20030905
Value your customers
Ad Nederlof the CEO of Genesys, a provider of call center software, thinks that customer service is the key to customer loyalty. (Gee, I wonder why he'd think call centers are important...) He points to a study his company ran with Purdue that he says shows that service is the number one driver of loyalty.
Personally, I disagree with the methodology, but I agree with the outcome. Service is important, but asking people what they feel is important ignores hidden drivers. Hidden drivers are those things that are important but aren't explicitly said to be important. The classic example is in the airlines. Air customers will say that safety and reliability are important, but when you analyze their responses on other attributes in relation to their loyalty, you see that food quality and the politeness of the service staff are the real drivers of loyalty.
Ad Nederlof the CEO of Genesys, a provider of call center software, thinks that customer service is the key to customer loyalty. (Gee, I wonder why he'd think call centers are important...) He points to a study his company ran with Purdue that he says shows that service is the number one driver of loyalty.
Personally, I disagree with the methodology, but I agree with the outcome. Service is important, but asking people what they feel is important ignores hidden drivers. Hidden drivers are those things that are important but aren't explicitly said to be important. The classic example is in the airlines. Air customers will say that safety and reliability are important, but when you analyze their responses on other attributes in relation to their loyalty, you see that food quality and the politeness of the service staff are the real drivers of loyalty.
20030902
Government Incentives
"Bureaucrats believe that failure to spend money before the end of the fiscal year will lead to cuts in their budgets the following year. What rules might the government adopt that would produce a more rational incentive system for spending money?"
Oh, oh, pick me, pick me! How about, instead of profit, government had a well understood, common metric to measure the bottom line.
So, the answer is: what metric would best express the bottom line of government? what is government for?
Wait, those were questions, not answers. Sorry.
"Bureaucrats believe that failure to spend money before the end of the fiscal year will lead to cuts in their budgets the following year. What rules might the government adopt that would produce a more rational incentive system for spending money?"
Oh, oh, pick me, pick me! How about, instead of profit, government had a well understood, common metric to measure the bottom line.
So, the answer is: what metric would best express the bottom line of government? what is government for?
Wait, those were questions, not answers. Sorry.
20030826
Critique of Tufte
Three critiques:
"1. Most of his high density data depictions are works of art and not practical for rapid or real-time analysis.
2. His data is typically mired in flat 2-D depictions for paper display
3. His complex data depictions don't necessarily provide enlightenment."
The first point I have verified with first-hand experience. The coolest chart with high data density is hard for people to digest that are used to the less dense, but familiar, charting formats. At work, we have a 'driver chart' that is VERY useful for understanding what aspects of the business to improve and in what priority. The problem is that you spend more time explaining the meaning of the chart then you do discussing the information contained by the chart.
The second point seems to jive with my general sense that Tufte doesn't seem to 'get' the web or interactivity. His approach seems to favor 'static' visualization.
The third point isn't a critique of Tufte as much as it a statemtent of how people can misuse Tufte's visualization advice.
Three critiques:
"1. Most of his high density data depictions are works of art and not practical for rapid or real-time analysis.
2. His data is typically mired in flat 2-D depictions for paper display
3. His complex data depictions don't necessarily provide enlightenment."
The first point I have verified with first-hand experience. The coolest chart with high data density is hard for people to digest that are used to the less dense, but familiar, charting formats. At work, we have a 'driver chart' that is VERY useful for understanding what aspects of the business to improve and in what priority. The problem is that you spend more time explaining the meaning of the chart then you do discussing the information contained by the chart.
The second point seems to jive with my general sense that Tufte doesn't seem to 'get' the web or interactivity. His approach seems to favor 'static' visualization.
The third point isn't a critique of Tufte as much as it a statemtent of how people can misuse Tufte's visualization advice.
Exemplary service drives loyalty
"Anybody can run an ad or put up a sign that says great customer service, but it really boils down to employee empowerment."
I like this guy's message. He is also pointing out the externality of loyalty... But again, I'm frustrated that there's no method given to quantify loyalty. I mean are managers expected to just hedge their decisions based on some vague idea of customer loyalty or is there some method to understanding the effect on loyalty of a particular decision?
Maybe I'll check out his new book.
"Anybody can run an ad or put up a sign that says great customer service, but it really boils down to employee empowerment."
I like this guy's message. He is also pointing out the externality of loyalty... But again, I'm frustrated that there's no method given to quantify loyalty. I mean are managers expected to just hedge their decisions based on some vague idea of customer loyalty or is there some method to understanding the effect on loyalty of a particular decision?
Maybe I'll check out his new book.
I got fired. Not by the boss—I was fired as a customer
Jeffrey Gitomer is one ticked off customer. He was fired, as a customer, by his bank were he had an account for 10 years.... This is a classic case of the unique impact customer loyalty (or in this case disloyalty) can impact your business. Your business's investment in customer loyalty is the only investment it will make that self-perpetuates. I don't mean like compounding interest. I mean customers walk around and tell other customers and potential customers how they feel about your company which in turn impacts those customer's behavior.
This effect is similar to the economics of networks. The more happy your customers are, in sum, the more they'll spread the word and the more customers you'll have.
When Jeffrey's ex-bank made the decision, on economic grounds, to fire some of its less profitable customers, it didn't factor the cost of the disloyalty that this would cause. It treated the newly disloyal ex-customers as externalities. This is a mistake because the disloyalty created fosters disloyalty in the pool of existing and potential customers, impacting future revenue.
