Wave of Technology Advancement

“Time is non-refundable, use it with intention.” -Unknown Author

Big waves only come around once in a while… 
I’ve been doing some reflecting and planning on our business for 2020. So things are coming together very nicely on the business development front … our deal flow, software partnerships, and sales messaging are all very strong. Maybe the strongest I’ve ever seen. SDL has something special that we can sell, Docs plus Sites and DXD is a game-changer. It solves a very large and expensive enterprise business problem, which is actually managing content.

Adobe, Sitecore, Drupal… (whatever pick your favorite Portal/CMS), manage websites or, more accurately, the presentation of the content, not the content itself.  
 
This gives all of those software products a fatal market flaw. Which is that most of the R&D investment for these software companies aren’t going to pay off. The number of device types and channels; desktop, cell phone, watch, tablet, TV screens, etc. have basically settled down and most of our experiences happen inside the context of an application. Even TV is moving to Netflix or Hulu, it’s all application-driven. The complexity is in the variations of the content not the variations in the presentation layer. When you’re running a software company you have to be smart about choosing which problem you solve and that problem for enterprise software has to be expensive. 

Conversely, SDL invested in structured documentation, Dita, and abstracting the presentation layer with DXD and Graph QL. Yes, it’s still a work in process, I’ll admit the software isn’t fully baked, I’m hoping that SDL is not more than a version or two away. It turns out that managing the complexity of content variation is a very important and very expensive business problem within the Fortune 500. Just consider the entire content supply chain, not only does it need to be accurate for compliance reasons, the number of variations is exploding. You have to worry about language, localization, segmentation, content sequencing, not to mention all of the workflows, compliance, and other regulatory or bureaucratic requirements. Content lives within various temporal states and is modified or enhanced along the way. I could spend the next few hours talking about content creation, modification, approvals, publishing, and curation and still not capture all the complexity. It looks like SDL spent their R&D dollars on solving a very expensive problem.  
 
Let me give you three examples to consider: 

  • You’re in a regulated industry; financial services, health care, etc. Since the economic crisis in 2008 or since the passage of the affordable care act, large companies have been inundated with significant regulatory requirements. A whole series of disclosures, forms, and certainty about the customer experience that must be adhered too, the same thing is true about HIPPA and privacy requirements on the healthcare side. Violations of these regulatory requirements come with huge fines and bad publicity. Look at the mortgage crisis, if you were not given the proper disclosure forms or you went to a site and were provided misleading information, you can sue your lender and have your loan forgiven. Then to top it off, the business will be fined for not complying with the regulations. The penalty for violating privacy rights or publishing unapproved content against FDA guidance, can not only cost you huge fines but can shut down a company. So how do you think compliance is worth to a large company … a lot of money.  So you’re Bank XYZ, you sell on a national level but you’re regulated at a state level, that’s how banks operate. You’ve decided to change your loan application disclosure forms. You now have to update the overarching standard disclosure and change a few paragraphs that differ from state to state based on the laws. You don’t have a creative based presentation problem. You have an entire content life cycle to manage and you need to ensure that at every single customer touchpoint the proper disclosure form is published. Oh, and if you make one mistake in just one state, the Attorney General from that State is going to open an inquiry on your deceitful practices.    
  • Or let’s consider the Knowledge portal problem. You run a large retail organization or a consulting company with 100K employees. Most of your costs and most of your profits are based on the efficiencies of the workforce. Do your people know what to do and are the instructions and manuals readily available? On average your workforce costs about $60 dollars per hour with benefits etc. This is a low number but you’ll get the point. If people can find accurate information faster, let’s say they’ll gain an additional 2 hours per week to spend on higher-value productive work rather than surfing the internal systems for the answer. The company will save somewhere north of $300MM per year in operational costs. So let’s say that our project costs $20MM including software and services. You’re the CEO, and the proposal is that you modernize your infrastructure and processes, which will cost $20MM plus “Tahzoo change orders”  and you save $300MM in a year in productivity… would you take that deal? 
  • Lastly and more briefly, let’s quickly look at Consumer Package goods products. So you sell computers on a global basis. Retaining customers is your best marketing solution, however, achieving this goal is based on the quality of the product and the customer service. Imagine that you can repurpose all of your technical documentation to enhance customer experience and then provide feedback to the product groups? What is that worth in terms of customer retention or creating great new products?  


What we are seeing is SDL solves this fundamental content management problem. That “below the line” result is worth millions of dollars in savings and “above the line” is worth millions in increased revenue and customer loyalty. That is worth millions of dollars in cost savings and millions in profit. Technology advancements come in waves, some bigger than others. I am here to tell you this is a big wave, a really big wave, buckle your chin straps we are just getting started.  
 
