Books

The Jelly Effect and the importance of focus on AFTERS

ianwaring Books, Enterprise IT, Marketing, Selling, Software, Training Leave a comment

Jelly Effect by Andy BoundsI have a few books in my bookcase that I keep for a specific reason. Normally that they are succinct enough to say the obvious things that most people miss. One of these is The Jelly Effect: How to Make Your Communication Stick by Andy Bounds.

His insight is that most people want problem solvers, not technicians. They typically don’t care two hoots about the history of your company, or all the detailed features of your products or services. What they do typically care about is what will have changed for them AFTER your assignment or project with them has been completed. Focussing on that is normally sufficient to be succinct, to the point and framed around delivering the goals that customer feels are important to them. All that without throwing large volumes of superfluous information at your prospect on that journey. Summarised:

“Customers don’t care what you do. They only care what they’re left with AFTER you’ve done it”.

The end results of taking the deeper advice in the book include:

  • One bank, who won business from 18 pitches out of 18 after having implemented AFTERs
  • Another bank increased weekly sales by 47% based on focus on AFTERs
  • A PR and Marketing Company that have won every single sales pitch they have made after having previously won far less sales than their available skills deserved
  • The author suggests it’s worked for every single company he has worked with, from multinational blue-chips, to small local businesses, to charities looking to win National accounts, to family run businesses.

He describes the process outlined in the book in a short 5 minute video here.

I was once asked to write out the 10 reasons why customers should buy Software from my then Company – Computacenter, widely considered to be the largest IT reseller in Europe. Using the principles of “The Jelly Effect”, I duly wrote them out for use by our Marketing Team (they could choose which one of the 11 reasons to drop):

10 Reasons to buy Software from Computacenter

  1. Reducing your Costs. We compensate our folks on good advice, not sales or profits. We would rather show you ways to lower or eliminate your software spend, rather than stuffing you to the gills with products or services that you don’t need. Putting a commission hungry software salesperson rarely delivers cost savings in a tough economic environment; we think being synonymous with “help” is a better long term business strategy.
  2. Improving Service Levels. Your Internal Account Manager or Sales Support contact is the central hub through which we bring all our software skills to bear to help you. We expect to be able to answer any question, on any software or licensing related query, within four working hours.
  3. Access to Skills. Computacenter staff have top flight accreditation levels with almost all of the key infrastructure and PC software vendors, and a track record of doing the right thing, first time, to deliver it’s customers business objectives cost effectively and without surprises. Whether it’s the latest Microsoft technologies, virtualising your data centre, securing your network/data or weighing up the possible deployment of Open Source software, we have impartial experts available to assist.
  4. Freeing up your time. Computacenter has trading agreements in place with over 1,150 different software vendors and their local distribution channels, almost all signed up to advantageous commercial terms we make available to you. We can find most software quickly and buy it for you immediately on very cost effective commercial terms, and with minimal administration. Chances are we’re buying the same thing for many of your industry peers already.
  5. Reducing Invoice Volumes and associated costs. We’re happy to consolidate your spend so you receive just one invoice to process per month from us across all your hardware, software and services purchases from Computacenter. We often hear of cost-to-handle of £50 per invoice, as well as the time you staff take to process each one. Let us help you save money, and reduce your costs at the same time.
  6. Renewals without surprises. We can give you full visibility of your software renewals, enabling more effective budgeting, timely end user notifications, simpler co-termed plus consolidated contracts, and lower support costs. Scheduled reporting makes late penalty fees and interrupted support a thing of the past. Reduced management burden, and more time to focus on your key management challenges.
  7. Self Service without maverick buying. We work with IT and Purchasing Managers to make only their approved software products, at their most cost effective licensing levels, available using our CC Connect online purchasing service. This can often halve the spend that users would otherwise spend themselves on retail boxed versions.
  8. Purchase Power. Computacenter customers together account for the largest spend of any reseller on almost all of the major Software vendors we trade with. In the final analysis, you get the best prices and access to the best vendor, distributor and Computacenter skills to help achieve your business objectives.
  9. Spend Reporting. Knowing what license assets you have is the first step to ensuring you’re not inadvertently duplicating purchases; we’ve been known to deliver 23%+ savings on new software spend by giving IT Managers the ability to “farm” their existing license assets when staff leave or systems evolve in different parts of their organisation. Reporting on your historical purchase volumes via Computacenter is available without charge.
  10. Managed Procurement. We’re fairly adept at, and often manage, relationships for new and renewal purchases across 80-120 different software vendors on behalf of IT and Purchasing staff. If you’d like to delegate that to us, we’re be delighted to assist.
  11. Services. If you’ve not got time to work out what you’ve purchased down the years, and wish to consolidate this into a single “bank statement” of what your current and upgrade entitlements are, we can do this for you for a nominal cost (we use our own internal tools to do this fast and accurately for the major PC software vendors, independent of the mix of routes you used to procure your software assets). When times are tough, many vendors think “time to audit our software users”; your knowledge is your power, and even if you find there is some degree of non-compliance, we work to minimise the financial exposure and protect your reputation. We’ve been known to strip 75% off a vendors proposed multi million pound compliance bill using our licensing experts and some thorough research.

