Lesson learned from LucidEra
LucidEra’s unfortunate announcement that it was suspending operations hits the SaaS industry hard. The on-demand sales analytics company had a good record of providing valuable solutions for sales organizations and managers interested in better understanding their pipelines and deriving meaning from their SFA data. But ceasing operations highlights one of the chief risks inherent in adopting a SaaS solution namely, that an application can become unavailable.
Fortunately, the people at LucidEra are classy people and they have spent the last week or two trying to ensure that their customers could migrate their data to another on-demand provider. They called it an “orderly transition.” That’s about the best you can expect and if every SaaS provider that goes out of business in the future did that we would have the rough equivalent of the scenario when a conventional vendor goes belly-up or stops supporting a version.
The conventional software model leaves you with the software that will run as is regardless of whether its vendor is solvent. Support and upgrades are a separate issue and they do not materially differ in either case.
So to the voices that have said LucidEra’s demise is proof of why conventional software is better, I say not so fast. Throughout the SaaS era — roughly ten years — the SaaS industry has had to cope with numerous similar situations where there were no precedents. Up-time, security and disaster recovery all had to be re-thought for SaaS and vendors invariably found solutions. LucidEra is providing another example of a SaaS provider figuring out a solution to a tough problem and I think they should be applauded.
Nonetheless, the SaaS industry should not act like this kind of thing could not happen again and it would be wise to consider contingencies for a SaaS company going down in the future. It may be wise for customers to consider requiring that SaaS providers carry insurance against failure or, more precisely, insurance to cover the contingencies associated with shutdown.
Surely some big insurance company would be happy to underwrite the risk in the same way that multiple insurers already provide business insurance against all sorts of calamities including errors and omissions. Such insurance might not have been feasible ten, five or even three years ago. But the popularity of SaaS and the business advantages it offers clients says that the risk pool is reaching critical mass if it has not surpassed that threshold already.
Let’s say insurance against a SaaS company’s demise costs a dollar per month per seat declining for really big implementations or customer bases. Who couldn’t or wouldn’t afford that, especially in this market? A dollar isn’t much but given the market I can’t see how it wouldn’t be a profitable business.
I don’t expect that any SaaS company will rush out and advocate for insurance and, as is often the case, demand for such insurance will have to come from the customer. But all of the pieces seem to be in place and, like mirrored data centers and SLAs (service level agreements) I expect transition insurance in the event a SaaS company goes out of business will become standard fare in this still evolving industry.
Selling your story
We are stuck in a mode where customer experience is the driving force in much of CRM, especially sales. Do everything you can to ensure a good customer experience and sales will happen, or so we believe. But we don’t define what an experience is and very often we confuse an individual’s experience with a company or product with the concept of elevating a product or service to an encounter that is so substantial that it becomes an experience.
The concept of an experience was predicated on the second definition posed more than ten years ago by Joseph Pine and Jim Gilmore but it was somehow morphed into the first definition.
The problem with the second definition is that most products and services do not lend themselves to becoming experiences. The problem with the first idea is that any vendor can cajole you into believing you had a good encounter, but if everyone is doing this where is the critical differentiation you need to stand out? Together, these definitions sum up the challenge.
I would not say that customer experience or the experiential side of the customer relationship is not important. But I would aver that it isn’t enough. Furthermore, I think we cling to it as though we are drowning and our laser focus on customer experience is crowding out the attention that we should be giving to other aspects, like operations. In the current economy, blind adherence to customer experience is like pushing on a string. For those reasons, I think it’s time to drive a stake through its heart.
Now, let’s wait a moment until the shouting subsides. Just a moment. Maybe two. Ok, let’s proceed. What did I mean?
Whether we are talking about customer experience or its mirror image, operational excellence, we are talking about the same thing, namely, innovation. The question to be answered is how do we innovate in sales situations now, today, in this economy? For reasons related to pushing on that string, I think we need to innovate around operations rather than experience.
The present economy is notable for the demand destruction that has taken place due to the credit crisis. Without credit people and companies have less latitude in purchase decisions. They don’t make purchases unless there are hard, objective reasons for doing so.
In sales and marketing, the focus on customer experience needs to shift to the operational needs of enabling sales people to sell. That might sound obvious, even tautological, but it is not and it can require a significant shift in our thinking. Two recent books illustrate my point.
The first, “Whoever Tells the Best Story Wins” by Annette Simmons explores the importance of story in business. Simmons’ point is that we all have a plethora of hard data about our products and services but that data has a diminishing effect on selling. She quotes George Lakoff, the famous linguist, who said that how we frame an issue has a dramatic effect on perceptions. Framing is part of story telling and stories are subjective — and dramatically different from the hard, data-driven messaging we routinely deliver in a sales process. Ironically, all that data is what we dispense while we are attempting to provide a great customer experience.
