Category Archives: Books

The Innovator’s Dilemma

Innovator's Dilemma

This is a book that I’ve recently read for my latest MBA course on Managing Innovation. It’s kind of one of those ‘must-read’ books for business/technology types and aspiring super-nerds like me. Without giving it all away, the crux of it is, when it comes to certain types of innovations (“Disruptive” Innovations), engaging in smart business practices may be the last thing you’ll want to do.

Intrigued?

It is a bit of mind bender, but Clayton Christensen goes into a fair bit of detail (don’t say I didn’t warn you) – using predominately the computer disk drive industry as his testing ground – to outline how doing things like listening to their customers, investing in the highest ROI opportunities and allocating resources to continue to innovate and improve on products and processes has actually lead to the demise of many organizations.

As I said, it’s a bit of mind bender.

If you’re interested in learning more about how doing these seemingly ‘right things’ can in some cases end up being the ‘wrong things’ (hence the dilemma),  I’d recommend checking out this book. Alternatively, if you want the Cole’s notes version, along with some of my insights on how I think that the Internet is “disrupting” the education industry, continue reading to check out a short paper that I recently submitted for the class.

Abstract

This is a book review on ‘The Innovators Dilemma’ by Clayton Christensen, being prepared and submitted for MBA 7351 – Managing Innovations, at the University of New Brunswick, Saint John. It will begin with a summary of disruptive technologies and innovations, as outlined in the book, to demonstrate an understanding of the concepts. It will be followed by a discussion on how the internet has and will continue to disrupt the education industry. The paper will then end with a brief conclusion.

A Summary of Disruptive Technology & Innovations

In ‘The Innovator’s Dilemma’, Clayton Christensen does a deep dive into the paradox of how, when it comes to dealing with ‘disruptive’ technologies, following good management practices can – and often does – lead to poor results. He focuses predominately on the computer disk drive industry as the focus of his research for the book, since as is still largely the case; it is an industry that moves at a staggering pace making it an easy target for research of an evolutionary (or in this case, revolutionary) nature.

Since ‘The Innovator’s Dilemma’ was first published some ten years ago, the term ‘disruptive’ has become somewhat ubiquitous, but as is often the case, it is used loosely and often incorrectly. As such, before proceeding any further, it will be helpful to first define what exactly a ‘disruptive’ technology is, as defined by Christensen.

Technologies and innovations can fall into one of two categories. The first is what Christensen calls ‘sustaining’ technologies, which are the most common. These are the types of advances that improve on existing products or services. They can be incremental in nature but they can also be radical. This is important to note, as sometimes radical, sustaining technologies are mistaken for disruptive technologies. Sustaining technologies, whether incremental or radical, are in fact the types that, “foster improved performance of established products along dimensions of performance that mainstream customers in major markets have historically valued” (Christensen, page xviii). As Christensen outlines, using examples from the disk drive industry, as well as others such as the excavator and motorcycle industries, sustaining innovations progress along the same performance trajectories whereas disruptive technologies redefine performance trajectories.

Disruptive innovations, unlike sustaining innovations which continue to advance existing technologies and products, often – at least in the short term – offer worse performance than is currently in the market. As such, when they first emerge they are of little, if any, interest to the mainstream market. And why should they be? A fundamental tenant of business is to seek out innovation as a way to create and maintain a competitive advantage in the market place. Another is to listen to your customers and to give them what they want. Yet another is to invest funds and allocate resources where you can get the highest returns. Understanding all of this – as good companies (companies not unlike the organizations featured in the book including IBM, Seatgate, Quantum and others) do – that is how businesses are typically managed. They seek out innovation (most often sustaining in nature); they listen to their customers; they astutely invest and allocate resources based on their expert knowledge, industry research and best practices. Yet, despite all of this, many wind up losing their industry leadership positions and eventually fail. Why does this happen? This is, in part, the “Innovator’s Dilemma”.

