Category Archives: Business

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The $20 Brand Bond

Amazon LogoLet’s talk about lifetime value of a customer for a few seconds. I use the term “a few seconds” purposefully.

Recently I bought one of those discount vouchers for a neighborhood deli, where you pay something like half of face value and then cash in full value when you’re at the restaurant. This one wasn’t from Groupon or Living Social, but from Amazon Local. When I went to cash it in, the deli was out of business. Tough times always for restaurant retail. It happens. Went to another place for lunch. Oh well.

I got home that night, went to the customer service web page for Amazon Local, found the template under Contact Us, and submitted a one-sentence email notifying them of the event. How long did the response take? Less than a minute. Full credit.

Yep, Amazon Local “bought” this voluntary endorsement for a whole twenty bucks. Plus my ongoing loyalty. My lifetime value to Amazon the Brand just increased a good deal more than twenty bucks, perhaps a hundred times that, maybe more. Why? Well, first because they respected me and my time, but more so because they laid the pipe to assure me that if something bigger ever needed to be addressed, I could count on them.

What did they do right internally to cause this function to be enacted externally? For one, they fully empowered their staff, someone in a call center likely on the other side of the world. There is no way in that brief turnaround their staff person had to ask anyone for permission to do anything. They saw an issue, they jumped on it, case closed.

We look for WOW THE CUSTOMER moments in business all the time. We spend hundreds of millions of dollars on advertising to get someone to sample a new product or service, so that somehow a WOW THE CUSTOMER moment can occur. This one cost an entire twenty-dollar bill.

Compare this experience to another I wrote about earlier this year, where try as I might, I could not get one of the largest retailers in the world to help me locate a $5 replacement part for a thousand-dollar appliance I had purchased from them. That retailer competes with Amazon, probably does not know it, and will never get another dollar from me. If you have a moment, go read the transcript I shared from that interaction. Coincidentally, I happen to have shared that post with a rising star at Amazon back when it happened who was aghast when he read it. He had no idea of the contrast to come.

This is not meant to be a lionizing of Amazon. Full disclosure, they were a minority investor in my previous company and proved to be a formidable competitor, daunting in many respects, not the least of which was their near-rabid obsession with precision, time to market, and transaction perfection. They had vast resources to call on that were not available to me, but they used them wisely and never skimped when it came to the customer experience. That is a big part of how they got to be best in class, and consistently one of the top performers in the Internet Retailer Top 500.

Germane to Amazon’s perfection is a mandate of setting a customer service standard that is so extraordinary and so rare it can seem financially irresponsible to emulate—so much of net margin goes right back into the expense line to serve the customer. Market analysts often shiver when they report on Amazon, wondering how their eye-popping trading multiples can last, with so much volume but so little relative profit. Amazon seems to pay little mind to these analysts, instead worrying instead about customers. That leaves them no choice but to focus on lifetime value, calculating it in complex equations with net present value back to the reinvested capital that most others would probably harvest.

How tempting it is to consume the fruit of that harvest, but harvest has to come each year, and that is why we focus on brands. Here I lionize the customer service commitment as an essential and grounding component of the brand promise. It is the shortest business case study in the world, yet almost every company you encounter gets it wrong.

A service culture in the information economy puts the CEO at the bottom of the hierarchy and the customer at the top. The customer is the boss. The people closest to the customer, individual contributors like those in customer service, are the ones who interact with customers. They make or break your brand. How much discretion and authority are they usually granted? None. How much should they have? As much as you can pile on. They own the customer relationship, so they own your future.

Go on, hire the highest paid consulting firms and retain power player ad agencies. Hold multi-day off-sites for brainstorming retention strategies. Give motivational speeches about reframing your mission and vision.

Or just be really, really, really appreciative of your customers. Love your customers, every single one them, embrace them as strategic imperatives, bonds that build moats.

What’s the ROI on world-class handling of those who frequent your brand? You tell me.

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The 70% – Part 2

EngagementHierarchyIn the Executive Coaching Workshop I co-lead with John Vercelli for Coaches Training Institute, we discuss early in the curriculum the pervasive epidemic of Bad Boss Syndrome.  It is jaw-dropping how many employees reflect on the lack of leadership and vision they receive from those who manage them, how starved they are for inspiration, and how little it takes to turn a bad day into a good day.  When you think about the study published recently by Gallup noting that 70% of employees are disengaged — and that too many of them hate their jobs — boss improvement is a good place to start.

