How to Activate Your Inactive Email Subscribers

Not my favorite article, but some good points to live by as a database marketer.  My main pet peeve is sending too many emails.  This has slowly been getting better through the years, I don't find myself getting so many daily emails, which is a testament to analytics I would imagine.

There are a number of reasons, but there are several common ones. And there are a lot of reasons at different companies. But the main one that we've found is that customers receive too many emails. So, it's always important for an email marketer to understand [customers'] preferences—especially the mailing frequency that your customers prefer. It's always important not to overwhelm them with emails. When you send too many emails, you're causing them to tune out.... They'll look at them, and just ignore them.

Getting back a customer that has become inactive is very difficult, so have different strategies for customers that are trending toward inactivity.  In my history I call these customers decliners and it is easier to save them before they become inactive.

The True Purpose of a Loyalty Card Program

Loyalty card programs are now a way of life.  So many businesses in every vertical has a loyalty program based on dollars spent.  The programs range from miles in airlines, to how many stamps does a customer have on their stamp card before they get a free yogurt.  The belief is these programs will drive loyalty and incremental purchases because of the benefits offered for the spend.  But do they really drive incremental spend?  Or should the true purpose of the program not focus on the incremental spend, but something entirely different?

Airlines are the standard bearer for loyalty programs.  Frequent travelers swear by the loyalty programs and can tell you how many miles they have in their account.  With so many travelers being able to quote their miles, this must work correct?  In reality very few of the people traveling through the air really care about the loyalty programs.  Most will actually look for price or non-stops when making a decision on who to fly with.  So who are these travelers who care about the program?  They are the 2% that drive most of the revenue.  Well that's a good thing right?  The funny part about this model is most of these travelers are not actually paying for their flights.  They are frequent business travelers who are not paying out of their own pocket, their work or customers are paying for it.  The irony of these loyal customers is they would never spend that kind of money with the airline if it was their own.  They are loyal to the program because they would like the free travel when they want to go somewhere on personal time, with the family.  

So what happens with the remainder of the travelers?  Is the program enough to drive loyalty?  The answer is no.  But that is ok.  They shouldn't be designed to drive loyalty from these customers.  If they actually did, they would more than likely be too rich of a program.  So what happens to the 98%?  Should companies just not push their loyalty cards on the rest of this market?  

Loyalty program should only be rich enough for customers to want to be tracked.  Now this means many different things for each industry.  For airlines it might mean a free amenity if the customer is a member of the loyalty program.  For a yogurt shop it could be a free topping for a member.  For a casino it is the ability to receive a comp.  Grocery stores are masters, you don't get the sale price unless you are a member.  Of course I want to join for that $10 off of my grocery bill.  

Loyalty programs are an opt-in for tracking behavior.  For the majority of your customers, the loyalty rewards in your program will either be out of reach or not worth any incremental spend.  But, what you are getting is behavioral data.  How often is the customer engaging, how much is the customer spending, what are the customers patterns.  Do they only come for sales?  Do they come only when they have an incentive?  Do they come a certain day of the week?

This is the gold that comes from the loyalty program.  Mining that gold has unlimited opportunity.  Loyalty programs have 3 major flaws.

1. They are not targeted
2. They are not proactive
3. They are easily copied

Loyalty programs treat customers differently based on 1 metric, a total amount of something.  Whether that's miles flown, purchases made or points that equate to dollars spent, the one metric is dollars spent.  Well that is a good start for measuring a customer, but what if a Customer A spent $500 3 times and Customer B spent $10 150 times?  They will both be in the same loyalty tier because they spent a total of $1,500, but they are entirely different customers.  If the company can get Customer A to spend 1 more time, it is worth a lot more than if they can get Customer B to spend 1 more time.  So the loyalty program doesn't incentivize customers equally.

Loyalty programs rely on customers to want to interact.  They are reactive mechanisms, waiting for customers to spend enough to get whatever reward the customer may be wanting.  Of course good database marketers can send out reminders that someone is close to a reward or they might move up a tier, but the reward has to be enough of a carrot for that customer to change their behavior.  

All the great innovations a company can make in their program can be copied by anyone, because it is a documented program.  If the strategy is to own loyalty by having the best program, any competitor could easily come over the top and have a richer program.  This leads a race to the bottom mentality.  The company could always come back over the top, but the programs start becoming too rich, remember only be rich enough to track behavior.  If a competitor can negate your best selling points (loyalty program), then the program can never be a competitive advantage, nor do you want it to be.

