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July 29, 2011

Crossing The Line

Last week while at a concert in our little town we ran into an old acquaintance, who I did not recognize at first. This was because she had lost a little over half of her body weight since the last time we saw her. It was an amazing transformation – one that she was both proud of, but yet modest regarding the success of the feat.

If you want to lose weight, one of the best techniques, which you might not hear about from the folks who want you to buy low calorie / high margin meals, is to set a weight-loss goal that includes both the number of pounds or kilograms to lose and by what date. It also helps to have a personal motive that corresponds with that goal, such as fitting into a bathing suit prior to a long awaited cruise.

What I have learned over the years about effective strategic planning it that it works the same way. You set up a target to be achieved by a certain date and have it tied very strongly to an important business gain. This is pretty straight forward stuff. Yet, an important lesson I gained early on in my career was from a colleague who observed that a good strategy means you have to choose an end state that is different from your current state. This may seem obvious, but it is a really key concept. It means that a good strategy requires that you declare that where you are today is not good enough – you have to change.

Effective strategic planning demands that you have to work toward a place you are not currently – you have to be dissatisfied with where you are. But, it also requires that you then have to take action to get to the new end point. This of course is where so many people fail at weight loss – I don’t believe I can get there so I won’t take the steps to get there, and then I’ll eventually stop setting the goals and just pretend I am happy with where I am. This again parallels the strategic planning process – you have to choose a strategic end state that requires you make effort to achieve – you have to work to achieve a change.

So, my question is, if you have to change in order to have a good strategic plan, when does the execution of that plan cross over from simple implementation of the plan and into the notion of business transformation. The old acquaintance of ours had truly gone through a transformation – she appeared to us as a different person. Does this mean that business transformation demands that you must become a different company at the end of the process? I am going to cut to the chase on this – I don’t have the answer. I don’t know when you cross the line from simple execution and into business transformation.

Your question at this point, and I acknowledge that it is a legitimate question; what possible difference does it make? My suspicion is that there are two camps of thinking with regard to the answer. One camp is that simple execution requires a different level of effort than business transformation. The latter requires more focus on the change. This follows the line of thinking that losing 10 pounds requires a different approach than losing 110.

A second school of thought is that everything is business transformation when it comes to effective strategic planning. The logic would be similar to the idea that if you want to lose 10 pounds you have to make some changes, otherwise you are going to gain the 10 pounds back in a few weeks. Likewise, if you are truly building an effective strategic plan, you need to set a target that requires you to change, to achieve something that you are not going to achieve anyway (this is the crux of the folly for many strategic plans).

Bringing this back to CRM, specifically, if you want your CRM program to make a difference, you will need to make some changes. You need to introduce best practices, you need to ask for new behavior, you must expect that technology will be used in new ways (for example, see my recent posting on Social CRM).

Well, I guess then that begs the question, does every good CRM strategy require that you take a business transformation approach and not just a simple execution of planned tactics? I am going to go out on a limb and get radical with a, yes, as the answer. Successful CRM initiatives require real change, not just what will happen if you go with inertia to carry you forward. Do you need to lose half your body weight to be considered successful? Absolutely not. Would a 50% drop in the amount of time that deals hover at stage 3 be considered a big success? Absolutely!

I don’t know about you, but all this talk about dieting is making me hungry.

Tapas Banquet

July 22, 2011

Growth Strategy for Crabs

Crabby Beachcomber

I have a serious case of crabgrass. It is shooting up absolutely everywhere. I have never had an invasion of this magnitude – it is going to be quite a battle for supremacy in my yard.

Crabgrass follows a very interesting growth strategy. It sends shoots in all directions and hopes that where it pops up will be a successful place to branch out. Those that end up in the driveway are doomed. Likewise, those that end up in the middle of a healthy patch of grass have difficulty making it as well. But, if they make it through to a spot that is distressed – perhaps a bit of clearing without other grass coverage – the new shoot quickly settles in and starts to expand.

This is an expensive strategy. It requires large amounts of shoots that are destined for failure. It also requires a very aggressive growth capacity – the new shoots have to grow faster than the surrounding grass in order to gain an adequate foothold for expansion. This requires a very deep set of roots to feed the shoots with the requisite water and minerals. It is as if the crabgrass has a rich uncle somewhere constantly funding its expansion without concern for cost.

I find crabgrass really, really irritating.

E-mail marketing has a lot in common with crabgrass. For those that don’t want to receive the offer, it is like having this invasive species in your inbox. Campaigns that utilize e-mail as a primary vehicle often follow the crabgrass growth strategy – send shoots everywhere and hope that one pops up in a location that will allow a foothold. The ultra low cost of e-mail as a channel is that analogous rich uncle funding the crabgrass. It does not really cost that much to send out 1000 e-mails, even if you only expect two to be opened. You can afford to end up in somebody’s driveway without much loss. But, two will get opened and they may lead to business. Crabgrass eventually does get a foothold and does thrive.

On the other hand, not very many homeowners are happy with a crabby lawn. Crabgrass has a pretty low brand value. If you have been utilizing a crabgrass growth strategy you might be doing the same to your brand. However, you can’t really blame crabgrass for its approach – millions of years of evolution have trained it. It is not smart enough to target those open patches in your lawn. But, your growth campaigns should be smarter. You do have the ability to target where you will have a better chance of being successful – reducing the irritation of messaging sent to the wrong buyer. Likewise, targeting also prevents making offers to those that are going to buy anyway. You want to use special pricing to entice a new buyer, not reduce your margin with existing buyers.

Targeting does require a bit of extra effort. However, e-mail campaign techniques that utilize a sound web strategy have proven extremely successful – topics for another post. Buying lists and pounding folks with offers is just so last century.

I wish you a green and happy lawn.