As Christensen illustrates throughout the book, the undoing of these otherwise well managed firms comes from their inability to make strategic decisions to embrace disruptive technologies; or at least while there is still time to do so. What has happened time after time and in industry after industry, is a disruptive technology will emerge onto the scene, and true to the earlier noted disruptive attributes of being a worse, not better performer by traditionally held standards, will be met with little fan fair from organizations trying to continually one-up the competition with the latest sustaining advancement. As a result of the inability to break into traditional markets, the disruptive innovations have to figure out an entirely new value proposition for a new, often smaller market. In doing so, what happens in these new, often fringe markets, is the disruptive innovation gets momentum and advances – through advancements in sustaining innovations on this new performance trajectory – until it can move ‘up-market’ to serve the very industries that weren’t initially interested. This then gets the attention of the often larger, established firms who will sometimes scramble to try and get on the bandwagon, but often it’s too little too late. It’s particularly interesting, and perplexing, how the when it comes to disruptive technologies, the attributes that make them “unattractive to mainstream markets are the attributes on which the new markets will be built”. (Christensen, page 267).

To illustrate these points using an example from the book, we’ll look at the disk drive industry where Christensen takes the readers through the progression of disk drives from being 14 inches (diameter) to 8 inches, to 5.25 inches, to 3.5 inches, to 2.5 inches and eventually to 1.8 inches. Initially the 14 inch drives, for use in mainframe computers, were the industry norm. In 1974 their average storage capacity was 130 MB (megabytes). Through sustaining innovations, disk drive makers were able to keep their customers happy by increasing capacities at levels the customers had come to expect. By the early 1980’s several entrant firms had emerged, producing smaller 8 inch drives with much lower capacities – from 10 to 40MB – nowhere near the requirement for a mainframe computer. As such, the mainframe computer users weren’t interested in these drives, despite the fact that they were smaller. Size wasn’t a factor for mainframe users, capacity was. So in order to survive, the smaller drive makers (Shugart Associates, Micropolis, Priam and Quantum) started selling to firms in a newer, smaller market than mainframes: minicomputers.

As the 8 inch drives gained momentum in the minicomputer market, developing sustaining innovations (at a faster rate of the established firms in the mainframe market) on this new performance trajectory, they were eventually able to begin serving the mainframe market, thus pushing out the established incumbents. Christensen goes on to walk readers though how this cycle repeats for all of the different drive sizes from 14 down to 1.8 inches.

In examining how disruptive technologies have lead to the demise of organizations that were once atop their industries, Christensen ensures that his readers understand that it wasn’t in these organizations’ lack of technical capability. He outlines how, in some cases, the industry leading organizations had working prototypes of the disruptive innovations ready to be taken to market. The reasons for their failures were largely related to what Christensen calls ‘value networks’ and their related cost structures. Essentially, large organizations in large markets are organized internally and within their supply chain to serve large markets. In the same vein, large companies require large markets to meet their growth targets and the smaller, fringe markets opportunities presented in the early days of disruptive innovations are generally not attractive propositions.

Similarly, he goes to great lengths to ensure that his readers understand that it wasn’t their inability to diligently manage their organizations. In fact, the diligent management of their organizations was the reason for their demise. They were innovative. They invested wisely. They listened to their customers. But what did their customers want? Better performance or worse performance? What made sense to invest in? Established markets with high returns, or fringe markets with low returns and little or no market research data?

With disruptive technologies, “doing the right thing is the wrong thing” (Christensen, page xxxiv). This is the “Innovator’s Dilemma”.

Impact of Disruptive Technology/Innovations on the Education Industry

At the risk of stating the obvious, the internet has and continues to have a profound effect on many industries. It has been a driver of both sustaining innovations as well as disruptive innovations.

Some of the more prevalent and talked about industries impacted by disruptive innovations tend to be the music (iTunes vs. brick and mortar music stores), video (Netflix vs. Blockbuster), and print media (Online news, Google, blogs, Twitter and others vs. traditional newspapers) industries as a result of the major changes that have already, and are continuing to take place.

There are other industries that are still in the very early days of what may become disruptions, some of which include the electric car (i.e. Tesla) and P2P currency (i.e. Bitcoin) – each, among others, were strong candidates for further exploration in this paper.

An industry that is somewhere in the middle is the education industry, which will be explored in more detail in this section. This industry is an interesting one in that it is being impacted by the internet for both sustaining innovations and disruptive innovations. Further, within areas that can be defined as disruptive, there are areas of similarity of those explored in “The Innovator’s Dilemma” as well as areas of difference making it a good candidate for inclusion here since certain aspects of the internet’s impact – and if they are truly disruptive in nature – may still be subject to some debate.