This all leads to the true reason to have a loyalty program, tracking behavior.  With targeted direct marketing, companies can inventive the behavior they are looking for.  A company can give Customer A a much different communication and offer because they know that the customer will spend $500 the next time they can get the customer to engage.  The direct marketing can be proactive.  Direct marketing can take a customer from someone that rarely comes in, to someone that engages with the business on a regular basis.  Last, but certainly not least, companies can innovate without being copied. Because direct marketing is not a published benefit, there can be many different tactics for a range of different customers and the competition is blind to the strategies.  

There is so much more opportunity in direct marketing compared to the loyalty program.  By keeping expenses as small as possible in the loyalty program, it leaves much more money for direct marketing to drive the business.  When allowed to drive the business, direct marketing can target customers in many different ways, based on the customers individual behaviors, with incentives that will truly drive that particular customer.  A loyalty program will never be able to do that as effectively. 

Twitter’s Dilemma

Good article to follow up on my post about Twitter.  Seems they have a product team that is talking about the right things, focusing on the product experience.  My fear is the "slave to two masters" part.  Should be interesting to see where the product goes in the next two years.

Twitter has a Growth Problem, or Not

Recently Twitter had their earnings call and the big story coming from the numbers was a slowing in the growth of Twitter's monthly active users (MAU).  There was plenty of commentary on the doom approaching for Twitter, as the MAU slow, so does the opportunities for Twitter.  

So I was looking at the number of MAU for Twitter.  That number has slowed to 288 million users. Let me say that again out loud, 288 million users.  These are mind boggling numbers.  Twitter made $479 million in revenue, which comes to a paltry $1.66 per MAU.  Now this number has doubled revenue, so that number seem to be growing.  

MAU is not the problem for Twitter.  If Twitter doubles the MAU, which is not going to happen, then revenue is still under $1 billion per quarter. The problem is the $1.66 per MAU.  This can also be attributed to Facebook having 7X the engagement over Twitter.  Twitters problem is their 288 million users do not spend enough time on the service.

Average time per MAU and revenue per MAU should be the main metrics for Twitter.  Twitter makes money on advertising.  Many say this is why MAU is the most important metric, I mean look at Facebook, they have 1.39 billion MAU and look at the money they make.  Twitter will never have the MAU of Facebook and it shouldn't worry about that number.  Twitter needs to have laser focus on making the Twitter experience the most engaging as possible.  288 million users is more than enough to have an amazing business.  I think 99.9% of the worlds businesses would kill for 288 million users.  

Recently Apple CEO Tim Cook made a comment that really resonated with me and I don't know if Twitter, or most companies for that matter, looks at their business in this way.  Tim Cook said "We're not focused on the numbers, we're focused on the things that produce the numbers."  Twitter needs to focus on what produces the numbers.  The product of Twitter.  The more their extremely large base of users engage with the platform, the more money Twitter makes.  It sounds so simple, but it isn't.  I feel Twitter doesn't spend enough time on making the platform the most engaging it can be.  

I don't have the answers on what will make Twitter more engaging.  I do believe that all of their focus should be on increasing the time each user spends on Twitter.  Make the platform more sticky.  If the focus is on the platform, then profits will follow.  Change the conversation to investors and make sure the organization is focused on the singular goal.  

I love Twitter.  I spend most of the time on my phone using Twitter, however I still find it hard to find new things to see.  I love using an app called Zite, that learns what I like by simple thumbs up and thumbs down and then shows me articles that I would like to read based on the input.  If Twitter could incorporate ease of use like Zite, I believe the platform would be so sticky.  Good luck Twitter and stay focused!   

The 7 Biggest Mistakes Made When Creating Charts

In the nascent world of visualization, so many times I see builders of viz's choose form over function when trying to communicate pieces of data to a consumer.  I remember when I first started building reports, boy I loved me some pie charts.  You would think I actually received a pie for every pie chart I used because I used to many pie charts.  But then I had an epiphany.  Pie charts kind of suck.  So this article I think is funny.  Any pie chart should probably be called a mistake, however some of these are classic.  My favorite are the radial charts.