Another good place to start is the Dead Brand Graveyard, where we also focus in the workshop.  Surely some brands die purposefully in mergers and consolidations, but my observation is that many more die because they break their promise to their customers, who simply move on.  In a world of virtually unlimited customer choice, when a company fails to innovate or repeatedly breaks a brand promise, the Dead Brand Graveyard is soon to cement a new tombstone.  For the employees who are part of the letdown, the lost promise, and ultimately the job loss that follows, demoralization is readily understood.  Remember, a lot of these employees came to their companies with hope and passion and energy and ideas.  They may have had the solutions to their company’s death sentence on their desktops.  Perhaps no one was listening.  That takes us right back to Bad Boss Land.  It’s an infinite loop.

Let’s pull these two concepts together — bad bosses and dying brands — and then think about the twelve Gallup questions which you can find in last week’s post, Part 1 of this inquiry.  None of the questions involve compensation.  They ask things like whether individuals have the opportunity to do what they do best, whether their supervisor cares about them or their advancement, whether the mission or purpose of their company is understood and they are part of something that matters, whether there is a commitment to quality in the workplace, and whether there are peers or leaders in the environment who are supportive.

Human stuff, huh?  HR mush?  Not the stuff of hard-won profit and loss?  Garbage!  If companies have it so right, why are brands evaporating from the landscape in record time?  Why are fully capitalized companies lasting half as long as the average human lifespan?  Creative destruction, you say, the natural course of things business?  Well, sure, I’ll give you that.  So is top management willing to say the whole Circle of Life is out of their hands and the survival of the enterprise is entirely up to market forces, to fate rather than strategy, to a competitor’s campaign rather than a driven response to galvanizing the single most important asset in the company’s inventory, the intellectual capital that is allowed to rest idle and fester?

That’s not very optimistic.  And yet, optimism is the spirit that drives opportunity, and opportunity is the backbone of capitalist enterprise.

Why do we so often get this so completely wrong?  Why would we let 70% of employees churn in the ranks, angry and sad and defeated?  Why would anyone allow a brand to go stale, to break a promise to a customer, to fail to reinvent itself when invention is the lifeblood of all revenue and profit growth?  Borders, Circuit City, Kodak, Polaroid, Palm — all once admired companies, all with revered brands — what do you suspect the internal opinions were of management as repositioning opportunities were missed and tired product performance spiraled downward?

Much has been written about short-term versus long-term financial incentives as value destroying tactics, particularly among senior management at the top of the compensation bell curve.  That is only part of the problem.  Certainly if you set a sales target for a commission based or stocky savvy executive, she or he will chase that goal aggressively, often with widespread collateral damage.  Yet is it the incentive that is the time bomb, or the misperception on the individual’s part of the fundamental rewards that may or may not be at hand?  To that end, I mentioned that the Gallup poll does not reference compensation.  I would be willing to bet Big Money that the disengagement factor cuts across every salary band in the spectrum.  It is my own observation that once you get past basic human needs being met — housing, food, safety, decent educational opportunities for the kids and maybe a family vacation now and again — there is no guarantee whatsoever that financial reward brings vast job satisfaction.  I have met as many or more unhappy wealthy people as I have in the middle class.  The tendency to focus on the wrong motivation is not exclusive to the underpaid or overpaid, and the failure to align truly rewarding incentives with human performance is almost always the difference between long brand life and flash in pan cash register rings.

When I hear that 70% of employees are disengaged, and when I see brands and companies dying in record time, I experience one story.  We try hard to focus the executive coaching mission on revitalizing the human potential in an organization, to bring the executive’s focus back to the brand promise, and to evangelize that set of values broadly among the members of a team as a rallying cry.

I see three major factors that matter in a job — what you do, who you do it for and with, and the compensation you receive for what you give.  If the first two mandates of that string aren’t met, it seems ludicrous to believe that compensation is going to make up for the loss.  And if the only thing that people are focusing on is compensation, what real chance does that company have at longevity?  A brand will not be reinvented because it needs to be more profitable; it will be the magnet of innovation because people care about it and bond together to transform it into something it currently is not because it matters.  From that investment of idealism will flow vast improvements in continuing profitability.