Leveraging the internet to provide learning opportunities has been around since almost as long as the internet itself has been around – or at least the internet as we know it today (post Windows 95 era). While generations past – including my own – used to have learn things the ‘old fashioned way’ (i.e. buying and reading a physical book, or setting foot in a physical classroom), now it is often as simple as a performing a Google search for an insightful blog or YouTube video to find the knowledge that you seek. Similarly, universities and educational institutions have been leveraging the power of the internet to extend learning capabilities to its students through such things as learning portals, such as the ‘Desire to learn’ portal currently deployed with the University of New Brunswick, Saint John. When the internet is used in this fashion, these are sustaining types of innovations. They further improve on an existing service. They add value – incrementally or radically – in ways that users have come to expect.

Somewhat more recently, as broadband internet becomes more accessible, combined with other factors such as rising university tuition costs and a generation of people doing more and more things online (i.e. working, communicating, watching TV, listening to music), opportunities to learn online are also increasing and more people are taking advantage. According to a recent study commissioned by The Sloan Consortium – a leading professional online learning institution, “over 6.7 million students were taking at least one online course during the fall 2011 term, an increase of 570,000 students over the previous year” (2013, The Sloan Consortium).

Where things start to take on disruptive characteristics are in a couple areas. Firstly, many of the entrant firms providing these online learning platforms are not your traditional, established firms (akin to the “IBM’s” in the disk drive industry). They are smaller, start-up firms such as Coursera and Aacademicearth, both education companies that partner with top universities and organizations around the world to offer courses online for anyone to take. Another – and arguably the most important reason they stand to disrupt this industry in a big way is – the courses are free.

Recalling that when disruptive technologies arrive on the scene they are often thought as being inferior offerings, it’s not a major surprise that there is still much debate over their merits within academic circles, with many education purists insisting that there is no substitute for the value of face to face interaction and collaboration that happens in a physical classroom.

One of the findings from the earlier noted study by The Sloan Consortium, was that “only 30.2 percent of chief academic officers believe that their faculty accept the value and legitimacy of online education – a rate is lower than recorded in 2004” (2013, The Sloan Consortium). However, the same study also found some evidence to indicate that reaction is still in fact mixed, with many academic institutions continuing to ponder as to how they will continue integrating online learning into their long-term strategies.

While traditional brick and mortar institutions continue working toward figuring this out, it’s hard to deny how providing a free education from top universities – the likes of which could include MIT and Harvard – for free no less, is opening the door to an untapped market for these technologies to get the momentum they require to become a real threat.

Interestingly, two of the major institutions driving online learning agendas are in fact two of the most established brick and mortar institutions: MIT and Harvard. These two academic powerhouses recently teamed up to develop an initiative called ‘edX’, a program that builds further on MIT’s existing OpenCourseWare platform (thousands of free online courses), to provide not only a library of free, online courses but also an open-source technology platform free for use by other universities looking for follow suit.

Conclusion

It will now be interesting to see how many of the traditional brick and mortar universities react to these disruptive innovations. Will they simply pass them off as an inferior product and continue developing sustaining innovations to serve their existing, mainstream markets hoping (or not aware of) the sustaining innovations advancing in the smaller markets below them (at potentially advancing at greater rates), as we have seen in the past? Or, will they take a hard look at what steps may be necessary – within their value networks, cost structures and organizational cultures – to not let history repeat itself in yet another industry.

References

(2013) Retrieved from:  http://academicearth.org/

(2013) Retrieved from: https://www.coursera.org/about

(2013) Retrieved from: http://sloanconsortium.org/publications/survey/changing_course_2012

Christensen (2000), The Innovator’s Dilemma

Dunn (2012, May 2) Harvard and MIT Introduce edX: The Future Of Online Learning.
Retrieved from: http://www.edudemic.com/2012/05/harvard-and-mit-to-form-new-online-learning-project/

Horn (2012, April 12) Yes, University of Phoenix is Disruptive; No, That Doesn’t Make It the End-All. Retrieved from: http://www.forbes.com/sites/michaelhorn/2012/04/12/yes-university-of-phoenix-is-disruptive-no-that-doesnt-make-it-the-end-all/

Myers (2011, November 13) Clayton Christensen: Why online education is ready for disruption, now.
Retrieved from: http://thenextweb.com/insider/2011/11/13/clayton-christensen-why-online-education-is-ready-for-disruption-now/

