My First Job: Learning the value of customer references
When I was 11 years old, my father gave me the assignment of cutting the lawn once a week through the summer. The lawns in our neighborhood were about ¼ an acre so it took some effort – especially after a lot of rain. As part of the assignment, he wanted me to make sure the lawn was cut following straight lines, the cuttings were bagged for trash pick-up and the edges were trimmed. He wanted our lawn to represent the neighborhood well and he showed me how to make that happen by paying close attention to details and keeping a regular service schedule.
Our neighbor, however, was struggling to keep up with his lawn. If he let it grow for longer than a week without cutting it, it would look like a jungle compared to our lawn. I talked to my father for permission to use our lawnmower to cut the neighbor’s lawn for a fee. He agreed.
I spoke to the neighbor about cutting the lawn once a week and we settled on the price of $10.00 each week. It wasn’t long until his lawn started to look good like ours. I decided to go through the neighborhood to see if there were others that needed their lawn regularly serviced. As a result, I found another neighbor willing to let me care for his lawn.
Then, one weekend in mid-summer, something interesting happened. Someone walking by while I was servicing one of the lawns asked if I would do his lawn as well. He had spoken to the homeowner of the lawn I was servicing and they were impressed by the:
- Regularity and reliability of the service
- Quality of the service and attention to detail
This happened more than once and by the next summer, I had accrued 10 different customers. By the time I was 13 years old, I was making over $100 per week. This wasn’t a result of me soliciting additional business, but it was a result of great customer references.
As a result of this early training by my father, I learned the value of providing a reliable service with high quality. By applying that training, I learned the additional lesson of the value of great customer references. Through great customer references, I was able to dramatically increase my income. I have carried these values with me throughout my career.
Corner Office Wisdom:
There is no substitute for a great customer reference. They will help you grow your business. To get great customer references, one needs to focus on high quality and reliability.
Big Data: Mountain of Differentiation
There have been many discussions on the topic of Big Data over the past couple of years. Is it being over-hyped? The Gartner Group thinks so.
Big Data has become the generic term for the massive amounts of data businesses have accumulated during the course of their operations. There are ongoing discussions on how useful it might be and how it can be used. By applying the right analytics software to the data, most believe it can lead to new efficiencies, improved business processes, lower costs, higher profits, improved customer experiences, services and loyalties.
Communication Service Providers (CSP) have an absolute mountain of Big Data within their domain that is clearly untapped – or at the very least under-utilized. Is this a missed opportunity for differentiation? Let’s take a closer look at their current business model and assess if there are new possibilities.
Mobile CSP’s revenue streams are based on service usage and their major costs are subscriber churn, device subsidiaries and keeping their networks current. To differentiate themselves from their competitors, they focus on devices, price plans and network. The problem:
- They all have the same or similar devices and price plans.
- They all claim the fastest 4G/LTE network.
Within their domains, they have available both real-time and “static” or near real-time data. A small subset of available real-time data includes:
- Currently active identity and device(s)
- Current location, presence, availability
- Active content
- Charging preferences, prepaid balance
- Minutes and data usage
A small subset of “static” or near real-time data includes:
- Real Name and Billing address
- Number of devices
- Web-sites accessed, searches made
- Friends and Family, Business associates
- Defined preferences
- Content and genre purchased and downloaded
For CSP’s that also offer wireline, broadband and video services, this list can grow to include number of devices in the home, devices active, channels watched, time of day, days of the week and many more data items.
Each service provider also has multiple third-party partners that augment their services. These partners are also going to have more information about subscribers relevant to what, how and when services and content are accessed and utilized.
With 10, 20 or even 100 million plus subscribers initiating a combined millions of transactions each day, all of which gets distilled into data records, that is a massive amount of data that can be used to establish insights and intelligence about subscribers and understand their preferences.
Identity and Master Data
All of the above data items are tied together by the mobile number/account number which acts as the common Identity or primary key of the subscriber. By using master data management techniques such as centralization, virtualization and federation, CSP’s can establish a single, universal view of the individual subscribers.