So can we help you?

I think that summarised things pretty well (my boss thought so too). Not least as the company were surrounded at the time by competitors that had a tendency to put software sales foxes straight into customer chicken coups. We always deliberately separated what media outlets consider a divide between advertising and editorial, or between church and state; we physically kept consultants measured on customer satisfaction and not on sales revenue. Computacenter are still pretty unique in that regard.

They still do that to this day, a long time after my involvement there as the Director of Merchandising and Operations of the Software Business Unit finished.

I don’t think the Andy Bounds has overhyped his own book at all. Its lessons still work impeccably to this day.

 

Focus on End Users: a flash of the bleeding obvious

ianwaring Apple, Books, Courses, Enterprise IT, Facebook, Google, IBM, Marketing, Microsoft, Selling, Software Leave a comment

Lightbulb

I’ve been re-reading Terry Leahy’s “Management in 10 Words”; Sir Terry was the CEO of Tesco until recently. I think the piece in the book introduction relating to sitting in front of some Government officials was quite funny – if it weren’t a blinding dose of the obvious that most IT organisations miss:

He was asked “What was it that turned Tesco from being a struggling supermarket, number three retail chain in the UK, into the third largest retailer in the World?”. He said: “It’s quite simple. We focussed on delivering for customers. We set ourselves some simple aims, and some basic values to live by. And we then created a process to achieve them, making sure that everyone knew what they were responsible for”.

Silence. Polite coughing. Someone poured out some water. More silence. “Was that it?” an official finally asked. And the answer to that was ‘yes’.

The book is a good read and one we can all learn from. Not least as many vendors in the IT and associated services industry and going in exactly the opposite direction compared to what he did.

I was listening to a discussion contrasting the different business models of Google, Facebook, Microsoft and Apple a few days back. The piece I hadn’t rationalised before is that of this list, only Apple have a sole focus on the end user of their products. Google and Facebook’s current revenue streams are in monetising purchase intents to advertisers, while trying to not dissuade end users from feeding them the attention and activity/interest/location signals to feed their business engines. Microsoft’s business volumes are heavily skewed towards selling software to Enterprise IT departments, and not the end users of their products.

One side effect of this is an insatiable need focus on competition rather than on the user of your products or services. In times of old, it became something of a relentless joke that no marketing plan would be complete without the customary “IBM”, “HP” or “Sun” attack campaign in play. And they all did it to each other. You could ask where the users needs made it into these efforts, but of the many I saw, I don’t remember a single one of those featured doing so at all. Every IT vendor was playing “follow the leader” (and ignoring the cliffs they may drive over while doing so), where all focus should have been on your customers instead.

The first object lesson I had was with the original IBM PC. One of the biggest assets IBM had was the late Philip “Don” Estridge, who went into the job running IBM’s first foray into selling PCs having had personal experience of running an Apple ][ personal computer at home. The rest of the industry was an outgrowth of a hobbyist movement trying to sell to businesses, and business owners craved “sorting their business problems” simply and without unnecessary surprises. Their use of Charlie Chaplin ads in their early years was a masterstroke. As an example, spot the competitive knockoff in this:

There isn’t one! It’s a focus on the needs of any overworked small business owner, where the precious asset is time and business survival. Trading blows trying to sell one computer over another completely missing.

I still see this everywhere. I’m a subscriber to “Seeking Alpha“, which has a collection of both buy-side and sell-side analysts commentating on the shares of companies i’ve chosen to watch. More often than not, it’s a bit like sitting in an umpires chair during a tennis match; lots of noise, lots of to-and-fro, discussions on each move and never far away from comparing companies against each other.

One of the most prescient things i’ve heard a technology CEO say was from Steve Jobs, when he told an audience in 1997 that “We have to get away from the notion that for Apple to win, Microsoft have to lose”. Certainly, from the time the first iPhone shipped onwards, Apple have had a relentless focus on the end user of their products.

Enterprise IT is still driven largely by vendor inspired fads and with little reference to end user results (one silly data point I carry in my head is waiting to hear someone at a Big Data conference mention a compelling business impact of one of their Hadoop deployments that isn’t related to log file or Twitter sentiment analyses. I’ve seen the same software vendor platform folks float into Big Data conferences for around 3 years now, and have not heard one yet).

