Welcome to the Future of Customer Experience Marketing

Old marketing habits die hard

by Dale Wolf, Cincom Systems at Expert Access

Looking back from the future we can see that as the century changed, marketing went from intrusive to helpful.

We left the safe cove of mass media. Our conversations with customers became more relevant at a personal, one-to-one level. We stopped communicating with people who had no interest in our offerings.

We learned how to locate and win over prospects with more personalized and helpful service, reliability and quality.

We discovered that giving up control of the selling process and shifting to a focus on making customers happier actually improved sales results.

Both the marketer and the customer profited. Marketing became more accountable for results.

The line was drawn

Marketers will mark 1995 as the point in history when a line was drawn between traditional marketing and data-driven marketing. This was the point in time when the rise of consumer power, a convergence of technology, and the potential for longitudinal customer relationships mandated we change how we converse with customers.

Two innovations in 1995 changed the customer conversation: Amazon's personalized recommendation engine and eBay's online auction engine. Together, they launched e-commerce in new directions and began a revolution in marketing that has reached far beyond the World Wide Web.

Just three years later, two Stanford programmers sent out a third tsunami when they developed an algorithm that echoed Amazon's automated personalized recommendation engine. They founded Google with an engineering concept that treated website links as recommendations, and from that foundation came the world's most effective search engine.

When was the last time you walked into a store where the clerk greeted you at the door with an item selected just for you? In the world of online commerce, Amazon and eBay can accomplish the seemingly impossible. They have built stores for every customer, picking perfect items from a universe of millions, all in the blink of an eye, thousands of times each second. In other sectors like package shipping, pizza delivery, discount airlines, electronics and low cost retail, companies such as UPS, Dominos, Southwest, Best Buy and Wal-Mart have changed customer expectations that every other company must meet just to be in the game.

The 4 Ps yield to a new kind of conversation

Customers already are demanding that we change the way we talk with them -- more personalized, more relevant, less interruptive. It will take time at many corporations because a generation of marketers who grew up practicing the 4Ps is still at the helm. They are only begrudgingly giving up on traditional mass marketing. This change will happen faster at companies led by marketers who see clearly into the future.

Few companies show sustained growth

A 1998 study by the Corporate Strategy Board examined 172 companies that were at one time in the Top 50 of Fortune 500 companies. Only five percent achieved sustained inflation-adjusted growth of more than six percent while 95 percent stalled. Of the companies whose growth had stalled, only four percent were able to successfully reignite their growth even to a rate of one percent above Gross National Product (GNP) growth. Once growth has stalled, it is nearly impossible to restart it. [1]

[1] The Innovation Solution. Clayton Christensen. Page 5

Four recently published studies indicate that roughly only one company in 10 succeeds at sustained growth:

1. Profit from the Core (Chris Zook and James Allen) only 13 percent of 1,854 companies achieved sustained growth.

2. Creative Destruction (Richard Foster and Sarah Kaplan) only 16 percent of 1,008 companies achieved sustained growth.

3. Good to Great (Jim Collins) only nine percent of 1,435 companies achieved sustained growth.

4. Stall Points (Corporate Strategy Board) only five percent of Fortune 50 companies achieved sustained growth.

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Dale Wolf began his career as a sports journalist, followed by several years as an advertising and promotion copywriter. Both account for the lively and engaging writing style found in his blogs. After several years running his own sales promotion agency serving Fortune 500 companies, Dale joined Cincom's marketing team as a brand marketing manager with responsibility for direct marketing best practices, campaign strategies and global website strategy. He is a recognized expert in customer-centric marketing, and a thought leader in customer experience management strategy.

After Difficult Year, IT Braces For Us Downturn

By Anil Penna, Bangalore, January 7, 2008
Mint

After weathering a tough 2007, India’s flagship IT companies face the spectre of the US economic slowing and squeezing profits as they start unveiling earnings this week, analysts say.

Software firms such as Tata Consultancy Services Ltd, Infosys Technologies Ltd and Wipro Ltd were last year roiled by the rupee’s steepest appreciation against the dollar in three decades, surging wages and real estate values and the end of a tax holiday.

Now come possible cutbacks in the information technology budgets of US clients preparing to tighten their belts as a housing slump, tighter credit and high energy costs take their toll on the world’s biggest economy.