5. Radial charts

Cartesian charts are much more in keeping with our mental models and organization of the world. Rectangular shapes the primary form for everything from packaging to architecture. Even our writing happens in Cartesian space. Radial charts look cool, but they make the data much harder to read. Keep your charts rectangular and show that data off.

I don't know if I necessarily agree with number 7.  There are times when using "overloaded charts" can convey your story much clearer as it shows a scale of how many inputs and why the piece of data is an outlier.  But be careful when using this technique, because as in the example shown below, if there are no outliers, it just becomes a jumbled chart.

Analytics Capability Landscape: The importance of decisions

It amazes me that in the year 2015 100% of the straw poll wouldn't be for decision making.  In my humble opinion that is what analytics is all about.

It’s clear when you analyze analytic capabilities that there are three main reasons people use analytics:

• A need to report on some aspect of the organization

• A need to monitor the organization’s behavior or performance

• A need for the organization to make data-driven decisions

As part of my recently completed research on the analytic capability landscape, we did an interesting straw poll.  We asked those attending a webinar on the topic which of these was the business goal for their analytic efforts today and how did they see that changing in the next 12-24 months. The split is shown in an excerpt from the infographic at right. Today the split is pretty even with reporting and monitoring coming in at 37% each with deciding – making decisions – slightly under at 27%. This matches my experience – lots of companies are still focused on reporting, many have moved on to dashboards and performance monitoring as their focus while a growing number are explicitly focused on decision-making.

What Great Data Visualization Looks Like: 12 Complex Concepts Made Easy

Very cool visualizations.  My favorite one is the unemployment rate by county that iterates through time to show the growth.  Very powerful.

In Geography of a Recession, Latoya Egwuekwe uses a short animated visualization to show the spread of the 2008 recession across the United States. By overlaying time, data, and geography, she is able to display both the rapid progression of unemployment and the regions hit hardest. Symbolically, the country visually turns darker as unemployment spreads. This effect of time-lapse on visualization is key to provoking insight from the viewers.

'70 Percent of CRM Installs Fail' and Other Crappy Stats You Should Ignore

The big stat that I think is very interesting is the total amount of organizations that have marketing technology installed.  Such a low number.

by looking at data from 3 million businesses in our Fall 2014 report, that the truth — a statistically significant number across all sizes of business, and 151 industries — is much harsher. Marketing technology (as a whole) only has 4.1% penetration, let alone marketing automation.

Your Digital Strategy Shouldn’t Be About Attention

I really like this article.  Digital has the potential to be one-to-one in real-time, but so many marketers use it as a commercial.  I have been working with Adobe and their marketing cloud for a couple of years now and their vision is very compelling.  Right now it is just that, a vision, but it is getting closer to reality.  

To make such a vision a reality, marketers have to push companies with great visions.  The tools can't push the vision, they have to enable the vision.  If marketers continue to use these tools to push brands and not relationships, the vision will be wasted.  

It’s easy to win “clicks” by titillating people with Kim Kardashian’s naked behind or a list of the world’s cutest human-cat baby unicorn fairies. And it might lend a dreary day a moment of relieved escapism. But it won’t help anyone. To do that, you must educate. Not in the awful, misused corporate sense of the term: dully lecturing them about “product benefits.” But helping them develop the capabilities and skills they’re going to need to live better lives. What will your “digital strategy” help them become better at? Does it have a point? Skiing, dating, cooking, coding, creating, building? If the answer is no, you don’t have a strategy. You have a vaudeville show.

Sometimes There Really is an Easy Button

The road to Tableau was an eye opening experience for me.  Noah really nailed it, there is nothing I couldn't really do before Tableau, but it just is so fast to do an amazing visual analysis that allows me to see opportunities, that I am so much more effective.

There’s absolutely nothing that Tableau can do that I couldn’t do before, but that’s exactly the point: it lets me do the exact same stuff much faster, cutting down on the parts of my job that aren’t the most exciting and leaving more time for more valuable work. So far, the things I use Tableau for take less than half as long as doing them with my more familiar toolset, and I end up with the same results.

3 Ages of Data Viz?

A very interesting post about data visualization.  I believe the correct answer is somewhere between 2 and 3.  Excel days were just awful!  

The Real Leadership Lessons from Steve Jobs part 2

I decided to break up this post into 2 parts because there were so many lessons and I liked most of them.  So here are the remainder of the lessons from the Walter Isaacson HBR article.

