Archive for October, 2010

A CAPTCHA A Day Keeps Customers Away

Sunday, October 31st, 2010

It wasn’t very long ago that I’d extolled the virtues of reCAPTCHAs and had introduced them in this blog to make it easy for people to leave behind comments without my getting hit by tons of spam. For the uninitiated, reCAPTCHAs originated from CAPTCHA, or Completely Automated Public Turing Test To Tell Computers and Humans Apart, and use graphical images that readers have to decipher in order to prove that they’re human – and not a computerized bot – before submitting forms and comments on websites and blogs.

rec01_300wHowever, I’ve recently been finding reCAPTCHAs to be quite complex. Fearing that they’d confuse readers wishing to leave comments, I recently replaced them with Disqus, a simpler yet more powerful blog commenting platform that does an equally good job at keeping me protected from spam.

It looks like I’m not alone.

According to a recent study reported in the New York Times, reCAPTCHAs are so confusing that about 25% of users simply fail in their attempts to solve them. For businesses that use reCAPTCHAs before permitting their website visitors to download white papers, register for webinars, and otherwise respond to their calls to action (CTAs), this results in a significant loss of prospective customers who are driven away by the complexity of reCAPTCHA. Lest you think that the 25% figure is exaggerated, just have a look at a couple of reCAPTCHAs that I came across recently, and you might start wondering how the remaining 75% do manage to crack them!

At the same time, reCAPTCHAs have proved to be very effective in keeping out spam since they can’t be cracked by computerized bots which are the source of most spam.

Does this mean that website abandonment caused by the complexity of reCAPTCHAs is to be considered a cost of doing business? Obviously not, since turning off prospects can never be an option for any business.

If that be the case, are there any alternatives by which marketers and website owners can make it easy for their website visitors to leave behind their comments and contact details, yet insulate themselves from spam? Yes, there are at least two other solutions I can think of to this end.

l01_100wOne is to continue to use graphical images but make them far simpler for humans to crack them. The graphical codes used by the leading online book rental present a good example. Although I’m not aware of the underlying technology used in this case, I’m sure that it’s as effective as reCAPTCHA in keeping out spam.

E01_150wThe other solution is to avoid images altogether and instead use AJAX-powered hosted forms that not only keep away spam but also collect contacts of their website visitors. The GTM360 website provides an example of this approach. By providing fluid in-page transitions, minimizing the number of keystrokes, and avoiding confusing CAPTCHA codes, this technology delivers a superior customer experience and persuades more website visitors to respond to CTAs. At the same time, by incorporating powerful validation and gatekeeping logic, it prevents computerized bots from dumping spam.

Although it’s a bit difficult and expensive for website owners to develop this functionality on their own, our EMAIL360 application provides a ready-made solution by using advanced widget technology. Marketers and website owners keen on transforming their websites into lead generation engines simply need to visit the  EMAIL360 website to enter a few basic details, and collect the widget code for publishing on their own websites. Voilà, their websites will immediately have this functionality! This process takes no more than a couple of minutes and doesn’t call for any IT support. EMAIL360 is best suited for web pages that contain newsletter signup, trial version download, webinar registrations, whitepaper downloads and other forms of CTAs (calls to action).

I’m sure there are other alternatives to reCAPTCHAs and I encourage readers to share their knowledge on them via comments to this post.

Puzzle Versus Mystery: Who’s To Blame For The Great Recession

Monday, October 25th, 2010

Puzzle: Can be solved with more information.  It pivots around lack of information ex: Watergate scandal, whereabouts of Osama bin Laden.

Mystery: Usually all the information, and more, is available to everyone but the mystery can be resolved only when the external parties take the time out – and possess the relevant expertise and the requisite tools – to analyze the information and spot the hidden red flags. A mystery thrives on complexity and no amount of transparency or disclosure burdens on the primary actor will help in cracking it ex: Enron and Satyam failures, financial meltdown of 2008. To quote Malcom Gladwell, who is credited with the above definitions, “It’s almost as if they were saying, ‘We’re doing some really sleazy stuff in footnote 42, and if you want to know more about it, ask us.’ And that’s the thing, (no external party) did.”

In the aftermath of the recent financial crisis where complex financial products blew up and resulted in huge losses to investors, experts and public alike are clamoring for greater transparency from financial institutions. By knowing more about all the risks involved in such products, they believe they’d be in a position to take more well-informed decisions and avoid such problems in the future.

This is a case of treating financial products as a puzzle and attributing what happened to lack of information. Whereas, in reality, they’re more like mysteries. A lot of information is available to us when we decide to buy them. It’s just that we don’t – or can’t – penetrate their fancy packaging to analyze the fineprint or spot the landmines that will inevitably blow up some day in the future. If you want proof, just check how many people can decipher 2/28, ARM, CDO, CDO-squared, CDS, and other fancy financial products mentioned in the post “Is Catch-22 Coming True?” I’d written at the height of the crisis.

Let me take an example from my personal experience to illustrate how financial products are akin to mysteries – not puzzles – and why no amount of additional information is likely to help an average investor.