July 15, 2011

Time to Stop Being Anti Social

She had been on my case for nearly two years. For some reason she decided to take up salsa dance classes and the expectation was that I should be participate. On Sunday I finally relented and joined my wife for a night of bachata, merengue and cha cha cha steps. I don’t understand why it has become so prevalent in these parts where I live, but pretty much everyone in our circle of friends was involved and I was the hold out. The classes are one part dance lesson, one part aerobics, and three parts social time. It was finally time for me to stop dragging my feet (pun intended) and also stop being anti-social. This rare Sunday evening event did not conflict with my travel schedule, so I relented.

Have you been dragging your feet too? Acting anti-social? It was not very long ago that I made a presentation on CRM trends to a client where our stated position was that Social CRM was a trend worth keeping an eye on, but maybe not something to take action on quite yet. I have officially changed that presentation – it is time to take action and get social.

The statistics are hard to argue with. Half of those business professionals that utilize social media sites are there seeking to access thought leadership. More than a quarter of business users are researching business decisions. B2B commerce is being performed within the cloud and your company is involved, whether you are there or not. Your customers are talking about you; your prospects are asking about you; there is priceless feedback being offered up for your R&D; and very possibly, there is a firestorm eroding your brand value. There is no industry or type of company that is left out of the dance – anything from a lemonade stand to NASA is in play.

Yes, it is true that from a CRM perspective we are breaking new ground, but that does not mean that we have not learned what is working. Here are some things that we know: first, social media is not a new function – it is just another channel through which all functions can reach and engage your customers. You have to weave it into how you attract, acquire, and retain customers, like any other channel. The difference is that this is a channel that they control. And that is the second major learning – social media is extremely democratic. If you don’t provide value with it, your attempts at engaging won’t work. This leads to the third major learning – in order to understand how to provide value, you will need to listen well. The conventional wisdom, if we can use that term with such a new business phenomenon, is that the most effective way to get started is by monitoring your customers’ activity. Learn from it and then act upon it.

Social media is technology that lives in the cloud. It is very accessible, which is why it has become so prevalent. But, that is also the risk, because it also very easy to just start doing stuff. And the technology is advanced to the point where it truly delivers. The most consistent piece of advice I have seen from all the research I have conducted on this topic, and my own experience supports it, is that the very, very first thing a company should do when deciding to attend the social CRM dance is to build a strategy first and only then jump into the technology. You must decide what business outcomes you are chasing before charging down a path that may be fruitless at best or become a branding disaster at worst.

So, if you listen to the advice on how to get started from the early adopters it goes something like this:
1) Define your targeted business outcomes
2) Identify how social media will be utilized within your existing customer-facing functions
3) Establish the capability to listen and analyze
4) Engage customers or prospective customers in a limited capacity
5) Repeat

Everybody seems to think that this is crawl, walk, run territory. And that means if you have not embarked on the social CRM path it is time to at least crawl out to the dance floor. I learned that it is hard to dance the merengue the first time out, but getting started is everything. And, iIt does not hurt to have the right shoes.

Gypsy Tools

July 01, 2011

Starting A New Cycle

We are on the eve of a big holiday weekend and all the good folks in my corner of New England are all about the final preparations for being out on their boats to enjoy the beginning of summer. The weather has not been all that cooperative for the last month and that has raised the stakes even higher. This is a must do situation and everything has to be in a high state of readiness. Anticipation of this weekend actually starts earlier in the spring when many of us were going through our annual ritual of nautical preparation.

There are many things required for the boat to be fully functioning so that when summer finally arrives in full glory you can turn the key and be off in the sun and spray. Back in April, weather permitting; an endless list of chores unfolds, all with the hope of being out on the water serving as the motivation. With any luck the investment will pay off and when that magical long weekend arrives with a blue sky forecast, the boat will serve without disappointment.

Those that take short cuts or procrastinate on their preparatory chores will invariably pay the price. I am not sure what is worse: never leaving the dock with a boatload of happy people and an overstuffed cooler due an engine that won’t turn over; or being towed back to shore with a boatload of irritable crew and a long-emptied cooler due to an engine that died in the middle of a far-away bay. Those visions also serve as my motivation during spring prep.

This is a seasonal activity for boaters, especially us New England types. Some cycles are annual and some cycles are longer. I have learned that CRM programs also go through cycles. They are not annual – more like every two or three years, but there is a cycle. There is a start to the cycle, comprised of planning and preparation; there is a period of deployment and enhancement; and then, unfortunately, there eventually is a period of decline. User adoption drops off, data quality decreases, managers relax their vigilance. It is a lot like a kind of CRM winter.

Snow Boat 1

Then there is talk of something new. Sometimes there is a desire for a new CRM platform. There might be a change of senior management and a direction for the business. Sometimes there is talk about raising the bar – wanting to take CRM to the next level. This, ladies and gentlemen is the CRM spring, when it is time to get the boat ready for a new cycle. While it is not always the same organizational dynamic that causes the cycle to start again, but there will always be something to drive it. You can sense the signals, just like seeing buds on trees and robins in the lawn. It is time for getting your CRM program ready for a new cycle.

The start of a new CRM cycle means that you do the same things that were required when you started for the first time. You plan for what you are going to accomplish – where are going to take the business with this revolution, what do we need to build, what actions do we need to take to get the folks ready to perform? You may already own the boat, but you need to change the oil, do some polishing, update some electronics, and maybe even upgrade the engine. Your CRM program needs the same type of attention.

So, if you are starting to witness the signs of CRM spring, think of what you want to experience when summer comes around – do the preparation to gain the benefits. And remember, don’t take any short cuts. The last thing you want is to have your CRM platform towed back to shore because it died while you were out having fun in the middle of that long holiday weekend (which would equate to the middle of your peak sales season).

Enjoy your summer!