With ongoing advances in analytics software, CSP’s have at their finger-tips the means to truly understand how their services are used and by whom. They can also define, redefine and fine-tune market segments, demographics and buying characteristics. As a result, it doesn’t take much imagination to brainstorm a list of ideas for service providers to:
- Personalize the service experience
- Develop enhanced loyalty management programs
- Enable targeted advertising specific to the individual’s preferences
Are there opportunities for service providers to differentiate themselves beyond just price plans and devices? Absolutely. There is a mountain of Big Data available to make it happen. With just a subset of the available data, there is much more that a service provider can do to enhance the experience of their subscribers. The category of personalization alone can create a whole new set of ideas and innovation.
Corner Office Wisdom:
In order to think outside the box when it comes to finding new opportunities and enhancing your business, sometimes you just need to look inside the box.
Supply and Demand: Price too high?
A challenge with managing any product or service is determining how to price the offer. There are many methods to determine price such as comparing with the competition, evaluating willingness to pay as well as assessing supply and demand. What if there was little supply and a lot of demand?
My grandfather told a story that provided a good lesson about supply and demand. In his later years of life, he refurbished wooden antiques and sold them throughout the midwest United States. At one antique show, he had a number of antique tools on display. They were priced at $14.00. One morning, he noticed a man stop by and give his tools a thorough examination. Then, the man walked away. The man came back again about an hour later and re-examined the tools. He walked away again. He came back a third time and had a very short conversation with my grandfather:
Man: “There is a store in town that had these tools for $7.00”
Grandfather: “Do they have anymore?”
Grandfather: “Well – if I didn’t have any, I would sell them for $7.00 as well. But I have these and they are $14.00”
He always had a dry sense of humor. Was he priced too high? He had a supply. Was there demand?
I told you that story so I could tell you this one. At one time, I worked for a Sr. VP of Operations for a small software company. He decided to give me a new assignment. There was a group of application developers that were eating up a lot of salary but their efforts weren’t tied to any revenue stream. My assignment: Recommend what needs to be done with them to eliminate the costs.
I met with the team and found they were working on a stack of customer requests to modify custom applications on legacy systems. These modifications included significant design changes to the applications as well as complex interface updates to billing and CRM systems – all at no charge.
After my discussions, here were my observations:
1. They were providing a value-added service to existing customers. Without a billing/CRM system interface the application would not function and not be able to fulfill its purpose.
2. They had no process or organization to the work. They were receiving work orders from multiple directions including customer service, sales and the customers themselves. The work orders were not tracked, quantified or scheduled.
3. Customers being served were on legacy systems that needed to be upgraded.
4. They had no means or methodology in place of showing their value.
Their efforts were essential to maintaining a satisfied customer base. My recommendation to the Sr. VP of Operations was to define a standardized process for the work and to charge customers for the value provided. There was plenty of demand and this group was the only supplier for the service. He agreed to move forward with the recommendation.
As a team, we defined a standardized process for receiving, tracking and completing the work orders including customer sign-off. Since there was a consistency in the type of work being completed, we also defined a standard pricing catalog for various requests being made.
This is when things got interesting. The head of customer service went through roof thinking that she and her staff would be inundated with complaints about being charged for programming modifications. The head of sales felt that existing sales relationships would be put in jeopardy and that they would not be able to upgrade those customers to the next-generation systems being deployed. There was a lot of pressure being applied to not make any changes to the way things were being done.
Within the first 30-days of implementing the new process and pricing for value-added services, contrary to the fears of customer service and sales, the feedback we received from customers was: “I’m surprised you didn’t do this earlier!” The demand was there. The customers appreciated the value of the service being provided and were willing to pay for it.
Over the next set of quarters, the team successfully tracked, reported and recognized revenue to not only cover their salaries but also add some margin to the company’s bottom line. Customer service never received the high volume of complaints. Sales maintained their relationships and successfully upgraded those customers to the next-generation systems.
And as for my grandfather was his price too high? He didn’t need to drop his price by 50%. He knew the value of his products, the demand was there and he had no trouble selling them.
Corner Office Wisdom:
If there is demand for a product or service that you can supply, don’t sell yourself short. There is a willingness to pay. Price it in such a way that allows customers to appreciate the value of your offer.