Let’s go be great! 
Brad  
 

Where We’ve Been and Where We’re Going

During the advent of the web, the dominant paradigm for advertising and marketing was built on the notion of frequency and reach. The idea being that if a brand or product was promoted enough, eventually the message would sync into your consciousness. We can all remember TV ads that struck the zeitgeist and were showed over and over again. In order to capture the largest possible audience, ads were geared toward the lowest/largest common denominator and there were mnemonic devices like jingles and slogans that embed the message into your brain.

For some fun, I am going to throw out a few examples and see if you remember the brand or product behind the slogan or jingle:

Plop Plop Fizz Fizz oh what a relief it is
The Energizer bunny
Quality is job one
Just Do It
Where’s the beef
The most interesting man in the world
We know a thing or two because we’ve seen a thing or two
MMM MMM GOOD
Melts in your mouth not in your hands
Don’t leave home without it
Because you’re worth it
A diamond is forever

My guess is that most of you’ll know the majority of these… I’ll send a copy of Ogilvy on Advertising to the first person who replies with the correct answer to all the slogans.

In the era of mass-market media, there were three basic forms of advertising: print, radio, and TV. Targeted marketing began in the ’80s and ’90s with segmentations based on household demographic data (age, income, gender, and the number of people within a household). Snail mail was delivered to a home in an effort to provide a targeted offer that drove a business outcome. One could argue this was the beginning of personalization.

With the rise of the web, most marketers took the view that the web was essentially another version of print advertising. In the early days of the web, we spoke a lot about the promise of dynamic experiences, demand-based pricing, and segmented content – however, it ran contrary to the dominant paradigm and there were not enough CPU cycles, hard disk space, and bandwidth to support many of these concepts. As a consequence, websites were built in a one-size-fits-all model and the end-user was left to traverse the content as they saw fit – a choose your own adventure model.

In the late ’90s, e-commerce began to take hold, replacing the catalog business or the travel agent. In these scenarios, sorting the offers and providing recommendations became an explicit requirement. This began the next wave of personalization. We saw things like Amazon’s “people who bought this also liked this” and A/B testing models in which small units of content or offers were selectively presented to audiences to see what was most effective. Unfortunately, these models reinforce the tyranny of the majority; if 51% of the visitors respond to the red button then everyone eventually gets the red button.

Concurrently, many of the Direct Marketers began email marketing campaigns. Electronic direct mail with ads and offers designed to promote action. While email marketing was dramatically less costly, it was also less effective because the second step in the process, taking an action – buying something or signing up for something – requires a landing page or a web experience that supported the offer.

Targeted marketing through e-commerce and email marketing became the new paradigm. Define a segment, create a variety of ads, test, and then optimize… Rinse and repeat. We’ve spent more than a decade in this model. You could call it personalization, but I’d argue it’s just informed guessing.

Because these programs are relatively low cost when compared to TV ad campaigns, marketers have accepted shockingly poor results. We have one client who was bragging about their 1:1,400 click-through rate on banner ad campaigns. When I pressed on the results to find out how much revenue was being generated from these campaigns, I discovered that the click-through rate was measured by how many people visited the site, not how many insurance policies were issued!

The convenience of e-commerce has fueled tremendous growth, so the paradigm of targeting content, offers, and testing has continued to reign, but the technology hasn’t stood still. As more and more information was posted to the web and the social media wave took hold, it meant that any purchase could be researched and validated with a broad audience of friends and consumers. The notion of a considered sales cycle, one in which a consumer conducted a fair amount of research, now applies to virtually any purchase – big or small. Furthermore, consumers began to share their experiences with a product or service supplanting or marginalizing the advertising delivered through a frequency and reach model. You can advertise that “Quality is Job One” but if your product sucks, everyone will know about it.

The nexus of information and social media has given rise to the experience economy. Not only does your product have to deliver on the brand promise, but consumers also need to be able to share their experience. I have written a long whitepaper on the experience economy which is available on my blog. Another way to think about the experience economy is, “it is not how much you have, it’s how good you have it”. A great product and a sharable experience work together to create brand resonance.

This brings me to why the current personalization paradigm of targeted content optimization is not sufficient. Consumers want to learn about products and have experiences that are pleasing and sharable. This means they will conduct research and experience products over multiple visits to the web. Marketers need to sequence content and experiences in ways that help consumers learn about a product and that reinforces the brand. You can’t just test the red button vs. the blue button or review A vs. review B. You need to model human to human interaction, think in terms of how people learn, what their expectations are and how they want to be engaged.

