Friday, December 20, 2013

Lead Nurture Campaign Blunders - More Fun With Hurricane Electric

Email marketing and lead nurturing campaigns are not new. Done right, it can be a great way to draw in business. At the same time, one factor that you might want to consider when shaping your lead nurture program is the current status of the person in the campaign. Simply, if you have a customer or a prospective customer in your database with a negative relationship with the business, you may not want to include them in a default promotional program. Here's an example.

I'm pretty unhappy with Hurricane Electric right now. If you aren't familiar with the back-story, you might find this recent post amusing. While it's not a flat out "Hurricane Electric Sucks" post, I think you can detect the unhappiness in my tone -- and you're not reading the original emails. I don't think that the people over at Hurricane Electric would be surprised to learn that I'm not happy with them nor would I recommend their service going forward.

So imagine my surprise when I received an email from Hurricane Electric the other day offering to upgrade the service that I was just trying to cancel about a month ago. A new server? No. A cloud hosting option? No. An unused copy of Windows 8? No, something of even less use to me. That's right, they wanted to offer me an upgrade on bandwidth to the server that is sitting in their data center, idle. When you see something like that, it really catches your attention. How disconnected is it? Let me count the ways:
  1. We just finished a series of communications back and forth about how I wanted to cancel our service
  2. It was offering to increase bandwidth to a server that is essentially idle
  3. It promoted the idea that the increase in bandwidth would help our business earn more by increasing traffic and overcoming the limitations resulting from our current bandwidth
What stood out even more was that the bulk email listed the sender as the very same accounts payable person that I had just been arguing back and forth with about closing our account with previously. It's laughably bad. 

Know Your List
If you want to run a nurture campaign, consider reviewing your member list and removing anyone with cases or customer service issues. You also might want to consider using cases and other customer service issues as a trigger for a different type of email campaign as they may not be suited to an upsell campaign.

Thursday, December 19, 2013

Insurance Companies Suck: Core Strategy Undermines the ACA

In all of the back and forth over the Affordable Care Act that you find in the media, one of the things that I've never seen addressed relates to inherent problems with the fundamental strategy behind the law. In the media, you may see concerns about the lack of a single-payer, medicare-for-all option or, on the other side of the spectrum, people complaining about the mandate requiring people to buy health insurance. While these two examples deal with opposite sides of the political spectrum, in one respect, they share a common underlying issue -- insurance companies suck.

Anyone who has had to deal with health insurance over a doctor's bill knows how frustrating it can be. And it's just gotten worse and worse over time.

Insurance companies use layers of contractual complexity to make treatment and treatment reimbursement horribly conditional. Why? Because, fundamentally, the way that an insurance company maximizes their profits is by paying out as little of the money as possible. Insurance is a wager that you, as the gambler, wants to be as safe and as predictable as possible -- I am sick, I go to the doctor, and the treatment is paid.

In the midst of the storm of the site problems, I read one post on Talking Points Memo that pointed to one of the challenges of individuals purchasing health insurance was that it was so complicated. And the entire reason it is so complicated is that insurance companies benefit from that complexity. They write policies that create a range of caveats to the "I am sick" equation in order to reduce the likelihood of a payout -- like saying that the roll of the dice doesn't count if they didn't hit the back wall of the craps table. Sometimes, they make these caveats deceptive so that you think that you're covered when you aren't. It's like playing 3-card Monte with some guy on the street -- you have a great chance of winning until you actually start playing.

This is why most states have insurance regulators and why we are forced to turn to "experts" in our HR department to help us navigate the contracts and, hopefully, prevent fraud. And yet, despite the existence of a regulation infrastructure in the states, the system has gotten progressively worse since I can remember.

The Pre-existing Condition
Perhaps the biggest sticking point surrounding health insurance was the pre-existing condition. This was the escape clause that would allow an insurance company to skip out on paying for various medical bills that might get too large and cut into their profits. Over the past decade or so, it also seems like they used it, increasingly, as leverage against churn. By that what I mean is, if you were unhappy with your insurance or you lost your job, the insurance companies forced you to keep paying for insurance coverage lest you be hit with the pre-existing condition clause when you get a new job or sign up for a new policy.

This use of the pre-existing condition was another driver for crappy health-insurance-in-name-only plans. If you were out of work or working at a job that didn't provide health insurance, you could get one of these plans and be able to say that you had maintained insurance coverage.

