and feel the material. If this set is going to last as long as the old one, it’s important to know what I’ll be sitting on and what individual pieces feel like.

What was the salesperson actually able to influence in my case?

I definitely made one salesperson’s day yesterday. He probably even bragged to someone about how nobody else earned a grand faster than him that day. I spent precisely 20 seconds on trying out the new set. Then I went to find the salesperson and had only one question (or request) for him. I wanted to have the old furniture (or what remains of it) taken away when the new set is delivered. When I inquired about a discount, the shop assistant immediately offered me free chair pads. Because both of my wishes were apparently already included in the offer, he had an “easy” customer whom he persuaded in no time. This is what it looks like when you have competent sales staff. 😉

As long as marketing and sales aren’t combined into a single measurable process, marketing will always be the loser. Even though this process most often passes from the online world (marketing) into the physical world (sales), they have to be connected.

So how did this retailer’s marketing or online store do yesterday? They paid for Google AdWords again and, thanks to this ad, obtained a visitor who ended up in their online store by typing in the keywords “outdoor furniture.” They know precisely what he was looking for and how long he spent in the online store. But eventually he left. The transaction wasn’t carried out. He didn’t even leave any other traces, such as an e-mail or phone number. Something went wrong.

Why does marketing come across as a loser in the eyes of the sales personnel and the management? Click To Tweet

Even though they set up a new online store, advertise it, focus on the material presented, and spend time on describing the products, the sales still take place in a real store. In the physical world. It seems that they need another optimization: they will have to improve the product descriptions, offer additional discounts, spend money on additional advertising, etc. They’ll hire a new agency. Maybe they’ll even stop using the online store because they’ve already tried out three different agencies, but the results are always the same.

Do you ever wonder what determines your purchase? And how we decide to look into one specific retailer and not a different one?

In the case of my outdoor furniture the salesperson felt like a great victor and marketing like the biggest loser which statistically only displays failures, but I know I would never have considered looking for outdoor furniture at this store had Google not brought it to my attention. I’d never even thought about this retailer before. But because it had a sufficiently large range of products on offer and the site was well organized by category, with excellent photos and product descriptions, transparent prices and purchasing conditions, info on inventory at each sales center, and also provided the opportunity to check out the product (in person) before making the purchase, it won.

It also had the AdWords, I must admit. I clicked the ad, not the organic hit, even though it was on the first page. I don’t know why. At that moment, I probably thought I’d find the selection of products I wanted to check out faster this way. I admit that I thought that if I clicked the organic hit, I’d be served some “bullshit” about maintaining, assembling, and selecting the outdoor furniture, whereas I was interested in products with specific characteristics. Yes, the company also provided information on the chairs’ width and bearing capacity. They were the only one. And to me this seemed pretty important when choosing the right furniture.

We do the research on the internet, but still make the final purchase in person. Why? Click To Tweet

A comfortable buying experience is what counts. This single factor sometimes makes us willing to pay more for something.

Another thing seems important to me. Even at the store I was thinking about how someone was considering himself a winner and how someone would be again declared a loser at the next marketing and sales meeting. At one point I even considered going home to purchase the thing online, just to show support to my fellow marketing colleagues. But I changed my mind . . . because I’m lazy. It was much easier to simply take out my credit card and enter the pin number than open a new account in the online store and copy the data from the credit card. I was already there, after all. Sorry, marketing.

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If there’s one thing I’m always thinking about and trying to understand, it’s people’s shopping habits or, more specifically, their purchasing decisions. I start by first observing myself, then I learn from people close to me, and after that I observe and study reactions to the same stimuli within my broader social circle. Actually, I’m constantly trying to learn about how people shop and why we actually buy or intentionally decide not to buy something at the end of the buying decision process. The hardest thing in all of this is to understand the decision to defer our final purchase decision just a little bit longer. You could say my job is to try to understand what makes someone change, speed up, or stop their buying decision. My mission is to find out how my clients can more effectively influence their (potential) customers. The technology we use to enhance our clients’ CRM systems is only a tool that can facilitate this influence. Nothing more, I’m afraid.

What do customers see, how do they feel, and how does this influence their buying decisions?

One of the things worth analyzing in greater detail in order to understand how it affects the buyer’s mind is marketing communications. Once a product is developed to the point that it’s relatively mature and competitive on the market (the same goes for services), I believe that for most activities and most products the impact of marketing communications is the second most important factor overall in shaping buying decisions. Like it or not, this means that I spend most of my time at work exploring what, when, and how often someone communicates, who they address through their communication, and how good they are at adapting their marketing communications to the purchase readiness of individual potential customers. I also analyze what feelings they want to develop in their target audience through their marketing communications.

