One thing that bemused the hell out of me – as a Software guy visiting prospective PC dealers in 1983 – was our account manager for the North UK. On arrival at a new prospective reseller, he would take a tape measure out, and measure the distance between the nearest Directors Car Parking Slot, and their front door. He’d then repeat the exercise for the nearest Visitors Car Parking Spot and the front door. And then walk in for the meeting to discuss their application to resell our range of Personal Computers.
If the Directors slot was closer to the door than the Visitor slot, the meeting was a very short one. The positioning betrayed the senior managements attitude to customers, which in countless cases I saw in other regions (eventually) to translate to that Company’s success (or otherwise). A brilliant and simple leading indicator.
One of the other red flags when companies became successful was when their own HQ building became ostentatious. I always wonder if the leaders can manage to retain their focus on their customers at the same time as building these things. Like Apple in a magazine today:
And then Salesforce, with the now tallest building in San Francisco:
I do sincerely hope the focus on customers remains in place, and that none of the customers are adversely upset with where each company is channeling it’s profits. I also remember a Telco Equipment salesperson turning up at his largest customer in his new Ferrari, and their reaction of disgust that unhinged their long term relationship; he should have left it at home and driven in using something more routine.
Modesty and Frugality are usually a better leading indicator of delivering good value to folks buying from you. As are all the little things that demonstrate that the success of the customer is your primary motivation.
There’s a fair amount of controversy about two mobile applications in San Francisco right now; MonkeyParking and ReservationHop. Both offer a twist on selling a place in a queue to a limited resource:
In an environment where it can sometimes take 45 minutes to find a car parking place, MonkeyParking enables someone currently occupying a space to sell this to another driver in the same proximity.
Likewise, where Restaurants having waiting lists that may extend to over a month, ReservationHop prebooks tables and sells these to customers who want to make a late booking
Transport authorities are objecting to the scalping of public parking spaces, and likewise there is concern about unsold restaurant bookings causing inefficiences when virtual diners don’t turn into real ones.
Besides the market for ticket touts, i’m also reminded that some customers will pay a hobo (tramp) to reserve their place in queues for new iPhones. I also recall Sir John Harvey-Jones, ex CEO of ICI plc, who once vented his frustration at the management of Morgan Cars, who maintained a multi-year waiting list for cars rolling off their production line. Customers would routinely sell their positions at greater than the cost of a new car, a practice resulting in much shrugging of shoulders at a practice that they felt wasn’t really cricket – but which they allowed to carry on regardless.
I guess the answer is to charge a premium for a standard car, and to discount personal customisations ordered up front. Customising something normally increases the value to the originally intended recipient, while decreasing the value to everyone else. Anyone who doubts that hasn’t looked at the value an iPad sale achieves on eBay between stock machines and ones engraved with the owners name.
But, same old. It’s happened from the dawn of time, and rarity of any resource (and timely access to same) normally attracts some value that scalpers can attribute a price to. The only thing I find distasteful is the name coined for mobile apps that enhance this process on the West Coast of the USA right now – that of “Jerkware”. Hopefully we can come up with a more appropriate name going forward.
I saw a great blog post published on the Andreessen Horowitz (A16Z) web site asking why Software as a Service offerings didn’t sell themselves here. A lot of it stems from a misunderstanding what a good salesperson does (and i’ve been blessed to work alongside many good ones throughout my career).
The most successful ones i’ve worked with tend to work there way into an organisation and to suss the challenges that the key executives are driving as key business priorities. To understand how all the levers get pulled from top to bottom of the org chart, and to put themselves in a position of “trusted advisor”. To be able to communicate ideas that align with the strategic intent, to suggest approaches that may assist, and to have references ready that demonstrate how the company the salesperson represents have solved similar challenges for other organisations. At all times, to know who the customer references and respects across their own industry.
Above all, to have a thorough and detailed execution plan (or set of checklists) that they follow to understand the people, their processes and their aspirations. That with enough situational awareness that they know who or what could positively – and negatively – affect the propensity of the customer to spend money. Not least to avoid the biggest competitor of all – an impression that “no decision” or a project stall will leave them in a more comfortable position than enacting a needed change.
