While reading Don Quixote, an interesting thought crossed my mind while on the chapter where the character prepares to go on his mission. The knight had made a helmet and tested it with his lance. The helmet broke on the first contact. Thereafter, I quote from the book --
"He did not like its being broke with so much ease, and therefore to secure it from the like accident, he made it anew, and fenced it with thin plates of iron, which he fixed in the inside of it so artificially, that at last he had reason to be satisfied with the solidity of the work and so, without any experiment, he resolved it should pass to all intents and purposes for a full and sufficient helmet."
In case you have not noticed, that is one single sentence. I caught myself chuckling when I was reading the text matter. Not from the confidence of the knight in the book but from remembering some of my discussions with marketing people. At one such discussion with a CMO, I was presenting a plan to execute the campaign. The initial phase was to test the campaign offer in a pilot. The CMO was aghast at this suggestion. He said that they know their customer and he knows what they want and the offer is the best that could happen to his customers. He wanted us to guarantee a minimum uptake on the offer. Since there was no history of similar offers neither was there any results of any testing on the offer, I refused to guarantee unless he agrees to do a pilot campaign. The CMO refused and I did not pick up the assignment. Needless to say, the CMO did not last long in the company.
At another assignment that I was involved for a promotion campaign, the client had designed a "intersting" campaign for his customers. On discussing, I found out that the campaign was "interesting" because people who heard about it found it interesting. These people were apparently collegues from other departments. I did a quick dip-stick and found that no one from my project team are the customers of the client. That is, no body bought their products. Now, when I discussed the promotion with my team members, they sure found it interesting. Then, I made one of them call up the office boy who was manning the reception desk to explain the promotion. The office boy was confused and wondered if he had intercepted a key message from the extra-terrestrials (okay I am over doing this last part). I asked the office boy if he bought the products of the client. He said yes and he did not seem too keen on the promotion. When I took this finding to the client, they just blew into my face. I asked them to repeat the exercise with the security guard. But the client refused to go ahead with the experiment and moved on to other activity in the execution plan. It would not be a surprise that the promotion did not perform as per expectation.
These two scenarios reflected the Don Quixote mindset in the real world. Sometimes we are so confident on what we believe will work with the customer that we just refuse to do any test marketing. It is a surprise that when one launches a new product, there is a whole lot of science applied to the pilot launch. But when it comes to campaigns, everyone just believes the campaign offer is the best idea and wants to execute it immediately. Is it because a new product has hundreds of crores of rupees spent on it whereas a campaign would relatively cost only a couple of crores of rupees? But if one clubs all the campaign costs as well as the costs of opportunities lost when a customer signs for do-not-disturb or moves to the competitor, the combined cost will eventually overrun the development cost.
At one telco, we were discussing with the campaign manager on his campaign activities. This person had recently run a "successful" campaign selling 100 Rupee voucher to people who recharge with 50 Rupee voucher. For this, he was giving 15 Rupee talk time free. His definition of success was he sold 30 Crore Rupee worth of recharge vouchers. When asked how does he know that the same customers would have anyhow bought the 100 Rupee voucher or more without any offer and he would have perhaps sold 38 crore Rupee worth of recharges, he was stumped. We persisted, highlighting that he has given off atleast 30% of the revenue in free talk time which further increased the cost of the offer. We told him, he should have test/control the offer before launching it. He was so angry with us and refused to meet us for the next two months. The communication restarted when he ran into some problem on new campaigns and wanted help. So he called us back for a discussion. Well, the prodigal son deserves a feast... so we went to meet him.
So many Don Quixotes in real life. This reminds me of a recent post on a social platform. The post was from a "vegetarian" guy who was angry because his grocery store sent him offers on non-vegetarian fare. He was upset that the store did not bother to check that he has NEVER bought a non-vegetarian item from the store ever.
Friday, September 02, 2011
Thursday, August 11, 2011
ATM eating cash!!! A lost opportunity for CRM...
Mumbai Mirror's 10th August edition has a cover page article that screamed about an ATM that eats up the customer's cash. On reading further, apparently someone had tinkered with the ATM machine such that it would debit a higher amount than what was actually withdrawn. In one of the cases mentioned, the customer withdrew Rs. 10,000 but was debited for Rs. 40,000. Another customer made a transaction of Rs. 50,000 but was debited for Rs. 200,000 thousand.
