Wednesday, June 24, 2009
Here's the Link -> Search Engine Land
There's a bunch of interesting video topics from Matt on YouTube. Here's an interesting one that I found one I started searching. This one is on companies that get burned for "BlackHat" SEO practices. This is a good one to bust out when they say, "why can't we do this"...
With that in mind, here's my creative question for you.
In 1966, Bob Dylan, noted folk singer who wrote great protest songs like "Blowin' in the Wind" picked up electrically amplified musical instruments and started down a brand new path. His new path was not well received (many in the folk scene didn't like electric rock and roll). A sample of this can be heard in the recording (available on CD), The Bootleg Series, Vol. 4: Bob Dylan Live, 1966. During the tour, the electric set generated anger and controversy. In the recording, you can hear someone in the audience yell "Judas" at the end of "Ballad of a Thin Man", followed by lot of applause from the crowd. There's another person that yells something (one blog says it was, "I'm never going to listen to you again"), but it's hard to tell what it was. Dylan responds with, "I don't believe you. You're a liar." But one of the best parts of that recording is where, as the band starts to crank up "Like a Rolling Stone", you hear Dylan turn to the band and say, "Play it f___g loud." If you've ever wondered about "Like A Rolling Stone", there is a piece of its soul captured in that moment -- the essence of rock and roll.
We can't all be Bob Dylan. Most of us won't reshape the way the word perceives art, culture, and life. But, as Joseph Campbell might say, the tale of the hero is allegory, the story of an individual, faced with adversity, and demonstrating exceptional behavior. Idealized behavior.
Have you channeled your creative hero recently?
Tuesday, June 23, 2009
While you might not know it if you just listened to the current debate in Congress, most Americans support a government-run, public medical program. Over the weekend, the New York Times/CBS News released a study that showing 72% of Americans support a government-run, public program for medical coverage. I mentioned that to one of my colleagues during lunch yesterday, and his expression went from surprise to concern / fear of government management and a list of talking points with seeds in the FUD arguments being used to keep any sort of national healthcare program from being implemented.
But rather than going down through the long path of the debate over public healthcare, I wanted to take a quick moment to focus on the costs and potential costs for businesses -- but I want to approach it from more of a Silicon Valley point of view. For many Silicon Valley companies, a significant portion of their workforce are contractors. Part of the reason behind this is that, between health insurance benefits and the freedom to flexibly expand and reduce their workforce, it's easier and cheaper for them. As a result, there are a lot of contract jobs here in Silicon Valley. What these all have in common is that they actually pay more in salary than permanent positions, because once you take the cost of health insurance and benefits out of the picture (offload it on the individual), they can afford to pay more.
Nobody WANTS to NOT have health insurance
So if you're a worker here in the valley, the salaries and the opportunities in those contract positions look pretty good, but if you're permanently employed, moving to a contract position can be a serious gamble. If, at the end of your contract period, there is a gap in your employment status, the health insurance companies can use that as a window to begin denying you coverage based on "pre-existing conditions". As a result, the people who are more likely to take contract positions are more likely desperate, unemployed.
Transforming the Entrepreneurial Market
Now imagine a system that freed and employees from having to worry about healthcare coverage costs. Here in Silicon Valley, a company that was ramping to build there innovative product could afford to pull in best and brightest, secure a commitment from them for long enough to complete the project, then release them back into the talent pool with risking any sort of organizational integrity. And for the employees / contractors / talent, you now have more flexibility to take risk, secure in the knowledge that if you take a gamble on an organization like an emerging start-up, your exposure is significantly reduced.
One frequent counter to this type of arguement (yet another FUD) is that this type of program will wind up costing businesses. It's ironic though, when you think about it. Take Wal-Mart for example. It's widely recognized that Wal-Mart goes to great lengths to ensure that they don't have to provide health benefits to most of their employees. If it were a profit for them in providing health benefits, there employees would have them. Instead, they push that cost out, making businesses that pay those costs look like suckers.