Myers (2011, May 14) How the Internet is Revolutionizing Education.
Retrieved from: http://thenextweb.com/insider/2011/05/14/how-the-internet-is-revolutionizing-education/

Stokes (2011, April 14) Is Online Learning a Disruptive Innovation?
Retrieved from: http://hepg.org/blog/54

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Not All Customers Created Equal

EPSON scanner image

At the risk of stating the obvious, there is a fair bit of buzz around entrepreneurship and start-ups these days. I suppose the truth is that this is something I’m interested in and work around, so it could just be that I notice it more than some. Either way, I think it’s safe to say that it’s an exciting time to be in the technology space. It seems every few weeks you hear about another “success story” (editorial note – success can be defined in many different ways) of some start-up that has hit the jackpot, by being scooped up by a large corporation (Instagram, Tumbler, or locally in my neck of the woods, Radian6 to name a few examples), to realize their exit strategy (be it planned or unplanned).

Again, at the risk of stating the obvious, regardless of what you’re “selling”, and regardless of your exit strategy, at some point you’re going to need some “customers”. (paying customers would be nice, but that hasn’t stopped many of today’s start-ups so don’t let it stop you…at least for now). Knowing this, it’s helpful to understand how customer adoption can differ. Some customers like to have the newest, shiniest things just because…we’ll because they’re new and they’re shiny, whereas some customer are more pragmatic and will hang back and wait for the “2.0 release” when perhaps the cost is a bit lower and/or some of the bugs have been worked out. This is the case in both the B2C as well as the B2B world. There is a continuum on which customers exist – from the “Innovators” at one end to the “Laggards” at the other. Though there are many ways to slice and dice the types and tendencies of the various “customer adoption types”, I’ve outlined below one way I’ve seen it done recently (with a B2B focus) with some of my thoughts woven in for good measure.

  • Innovators – these guys are the “techies”; the group even before the “early adopters” that we hear about so often. These guys are the ones that must have the latest and greatest gadgets and technologies. The consumer market equivalent would be the hardcore “geeks” (no disrespect; being a geek is über-cool now) that camp out overnight a Future Shop whenever Apple releases…well just about anything (again – no disrespect; kudos to Apple for building the hype and delivering most of the time). If you’re trying to appeal to this crowd – and why wouldn’t you want to really – you’ll want to focus on the elegance and general coolness of the technology.
  • Early Adopters – hey I’ve heard of these guys! These guys are the “visionaries” and often also leaders in their industry. They prefer technology “revolution over evolution” and are always on the lookout for a new technology to give them a competitive advantage. Landing these guys as customers should be part of any strategy as they can become great case studies for early successes that can help you land customers of a more pragmatic nature.
  • Early Majority – these guys are the “pragmatists”. They dig technology but really want see the proof that adopting something new WILL yield business benefits (e.g. lower costs, higher revenue). Show these guys the business case for how this will help them save money, grow revenues or some combination of the two. Show them how finely tuned your product is now as a result of working closely with your innovators and early adopters. In Geoffrey Moore’s book, “Crossing the Chasm” Moore discusses how bridging the gap from the early adopters to the early majority is a key step for any organization to achieve mainstream success.
  • Late Majority – this group is often referred to as the “conservatives”, and as the name suggests, they tend to resist change but are willing to adopt so long as the changes can be integrated into their existing systems and/or processes. Boring!
  • Laggards – these guys are the “skeptics”. They’re just not into it. They only adopt technology when they’re absolutely forced to. (Internet Explorer 6 is no longer supported. Please, please upgrade!)

So that’s it*. Know your customers then go get em’.

* That’s not it.

Image credit: http://tomfishburne.com/2011/04/crossing-the-chasm-cafe.html

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Flip the Funnel Reflection Paper

funnel-flip

A couple of posts ago I noted that I was reading a book for my B2B Marketing course called Flip the Funnel. This is a short ‘reflection paper’ that I recently submitted that I thought I would share.

Introduction

This is a short reflection paper on the book ‘Flip the Funnel – How to Use Existing Customers to Gain New Ones’ by Joseph Jaffe, submitted for MBA 7384 – Business to Business Marketing, at the University of New Brunswick, Saint John. It is not intended to be a recap of the entire book, or even a recap of all of the concepts, but rather my thoughts on what I felt to be some of the more interesting aspects.