“The negative view is that US corporate budget growth will slow and we won’t see as much demand for outsourcing and offshoring as we saw last year,” said Suveer Chainani, technology analyst at Macquarie Capital Securities in Mumbai.

“Most people’s perception is drastically negative.”

Clues to the extent of the fallout may surface when Bangalore-based Infosys kicks off the corporate earnings season on Friday by announcing its fiscal third quarter results.

Investors hammered the shares of IT companies last year as the bad news kept piling up. IT stocks trailed the benchmark Sensex by more than 40% in 2007 and no relief is seen by analysts in 2008.

“The rising risk of an IT spending slowdown raises the hurdles on a 12-month view and we remain underweight on Indian tech,” investment house CLSA said in a report.

“Barring periodic deviations, we see absolute long-term annual stock returns of 10-12%, down from the heady 30-40% of the past,” CLSA analysts Bhavtosh Vajpayee and Nimish Joshi said in the report.

Sentiment remains negative although IT firms have remained profitable. TCS, India’s biggest software services exporter, reported a second quarter net profit jump of nearly 23% to Rs 1,251 crore.

Infosys saw its profit in the quarter ended 30 September rise 18.4% to Rs 1,100 crore Wipro’s profit climbed 18% to Rs 8,23.7 crore.

The US is the biggest market for Indian software and service exports, which jumped 33% to $31.4 billion in the year ended March and are forecast by the industry grouping National Association of Software and Services Companies (Nasscom) to reach $60 billion by 2010.

Not Dead Yet...

New York: Doctors say they have never seen anything like it: A window washer who fell 47 stories from the roof of a Manhattan skyscraper is now awake, talking to his family and expected to walk again.

Alcides Moreno, 37, plummeted almost 500 feet in a December 7 scaffolding collapse that killed his brother.

Somehow, Moreno lived, and doctors at New York-Presbyterian Hospital/Weill Cornell Medical Center announced Thursday that his recovery has been astonishing.

He has movement in all his limbs. He is breathing on his own. And on Christmas Day, he opened his mouth and spoke for the first time since the accident.

His wife, Rosario Moreno, cried as she thanked the doctors and nurses who kept him alive.

"Thank God for the miracle that we had," she said. "He keeps telling me that it just wasn't his time."

Dr Herbert Pardes, the hospital's president, described Moreno's condition when he arrived for treatment as "a complete disaster."

Both legs and his right arm and wrist were broken in several places. He had severe injuries to his chest, his abdomen and his spinal column. His brain was bleeding. Everything was bleeding, it seemed.

In those first critical hours, doctors pumped 24 units of donated blood into his body -- about twice his entire blood volume.

They gave him plasma and platelets and a drug to stimulate clotting and stop the hemorrhaging. They inserted a catheter into his brain to reduce swelling and cut open his abdomen to relieve pressure on his organs.

Moreno was at the edge of consciousness when he was brought in. Doctors sedated him, performed a tracheotomy and put him on a ventilator.

His condition was so unstable, doctors worried that even a mild jostle might kill him, so they performed his first surgery without moving him to an operating room.

Nine orthopedic operations followed to piece together his broken body.

Yet, even when things were at their worst, the hospital's staff marveled at his luck.

Incredibly, Moreno's head injuries were relatively minor for a fall victim. Neurosurgeon John Boockvar said the window washer also managed to avoid a paralyzing spinal cord injury, even though he suffered a shattered vertebra.

"If you are a believer in miracles, this would be one," said the hospital's chief of surgery, Dr Philip Barie.

New York-Presbyterian has treated people who have tumbled from great heights before, including a patient who survived a 19-story fall, but most of those tales end sadly.

The death rate from even a three-story fall is about 50 per cent, Barie said. People who fall more than 10 stories almost never survive.

"Forty-seven floors is virtually beyond belief," Pardes said.

Science may never be able to explain what protected Moreno when the platform he and his brother were using atop an Upper East Side apartment tower broke free and fell to the ground.

Edgar Moreno, 30, of Linden New Jersey, died instantly. He was buried in Ecuador, where the brothers are from.

Alcides Moreno, whom his wife described as strong and athletic, may have clung to his scaffolding platform as it dropped. It is possible that the metal platform offered him some protection, although doctors said they were unsure how.

An investigation into the cause of the accident continues.