A few years ago, when I wanted to park some one-time surplus cash, I was on the search of an investment product that called for no more than one or two payments. The MNC bank where I’d held my salary account at the time suggested a Unit Linked Investment Policy (ULIP) from a leading multinational insurance company. While buying this policy, I was assured that I could stop making premium payments after the second year. I was also told that returns from the policy were subject to market fluctuations. Since this was a standard disclaimer, I thought no more about it.

Fast forward to now: The Indian stock market has trebled since I’d bought this product but my portfolio value has barely crossed the sum invested.

pic01_200wWhen I asked the insurer why this was the case, I was told that, since I’d stopped paying premium after the second year, my policy had gone into a so-called “paid-up” mode. When I told them that meant nothing to me, they explained that, as per the terms of the policy, when a policy goes into paid-up mode, the management fees for the entire tenure of the policy (20 years in this case) would be recovered immediately after the second year – which is what put a big dent to my portfolio value.

This came as a rude shock to me and I finally decided to open the Standard Terms & Conditions that had accompanied the policy documents a few years ago. After wading through ten pages of fineprint, I was able to locate a set of clauses (cf. list on the right) that seemed to indicate that, while the insurer could deduct units proportionate to the management fees for the full policy term if the policy went into paid-up mode, they could do so only if the policyholder surrendered the policy and sought premature redemption. Since I was still holding on to the policy, there was no question of the deduction applying in my case. When I pointed out these clauses to the branch staff and call center representatives, they were clueless on how to interpret them despite the fact that their own agreement contained them. They deflected me to some email address. Six months and two reminders later, I still don’t have a reply to my email.

To me, this experience illustrates the following points:

To the extent that the salespersons of the bank and insurer hadn’t explained the possibility of such huge deductions to me and had hidden behind the general disclaimer that linked returns only to market fluctations, they certainly engaged in mis-selling. And in not responding to my recent emails seeking clarification, the insurer is guilty of poor customer service.

However, when it comes to the basic structure of this product (viz. ten pages of terms and conditions) and my decision (viz. to buy it without reading the terms and conditions), this is a mystery and not a puzzle.

GTM360 Launches SAP Mailing List v2

Friday, October 22nd, 2010

logo_sapml_300dpi_200wAround three months ago, we launched our SAP MAILING LIST product which then contained around 3,500 contacts of SAP customers and partners.

Apart from fielding inquiries from several prospective customers, we derived a few useful insights during this period:

  • There doesn’t seem to be any single source – paid or free – of contact information about SAP installed base. Marketers of SAP and other ERP service providers targeting existing SAP sites for upgrade, support, replacement and other offerings have to spend a lot of time and money to assemble customer names and contact information from diverse sources. No wonder our consolidated SAP MAILING LIST received – and continues to receive – such an enthusiastic response.
  • Most marketers seem to be focused on just a few states of the United States instead of targeting the entire country with their offerings.
  • Snail-mail is not dead. From the number of inquiries we receive for postal address for contacts, it appears that marketers are increasingly going back to sending direct mail shots by post – maybe they’d never stopped? – to beat overzealous spam filters that divert their emailers to junk folders.

In response to these insights, we’ve enriched the product, which now has more contacts. Apart from that, we are introducing an advanced version that includes the street address for all contacts. Click here for more information.

Regulation Can Prevent The Last Crisis

Saturday, October 16th, 2010

Lately, there has been a lot of buzz around how Reserve Bank of India, Bank of China and other banking industry regulators in the emerging world saved their respective economies from the recent Great Recession. According to the subtext, these conservative agencies acted in time to pass regulations which prevented their banks from engaging in the sort of extremely risky shenanigans that almost brought the roof down on developed economies.

Since I haven’t yet forgotten statements made not so long back by many Indian IT moghuls that India could become a software powerhouse only because it was free of government intervention (read regulation), I now find it hard to come to terms with the diametrically opposed notion that credits regulators for ensuring the well-being of an industry!

Let’s look at the root cause of the recent recession that struck developed countries and analyze what was really different in India and other developing nations that kept them insulated from it.

To do this, let’s draw an analogy with the risks and rewards of high-sea fishing. Let’s think of subprime mortgages, mortgage based securities (MBS), collateralized debt obligations (CDO), credit default swaps (CDS) and other financial products as the fish swimming in the sea that is the financial services industry.

For several years before the subprime mortgage crisis struck the developed world, Wall Street and London City bankers were fishermen who reaped a rich harvest from these seas.

(For those having any doubts about the rich harvest bit, let me simply explain “4 x 4”, a fairly standard pay package for investment bankers in middle management in London during 2004-2007: The first “4” stood for a fixed salary of GBP 400,000 per annum and the second “4” meant a guaranteed bonus of GBP 4 Million a year).

In the end, as we all know, the fish proved to be sharks that nearly gobbled up the fishermen and the sea.

According to the popular notion, regulators in emerging markets always knew that the fish were sharks and posted warning signs on the shore to this effect, whereas those in the developed world were asleep at their watch.

Nothing could be farther from the truth.