The Funnel – AIDA vs. ADIA

Marketing is ubiquitous. It’s all around us. We’ve all heard the statistics, at least anecdotally, about how many message we’re all exposed to in the run of a day, or a week, or a lifetime. It’s ridiculous. But alas, this is the process. This is what marketers do. They market. They break their necks to get our attention; to make us “Aware”. There it is; the wide end of the ‘traditional’ marketing funnel. As Jaffe, outlines for us early on in the book, the traditional marketing funnel is based on this acronym:

 funnel-diagram-powerpoint
  •   A: Awareness
  •   I: Interest
  •   D: Desire
  •   A: Action

It’s about getting our attention; getting us into the funnel. From there they really turn on the charm and try to work us through the other steps, squeezing us into the narrow end of the funnel in hopes to get us to the desired end state: the sale!

This is how it is and how it may always be; but not if Jaffe has anything to do with it. In ‘Flip the Funnel’, he makes a very compelling argument for how the marketers of the world have been doing it wrong all this time and that instead of ‘AIDA’, the process should be ‘ADIA’, which stands for:

 funnel-diagram-powerpoint2
  •   A: Acknowledgement
  •   D: Dialogue
  •   I: Incentivization
  •   A: Activation

While the changes to the acronym look subtle, the approach is anything but. Jaffe spends two hundred plus pages making his argument for how, rather than spending our organization’s resources building ‘Awareness’ to a group of potential customers, what we should be doing is taking care of the customers that we have – and leveraging these relationships as an asset to build our businesses.

Multiple Perspectives

I really liked this book. I tend to enjoy books, authors, articles – people for that matter – that challenge conventional wisdom. In addition to the topic itself, I also enjoyed his informal, free-wheeling ‘write the way I think’ kind of style.

When reading the book, I tended to interpret his ideas, concepts and examples from two different perspectives. Firstly, I’m a consumer. Like everyone else, I buy stuff so I can relate to much of the content from that perspective. Secondly, I work for an IT consulting organization so I also tended to think about how the content applied to how my organization markets its services. Have we been doing it wrong too? And how can I take what he’s putting forward – essentially flipping convention marketing wisdom its head – and apply it to help my organization (ideally without getting thrown out the door for sounding certifiably insane!)

Retention over Acquisition

Jaffe’s argument around focusing on retention over acquisition, or even retention as a tool for acquisition, is an interesting one. The first thing that came to my mind when reading it was, ‘Well, you’re going to need to get some customers first’, since by definition, before you can retain something, you need to have acquired it first. With this in mind, organizations will need to figure out for themselves at which point, and to what degree, they execute this as a strategy.

Once you have arrived at a certain point however, switching the focus from acquisition to retention may make sense. At one point in the book, he put forward an interesting idea related to, what if as an organization you put the word out that you were going to put a ‘freeze’ on taking on any new customers. Now this is a radical idea, but he certainly got my attention!

When reading this I immediately thought of my experiences as a consumer of cable/phone/internet services. It seems to be almost every other week I see an advertisement in some form or another from my current provider offering incentives for NEW customers. My first thought is always (and you can probably guess) – what about me? Do I not qualify for the same – or dare I suggest it – a better discount for my years of loyal service? Something about this commonly used tactic doesn’t seem right to me. So, back to the point of implementing a freeze on new customers to better focus on existing customers – I think this would be a great idea.

Jaffe also spends considerable time in the book making the argument for how your retention strategy can effectively be your acquisition strategy; and it’s not that complicated. How many times have you felt, essentially kicked to the curb, immediately after a transaction has taken place? Far too many times, that’s how many. But, again – going back to the opening of this paper – this is how the marketing process typically works; once the sale has been made, you’ve been ‘converted’ and its onto making the next sale. Now, this isn’t always the case, some companies do it better and Jaffe provides some examples of who and how. He notes how shoe ‘e-tailor’ Zappos has had great success with a ‘Flip the Funnel’ strategy, with such tactics as a flexible return policy – again, not rocket science – just taking care of the customers after the sale. Other tactics that Jaffe notes that can be used to include things like simple ‘acknowledgements’ (the ‘A’ in ADIA) like a thank you card or a progress report (e.g. Amazon – ‘Your order has shipped’) to let you know that even after the sale, the organization you’ve just done business with still cares about you.