Rosario Moreno said that her husband remembers little of the fall but that he didn't need to be told his brother had died.

The injured window washer spent about three weeks on a ventilator, unable to speak, and initially his only means of communication was by touch.

"He wanted to touch my face, touch my hair," Rosario Moreno said.

She would take his hand and hold it to her skin. Then, one day, he reached out and touched one of the nurses.

Rosario Moreno said that when she heard about it, she jokingly lectured her husband to keep his hands to himself. He answered in English, "What did I do?"

"It stunned me," she said, "because I didn't know he could speak."

There is still a rough road ahead for the tough New Jersey man, a father of three children, ages 14, 8 and 6.

He was scheduled to undergo another spinal surgery on Friday, and he will need another operation to reconstruct his abdominal wall. There is a chance he could develop complications, even life-threatening ones, during the months ahead.

Moreno will remain in the hospital for at least a few more weeks, doctors said. After that, he will need extensive physical rehabilitation. It may be another year before doctors know how much he will improve.

The medical staff was guarded Thursday about his prospects for returning to a normal life. Doctors said they believe he will walk, but they also suggested that some of his injuries are likely to be lifelong.

"We're optimistic for a very substantial recovery, eventually," Barie said

Rosario Moreno said she knows this much for sure: His days as a window washer are over. "I told him, 'You're not going back to work there,"' she said.

Billion dollar IT outsourcing deals on downswing

By PP Thimmaya, TNN - Economic Times

BANGALORE: The large IT outsourcing deals, running into billions of dollars, have been on a decline since last two years and it’s quite unlikely that there could be any reversal this year.

According to Everest Research Institute, fewer IT outsourcing (ITO) mega deals will occur in 2008. A decline in the number and size of mega deals, defined as contracts of $1 billion or more in total contract value, will instead result in a focus on existing mega deal renewals and an increase in price competition by suppliers, according to a study by the institute.

At the same time, multi-sourcing engagements are increasingly becoming the preferred route for outsourcing. Analysts said that this model has evolved over time and a single buyer is increasingly comfortable in working with multiple suppliers of IT services.

It has been a trend in the market place for quite sometime now with large IT deals being split into a multi-sourcing contracts with more number of IT services providers being part of it. “A decline in mega-deals is likely irreversible any time soon as few Fortune 100 companies remain that could sign new mega contracts,” says IT outsourcing research firm Everest Ross vice-president Tisnovsky.

In the recent past, there have been very few mega outsourcing deals which have come in the way of Indian players. TCS recently signed up a $1.2 billion outsourcing deal with Nielsen spread over 10 years. ABN AMRO awarded its $2.2 billion IT outsourcing deal in 2005, which saw three Indian players being part of the business, Infosys, TCS and Patni Computer.

Tholons CEO Avinash Vashistha felt that mega deals will continue to decrease even in the current year as there are lot of issues with managing such large deals. From a buyer’s point of view, it becomes a truly difficult task to globalise such outsourcing agreements while the suppliers are constrained in providing services from diverse locations.

“Next year, we expect buyers will gain pricing benefits due to the pressure suppliers will have to grow signings and contend with increased competition for contract renewals. In the large enterprise market segment, comprising of Fortune 1000 companies, we also foresee long-term price decline in the infrastructure outsourcing market due to an influx of new suppliers and increased competition where the most opportunities for ITO exist,” Mr Tisnovsky said.

INTERNET TELEPHONY LOGS 15 PERCENT JUMP IN JULY-SEPTEMBER '07

By Deepshikha Monga & Joji Thomas Philip, New Delhi
The Economic Times

 

Internet telephony is gaining ground in India, as prices head southwards and leading Internet service providers (ISPs) expand their networks. According to the latest data by telecom regulator Trai, the Internet telephony market grew 15 percent in the quarter-ended September 2007. The quarter saw total minutes of usage grow to 129.43 million, as compared to 112.26 million minutes in the April-June 2007 quarter.

However, these are figures that don’t take into account players that operate without a licence in India. “The total usage could easily be 250 million minutes as half the market is cornered by grey market. Since such players don’t have to pay the 6 percent revenue share and 12 percent service tax, their services are cheaper than those by registered ISPs and hence, they have much more takers,” says ISP Association of India (ISPAI) president Rajesh Charia.

