Yesterday a colleague and I were at a client’s place discussing ways and means to improve sales performance and reach the ambitious targets the company has set for the year. As is our wont ( as consultants!), we had done a lot of analysis of the numbers we got from their CRM and SFA ( which i must say was really good for a company of their size and in their industry), and arrived at some inferences and insights based on which we discussed ideas and improvement initiatives.
Through this discussion, the managing director was ruing the fact that his his sales leadership team, and even the management to an extent, did not spend enough time looking at data or integrating different pieces of information that came from the CRM to conduct meaningful reviews and plan course corrections.
I felt a sense of deja vu. How many times have we heard this? We come across companies that invest in MIS and are unable to leverage it adequately ever so often.
It appears that there are a couple of reasons for this – one, culturally many organizations do not appear to have a well oiled process for reviews, and this in turn, makes data analysis an optional exercise, as reviews are the one place where data could lend objectivity as well as depth. Second, appears to be lack of orientation. Lot of managers are not properly equipped to interpret numbers or slice and dice information in the right way and then ask the right questions.
Needless to say, two action points for us, arising out of yesterday’s discussions were to address the review mechanism specifying also what kind of data analysis would support reviews.
With more and more organizations, big and small, investing big time in IT, it would be prudent for management to also look simultaneously at training and reorientation of leadership at various levels to make use of information that is available at their disposal.
It would be great to hear of others’ experience in this context……..
After an unceremonious exit from HP, Mark Hurd, credited with making HP the world’s largest PC and server systems company and spearheading acquisitions like EDS and 3Com. A quiet successor to the more high profile Carly Fiorina, Hurd was the toast of the company till he got embroiled in a controversy regarding a marketing consultant.
HP lost no time in sending him home; equally Oracle and Larry Ellison were quick to defend Hurd and called the decision by HP as equivalent to Apple throwing out Jobs earlier! Oracle, which is a close partner of HP, has now put its money where its mouth is and made Hurd the Co-President.
This is an interesting move; and though as of yesterday, HP has filed a suit, the expert opinion says that HP is on a weak wicket as Hurd was not under a non compete and California law is expected to favor Hurd.
There are many interesting insights to draw from this episode- first, did HP over-react to the incident around the marketing scandal, or were they living by their values? How will Oracle now navigate the tight rope, with HP as one of its closest partners, in making this bold, but not unexpected move? How will this change the pecking order amongst IT companies- for example, will IBM have gained something from HP’s decision?
Welcome your views and comments………….
I guess its OK to become mad over something once in a while. I shelled out 450 rupees over the weekend to watch Endhiran, in Tamil, a language I don’t even know the head or tail of. It didn’t become a hindrance. I enjoyed every minute of the film, especially the mother of all climaxes you may have ever come across till now!
Coming on the back of the biggest hype around a movie in recent times, the movie had a lot to live up to. And made on a whopping budget of 160 Crores, skeptics wondered if it would be able to recover its costs.
Make no mistake, the movie is breaking records everywhere.And the single biggest reason for this is the smart way in which it markets its USP, the Superstar himself! Endhiran is the ultimate example of using a Star to sell the product. Rajni is Omnipresent in the movie. He is the hero, he is the rogue, and he is practically in every frame of the film.
In this digital era, where everyone and everything is connected, the impact of Starpower marketing is more prevalent than ever before. Stars sells you everything nowadays, from movies, to consumer durables, to dreams, to mobile connections and sundry other things.
When I see any Airtel ad, I can only see SRK seducing the viewers, the service provider is just the means to do it. A decade after ditching it full time, I went back to buy a Reynolds pen only because Sachin has started endorsing it. In a week from now, Indians will again take a liking to KBC, because the Big B is back as the host. And going by the trend, I think you cannot fault Times Now for spending half an hour of
prime time yesterday, showcasing Biggboss 4, which is in fact broadcast on a rival network of the Times Group.( And in all probability will eat up its viewership in the next three months).
in hugely competitive markets, when the difference between two rival products is negligible, emotion may take over, and you may just end up buying the one endorsed by your favorite star. A considerable percentage of people do indeed fall for Starpower Marketing.
As an aside, when the Ayodhya verdict was announced, there was Ravishankar Prasad, announcing it to the waiting world. Although he was representing one of the parties in the case, you cannot but wonder if the BJP got benefited through his appearance. Sometimes perception is everything. So while Rajni, the Scientist, is supposed to be the Hero, it is Chitti, the Robo, who walks away with the applause!
