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How to scale successfully - and avoid 'systematic collapse'

Elephants, cities and companies. And what they have in common…

Think of one of your favourite suppliers. I don’t mean big brands, but small ones. The boutique PR agency or the web-hosting company you use. Or anybody who’s ‘small enough to care, but big enough to cope’ (in that time-worn marketing phrase). So they’re in that happy space between being a mom-and-pop shop and a big, faceless supplier.

How would you feel if they got bigger? How do you think they’d cope? How do you think you’d cope if you were the supplier?

As a company scales up, the dynamics change. I thought about this as I watched a TED talk recently.

Theoretical physicist Geoffrey West of Santa Fe University has some fascinating insights on scalability. The really striking thing is that it’s governed by a universal law: plot size against resources required and it’s entirely predictable.

The same is true of animals, cities and organizations. So the graph looks the same for an elephant, New York and a Fortune 500 company. The interesting thing is that the relationship is ‘sublinear’. So when organizations double in size, resources only need to increase by 75%. And at the same time, revenue increases by 15%.

In other words, you get economies of scale.

So does that mean that continuous, scalable growth is a given? Not quite. Because sooner or later, West says, companies (and he and his colleagues studied 23,000 across the US) face ‘systematic collapse’. What saves them from that collapse, and takes them onto the next growth curve can be summed up in one word.

Innovation.

It’s a thought-provoking presentation. Check it out and maybe it’ll help you think too (as it did me) how to avoid systematic collapse. I’m innovating even as we speak. 

[If you’re reading this in an email, click here to see the talk on TED.com]

When worlds collide, the customer is usually caught in the middle

Omnichannel or omnishambles? Time to join up the dots.

 

[Image courtesy of Dave Gray at Flickr Creative Commons]

Life used to be so simple. You wanted something, so you went to a shop. Either they had what you wanted, or they ordered it in. Maybe you phoned ahead, or maybe you just took a chance.

And then came the internet.

You could have anything you wanted, whenever you wanted it. Or almost. Because if you had to have it right now, you still had to go to a store. But the good thing was that most had an online presence, so you could check what they had in stock and save yourself a wasted trip. 

Well so goes the theory. The practice is quite another matter, as I found out last week. Not once, but twice.

Sweet surprise

I checked the website of Boots the chemist to see if they had a box of strips for glucose testing kits at my local store. They had not only one, but lots. So off I went.

When I got there, I scoured the shelves but couldn’t find what I was looking for. No problem, I thought – it’ll be behind the counter. So I asked the assistant, and she went to check with the pharmacist. The confab lasted longer than it should have, and she came back with that look on her face. You know the one. 

No, they didn’t have what I was looking for. They had bigger boxes of the strips, but only on prescription. So I’d have to go to a doctor – for something that in theory was available over the counter.

Just not that counter. 

Or I could order on Boots.com, said the assistant. But she said it as if it was a separate company to the one she worked for. When I pointed out that I’d specifically checked that store’s stock online, she gave me a look of blank incomprehension and said, “I don’t know anything about that”.

So much for joined-up service.

Computer says no

The second experience didn’t happen to me, but to a friend of mine.

Here’s the quick version: PC World, a monitor, stock levels that looked fine, a reservation number and confirmation email, and a wasted trip to the store, when they told him that the monitor he’d reserved was actually on display, and so obviously not for sale. 

Add in an assistant who was new and didn’t know what he was doing, a call to his manager that wasn’t returned while my friend waited in store and much confusion, and you get the picture. My friend couldn’t wait any longer, so he asked the assistant to call him once he’d heard from his manager. 

He got the call – six hours later. By which time, he’d bought the monitor on the PC World website and paid £10 for next-day delivery.

Customer care everywhere

You couldn’t make this stuff up, could you? It shows how complicated it is in practice to link the online and offline world. And how it should work in theory: integrated systems, trained staff and a consistent message.

Not to mention a consistent customer experience.

As part of the humungous project on customer care I’ve been working on recently (nearly there) I’ve found out lots about how companies are trying to pull together the disparate strands of their service into something coherent and consistent.

It’s not easy, but it is possible. 

Automation and artificial intelligence have made great strides in recent years, and systems have been simplified to deliver a similar experience whether you’re on a website, social media, chat or a voice call. But somewhere, somehow, that all needs to be linked to the offline experience. 

And that’s not just systems but training too. Put a monitor on display, tick it off the system. Customer complains about glucose strip shortage? Report it to the online team. 

None of this requires artificial intelligence. Just a little bit of old fashioned human intelligence, basic initiative and common sense. Because that’s what will make the omnichannel truly omni.

And keep blood sugar levels down. 

When did you last review your website content?

Is it still working? Or is just lurking? Might be an idea to find out.