Imagine leveling that playing field...
Remember when Internet investment took off? Call it the dot.com bubble if you want, but one aspect of that period was a tremendous amount of investment and growth. What if one of the factors that contributed to the growth was the competitive landscape -- the potential that some small start-up company might grow up and compete with AT&T. Or Microsoft. Or IBM. Or Intel. That some company might grow up to be Cisco. Or Google. Or Yahoo (well, that one didn't quite work out the way that you might have expected...) What if that potential was the thing that brought in investment? What if...
Sadly, Washington is more likely to work predictably, so my expectation is that we're unlikely to get any real reform. Is real change the audacity of hope?
Monday, June 22, 2009
- the tips are good for all.
Sent from my iPhone
Top Ten Myths About Google Analytics not only debunks some issues that Google probably hears from enterprise customers, it offers some helpful tips for configuring and using Analytics. If you don't know about Analytics, you're missing a very powerful tool for monitoring traffic on your site -- oh, and it's free!
Saturday, June 20, 2009
I've published several review posts about my iPhone, but it's hard to capture the day to day experience of using and having the phone. There's certainly the usage, but there's another level of activity that goes on everyday - it's the community of users, discussing applications and functionality, raving about the cool things that you can do with the phone and the software. It's easy to get caught up in the excitement and it's all good until someones feelings get hurt.
Sent from my iPhone
Updated: I made a few corrections for overlooked autocorrect mistakes and a few spare words. Second update to erase hard line breaks in the post.
Wednesday, June 17, 2009
Now I'm sure that you've heard these kinds of stories before, the story where the bank insists that for you to close your account and to make them stop charging you, you need to pay them the negative balance on the account. My Friday was spent arguing with the BofA customer service team on the phone, back and forth over this exact issue. However, rather than going into the specifics of this issue, I'd rather focus on some root causes of this issue, what they say about a company's approach to business, and what that means for branding efforts.
We've all heard the stories of people whose bank accounts were charged to zero and they were asked to pay in order to close the account. So, one question that you might ask if you were a customer of Bank of America and you were receiving a call like I did was:
What triggered Bank of America to call?
Simple Answer: they have software that monitors your account. When your account balance drops below zero and you "owe" them, a process is triggered that alerts their organization to contact you. In my case, I made at least two deposits of a couple hundred dollars on prior occasions, but my last actual withdrawal transaction from that account was probably over a year ago -- so my only activity in the account for a year or more was BofA charging my account and taking my money.
As a customer, wouldn't it be better to have a more sophisticated trigger, one that looks at account activity as well as balance, and if no account activity has taken place, a notification trigger is initiated?While this type of process might win praise from some customers for it's "customer first" approach, it won't make the company any extra money. Consider this as an example: Grandma has a bank account that her relatives don't know about. Grandma passes away. Under the current model, BofA will continue to collect -- in the form of fees -- whatever money sits in Grandma's account and they won't contact anyone until the account is in arrears. Then, once the account is depleted -- and they have collected all of the money that was there, they will move forward, trying to squeeze the additional closing costs from the account.
Imagine if they created a pre-emptive account notification, one that looks at activity and reaches out to customers if no activity has been taking place. While they might "lose" the potential revenue of the money that's sitting in the account (money that isn't really even their's), they would probably gain loyalty and reputation for their more customer-centric behavior. But part of the problem is that it's easier (and more profitable) to let you walk away from the table without your chips, then take them away slowly, through fees.
Since you've heard these "you need to pay to close out your account" stories before, you might guess that this situation isn't uncommon. It's happened before. If you knew about a problem and could fix it simply with a software trigger and some customer engagement, are you customer focused if you don't implement it?
