Revolution after the crisis

Roel Lakmaker
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web 2.0, co-creation, crowd sourcing, social media, social crm

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• 2011-07-05

  Value co-creation canvas

  Herewith an attempt to fill out the value co-creation canvas as developed by Wim Rampen. Please do not hesitate to react this will be highly appreciated.

  Some background; the initiative focus on health care. The promise is a free instant diagnostic service. Based on patient symptoms and tests a second opinion by means of a set of relevant diagnoses are generated through a web site. The crowd sourcing initiative aims to improve and expand the quality of the results. The content is broad and deep and requires very specific knowledge on fragments (professional disciplines) of the content. Results could vary locally due to specific circumstances (flue in Europe will have different results over flue in e.g. Africa).

  The to develop crowd sourcing community offers professionals to share opinions and discuss local prevalence’s on which the validation of the presented diagnoses are based. The focus is to create a database which works worldwide. Also the discussed information will be set up like “wiki” the gathered information will be available free for third party references or use. Companies business model is a freemium model, website for individual use will always be free. An internal integrated Medical Center version will be offered at subscription base/or usage base.

   

  
  

• 2011-05-04

  The buying process for both consumers and professionals is changing due to “googling”

  The buying process is rapidly changing. Consumers use the internet by googling for products and services. Not only the best deal, but even more importantly the reputation of the providers of goods and services are googled. Based on this evaluation process the deal will be made on line or the consumer will contact the company and have a well-informed conversation.

  This change in behavior effects large businesses such as newspapers and travel agencies. Due to the internet capabilities distribution changes as well. A real challenge for producers and distributers of e.g. music, others such as Apple are taking over the business.

  Much to my surprise this phenomenon of changing consumer buying behavior is something ignored by b2b CEO’s. They prefer pushing product and investing in more sales power.  If consumers buying process change, it will also count for professional buyers. They are consumers too!

  If the buying behavior is changing, so should companies and therefor adapt to these changes. Even better this change of behavior is offering tremendous new opportunities to create more wealth.

  So instead of you finding customers, customers should stumble upon you.  This gives a whole new meaning to pushing products and services. Companies have to think in niches, understand where there customers might “hang out”. Understanding how customers perceive problems and use this to google. Google juice (Jeff Jarvis) should be created. This can only be done if companies are out there and share their vision and knowledge, communicate openly with stakeholders, involve in communities or even start collaborating. Buying Google adwords and online advertising alone will have little effect if the reputation part is not treated well.

  The eventual “lead” is the start of a conversation. This will only take place if buyers evaluate your offering and reputation as positive.

• 2011-02-03

  Social media supports radical management

  Social media strategies if implemented and used to delight customers will allow companies to be more successful. If a social media strategy is not supported by radical changes in management, social media will only be a fad.

  What is missing? Traditional management focuses on maximizing shareholder value. The focus will be on producing and delivering products and services at low as possible costs. This results in average products and services at low prices. We also have to live with the fact that in case something goes wrong with the delivery of a product or service we are not treated as customers anymore. Once the payment is done; waiting lines, rigid procedures, business hour service are what you have to deal with. No wonder brand loyalty is decreased to minimum over the last decade or so.

  Companies understanding the importance of delighting customer will have loyal customers. These companies will benefit tremendous by word of mouth. Customer retention and referrals outperform expensive marketing campaigns in terms of effect and costs.

  Steve Denning wrote a terrific book about radical management. Below Steve Dennings describes the differences between traditional and radical management.

  

  Please see what traditional management does with the knowledge worker. Companies’ following trends call’s themselves transparent, customer focused, innovative and what more. The metrics described above under traditional management proves why traditional companies are incapable of keeping these trendy promises.

  Radical management is all about delighting customers. Enabling employees to care about the customer by freeing them from silo thinking and acting. Employees will become more responsible and rewarded and therefor much more productive.

  Social media enables companies to be transparent and if done right to create fame. Social media maximizes the word of mouth. But if management is kept unchanged social media will have limited impact. Customers will consider the social media attempts as promotion and sources of useless information.

  Metaphorical speaking, CRM is always meant to be the solution to realize customer focus, to centralize the customer. The implementation of CRM is mostly focused on the sales process; “getting the customer in”. As a result we as customers receive personalized mailings and offerings. In the customer service process it is often painful to experience how unimportant we seem to be for companies from which we buy products and services. The CRM systems contain hardly valuable information. Due to traditional management CRM is in no way capable to create customer value or putting the customer first. If it would be implemented to delight the customer, CRM would support the service processes even enabling companies to act proactive instead of reactive.

  My best bet is that share holder value as result of the changed focus will increase dramatically. But the trip will not be easy.

• 2010-12-23

  Snow is a force majeure, bad luck customer! A painful Lufthansa case

  Friday 17 December my family and I travelled in the early morning to Amsterdam Airport for a sunny trip to Florida. Saturday 18 December we were back again in Amsterdam.

  Due to a problem with the fuel provider of Lufthansa we boarded well after scheduled departure time. In the meantime it snowed through Europa resulting in the closing of several airports. The different circumstances led to missing our connection to Miami.