Jaffe argues that engaging in these types of activities make smart business sense, since they result in things like repeat purchases – and why wouldn’t you want your customers to be customers again and again? As we all know that it costs more to acquire a new customer than to retain an existing one, this only makes economic sense. Further to this, every happy customer you have is one more person who helps you with your advertising efforts, as word of mouth advertising and referrals have and continue to be powerful tools.

Happy Employees = Happy Customers

As I noted earlier, I’m a consumer (being marketed to) and I’m an employee (that ‘markets’ – if you will). The chapter titled, ‘How Employees Help Flip the Funnel’ was one that I particularly enjoyed. I found the section that referenced the Alexander Kjerulf blog post titled, “Top 5 Reasons Why ‘the Customer Is Always Right’ Is Wrong” to be particularly interesting. [Editorial note for blog readers – check out my thoughts on this post here.]

In this section Jaffe paraphrased the original blog post while adding his own spin on some of the things that organizations do in an effort to retain customers – customers that in some cases take a disproportionate amount of the organization’s time and resources and may not be worth the return on investment – at the peril of their employees.

The original blog post provided a comical example of a CEO that was tasked with dealing with a difficult customer with a bad reputation for never being satisfied with his company’s services, going through great lengths to make the service staff aware of her ‘issues’. Understanding the strain being put on his staff – and the negative implications that they could have in their ability to service other customers – he bluntly, yet politely ‘fired the customer’. Interesting approach!

Let’s get Social

The blog post noted above with the CEO firing the customer was originally posted in July of 2006. This was just around the time when Twitter was coming into existence. I make note of these two, seemingly unrelated items, only to point out that had this happened a few months later, this may have been a riskier move. It’s not that social media wasn’t in play in 2006, because it was. Facebook had launched a couple of years prior, however; at this point in time people were still mostly sharing pictures of their cats and brands were still in the very initial stages of figuring out if they needed to care about this whole social media thing. Things are different now (though many would argue that there is still a lot of cat picture share going on AND brands are still figuring out social media). This leads us into the next topic of the book that I found to be quite interesting: social media.

You can close your eyes and pretend it doesn’t exist or you can get on board. As Jaffe discusses, and makes you painfully aware through some great “good examples” (e.g. Obama’s presidential campaign) as well as some great “bad examples” (e.g. Motrin’s Babywearing debacle), social media is no longer simply an optional component of your marketing strategy. In fact, it goes further than marketing – or at least it should – social media can be a customer service tool and even a revenue generator. Since the advent of Twitter, the communication between companies and consumers is 2-way; it’s a dialogue (the ‘D’ from Jaffe’s revised marketing funnel acronym). It opens – and significantly speeds up – the lines of the communications between companies and customers. It also provides the customer with a captive audience to talk about your brand. If you do it right, you can leverage this channel as opposed to fearing it (which might be your first inclination). It won’t always be a happy story. Odds are you will take your lumps. If you don’t get it right, your customers will let you – and their legions of followers (and their follower’s followers and on and on) know about it. The key is to be in the game and listening.

Similarly, being on top of social media allows you to also provide your happy customers with an equal opportunity to spread the word, as Jaffe discussed in various areas of the book including the “Transforming Mouths into Megaphones” chapter.

Technology as a Game Changer

Similar to the social media phenomenon, technology can be an asset or a liability; it just depends on your view point as well as how you execute your strategy based on how you’ve opted to categorize it. In fact, just having a strategy is a good start. Jaffe goes to the commonly used ATM example for how technology has made our lives easier; by making a service that was once only available during “banker’s hours”, available 24/7. The advent of technology in this example has allowed banks to automate a once manual, human-performed service, to add value for their customers. The automation of processes is one way that technology can be used, but it shouldn’t be the only way. Organizations that ‘get it’ are the ones that use technology more intelligently, figuring out to what degree technology should be used  since just because you can do something, doesn’t mean you necessarily should. Organizations need to ensure that they’re taking a holistic view of their delivery and customer service strategies – a complete ‘customer experience’ approach – and understand that while an automated process may save you money in the short term, in the longer term it may not be the best approach.