Underlying Fallacies of the Health Care Debate
I think that the think that pisses me off the most when I listen to a debate about health care is this idea that we make choices about the level of care that we want to pay for. Given the choice, it's hard for me to imagine somebody saying, "just give me half of what's required to make me well." Or, like the snippet from the Michael Moore film healthcare, "I know I lost three fingers in the accident, just repair one." These aren't decisions made by choice. In the same way, the decision to not participate in the healthcare system -- to not have coverage -- is not something somebody chooses. They may choose between having shelter or healthcare coverage, having food or healthcare coverage, or even -- like I might have back in my college days -- having beer or healthcare coverage, but it isn't healthcare or not.

Similarly, there is this notion that the reason that health care is expensive is because people with health insurance use too much healthcare because they don't realize how much it costs. It's as though we are choosing to take Vioxx instead of aspirin because we make decadent choices as opposed to the reality -- we take it because they, the experts, tell us it's better and more effective. In the old days of a lifetime relationship with a family doctor, efficacy might be measured by long term patient health. These days, profit plays a significant role.

I Don't Like My Existing Healthcare Plan
Which brings us to the issue behind the most recent round of controversies. I don't think that anyone actually likes their existing healthcare plan; rather, they probably prefer it over the idea that the available options are worse. Or more expensive for, essentially, the same crappy service. Because, like most of the airlines, we have been subjected to a historical degradation of service and the majority of the incumbents essentially offer minor variations of the same service, we don't see any upgrade in change.

The bottom line: insurance companies suck. And this is, fundamentally, what's wrong with the ACA. Rather than crippling an industry that most people have had terrible experiences with, the government essentially said, "heck-of-a-job insurance companies, let's give you more customers and more business." For many people, this would be the equivalent of handing over Social Security to the same corrupt financial industry that crashed the economy with the sub-prime mortgage crisis. Rather than stopping all of this "your surgeon was covered, but your anesthesiologist wasn't in network and so he wasn't covered' mess, they stomped on the gas and pointed all of us straight into the heart of darkness.

The Paradox of Choice
Here's a great link to psychologist Barry Schwartz's Ted Talk where he talks about how having more choices makes us less happy with our choice and also makes it more difficult to choose. In that way, another difficult aspect of the ACA is, inherently, one of the things that is supposed to be better about it -- more choices. The paradox of choice also plays into the health insurance offering -- with so many nuanced aspects to compare and options to segment, they can move you into a state of selection paralysis. This is another way that they are able to control the transaction.

In many respects, the importance of choice in health care is overstated. If we're sick and we need antibiotics, we don't choose which medicine to prescribe. We think we want choices, but, like a menu with too many options, more is not better.  

While the idea of more choices pays lip service to freedom, if you couple some of the themes in the Paradox of Choice with the idea that all of the choices are deal-with-the-devil options from businesses that many people have had negative experiences with, you're in for a high level of customer dissatisfaction, even if the product has been reformed and is actually improved. The reformed system may be better, but we are primed for not liking it.

Wednesday, December 4, 2013

My Terrible, Awful Day at Dreamforce 2013

Each year,'s Dreamforce conference represents a mixed bag of experiences. On the one hand, it's an incredible opportunity to see a few of the ways that some of the world's top businesses are using software to evolve their businesses. And, if you work with the software, some of the breakout sessions can provide a great window into how to take advantage of certain features and functions.

At the same time, there is a dark side to entire Dreamforce experience, one that corresponds to crowds and capacity. There is a chaos that hangs over the event, a madness of conflicting schedules and oversubscribed sessions.

Back in the old days (that period when the year still had two zeros in it), the crowd helped contribute to the excitement. It was an era when there was still a lot of skepticism about the viability of the cloud and multi-tenant architectures. In that era, one of the most common question that I wound up having to answer was, "but really, who is using" In that environment, being in that sea of people was vindication.

These days, the crowd is more of a crowd than a bonding experience. What's more, instead of feeling like a giant user group, VIP passes and exclusive access options have turned the entire event into the equivalent of a crowded flight -- the people in first class get treated well, but most of us are stuck in the back with a middle seat, no leg room, and no recline.