The problem for managers is to quantify customer loyalty... Once they've done that, all costs will be accounted for.
BTW, Jeffrey has written a book that is getting pretty good ratings at amazon. I haven't read it, though, so I can't give a personal recommendation. He is a consultant and journalist. His website is sales oriented.
Jeffrey Gitomer is one ticked off customer. He was fired, as a customer, by his bank were he had an account for 10 years.... This is a classic case of the unique impact customer loyalty (or in this case disloyalty) can impact your business. Your business's investment in customer loyalty is the only investment it will make that self-perpetuates. I don't mean like compounding interest. I mean customers walk around and tell other customers and potential customers how they feel about your company which in turn impacts those customer's behavior.
This effect is similar to the economics of networks. The more happy your customers are, in sum, the more they'll spread the word and the more customers you'll have.
When Jeffrey's ex-bank made the decision, on economic grounds, to fire some of its less profitable customers, it didn't factor the cost of the disloyalty that this would cause. It treated the newly disloyal ex-customers as externalities. This is a mistake because the disloyalty created fosters disloyalty in the pool of existing and potential customers, impacting future revenue.
The problem for managers is to quantify customer loyalty... Once they've done that, all costs will be accounted for.
BTW, Jeffrey has written a book that is getting pretty good ratings at amazon. I haven't read it, though, so I can't give a personal recommendation. He is a consultant and journalist. His website is sales oriented.
20030805
Online forms standard gets a push
Forms are the only(?) web-based technology to get customers to give feedback (via surveys or comment boxes). So this story bares good news. With standards come tools.
Forms are the only(?) web-based technology to get customers to give feedback (via surveys or comment boxes). So this story bares good news. With standards come tools.
20030801
Wired News: Antispam Bills: Worse Than Spam?
"'I don't need blacklists,' said Graham. 'My own software is better than I am at deciding what is spam and what is not.'" Exactly!
"'I don't need blacklists,' said Graham. 'My own software is better than I am at deciding what is spam and what is not.'" Exactly!
20030721
Siebel, IBM preparing online CRM service
Hmmmm.... Could it be that Siebel/IBM are feeling a little pressure from the emerging salesforce.com juggernaut?
How about this? Compared to client/server models, the ASP model is a superior business (subscription-based revenue and scalable datacenters), it adds more value to the customer (by removing burdens on IT) and it preempts the 'utility' computing paradigm (that won't work anyway because we care about applications, not hardware). ASPs allow companies to stop being data collectors and start being data analyzers... Isn't that the whole point?!
Hmmmm.... Could it be that Siebel/IBM are feeling a little pressure from the emerging salesforce.com juggernaut?
How about this? Compared to client/server models, the ASP model is a superior business (subscription-based revenue and scalable datacenters), it adds more value to the customer (by removing burdens on IT) and it preempts the 'utility' computing paradigm (that won't work anyway because we care about applications, not hardware). ASPs allow companies to stop being data collectors and start being data analyzers... Isn't that the whole point?!
Question to self: What value do these analytics (aka 'business intelligence') vendor's provide over and beyond simple Excel spreadsheets? I'll tell you what drives me nuts about Excel... combining data from two different data sources (e.g. CRM and finance). You have to make sure the account names match up (is 'MS' Microsoft or Morgan Stanley?). Also, you have to figure out what to do about duplicate entries (drop or average). If these companies solve that problem, then I'm sold. Otherwise, give me access to the data sources, a copy of Excel and I'm golden.
Certainly, they don't claim to discover 'knowledge' out of the data. That would be interesting.
Business Objects to acquire rivalThe business-reports software company will buy Crystal Decisions in a deal valued at $820 million, the latest in a series of buyouts reshaping the business software market.
[CNET News.com - Enterprise]
Funny, I was just talking to our data center people about application-layer management akin to SNMP for hardware. I guess this is it... Now will all the vendor's bite; what will make all the vendor's bite?
HP kick starts Web services planThe IT and computer products company submits a Web services management specification to a standards body, in a step toward making products from different providers interoperable.
[CNET News.com - Enterprise]
20030713
PeopleSoft Customers in Key Role
Customer relationships are a tough nut to crack, especially in enterprise software. Who would have thought that PeopleSoft's investments in its relationships with its customers would pay off in this way?
The article ends suspecting that PeopleSoft may be fishing for the most loyal customer and those customers' opinions may not represent all customers. "PeopleSoft has more than 5,000 customers. It's not that difficult to find five or 50 that are going to be very vocal in supporting you. With Oracle (customers) you can find the same or more supporting Oracle's approach," he said.
Well, you could resolve this issue by asking all of PeopleSoft's customers where they stand on the take-over bid. It may be that the best way to put a valuation to this take-over bid is by assessing the value of customer loyalty.
Customer relationships are a tough nut to crack, especially in enterprise software. Who would have thought that PeopleSoft's investments in its relationships with its customers would pay off in this way?
The article ends suspecting that PeopleSoft may be fishing for the most loyal customer and those customers' opinions may not represent all customers. "PeopleSoft has more than 5,000 customers. It's not that difficult to find five or 50 that are going to be very vocal in supporting you. With Oracle (customers) you can find the same or more supporting Oracle's approach," he said.
Well, you could resolve this issue by asking all of PeopleSoft's customers where they stand on the take-over bid. It may be that the best way to put a valuation to this take-over bid is by assessing the value of customer loyalty.
