Tag Archives: Strategic management

May 18, 2015 · 10:05 am

Predicting The Unpredictable

You might be starting your work week pondering what new opportunities will present themselves. Then again, you might just as likely be sitting at your desk dreading those very same opportunities. For many folks, seeing and being ready for what’s just over the horizon is absolutely the hardest, most gut-wrenching part of their jobs. It certainly was for me and remains so as I work with clients on their behalf.

Part of what we probably ought to be doing is not thinking so much about what the next hot new platform is going to be and spending a lot more time on controlling the things we can.  Your immediate response might be “sure, all two of them” but there actually is quite a lot which can help mitigate the unpredictability of business these days. All we’re really trying to do is to change “predict” to “anticipate.”

We can anticipate a good customer’s birthday (assuming we’ve taken the time to gather that data) just as easily as we can anticipate them appearing in our place of business based on past behavior.  We can use that knowledge to send them a coupon or tweet birthday wishes to them.  I’m still surprised how few businesses listen to all of the social streams and attempt to cull knowledge from what they’re hearing.  The old-school megaphone mentality is still pervasive.  Most of us in marketing need to listen more, speak less, and react more quickly to what we’re hearing.  This isn’t so much predicting as it is reacting but unless you’ve taken the time to set up the processes and people required to be proactive (thereby predicting the need!), you’ll fail.

Here is my prediction.  The pace of change is going to continue to accelerate.  We see disruption in once unthinkable ways (the impending changes in the TV landscape, for one and the huge shift to mobile from the desktop for another).  Many of us will have meetings about the future and write “long-range” plans as we do our budgets.  Much of that is unnecessary.  Business has become more like driving a foggy road – you can only see so far out.    Pay attention to what’s visible with your past experience telling you what’s still hidden in the fog.  it will become clear eventually as long as you stay on the road.

 

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May 8, 2015 · 10:03 am

Coffee, Burned

Foodie Friday has come around again and this week it brings us coffee. The folks at Keurig manufacture coffee makers and the pods that hold the coffee itself. They had an earnings call the other day and it brought out some very valuable lessons for all of us. Keurig’s financial results were not good and their stock has been hammered subsequent to the announcement. That’s not so instructive but the reasons why certainly are.

You might have one of these machines. If you do, you’re aware that the pods are both very expensive and not particularly earth-friendly. As what I consider to be a consumer-friendly nod to that, Keurig also makes a little reusable pod that you can fill with your favorite coffee. It’s less expensive, I find it makes better coffee, and the coffee grounds are the only trash. Of course if you want to go the single use pod route, there are lots of sources for them other than the “official” Keurig partners.

Keurig introduced its new flagship machine recently and there were some changes. First, the machine would only accept “official” Keurig pods – sort of Coffee Rights Management. The interwebs quickly figured out how to bypass this but the fact that it was deployed at all demonstrated Keurig’s thinking. Next, the reusable pod doesn’t fit in the new machine nor has Keurig made one. You MUST buy disposable pods.

Why would Keurig do this? Simple – the profit margin on the pods is huge. The results? Sales of coffee machines and accessories are down 23% in the last year and Keurig was forced to lower its 2015 sales forecast. Oops.

Of course, it’s not Keurig’s fault, at least not in their minds. “Some of this was due to consumer confusion around pod compatibility.” That’s the CEO on the earnings call.  OK, we’re dumb, but at least you admit you were too:

…we took the My K-cup away and quite honestly we’re wrong. We missed, we didn’t – we underestimated, it’s the easiest way to say, we underestimated the passion that consumer had for this. And when we did it, and we realized it, we’re bringing it back because it was we missed it.

The lessons are pretty apparent.  Don’t build your business around a plan that conflicts with your customers.  If they like a product, make it better or less expensive, or both.  Don’t take it away because you think it might improve your profits.  When something you’ve done isn’t accepted or working the way you planned, alluding to “consumer confusion” without admitting you caused it is narcissistic.  Frankly, for many people I know their morning K-Cup is not consumed with a desire for great coffee – it’s fast, it’s convenient, and they get over their guilt about polluting by the time they race out the door.  Getting those people angry by taking away choice in what they put into the machine isn’t growing the business – quite the opposite.

No business can overcome crappy product reviews (the new machine failed miserably) and consumer resentment over less choice.  Keurig’s results demonstrate that very well.  Any questions?

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May 6, 2015 · 10:39 am

Reading The Words, Missing The Meaning

Let’s start today thinking about a language you don’t speak. It’s very possible, assuming that it’s written using the Latin alphabet, that you could pick up a book and begin to read out loud in that strange tongue. Of course, you’d have absolutely no idea what you’re reading. You can say the words on the page but you can’t explain what they mean.

Keep that image in mind as we change the topic to data. I can’t tell you how many times I’ve sat with clients and gone through their analytics reports with them and the aforementioned image has popped into my head. I don’t mean that to be derogatory to the people who pay me, nor does it mean that I’m fluent in analytics and they’re not. It raises a business point that is something we all need to keep in the back of our minds as data becomes more integral with everything we do.

Here is a small example. Most of us see “direct” traffic in our analytics reports. In theory, those visitors typed in the site URL or clicked on a bookmark they set on a previous visit. That’s a partial truth. The reality is whenever a referrer is not passed, the traffic is treated as direct traffic by Google. Think that’s an unimportant bit of information? How about in the context of mobile traffic not passing referrers at all (and I bet mobile is a big and growing part of your site traffic)? The point is that it requires both the knowledge that the “direct” bucket isn’t an absolute as well as some further analysis to figure out the truth.

I’ve seen the same sort of issues crop up in attribution modeling (what source was responsible for the sale).  The groundwork for proper attribution hasn’t been laid and so the reports aren’t accurate.  Sure, any analyst can puke out the data in front of them but the good ones – the ones who can interpret the words and not just say them – will tell you why there is a problem and fix all the links you’re putting out there to accurately reflect what’s going on.

“Keith,” you say, “I’m not a data scientist.”  Neither am I.  What I can do – and you probably can too – is to ask questions, especially when someone tells you they are dead certain about what the data is saying.  Be sure they’re not just reading aloud in a language they don’t understand.  Get beyond reporting and into meaning.  It changes everything.  Agreed?

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