Don’t Be a Slave To Focus Groups

When Jobs took his original Macintosh team on its first retreat, one member asked whether they should do some market research to see what customers wanted. “No,” Jobs replied, “because customers don’t know what they want until we’ve shown them.” He invoked Henry Ford’s line “If I’d asked customers what they wanted, they would have told me, ‘A faster horse!’”

Caring deeply about what customers want is much different from continually asking them what they want; it requires intuition and instinct about desires that have not yet formed. “Our task is to read things that are not yet on the page,” Jobs explained. Instead of relying on market research, he honed his version of empathy—an intimate intuition about the desires of his customers. He developed his appreciation for intuition—feelings that are based on accumulated experiential wisdom—while he was studying Buddhism in India as a college dropout. “The people in the Indian countryside don’t use their intellect like we do; they use their intuition instead,” he recalled. “Intuition is a very powerful thing—more powerful than intellect, in my opinion.”

When I was a product manager for a software company that catered to database marketers and analysts, customers would always speak in terms of features.  "I want the product to do this" was a common request.  I quickly learned that putting features into the product just made the product more complex.  The true genius is in solving the problem the customer is having in the most elegant and simple way possible.  Customers mostly focus on what they can see and what they already know.  To be great you have to translate what your customer is asking for and then really solve their problem, because adding features can spaghetti your product before you know it.

Bend Reality

Jobs’s (in)famous ability to push people to do the impossible was dubbed by colleagues his Reality Distortion Field, after an episode of Star Trek in which aliens create a convincing alternative reality through sheer mental force. An early example was when Jobs was on the night shift at Atari and pushed Steve Wozniak to create a game called Breakout. Woz said it would take months, but Jobs stared at him and insisted he could do it in four days. Woz knew that was impossible, but he ended up doing it.

I believe that people want to be great at what they do, but when left to their own devices will let the fear of failure get in their way.  Failure is a much bigger enemy of greatness than the lack of talent for the individual.  The fear of failure gets in the way of taking risks and leapfrogging yourself.  If you can put your team in an environment where failure is viewed as a success or a learning opportunity on the way to greatness, your team will succeed in greatness.

Impute

Jobs’s early mentor Mike Markkula wrote him a memo in 1979 that urged three principles. The first two were “empathy” and “focus.” The third was an awkward word, “impute,” but it became one of Jobs’s key doctrines. He knew that people form an opinion about a product or a company on the basis of how it is presented and packaged. “Mike taught me that people dojudge a book by its cover,” he told me.

First impressions make all the difference.  The product, experience or the deliverable have to focus on delivering an experience worth returning to in order to succeed.

Push for Perfection

During the development of almost every product he ever created, Jobs at a certain point “hit the pause button” and went back to the drawing board because he felt it wasn’t perfect. That happened even with the movie Toy Story. After Jeff Katzenberg and the team at Disney, which had bought the rights to the movie, pushed the Pixar team to make it edgier and darker, Jobs and the director, John Lasseter, finally stopped production and rewrote the story to make it friendlier. When he was about to launch Apple Stores, he and his store guru, Ron Johnson, suddenly decided to delay everything a few months so that the stores’ layouts could be reorganized around activities and not just product categories.

In the world of database marketing there is always a push for perfection.  The mantra I use is "The campaigns are a living, breathing entity".  A good database marketer is always looking for ways to improve the performance of a campaign.  It is never complete, it will never be perfect, but one should always strive for perfection. 

Tolerate Only “A” Players

Jobs was famously impatient, petulant, and tough with the people around him. But his treatment of people, though not laudable, emanated from his passion for perfection and his desire to work with only the best. It was his way of preventing what he called “the bozo explosion,” in which managers are so polite that mediocre people feel comfortable sticking around. “I don’t think I run roughshod over people,” he said, “but if something sucks, I tell people to their face. It’s my job to be honest.” When I pressed him on whether he could have gotten the same results while being nicer, he said perhaps so. “But it’s not who I am,” he said. “Maybe there’s a better way—a gentlemen’s club where we all wear ties and speak in this Brahmin language and velvet code words—but I don’t know that way, because I am middle-class from California.”