What happens when your spoken message conflicts with your behavioral message?Bank of America is one of those companies that attempts to push a customer service focus all the way down through to their lowest-paid, customer-facing employees. I've participated in several BofA surveys where they asked a bunch of questions about how my local branch handled service. And whenever you interact with their frontline people, whether your speaking with a teller or talking to customer service, they'll ask whether they've "answered all of your questions today." Bank of America wants you to see them as a customer-focused organization. The sad part of this is that you feel for the front-line, customer-facing service people -- they're being pushed to promote a level of customer-service that the company doesn't actually support. What that means is that, the customer-service team is forced to push a message that they know the customer doesn't believe so they can't believe it, and it all turns into a great customer service Kabuki dance.
The Importance of Good Faith in Business Transactions Good faith is a critical component in any business transaction and a foundation for building long term relationships. Consider a warranty -- a warranty is basically a contractual commitment that says,
"I know that this product that I'm offering is complex and will require you to spend a bunch of your money -- to ease your concerns and to help you focus on the value that this product offers you, I'm going to offer you a warranty. If the product fails because of some issue like, my manufacturing was sloppy, I'll fix it for you, no charge. Mind you, if you break it, I can't afford to just give you another, but if it breaks because I didn't do my job correctly, I'll fix it."Compare that to the BofA approach where, after my account had eroded once (and I still thought that I might get some benefit from having the account, so I deposited some more money), they eroded my account again. I should note that, this erosion didn't take place over a short period, but rather, over the course of months. While, as a business, it's perfectly acceptable to charge fees for your services, it's a bit disingenuous to promote a customer-focused message so long as you can pick meat from the bones of your customer.
If we can just get the customer locked in, then we can really show them how great we are...BofA isn't the only large company to suck when it comes to these philosophical aspects of customer service. Lots of companies break out the bait-and-switch approach in order to get you to commit to long term contracts and entrenched services. Cancellation fees and early contract termination charges aren't just designed to recoup some costs, they're designed to create barriers to switching services. You'll note my previous post about AT&T's wireless service and my frustration with the deterioration in the quality of service that I've received from them -- when I first made the switch to AT&T, they offered a "no-commitment" contract that allowed me to switch whenever I wanted with no penalty -- and, while it may have just been psychological, I actually felt better about my choice of AT&T for wireless service back then.
I'm sure that you've come across the same kind of approach -- it's widespread and the "product" runs the gamut -- from online services to those infomercial products where, when they get your credit card, they are committing you to a subscription until you cancel. And they don't make canceling easy. AOL used "difficult to contact customer service, difficult to cancel" as a key ingredient in their brand-gutting recipe. Regardless of how big you are or how much brand loyalty you've built, these practices reek with the stench of scam.
Contracts, lock-ins, market leadership, and limited customer options are all potential breeding grounds for serious customer discontent. And while, as a customer service strategy, you can force your front-line staff to push a "customer friendly" approach like a deodorant, unless your prepared -- as a business -- to WOW the customer on a regular basis, you're probably building an infrastructure that's going to foment anger and frustration with a segment of your customer base.
So What Is Your Customer Service Mission Statement?
My favorite quote from the front-line customer service person that I spoke with was, "if you want to continue to utilize your account, you'll need to pay the outstanding amount."
Tuesday, June 9, 2009
However, it's starting to look like AT&T, their network and their policies are becoming an increasing loadstone on the iPhone. Here's a post from Techcrunch following today's announcements at the WWDC keynote: Jason Kincaid writes AT&T Fails iPhone Users Once Again,
MMS and Tethering — two features that have been readily available on many smartphones for years — are finally making their way to the iPhone. But if you’re in the United States, you won’t be able to use them for at least a few months. Because AT&T, the network with an exclusive lock on the iPhone in the US, couldn’t get it together in time to support them for the iPhone 3.0 software launch.AT&T also blocks some applications from accessing certain functionality when using their cellular network. Some streaming video applications work great on the iPhone -- if you're on a Wifi connection -- or you happen to be using a phone from some other international carrier -- but they don't work on AT&T's cellular network. Cellphone carriers using their network control to "restrain" phone functionality isn't new, Apple cited that as an issue for them with their first forray into an iTunes compatible phone, but it's a frustrating barrier to users who want take full advantage of the product that they bought.
