Is relationship building the key to customer loyalty?

Harvard Business Review (HBR) has just published the second in a four-part series featuring findings from a study by the Sales Executive Council which analyses the productivity of over 6,000 sales representatives.  5,000 business customers were also surveyed as part of the study.  The findings challenge some long-standing beliefs about what drives an effective customer engagement strategy.

The research identifies five ‘types’ of sales representatives (relationship builders; hard workers; lone wolves; reactive problem solvers and challengers).  The findings suggest that the most successful – by far – are the ‘Challengers’.  They are assertive and unafraid to take control of sales conversations.  They are capable of teaching their customers, not focusing on features of benefits but bringing insights in their conversations with customers.  They also have finely tuned understanding of what drives individual customers.  Not only are the Challengers the most successful, but Relationship Builders constitute only 7% of the high performers identified in the study.

If this finding is surprising, the survey also finds that where the sales experience itself is of a high quality, this is more likely to drive customer loyalty than just about anything else, including brand, product or price.  If the sales representative is one who can challenge the customer and bring new insights, then this can have a real impact.

And if you are surprised so far, wait till you get to the section about how asking customers “What keeps you up at night?” is ‘the worst question you can ask’!

The first and second part of the series are available on the HBR blog.

(Thanks to @Thepastamaster for alerting me to the story)

Adopt a humble position – a lesson for facilitators

Manavodaya is an organisation that has been working with the poorest communities in Uttar Pradesh in India for 20 years.  Its work takes place in villages, many of them remote, where it is not uncommon for villagers to be living on the equivalent of 20p per day – well below the poverty line.  These people are the most marginalised and disenfranchised in their communities.

The Manavodaya approach is simple.  A facilitator goes to the village and opens up a ‘human-level dialogue’ with villagers.  There may be several meetings with villagers before any discussions about ‘change’ even begin.  The key is that the facilitator’s role is a ‘quiet and humble one’.  The villagers are the experts in the life that they are living – not the facilitator.  There are no pre-conceived agendas, targets or solutions.  The philosophy is as far away from the co-dependency of ‘solutions delivery’ as it is possible to be.

At first, villagers are, at least, agreed in the need for change.  Through collective visioning, ways to deliver real change can emerge – very often from the smallest of beginnings.

The Manavodaya philosophy was explained in a lunchtime lecture at the RSA.  Many members of the audience were there to explore whether lessons could be integrated into social programmes in the UK.  Certainly the focus on user- or community-centric development struck a chord with many.

Yet elements of the philosophy have wider implications.  The approach calls for quiet self and group reflection.  It focuses on enabling others, not encouraging them to depend on us.  It acknowledges the expertise of others.  It urges us not to have pre-conceived ideas.  Most of all, it recognises the importance of delivering change through our own behaviour and attitudes.

All in all, a humbling lesson.

Twitter: learning from the bad and the good

We have all read inspirational quotes encouraging us to learn from our mistakes.   How much more fun, though, to learn from other people’s mistakes.  Chris Brogan (always worth reading) writes about badly managed or abandoned corporate ‘grocery goods’ Twitter accounts and the lessons are clear.

  • An abandoned Twitter account is worse than no official Twitter account.
  • Many companies and brands still don’t ‘get’ social media and are simply broadcasting press releases
  • Spamming is just wrong – don’t do it!
  • Tone of voice is everything – don’t be a Twitter braggard

Chris also gives examples of great Twitter usage if you are that way inclined.

There are also positive Twitter lessons to be learned from the Top 50 ‘most followed magazines’.  Speaking to Folio Magazine, representatives from four of the top 50 share ideas on growing readership via Twitter.  Key lessons include:

  • provide useful information
  • reply to all questions
  • use hashtags consistently
  • be willing to entertain – and challenge
  • above all – be human.  It should be clear to your community that you are speaking with your ‘true voice’

What ‘good’ looks like

Some years ago, when he was working at BP, Chris Collison and his colleagues developed a deceptively simple methodology that helped transform the way that knowledge and expertise was identified and shared.  This ‘river’ diagram remains an astonishingly powerful tool that is used by organisations of all types, size and sectors, from global telecommunications businesses to third sector organisations.

At the latest NetIKX event, Chris guided members through a river exercise that sought to identify the supply and demand for knowledge expertise within the room.