Dreamforce is not like a traditional trade show in it's use of the convention center. Rather than many exhibits crowding a convention center floor, Dreamforce depends upon meeting rooms for technical breakout sessions. Each year, as the conference has grown, it's been surprising to see how the infrastructure has adapted to handle the expanding crowds broad agenda. Last year, when they closed off Howard street, held conference sessions in all of the surrounding hotels all the way to Union Square, and then blocked off the area around the Civic Center for the gala event, it struck me as a wonderful example of how San Francisco can come together and jump through hoops in an effort to host these kinds of things. In so many ways, the City is an amazing place.

And yet, for everything that worked well last year (other than what was probably a traffic nightmare for San Francisco), this year was marked by a conference out of sync with the city and the weather. With the November timetable, suddenly all of the outdoor overflow areas became unusable. Travel between downtown locations meant getting soaked between sessions. And while this year's gala event location at Pac Bell park had the potential to provide an well structured venue for an outdoor event, the predictable fall rain meant transformed the event into something into a gathering under the dry parts of the stadium to eat hamburgers and hot dogs, while watching some music on the television. Even the bus rides to the park were challenged with the traffic and the construction on Fourth street.

For the past three years or so, hotels in San Francisco sell out several months before Dreamforce. I knew it was bad this year when I was registering and the Dreamforce hotel interface was listing Hotels in Monterey. Another indicator is when the motels in the ugly parts of the Tenderloin/SOMA area are charging over $300 per night (it leaves you wondering what the people who wind up staying there end up thinking about San Francisco). Even funnier was when I mentioned the crappy hotel situation to our Salesforce account rep and he sent me a link to the housing page in the registration app (#worse-than-a-chatbot). So, invariably, I was forced to commute into the city from the South Bay each day. And while the hour or so commute on Caltrain isn't too bad, what it does add to Dreamforce is a lot of extra steps, the need to carry everything you need (or take back from the event), and it puts a serious damper on any evening events.

For me, the worst day turned out to be Wednesday. The third day of Dreamforce is a day that is punctuated with sponsored events and after-parties. But when you have the added commute to the overcrowded city, it can be a bit taxing. I decided to head out early that night and grab an express train home. Unfortunately, like many commuters that day, my trip home was hindered by a downed power line near the Hayward Park stop on the Caltrain line. I wound up standing in a packed train, waiting from about 6:50 until shortly after 8:00pm before we even started the journey down the peninsula. After a slow ride and a bus bridge at San Mateo, I finally arrived in Mountain View sometime after 10pm. I, like many of my fellow commuters, went home tired and unhappy -- questioning the wisdom of returning to the city for the last day of the conference (I ended up driving on Thursday, but I heard that Caltrain had another day of delays that morning).

Dreamforce: Too Big to Be Meaningful
As I've mentioned in the past, when you attempt to create an illusion of personalized experiences that are clearly generic scripted repetitions -- like the Safeway checkers reading your name off of the receipt like they know you -- it almost seems worse than doing nothing. It's like saying to the customer, "oh yeah, you are important to us, we value your business" with an accompanying satirical tone and an eye-roll. You're personalized customer experience is a mockery of personalized customer experience.

In may ways, that is what Dreamforce has become. In the old days of the conference, the entire experience was like a multi-tenant architecture. You sat, side by side, with your colleagues on the platform. Big companies, small companies, you shared an infrastructure and you shared the challenges of the crowd. You were just as likely to wind up sitting in the front row as you might be at the back of the venue. When you attended the event, you were part of a community.

Now, it feels more like you are part of a herd -- sorted, weighed, and routed as is most profitable. With VIP lines and exclusive access, you are often reminded that you are in economy class, not good enough for business or first -- despite spending what probably amounts to a premium, regardless of the size of your business. Yes, you are a customer, but as a customer appreciation event, this will leave you feeling like you are second class.

Consider this: in five years of attending the conference, only two of my five account representatives have made an effort to meet with me during the week of Dreamforce. If the customer-facing roots of your organization can't interact with your customers that have paid $1000 to come to your party, are you really holding a party for your customers? And can you really call yourself a customer-focused business?

Think about that. As marketers, most of us have considered road shows and customer events. We all understand the costs and the challenges. We've all consumed our share of free food and drinks at business events. Now imagine asking your customers to pay to come to your customer event. What kind of experience would you expect that they were expecting?

