Tag Archives: Cost

How Do You Find and Focus on Your Promoters? Five Factors

Interview with Richard Owen, CEO, Satmetrix Systems

Situation: If you are not creating promoters of your product or service, you are inhibiting your own growth. Growth is challenging and if you don’t have positive word of mouth it becomes more expensive. How do you find and focus on your promoters?

Advice from Richard Owen:

  • Calculate and understand your “Net Promoter Score” – the percentage difference between “promoters” and detractors.” Promoters are those customers who would highly recommend your business, detractors have a negative perspective.
  • It is important to attend these two audiences – “detractors”, who create negative word of mouth, and “promoters” who create positive word of mouth. Detractors can be targeted for service recovery. At the same time, you must identify your promoters and find ways to get them to actively let others know about your business. Both negative and positive effects are being amplified today by social networks.
  • Understand what your business does that creates detractors and promoters. Gather and analyze root cause data to provide insights around the actions you and your team should take to change the balance in your favor.
  • Hold employees accountable by “stack ranking” the customer performance of each of your teams or employees. In part, this helps you to understand areas of strength and weakness and allows you to create individualized or group action and coaching plans. There is also a tendency for groups below the average to improve performance because they are being measured.
  • These are simple ideas, but making this work in practice can be a challenge. Setting up an effective system takes more leadership than leaders typically realize and is often counter to the short term realities of most companies. Success requires a long-term perspective and an external versus internal focus. And, of course, the right systems!
  • While the leadership of many mid-market companies are as sophisticated as that in large companies, mid-market companies lack the resources of large companies. A focus on action around promoters and detractors allows a company to get 90% of the value for 10% of the effort in customer experience management.

You can contact Richard Owen at [email protected]

Key Words:  Promoter, Growth, Word of Mouth, Positive, Negative, Cost, Data, Customer, Metric, Coach, SMB, Perspective, Effectiveness, Resources

[like]

What Are The Barriers to Companies Moving to The Cloud?

Interview with Jim Kaskade, Global Executive (most recently SVP and General Manger, SIOS Technologies, Inc.)

Situation: Cloud computing as a concept dates back to the 1960s. “Cloud” became a more prominent concept in 1990s as a metaphor for service delivery over the Internet. The technology that makes it a practical reality has advanced significantly. Broad business adoption, however, has varied depending on the deployment architectures used. What are some of the barriers to enterprises “crossing the chasm” and embracing moving to the cloud?

Advice:

  • Definitions: There are three cloud deployment architectures or market segments when defining the opportunities and barriers to entry:
    • Software as a Service – SaaS – represented by distinct B2B applications like Salesforce.com and Google Apps, and B2C applications like Apple’s iCloud.
    • Platform as a Service – PaaS – represented by application platforms targeted at application developers and including Microsoft Azure and Amazon Beanstalk.
    • Infrastructure as a Service – IaaS – represented by on-demand access to low-level IT infrastructure such as virtualized computer, storage, and networking infrastructure.
  • The elephant in the room is that, relative to global IT spend, use of public cloud is in its infancy.
  • Adoption of the cloud varies by business size and IT structure.
  • Start-ups – particularly technology start-ups – use all three segments. The rationale is simple. It is easier and conserves capital to use all three delivery segments as an expense rather than invest in IT infrastructure. Another benefit is time to market.
  • Mid-sized companies  – up to hundreds of employees – have more challenges.
    • They start with SaaS applications to get their feet wet. Primary concerns are availability and security. If they have good, dependable Internet access, barriers to entry can be low.
    • Using a PaaS is also attractive but begins to compete with internal, existing platforms. Mid-sized companies typically have their own IT and developers who may prefer an internal platform. The company’s choices are also limited to a PaaS system that is similar to current development platforms.
    • The barrier to IaaS adoption is the IT staff itself. If the IT staff is savvy, they can maintain and run their internal data center less expensively than IaaS services. The question comes down to whether building and maintaining a “crazy smart” IT group is core to the company’s business model.
  • Enterprise companies – Fortune 100s or even 1,000s – have far greater challenges.
    • Their current IT model already has moved to a mix of 30% in-house and 70% outsourced with partners like CSC and Accenture.
    • Most Enterprise CIOs begin their use of “cloud” with a migration to SaaS. The barriers to PaaS are that their systems are tailored to customer-specific applications and internal infrastructure, limiting PaaS use to small, non-critical applications which require quick, global deployment.
    • The barriers to using IaaS services are similar to PaaS, where CIOs struggle with tradeoffs between agility and issues of cost, security, and availability.
    • The Achilles’ heel of these companies is that 80% of their IT spend is just keeping the lights on.
  • The implications of all this are that the cloud is ideally for small to medium companies, some of which will become large enterprises. If you can succeed with a migration of legacy applications to cloud-based services you will become more nimble in responding to customer’s needs – the biggest upside to cloud services in general.

You can contact Jim Kaskade at [email protected]

Key Words: Cloud Computing, Adoption, SaaS, PaaS, IaaS, iCloud, Business Size, IT, Structure, Staff, Applications, Cost, Nimble, Availability, Security, Chasm, Start-up, Mid-Size, Enterprise, Outsource, Partner, Data Center, Legacy

[like]

How Do You Respond to Pressure to Cut Prices? Six Guidelines

Situation: One client represents a majority of a company’s revenue. They have multiple contracts with this client. A new purchasing agent is on a mission to reduce purchasing costs, and claims that other suppliers cost less. What’s the best response?

Advice from the CEOs:

  • Spend time with your true client – the employees and managers who have chosen your product. These people stand to gain the most from an ongoing relationship with you and may be able to reduce the pressure from purchasing.
  • Assemble testimonials and metrics from the client to show that you produce a better result at lower cost than they can get from other suppliers.
  • Simultaneously, reduce your overhead so that if you must cut prices to retain the business, you can afford it.
  • If you must cut prices, you have other options:
    • Reduce the cost of resources producing the product and service. Let your client contacts know that you are being forced to do this. This may prompt them to argue that they need more senior experience from your team at the higher rate.
    • Offer lower prices in exchange for higher volume and longer term purchasing commitments. This can lock out the competition by reducing the frequency of contract renewals.
  • Remember that the job of the purchasing agent is to reduce costs. The agent who is hounding you is hounding other suppliers as well. If they can negotiate savings from 30% of the suppliers, it’s a big win. Get your ducks in line so that you aren’t in that 30%.

Key Words: Purchasing, Contract, Purchasing Agent, Cost, Client, Customer, Metrics, Cutting Prices, Purchase Commitment  [like]