It’s important to appreciate that Jobs’s rudeness and roughness were accompanied by an ability to be inspirational. He infused Apple employees with an abiding passion to create groundbreaking products and a belief that they could accomplish what seemed impossible. And we have to judge him by the outcome. Jobs had a close-knit family, and so it was at Apple: His top players tended to stick around longer and be more loyal than those at other companies, including ones led by bosses who were kinder and gentler. CEOs who study Jobs and decide to emulate his roughness without understanding his ability to generate loyalty make a dangerous mistake.

Find great people and then get our of their way.  Great "A" players will be great without you telling them what to do.  Set the expectations, guide them when needed and then be hard on their results.  If their results are subpar, let them know.  You don't have to go Steve Jobs on them, but an "A" player will be harder on themselves then you could ever be.

Engage Face-to-Face

Despite being a denizen of the digital world, or maybe because he knew all too well its potential to be isolating, Jobs was a strong believer in face-to-face meetings. “There’s a temptation in our networked age to think that ideas can be developed by e-mail and iChat,” he told me. “That’s crazy. Creativity comes from spontaneous meetings, from random discussions. You run into someone, you ask what they’re doing, you say ‘Wow,’ and soon you’re cooking up all sorts of ideas.”

Jobs hated formal presentations, but he loved freewheeling face-to-face meetings. He gathered his executive team every week to kick around ideas without a formal agenda, and he spent every Wednesday afternoon doing the same with his marketing and advertising team. Slide shows were banned. “I hate the way people use slide presentations instead of thinking,” Jobs recalled. “People would confront a problem by creating a presentation. I wanted them to engage, to hash things out at the table, rather than show a bunch of slides. People who know what they’re talking about don’t need PowerPoint.”

Greatness happens with spontaneous collaboration between individuals who trust each other.  Meetings with different groups who are not accustomed to working together and are forced to collaborate never work.  Grabbing a few individuals from their work space, bringing them into a meeting room, getting into the issues at hand can encourage an atmosphere where greatness can evolve.  Great ideas do not happen on a timetable.  They happen spur of the moment and they can be lost if left to fester.

Know Both the Big Picture and the Details

Jobs’s passion was applied to issues both large and minuscule. Some CEOs are great at vision; others are managers who know that God is in the details. Jobs was both. Time Warner CEO Jeff Bewkes says that one of Jobs’s salient traits was his ability and desire to envision overarching strategy while also focusing on the tiniest aspects of design.

Probably the biggest issue with leaders is they are one dimensional.  It's great to have a vision and be able to articulate that vision, but if the leader is so detached from the execution of the vision, they lose respect from the team.  Beyond just losing the respect, the team may build or execute on something that is in an entirely different direction once complete.  The leader needs to be involved with the team on the details to ensure the vision is executed to perfection.  Being both visionary and implementer is key.

Combine the Humanities with the Sciences 

He connected the humanities to the sciences, creativity to technology, arts to engineering. There were greater technologists (Wozniak, Gates), and certainly better designers and artists. But no one else in our era could better firewire together poetry and processors in a way that jolted innovation. And he did it with an intuitive feel for business strategy. At almost every product launch over the past decade, Jobs ended with a slide that showed a sign at the intersection of Liberal Arts and Technology Streets.

Combining two disparate disciplines into one creates bridges for teams to collaborate in one distinct language.  This ability os very rare in individuals.  The passion that an individual has usually overtakes one discipline for another.  When doing analytics, I often articulate to the team it is a combination of art and science.  The science part can give you an answer, but without the art side, the articulation and strategy coming from the data will get lost in interpretation.  The nuggets of information cannot be articulated in pure scientific form for a strategy to unveil itself to the business side.  

Stay Hungry, Stay Foolish

Steve Jobs was a product of the two great social movements that emanated from the San Francisco Bay Area in the late 1960s. The first was the counterculture of hippies and antiwar activists, which was marked by psychedelic drugs, rock music, and antiauthoritarianism. The second was the high-tech and hacker culture of Silicon Valley, filled with engineers, geeks, wireheads, phreakers, cyberpunks, hobbyists, and garage entrepreneurs. Overlying both were various paths to personal enlightenment—Zen and Hinduism, meditation and yoga, primal scream therapy and sensory deprivation, Esalen and est.