The process involves:

  • Bringing stakeholders together to agree ‘what good looks like’
  • Enabling teams to self-assess their performance levels
  • Encouraging teams to set targets for improvement
  • ‘Matchmaking’ those with a supply of expertise and experience with those who want to improve

As with any great consulting methodology there is as much to be gained from participating in the process itself as there is from the actual outputs.  The conversations that take place to discuss what constitutes ‘basic’, ‘good’ or ‘excellent’ can help stakeholders to develop a shared organisational language.   The process helps organisations identify, capture and share good practice. The longevity of the river diagram approach also shows the power of effective visualisation – and of a great metaphor.

In our session, two café conversations took place, bringing together those who self-assessed high on knowledge strategy and organisational learning and those seeking to learn from them.

The amount and level of animated knowledge sharing at our workshop demonstrates just how healthy the NetIKX knowledge marketplace is.  It also shows how committed the members are, not only to their own learning, but also to the ongoing development of peers and the future success of knowledge and information management.

Pirate Party’s success in Berlin

For those who missed the story, the Pirate Party, dedicated to the freedom and transparency of internet traffic, has entered a state parliament for the first time.  The Party received almost 9% of the votes in the recent Berlin regional elections taking it comfortably over the 5% hurdle required to enter the city’s legislature.  The Party took 15 of the 149 seats available.

You can read an analysis of the political implications of this development on the Economist blog.  You can read more about the (apparently astonished) victors on this English language German news blog.

Cyber crime, cyber criminals and information professionals

In his new book Dark Market: CyberThieves, CyberCops and You, Misha Glenny identifies and explores three major threats posed by networked computing.

Cyber crime, which is very often high value/high-volume includes such criminal activities as card skimming and identity theft and represents in most instances the more low hanging fruit for cyber criminals

Cyber warfare, which has been recognised by the Pentagon as the fifth domain of warfare (in addition to land, sea, air and space).  Whether a nation state – and which one – was responsible for the Stuxnet attack on Iran’s nuclear industry has been hotly debated.  Even if it is impossible to prove the original source, Glenny sees this as the start of a new arms race in cyber offensive weapons.

Cyber industrial espionage, which sees organisations targeted for extortion or competitive espionage purposes.  The problem is that, until it becomes compulsory to report such breaches, it is impossible to estimate the true cost of cyber industrial espionage.   Glenny quotes estimates ranging from $100 billion to $1 trillion per annum.

Fake malware – a case study

Speaking at the RSA this week, Glenny presented a case study which seeks to put this estimated value into context.  Based in the Ukraine IT company, Innovative Marketing advertised prize winning malware to its customers.  The hitch was that the prizes were not real and the anti-virus software being sold was both fake and liable to open up users PCs to viruses.  Many people took the company’s claims at face value, and failed to carry out even the most basic check – such as whether the top computer publications named really HAD granted prizes to the company.

Ironically, the company failed to address its own computer security and it was possible for someone to review its invoices and estimate that the company had made in excess of $500 million.

Who are the hackers?

Glenny is perfectly aware that the subject of data security might put many readers off (although it didn’t seem to put off too many readers of the Millennium trilogy).  In his book he features the people who are involved in hacking, reasoning that it is important to understand exactly what it is that motivates hackers.  Not all of them, for example are motivated by money.  Many of them are simply ‘ahead of the curve’ when it comes to applying internet technology.  The growth ‘carding’ websites for example enabled  the industrialisation of cyber crime on a massive scale.

The hackers Glenny encountered shared some common characteristics.   In most cases they were men and obsessive gamers.  Many – but by no means all – were lacking in ‘real world’ social skills and were easy prey to criminal elements.   The solution, Glenny suggests, would be to intercept such people very early in their hacking career, which in almost all cases happens in their teens.   It is important to understand the human element behind hacking, and to remember that financial gaine is not always the main driving force.

Fight complacency

Meanwhile, there are some pretty obvious lessons for the corporate sector.  The risk of cyber crime and data breaches should be on every organisation’s agenda at board level.  Reputational as well as financial risks must be taken seriously.  And as the story of Innovative Marketing in Ukraine proves, there is still much work to be done by information professionals in helping colleagues recognise scam sites and helping them to understand why, and how, they should check a website’s claims for its products and services.

Some CPD dates for the diary

Autumn is traditionally a busy season for conferences and professional development/CPD events and my diary is rapidly filling up.  Some highlights are described below and they show the range of topics, speakers and formats available.

