Tuesday, February 25, 2014

Bridging the Analog and Digital Worlds.


Life's been good so far.
Classic rocker Joe Walsh took a break from touring with the Eagles a few years back and released a single called “Analog Man.” The lyrics include “the whole world’s living in a digital dream, it’s not really there, it’s all on the screen, makes me forget who I am, I’m an analog man.”

There’s a digital divide out there, and I am not talking about if people just have access to the world wide web and wi-fi or not. This is about a business orientation – those who worship at the high temple of all things digital, at the expense of being present for what goes on in the real or analog world. 

Lots of commerce is conducted online, evidenced by the explosive growth of Amazon - ranked as one of the most innovative companies of 2013 by the Harvard Business Review. But am I supposed to take the word of handful of either really happy or very angry people who take the time to rate their shopping experience? Is there really any objective perspective out there for user shopping experiences? How are the shopping promises made in the digital world actually delivered?


What's wrong with this picture?
According to a survey by Bain & Company there is a huge service "delivery gap" - with most companies assuming they are consistently giving customers what they want through a "superior experience" - while 9 out of 10 of their customers disagree.


Enter Stella Service. I met Jordy Leiser Stella’s - Co-Founder & CEO recently at the Data Driven
 NYC # 23 Meet-Up at Bloomberg. He touted the value of using primary data to help online retailers improve the customer experience. His company is bringing an entirely new business model to the online shopping market. As their website says “Some retailers tout great service. Stella Service finds out who really delivers.”
Jordy Leiser - CEO.
Each year, Stella Service evaluates thousands of online retailers both large and small. Their customer service performance data is driven by thousands of mystery-shopping interactions with retailers each month, collected through a process audited by global accounting and auditing firm KPMG. Their in-depth evaluations emulate a true shopping experience. 

Stella Metrics: Takes the guess work out of service delivery.

For the largest retailers in the U.S., they order online, call, email and live chat customer service questions, and monitor the responses they get back. In addition, they return products and engage in all sorts of problem resolution, including the refund process. And, it all happens undercover so their findings are unbiased and true to the shopping experience. As Forbes cited Leiser "Think about how many times you've interacted with a retailer in the last year and the percentage of times you've actually provided feedback. It's probably microscopic."

This is a brilliant business concept that bridges the promise of value delivered in a digital environment with the reality of an analog shopping experience. Jordy and his team aren’t analyzing secondary data, they are creating their own data set and helping give their clients a blinding glimpse of reality on what they deliver at the point of sale. 

Retailers can search for their own company data on the Stella website.
What actually happens when customers open the box? When then try to contact the retailer with questions and returns? These metrics are drivers of customer satisfaction that either fuel grown or spell disaster for an online retailer. Brand advocates or brand detractors in the making every day.

Stella Services offers a cool blog called "Happy Customer" that leverages their nationwide network of mystery shoppers to surface the best online customer experiences. Stella Benchmarks sheds light on various online retail categories and provides composite service level trends. It gives smart shoppers insights into online retailer performance and in kind providers competitive benchmarks for the retailers themselves.

The Wall Street Journal reported on the “winners” in the online retailing race for the most recent holiday shopping season – using Stella’s mystery shopping data points. I am sure that winners like Sears welcomed this news, and share it with hard nosed financial analysts every chance they get.

Thursday, February 13, 2014

Less is more: Creating a simple business strategy statement.


 Does strategic planning  remind you of junior high school?
In the January 2014 issue of the Harvard Business Review Roger Martin writes about "The big lie of strategic planning" where he outline three rules that will help companies succeed in their planning efforts. Rule # 1 is "Keep the Strategy Statement Simple."
I am amazed when I interview senior business teams and ask them to summarize their firm’s strategy in a single sentence.  Often I get very different answers. Imagine a football team or military unit going into action without a common objective. Their chances of success are obviously not too good.
Many companies suffer from a “silo mentality” with various departments viewing their job through the lens of their respective disciplines. For example IT teams can view their efforts as highly technical and as an end in itself. I support the idea that IT is a means to an end, like improved efficiency, better data capture / analytics to helping deliver enhanced customer experiences. 
Brings to mind an IT and Marketing department meeting I recently attended. The CIO and CMO seemed to be from different planets, but carrying the same business cards. Modern marketing makes this collaboration key – from sourcing analytic data to leveraging the process discipline of IT professionals in helping develop better user experiences for customers, from billing to order fulfillment.
Another way to say "Brand Advocate"
I often remind our clients to think about their customers, the nice people who “make the cash register ring” Does the business strategy focus on what the customers want? Is it stated in “benefit-based terms?” Is it different from what other firms are offering?
One of my business school marketing professors once said “Sears sells lots of Craftsman cordless 3/8” variable speed reversible drills.” But “people don’t buy the drill, they buy the hole in the wall.” It’s the end benefit that people seek.
And the strategy should highlight points of competitive difference. Sadly the most unique thing that most businesses offer is that there is nothing unique about what they offer. So the challenge is finding a simple, tangible, and relevant unique selling proposition.

The Ikea Concept: Doing it a different way.
In a recent HBR Blog post Alessandro Di Fiore made the case for crafting a 15 word strategy statement and cited the clarity of furniture retailer Ikea's strategy statement. It targets consumers: "At IKEA our vision is to create a better everyday life for the many people." IKEA states its retail concept as "Doing it a different way." Short and brilliant, a unique shopping experience with great furniture and housewares, with the best Swedish Meatballs around, bar none.
Putting customers first really worked.
I saw this approach work equally well in a B2B context  when I was at MetLife - which sells a pure commodity: Employee benefits including group life, dental and disability insurance. We came up with a strategy - “MetLife is Easier”  - which promoted superior customer service in B2B group insurance. It was adopted throughout the organization, from staffers promptly returning calls to easy to understand group insurance quotes, to an effective “once and done” problem resolution process.
This simple strategy helped grow the business by leaps and bounds. It got the business out of competing purely on price by giving customers a tangible point of difference and real value: reduction of administrative burden by the HR management target. This was a major pain point for the target audience that we discovered through primary research.
Drive profitable growth by keeping it simple.
Forget the 2 MB strategy documents. All great business strategies should ideally be summarized in a single statement. Hopefully one that is easy for every employee to remember, and that is relevant and different enough to get the attention of the prospects and generate consideration, invite a conversation, or encourage a purchase.