An admixture of these cultures was found in publications such as Stewart Brand’s Whole Earth Catalog. On its first cover was the famous picture of Earth taken from space, and its subtitle was “access to tools.” The underlying philosophy was that technology could be our friend. Jobs—who became a hippie, a rebel, a spiritual seeker, a phone phreaker, and an electronic hobbyist all wrapped into one—was a fan. He was particularly taken by the final issue, which came out in 1971, when he was still in high school. He took it with him to college and then to the apple farm commune where he lived after dropping out. He later recalled: “On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: ‘Stay Hungry. Stay Foolish.’” Jobs stayed hungry and foolish throughout his career by making sure that the business and engineering aspect of his personality was always complemented by a hippie nonconformist side from his days as an artistic, acid-dropping, enlightenment-seeking rebel. In every aspect of his life—the women he dated, the way he dealt with his cancer diagnosis, the way he ran his business—his behavior reflected the contradictions, confluence, and eventual synthesis of all these varying strands.

Even as Apple became corporate, Jobs asserted his rebel and counterculture streak in its ads, as if to proclaim that he was still a hacker and a hippie at heart. The famous “1984” ad showed a renegade woman outrunning the thought police to sling a sledgehammer at the screen of an Orwellian Big Brother. And when he returned to Apple, Jobs helped write the text for the “Think Different” ads: “Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes…” If there was any doubt that, consciously or not, he was describing himself, he dispelled it with the last lines: “While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones who do.”

The world will miss out on all the great things Steve Jobs would have done over the years he lost.  

The Real Leadership Lessons of Steve Jobs

In the latest HBR article by Walter Isaacson, the author of the Steve Jobs biography, had more interesting things to say about the man who cofounded Apple and made it into the most valuable company in the world.  This article goes into the management style of Steve Jobs.  This article comes at a perfect time because I have been talking to my team and others about this very topic and how Jobs was portrayed outside of the company is probably too harsh compared to the reality of the day-to-day life at Apple.  My take on Steve Jobs is he demanded excellence, however if he was such a tyrant and maniac, he would never be able to keep "A" players.  

In the months since my biography of Jobs came out, countless commentators have tried to draw management lessons from it. Some of those readers have been insightful, but I think that many of them (especially those with no experience in entrepreneurship) fixate too much on the rough edges of his personality. The essence of Jobs, I think, is that his personality was integral to his way of doing business. He acted as if the normal rules didn’t apply to him, and the passion, intensity, and extreme emotionalism he brought to everyday life were things he also poured into the products he made. His petulance and impatience were part and parcel of his perfectionism.

Isaacson goes on to list many reasons why Steve Jobs was a great leader that are getting missed by most pundits and scholars.  These are the attributes that made Jobs a great leader.

Focus

When Jobs returned to Apple in 1997, it was producing a random array of computers and peripherals, including a dozen different versions of the Macintosh. After a few weeks of product review sessions, he’d finally had enough. “Stop!” he shouted. “This is crazy.” He grabbed a Magic Marker, padded in his bare feet to a whiteboard, and drew a two-by-two grid. “Here’s what we need,” he declared. Atop the two columns, he wrote “Consumer” and “Pro.” He labeled the two rows “Desktop” and “Portable.” Their job, he told his team members, was to focus on four great products, one for each quadrant. All other products should be canceled. There was a stunned silence. But by getting Apple to focus on making just four computers, he saved the company. “Deciding what not to do is as important as deciding what to do,” he told me. “That’s true for companies, and it’s true for products.”

Focus is so important in an organization.  Without focus, organizations have individuals who determine what is important for themselves or their departments, even if it is not in the strategic direction of the company.  Many of these decisions might make a profit, but what all of these decisions will take is time.  Time is the most important asset of a company and if individuals are using their time to pursue endeavors that will not move the company forward in a focused direction, it is a massive opportunity wasted.  Focus comes from the top and Steve Jobs was more focused than any other CEO of such a large company.

Simplify

Jobs’s Zenlike ability to focus was accompanied by the related instinct to simplify things by zeroing in on their essence and eliminating unnecessary components. “Simplicity is the ultimate sophistication,” declared Apple’s first marketing brochure. To see what that means, compare any Apple software with, say, Microsoft Word, which keeps getting uglier and more cluttered with nonintuitive navigational ribbons and intrusive features. It is a reminder of the glory of Apple’s quest for simplicity.

Simplification takes extreme time and effort.  Most organizations don't obsess over the details, they want to get the product to market, to be first.  Simplicity is what makes Apple successful.  I love reading tech pundits talk about Apple and they don't appreciate some of the simplicity that Apple sweats and what that means to a normal person using the product.  It's so easy to build products for yourself, it's very tough to build products for others.  Jobs had a knack at designing for others.