The article has generated a decent amount of comments on how ATMs are tinkered with.
In all this melee, there was something the bank, in this case Axis Bank, could have done. I am not going to lecture on how ATMs can be made more secured. That is not my area of expertise.
In a career spanning close to two decades, I have delivered multiple projects. As with every software project, the User Acceptance Test phase is the final stage wherein the end users test the software before signing it off for deployment. During every UAT, I always set some ground rules:
1. It is a system made by man and can definitely be broken by man.
2. If your objective is to break the system, you will definitely succeed and it is not a commendable thing to achieve.
I use the same rules for this scenario. The ATM has been designed by man and so can be broken by man. There is a manual process involved where access it permitted to a person and thus opens environment for tinkering.
In line with CRM, the question is what could the Bank have done?
In both cases mentioned, the customer was the one to complain to the bank. No doubt the bank would have refunded the money to the customer. But what about the customer who did not get the SMS message or did not check his account soon enough?
This is a perfect case for event or transaction based analysis. In both scenarios, withdrawal of such a large amount may not have been a regular transaction for the customer. In fact for the second case, withdrawal of Rs. 200,000 may have been a first.
The bank could have analysed the debits for each customer and been able to identify the unusual withdrawal by the customer. Based on past behaviour each customer may have a different threshold for identifying an unusual behaviour. The moment this unusal behaviour was identified, the bank should call the customer and confirm the withdrawal. When the customer denies the transaction, it would point to possible fraud. The bank would have various options now:
-- deactivate the debit card
-- noticing the ATM machine to be the same one, decommission it immediately so more customers do not face the trouble.
From a customer perpsective, the bank could have assured the customer that the transactions will be actively investigated and the amount credited back to the account if valid.
The benefit to the bank was that the customer would be comfortable thinking that the bank is looking into his case as well as the bank could have limited the customers exposed to the fraudulent ATM. And more important, imagine if the press article said -- that the bank identified the fraud and quickly protected more customers from facing the same by blocking the ATM. Now that article would be "priceless".
The article has generated a decent amount of comments on how ATMs are tinkered with.
In all this melee, there was something the bank, in this case Axis Bank, could have done. I am not going to lecture on how ATMs can be made more secured. That is not my area of expertise.
In a career spanning close to two decades, I have delivered multiple projects. As with every software project, the User Acceptance Test phase is the final stage wherein the end users test the software before signing it off for deployment. During every UAT, I always set some ground rules:
1. It is a system made by man and can definitely be broken by man.
2. If your objective is to break the system, you will definitely succeed and it is not a commendable thing to achieve.
I use the same rules for this scenario. The ATM has been designed by man and so can be broken by man. There is a manual process involved where access it permitted to a person and thus opens environment for tinkering.
In line with CRM, the question is what could the Bank have done?
In both cases mentioned, the customer was the one to complain to the bank. No doubt the bank would have refunded the money to the customer. But what about the customer who did not get the SMS message or did not check his account soon enough?
This is a perfect case for event or transaction based analysis. In both scenarios, withdrawal of such a large amount may not have been a regular transaction for the customer. In fact for the second case, withdrawal of Rs. 200,000 may have been a first.
The bank could have analysed the debits for each customer and been able to identify the unusual withdrawal by the customer. Based on past behaviour each customer may have a different threshold for identifying an unusual behaviour. The moment this unusal behaviour was identified, the bank should call the customer and confirm the withdrawal. When the customer denies the transaction, it would point to possible fraud. The bank would have various options now:
-- deactivate the debit card
-- noticing the ATM machine to be the same one, decommission it immediately so more customers do not face the trouble.
From a customer perpsective, the bank could have assured the customer that the transactions will be actively investigated and the amount credited back to the account if valid.
The benefit to the bank was that the customer would be comfortable thinking that the bank is looking into his case as well as the bank could have limited the customers exposed to the fraudulent ATM. And more important, imagine if the press article said -- that the bank identified the fraud and quickly protected more customers from facing the same by blocking the ATM. Now that article would be "priceless".