[Image courtesy of GotCredit at Flickr Creative Commons]

Maybe it’s just an age thing, but I’ve spent most of the last two years throwing out stuff. Books, clothes, old cameras that were once cutting-edge, mobile phones, cables (lots and lots, which I thought would one day come in handy, but which I could never actually find when I needed them). 

The thing is, physical clutter is obvious. You have shelves that groan under the weight of novels you’ll never re-read. Wardrobes stuffed to the gills with clothes you’ll never wear again. And cupboards jam-packed with knick-knacks you should have chucked out long ago.

It’s obvious. You can see it. You have, at some point, to deal with it.

But virtual clutter is an entirely different affair.  Digital stuff can just stack up unchecked, and there’s an almost infinite capacity for storage. So you add and add and add, and very rarely subtract or even check what’s there.

And before you know it, you have a bloat situation. But it’s not just a question of stuff out there – it’s stuff that’s potentially hurting your business.

How? Well maybe it’s: 

  • Outdated, so it’s talking about products you no longer produce, services you no longer offer, or people who no longer work for you. 
  • Off-message. ‘Only fools don’t change their mind’ goes the old saying. Over time, what you say and how you position yourself will change. But if old stuff is lurking out there, people might just get the wrong signal.
  • Hurting your brand. That snarky blog post you wrote when you were all worked up? Or the side-swipe you took at the competition? Those times you may have strayed from the moral high ground may just need a quick review.

Search and rescue

You could start with a sitemap to get an overview of what you’ve got out there. If you don’t have one, try one of the free tools like the XML Sitemap Generator. Or if your site is created in WordPress, there are plenty of plugins. Personally, I use Google XML Sitemaps, which is easy, even if you’re a non-techie.

You could also just do a simple site search using Google. I do it all the time when I’m checking out clients’ sites (and their competitors’ ones) for content, cross-references and ideas.

So if I wanted to see what PDFs were on a site, I’d simply type site:www.sitename.com pdf into the Google search box. Or if I was looking for material on pricing models, I’d search for site:www.sitename.com “pricing model”

It’s a quick and easy way to see what you’ve got and requires no downloads, installation or configuration. For bigger, more complex sites, there’s no shortage of heavyweight solutions to find out what’s lurking. 

OK, so now you know what you’ve got, what it’s saying and where it is. So what’s next?

Decision time, that’s what. And there are only three possibilities for the stuff that’s not working:

  • Remove it, because it’s too off-message and outdated to be usable. 
  • Rework it, to update it and make it reflect where you are now. Or ‘re-purpose’ it, which is just a fancy way of saying turn it into something else. 
  • Hide it until you’ve decided what you want to do with it. Remove it from the site nav, and update your robots.txt file so it’s not indexed. 

My personal preference is for removal. Reworking is often just a makeover, and if it’s wrong, it’s wrong, now matter how much you make it over. Hiding it is a non-decision, and that just delays the inevitable. 

There is a fourth option: doing nothing. But that stuff is still there, and spiders and humans are crawling all over it. It’s a bit like people rummaging around in your wardrobe and finding those embarrassing kipper ties and butterfly collars. Or those trashy airport novels you read on the beach.

Time to have a throw-out. You’ll feel better afterwards – I promise. 

Five counter-intuitive marketing moves

Forget what you’ve always done. Do what you’ve never done. 

Let’s face it: we’re all more comfortable in our comfort zones. So that means we usually just carry on doing what we’ve always done, and we usually follow the crowd. Because it’s easier that way. 

But you know what they say: do what you’ve always done, and you’ll get what you’ve always got.

And as for following the crowd, well somebody somewhere was at the head of that crowd, and inspired the followers. What if they’re wrong? And even if they’re right, it still took a leap of faith on their part to be the first. Wouldn’t you like to be in their place? 

Here are five ideas that might just put you there. 

1. Raise your prices

Yes, we all know it’s dog-eat-dog out there, but cutting your price is like pulling up the nose of your plane when you’re stalling. It doesn’t stretch the glide, but just makes the rate of descent faster.

I was recently chatting to a friend who bumped up her prices quite significantly, which seems like commercial suicide in a cash-strapped market. But she did two clever things.

First, she positioned it clearly – and research shows that if you explain something clearly, people are far more likely to accept it. Second, she decided to up her game – and that meant going after higher-end clients who expected to pay more, and avoided offers that seemed too cheap.

2. Don’t try to make everybody happy

In classic boiling-frog style, over the last few years the idea has taken hold that you should go the extra mile for everybody, every time. And nobody’s questioned it. But as I mentioned last time, that’s both exhausting and expensive, and rarely makes an appreciable difference.

So keep your valuable customers happy – and that means focusing on high-value, low-maintenance customers first. Low-value, high-maintenance ones can go elsewhere. Write for the perfect customer, market to the perfect customer, and sell to the perfect customer. Forget the others. Because they won’t stay with you anyway.

