Start-ups and reassurance for the client

As a client that uses a number of new technology businesses that could be defined in the 'start-up' vein one of the things that I constantly look for is reassurance that there is sustainable substance behind the beauty parade and that the business will keep pace with industry and client demands.

There are a number of variables that I look for all of which I portion a weighting to, this then helps me form an overall level of reassurance for the business. Here are a couple of the variables that I look at:

Industry speed: In technology there is a big risk that businesses won't keep up with changes in technology standards or client demands, the faster the industry moves the bigger the risk. For this variable you have to know the industry back-to-front or, like me, read as much research and keep up-to-date with industry blogs.
Competition: Especially in tech companies the barriers to entry are very low so it is important to view the landscape for competitors and get an understanding for the sustainable competitive advantages of each. Forrester and Gartner research really helps for this variable.
Funding: This is a tricky one as you'd think News Corp buying MySpace for $580m would give you reassurance that it's a safe bet, alas... But still, looking at the funding sources for start-ups does give some level of reassurance. Look at the funding sources to see if they align with your business, eg Microsoft or Cisco capital investments in start-ups might align with your long-term infrastructure aims
Customers: Another tricky one, especially in tech start-ups. Look at how MoveNetworks lost Fox as a customer and saw the decline of a $70m business. Still, portioning some of your reassurance to existing customer relationships is worthwhile.

Now I know whole libraries have been written on this subject and from a Venture Capital or M&A perspective my analysis would probably not even get me a janitor's job in their marble-lined offices, but from a customer point of view it is these basic steps that has helped me sort out the hundreds of vendors out there.

What other variables should I add to my vendor scorecard? It'd be great to beef up my scorecard with more analysis.


Image credit: archangel12

The new division of marketing labour

The debate over marketing as an activity within an organisation is nothing new. In retail organisations it's a pretty simple model that product management and marketing fit snuggly together whereas operations/sales-force and customer service go together on their merry way spruiking the line they've been given from the former departments.

Service organisations can be a little more blurry between departments but the general principles still exist that one side manages the product and message and the other side manages the customer and company operations.

But the socialising of consumption and business is melting these generally held principles and we are now seeing a multi-coloured pool of muck on the floor and a metaphorical "watch out, slippery floor" sign has gone up around the whole marketing/customer-service model.

Laurel Papworth has been championing the 'social business interactions belong in customer service' thing for a while, here's her category posts for customer service, so like I said it's nothing new.

BBH-Labs has also picked out some juicy points in its review of Razorfish's third annual digital brand experience report. Particularly BBH-Labs points out "... the silo walls between marketing & customer service teams in particular need breaking down; they are increasingly one and the same thing ..."

I know at my own job the business is only just defining its voice in an online world: is it customer service, news service, sales service; is it formal, informal; pro-active or reactive?

It's possible to even take this one step further and ask if it is even possible for a business to define its online personality, or is it the customers that define it for them? I think, just like a steamy first date, the relationship will be defined by the mimicry of interactions between the two.

All these philosophical questions aside I agree with both Laurel and BBH-Labs that the socialisation of business will ultimately draw marketing closer to customer service.

For a marketing manager that has paraded from advertising agency to sponsorship events and around the board table to have to grind away the hours with customer service and on the shop floor will be too much for some. Some businesses will refuse to change, refuse to engage with the customers. I believe that those that refuse to adapt to this new division of marketing labour will struggle to grow.

So I say to the marketing managers that are asking 'their agencies' to create a social media campaign for them, stop. It's not sustainable. You have to look within yourself and your brand, as the brand ambassador only you can create the social business your brand deserves. And it will include talking to customers yourself.

Kleenmaid's foray into YouTube

Kleenmaid Appliances, an Australia whitegoods retailer went into voluntary administration on April 9 with an estimated debt of $73 million.

To provide Kleenmaid customers with an update on what this meant, the directors, Bradley Young and Andrew Young, took the unusual step of broadcasting a message via YouTube.

View it here. I have linked rather than embedded it because embedding permissions have been turned off.