To deliver true personalization is to closely model the same experience you would have when you walk into a Nordstrom store and ask for help. A good salesperson assesses your needs, guides you through a selection process, and ensures that you leave satisfied. Tahzoo’s personalization solution provides technology to understand your customer, all of your content, the context of the engagement, and where they are in the journey before the content is presented to a customer. We are not just testing units of content for a better result, we are providing a framework for unique experiences for each customer that is differentiated and evolving. Much like a good friendship, it grows and becomes more intimate over time. As the experience becomes more resonant it also becomes more frequently shared, creating a virtuous cycle. Next week I am going to get into the specific techniques and technical aspects of the Tahzoo solution, but this week I wanted everyone to have some perspective on where we’ve been and where we are going.

Let’s go be great!
Brad

Digital Transformation

For all the advancements in our technology and methods of communication, it’s still just one customer at the end of all those devices. I am regularly asked to speak to our clients about their customer engagement strategies. More often than not, they are concerned about a particular channel of communication… mobile, web, promotional, etc. This is always a curious conversation for me, as no consumer engages with a brand in a single dimension.

My first task is to broaden the conversation to include all the ways in which a customer engages the brand. Actually knowing your customer is the most important step in customer engagement. Many companies mistakenly believe that content optimization thru A/B testing is personalization, when in fact it’s just better guessing. Not to say that it’s not effective at times, it’s just not personalization. Worse yet it misses the opportunity to create customer intimacy because it’s one dimensional and is a channel-dependent strategy.

I talk about “knowing” people in three contexts…

What is their expectation when interacting with the brand?
The notion of understanding expectations can be most simply described as facilitating the expected experience. Creating circumstances in which the task or activity is quickly and efficiently delivered. Do they want to download a user manual or pay their bill? We can use personalization techniques, not just to optimize the content but also the UX and UI. For a large bank, we created a form that would change font size based on the age of the customer. This area in particular is under-leveraged when we contemplate building systems for our clients.

What is the type and style of content they would like to consume?
Do you like watching videos on your phone? And do you read on your iPad? Or do you source social media for information? Much of our social data science work is centered around understanding the type and style of content people would like to consume. We identify the characteristics of frequently shared content to better inform the content strategy. As we build our personas and customer journeys, considering the basic format of the content is an important part of delivering a personalized experience.

What are the patterns of behavior that can be identified and addressed?
Some patterns are obvious – For example, when it’s bill-paying time or I’m responding to a marketing email. Subtler yet is understanding people in context. While shopping for my daughter, I might be very fashion conscious, not very price-sensitive, and frequently return items, however, when shopping for my son, I am cost-conscious (mostly because he’s 7 and he destroys most everything). In an e-commerce context, the experience needs to be optimized for two totally different shopping profiles. A good salesperson at a department store would easily navigate this and provide appropriate options. Our data science practice is quite skilled to help clients build a dataset that becomes the basis for behavioral research and understanding.

Armed with this understanding we can begin to break down organizational barriers and silos that prevent our clients from delivering a consistent message across channels or devices. Most marketing departments are organized by channel; you’ll have the web team, the email marketing team, the direct mail team, etc. The silos are further promulgated by the way budget and rewards are based on the performance metrics within a single channel. I consistently promote the idea that marketing departments need to reorganize themselves around discrete audiences.

This idea, once it takes shape becomes the basis for digital transformation and customer-centricity. Sometimes I am asked, what is it that we do? Among other things, I tell them we are agents of change. We encourage our clients to open their minds to new ideas and new possibilities for engaging with their customers. Those new ideas require change, we need to be excellent and simplifying and motivating our clients to embrace the necessary steps to move forward. Tahzoo is one of the few companies in the world that can provide the data science, the experience design, and technology required to make this complex journey achievable.

Our evolution as a company – our success – will not be measured by the strength of ideas, but in the quality of our execution. The idea of a better customer experience is powerful, but if we do work and don’t fundamentally change the customer experience, have we really done the best for our client? Let’s walk the talk… let’s be the company you hire for the Transformation in Digital Transformation.

Let’s go be great,
Brad

The Culture of Experience

The culture of customer experience is upon us… although very nascent, while there have been a few companies grounded in customer service over the last 20 years they are outliers and not the norm. Most large companies are organized to serve themselves while providing a service or product to the market. Typically, one part of the organization is dedicated to the customer in the context of sales or marketing.

In the customer experience economy, the entire organization needs to be designed to serve customers and deliver a shareable experience. It must be understood throughout the organization the real value of a consumer spending their money and time interacting with a brand. I used to say that all companies are becoming publishers whether they wanted to or not because the competition and the way that all purchasing has become considered sales cycle was going to force the issue. However, I think that we are now seeing with the proliferation of connections between people and the speed of communication through technology that all companies are now experience providers.