At launch on June 17th, MMS is going to be supported by 29 carriers, and tethering will be supported by 22 of them. So when can we finally expect these stateside? MMS is apparently coming “later this summer”. And tethering? A much more nebulous (and ominous) “later”.
Another great Techcrunch post comes from MG Siegler. In Why The iPhone 3G S May Be A Sucker’s Bet Right Now, he writes,
While current iPhone owners last year got to upgrade to the iPhone 3G for the fully subsidized $199 and $299 prices, the same will not be true this year. Instead, current iPhone 3G owners only 1 year into their 2 year contracts, will have to pay $399 and $499 to upgrade. The reason for this is simple: AT&T subsidizes the phone down to $199 based on a 2-year payment agreement with the customer. If you only paid one year of that contract, AT&T would have to eat those costs. So instead it’s putting that cost back into this new phone.Siegler goes into greater detail explaining how, in the classic take-money-now-lose-customers-later, despite well-publicized service problems that have created widespread, public customer dissatisfaction, AT&T appears to be focused more on trying to capture dollars rather than customer loyalty. And while the carriers have a long history of conducting these turf wars, tolerating a percentage of churn while leveraging their networks, exclusivity and long-term contracts to profit without regard to actual quality or their customers' interests, AT&T's burn-the-customer strategy hangs on maintaining exclusivity on the iPhone. If you thought that negotiating broadcast rights to the Superbowl was a big deal, my guess is that you haven't seen anything compared to the backroom negotiations going on over the iPhone.
But back to the marketing / word of mouth aspects of this whole deal. If you want to see the level of passion that AT&T is stirring up, read the comments from the two posts that I linked. The commenters aren't just angry, their mad as hell. People often comment about how passionate/enthusiastic/loyal Mac users are -- increasingly, these people are finding a target. Remember how, years ago, people at MacWorld booed when Steve Jobs mentioned signing a deal with Microsoft? This is worse. While you can't throw a rock without hitting someone who either has an iPhone or wants one (at least around here), ask anyone with an iPhone and they'll probably raise AT&T's service as their top complaint -- or at least in the top 3.
Does the Customer Really Matter?
The funny thing about marketing when your dealing with certain organizations is that the equations -- or at least the way that people view them -- change. In the case of the telecom carriers like AT&T, my experience is that they don't look at see the market through the lens that you might typically use. Instead, they see a market that isn't really changing, that isn't really going away. There is no competition, and time just means more money for them. For the carriers, customers aren't customers in the traditional sense, they're more like dirt for a farmer -- a collective pool that you harvest revenue from. It's also why you can find a number of studies about customer satisfaction, churn, and the cost of winning back a customer. In those models, revenue can be maximized by pushing you to the threshold of tolerance, then when you get upset, offering you a cookie or some other small token to reduce your hostility.
And in the long-term, they've been proven right. In the days when broadband was emerging and people where touting the potential of the CLECs to transform the industry, the ILECs held to their game with a multi-tiered approach to crushing the competition. And when the CLECs died, it wasn't just a business or some metaphorical idea of competition, it was the heart of broadband in the US -- innovation and enhancement. Innovation isn't profitable, running a network that does the same thing without any real cost is -- that's why bandwidth hasn't really increased since 2001 -- and why the US has shifted from a broadband leader to one that follows some third world countries.
Like Quantum Theory, Some Economic Ideas Don't Always Behave the Way That You Would Expect
During a recent hearing on the banking crisis, Alan Greenspan admitted that he he was wrong, that ""I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms." Like Alan Greenspan's belief in the power of the market, many people believe that competition and some inherent need to keep the customer happy will prevent companies from engaging in behavior that alienates customers.
Take Dell as an example -- they engage in practices that make customers angry, customers get angry, publish, and their reputation for poor customer service starts impacting their business bottom line. Their response is to aggressively target customer perceptions and the create programs to target dissatisfied customers. But, even for a market leader like Dell, the PC industry is very competitive, and the barriers preventing you from switching vendors isn't very high.