Friday, August 05, 2011
Let HRD solve Marketing Issues.....
Recently I viewed the video of the presentation of Deborah Rhodes during her appearance at TED. During the speech she has quoted Malcolm Gladwell stating "The only time a physician and a physicist get together is when the physicist gets sick". She goes on to state that this occurence "makes no sense, because physicians have all kinds of problems that they don't realize have solutions. And physicists have all kinds of solutions for things that they don't realize have solutions." Before I continue with my post, I want anyone who has a woman to love in their life (and thats practically everyone) to view this talk by Deborah titled "A tool that finds 3x more breast tumors, and why it's not available to you."
What Malcolm Gladwell says is so very true. If you look around your office and see groups of people hudled in the conference rooms, there is a 9 out of 10 chance that they belong to the same department. They have probably got together to solve some problem or address some issue related to operations of the department.
Organizations define Key Performance Indicators and allocate them to various departments. So revenue is sales. Costing is finance. and so on.... Thereafter, these KPIs are the babies of each department and no body else is allowed to play with the baby or provide tips to the foster parents.
At one telco, there was a high amount of customer churn in the landline business after the first 3 months of activation. The role of keeping the customer active belonged to the "Retention Department." There was a whole lot of action happening in the retention department. I was called in to see if statistics could play a role. Having just two months of customer behaviour data did not excite he statistician in me. I decided to snoop around while I was at the premises of the company. I was also building CRM processes in line with eTOM for this telco. As part of this assignment, I was walking the process with the team responsible for installing the landline phones at the consumer site. One of this person stated that the sales person would ask the customer to just sign the acquisition form and would fill it up later in the office. While filling the form, the sales person would tick all options and services to be activated. When this person went for installation, the consumer would only be interested in knowing about voice calls since that was all he wanted. However, when the bills came in, the consumer saw an 'inflated' bill since he was also charged for services that he did not need. The installation person stated that he could not help the consumer since the installation process did not allow him to revalidate the consumer services and to deactivate the ones the consumer does not need.
This discussion connected the dots. The consumer saw a high amount on his bill for just 'voice telephony.' To him, the telco was overcharging him. Nobody explained to him the rentals charged for services that were activated for him because the sales person ticked the options in the application form. The consumer got upset over this payment and would request for disconnection in the second month. Before he could be disconnected, the telco required him to pay his outstanding till date. So a second bill was generated. This showed that majority of consumers churned in the third month.
If only, the retention department had involved every one who had a consumer touch point in trying to understand the problem at hand.
For that matter, the Human Resources and Finance departments may also have some solutions to the problems of say, the Marketing department.
What Malcolm Gladwell says is so very true. If you look around your office and see groups of people hudled in the conference rooms, there is a 9 out of 10 chance that they belong to the same department. They have probably got together to solve some problem or address some issue related to operations of the department.
Organizations define Key Performance Indicators and allocate them to various departments. So revenue is sales. Costing is finance. and so on.... Thereafter, these KPIs are the babies of each department and no body else is allowed to play with the baby or provide tips to the foster parents.
At one telco, there was a high amount of customer churn in the landline business after the first 3 months of activation. The role of keeping the customer active belonged to the "Retention Department." There was a whole lot of action happening in the retention department. I was called in to see if statistics could play a role. Having just two months of customer behaviour data did not excite he statistician in me. I decided to snoop around while I was at the premises of the company. I was also building CRM processes in line with eTOM for this telco. As part of this assignment, I was walking the process with the team responsible for installing the landline phones at the consumer site. One of this person stated that the sales person would ask the customer to just sign the acquisition form and would fill it up later in the office. While filling the form, the sales person would tick all options and services to be activated. When this person went for installation, the consumer would only be interested in knowing about voice calls since that was all he wanted. However, when the bills came in, the consumer saw an 'inflated' bill since he was also charged for services that he did not need. The installation person stated that he could not help the consumer since the installation process did not allow him to revalidate the consumer services and to deactivate the ones the consumer does not need.