According to Trai data, BSNL has about 45.86 percent market share among ISPs while MTNL is ranked second with a 18.78 percent share. BSNL is in the process of finalising the companies that will provide voice over Internet protocol (VoIP) over its platform. “Internet telephony growth will be driven by reduced prices and better quality of services. BSNL is very aggressive on the broadband front, with a target of 20 million connections by 2010, and is now offering high-quality, video-enabled broadband,” says Aksh Optifibre managing director KS Choudhari.

The tariffs on services provided by MTNL and those in the offing by BSNL are as low as 10 paise per minute for PC-to-PC calls, while a call made from a PC to a landline or mobile abroad would cost a little over Re 1 per minute.

Trai, in an earlier report, had pointed out that “the quality of service offered by ISPs has improved and as a result, more minutes are likely to flow through the ISP network in future”. Based on the growth so far, Internet telephony could see usage in the range of 500-600 million minutes in 2007-08, a growth of 250-300 percent. As per Trai’s estimates, international long-distance operators (ILDOs) will account for about 3,478 million minutes of outgoing calls in 2006-07. That means Internet telephony would be equivalent to 14.3-17.2 percent of ILDO.

 

FIIs ALLOWED TO SHORT-SELL, LEND AND BORROW SHARES, WITH RIDERS

By Anup Roy, Mumbai
Mint Business Standard The Telegraph The Economic Times

The Reserve Bank of India (RBI) has signed off on allowing foreign institutional investors (FIIs), registered with the Securities and Exchange Board of India (Sebi), to short-sell, lend and borrow Indian shares, albeit with certain conditions.

Investors use short-selling to profit from the falling price of a stock. For example, if a particular stock is overvalued and an investor expects the stock to fall after sometime, he might consider selling the shares now, even if he doesn’t own any stock. In doing so, he has to cover his position, or buy the number of shares that he sold short when the price does fall. Effectively, he is selling a stock in a high-price scenario and buying it back in a low-price scenario, thus making a profit.

RBI’s latest move comes after consultation with the government and the capital market regulator, Sebi, which, on 20 December, allowed all classes of investors to short-sell shares. Earlier, only retail investors were allowed to sell short.

While allowing FIIs to short-sell, borrow and lend equity shares, RBI has put in certain strict conditions too. In a notification posted on its website, the banking regulator said such FII participation will be subject to the current foreign direct investment policy and short-selling by FIIs shall not be permitted for equity shares that are under the banned or caution list of the bank.

Borrowing of equity shares by FIIs shall only be for the purpose of delivery into short sales, the RBI said. It also said that the margin, or collateral, should be maintained by FIIs only in cash. No interest is allowed on such margin and collateral. The RBI also instructed designated custodian banks to separately report all transactions pertaining to short-selling, lending or borrowing of shares by FIIs in their daily reporting.

Some experts said allowing short-selling will not have a significant impact on the overall market. “This has got no major implication, except in increasing the depth of the market. Earlier also, firms could borrow stocks overseas and sell it here. A certain segment of the investors are thinking that the market is overvalued and they might welcome the decision. But, otherwise, no major impact,” says A. Balasubramanian, chief investment officer of Birla Sun Life AMC Ltd.

A senior executive with an FII, who didn’t want to be identified, predicts short-selling will not pick up in India, as there are not enough large sellers of stocks. “I don’t think it will pick up much in India. You need to have a large stockholder, like the Life Insurance Corp. of India, who is willing to sell when you cover your position. It’s very difficult to cover your position unless you have a huge stock-bank willing to sell,” he said.

Indian markets witnessed more than $17 billion of net FII flow into the country in 2007. Almost half of it came after the US Federal Reserve cut its interest rate by 50 basis point to 4.75% in September. Since then, Fed has brought down its policy rate to 4.25%.

FII investments in 2007 touched a record $17.98 billion through mid-October, before Sebi’s curbs on participatory notes, an instrument through which FIIs used to invest in India largely anonymously.

FIIs sold more than $2.14 billion worth of Indian stocks until the end of November. But, the trend reversed and in December, FII flows slowed considerably. However, 2007 ended with the highest ever net FII investment in Indian stocks since the markets were opened to foreign investments. The previous best was $10.7 billion in 2005.

Tele-marketing: Rules of the game change

David Foulcher talks about the emerging trends in telemarketing and how vendors are leveraging technology to lure prospective customers.