First up is NetIKX’s September workshop, which Chris Collison will facilitate.  The event marks the two thirds point for the network’s ‘framework for seminars’ and provides the opportunity for delegates to consider future priorities for CPD – for themselves, their organisations, for NetIKX and the ‘profession’.  Chris is an excellent facilitator who will no doubt enable delegates to focus clearly on key priorities. 

Other events I have signed up for include the RSA lecture ‘Value-based social change’ which focuses on how India’s self-help movement is achieving sustainable social change amongst the poorest and most disenfranchised groups.  I am looking forward to hearing how such communities have been empowered and to exploring opportunities for other types of organisation to learn from such initiatives.

At the beginning of November I will be attending Axiell’s two-day Rethinking Libraries Symposium in London.  Hosted by the London Libraries Consortium, the event will focus on new opportunities for libraries including new forms of partnership and new user groups.

Before that, of course, I will be attending, and blogging and tweeting from, Internet Librarian International 2011.  During the conference last year ILI2010 was a Twitter trend!  A year in social media is a long time, and the growth in the number of Twitter accounts and traffic makes it unlikely that a niche event could trend this year – but you never know!  Please make a note of the hashtag (#ILI2011) now, and let’s see what we can do!

Putting a value on ‘search’

In the latest in a series of reports investigating the impact of internet technologies, McKinsey sets out to assess ‘the far reaching value of search technologies’.

Focusing on Brazil, France, Germany, India and the US, McKinsey analyses nine activities that create search value and then sets out to analyse the impact of search in 11 sectors/constituencies.

According to McKinsey, traditional analysis of the value of search tends to focus on three activities:

  • Time saved – search can help facilitate quicker decision making
  • Raised awareness – brand awareness, of paid and natural searches
  • Price transparency – benefit to consumers but also to reduce consumer uncertainty

In their latest research, the McKinsey team also analyses the impact of:

  • Better matching – search helps guide ‘consumers’ to the most relevant information, products and services and helps providers find the right audience/customers
  • Long-tail offerings – search facilitates the sale of ‘niche’ items of interest to relatively few people
  • People matching – both business and ‘personal’
  • Problem solving – challenging to place a value on but likely to big one of the biggest source of value
  • New business models
  • Entertainment – (30% of total web searches relate to entertainment)

The report also analyses how 11 sectors/constituencies (including content creators, entrepreneurs, health, government, consumers and education) derive value from search.

Focusing on 2009, the research ‘conservatively’ estimates that search was worth $780 billion globally, the equivalent of $.50 for each search.

You can register to download the report on the McKinsey website.

Doing a digital detox

Susan Maushart withdrew digital media from her home (and her three teenagers) for six months and wrote a book about it.  The gloriously entitled Winter of our Disconnect was published at the beginning of 2011 – and received much media coverage.  It was featured on BBC Radio 4 and the author was interviewed and featured in many broadsheet papers in the UK and around the world.  Meanwhile, an experiment was featured on a BBC TV programme.  A family of six were taken back to the 1970s to experience the changes that technological developments made on family life.

News now from the US.  The Marriott Renaissance Pittsburgh Hotel is offering a weekend break from the ‘always-on’ lifestyle.  Guests checking in must hand over their digital devices.  The rooms have no televisions, telephones or docking stations, but they do have a supply of literary classics.

Sounds fantastic.

‘Serious gamification’

Game designers, business executives and academics were brought together for a conference hosted by Wharton School (University of Pennsylvania) to discuss the opportunities of applying gaming techniques to a number of sectors.

The website captures some of the outputs of the conference and also features transcripts of conversations between some of the key speakers as they discuss their own experiences and consider the implication of gamification to all types of organisations.

Although gamification is not the same as gaming, it does take some key elements from it.  Organisations are looking to enhance online experiences and to encourage certain types of behaviour, whether this be making a purchase, taking out or renewing a subscription, clicking on a link or simply returning to the site more frequently.

According to one of the speakers Rajat Paharia (founder of Bunchball), gamification is not particularly generational and should not be thought of as something of interest only to ‘generations X/Y’.  Other speakers agreed.  Gamification can address a number of human needs including the desire for self expression, or competition, or status or even altruism.  The key for organisations is to understand the complexities of motivation.

Gamification can also be used to motivate people inside an organisation just as much as it can be used to engage customers and potential customers.  One of the speakers was Daniel Debow from Rypple which uses social gaming techniques in its performance management system.

The non-profit organisation HopeLab is using gamification to tackle teen obesity in the US and there are other examples of gamification being used to educate and involve children.

You can read more about the conference, including the key themes of individual sessions here.