At one point during the technology discussion, Jaffe takes the readers back to elementary school math class by using an analogy with fractions where he uses numerators and denominators as factors for the degree to which organizations choose to deploy technology in their businesses. He makes the point that smart companies think of technology not simply as a cost centre, but a way to ‘change the game’ and provides some good examples of companies that are doing just that. He notes how Apple, a company that does both technology and marketing  very well, put real people in their ‘Genius Bars’ at their Apple Stores and this is a strategy that is really working for them. He also notes IBM, and how they get it right by providing a multitude of ways for their customers to get in touch with them. When reading these sections it struck me as interesting that how something so seemingly simple ends up being considered as something so innovative.

Conclusion

‘Flip the Funnel’ was an interesting read and a welcomed change from another MBA text book. It made me think and entertained me in the process. There are many good points that I will consider and recommend for use in my current organization and further into my career.

While I think it is unlikely that too many organizations will abandon many of the traditional, tried and true, marketing strategies of old, there are many concepts in this book that are hard to argue with, including but not limited to the ones covered in this paper that included ‘retention over acquisition’, a focus on employees, embracing social media and understanding the right mix and use of technology.

References

Flip the Funnel, by Joseph Jaffe

http://positivesharing.com/2006/07/why-the-customer-is-always-right-results-in-bad-customer-service/

http://www.ericbowe.com/2010/03/making-the-purchase-funnel-fixation-personal/

http://www.free-power-point-templates.com/articles/drawing-a-funnel-diagram-in-powerpoint/

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Flip the Funnel

flip the funnel

Here is a book that I’m reading as part of my latest MBA course, this one on the topic of Business to Business (B2B) Marketing. I’m only a couple of chapters in but pretty impressed with what I’m seeing so far – and I don’t impress easily.

Basically, as you’ve probably guessed from the title, it’s taking some of the tried and true pillars of marketing and turning them upside down, literally. The author is making a case for how we’d be better off taking the typical marketing ‘funnel’ – where the a large number of leads that we’ve invested in advertising to eventually give way to hopefully at least a few conversions at the narrow end of the funnel – and doing essentially the reverse. His argument is based around how our efforts – and investments of money and time – should be focused more on retention than acquisition. Hmm. Ok, I’m listening. Go on.

He asserts that by taking this tact – investing more on retention than acquisition – we can effectively think of the sale – formerly the optimal end state – as the beginning to what will ideally be a long and meaningful relationship with said customer. I know that all sounds a bit fluffy and pie-in-the-sky, but he’s making some good points so far so I’m going to stick with him to see where it leads (plus, it’s a required reading for a paper I’ll be writing later in the course so I’m not sure I really have a choice anyway)!

Stay tuned for more updates on this book as well as my insights, thoughts and maybe even the odd limerick or haiku on the topic B2B marketing over the next couple of months.

 

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Rework

rework

I picked up a couple of books the other day and this was one of them. Its authors, Jason Fried and David Heinemeier Hansson are the founders of a company called 37 signals. These guys are perhaps best known for their immensely popular web based Project Management tool, Basecamp. I’m only about 40 pages into the book so far but I felt like a quick post about it was in order.

It’s Fantastic!

Of the few topics they’ve touched on so far, it’s almost as though they’ve been able to channel some of my own thoughts. Topics like ‘Planning is guessing’, notes how plans are really, as the title denotes, just a series of guesses – strategic guesses, financial guesses etc. This isn’t to say that you shouldn’t plan. You should. However, your plans should be flexible enough to allow you to embrace current opportunities and allow you to pivot if and when a change may be needed.

They also touch on topics such as ‘growth’ in a section titled, ‘Why grow?’, where they make a case – citing their own experience at 37 signals – where sometimes a company’s ‘perfect size’ might not be big number and why growing to gargantuan proportions is often the default goal of many companies, and how this approach is often at the company’s own peril, or at least at the peril of their employees and culture.

Another interesting topic is something they refer to as ‘Workaholism’, how throwing sheer hours at problems, rather than applying innovative thinking to find efficiencies to get the work done smarter is too often the approach; and how this approach is not only accepted, its often commended and even revered.

Anyway, great stuff so far. I’m looking forward to checking out the rest of it, at which point I will likely create a follow up post on how it turned out.

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Filed under Books, Business, Management