Marketing communications is the second most important factor in shaping purchase decisions. Click To Tweet

Training is based on copying rather than encouraging difference—even as a child you were always sung the same song and read the same fairytale.

Whenever I’m telling somebody who asks about what I actually do for a living about my work and the methodology we’re developing at FrodX, most of them say something along the lines of “Oh, how interesting!” But it’s not! Not even remotely! Because everything’s the same, all the time and with everyone. Whatever I start reading it feels like I’ve read it before. Whenever I want to watch a TV show I’ve already seen it or heard it. Big Brother now has five more clones on three different channels. The groundbreaking Ena žlahtna štorija TV series was joined by Usodno vino after its first season. Not to mention the myriad of other series I can’t even tell apart because I only watch them once in a while. One or two on each channel. It seems that everything’s become the same or similar, regardless of the medium. We’re living in circles of repeating content. And that’s also true of the marketing communications I track in my line of business.

Trends bring benefits to the trendsetters, not you.

We proclaim something a trend and then all of a sudden everyone jumps on the bandwagon. Hitching yourself to a trend ensures that you don’t lose too much. Products are also marketed the same way. The copycat strategy is the number one choice for most businesses. Some do this intentionally and others do it because they don’t have better ideas or skills.

I’m not trying to say that everyone that sells IT one way or another will have trouble finding new clients if they use stories about digitization and the “new” economies and phenomena of Uber or AirBnB to try and create a FoMO effect on our potential clients who need to digitize, support new business models, and start using different marketing strategies. And “digital disruption” isn’t the only trend of this sort. Others have latched onto the circular economy, Industry 4.0, the internet of things, and so on.

You can either be original or very loud. If you’re neither, it pays to just keep quiet.

Mentioning anything associated with copying and merging with trends can easily backfire on me (our clients also like to adapt to a certain trend rather than pave the way to a new one) or seem like I’m taking a cheap shot at companies that perceive themselves as FrodX’s competition. Neither is the intention here. I just want to draw attention to the fact that without a critical mass of creativity or diversity in every marketing communication we’re condemned to merely intensifying this communication and nothing more. If you can truly be louder than the rest, they might even credit you with a new trend (eventually). But our economy doesn’t actually have the power to do this. Maybe only for an extremely small niche, and even in this case this niche has to carve out space for its uniqueness using a considerably “different” product, one that solves a new problem or solves an existing problem in a significantly better way. Two of our clients have achieved global success within their respective niches. And I’d be willing to bet that a few more could achieve the same thing. But what all of these clients with the potential for global success have in common is that their product allows them to communicate “differently.” They are able to be original. Actually, they have to be.

Just being different is no guarantee of success. You still need to be better than the rest. Click To Tweet

Of course, they too have copycats, but the copycats’ progress is only measured by how fast they can learn to copy something. Their progress is largely measured only by how well they reduce the time they need to start being competitive in a new field. But they hardly ever manage to become innovators, because they think differently.

I don’t want to go too far with my enthusiasm about some of our clients. The main point of this post was that marketing communications that doesn’t convey how and on what you build your uniqueness is probably not very wise. I even wonder if it makes sense at all or why it is needed. OK, I understand that following a trend can protect you from making mistakes and works as a mass tranquilizer, but you’ll never unhitch yourself from it by being only one of the many that put their energy into describing what the trend is and how they’re following it.

I always try to see things around me as simply as possible. Even when that’s impossible, I at least try to explain things to the people around me in the simplest way possible. I get it that the task of marketing is to keep leading the pack and stay visible that way. But the task of sales is to calm down the customers it comes in contact with. Marketing must grab the spotlight and sales must appease any doubts. If you’re not creative or rich enough to grab the spotlight through your marketing communication, you should invest only in sales. You can also get a share of the spotlight through the recommendations of your existing customers, to whom you’ve delivered what you’ve promised.

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P.S. I’ve already written something similar on copying. It’s worth reading again: Copying from the competition, yet you think you can beat them?

There was an article in last week’s Finance (Slovenian financial newspaper) stating that 55,481 households changed their electricity supplier last year. Since I’m well aware that not even 10% of this can be attributed to new construction, I can safely say that someone had to lose a customer so someone else could gain one. If the pool of customers that need electricity stays roughly the same, customer turnover is one of the largest costs for electricity suppliers. The biggest problem is that most suppliers invest heavily into aggressive expansion. It would cost them less to focus on retaining the existing customers, but such an approach would require some thought. The cost savings that could result from such an approach are measured in millions.