I used to think that it might be helpful to bring a team of attendees to Dreamforce; perhaps a couple of people from the sales organization, somebody from IT, and an exec or two. But considering how large Dreamforce has become, I've come to believe that, even if they were excited to participate and be a part of the crowd, the real benefits that they might have gained two or three years ago have faded, washed away in a sea of lines, generic experiences, and diverse business/software platform interests. Should I be battling with the people who might be there for Or the developers who don't know about Heroku? Do I really need to hear another pitch on the latest version of Portal - now Communities -- when the pricing model is so disconnected from anything that makes sense for our business?

Would you pay $1000, then wait in line behind a thousand people if you could only ask one question? And, if you did all that, how would you feel about the experience if the answer that you received gave you less information than already got during your online research?

Can Dreamforce Be Saved?
This question is actually several questions rolled up into one.
  • Has the conference grown too large for San Francisco? 
  • Would it work better if it was relocated somewhere else that could handle the size of the event?
  • Has the conference itself become too diversified and lost it's focus?
  • Is there any way to make it effective in connecting with individual customers while hosting the massive crowds?
In many ways, I think that there are elements of Dreamforce that are intertwined with San Francisco. While a location like Las Vegas might be able to handle the large crowd, there is a reason that so many Internet businesses have found their home in San Francisco. The city speaks the language of software start-up and part of the dream in Dreamforce is a harmony with this world. And yet, there is little question that the San Francisco infrastructure is overwhelmed by the conference crowds. Housing, transportation, conference room capacity, all are being taxed beyond their limit during the event. Without limits, I expect the reality of the conference to just get worse and worse.

As for the diversity, there's always the dream of serendipitous interaction and the potential engagement with technologies and applications that you might not otherwise have imagined. And yet, when crowds become overwhelming, it's less about serendipity and more about traffic and road rage. Perhaps the bigger question is, what is a realistic take-away from this in-person experience?

So when you consider the world of modern marketing and making individual connections, it seems so antiquated to provide such a generic, impersonal experience. As the provider of the leading CRM platform, you'd expect the experience to be more personal. But perhaps that underscores the difference between the hype and the reality -- in the same way you'd expect Facebook marketing to be... better. Big data and algorithms are powerful, but they are hard-pressed to achieve something greater or overcome something as powerful as a long line or a frustrating commute.

And so, the spectacle will probably continue. And as it does, the evangelism will probably ebb -- or continue to ebb -- and instead of something amazing, it will become something amazingly horrible. My terrible, awful day at Dreamforce probably would have been better if all of the hotels in San Francisco weren't sold out and I was staying in the city and hadn't been stuck on Caltrain for over three hours. But without that Caltrain experience, I might not feel so compelled to ask is the entire experience really worth it?

Tuesday, December 3, 2013

The Don't-Let-Go Business: How Hurricane Electric Earned a Blog Post

I know that it seems like much of the posts that find there way here are lately arise out of some business or service pushing my buttons, so I promise that I'll put together something that's not an angry tirade soon -- maybe after this post.

Recently, I found myself embroiled in a situation that serves as a great reminder about how technological progress shapes business expectations. It's the kind of thing where, one day you're selling the "must have" advertising like a Yellow Pages ad or a Thomas Guide listing, then "suddenly" you wake up to realize that your product is obsolete, usurped by the Internet and Google. Not only do you have to re-envision yourself and your business to adapt to the new market climate, but you also have these longstanding relationships with some of your most loyal customers that have stayed with you all of this time. How do you handle dissolving these relationships?

As with other moments in the lifetime of interactions with your customers, how you behave as a business shapes your customer's perception of you and your future reputation, regardless of how awesome the relationship may have been.

Our Story: Longtime Hurricane Electric Customers
When you look back to 2006, it doesn't seem all that long ago. And yet, in the world of servers, 2006 is two to three generations in the past. And when it comes to web hosting, so much has changed since that time. Back in the day, many companies were running on dedicated servers in co-location data centers. The idea of using virtualized servers and grid computing wasn't really in play and a multi-tenant infrastructure was a tough sell for some in the IT world. Amazon Web Services officially launched in 2006. Technologically speaking, 2006 was in many ways BC, Before Cloud.