3. Analyse your failures, not your successes

When you do well, there’s often a temptation to see what you did right and replicate it. But often, sales are down to good timing or even just dumb luck. As long as you’ve got the basics right, and do it well and often enough, you should see the benefits.

It’s when things go wrong that you can really learn something.

When a client has checked you out and gone elsewhere. When you’ve lost a client you didn’t want to lose (as opposed to one you did). When you’ve had a string of losing pitches against a competitor who keeps eating your lunch. So analyse your failures, see if they matter  – some don’t, so you should move on – and see what you can learn. You might be surprised. And humbled (I certainly was).

4. Forget about quality

Well not totally. What I really mean here is that quality is all fine and dandy, but quantity is not to be underestimated.

I did an e-mailshot earlier this year, and had some hits and lots of misses. And yes, before you ask, I did eat my own dogfood and analyse my failures.

But I was also realistic, and accepted that quantity often beats quality.

So a couple of months later, I sent out a slightly modified version of the e-mailshot to the people who hadn’t replied. And when I say slight, I mean slight. I referred to my previous email and said I know that timing is everything and quoted that Woody Allen line about how 80% of success is showing up.

And guess what? It worked. Maybe because the humour appealed, or maybe because Allen had a point. 

5. Don’t obsess about growth

The ancients used to say that there was an optimal size for a city. If it was any bigger, it lacked human scale. And you have only to look at mega-cities like Tokyo or Cairo to see that they were probably right.

Companies are the same, especially if they’re small or medium-sized.

They provide a quality service and a personal touch to a select bunch of people, and they’re very good at what they do. But scale that up and the personal becomes impersonal. Doers become managers (and not everybody’s cut out to be a manager), quality drops and customers become faceless. People spend more time on admin than on doing what they love. Passion wanes and duty fills the gap. So growth has come, but at a price that’s probably not worth paying.

* * *

Questioning received wisdom on marketing is always refreshing. Swimming against the prevailing current may feel like hard work to begin with, but you’ll soon get used to it. You’ll get some fascinating insights and come up with some great ideas.

And you may just one day be the person at the head of that crowd.

Why customer service is the ultimate weapon in the marketing battle

What you think, what they say and how to close the gap

[Image courtesy of Alan Clark at Flickr Creative Commons]

I’ve been doing a lot of reading recently about customer service for a big project. And what I’ve found out has surprised me, and sometimes amazed me. But before I dive into the detail, let me ask you a simple question: 

Do you provide good customer service? 

Of course you do. The default response to that question is yes. If it were no, you’d either be very honest (you owned up) or very naive (you thought it didn’t make a difference). It’s like asking somebody if they’re a good wife, or husband, or boyfriend, or girlfriend. A knee-jerk yes. 

And yet and yet. One of the surveys I saw said that 88% of companies think they provide good customer service. And customers? Go on – think of a number. Got it? OK, we’ll come back to that later.

That figure wasn’t the only one that caught my eye.

Research company Gartner say that only 5-10% of companies truly have customer care at their core. The rest – and that’s a whopping 90-95% – simply focus on customer care because they have no choice, and because all other differentiators have disappeared. So they’re doing it simply because they have to, not because they want to.

Let me throw some more figures at you, and just think how they relate to your business: 

  • Reducing your customer defection rate by just 5% can boost your sales by between 25% and 125%
  • 70% of buying experiences are based on how customers feel they’re being treated. 
  • A 2% increase in customer retention has the same effect as cutting your costs by 10%. (Read that again, and write it down on a Post-it. Now stick it to your monitor.)
  • 86% of people will pay more (read, write, stick) for customer service, but only 1% of them feel their expectations are met.
  • In 2013, 62% of global customers switched service providers because of poor service.

OK, OK – I’ll stop. You get the picture.

It’s the service, stupid

The takeaway here is: customer service is important, nobody’s getting really right, and everybody better start getting it right soon. 

In fact, that’s the other really big thing I got from my research. By 2020, customer service will overtake price and product as the key brand differentiator. So that’s five years at best – and that’s a very short time indeed when you’re running fast just to stand still.

So what’s the answer? Run faster? Do more with less, in that time-worn cliché? Under-promise and over-deliver (ditto)? 

No.

The answer is really simple. Just promise and deliver. You don’t need to aim for excellence, or go the extra mile every time. In any case, when your resources and your time are maxed out, overshooting for all customers is both exhausting and expensive.

So just do a good job. Do what you said you’d do. Because one other finding I saw really caught my attention: research shows that ‘customer delight’ is wasted effort. Exceeding expectations doesn’t have an appreciable effect on customer satisfaction.

As the man said, good enough is good enough. Now stop reading and start doing.

(A paltry 8% of customers say they get good service, by the way. Chilling, isn’t it?)