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Archive for January, 2012

Why is Facebook planning to go public now?

January 30, 2012 1 comment

I just read about the plans of Facebook going public with a 10b$ share offering. I am sure that this is going to generate a lot of press and noise around this IPO.

The question to ask is this: Why go for an IPO? Why now?

In my opinion, the investors of facebook have realized that

  1. The dizzying growth rates in membership is no longer sustainable.
  2. The scope for breakthrough innovation is also reduced which could add substantial value to the company.
  3. Other players (Google+, Twitter) are catching up fast.
  4. The valuation for the company will only fall going forward as the growth rate slows down. So, better to cash out at the peak or atleast close to the peak.

In my opinion, the following will happen post the Facebook IPO:

  1. Facebook will continue to perform well due to its momentum.
  2. In about 3-6 months, we will start seeing some decline in the growth rate and the momentum.
  3. In about 12-18 months, Facebook will become another large corporation living on the laurels of their glorious past.
  4. By this time, Facebook will have a lot of cash in thier coffins and so will start an acquisition spree to continue to keep the growth coming.
  5. In about 20-24 months, we will have some other start-up take the lead and Facebook will start receding in the background.
  6. Meanwhile, all the investors in Facebook would have cashed in the IPO will move on to fund the next great idea.

I only hope that I am proved wrong and that Facebook continues to remain one of the innovation hubs and continues to grow in the years ahead. However, I am not very sure if that is the future of Facebook.

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Categories: Ideas, Ideas, Uncategorized Tags:

66 Things You Should Know About Your Customer & some more

January 30, 2012 Leave a comment

I just came across the article “66 Things You Should Know About Your Customer” in the Inc.com website written by Harvey Mackay. He talks about the importance of knowing your customer in selling to them.

He also stresses the fact that, even though you may be selling to a business or an organization, the real buyer is still an individual and it is important to know about the individual as much as you know about his company, if not more.

He also has developed Mackay 66, a 66-question customer profile that includes absolutely no information about the envelopes a company buys, but rather focuses on the person who does the buying.

I would like to contradict here a it with Harvey. Though I agree with him about knowing the person behind the decisions is very important, one must not get carried away with this facet of the selling. Successful sales people always care about the person making the buying decision or involved in the decision making process, but always make sure that they demonstrate clear value proposition for the customer organization as well. If one forgets this part and sells solely based on the relationship that they develop with the decision makers, they will not do any good for themselves in the long term as the buyers will understand sooner than later that they got manipulated to buy stuff that did not bring in value to their organizations.

So, it is important to know the 66 things about your real customer, but one needs to do a lot more than just knowing these things.

Successful sales people will not sell to a customer unless there is no demonstrable value for the customer organization in buying their product/services.

Categories: sales Tags: , ,

Why Airlines need to re-design their loyalty programs

January 30, 2012 6 comments

Today, I was reading an article “Why Airlines Need to Reconsider What “Loyalty” Is Today…”. This brought back a few questions to my mind.

I work for an MNC and my work involves a lot of travel within India. My company has a corporate deal with an airline (Jet Airways) in India to minimize the cost of travel. So, most of the times, I am required to take a Jet Air flight. I do not like flying Jet but do travel quite a bit in Jet due to the company policy. The company also allows me the freedom to choose a different airline if there is no Jet Air flights available at the time I want to fly.

Now, 80% if my travel in the past couple of months have been on a different carrier – Indigo.  How? I plan my trips in such a way, that there are no Jet Air flights available at that time and hence I am allowed to choose the carrier I want to use to fly.

There are some interesting lessons to be learned from this behaviour for both Jet Air & Indigo.

For JetAir:

  1. I did fly a lot on Jet Air and will continue to use them every now and then. This allows me to collect frequent flier miles on that airline. So, should Jet Air consider me as a loyal customer ?
  2. What kind of offers can Jet provide me in order to continue to attract me?
  3. Do they know if I am flying with them most of my trips or also using competing airline carriers?
  4. How can they find out how much could i be worth to them in terms of revenue?
  5. How can they find out if I am a loyal customer with the airline? If yes, how can they continue to keep me happy & loyal? If not, how can they convert me into a loyal customer?

For Indigo:

  1. How does Indigo know if I am a loyal customer (which I am)
  2. What could Indigo do to increase my loyalty and make a fan out of me?
  3. How can Indigo leverage my loyalty and help me spread word about how I feel about Indigo?