Bargain hunters are an important unnecessary cost for service suppliers

By my calculations, the number above represents around 6% of all Slovenian households. This percentage roughly corresponds to the usual percentage of bargain hunters – such customers respond really well to benefits that subscription service providers offer for switching to their service. My prediction is that these customers will just wait until their contract period expires, and immediately start looking for a provider that is prepared to subsidize them in exchange for committing to their services for a certain time period. They don’t do this only with their electricity supplier. They switch their health insurance company, mobile phone operator, bank – maybe even their car insurance company as well as their cable company and internet service provider even if these services might be a little more complicated when it comes to constantly changing providers. All of these activities are commodities where only the price and partially the customer service level count. If everything works as it should and you don’t need customer service, they are almost identical.

Take care of your loyal customers instead of chasing the “bargain hunters”. Click To Tweet

Loyalty means being prepared to pay more than you ought to be paying

Unfortunately, prospective customers can always get better conditions than your existing ones, since they have more leverage. It would be great if a provider rewarded loyalty by lowering the price for long-term loyal customers. Can you imagine your electricity supplier notifying you that they upgraded you to a more affordable plan that will save you 50 EUR every year? They don’t do it because it would cost them much more than shuffling bargain hunters costs them. Bargain hunters would not change their modus operandi even if you did this for them and would probably still be on the lookout for benefits that they could get from your competitors. The hunt wouldn’t stop, it would just lose some intensity.

Discontent with customer care is probably the main factor why loyal customers switch providers. Click To Tweet

If we continue focusing on subscription services, it is more than clear that some customers are not in the least bit interested in chasing the best deal. Most people probably pay more than the current market price if we take all the available limited time offers into account. They probably only think about switching because they had multiple (above average number) contacts with customer support and the service they received wasn’t completely satisfactory or it even disappointed and angered them. They might want to explore other options because they are disappointed with the level of service or they might even be emotionally determined to leave. I personally feel that the performance of customer service is crucial if not the only motivation that drives customers who are not price-sensitive to leave their provider. The level of customer satisfaction with customer support is not hard to measure.

The “fight” for bargain hunters costs providers millions of euros

The data analysis of past buying decisions shows that customers who changed their electricity supplier in the last year are most likely to switch again next year. The longer customers stay with the same supplier, the less likely they are to leave soon. But we are limiting our perspective by only focusing on the group that switched their supplier in the least year. The customers who haven’t changed their services in a long time, have been “overpaying” for their electricity and had an above average number of contacts with customer support are dangerous as well. I’m certain that this theory could be confirmed by carefully processing statistical data that covers business with existing customers.

Can you recognize the customer that is about to leave you tomorrow? Click To Tweet

I find all other data about previous business dealings with the customer quite unimportant in looking for customers with the potential to leave. The key question is how to recognize those that are actually thinking about leaving. You can find out who is going to leave you only if they tell you so or if you track their behavior on your website. Luckily that isn’t impossible anymore. Marketing automation can be much more useful for keeping your existing customers than in the battle for new ones.

Marketing automation can help you recognize existing customers “on the move” who need special attention and a proactive approach

I see no problems with segmenting customers based on tracked activity such as researching online content on special offers, contract termination conditions, contact termination costs… If a customer from the group that is at high risk for leaving (past business data) joins the “researching special offers” group, they are probably not only turning to you for this information, but are actively researching it at your competitors’ websites. I would understand this as a red flag that requires me to do something about it. If we take a look at it from a technical perspective, a task should appear in CRM and instruct the salesperson to call this customer and prepare a special offer for him/her.

Bargain hunters are the most engaged customers – they will gladly recommend you if you offer them a reward

It is highly likely that only “attention” can help you keep such a customer in the right moment. You just need to be proactive and offer them the same benefits that they would get for switching to your competitor. Extending the benefits if we gain a new customer through their recommendation in the first 6 months of signing the contract could provide them with some additional stimulation. This would of course incur costs, but it would bring significant savings in advertising costs that are currently more or less the only channel for communicating benefits for new customers.

Only the one who first uses the technology for defending their customer portfolio can win. Click To Tweet

The technology that tracks the behavior of individual customers is the only way to switch to proactive marketing of commodity services

If you want to have a better overview of customers that have the highest potential to leave, you need technology that tracks their behavior online. This provides you with much more valuable data than the analysis of your business relationship in the past. If you could overcome the limitations of standardized service packages, automatize some processes and offer a personal touch to the small group of price sensitive customers, you could do a whole lot better at defending your portfolio. The savings and the business effects will only benefit the provider who first uses technology for defending its customer portfolio in this way. Unfortunately, this will work only until every provider starts doing it. The first ones work with us. Will that be you?

 

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