Take Responsibility End to End

Jobs knew that the best way to achieve simplicity was to make sure that hardware, software, and peripheral devices were seamlessly integrated.

Own the entire experience.  An organization cannot create the ultimate experience without ownership of all aspects from beginning to end.  This is what Tim Cook is talking about at the end of keynotes when he says only Apple can do this.  Others are trying to copy the model, but it's very hard.

When Behind, Leapfrog

The mark of an innovative company is not only that it comes up with new ideas first. It also knows how to leapfrog when it finds itself behind.

The obsession for great products or experiences allow for leapfrogging the competition.  So many times companies are content with catching up to the competition.  Always understand what the competition is doing, but focus on making the best product or experience. 

Put Products Before Profits

John Sculley, who ran Apple from 1983 to 1993, was a marketing and sales executive from Pepsi. He focused more on profit maximization than on product design after Jobs left, and Apple gradually declined. “I have my own theory about why decline happens at companies,” Jobs told me: They make some great products, but then the sales and marketing people take over the company, because they are the ones who can juice up profits. “When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off. It happened at Apple when Sculley came in, which was my fault, and it happened when Ballmer took over at Microsoft.”

I worked for a company where the owner had the philosophy of "Get famous first, then the money will come".  That has stuck with me through my career.  Focus on making great products and experiences because that is what will make you famous.

The Slow Decline of Companies

In Seth Godin's latest blog he mentions how company's almost always melt, they rarely explode. It is almost always the short-term thinking of today that causes the crisis of tomorrow. 

Rarely in the moment, when business is down and your customers are no longer engaged can a corporation look back and find the reason. That's because it's multiple little reasons that were made in years past for short-term gains that lost the customers trust. 

Trust in a personal relationship is hard to regain, but trust in a consumer to business relationship is almost impossible to regain. 

Why Amazon Has No Profits (And Why It Works)

What amazes me about Amazon is how Wall Street treats them.  I love companies that put their profits back into the company to make the future better.  Some companies, like Apple, cannot necessarily put all of the profits back into the company, it goes against their strategy of extreme focus.  

However, the secrecy of all the spend is what baffles me.  Not that Amazon has to tell anyone where it spends its money, but that Wall Street gives them a break on it.  Apple doesn't say what their future products will be and Wall Street gets very upset, yet Amazon spends billions of its profits on reinvesting in Capex and then tells Wall Street its none of your business what we are spending it on and Wall Street says, "ok".  

The thing that would worry me about Amazon is lack of focus.  The varying array of different businesses Amazon has gotten itself into continues to grow.  From the article:

Amazon is in fact organized not just in these segments, but in dozens and dozens of separate teams, each with their own internal P&L and a high degree of autonomy. So, say, shoes in Germany, electronics in France or makeup in the USA are all different teams. Each of these businesses, incidentally, sets its own prices.

The bigger Amazon becomes, the harder it is to manage.  Amazon then becomes a conglomerate and eventually starts doing nothing well, just runs a bunch of revenue through its coffers.  This leaves the valuable revenue and cash flow at risk, giving an upstart the opportunity to out perform Amazon by focusing on one part of their business.  If that happens to be the profitable retail business, Amazon could find itself vulnerable as it may be focusing on other business lines and be too late to react.  

Graphic: Android's split personality, 2014 edition

Interesting and true take.  Without that fragmentation, Android would never have the market share it currently has, however that fragmentation makes it very difficult for developers and smartphone manufacturers to thrive in the ecosystem.  

This is exactly what happened in the Windows vs MacOS past.  At the beginning of the "war" the Windows environment had a plethora of people making money.  Developers were making a fortune in software and manufacturers were making very good money in making computers.  Of course Microsoft was making the most money out of all of them.  

However, over time there becomes a race to the bottom.  In the Windows example the developers never felt the hurt as much as the manufacturers because Windows owned the enterprise.  The manufacturers however hardly make any profit.  

The interesting thing to watch in the Android vs iOS "war" will be the long term game.  The smartphone wars are very young and already all the manufacturers have gone straight to the bottom.  Since this "war" doesn't have high-end enterprise dominance, developers are not making more money on the marketshare winner, they are making more money on the profitshare winner.  