The other book, an eBook by Jeff Ernst of Kadient, discusses how the best sales people intuitively know how to deliver the right information at the right time in a sales process to achieve outstanding results. Ernst’s point is that everyone in sales needs to be able to deliver the right information, to tell the right stories.
Ernst boils an ocean of information down into a short book with a handful of new rules for selling, which I think anyone would benefit from. Rather than a rote exercise in sales methodology, Ernst counsels listening to customers and responding with the information that resonates with particular buyers. His differentiation is in how he determines what stories resonate.
The high achieving sales people are telling the right stories instinctively. These are stories with a purpose and the approach, which is embodied in sales playbooks, can be quantified by collecting data about which stories worked best in a very limited universe of situations faced by a sales team. As Simmons writes, “Story is how humans interpret things as good or bad, important or irrelevant, safe or dangerous, and who is ‘one of us’ or ‘one of them.’”
A sales process is all about a sales person becoming “one of us,” long before the customer makes a purchase. And I would suggest that unless a sales representative passes that test the actual deal will always remain out of reach.
Ernst prescribes a sales process in which companies enable their best sales people to share their stories about how they conduct the most successful sales campaigns. The information, as well as advice about when to use it, is captured in sales playbooks and made available in chunks that are easily absorbed by the representatives. Ernst says sales people are just-in-time learners so why burden them with three ring binders and long training sessions they won’t remember in a month?
This approach falls under the heading of sales enablement, a term that has received increasing notice recently. At its heart is a pragmatic approach to doing what works by understanding that people, buyers, make logical decisions for emotional reasons, as the great sales trainers frequently say, rather than relying on a mountain of “facts.”
In her book Simmons quotes Barry Schwartz, author of “The paradox of Choice: Why More is Less,” in which he writes, “There’s a point where all of this choice starts to be not only unproductive, but counter productive — a source of pain, regret, worry about missed opportunities and unrealistically high expectations.”
You could say the same about customer experience. We can’t layer experiences onto confusing processes without risking customer overload. Like anyone, a customer doesn’t know what he or she doesn’t know and customers look to trusted advisers — sales people who have become “one of us” — for answers. The best customer experience is one in which the customer is lead on an exploratory mission through the chaos of a buying process. Providing that experience requires a good deal of operational organization on the other side. It is why sales enablement is so important today.
This revolution is being televised, blogged, tweeted and tubed
Events taking place on the streets of Teheran may have an important affect on how social networking rolls out across the rest of the world and that includes the CRM world. Last week the media began carrying stories about a “cyber revolution” that may be happening in the Islamic Republic, but those stories fail to account for the whole story, the yin and yang of social media.
We tend to think about social media as unalloyed goods because they have benign and possibly beneficial outcomes but our thinking is clouded by one important point: social media is literally a free for all. Any tool, including social media, can be used for good and not so good purposes as we have learned repeatedly.
Much was made about the U.S. State Department asking Twitter to delay taking its system down for maintenance until night time in Teheran so that the micro-blogging site could continue its role in support of protesters. But who said that only the good guys were using these Internet tools?
It might only be 1388 on the Muslim calendar but the government and many religious schools have been into modern Internet communications — including blogging — since 2006 according to an article I saw. The New York Times also weighted in on the significance of social media on Sunday. Regardless of your thoughts about the government in Teheran, it has been a party to all of the twittering and blogging and video sharing that we in the West have used to trumpet the benefits of social media.
It may be highly ironic but both sides in the dispute about the recent Iranian presidential elections are part of the same communities. The students might be able to blog about a crackdown or upload some video but the authorities can use the information to identify people in the videos, individual bloggers and tweeters with the result that they can arrest and shut down dissent. The revolution may be being televised but live or near instantaneous feeds we get in the West come at an increasingly steep cost to the participants.
I think the connection with CRM is clear. No, you don’t have to worry about big brother coming down on you, at least in the U.S., at least not yet, but the example of Teheran and the existence of social media monitoring and management technologies for business purposes, should give us all pause. I repeat, it is a free for all out there and social media are adding some zip to the situation.
It might be good for us all to consider a code of conduct for using these powerful tools, at least in our business lives. Unlike many similar codes that are designed to protect others, a social media code of conduct would have powerful benefits for the people generating content. It would serve as a personal reminder that the Internet is an increasingly dangerous place and like any dangerous place, we must have our wits about us whenever we venture forth.
Some parts of the code might be obvious, like performing a bit of fact checking before re-distributing third party content or refraining from certain activities because they may have unpredictable consequences. We can’t be perfect about predicting the future, of course, but just as we instinctively avoid say, spitting into the wind, we need to develop instincts regarding the combination of cell phone cameras, alcohol and business meetings just for starters.