When someone reaches board level, then their reference points tend to be folks in the same position at other companies. Knowing the people networks both inside and outside the company are key.
Folks who I regard as the best salespeople i’ve ever worked with tend to be straight forward, honest, well organised, articulate, planned, respectful of competitors and adept at working an org chart. And they also know when to bring in the technical people and senior management to help their engagements along.
The antithesis are the “wham bam thankyou mam”, competitors killed at all costs and incessant quoters of speeds and feeds. For those, i’d recommend reading a copy of “The Trusted Advisor” by Maister, Green and Galford.
Trust is a prize asset, and the book describes well how it is obtained and maintained in an Enterprise selling environment. Also useful to folks like me who tend to work behind the scenes to ensure salespeople succeed; it gives some excellent insight into the sort of material that your sales teams can carry into their customers and which is valued by the folks they engage with.
Being trusted and a source of unique, valuable insights is a very strong position for your salespeople to find themselves in. You owe it to them to be a great source of insights and ideas, either from your own work or curated from other sources – and to keep customers informed and happy at all costs. Simplicity sells.
I got asked today how we grew the Microsoft Business at (then) Distributor Metrologie from £1m/month to £5m/month, at the same time doubling the margin from 1% to 2% in the thick of a price war. The sequence of events were as follows:
Metrologie had the previous year bought Olivetti Software Distribution, and had moved its staff and logistics into the company’s High Wycombe base. I got asked to take over the Management of the Microsoft Business after the previous manager had left the company, and the business was bobbing along at £1m/month at 1% margins. Largest customer at the time was Dixons Stores Group, who were tracking at £600K sales per month at that stage.
I was given the one purchasing person to build into a Product Manager, and one buyer. There was an existing licensing team in place.
The bit I wasn’t appraised of was that the Directors had been told that the company was to be subject to a Productivity Improvement Plan, at the same time the vendor was looking to rationalise it’s UK Distributor numbers from 5 to 4. This is code for a prewarning that the expected casualty was…. us.
I talked to 5 resellers and asked what issues they had dealing with any of the Microsoft distributors. The main issue was staff turnover (3 months telesales service typical!), lack of consistent/available licensing expertise and a minefield of pricing mistakes that lost everyone money.
Our small team elected to use some of our Microsoft funds to get as many front line staff as possible Microsoft Sales certified. I wasn’t allowed to take anyone off the phones during the working week, but managed to get 12 people in over a two day weekend to go from zero to passing their accreditation exam. They were willing to get that badge to get them better future career prospects. A few weeks later we trained another classful on the same basis; we ended up with more Sales accredited salespeople than all the other distributors at the time.
With that, when someone called in to order PCs or Servers, they were routinely asked if they wanted software with them – and found (to their delight) that they had an authoritative expert already on the line who handled the order, without surprises, first time.
If you’re in a price war, you focus on two things; one is that you isolate who your key customers are, and secondly you profile the business to see which are the key products.
For the key growth potential customers, we invested our Microsoft co-op funds in helping them do demand creation work; with that, they had a choice of landing an extra 10% margin stream new business dealing with us, or could get 1% lower prices from a distributor willing to sell at cost. No contest, as long as our pricing was there or thereabouts.
The key benchmark products were Microsoft Windows and Microsoft Office Professional. Whenever deciding who to trade with, the first phone call was to benchmark the prices of those two part numbers, or slight variations of the same products. However, no-one watched the surrounding, less common products. So, we priced Windows and Office very tightly, but increased the selling prices by 2-3% on the less common products. The default selling price for a specific size of reseller (which mapped into which sales team looked after their account) was put on the trading platform to ensure consistency.
Hand offs to the licensing team, if the business landed, were double-bubbled back to the field/internal salesperson team handling each account – so any more complex queries were handed off, handled professionally, priced and transacted without errors.
We put all the measures in place, tracking the number of customers buying Microsoft software from us 1 month in 3, 2 months in 3 and every month. We routinely incented each sales team to increase the purchase frequencies in their account base on call out days, with programs that were well supported and fun in the office.