Short-term harvesting of any cash cow is possible — if you want to squeeze profits, go ahead and squeeze the people who are producing them.  At the moment 70% of those people are telling you they don’t like what they are doing or who they are doing it for.  Want to make the Big Money that lasts the long run?  The Gallup survey tells you in the questions alone where we’re leaving the Big Money on the table.  Start Thinking Different!

Bosses must learn to listen.  Employees need to teach their bosses to listen so they can be heard and emerge.  Coaching can be implicit or explicit, but it has to be obvious that letting ideas flow not only improves morale, it is vital to sustaining the enterprise.  Companies that last do so because they apply long-term strategies, both in terms of bolstering their brands and employee engagement.  Everyone can win — especially customers — if that’s the walk that leadership walks, leadership by example.  It does not happen accidentally, but by commitment, and constant reminder of core values that can be shared.

For me, it will always be People, Products, Profits — In That Order.

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The 70% – Part 1

Gallup Logo 2A Gallup study released last week on the State of the American Workplace reported that 70% of American workers are disengaged in their jobs. An extraordinary number of these people convey that they hate going to work for their employers. Here we are, ostensibly emerging at long last from The Great Recession, and yet, this is how a frightening majority of employed individuals are reported to feel.

Sound impossible?

Try it on yourself.

Here is the twelve question survey Gallup used to measure employee engagement, from Page 19 of the published report:

1) I know what is expected of me at work.

2) I have the materials and equipment I need to do my work right.

3) At work, I have the opportunity to do what I do best every day.

4) In the last seven days, I have received recognition or praise for doing good work.

5) My supervisor, or someone at work, seems to care about me as a person.

6) There is someone at work who encourages my development.

7) At work, my opinions seem to count.

8) The mission or purpose of my company makes me feel my job is important.

9) My associates or fellow employees are committed to doing quality work.

10) I have a best friend at work.

11) In the last six months, someone at work has talked to me about my progress.

12) This last year, I have had opportunities at work to learn and grow.

I will be writing a good deal more about my thoughts on this in the coming weeks. In fact, as mentioned often here I have written a novel on this theme that will be published this fall (October 2013) by The Story Plant. Before I offer some of my opinions on the topic in a subsequent post, I wanted you to have the opportunity to ask yourselves the Gallup poll questions. Be honest, internalize the answers over some quiet time, think about your own sense of employee morale, then draw your own conclusions.

Are you in the 70%? I sure hope not. If you are disengaged, try to boil it down to the essence of what is eating at you. I’m guessing you already know.

Wow, 70%. Imagine how much creativity, passion, energy, and enthusiasm is waiting to be unleashed in all that humanity. Now there’s a problem that’s worth solving. And you know what, it is completely solvable, if that becomes a shared value.

What’s the solution?

Start with the questions.

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Blog Begets 100

It’s hard to believe this is my 100th post on Corporate Intelligence Radio.

I started this blog over two years ago, about the time I committed to writing my novel, which I announced last month.  Soon after I started the novel, it became clear that it was going to be a very long time before anyone read a word of it.  Initially I was okay with that.  Then it became overwhelming.  I needed to publish something, to start this dialogue, and I needed a way to warm up my fingers before filling blank pages with thousands of words.  The blog became part writing exercise, part wish-fulfillment, and part therapy.  It also caused me to talk less to our dog when I was having a particularly slow day on the word processor, which I am not sure she misses.

One of the questions I often get is why I called it Corporate Intelligence Radio.  My friend Mitch Dolan who used to run ABC Radio named it.  He likes to call me KennyG.  If you know me and you know my taste in music, KennyG is a tough fit other than the extrapolation of my name, but Mitch does like to come up with names where I’m concerned.  He knew my book was about a radio talk show host and that someday this blog would feed the story, and we have always talked about doing some kind of a show together, so he just said to me over dinner in New York, call it Corporate Intelligence.  I tried to get the URL for that but of course could not, so I added Radio and there you have it, a bit of nonsense referencing radio on the internet.  Maybe someday we will do that show together and it will make sense, or perhaps when you meet Kimo Balthazer, one of the main characters in This is Rage, you’ll understand.  Or maybe I’ll change it.  Who knows?  Another distinguished publisher I often cite has since started calling a section of their periodical Corporate Intelligence, but I predate them.  Plus I have my Twitter handle CorporateIntel, and that will always be mine.

