I'd say I was brilliant if it hadn't been so obvious.

"It’s too late for Vista, and my humble prediction is that it will go away and undergo a retooling - perhaps a later integration of key features into a different OS release. "

- Me, Your Humble Blogger, in a March blog entry, "When Did The Guys From Delta House Start Running Microsoft?"

~Seven months later~

Microsoft Introduces Windows 7, Ending Vista Brand - New York Times

"Microsoft introduced what it said would be a slimmer and more responsive version of its Windows operating system on Tuesday, while unceremoniously dropping the brand name Vista for the new product... Other new features in this very early version included an enhanced and more flexible task-bar, more powerful search features, and an easier-to-use home network and file sharing. There was also a hint that Microsoft plans to revise Windows 7 to take advantage of the coming wave of multicore microprocessors from Intel and Advanced Micro Devices. Mr. Sinofsky said the company would give more details on the ability of the new program to handle up to 256 processors."

Its a damn shame that my brilliant prognostications do not extend to the stock market.

The Trouble With ROMI

ROMI, or Return on Marketing Investment, is the stalwart of the accountability marketing movement, spurred on by the dozens of dashboard software products and services that promise not only to track the success of your marketing efforts, but change the very nature of the way marketing is viewed in the corporate environment.

Poppycock.

As I told an audience at a recent BMA luncheon at which I was the speaker, ROMI is a Red Herring. It provides a false sense of security to marketers who otherwise have abdicated their responsibility to learn the language and requirements of the finance team, and therefore, the organization generally. Here are the top three reasons that ROMI, while a good tool, is useless in creating real influence in the boardroom, and real impact on the bottomline:

1. ROMI is a metric, not an objective. Measuring click-thrus, phone calls, leads generated are all useful metrics that measure the effectiveness of tactics, not strategies. All too often marketers and professionals from other fields, for that matter, mistake their metrics as objectives. Objectives are far broader than a lead, and marketing needs to recognize the difference.
2. ROMI only measures one of the four Ps. We can debate the current relevance of the four Ps, but putting the debate aside for a moment; ROMI is targeted toward measuring Promotion only. What of Price (price cuts versus premium pricing strategies?), Placement (how to leverage distribution channels?), and Product (feeding customer and market research to effect product changes?). ROMI acknowledges none of that, yet if there was a single ‘P’ whose impact on sales was the most expendable, it would be Promotion… yet it retains the lion’s share of our attention as marketers.
3. ROMI metrics are created in a vacuum. They do not necessarily reflect the concerns of the executive team. The CFO is concerned with EBITDA, not PPC. He/she wants to know about your contribution to EPS, not the circulation of your industry’s leading trade publication. As compelling as some metrics are, finance types are often as guilty as engineers in the ‘not invented here’ mentality. They set the critical metrics, not you.

In the end, finance folks and executives are your customers, and like reaching customers, you need to speak to their needs, not your own.

Of metrics and meaning

A few posts back, I commented on Corporate self-delusion in measuring customer satisfaction. Seth Godin makes the point in his blog regarding the importance not of measurement for measurement's sake, but measurement for knowledge's sake. Common metrics and the 'real thing' they are intended to measure:

• Good grades in school (the ability to solve problems in life)
• Lots of raw traffic to your blog (conversations among prospects who become fans or customers)
• Burning calories (feeling better and looking good)
• Clickthrough rate on ads (conversion rate to customers)
• High salary (long-term happiness)
• Class rank (actually learning something)
• Number of stock options (future prospects of your employer)
• This quarter's commission (reputation in the industry)
• Technorati rank (number of RSS subscribers)

I could add leads, visitors, reach, frequency, and a host of old black magic measurements to the list as well. And in addition to measuring the right thing, it is also important not to be blind to the subjective things as well. One does not trump the other.

http://sethgodin.typepad.com/seths_blog/2007/01/high_resolution.html

Corporate Self-delusion

According to a Bain & Co. survey, corporate self-delusion is at critical levels, particularly as it concerns perceptions of customer satisfaction. The survey of 362 firms found that 80% believed they delivered a 'superior experience' to consumers. Yet only 8% of customers of those same 362 agreed with that characterization.