  Snow at itself belongs to the winter season, right? Snow apparently is considered a force majeure for Airlines. After arriving at Munich airport our connecting flight to Miami already left. Here the real nightmare started and made clear how sick our system really is. There was only a hand full of Lufthansa employees working under high pressure to help customers. The employees involved were totally committed but could only serve 2-3 customer per hour. It looked a lot like carrying water to the sea; waiting lines of well over six hours were common. 

  In our case after queuing for five and halve hours we found out that the only option was to fly back to Amsterdam that night. Later that night we found out this flight being cancelled. The Lufthansa service was to go back in line, which was only increased in the meantime! Instead we booked a hotel ourselves and went back the next morning facing exactly the same situation. Later we found out that this was not an incident. The total chaos was already going on for four days in a row!

  What is going on here? Lufthansa top management made two major mistakes:
  - Paying customers are not seen as customers but as costs
  - Refrain support to their own employees, leaving them down

  What do travellers expect in these circumstances? Information, even if it is bad news. We don’t like it, but understand that the only option is the next day flight at xx:yy hour. We don’t want to wait hours (with two children!) to get proper information. The solution to the problem is easy. Close down the Lufthansa offices and send sufficient employees to the airport supporting Lufthansa customers. Two reasons this is impossible in the nowadays organization structure and culture. Remember how companies are organized directly stems from Ford’s revolution more than 100 years ago. Ford offered products to the crowd which was before than only available to the rich and famous. He could do this by mass production, leaving the individual customer out of the process. Now more than an age later this is still at place with these differences that the customer is changed and the companies are professionals on limiting cost and strive for shareholder worth. You can wrench a wet towel but only to the extent there is still water in it.

  Employees are also changed. They are consumers as well. Mass production meant also a strict organization, a top down approach leaving no room for initiatives. So the employees become more and more apparatchik. Strict employee’s conditions and regulations marks the boundaries of work responsibilities. So probably even if Lufthansa would close their offices the employees would be bound by there working conditions.

  How do customers react on bad service? In Frankfurt Airport it even led to small riots inclusive of serious police interventions. In the Netherlands Youp van ‘t Hek, a comedian, started a buzz against the lousy service of customers services especially at call centers. The amount of buzz he created – with effective use of social media - led to government intentions to make rules to protect the customer. After diving in the different rules with respect to the airline industry I experienced that due to Government laws the customers are protected to a certain degree. Hence companies themselves need to be forced by Government to offer proper service, service where we all paid for!

  I think Internet technology such as social media can do the same for companies as the assembly line did for Ford. First companies must truly believe putting the customer central is essential to bring prosperity. Companies saying they are customer focused are feed for social media. The nowadays organization structure won’t allow putting the customer central. It is impossible, shareholders value is key. As soon as the customer is in, all extra efforts are costs. The number 1 rule in business, the costs are always too high.

  Internet technology makes it possible to change companies in a revolutionary way.
  In the case of Lufthansa. In the system our information was available, travelling with two children, which connections et cetera.  The system itself could make new proposals sending it to me by text, email or webapp. If working together with hotels, transportation and entertainment industry the app could have offered me a hotel, the quickest connection to the hotel and even options to spend time with the children. If more personal information was made available they could have found out that we did not have any warm clothes. Based on this information they could offer alternative options for entertainment. This is only possible if the customer is centralized, information is shared and companies are willing to work together to provide real satisfying customer service.

• 2010-10-08

  Paradigm shifts needed to understand the power of social media

  As explained in my last post one of my tasks is to support a company in developing a social media strategy. The first introductions to management were very interesting. They all have a strong feeling social media is important and will play a key role in the near future.

  During the discussions I experienced the focus on Social media as using tools. “We need to be on Twitter, Linkedin, Hyves (Dutch Facebook) to be in contact with our clients”. The company is incredibly creative and sees new opportunities to lurk contacts from these channels for marketing purposes. And also use these new channels to broadcast company news. 

  The company’s focus markets could be described as rather traditional with only few stakeholders to be expected social active. The combination of strong traditional marketing focus and little expectations of social media engagement of stakeholders make the job really challenging.

  Introducing a social media strategy will first need a common understanding how social media is affecting the way the company will do business. The first step is to mirror how they use Internet at home and how this will apply to their business relations. An example I use a lot is asking them how they book their holidays, they will look for best prices and reviews. The real question is the likelihood of this behavior to happen in their business relations?

  It is important to let them experience what’s happening. So now the focus is to get commitment to monitor social media activity themselves. The suggestion is to start with visiting the linkedin profiles of their clients and to understand which groups they attend. The commitment should be to spend a couple of hours per week for the next month. Based on their experiences I expect either their support to start defining a social CRM strategy or good arguments why this is not yet of their interest.

  During the first explorations they did run into a customer question in their field. The - to be expected -first reaction was to promote their products and services and try to contact the “lead”. The real change needed was to honestly provide their expert knowledge while staying away from providing their solution.

  Other social media areas to discover are collaboration and crowdsourcing for their products and services innovations. Two goals could be defined; the first goal is to understand the common needs for product improvement by sharing experiences between users. The second goal is to build a reputation by sharing this community with stakeholders and potential clients. With respect to the latter mentioned goal the company has to let go their fear competitors could also use this information in their benefit.

  My evaluation so far is that a social media strategy requires some radical changes, almost paradigm shifts in behavior and expectations.