When you look back through time to those thrilling days of yesteryear, there were some common Internet provider business practices that just seem laughable in today's market. Back in those days, it was all about the box. In 2006, as we compared data center providers, having a local provider like Hurricane Electric -- versus, say, Rackspace -- offered some potential advantages in the event that you needed to do some level of hands-on maintenance to your server box. While it may not have any any real practical advantage, it helped comfort the IT guys who didn't really want to loose touch with the physical hardware. Another common practice was a set-up charge for a dedicated server. Essentially, since you were getting ready to run a server, this helped subsidize the Internet hosting company's costs in case you suddenly went belly-up ala so many dot.coms and start-ups. And it was not unusual to have longer initial term hosting contracts, year or multi-year agreements.

And that, in a nutshell, describes our initial relationship with Hurricane Electric. At the time, they were great, and a good fit within the prevailing business climate. Their hosting services did well, we were a couple of hops off of the main Internet connect running through San Jose, and all was good. During the server build process, we had spec'd one system, but for one reason or another, it wouldn't work with the drives that we had spec'd, so Hurricane offered us a 'free' upgrade to a dual CPU server board that had come off of a recently decommissioned system. As I say, we were happy.

So, jump ahead four years to 2010. With the server getting old in server years, we approached Hurricane about a plan to replace the box with a newer model, ideally with the current one running in the foreground while we built up the other one. Despite four years of consistent, trouble-free business running on hardware that was essentially theirs, Hurricane Electric wanted to charge us another set-up fee. Instead, we began looking at alternative hosting solutions.

In today's hosting environment, virtualized servers and cloud environments allow you to sign up with a credit card, build a server from a control panel, pay nothing for the server until you build it, and, ultimately, pay only for what you eat. Storage, CPUs, processor cycles, bandwidth can all be metered. When measured against the cost of hardware and colocation rent, the cloud was really a no-brainer decision. So move we did.

Leaving Hurricane Electric
This is the part of the story where things get really sad, where Hurricane Electric moves from becoming a respected local partner to one of those companies like AOL that make it very difficult to escape their clutches. Once we had our new cloud server up and running, we reached out to Hurricane Electric to shut down our service. First, Hurricane told us that we needed to send them written notice on company letterhead along with why we were leaving. Next, they told us that we've been under an automatically renewing annual contract and we wouldn't be able to cancel our agreement until Q2 of next year.

Since 2006, we've made consistent monthly payments for our dedicated server. We have been a consistent, no-hassle revenue stream. But now, like AOL's dial-up service, our needs and the terms of our agreement have become hopelessly outdated. And yet, within the halls of Hurricane Electric's accounting and customer service groups, they would rather cling tightly to a few more months of revenue than create a positive customer experience. Somehow, all of that historical value that we represented to them is no match for a couple of months payment. In short, they do not connect this portion of their business with reputation and positive word of mouth.

Where we could have dissolved the relationship with a simple "their service offering ceased to match our needs," we moved into a "their service offering may have been acceptable at one time, but even if they were an okay match for your requirements today, I would not do business with them." In the same way that I would never give AOL my credit card information -- anyone who has ever tried to disconnect from them knows how difficult they make that transaction.

Auto-renew contracts can be a convenience to customers, but too often auto-renew is used like a club, hammering the customer with a commitment that doesn't match their needs. Because it's employed in scams and borderline scams by businesses that look to surreptitiously trap customers in leech-like transactions, businesses should be hyper-vigilant around the use of this tool. When your business becomes knowingly collecting funds well past the useful life of the contracted service, you've entered the land of scam. Let's apply a new term, scamification, to our lexicon.

As marketers, it's particularly frustrating to see this kind of behavior from a business. When you think about all of the battles that you have to go through, justifying budgets in order to attract and win customers or to build reputation, only to watch all of those efforts flipped on their head when other parts of the business act aggressively to piss off the customer, it makes you crazy. Radio and print ads? Wasted. Those billboards? Pointless. When you compare the cost of what you might spend to publish a case study or a customer testimonial, then compare that to the negative word of mouth created by an angry customer -- or attempting to be former customer -- and yet, they don't get it.

After all is said and done, I would not do business with Hurricane Electric again. I would not recommend them to you either. While I would not put them in the same category as those scam businesses that trick you into an online transaction, then leech off of your credit card while you try to find a way to cancel their service, their business behaviors are such that it certainly reminded me of that type of business. Caveat Emptor.