So why the chasm? One, companies are defining their own standards of performance. Two, they aren't looking broadly enough at the entire customer experience. It is critical that companies transform quality and service measurements according to customer expectations and experiences, not internal operational standards. Let's look at these two critical issues by picking on, say, randomly, a cable company...

Cableco says it has over a 90% satisfaction rating because they are arriving within a promised four hour window 94% of the time, and addressing the issue on the first visit 97% of the time. Trouble is, customers do not see waiting for half a day as good service, even when that time window is observed. Conscious of the value of their time, they want a narrower service window. Further, after a four hour wait, resolution on the first call is a considered a baseline standard for customers, not an indication of superior service.

Relatedly, if timeliness and first call resolution are the only standards Cableco uses to measure satisfaction, they'll overlook other critical touchpoints that impact customer experiences - from the initial call and ease of use of an IVR (Interactive Voice Response) system, to the physical appearance of technicians, through to the billing system and complaint resolution process.

Then, as competitors recognize the factors that are impacting the customer experience and make adjustments to their own policies to exploit them, Cableco will continue to hemmorage market share as their leadership gazes contentedly at a PowerPoint slide that reveals "90% customer satisfaction".

When it comes to customer satisfaction, measure the right things. Not just the easy things.

M&A In Dim Light

“What are you doing?” asked the stranger to the man, who, lit by a streetlight, seemed to be closely inspecting the sidewalk.

“Looking for my watch,” said the man.

“How long ago did you lose it here”, asked the stranger, starting to help the man search.

“About thirty minutes ago, I guess,” replied the man, “But I didn’t lose it here. I lost it about three blocks that way,” said the man, as he motioned down the street.

The stranger stood up and turned to the man. “Then why in the world are you searching here?” he asked.

“The light is better here.” Replied the man, confidently.


A colleague tells me his company purchased another, smaller rival recently, which on the surface seemed like a positive move as it had been clear for some time that the market they were in was leveling off, even declining.

“So, what do they do?” I asked, expecting to hear about the extension the company now had in the way of offering a new, larger; or perhaps smaller but profitable niche, market.

“Same thing as we do. Same thing”, my colleague shrugged.

“No promising IP (intellectual property)?” I asked. “No vertical markets, new distribution partners, nothing?” I offered, hopefully.

“No, not really. We lost a few deals to them before. Same customers.” He was beginning to see my point. “We’ll just be bigger.” He sighs. “For awhile.”

So it is, another company looking for inorganic growth where the light is better. A market they know, are familiar with, regardless of whether it’s a good fit, because it will, for a time, stave off inevitable decline. To this type of management, to do the right thing - to take on an ancillary product line or enter a new market, is a seen as a bit like dusk… uncertain and just a little spooky. However, I prefer to think of it as a bit more like dawn, as dim and uncertain as dusk, but with far greater promise.

This is a critical difference between management and leadership. My colleague’s company is managed, not led. Leadership would search the right places for something worth finding; whereas management will limit its searches to that with which it is comfortable. When it comes to M&A, competitors and partners are often the first targets (or buyers) that come to mind – vertical integration comes easy. In fact, almost half of such deals are from the sellers' same industry. However, these tend to be strictly buyers seeking financial leverage, and are unlikely to invest significant amounts of additional capital to grow the market or build further on foundations of organic growth. This leads to internal strife and eventual disintegration of even the most modest goals that spurred the initial interest. This is among the reasons most mergers fail. On the other hand, premium buyers, with visionary leadership in place, like many big public companies, invest in potential and pay for it, or alternatively, well-led micro and mid cap companies market themselves to these ideal suitors.

When seeking inorganic opportunities for selling your company or in buying another, be certain of your motivations and goals for the transaction.

And bring a flashlight.