The business kept on stepping up. Still a few challenges; we at least twice got reverse ram raids, emptying returned stock back into our warehouse on day 30 of a 31 day month, making a sudden need for sales on the last trading day a bit of a white knuckle ride to offset the likely write down credit (until Microsoft could in turn return the cost to us). The same customer had, at the time, a habit of deciding not to pay it’s suppliers at month end at the end of key trading months, which is not a good thing when you’re making 1% margins assuming they’d pay you to terms.
One of the side effects of the Distribution business is that margins are thin, but volume grows aggressively – at least until you end up with a very small number of really big distributors left standing. A bit like getting wood shavings from wood on a lathe – you want just enough to peel off and the lathe turning faster and faster – but shy away from trying to be too greedy, digging the chisel in deeper and potentially seizing up the lathe.
With a business growing 40%+ per year and margins in the 1-2% range, you can’t fund the growth from retained profits. You just have to keep going back to the stock market every year, demonstrating growth that makes you look like one of the potential “last men standing”, and get another cash infusion to last until next year. And so it goes on, with the smaller distributors gradually falling away.
With the growth from £1m/month to £5m/month in 4 months – much less than the time to seek extra funds to feed the cash position to support the growth – the business started to overtrade. Vendors were very strict on terms, so it became a full time job juggling cash to keep the business flowing. Fortunately, we had magnificent credit and finance teams who, working with our resellers, allowed us the room to keep the business rolling.
With that, we were called into a meeting with the vendor to be told that we were losing the Microsoft Business, despite the big progress we’d made. I got headhunted for a role at Demon Internet, and Tracy (my Product Manager of 4 months experience) got headhunted to become Marketing Manager at a London Reseller. I stayed an extra month to complete our appeal to the vendor, but left at the end of June.
About 2 weeks into my new job, I got a call from my ex-boss to say the company’s appeal had been successful at European level, and that their Distribution Contract with the vendor was to continue. A great end to that story. The company later merged with one of the other distributors, and a cheque for £1000 arrived in the post at home for payment of stock options i’d been awarded in my last months there.
So, the basics are simple, as are the things you need to focus on if you’re ever in a price war (i’ve covered the basics in two previous blog posts, but the more advanced things are something i’d need to customise for any specific engagement). But talking to the customer, and working back to the issues delivering a good and friction free experience to them, is a great way to get things fixed. It has demonstrably worked for me every time – so far!
One of the legendary things that Ken Olsen, founder of Digital Equipment Corporation, used to do from time to time was to issue fairly long parables across the company (note: 110,000+ staff at the time). Following release, there was often quite a discussion to try to understand what he meant, and to then apply what we believed to be the sage learning experience to improve our own corners of the company.
I’ve kept a number of these from way back then, and still find some of them just as applicable these days. Try this one for size, keeping in mind that Ken was also a main board Director of Ford at the time also. I’ll lay odds that many can relate to it, even today – some 37 years after he wrote this.
SUBJ: TRACTORS AND COMPUTERS
I am in the market for a backhoe. It is not an important project and I am embarassed to spend much time on it, but it is an interesting experience.
The other day I stopped at a Ford tractor place and went through their literature rack to get some background information on tractors. They had two kinds of literature. One is a colored brochure with beautiful pictures and glowing terms describing what their tractors would do and the other, black on yellow data sheets which are very plain and just filled with numbers.
They have four models which I think may cover my needs but they all say they are made by different product lines. They seem to compete with each other in who can make the most expensive, beautiful, color brochure and it appears they are more in competition with each other than with other tractor manufacturers. No way would they explain why one Ford tractor would have advantages over another.
Everything in the literature is positive and beautiful. I then tried to study the data sheets. These too seemed to be made by separate product lines even though their tractors were almost identical. They vary from two pages to eight pages and there is no consistency in the way in which the data is presented.
I thought one way of comparing would be to find out what each model weighed so that I could make a guess as to which one had more power and more value. One data sheet had no weights, the next had a tractor without a loader and without a backhoe, the next had a tractor and a loader and the fourth had a tractor, loader, and a backhoe. There were all possible combinations and no way of comparing them.