So even though the marketshare won the day in the previous "war", we are not seeing the same behavior in this war, so over time I believe the fragmentation will hurt Android.  That's why Google is going with the Android L philosophy moving forward, which I think is a necessity for long-term survival.  

The Case for Why Marketing Should Have Its Own Engineers

Today, he runs the marketing team like an independent agency within the organization complete with its own engineers — a strategy he highly recommends for small teams that need to get a lot done fast.

An interesting article to set up an in-house agency to support all of marketing.  As a database marketer, I truly believe the team needs its own database and its own engineers to maintain this database.  It has to be separate from the IT processes that slow down progress.

Why?

Why shouldn't marketing data be included in the rest of the organizations data?

The simple answer is time.  Most data put into data warehouses are used for analytics.  Sounds just as important right?  Analytics is the driver of making money in the organization correct? 

Sort of.  This data can also include financial data that has different processes based on financial rules, especially for public companies.  Some data might include credit card information, which need to be PII compliant.  This data needs strict data governance and encryption of sensitive data.  All of this takes time.

Time is the enemy of marketing.  The amount of time it takes to get data into a marketing database relates to an amount of revenue that is being lost.  Most data requested into a marketing database is used right away in segmentation for campaigns.  These campaign changes either drive revenue or save on expense.  Having engineers able to get data into the marketing database in an expedited process gives an organization a competitive advantage. The quicker new data equals the more efficient database marketers.  All this leads to more money to the bottomline.  

Where DO HR's Come From?

Learn About Tableau

The Strategic Mistake Almost Everybody Makes

Every business and business model has a finite life. Products come and go. Customer preferences change. As Rita Gunther McGrath notes, competitive advantage is increasingly a transient notion. The companies that last over long periods of time do so by creating new products, services, and business models to replace yesterday’s powerhouses.

Scott Anthony makes some great points in this piece.  I stated in a previous blog how much focus is put on "churn" percentages.  In most industries it is very important to watch churn, however to keep customers as a defensive move will always result in long-term demise.  

Your customers will churn, this is a proven fact.  At what rate and when is always the biggest question.  The key is to have customers churn to your next innovation.  Apple didn't try to prevent churn in their iPod line as a defensive move, they were always on the offense.  Creating new form factors, adding color and video.  At some point they were so much on the offense, they destroyed this business with the iPhone, but I would imagine the positive churn of Apple customers is many times greater than if they would have played defense with the iPod line.  Compare this to Microsoft which has been playing defense with Windows for many years.  They are starting to see that negative churn by only playing defense, which has put them at a distinct disadvantage in mobile.  They played defense so much, their mobile strategy is Windows.  

Portfolio theory has its naysayers, but few argue with the fundamental idea that diversification decreases risks and increases a portfolio’s potential. Do you remember the most efficient buggy whip manufacturer or the most profitable distributor of packaged ice? Of course not.

I don't fully agree with what Anthony has to say here.  Where I disagree is with the size of the portfolio of the business.  Diversification is good if it remains within the core competency of the business.  Too many times businesses diversify into areas where they have little expertise just to increase the portfolio, which causes a loss of focus on the strength of the business.  The best companies diversify within the core, like Apple.  I think the proper strategy is to be the company that causes your customers to churn, this way you keep the customers loyal to your brand and you are always trying to be the next product in your industry.

The Art of Crafting a 15-Word Strategy Statement

Focus: What you want to offer to the target customer and what you don’t; Difference: Why your value proposition is divergent from competitive alternatives.

I don't know about 15 words, but succinct and to the point is the best way to articulate a strategy.  So much time is built constructing long strategy documents that sit on a shelf and are never read again.  A mantra or a short strategic statement become rallying cries of the organization.

I had the pleasure of watching a keynote by Guy Kawasaki where he stated that every organization needed a mantra.  It is something that has changed my way of thinking since hearing the logic behind his statements.  It takes so much inertia to move an organization that having a simple mantra can rally the entire organization around a single statement.  

The focus and difference in the strategy statement proposed by Alessandro Di Fiore are wonderful points.  So many times the target customer is forgotten in an organization.  In an age of growing earnings every quarter and constant pressure on short-term financial results, the target customer gets lost in the shuffle, replaced by revenue opportunities that alienate the target.  The difference piece is key for the organization to understand what they need to deliver to that target customer.  Once the organization understands why it's different, it becomes easier for everyone to deliver on the promise.