This discussion connected the dots. The consumer saw a high amount on his bill for just 'voice telephony.' To him, the telco was overcharging him. Nobody explained to him the rentals charged for services that were activated for him because the sales person ticked the options in the application form. The consumer got upset over this payment and would request for disconnection in the second month. Before he could be disconnected, the telco required him to pay his outstanding till date. So a second bill was generated. This showed that majority of consumers churned in the third month.
If only, the retention department had involved every one who had a consumer touch point in trying to understand the problem at hand.
For that matter, the Human Resources and Finance departments may also have some solutions to the problems of say, the Marketing department.
Tuesday, July 19, 2011
Choice is Good... but too much of it is BAD
The TVC for a noodle brand shows a kid asking a series of questions to arrive at the fact that choice is good.
There have been a lot of arguments in favour of providing choices. It leads to personalization of offers. One can target greater population. A seller can provide more options. And finally, the customer feels empowered and in control of the buying process when he can select and decide the item to purchase from various options available.
I would advise the product managers and marketers to exercise caution when providing options. Let’s walk through the customers’ mental buying process. For sake of example, we will consider an item which is fast becoming a frequent purchase – a mobile handset.
When a customer has decided to purchase a new handset, there is a set of features and functionality that forms a checklist in his mind. He looks at various options available and shortlists those models that meet the mandatory and sufficient needs from this check list. Finally, he zeroes on one model and purchases the same.
What happens next is very interesting. Have you ever considered why you are dissatisfied after you buy a product?
When the customer has purchased the product, his universe of options now reduces to just two. The first option is the model he has recently purchased and the other option is a “collation” of all other models. So it is now a comparison between one model and the “best features” of all the remaining models that was originally being compared. When this evaluation plays in his mind, he obviously feels a doubt that his decision was not correct and he feels disappointed. Sometimes this process happens even while the purchase is being processed. Ever noticed that slight tinge of doubt on your decision and purchase while your credit card swipe is being authorized?
Most often this disappointment gets translated into dissatisfaction with the product purchased and eventually with the supplier or manufacturer.
It is very important that the choices be kept at an optimum. Cause the fact there is a choice of options forces the customer to take one more decision. Any step in the buying process delays the sale and every step is a potential drop from the purchase process. Thus choices can delay the sales closure since the customer now has to perform one extra evaluation and take an additional decision. Even when a customer does make a decision, the post purchase evaluation will result in dissatisfaction with his decision. The blame will ultimately rest on the supplier / manufacturer. Hence, I reiterate, keep the choices at an optimum. Let there be a real reason for the option to exist.
In case of the noodle, whenever I walk down the breakfast aisle, I take the easy way out. I pick up one of each flavor and dump it in the shopping cart. That’s one less decision for me.
And as for the mobile handset, I still get the tingle that maybe the E72 was not the right handset to buy…sigh!!! Especially when I use my wife’s phone … an E5 from the same manufacturer at 60% the cost…sigh! sigh!!. Ford was so right… any colour as long as it is black.
If you read this, do leave your feedback / comment.
There have been a lot of arguments in favour of providing choices. It leads to personalization of offers. One can target greater population. A seller can provide more options. And finally, the customer feels empowered and in control of the buying process when he can select and decide the item to purchase from various options available.
I would advise the product managers and marketers to exercise caution when providing options. Let’s walk through the customers’ mental buying process. For sake of example, we will consider an item which is fast becoming a frequent purchase – a mobile handset.
When a customer has decided to purchase a new handset, there is a set of features and functionality that forms a checklist in his mind. He looks at various options available and shortlists those models that meet the mandatory and sufficient needs from this check list. Finally, he zeroes on one model and purchases the same.
What happens next is very interesting. Have you ever considered why you are dissatisfied after you buy a product?
When the customer has purchased the product, his universe of options now reduces to just two. The first option is the model he has recently purchased and the other option is a “collation” of all other models. So it is now a comparison between one model and the “best features” of all the remaining models that was originally being compared. When this evaluation plays in his mind, he obviously feels a doubt that his decision was not correct and he feels disappointed. Sometimes this process happens even while the purchase is being processed. Ever noticed that slight tinge of doubt on your decision and purchase while your credit card swipe is being authorized?
Most often this disappointment gets translated into dissatisfaction with the product purchased and eventually with the supplier or manufacturer.