We recently conducted a poll on Linked In to get views on the best way to brand a business unit for an emerging company. The options provided were:
- Ride on the corporate brand (leverage the corp brand)
- Spin off as a separate brand
- Stand out under the corp umbrella (i.e. your branding efforts are independent yet aligned with the corp brand)
- Does not matter
The results were interesting and we got 42% of responses voting for “Stand out under the corp umbrella”, 32% for “Ride on the corporate brand” and 21% for “spin off as a separate brand”. We got a good mix of responses – across ‘c’ level and management to mid-level people. We found that marketing people were the ones who vehemently opposed spinning off a separate brand whereas some ‘C’ level executives were open to it. The results can be viewed at http://polls.linkedin.com/poll-results/99477/asrgs.
When does it make sense to spin off a separate brand? The example that immediately comes to mind is P&G where the individual brands marketed by the company are probably more famous than the corporate brand itself. A spin-off makes sense when you want to have a different positioning, attributes etc. for each of your products/services. Case in point – Accenture setup this low-cost entity called Concadia and the reason is to convey the image of a low-cost provider. Now, this would not have been possible under the Accenture umbrella.
Rather, for emerging companies, it would make more sense to remain aligned with the corporate brand – it is highly likely that the brand attributes for new services/products would be similar to the corporate brand and hence efforts need not be invested in setting up a new one. B2B buyers are also more interested in what you offer, your content, delivery etc and hence it makes more sense to focus on these aspects and ensure your brand attributes are consistent across your organization. Your views on this topic are welcome.
This morning I read an interview by Forrester analyst John McCarthy in the Economic Times. John predicts that with buyers consolidating vendors and driving hard bargains, it would be hard for the top tier Indian companies to maintain their 20+ margins. He believes that in the next 2-3 year period the margins will drop to around 15%.
This observation is not entirely surprising or unexpected. IT services companies have known that sustaining such high margins in the long run would be an issue especially in such a people driven industry.
That is why many of the scale players have embarked on non linear growth initiatives. The question to be asked, though. is how successful will companies be in de-linking a substantial part of their revenues from head count, which is when this initiative will compensate for other margin suppressing trends.
Furthermore, non linear initiatives come with their own set of challenges – one has to think through associated risks. Also, there could be a range of such initiatives that could incrementally add up to something substantial. Thus, managing such initiatives and reviewing them would also be key.
Every top tier player talks about progress on, and revenue from these initiatives in every quarterly release. Right now, it appears, revenues from nonlinear initiatives are still small, while investments are being made. Equity analysts are also keenly following this area.
The next 12 – 24 months should give us a better indication of where companies are going with this.
It would be interesting to see what works, and who emerges successful.
Taking off from Deepta’s blog on social media, there are so many examples of companies that have used social media effectively to advance their business objectives. And by the way, these are companies in the B2B space. My favourite example is of Archer Technologies – a risk and compliance solution provider. They setup online communities for their customers to interact and share best practices. This community attracted lots of traffic and by listening to the conversations going on in these forums, Archer picked up valuable ideas and launched 3 applications.
SAP has also done a good job of using online communities across stakeholders (developers, customers etc). They are very serious about this channel and track how quickly they respond to queries/suggestions etc and also number of responses per query etc. They claim that this has reduced the # support calls they receive as it gets directed to this forum. More importantly, it has helped them build a better rapport with the stakeholders.
Like this there are several other examples – social media is here to stay and the sooner companies figure out how to use it, the better. Of course, it is not as simple as setting up a facebook/linkedin community and hoping for traffic to roll in. It requires a well thought through strategy, concerted & sustained efforts to make it a success. As we have seen examples of several companies which jumped on to the social media bandwagon but were not prepared for it adequately – Nestle did not have a crisis management strategy in place and paid the price for it. The point is companies need to prepare for this channel seriously as a misstep can have severe implications.
The year end results have brought a lot of cheer to the outsourcing industry in general, and the biggies in particular. Having the scale and resilience, the larger companies have bounced back quickly to post good results and predict a recovery this year. The story for mid sized companies is a little different. From what we see and hear, the results are mixed and here is where the smarter ones are trying to separate themselves from the bunch.