One brochure brags about the wonderful feature of having a 3 point hitch. It goes into great technical detail of what the pin sizes and dimensions of the hitch are and how much power it has but no where does it ever describe what the advantages of a 3 point hitch are and what you sacrifice in order to get it. With all the beautiful color brochures and the glowing claims made for their tractors which are obviously aimed at the layman, the real questions can only be answered by an expert who happens to know what a 3 point hitch is.
I stopped by the Ford place while going between plants and felt guilty about getting involved with the salesman and so I didn’t talk to anyone. I was afraid that once I did start talking I would get involved for a long time and I wasn’t sure that the salesman would understand the difference between the models anyway. My guess is the salesman would, first of all, sell only the tractor models which he has had experience in selling and would not get involved or feel at ease with the tractor models which he did not have experience with. Then there is the other type of salesman, who I am sure is in this field as in all others, who once he got hold of you would spend most of the time telling about his experiences when he used to sell John Deere Tractors and avoid all technical issues involved in the present line which he is selling.
If I don’t get tired of the whole idea of a backhoe after trying to figure out the pile of literature I have, I’ll try talking to the salesman and see how I do. It takes a lot of nerve because I feel intimidated by my lack of knowledge about the equipment and also about the traditions of buying in this market. I don’t know if you pay list price or whether you look for a 20% discount. I also have to build up my nerve because I am always embarrassed when they act surprised that I don’t know how deep a ditch I want to dig and how heavy a load I want to lift, and I don’t even know how high I want to lift the load.
Sometime I’d like to have you explain whether there is a parallel at Digital with this or not.
Seeing various bits and bobs about writing better emails today (or getting attention for your words among the surroundings in a typical email inbox). One from KissMetrics that advises keeping subject lines to 35 characters (which means that the full text of the subject fits on an Apple iPhone screen) and to start off with the recipients name. More (in multiple subjects squeezed together and a few sample short bits of email subject line click bait) here.
I had an account manager from AWS ask me where the follow facility was on my blog, and i’ve realised there is no easy link – so i’m currently building one using the very impressive Mailchimp. This has an associated WordPress Plugin which appears to have many 5* reviews and a vast majority of the support posts with quick answers. So, a small project to finish this weekend, and a side use to boot a very short message to some of my LinkedIn contacts using the same facility.
In the meantime, I notice Drayton’s off on a rant about a menu he’s been subjected to at a Restaurant up the Shard today. Typical Drayton, though he’s got a lot more mild since he phoned up the CEO’s office at Thus (ScottishTelecom as was, before being subsumed into Cable & Wireless, then Vodafone). I wouldn’t dare repeat what he said, but it caused some immediate impact, and he got some business out of being so explicit at the time. I just cringed.
“The future is here. It’s just not evenly distributed yet“. Those were the words of Tim O’Reilly, owner of O’Reilly, producer of many of the definitive books on software systems and associated conferences. His company’s Radar blog is also noteworthy for it’s excellent peeks into the future of high technology related products and services. One subject seems to pass it by, and I can’t help think the implications are much more significant than people really comprehend yet; that of the technology that sits behind Bitcoin (Bitcoin itself is but a small part of it).
The mechanics of Bitcoin are described in the original Satoshi Nakamoto paper here. Alternatively, an earlier introductory blog post from me.
The main truly disruptive innovation with much wider utility is that of a Blockchain. A public record that is stored across many hundreds or thousands of machines, in hundreds of different legal jurisdictions, but together forming a definitive record of activity without any central control. A sort of ledger that lives in the worlds commons, and operable in a way that ensures a single digital object cannot be “double spent”; only transferred between entities.
Much of the economic activity in the world is currently served by institutions who possess “choke points” through which activity is carried and who charge (in some way) at the gate. If I want to send cash to someone, I typically pay commission or transaction charges to a number of institutions to do so. There are many areas that could be unleashed when transaction costs tend to zero and the record of some activity is stored in a publicly accessible entity without any central control:
Proof of Existence. One of the innovations of GIT (the Source Code Control System written by Linux author Linus Torvalds) is that every individual document/file is recorded in it’s database as a “hash”. When any piece of Digital material is passed through this piece of maths, the hash is a 8 byte “signature” that is effectively unique (the change of two random documents having the same hash is circa 1 in 83 million). So, you can immediately see, with very little comparison work, whether two documents are exactly the same or different. Manuel Araoz, a 25-year-old developer in Argentina, uses a blockchain to prove authoritatively that you had a specific document in your possession on a specific date, without having to publicly publish it’s content. The fact that electronic signatures can be part of the document being held (and hashed with the rest of its surrounding content) means that you have a distributed contract “system of record”.