Other instincts might be commonsensical but they may not have been figured out yet. For example, how often do you perform an Internet search on yourself or your company or your corporate officers? Do you know what the rest of the world is saying about you? If you are in corporate marketing or have high-level responsibilities you might consider instituting a policy.
Finally, what information about your company is confidential and how much of it is being put out on the Internet in the normal course of business? Even it you think you run a tight ship, your job postings offer unique insight into staff turnover and product development.
I am trying to be careful not to refer to any of this as the “down-side” of social media because none of this is inherently part of the technology. We are witnessing the moment when we discover just how powerful a new technology is and it is sobering. Social media brings new capabilities to all of us. The hard part will now be to domesticate it to first do no evil.
Enterprise 2.Oh wow!
Ok, last year’s Enterprise 2.0 conference left me with the impression that this was the flavor of the month. Its significance escaped me. This year it was completely different. Since I have been tracking social media, social networking and the like since 2002, I don’t believe that I had failed to get the religion. I think it has taken a few years (this was the fourth E2.0 conference I believe.) to get the ideas and the messaging right. That’s all water over the dam and if you were stuck in rainy Boston for this conference, you probably got the impression that last year was a long time ago.
So, it’s time t put a marker down. This is it, the real deal, a disruption is forming but it isn’t here yet. Too many vendors are still (and will be for a while) stuck in the gee-whiz isn’t this technology cool phase. It’s more like a weather pattern disturbance off the coast of Africa that has the potential to grow into a Caribbean hurricane give time and a few readily available ingredients. It was fun to be at the conference, to absorb the mood and the thinking and to take copious notes.
The notes will form the basis of about three posts over the next few days. They will appear here when they’re fully baked.
Red Sox and the 4-4-1 strategy
Today’s Boston Globe sports section examines the “problem” of what to do with all of the pitching talent in the bullpen. There are 13 pitchers and 6 starters or starting quality arms. An article by Tony Massarotti examines five solutions four of which involve demoting a pitcher to the pen and the last one suggests a 6 man rotation.
I think it’s time for bolder thinking.
I believe there should be two objectives for figuring out this rotation (in addition to winning most games). They are:
1. Reducing late season fatigue due to pitching too many innings
2. Keeping pitchers’ heads in the game
The five day rotation has a rhythm that the pitchers are accustomed to. They rest, recover, throw on the side and work on technique, and eventually get ready to pitch again. We wouldn’t want to disrupt the five-day rotation because it might be hard to get everyone on the same page. But we could reduce the innings pitched to preserve arms for the post season.
I suggest pairing two starters or a starter and a reliever as a tag team — the 4-4-1 strategy. Each would be responsible for pitching 4 innings. That leaves the closing duties to the three remaining pitchers in the pen. And if a game is close or the pen is tired, asking a starter to pitch an extra inning (the fifth or the ninth) would not be a strain. To ensure that the starters are kept happy a “starting pair” of pitchers could alternate which chunk of 4 innings they pitch effectively giving each pitcher a start every ten days.
The down side of this rotation would be to leave the pen depleted of short relief. But frequently we see pitchers brought in for the later innings because a starter runs out of gas or long relief because the pitcher’s stuff is no good or because the manager wants to have a match up of lefty vs. righty. But all these strategies are attempts to make due with insufficient pitching power to begin with. In a 4-4-1 strategy we would know a new pitcher was coming after four or possibly five innings no matter what.
In the first four innings of a game these starting pitchers can be reasonably depended on to throw well and I wouldn’t worry too much about a Red Sox starter getting shelled and leaving the game before four innings are up. It could happen but we go into a game knowing no team wins all the time. In the worst cast scenario, if a starter got pulled after only two innings the second starter could be reliably counted on to go the next five or six.
Lastly, the matter of matching up relief pitchers and hitters in the late innings would be less important because there would always be a fresh, high quality pitcher on the mound.
When I was a kid pitchers routinely went 9 innings which resulted in some very tired arms in the later part of the season and the last third of an inning could be a hitter’s dream as the pitcher’s effectiveness wore down. (As a reminder we need look no further than that painful memory of Pedro and Grady Little at Yankee Stadium in the ALCS.) Then we went to 7 innings for starters and to monitoring pitch counts, which is better but we still see late season fatigue and still too many head games (and station breaks) late in games as pitchers are brought in to face one batter.
A 4-4-1 strategy may be the next logical evolution of a system that started with greater reliance on relief pitching, and in a way it is a throw back to little league. Few teams have the talent to even attempt this strategy, which is a good thing because it could prove to be the Red Sox secret weapon for the second half of the season.
A great way to test the effectiveness of 4-4-1 might be to briefly implement it in the run up to the All-Star Game. If the experiment blows up it will have limited impact but if it works it could mean lots of fresh arms in September and October.