That's how the market is supposed to work. But what happens when your only choice isn't really a choice? When your options are limited, vendors tend to use that to their advantage. Consider the current debate over health insurance as an example. Suppose you have what is currently being referred to in the media as a "good health insurance" plan. What choice do you have when your health insurance provider tells you that they aren't going to cover a medical procedure, even though it's standard and necessary? If work for a business that provides health insurance, then you were probably presented with a list of plans to choose from during an open enrollment period, and once you've chosen, your stuck with that for a year. While there are, theoretically, competitive factors at play -- maybe the provider had multiple plan options or the company that you work for had several providers to choose from -- the abstract model of being in a market where you have different stands to purchase from really falls flat. Instead, you find yourself forced to trade at a booth where, despite changes in the market, you're left with whatever offering and terms that you are given by the merchant.
Why The iPhone Makes You Even More Angry at AT&T
One word -- Software. The iPhone supports software (sure a bunch of other phones have as well, but the iPhone opens the phone as a software platform in ways that were simply not done in the past). The other day I was thinking about the world pre-iPhone. Remember when all of these "futurists" talked about people using "smart phones" to do everything they did on computers... on a phone. Unfortunately, even the best "smart phones" were good phones but really crappy anything-elses -- sort of like early DOS or Windows PCs. What that meant is that, even for the people with "smart phones", they didn't really do much smart, network intensive things. But the iPhone is different, because it's real strength isn't the phone. In that same context, the iPhone is an excellent media player, mobile web browser, portable game system, with email and software support, and a mediocre phone.
My guess is that nobody at AT&T anticipated how big of an impact the iPhone would have on their network -- that people would pick up their iPhones and use them ALL THE TIME. In some respects, this is the same factor that drives the complaint about battery life on the iPhone -- people use the device all the time. If your sitting around and you have a free moment, you're probably using your phone, doing something that involves either wifi or the cellular network, running your processor and display, and chewing up your battery. Compare that to someone that just has a phone -- it sits idle a lot. All the time also means that, if there's a problem with the phone, you're more likely to notice it, that small problems loom larger because you encounter them more frequently -- using my Blackberry, I can probably count the number of times that I actually used copy-and-paste on two hands, but with the iPhone I've probably needed copy and paste two or three times the Blackberry number.
The Funniest Thing About The iPhone Competition Discussion
You know, it used to be that cell phone carriers trapped their customers and made it difficult for them to switch. That's when they passed the number portability regulations, so you could easily switch between carriers without losing your existing number. And, in the old, pre-iPhone days, you could count on similar models of phones at most of the major carriers, so while you might get variations on features, you could switch without too much of a loss. It's only now, when there is no equivalent to the iPhone that you're put back into a situation of being forced to endure a specific carrier's service. If there were truly a competitive match to the iphone, you might be able to switch.
When all is said and done, AT&T probably won't be doomed by their failure to keep some chunk of their iPhone customer base happy, but there is a storm building. I have to believe that Apple is sensitive to the issue -- the carrier, their network, and their business practices are all integral to the iPhone product, and if you had a window into the product roadmap, you'd expect that cellular network is an aspect that's being tracked. In one respect, this seems like a battle between AT&T's traditional cellular carrier mindset (we control the features that get implemented on products that use our network) versus Apple's PC industry mindset (we innovate to match the customer's needs and stay ahead of their interests, and we demand that our support infrastructure keeps up). Down from Above versus Up From Below?
Finally, to quote the Siegler post,
If I learned tomorrow that AT&T and Apple were ending their exclusive deal in 2010, there is no way I would upgrade. I’d suck it up and wait for a year.AT&T, your customer base is speaking, don't make me quote the Verizon tag line.
Tuesday, June 2, 2009
You really need to check out the article in order to see the artwork. It's really amazing. It's a great reminder that a strong concept isn't bound by budget. It's also a refresher on the power of creativity.