I think there are a few trends and technological advances which now allow organizations to be able to profile their customers to this level of granularity. The combination of advanced analytics, social media and big data capabilities now offer the power of making individual offers to select profiles of customers possible.

Now imagine the following:

  1. Jet realizes that I am only using the Jet airways when I do not have an option, they can initiate contact to understand why I do not use Jet all the time.
  2. Jet creates and delivers special promotions personalized to me to win over my business.
  3. Indigo, on the other hand knows that i like travelling their airline. So, they provide me opportunities on the social media platform to promote or atleast to show that I like travelling Indigo to my broader network.
  4. They could tailor their offers to me in order to continue to retain my loyalty.

In the end, its the customers who win and the organizations that provide true customer value (personalized) will win the business in the long run.

 

Delighting customers – Bollywood style

January 27, 2012 3 comments

As I have always said, you can always delight your customers. I came across a video of a Finnair Flight which was on its way to Delhi, celebrating India’s Republic Day, Bollywood style – Song & dance routine. Have a look at the video below.

The video has already garnered more than half a million views on Youtube. The reason why this works great are:

  1. Element of surprise: No one expects to see a song & dance routine on an aircraft.
  2. Effort: The effort the dancers had put in clearly showed.
  3. Emotional: There was an emotional connect for all the Indians on the aircraft as the Republic Day is associated with the emotion of freedom.

Hats off to them for pulling this off.

Hope they keep up the good stuff and others learn from them.

How could Flipkart respond to the open letter to its founder by a dissatisfied customer

January 26, 2012 27 comments

Today, I came across an open letter written to Sachin Bansal, CEO/Founder, Flipkart.com. In this letter, the writer (Sushrut Bidwai) talks about his experience of trying to get his laptop replaced by Flipkart. He also talks about the attitude of the service staff and how they left him feeling frustrated (repeatedly).

This open letter has also induced responses from other customers of flipkart to come in the open and admit that they also had similar experiences when it came to refunds or replacements.

Now, flipkart has the following options:

  1. Pretend that nothing happened and continue business as usual.
  2. Take notice of the service failure, take corrective actions to ensure that this is fixed at the earliest. Then continue business-as-usual.
  3. Put corrective measures in place, reach out to Sushrut and sort out his matter. Also, reach out to the others who have indicated that they went through a similar experience and sort their matter as well.

These steps can address the issue at hand. However, can Flipkart manage to use this incidence, turn it on its head into a great PR activity for itself? I think it can. The question is how? If I were in Sachin’s place, I would write an open response to this letter as below:

Dear Sushrut

First things first. I am really sorry for the harassment caused to you in your transaction with flipkart. I also know that no matter what I say or do, your 40 days of productive time will never be recovered. As a fellow entrepreneur, I understand what a difference such a time frame can have on a business.

However, I also wanted to thank you for taking the time and writing such a long and detailed letter to me. I want to let you know that I personally take responsibility for the actions of my employees and apologize to you for the bad treatment that you have received from Flipkart.

Just so that you know, your open letter has had the following effects on flipkart:

  1. We have identified the reasons for this service breakdown and have put in place processes and policies to ensure that such an incident never happens again with any other customer. Thanks to you, the service levels at Flipkart will go up a couple of notches which will be appreciated by our future customers. 

I would like to invite you to my office so that I can explain how we have ensured that such an experience never happens with any other customer.

Also, I would request you to address our employees on your distress during this period. I hope that this will make our employees more aware, conscious and inspire them to provide better service to our customers. 

As a token of gratitude & appreciation (for having taken the time, put in the effort to bring this to our notice and helping all our future customers), I would like to offer to you one book, free of cost, delivered to your home every month, for the next 5 years. You can pick the books and we will deliver it. I know that this can not in anyway bring back the time you lost due to the issue, but hope that you will benefit from the knowledge you gain from the books. 

I would also like to take this opportunity and request all our customers to continually engage with us and continue to provide us your valuable feedback. We would like you to believe that delighting you at every interaction is our only objective. Anything short of that is not expected. So, if you think, we are slipping, please provide a helping hand and let me know. I will be ever grateful to you for this help. You can reach me at (his email ID). 

Looking forward to meeting Sushrut and delighting all our other customers. 
Your’s 
Sachin Bansal 
Note: This is my way to respond to such a situation. Let’s see what action Sachin takes (or ignores).