Namecoin. The current Domain Name System (DNS) is effectively the web’s telephone directory that translates memorable names (like www.bbc.co.uk) into the Internet Protocol Address(es) at which that web site resides (in this instance, 184.108.40.206 and 10 others). However, the central repositories where this information is stored can be systemically blocked or willingly corrupted by owners of the various choke points, or the governments under whom they operate from a legal jurisdiction perspective. Namecoin is an attempt to mirror the DNS in a widely distributed blockchain, with domain names ending “.bit”, and hence operationally difficult to corrupt or censor. Although I have no useful application for it at this stage, I have already registered “ianwaring.bit” to reserve my presence there.
Music Distribution. Following a Kickstarter type model, would you like to buy shares in a specific musicians new song? That way, you’d see a return on your investment if it proved popular and you managed to help promote it widely to a bigger audience. Piracy in reverse! The Blockchain protocol does have the ability to run such Assurance Contracts (ie: this project is funded only if pledges of a specific value are achieved by a certain date, or annulled if the target is not met by then), so there are similar precedents for Venture Capital, or even what has to date been tax funded Government projects for the public good. I sometimes wonder how HS2 would do if the UK Government ran the whole thing as a Kickstarter project, and see if the beneficiaries were willing to put money where their political mouths are!
Voting. One of the ultimate choke points where MPs act as a proxy for the voters in a geographic area they represent for a multi-year term. The act of multi-year elections is probably an edge case; it’d be more radical if I could choose when I want my MP to act as my proxy and when I wish to register my share of the decision making process personally instead. I somewhat doubt that folks currently in Westminster would wish to put their constituents in control of their own interests, despite how refreshing and re-engaged we’d feel as a result.
Vendor Relationship Management. This is the ultimate result of Doc Searl’s work on VRM, where we ask commercial entities to bid for our business. Given the low or zero transaction cost, you could delegate a lot of the associated work to software agents if the product or service was a commodity. Like a Taxi or self-driving car, as given in this excellent 25 minute talk by Mike Hearn, an ex-Google employee (it is a great talk to listen to – not least the effect when some of the actors in transactions are machines themselves, complete with their own bank accounts and long term trade related decision making). Even Yelp, TripAdvisor or Social Media recommendations would be more plausible if subjected to the authoritative “someone I can trust” standards that the underlying technology can provide.
I’d thoroughly recommend this article on Business Insider, which does a great job of highlighting some of the possibilities.
There are many challenges ahead. Some regulatory (I hope Politicians and our Public Servants do act in our long term best interests, without being victim of the lobbying of interests rendered on the wrong side of , or distorted out of shape, by a drive for our mutual good). Some technology (things like Bitcoin will need improvements to bring down the current 10 minute delay to provide definitive authentication, and to handle an increase in Blockchain size to handle the transaction volumes currently seen by Mastercard and Visa networks). But the potential applications are dizzying both in number and of disruptive impact to everyone.
As Fred Wilson, notable VC, said recently: Let’s go back and revisit the big innovations on the commercial Internet over the past twenty years. TCP/IP, HTTP, The Browser, Search, Social, Mobile, Blockchains. Each one of those innovations drove an investment cycle. Our 2004 fund was built during social. Our 2008 fund was built during social and the emergence of mobile. Our 2012 fund was built during the mobile downturn. And our 2014 fund will be built during the blockchain cycle. I am looking forward to it.
Bitcoin (which I described in greater detail here) was only the start. The main challenge now is one of identity, and protecting it from interlopers. You have to keep your private key insanely private (even to the extent of keeping it off Internet connected machines), as that is your definitive personal identifier that someone else could use to masquerade as the real you everywhere online. At least until something can check your own physiology (it is really you), and your state of mind (you haven’t been sectioned, frail nor threatened), prior to any transaction being authenticated. Or is that what the Apple iWatch will be all about?
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.