The fact is, financial services industries in emerging markets weren’t as advanced as those in developed nations – at least not when the recession struck in 2007-08. They didn’t have MBS, CDO, CDS, and other sophisticated financial products. For them, it was like no fish or sharks, so no one got gobbled up, so no question of crisis. Period.

As and when structured financial products are launched in emerging nations, should we be worried that the sharks would migrate to their seas? Not necessarily. Although their regulators are not clairvoyant, they have the benefit of learning from others’ mistakes. By banning third-party CDS contracts – which is one factor that allegedly precipitated the Great Recession in the developed world by triggering off some of the worst abuses by their financial markets – India’s RBI has shown its ability to develop hindsight that is proverbially 20/20.

While regulation didn’t avert the last crisis, it can play a strong role in preventing an identical one from striking emerging markets in the future.

Why Implementation Methodologies Won’t Go Away Anytime Soon

Friday, October 8th, 2010

Writing in a recent Finextra blog, Gordon Perchthold laments on the futility of relying upon methodologies.

Involved especially in ERP and other large change initiatives, SAP ASAP, Oracle AIM and other implementation methodologies codify “the key steps in a typical project, thus being able to deploy less experienced resources who, equipped with a methodology, would be able to complete the project with minimal previous experience“.

Perchthold hits the nail on the head by saying that “… the ingredients are the resources, and the environment is the organisation, these … are certainly not standardised from project to project”. This probably explains why standardized methodologies have limited use in the actual delivery of most projects.

At the same time, if you look at it from the project owner’s perspective, a very different picture emerges when they’re trying to select a consulting firm for carrying out the implementation. The admittedly non-standard nature of resources and organization in the AS-IS scenario poses tremendous risks on the success of the project. Recognizing their potential to scuttle the implementation, project owners naturally search for ways to mitigate the risks by bringing about standardization in resources and organization behavior. Enter implementation methodologies. With their “best practices”, “accelerators” and other numerous goodies, they seem to be just what the doctor ordered. Project owners dream of fostering standardization during the implementation and in the subsequent TO-BE phase by leaning on such methodologies.

This explains why, despite limited success stories of their use in projects of any scale, implementation methodologies will continue to remain a “necessary”, if not “sufficient”, weapon in the armor of consulting and implemention firms bidding for transformation projects.

Gordon Perchthold

A Little Communication Can Go A Long Way

Saturday, October 2nd, 2010

I was recently in the market for a new credit card, and I decided to inquire about the various options available with the branch manager of a leading leading Indian private sector bank in which I hold my checking and savings accounts. According to this customer-friendly person, I was eligible for a Titanium International zero-fee card, so I went ahead and applied for it.

A few days later, I received a brand new Platinum card. From my experience with American Express and Citi credit cards, I knew that Titanium was in a higher league as compared to Platinum. The Platinum card also attracted hefty annual fees. Moreover, I hadn’t received the add-on card that I’d applied for. All in all, I was quite ticked off at the whole affair, and my first instinct was to return the card. Since I had to visit the bank for some other work that day, I decided to talk to the branch manager before taking the next steps.

While the branch manager also initially felt that that Titanium was higher than Platinum, a quick call to an executive in the credit card department revealed that the reverse was true in the case of this bank. Not just that, the Platinum card offered higher rewards than Titanium and, contrary to what the flyer in the welcome pack said, it was free for lifetime. When I received a commitment that the add-on card would follow in the next few days, I no longer had any issues with the Platinum card and decided to keep it.

Here’s a classical case where a little bit of communication from the bank – something to the effect of  “based on our evaluation of your application, we’re happy to upgrade your card to Platinum” – would’ve created customer delight. However, the lackadaisical attitude of the bank caused me a lot of ire; and, had it not been for the timely intervention of the branch manager, the bank would’ve lost a customer.

Now, let me come to the next example, which revolves around the reason why I was in the market for a new credit card.

For several years, I’ve been using a credit card issued by a multinational bank. Their latest monthly statement (due in August) carried a charge for renewal fees, from which I concluded that my present card had expired. However, I hadn’t received any new card. I wrote to the bank expressing my annoyance and inquiring them how they could charge me renewal fees when I hadn’t even received the new card. They replied back with a boilerplate message saying my card was not free, so I was obliged to pay the renewal fees. I wrote back to them explaining that I didn’t mind paying the renewal fees as long as I got the new card. They still didn’t get it. I finally lost my patience with them and cancelled the card.

Only when I was about to destroy the old card did I notice that, while it had a July expiry date, it was July 2012, and not July 2010 as I’d originally assumed. Although this was an oversight on my part, the fact was that the bank hadn’t bothered to understand the reason for my annoyance. If only they’d told me that present card was good for another two years, they wouldn’t have lost a customer.

These two examples highlight how a little effort in communication can go a long way in fostering customer retention and customer delight. And, per contra, how a failure to do so can result in lost revenue and tarnished reputation.

PS: I’m aware that customized messages can disrupt standard workflows and play havoc with STP (straight-through processing) rates of bank systems. However, both my examples are cases of exceptions, which should surely trigger off some sort of specialized communication?