It is very important that the choices be kept at an optimum. Cause the fact there is a choice of options forces the customer to take one more decision. Any step in the buying process delays the sale and every step is a potential drop from the purchase process. Thus choices can delay the sales closure since the customer now has to perform one extra evaluation and take an additional decision. Even when a customer does make a decision, the post purchase evaluation will result in dissatisfaction with his decision. The blame will ultimately rest on the supplier / manufacturer. Hence, I reiterate, keep the choices at an optimum. Let there be a real reason for the option to exist.
In case of the noodle, whenever I walk down the breakfast aisle, I take the easy way out. I pick up one of each flavor and dump it in the shopping cart. That’s one less decision for me.
And as for the mobile handset, I still get the tingle that maybe the E72 was not the right handset to buy…sigh!!! Especially when I use my wife’s phone … an E5 from the same manufacturer at 60% the cost…sigh! sigh!!. Ford was so right… any colour as long as it is black.
If you read this, do leave your feedback / comment.
Thursday, July 07, 2011
Happy to be PETER
Finally I got to contributing to my blog again. My earlier company had stopped me from publishing in my personal blog and expected me to contribute to the official blog. For some reason this bought about the most dreadful thing to writers -- A writers Block. I just could not get to write any more ... any where. A change of job resulted in change of mindset and I am back in action here.
Today I write about online insurance. Recently I bought a term insurance online. One of the reasons, I went online was the very low premium. Initially I was sceptical about the low premium and thought maybe the claim process will not be good. But somehow I convinced myself to get a policy online.
The past few days I did some research on the online v/s offline policies being sold. Some insurers have similar policies being sold online as well as offline (via agents). But there is a huge difference in the premiums being charged. I thought it might be the savings on the agent commission and selling expenses. But then, that is high only in the first year, whereas the premium is a constant low throughout the policy term.
A lot of research and reading various articles by insurance experts and the following came about:
1. People buying online are educated guys.
2. Educated guys are more knowledgeable about health issues.
3. Guys buying online are likely to be in white collar jobs.
4. White collar job workers have lower mortality rates than the blue collar job workers.
So the expected claim ratio from online policies are much lesser and as such the insurers can charge much lower premiums.
Which means, when I bought the policies offline (via agents), I was clubbed with the general population and ended up paying a higher premium to offset the losses from the segments with higher mortality experience. This reminds me of my earlier article Robin Hood Pricing wherein I had highlight how good customers end up subsidizing the bad customers. Today, the insurer treats the online policy buyers as a separate market and does not club it with the rest of the population. The cost of serving the online policy customer is less and as such the premiums are lower.
Now as I hold my policy documents I feel happy to be Peter and happy that the insurer did not rob this Peter to pay some Paul.
Today I write about online insurance. Recently I bought a term insurance online. One of the reasons, I went online was the very low premium. Initially I was sceptical about the low premium and thought maybe the claim process will not be good. But somehow I convinced myself to get a policy online.
The past few days I did some research on the online v/s offline policies being sold. Some insurers have similar policies being sold online as well as offline (via agents). But there is a huge difference in the premiums being charged. I thought it might be the savings on the agent commission and selling expenses. But then, that is high only in the first year, whereas the premium is a constant low throughout the policy term.
A lot of research and reading various articles by insurance experts and the following came about:
1. People buying online are educated guys.
2. Educated guys are more knowledgeable about health issues.
3. Guys buying online are likely to be in white collar jobs.
4. White collar job workers have lower mortality rates than the blue collar job workers.
So the expected claim ratio from online policies are much lesser and as such the insurers can charge much lower premiums.
Which means, when I bought the policies offline (via agents), I was clubbed with the general population and ended up paying a higher premium to offset the losses from the segments with higher mortality experience. This reminds me of my earlier article Robin Hood Pricing wherein I had highlight how good customers end up subsidizing the bad customers. Today, the insurer treats the online policy buyers as a separate market and does not club it with the rest of the population. The cost of serving the online policy customer is less and as such the premiums are lower.
Now as I hold my policy documents I feel happy to be Peter and happy that the insurer did not rob this Peter to pay some Paul.
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