Over 230 million telecom subscribers in India now have the option of opting out of tele-marketing calls and apparently more than six million, predominantly urban users, have already taken up the offer.

The new directive that allows subscribers to list their landline and mobile numbers under the National Do Not Call (NDNC) database and opt out of receiving any Unsolicited Commercial Communications (UCC), including SMS (short messaging service) has found many takers.
The Telecom Regulatory Authority of India (TRAI) has disclosed that 14,750 telemarketers having around 4,50,000 telephone lines have put in their applications for registering with the Government to comply with the National Do-Not-Call (NDNC) Registry guidelines.
Registered tele-marketers not complying will face fines and even severe punishments.
This has changed how the $240 million tele-marketing industry that generates more than 10 billion calls a year will need to engage the customer.

Buying lists from service providers or anyone else will not have the same charm. No longer can a caller just try his luck with a random number hoping it would be his lucky break. It’s a totally different ballgame that promises to separate the men from the boys.

The following possibilities may emerge:

Use of contextual marketing and sophisticated modeling
Technology is likely to play a very important role in understanding whom to target at what time. Customer databases will be constantly mined and tracked to figure this out. For e.g. If a bank is able to monitor a salary hike at the beginning of the financial year, it will be able to target it new mutual fund increasing the odds of sale significantly. If a retailer gauges the monthly purchase pattern of a loyalty customer, he could use that information to specifically market substitute high-margin products. If a marketer can mine credit card customer data and on realizing that the customer spends more than 80% on restaurants in a particular area could specifically market another restaurant in the vicinity. A telecom company could even profile its customers based on their caller tunes and could target specific messages to them—lets say even marketing a rock show.

This will push organizations to cross-sell, up-sell and those that make cold calls to consumers to resort to contextual marketing and sophisticated modeling and analytical tools to give the consumer the right product at the right time. Those that are in an enviable position with this data are banks, credit card companies, retailers and telecom companies.

Evolution of the tele-marketer
Say goodbye to the conventional tele-marketer that you knew. The tele-marketing agent will be compelled to take on the role of a more frequently engaging concerned service provider and not just a commission-driven aggressive (and sometimes insensitive) salesperson.
So now, many calls that will need to be initiated to the customer will now have to be a service call—i.e. the caller will need to update or discuss an issue that a customer is already facing. Only on the successful resolution of the same will the customer give him time to push the caller’s sales agenda further. This is significant as, especially in India, a prospect is hounded till he gives the tele-marketing organization business but the same organization becomes incommunicado when the customer has a service query. Ineffective automated channels, lengthy protocols and red-tape are deployed to discourage the consumer from following up. How long would a customer follow-up for

Rs. 50 incorrectly charged to his bank account or telephone bill? Fifty rupees for an individual are not worth the bother but multiply it with 200 million customers and one can appreciate the commercials involved.

Pay customers to receive your message
Another possibility is the emergence of services equivalent to Boxbe in the Internet world. Those are willing to receive tele-marketing message may actually get paid to do so. So if you are willing to receive a call, you may actually be able to subscribe to a service that gives you an alternate telephone number where people can reach you for the pure purpose of selling their wares. You will need to submit a detailed profile of yourself to the service provider. The service provider will, in turn, hand over your data (or at least the part you permit him to) to the seller. Since the seller is now paying to get you to hear, he will automatically attempt to sell you a relevant product as he is paying for every minute of your time. For the seller it would mean your undivided attention and you can raise some money for your local charity.

Temporary telephone numbers
On the flip side, tele-marketers may innovate to have calls emanating from outside India (or what might seem to be from outside India) thereby limiting the ability for such calls to be tracked. Additionally, again taking a parallel from the Internet, a service equivalent to Guerrilla mail or disposable/dynamic telephone numbers will be used to call the unsuspecting customer. With perpetually changing numbers this tele-marketer will get an advantage. While larger players may not attempt such stunts, as it would be detrimental to the brands in the long run, one can expect such attempts till such time the market matures.

There may be many more innovations to target the customer and get the sale done. Maybe tele-marketers are just about reeling from the shock right now. Let’s wait for them to catch their breath and see how they attempt to conquer unchartered territory.

The author is the Regional Director of Cincom India dfoulcher@cincom.com