One of the best courses I ever went on was given to us by Citrix, specifically on selling to CxO/board level in large organisations. A lot of it is being able to relate small snippets of things you discover around the industry (or in other industries) that may help influence their business success. One example that I unashamedly stole from Martin Clarkson was that of a new Tesco store in South Korea that he once showed to me:

I passed this onto to the team in my last company that sold to big retailers. At least four board level teams in large UK retailers got to see that video and to agonise if they could replicate Tesco’s work in their own local operations. And I dare say the salespeople bringing it to their attention gained a good reputation for delivering interesting ideas that may help their client organisations future. That’s a great position to be in.

With that, i’ve come full circle from and back to Tesco. Consultative Selling is a good thing to do, and that folks like IBM are complete masters at it; if you’re ever in an IBM facility, be sure to steal one of their current “Institute for Business Value” booklets (or visit their associated group on LinkedIn). Normally brim full of surveys and ideas to stimulate the thought processes of the most senior users running businesses.

We’d do a better job in the IT industry if we could replicate that focus on our end users from top to bottom – and not to spend time elbowing competitors instead. In the meantime, I suspect those rare places that do focus on end users will continue to reap a disproportionate share of the future business out there.

The Art of Decoy Pricing

ianwaring Apple, Books, Marketing, Pricing Leave a comment

Over Christmas, I read Dan Ariely’s “Predictably Irrational” – a fascinating Book. One surprise, then a few snippets that suggest Apple execute a few important things to textbook standard – albeit with one glaring mistake.

The one surprise was from The Economist, who offered:

Economist Subscription Offer

At first blush, a silly offer. In tests, 16% chose the Internet only edition, 0% the print only one, and 84% the print plus Internet offer. However, offer only the basic and top flight offer:

Economist Revised Offer

and the takeup goes to 68% and 32% respectively. Hence, the presence of a similar, but clearly inferior, decoy swings the takeup of the high priced option from 32% to 84% of the takeup. Which is exactly what happened when Apple’s iPhone line-up became the iPhone 4s, 5c and 5s – with the 5c and 5s prices starting at circa £469 and £549 respectively. Everyone jumped at the most expensive 5s model, leaving short supply of that model and a glut of the slightly less expensive (but less capable) unsold 5c models.

As to the more positive things that reminded me of Apple, the following struck chords:

  • Perceived prices being high through restricted product supply
  • Setting (high) price anchors with arbitrary coherence; Johnny Ives gushing verbals at Apple announcement events, no less. Reassuringly expensive, just like some french lager ads.
  • the use of “free” components to take all risk out of a risk/reward comparison
  • Social norms of help at a Genius Bar versus competitor costly pains when a product goes wrong
  • Minimising options. I recall Steve Jobs redefining the Mac lineup to a 2 x 2 matrix; consumer/professional vs laptop/desktop, one model in each box. Likewise iPhones and iPads to good/better/best models.
  • Lower prices distinctively make us believe lower quality; Apple do the opposite, even wrapping the packaging to reinforce the quality feel. Even their boxes are things of beauty, apparently no expense spared.

There are further snippets about folks following a herd instinct as a sense of belonging (ordering meals aloud in a Restaurant; make sure you call your choice first!). Also the fact that if you affirm your honesty in some way before initiating any task, you are likely to follow it with the absolute truth – something our judicial system does very well.

I ended up in a difference of opinion with a friend on DNA testing (Jane ordered a testing kit from 23andMe, just before the US Food & Drug Administration told them to stop releasing results of their genetic tests). Textbook defence on my part having invested in one side of the argument, just like supporters of opposing football teams having self centred views of the exact same incident (it’s a penalty! No, he dived! How could you think that, it was right in front of you! …).

So, with that, some karma. I know how I’d react, and I could see my own irrationality.

People. They are confusing things. And in all ways but one slight pricing hiccup, Apple are eerily clever.

Crossing the Chasm – on one page of A4

ianwaring Books, Enterprise IT, Future Trends, Management Leave a comment

Crossing the Chasm Thumbnail

Among my many Business books, I thought the insights in Geoffrey Moores Book “Crossing the Chasm” were brilliant – and useful for helping grow some of the product businesses i’ve run. The only gotcha is that I found myself keeping on cross referencing different parts of the book when trying to build a go-to-market plan for DEC Alpha AXP Servers (my first use of his work) back in the mid-1990’s – the time I worked for one of Digital’s Distributors.

So, suitably bored when my wife was watching J.R.Ewing being mischievous in the first UK run of “Dallas” on TV, I sat on the living room floor and penned this one page summary of the books major points. We grew the DEC business from £12m to £52m in 2 years after using this work, so a lot of the lessons appeared to be good ones. Just click it to download the PDF with my compliments. Or watch him describe the model in under 14 minutes at the recent O’Reilly Strata Conference here. Or alternatively, go buy the latest edition of his book:

I did use this as part of a project to increase sales of Trafficmaster SmartNav jam-avoiding in-car navigation systems, which I conducted with the assistance of two professors from Cranfield Business School. We picked three target use cases to take us over the Chasm, with varied success.