There are some companies that we know which have displayed tremendous agility and bounced back to grab market opportunities while there are some others which are still trying to find the path to recovery. Within one company, we find businesses focused on one geo doing better than the othe (though both geos have been hit as hard during the downturn).
This is the time for the leadership to make a difference. Doing the tried and tested may not yield any exciting outcome. On the other hand mindless experimentation will also drain resources. Mid sized companies need to selectively try out things they have not done before- example, go after deals that are big – yes, some of these deals may call for resources, expertise and program management skills that may be hard to come by. But, that should not be a deterrent. The leadership should be more open to collaborations, and actively seek out partners who can complement the company’s repertoire of capabilities.
Likewise, the leadership should spend more time in front of customers, understand changing demand patterns and also provide the much needed assurances. It is also time to think about promising outcomes for engagements and agreeing for fees that are partly determined by these outcomes.
The scale players have spent time during the downturn doing a fair amount of introspection and are, it appears, all geared to shift gears.
Mid sized companies should likewise get ready, and fast, to find their path to success.
Reflecting on a current discussion on Net promoter score (NPS) in our TechMarketing Forum in LinkedIn (http://www.linkedin.com/groups?gid=2396070&trk=hb_side_g) made me wonder how companies use feedback from CSAT studies. Obviously, the CSAT score as such provides good indication of what customers think about you and should give enough pointers for action.
Most times companies seem to apply the feedback internally rather than use it as a marketing tool. I have seen some of our clients use the feedback rather well in operations – for example, the account team reviews the detailed feedback thoroughly and prepares an action plan focusing on the areas of improvement and presents it to the client. Importantly, this action plan becomes the KRA for the account team and hence becomes effective. Some other clients have setup trainings and workshops to address lacunae in sales/delivery resources based on customer feedback.
This leads to the thought – how often do we go back and tell prospects or new contacts about what our customers think about us? Yes, testimonials are prevalent but it will be worth a marketing team’s while to share some CSAT findings as well. For example, if majority of your customers feel that you understand their business context well and deliver high quality work within prescribed timeframes, that is something you can showcase to others. A report based on CSAT findings can be selectively shared with important prospects.
The point is companies can use CSAT findings as a marketing tool rather than just focus on specific customer improvement initiatives or internal ones. Do you know of any company that does that?
I happened to watch an interview with Google’s H- Global Sales, Nikesh Arora, recently on NDTV. Arora’s insights on Google’s hiring methods were pretty interesting.
For one, his own interview was conducted at the British Museum by the Google founders and much of the interview veered around the Rosetta stone.
Arora also gave examples of people at Google who did not quite have the usual background- an Olympic gold medalist in figure skating who did not have a regular MBA, a poet, a member of the British rowing team, and a knitting champion (yes!).
While grades, pedigree etc count for something, Google looks for something beyond- one is chemistry- if you were stuck with this person in an airport, would you enjoy making a 3 hour conversation with her? Or, would you wait to run away?
The second is passion- and hence the choice of the figure staking or rowing champs- these are people who have discipline, the perseverance to go after a goal even it means giving something else up, and winners. So, what they lack by way of context, they more than compensate in their innate approach to life. So, Google believes that they will make a difference to the company.
The other point made by Arora was also that Google always looked for people for not one specific role, but at a broader level.
In today’s world, where change is the order of the day, hiring for context may indeed be a futile exercise. Google seems to have figured this out ahead of the rest, and the results are there to show, perhaps?
On the back of robust results announced by the top 3 Indian IT services vendors, we have HCL announcing a half a billion dollar deal with Merck Sharpe & Dohme and Cognizant beating its Q1 estimates.
The HCL deal is interesting both owing to its size as well as the proposed delivery model. The company plans to augment its onshore delivery capability in the US, as well as use a truly global delivery network to service this deal.
Cognizant continues its stellar run- it has beat its estimates for Q1 and provided guidance of over $1B for Q2. The company’s press announcement says that its investment in new areas including emerging markets. cloud and mobile technologies is paying off, in addition to its long standing philosophy of reinvesting any profits beyond 19-20% (op margins) back into the business. Their CFO has also mentioned that pricing pressure is coming down, which is a good sign too.
It will be interesting to watch the performance of the IT services sector this year. With the recession finally on its way out, companies should begin to see the benefits of investments they made or tweaking they did to their businesses during the downturn.
It will not be surprising to see some changes in the vendor landscape ( with regard to stature and positioning) in the next 12 months.
Would welcome your views on this……..