Archive for July, 2013

Engaging Your Customers Is Not Sufficient Anymore

July 11, 2013 4 comments

We are in an era where we are grappling with too much choice.  Consumers today are facing a challenge in keeping up with the different choices they have.

Every product or service category has become crowded (maybe apart from some categories like online search, where Google still continues to have substantial market share). In this scenario, having a meaningful engagement with your customers has become table stakes for any business to survive and thrive.

So, the question that every marketer grapples with is “How can my Product/service stand out in this crowded marketplace?”.

Some marketers try to stand-out by providing exceptional products/service/engagement (Apple)

Some try to come up with stunning advertisements and marketing campaigns for their products/services (Coke).

Some try to use the new age media to engage with their customers and build communities (SAP).

Irrespective of what strategy we use as a marketer, we need to be able to “Surprise” and “Inspire” our customers. If we are able to do both, we would have their attention and affection.

Doing these alone is not sufficient for a product/service to stand out and be successful. The product/service needs to be good quality, address a specific need for a customer, engage the customers in meaningful ways. All these are table stakes without which you do not stand a chance.

But by themselves, you don’t stand a chance to win over your customers.

Find creative ways to both “Surprise” and “Inspire” your customers.

How does your organization go about doing this?

Share your experiences about when were you “surprised” or “inspired” as a customer/consumer.

PS: Some integrated campaigns which have both “Surprised” and “Inspired” me are below:










Customer Engagement during Moments of Truth

July 8, 2013 5 comments

Last week, I was flying on a Jet Airways flight from Delhi to Bangalore. This was an evening flight and they serve food (dinner) in the flight.

The service staff completed serving food to all the passengers and started to come back to collect the used plates.

Meanwhile, I tasted the food and did not particularly like the food and so had left most of the food untouched.

The staff came back, collected my un-touched food plate and went back without a word.

I think, this was a moment of truth for me as a customer. If someone from the service staff had noticed that I had not eaten anything from the food served and came back to ask me the reason or to offer something else that they had, I would have been truly surprised and happy.

This does not take any specialized training to do. This is something that any member of the service team would have done, if I were a guest at their homes.

So, why do they not care when I am guest on board an aircraft that they are serving?

It is such moments of truth when the true engagement of the employees and the organization is tested and opinions formed.

It doesn’t matter how many times the service staff announce during take off or landing about how they value our business and would like to serve us again, I know that these are only said as they are required to say them and that there is no true emotion or truth behind these statements.

How many such moments of truth does your support team encounter in a day? How do they deal with them? How do you deal with your employees who do well in these moments? How do you identify and train employees who falter in such moments so that they learn and do not repeat their mistakes? Therein lies the crux of true customer engagement and delight.

Do you agree with my thoughts? Do let me know your thoughts by commenting below or by tweeting them to me at @rmukeshgupta.

PS: An interesting video that talks about the “Moments of Truth”.


Lessons from a Failed (Billion Dollar) Business Model Innovation Attempt

July 8, 2013 4 comments

In May this year, Better Place, an auto tech company filed for bankruptcy, burning close to a billion dollars. They had a brilliant solution to a complex problem.

Their idea was to replace fossil fuels with batteries – literally. What this meant was that as you re-fuel your cars with gasoline, you could get your batteries changed at a fuel station. This was in stark contrast to all the other start-ups in this space, who have been working on increasing the range of their batteries to go longer distances or increase the speed at which one could charge the batteries on-the-go. 

There has been enough written about their strategy and why it did not work. Some of the reasons that have been proposed for the failure of the business model are: 

  • The most important cause was the fact that the very need to create a network of fuel stations where battery could be switched was very expensive and was a pre-requisite to start acquiring customers.
  • They got too ambitious by expanding to other markets even before they won in their home market (Israel).
  • They were not able to offer choice of different car models to their customers, which was a mistake.

However, no one has written about what would have given them a fighting chance at success.

I would like to stick my neck out and outline what I would have done if I were running the company.

I think that the business model that they were pursuing was and is still a great model. This ensures that the behavior of the end customer does not change and with the improving quality of batteries, my cost over time would reduce while my revenue would continue to increase, which is a perfect situation to be in.

One of the most important lessons that we can learn from this exercise is that the choice of your initial market is the most important decision you have to make. The choice of markets (Australia, California, Canada, Denmark, Hawaii and Israel) in this case was a mistake.

If I were in their position, I would have chosen a city based approach rather than pick a country as a market. I would have also chosen a city in densely populated area where, the populations do not generally drive very far (thus reducing the number of switching stations necessary to serve the market.

I would have franchised these switching stations (just like Shell or other Oil players do, mostly to the same franchisees) and signed a revenue sharing agreement with them, thereby eliminating a lot of cost in creating a network of switching station. Also, this would have been much faster and would have provided the momentum to the start-up.

Instead of trying to get Auto manufacturers on-board as a partner, I would have signed-up with them as a customer. I would have co-designed a few models along with the auto manufacturers and placed an order for these cars, thereby eliminating the risk for them, thereby creating choice for the customers.

Once the auto companies have made the models, adding or improving them is not much cost or effort and would lead to them developing more models by themselves (if the initial model was successful in the market).

I would then lease or if possible rent these models (co-branded with the auto manufacturers) on a rental based on either the kilometers driven or for every battery being replaced. This makes it more attractive for a customer to rent a car than to buy it (capex to opex).

This would have allowed me to win one city at a time and then expand to an ever larger network. Once the concept is validated in a few cities, I would then scale like hell and create a network (again franchised) across a nation. If the revenue sharing is fair for the franchisees, it would be easy to create a nationwide network.

This would have allowed me to iterate and learn about the operational challenge and find answers to these challenges with the least risk exposure and perfect the model to enable fast scale.