Changing the face of retail distribution of oil in India

January 25, 2012 Leave a comment

I was in Mumbai today and was going back from the airport to my hotel in a cab. The cab driver stopped at a fuel outlet to fill-up his tank. It took us about 15-20 mins to get the tank filled up and start our journey back to the hotel.

While waiting, I asked him if we could not fuel up at some other outlet rather than wait in the que at this outlet. He responded that the next petrol outlet was about 5-6 kms away and was not enroute to the hotel. He also said that wherever you go, the fuel outlet always has a waiting time. He said that this was due to the fact that the growth of vehicles was outnumbering the growth of the number of retail fuel outlets.

This got me thinking and I realized that it has always been the case in almost all the cities that I have been in India. The infrastructure was always lagging the actual consumption growth. Also, with the cities expanding towards suburbs, the real estate  costs within the city is increasing exponentially. It is getting increasingly prohibitive to set-up new fuel retail outlets within the city. Result is that most of the new fuel outlets are being opened in the suburbs rather than in the city, leading to more congestion at the outlets within the city.

This got me thinking and in my opinion the following ideas could be worth exploring:

  1. Mobile fuel outlets: Like mobile libraries, mobile restaurants, we could also have mobile fuel outlets. They could have fixed spots where these vehicles would be parked based on a pre-defined schedule.  These could also go to the big apartment complexes with more than 500 apartments on a fixed date every week so that people from that complex can re-fuel at their homes rather than go to the fuel outlets. Similar set-up could also be thought for office complexes/malls.
  2. Permanent retail fuel outlets in apartment or office complexes: Every mall/office/apartment complex with more than 500 car parking facilities could have a retail fuel outlet in their parking lots. This could not only provide another revenue stream for the complex but also solve a big infrastructure problem.
Some benefits for the oil companies include: 
  1. The first oil marketing company that does this could gain a substantial jump in their revenue, market and mind-share.
  2. This could also lead to a lot of free press for the company improving their brand recall.
  3. Since the set-up costs for a mobile fuel outlet is minimal, the profitability for the oil marketing companies will also improve.
  4. This could also result in a decrease in the total emissions as at the city level the total distances travelled by vehicles will also reduce though we can not measure this impact quantitatively. Thereby reducing the carbon footprint of the city.
  5. Most importantly, this will help us save a lot of commute and wait time to re-fuel our vehicles.

Hope some of these oil companies are listening to this idea and do bounce it off in their organizations.

There’s always an opportunity to delight your customers

January 18, 2012 2 comments

My wife uses a CDMA mobile connection by Reliance Communications. We have been a loyal customers since 2006.

The operator has been advertising about their unlimited network coverage and position it as one of their USP’s to attract new customers.

Their ad featuring bollywood actors Anushka Sharma & Rannvijay Singh showcasing their network coverage is below.

Now, this is  a good thing to do if you are able to live up to the expectations you create.

The trouble is that since yesterday, my wife has not been able to make or receive any calls on her mobile phone. Today, when I contacted the service centre on CMH Road in Indira Nagar, Bangalore, the customer service representative was not interested in the complaint. He instead asked me to log a complaint at the call center. I called up the call center and they said that they are experiencing a trouble in their network and that they are working to resolving this. When I asked the call center representative about the time it might take to get the network up and running, she kept repeating that they are working on it on a priority basis. When I specifically asked if they know how long it will take to get it up, they had no answer.

Now, this is not the first time that they have had network issues.  I also understand that these things happen. Now what is more important is how these situations are handled.

A few things that Reliance could do in order to change this incident on its head and really wow their customers:

  1. Send out a personal apology letter to all their customers which explains what happened and what they plan to do to avoid such a thing happening again.
  2. As a good will gesture provide them something in return to the in-convenience caused. It could be as small as a 25% for pre-paid customers on their current balance or a 10% reduction in the bills of pre-paid customers or a gift voucher for their customers redeemable at any of their reliance retail outlets or any such thing.
  3. Identify 2 or 3 causes and let customers choose a cause which is closer to their heart and make a donation to the cause on behalf of your customer. Send them a receipt and a thank you card with their next bill.
If they do any one of the above or something else which can help them re-connect with their customers, they will not only have turned this situation to their favor, they would continue to retain most of their customers and also generate some buzz online which could only be good for their brand.
One of the keys to have a satisfied set of customers is to first deliver your commitments and then exceed the expectations of your customers.
Hope someone is listening at Reliance.