There are a bunch of things I have learned since I began blogging.  They are the kinds of thing I really couldn’t have learned any way but doing it.  Here are a six (6) that come to mind:

1) STYLE IS CONTENT – For the first year, the hardest part was finding a voice.  I had lots of topics, things I wanted to write about, but finding the right conversational tone that could both be mine and yours was the hard part.  There were more things to write about than there was a clear way to express them.  The longer a post took to write, the less conversational it seemed.  I had to learn not to over rewrite, the opposite of the book, where there is no such thing.

2) CONTENT IS HARD – After the first year, coming up with a worthy topic became the hard part.  I had honed my blogging voice, but I didn’t want to bore you with things that didn’t matter.  To this day I would write more often if I could think up more interesting stuff to write about, but I have a newfound respect for journalists who write a weekly column.  For the old school guys who did it daily — Herb Caen (San Francisco Chronicle), Jack Smith (Los Angeles Times), and Mike Royko (Chicago Tribune) — I have no idea how they did it without going bonkers.  Sports writers and movie reviewers enjoy a steady stream of topics, news reporters get desk assignments, columnists just gaze until something comes to mind.  Pondering is weird, and makes you weirder.

3) THE FIX IS IN – Electronic publishing is really cool, because it lets you fix things and change your mind.  I have rewritten very little once I have published here, but every once in a while when I think of a better adverb, I can deploy it painlessly and not even tell you.  I can unceremoniously make a No a Yes and vice-versa after rethinking it.  I love the Update button on WordPress.  Sometimes I wish the rest of the world had an Update button — or the “recall” function on email actually worked, which we know it does not.

4) KEYWORDS RULE, DUDE – Keywords are the lifeblood of online traffic acquisition.  Learning to tag is an art and a science, brewed with a touch of alchemy.  It never ceases to amaze me how people get here, but other than regular readers, the best door remains random keyword searches, that in Google’s eyes aren’t random.  So many of my readers land here accidentally because I indexed well on some search term they queried,  and then they subscribe without my asking.  What Google sees matters, and what Google indexes is the whole shooting match (plus good writing, of course).

5) YOU NEVER KNOW WHAT STICKS – There is literally no way to know what will get people’s attention and inspire their imagination.  Little throwaway pieces I have done have become among my most read, and proclamations of vision and justice died in a few days.  You write, and then you set it free.  Words have a life of their own after you give them away, and the writer doesn’t get to decide their fate, only their intention, which matters increasingly little across the democratic digital world.

6) TALKING BACK CAN BE A QUIET AFFAIR – I get a lot more private than public comments.  No matter how much I encourage people to comment publicly, most people are shy, especially when they have to post under their own name.  I don’t blame people for this, who wants to say something in public and risk attack for no particular gain, but it does remind me how brave and vulnerable all writers are.  I have become increasingly brave and vulnerable each time I push the publish button, and that’s with a book of fiction on the horizon.  Oy, please come along with me, and hey, keep the comments coming, public or private.

So here we are together at my one hundredth blog post, and this is an especially ironic bit of timing because I have just submitted my pre-copy-edit draft of the book to my wonderful publisher, The Story Plant.  I promise you I didn’t time it this way, it just sort of happened.  I used the blog to pace writing the novel from the blank page through countless rewrites, and sure enough it all came together this year right before Memorial Day.  I will continue to blog on the topics I cherish — innovation, creativity, imagination, leadership, vision, business ethics, smart marketing, well-reasoned investment strategy, creative destruction, and every so often politics (say it ain’t so!) — and I will also keep you posted as we take my novel from manuscript to release date on October 8, 2013.

I have already begun discussion of a follow-up book and may bend your ear on that, and of course I want to include you in the sales and marketing journey as my first book comes to market in paperback and eBook.  Mostly I just want to thank you for being friends, listeners, readers, and clever people who tell me things I need to know.  I have learned way more from writing this blog then I ever imagined, and it is because of you.  Writers write surely to be true to themselves, but without an audience it is even more lonely an activity than good sense would suggest.  Knowing someone will read the words and share the ideas makes it a community, and hey, that’s intensely gratifying.

Again, my deepest and most sincere appreciation for sharing the journey with me!  We’re maybe in the second inning of the first game of a doubleheader, so grab a bag of peanuts and plan to stay awhile.  We still have a lot of ground to cover and it will be entirely more rewarding if we do it together.

100 Candles