For many years the experience, the interaction, was managed by a division within a Fortune 500 company who looked at the in-store, in-branch, or in-restaurant experience and created something that was visually appealing, memorable, pleasant, and efficient. The design, well-executed, helped consumers know where to stand in line, where to get help, or look for specific products. It was staffed with friendly people who could naturally fill in the missing details or connections but most importantly provide a personalized experience or build a personal rapport with the consumer. They made the intuitively inefficient and efficient experience; if the design wasn’t quite right the personal connection filled the gaps.

As technology has replaced many of these branches, stores, and human touchpoints, in part because it’s more cost-effective, in part because the speed of the transaction or the convenience for the consumer held sway. Large companies have inarticulately made an effort to increase the number of touchpoints or tackle the gaps in service as a series of technology and marketing projects. As with all transformations, a serialized and interstitial set of projects never provide the harmony and richness of the experience a consumer demands. Often times when I hear large companies speak about their digital transformation or customer experience projects they feel like how a symphony would be written by a series of committees each focused on the instrument they play.

It is the whole experience, in all its dimensions that need to be addressed. For a large company, this is an almost achievable amount of organizational alignment required in a short period of time. Most companies have been built over decades and the organizational division, operating principals, and culture cannot be rewired overnight. As with most disruption triggered by technology, the initial innovation is obtuse but with great promise. So while the value is well understood, the adoption model follows a standard distribution curve, the early adopters take a leap of faith, and when the point of leverage to value is understood the majority steps in. In some cases, the adoption curve can be accelerated when “killer” applications can be applied.

In the case of digital transformation, the killer application is personalization. Delivering experience in context, that is relevant and personalized is the key to moving an organization forward. In the case of customer experience and within the experience economy, the accelerant is the ability of large organizations to deliver personalized or contextualized experiences. While it may take a decade or more for a Fortune 500 company to reorganize, we can deliver value today through a more personalized experience.

As expected, the organizational changes that will take time to work their way through a company that spent decades building for and organizing around 20th-century models can recognize immediate value by through technology recreating the front line staff that helped clients find what they needed, answered questions and most importantly build a sense of intimacy between a consumer and brand.

The Four Engagement Models for Our Clients

The business we’re in is achieving business results for our clients by enabling them to deliver contextually relevant and personalized experiences. 

There are many people within the company working on the integration plan, exploring the opportunities and challenges of combining the businesses. A common thread in the discussion is what business we are in? I would like to add some clarity to that concern. 

We have an “as is” and a “to be” state in the business that needs to translate to both sides of the Atlantic. If we all agree that enabling our clients to create and deliver better experiences for our customers then we need to think about how the various dimensions of our business work together to achieve that goal.

We have four types of engagement models with our clients… 

Staffing Support, Project Work, Digital Transformation and Managed Services/ALM 

Almost a third of our work fits into the category of staffing support. This includes contracts we have with the Dutch government, but it also encompasses all the work we do for clients where they are leading the engagement and we are providing skilled and expert services to support their project and business goals. These engagements are typically bound in time and will bill according to the hours worked. There are many reasons why this is a great business for us, two that I’d like to point out is that we are able to build a wide base of competencies in the company which can support many different initiatives. The second reason is that it a fairly consistent and predictable business, so when we are planning for growth it’s nice to have stability in our client base. While I don’t see this business growing as fast as the rest of our business, there is still a strong market supporting clients who need a trusted partner to provide expertise. 

Another third of our business could be called project work. This typically involves Tahzoo assuming the responsibility of the successful implementation of some technology or execution of a strategy project. In these cases, we are hired because of our expertise and experience solving similar problems for clients in the past. We try to use this type of work to engage in a deep conversation around organizational goals and initiatives to win additional work. In the US many of our accounts are just an ongoing series of projects drive toward the goal of better customer experiences. On the strategy side of the business, these projects often lead to a retainer-based relationship but stop short of digital transformation because they are one dimensional and/or they are only applicable to a portion of the business.  

About twenty percent of our business is true digital transformation work. In these cases, our clients have hired a dedicated multi-disciplinary team to support a transformational initiative. These are long term strategic engagements in which Tahzoo provides the full range of services over many years. As we have discussed, there is a lot of organizational change required to provide contextually relevant experiences, its journey.

The last category, managed services/ALM, is evolutionary.  Today it’s mostly about technical support.  But where we want to go with it, is to include marketing operations, run campaigns and marketing programs, ultimately ending up as a type of business process outsourcing (BPO) for digital marketing. 

Next week, I’ll start taking you through some of our ideas on how to get there.