This would have also reduced my total cash burn and given the start-up a longer play in the market.

I believe 6 years is too long a time to prove your concept, which led to Nissan moving out and others not too keen. The key in this case was the inability to win a single market that led to the fall-out of the business model.

Also, I think that one of the key aspects of business model innovation is the velocity with which you are able to execute and validate your business model in the market, failing which you will find ever increasing resistance from the ecosystem and inertia will kill the project.

What would you have done differently if you were the CEO of Better Place? Do you think that someone should still pursue the business model that they were pursuing?

Let me know your thoughts by commenting below or tweeting to me at @rmukeshgupta. 

PS: Interesting news about speed charging your electric vehicle. 

The State Of Social Media Marketing is Not So Depressing After All

July 5, 2013 3 comments

I recently ready a blog post titled – “The Depressing State Of Social Media Marketing” by Mitch Joel (btw, I highly recommend both his podcast and the blog) lament about how brands are not realizing the true potential of Social Media.

In my opinion, the vision being proposed by Mitch or by Chris Brogan, Seth Godin or Nilofer Merchant is the extreme end of the spectrum of possibilities for social media.

However, what we don’t realize is, that in order to be able to realize that vision of enabling connections/conversations, the entire marketing strategy and execution (to a certain extent, of the entire organization) needs to change. Such a change is not only too complex but lacks an owner/sponsor within most organization, due to which is not even attempted.

In my opinion, every brand has its own set of challenges and priorities and I think it is ok for each brand to use Social Media as they want to use it, as long as it helps them in overcoming these challenges.

What does that mean? A brand might decide to go the full way and want to realize the vision proposed by these stalwarts, i.e., start creating connections and having conversations. What does that mean for a company like Coca Cola or Virgin Group or a Dell Computers or Walmart or Zappos or Louis Vuitton? Will coca-cola want to have a connection/conversation with all their customers? I don’t think this is even practical for such an organization.

However, Louis Vuitton might want to connect and engage with all their customers. Now the question is what do they do?

  • In order to have a meaningful connection or conversation, the brand will need to know about the customer, his preferences, his past purchases, his interests (which are publicly shared on the various social sites) and
  • This is only possible if you have the CRM system running at Loius Vuitton is able to identify a customer through their social profile and collect and organize these information and create different personas for their customers and
  • Then create conversations around his/her interests.

This is no mean task if you have to do this even for a few hundred customers let along a few hundred thousand customers.

What Coca-Cola might want to do is to create an specific kind of association with their brand (Happiness). So, their content and social strategy would be very different. They would like to engage with communities instead of individual customers, which they have done very well in the past year using some amazingly integrated campaigns, which has led them to win the marketer of the year award at Cannes.

Some other brand might want to use social media as a channel for service and support. Their engagement with their customers is more in the real world than in the virtual world. That is fine as long as that is part of a deliberate strategy.

Expecting every brand to use social media from our own perspective is not being fair to these brands.

I think as long as the brands have taken a strategic decision (which supports their overall business strategy and goals) about how to leverage social media, they should be fine.

Though, I understand and totally agree with the vision that these experts have about social media and the impact it can have on businesses, I also think that the state of affairs is not so bad after all.

What do you think?

First Step in the Journey Towards Becoming a Real-time Business

July 1, 2013 2 comments

There is a lot of talk about Real-time data and how real-time data can provide organizations to be able to respond in near real-time to business events.

However, to realize such a vision, there is a lot that needs to change in the way we do business. One of the most basic thing that needs to change is how we run our business itself.

Most organizations currently operate in the mode where the decision making sits at the top of the hierarchy. We have a C-Suite where we have the Chief Executives, who decide the strategy and roll-it out for others in the organization to execute.

  • The strategy is designed by the C-suite and cascaded down for execution.
  • The KPI’s are defined (annually, in most cases) and cascaded down.
  • Bonus structures are defined (annually, in most cases) and cascaded down.

What this means is that there are multiple layers of management (depending on how big an organization is) before any true decisions are being made.

In a vision of a real-time enterprise, this needs to change completely.

The front-line employees, people who are interacting with your customers, partners, suppliers,

  • the sales executive who sells your products and competes with your competitor or
  • the support executive who supports your customers when something breaks down or
  • the engineer or product/service developer who designs and produces the products

are the one’s who get to know if something in your business environment has changed. They are the one’s who need to respond to these changes.

In order to realize the vision of a real-time enterprise, we need to be able to spend time training these people to identify such shifts and provide them the real-time information that organizations are capable of in a way that they can make sense out of the data and respond appropriately, without having to go through a series of approvals, et al.

What would help organizations become real-time would be:

  • Move from a pyramid shaped organization structure to a concentric circles shaped organization, where, the customer is at the core of the organization, surrounded by the customer facing employees (sales execs, support engineers, product development folks, etc). Each outward circle represents a layer of people who shall support these customer facing employees in serving the customers needs in the best way possible.
  • The core employees are trained in identifying trends and insights and create the strategy with the guidance from the other execs in the organizations.

This more like improv theater. Just like in a theater performance, the actors (in front of the customer) are the most important people when it comes to the audience (as they execute the vision of the writer and the director). Every one else is there to enhance or complete the experience.

So should organizations realize that the true heroes or stars for your customers are the folks who perform in front of them. The role of the others is of support cast and need to find, train the best actors and put them in the spotlight.

Also allowing the actors to improvise (if needed) has the potential to improve the overall experience for the audience substantially, similarly empowering your front line employees to improvise can improve the ability of the organization to adapt to any situation that they can come up with.

This will be the first step that an organization can take to move towards becoming a real-time enterprise.

This is not easy, but as people say – “Simple, but not easy”

PS: The best improv show that I have seen – “Whose Line is It Anyway”