As well, comments and response videos have also been turned off. What this says to me is that Kleenmaid had the best intentions for using YouTube as an engaging medium in what must be quite a stressful time. But the stress may have been too much, by turning off all forms of two-way communication this has meant people have circumvented this non-communication by other means.

Here are the examples to be found on YouTube today:





Yes, YouTube is full of weird and wonderful people, but like any other new media/social media platform, an inherent part of its purpose is to facilitate two-way communication. As seen in this example, people will call you out when you "don't play by the rules". And yes, going into voluntary administration must be stressful enough without having to respond to all the people of the interwebs. But if you choose YouTube as a form of communication then you should obey the etiquette and its reason for being.

Take for example GE. GE is a global manufacturing and financial services organisation that no doubt angers many people for various reasons. However, though its communications arm it has bitten the bullet and agreed to allow customers, shareholders and the public to comment on everything from its products to its financial performance through its GE Reports website and YouTube channel.

The worst that can happen is that you get a bad comment which, if defamatory, you can moderate. The best that can happen is that you can control the debate via responding to comments and centralising the debate.

Savvy businesses are realising that YouTube and two-way communications platforms are providing a whole new level of engagement with their customers and shareholders. By using these platforms to craft and moderate the debate much of the fire that comes out at retail outlets or shareholder meetings can be abated.

And on a final note out of all the saga of Kleenmaid and its stuttering foray into YouTube, here is my pick for the winner. Amos, a Kleenmaid technician from Adelaide that has had the foresight to respond to one of the negative Kleenmaid spoofs. Well done!

The difference between shopping in the real world and online

So I've just come back from lunch and a few revelations came to me on my walk around town.

1. The Internet has changed shopping forever. OK, we've known this one for years and years. But it was only today that I actually got depressed about it. I looked at all these great shops with their pretty displays and thought, "I could go online and fine ten times as much of anything you could possibly stock in your little store." The poor shop-owners don't have a chance, there is no-way a bricks and mortar store can ever compete on range. Ever.

The depressing thing was that I like to touch and feel things, the texture, the look... yes I admit it, I like the SMELL of books. You can't get this online. This is the only thing the little stores have over the Internet. They have reality. Real people. Real customer service. All I can say is: little shops, customer service is the ONLY thing you have over the Internet - so used it well.

2. The key is in engagement. Walking down the the street I also passed a large number of pamphleteers. You know the people with a little A5 photo-copy selling you something or telling you about the next rally organised by the socialist left.

Most of the pamphleteers had it all wrong. Chatting to their buddies, casting a strange glare, handing you a pamphlet as if it were a controlled narcotic. It's not a hard thing, it does take a little technique, but shock-horror it's not hard. Smile, be open, say hello, say what you're giving the passer-by.

Conclusion? The traditional shop must evolve. Utilise your best asset - customer service. Leverage the Internet for what you cannot provide - range - affiliates, distribution agreements. And for the online retailers? Take a lesson from the humble street pamphleteer. If your usability is poor, or you don't have an open and welcoming appearance, then people might pass you by. Say hello, put a face to your store, utilise your best asset - range. Take lessons from the real world on the things you can't offer - personal customer service, just because you're online, doesn't mean you can leave the customer in the wilderness.

Ratings - what do they really say?

Here's a really good example of the different things simple ratings can tell you. Jared Spool on User Interface Engineering shows us that by comparing ratings of the same product on different websites you can get a very conflicting story.

Essentially one website was that of a bricks and mortar shop and the other was Amazon. Taking an example review from each website we could see that each review told essentially the same story but on one the product got 3 out of 5 stars and the other only 1 out of 5 stars.

The reason? Not the product but the customer service of the retailer.

Internally, for all events we rate based on a number of different KPIs. This allows us to find out what parts of the event performed well and which parts didn't. These ratings are not public, but it makes me think if they were to be made public, how would they be displayed? I wouldn't like to have five different 5-star ratings, but as we can see above, a single 5-star rating may be inadequate.