Member Since: 20th Aug 2009
Principal Architect T-Mobile USA
12th Jul 2011
What we see is that people are no longer willing to absorb corporate dictates toward low-quality, low-cost providers who add only marginal value to the products and services that they sell. The cost of fixing brand and customer satisfaction are much more difficult to repair than simple balance sheet mechanics.
I've known for a long time that outsourcing to offshore provides marginal (read: very marginal) advances in most cost structures over time because the quality on goods and services is low, and the administrative overhead is significant due to a low committment labor force.
With the costs of repairing brand and customer satisfaction incresingly dificult due to competitive market forces, it becomes necessary to differentiate in a way that sets one's company above its competition. Localised or regionalised labor forces become very necessary to connect with one's customers in a unique and fulfilling way.
You don't see Canadian CSR's manning the phones for Chinese banks for the simple reason that they're not a good cultural fit to their customer base (aside from the cost issues). I struggle to find a compelling reason why more companies are not recognizing that in fully saturated markets, service differentiation is critical to profitability margins. The prospect of not having to deal with people who can't understand, comprehend or empathize with someone 12,000 miles away is quite appealing.
Additionally, most countries in the world marketplace need those jobs to promote their own financial and demographic stability, so the push will be towards smaller economies of scale at the regional level first, and then perhaps even towards more nationalised boundaries thereafter.
There's a reason that the global map has outlines for countries on it. Time, distance and cultural differences dictated its necessity. The movement back towards more segmented vertical markets is not only necessary, but welcomed.
29th Mar 2011
It's important that we segment within the concept of Social into a Hub and Spoke model.
Social channels like Twitter, Facebook, MySpace - have no 'real' value unless taken within the context of Advertising and Public Relations. People (Customers or Enthusiasts) have no real desire to track FB and Twitter updates as consumers - they get much higher quality of content AND interaction with online Forums.
Social via Forums as a Hub is where the most value is realized. All good things 'Social' flow from Forums, as it's a captive and engaged audience with repeat visits in short periods of time. Driving traffic to a controlled branded destination is the name of the game in web and e-commerce, and this is as good as it gets. In this regard, companies couldn't ask for a much better way to catch all of those people and keep them hooked in. Online 'culture' promoted and propogated by a host of Marketing weenies and would-be Ad execs is what prevents this from being a 'real strategy', among other things.
Any company who thinks that it is going to write a positive-ROI business case on Social as a program or technical implementation is in for some tough conversations. Here's why: As is the case with most IT projects and initiatives, the value is in the larger business case. If companies are capable of measuring things like brand strength, customer experience, customer loyalty, and customer satisfaction, then they can expect to be able to derive 'value' and a business case from Social. If they are not capable of doing this, they won't be able to qualify the opportunity that Social present, or quantify what it could mean in terms of 'hard dollars'.
Most companies have no interest in exploring 'soft dollar' recapture, which is why many companies struggle with digital experience and investments in brand, UI, UX, etc. Same problem, different application. If you don;t have the answers to measure soft-dollar web details, Social will be no different. SSDD.
Soft ROI is a return on investment that is not quantifiable or measurable in specific dollar amounts and does not show up as a bottom-line savings. Soft ROI manifests itself as an increase in intangible elements, including brand strength, customer experience, customer loyalty, and customer satisfaction.
For several years I've advised my own company that we can achieve better leverage of our online experience by promoting Forums as a cornerstone of the B2C web experience, cross-sell /upsell via Loyalty and Offers Management, and designing an integrated purchase path. The rest of the 'bling' and 'wow' is great, but if it's not functionally aligning to keeping customers engaged repetitively, it's not value based. It's an idea that's probably a bit ahead of its time.
Companies can (and will) stand up separate microsites to drive specific traffic. They'll spend millions of dollar overhauling their front ends for a 'fresh' look, but most have very weak presence in Forums and weaker still in Social.
All people know how to traverse a website to 'buy', and for the most part, there's a formula there that hasn't changed appreciably in a decade. Ask yourself this: what makes the best retail stores profitable? Let's take Costco as an example. How many times have you gone to Costco to buy X, and come out with X, Y and Z? If you're like me - probably quite a few. how do they do it? They create an experience that keeps you engaged and offers ridiculously good incentives to 'buy now'. Wow - novel idea, eh?
As companies become more advanced with integrating online channels under a consoldated platform, brand, etc. - what becomes evident is that they can roll up these types of programs under CRM, ERP, or similar 'big-bet' banners.
The concept of Social as a hub is one specific endpoint destination that many companies could strive to reach. It is a lofty goal. It will take the retirement of a generation of current business and technology leadership, as well as the emergence of Millenials as a primary consumer audience to really usher in this kind of change. ETA is probably about 10 years under current conditions, but I think there's a lot of market to be captured for those companies that are willing to take a calculated risk by designing for this experience as part of their online, digital experience and CRM strategies.
1st Nov 2010
Interesting that we see that the primary problem is a model that was designed to resolve structure has now created a situation where it has been over-engineered. As an embedded cultural norm, it has become a risk instead of a benefit. Many of these models are outdated because of market saturation. Back in 1880, the vast majortiy of all industry was still open field. Now, in a predominantly professional service and intellectual property-focused industry (as opposed to manufacturing focused), as well as a global economy where logistics is no longer a huge barrier to competitive markets, the rules have changed because the needs of the business models have changed.
It's only a case where we're still holding on to our comfort zones - which is primarily a limitation improsed by the current generation of existing leadership. Not enough focus to see the forest from the trees and adapt willingly, and most of the businesses that will benefit the most are still stuck in a busines smodel that persists and is resistant to change because the expense of migrating forces them to assume a lot of risk that they're not willing to accept, or are incapable of managing effectively.