I did manage to get 300 of them installed in the complete Virgin Atlantic “Upper Class” Chauffeur Car Fleet, which avoided the normal driver practice of having to wake the passenger up with an abrupt piece of braking as they neared the customers destination. Also saved a phone around to find out who was closest to a customer who just called in (found that the McDonalds outlets around Airports was a favourite haunt of their drivers).

By hook and by crook, we also managed to get test units in the cars of board members of 7 of the top 10 System Integrators in the UK at the time (given they had hundreds of expensive staff on the road every day; thought keeping them out of traffic jams would help their bottom line). Incorrect thought as it turned out; staff competitions to win a one of ten SmartNavs in each company (to promote them down the line, hoping for bottom up demand) invariably ended up with a glut of them on eBay.

Trying to engineer a bridge over a chasm proved difficult when the product is already designed and the B2B use cases wide ranging, especially when sales appeared to be over a myriad of different small segments. The company subsequently went B2C, and I suspect directly into the headlights of the steam roller that TomTom became.

My PA redrew my hand-drawn sheet of A4 into the Microsoft Publisher document that output the one page PDF. I may have the source file somewhere, so if you want a copy of the source file, please let me know – drop a request to: [email protected].

The Hard Thing about Hard Things

ianwaring Books, Management Leave a comment

I pre-ordered the Kindle version of Ben Horowitz’s new book back in January, and it was duly released and appeared on my iPad Mini yesterday morning. Fantastic book, finished it in two sittings.

Ben is co-founder with Marc Andreessen (of Netscape fame) of Venture Capital firm Andreessen-Horowitz, otherwise known in techie circles as A(16)Z. I recall the two companies he ran in his earlier years – Loudcloud and Opsware. At the time, the Divisional Manager of BT Ignite was more interested in a company called Jamcracker, principally because she liked their name. Meanwhile I was being sent in to do technical due diligence on a few potential acquisitions, just before the dot com crash.

While the VC’s feeding ideas were ex-colleagues of the then CEO (Peter Bonfield), the quality was generally shocking; promising scale to hundreds of thousands of users with software written in Visual Basic, or (with the help of Rothschilds) proposing sale of a domain name business back to BT for £70m before finding 2/3 of the customers were referred to them by… BT. That latter one eventually IPO’d for £12 million a couple of years later. Not to mention some hosting businesses, albeit they didn’t know i’d managed to size their server numbers and customer mix per Datacentre – routinely scuppering their slides when they deviated from an exact truth. One I looked at had 14 servers deployed in one very large building; others we monitored had frequent outages (and we knew which end customers were affected each time). But I digress.

Loudcloud and Opsware, unlike most of those companies I was asked to look at, were of the highest quality. Having said that, the impression reading the book is that being the CEO of both operations was quite a job. It sounded like someone running over a field chasing a tractor trailer with tons of cash accelerating away, but pursued at the same time relentlessly by a Combine Harvester. And then finding a lot of running track between the two was littered with tripwire and sinking sand. In both cases, Ben made it to the tractor trailer – just – despite enormous challenges. Very impressive.

I can relate to the story of folks visiting him where two co-founders wanted to share all the decision making in their proposed business. The one thing I learnt indelibly from my “Leadership and Followership” Management Training at Sandhurst was, that in any team setting, however ad-hoc, job #1 was picking one leader that everyone would defer to. So, while we were free to propose any action, the ultimate call was from that one person. And once they’d made that call, it was our job as a team to execute the decision made to the very best of our mutual ability.

There is a lot of truth in Business Books talking about “Peace Time” CEOs (which get written about all the time) and “War Time” CEOs (which rarely get mentioned). The first acknowledgement of the phenomenon i’ve seen outside the excellent writings of Simon Wardley (just wish his knowledge finally made it into book form). This will become key, as the world of Enterprise IT is going to descend into war type conditions for many vendors by this side of 2017.

The other thing that struck a cord was his coverage of hiring “older” folks to positions in a company. I went for 6 months trying to get interviews at the young age of 55, something that proved virtually impossible – this despite a long, successful track record of running large Software and Internet operations for Market Leading companies and always delivering my numbers. And of developing my employees, many of whom became regarded as “fast track talent”.

Ben reminds people that the chief advantage is “time”; while some tasks like engineering can be internally focussed, that there are several things that relationship networks and business building skills in an older candidate can deliver that truly make a difference between success and liquidation. So while HR and Management ageism is endemic (and it’s not controversial in any way to suggest that – it is a fact of life), it’s my job to point out areas where I can help any organisation. There are some excellent examples of techniques taught in Andy Bounds fantastic book The Jelly Effect: How to Make Your Communication Stick that should make a material effort to that effort.

In the meantime, Ben Horowitz has written a fantastic book. Very recommended.