Archive for March, 2015

Loyalty Rewards – Buy Or Earn?

Friday, March 27th, 2015

Those of us who redeem our loyalty points will have inevitably come across a gift or two that was appealing but just beyond our point balance. On some reward portals, it’s possible to pick up these goodies by simply paying up the difference with cash e.g. Lufthansa WorldShop, IHG, HDFC Bank. Whereas on others, it’s not.

leo04The same is true when it comes to leveling up in loyalty programs that give special benefits to members of higher levels. Take Flipkart First for example. Among other benefits, members of the program gain earlier access to special sales. You can buy Flipkart First for INR 500 (US$ 8.35). On the other hand, the leading flash ecommerce site Gilt confers a similar benefit only to customers who have spent at least US$ 10,000 on the site (and have thereby been elevated to the highest “Gilt Noir” level of its Gilt Insiders Rewards program). Likewise, ICICI Fast Forward cardholders can advance to the head of the queue when they visit branches of India’s largest private sector bank. I’ve had this card for over a decade – the frayed edges bear testimony to its age – and I never paid to qualify for it.

This brings us to the question of whether brands should let members buy gifts and levels – collectively “rewards” – or give them only to members who display greater loyalty to the brand.

Let’s look at the pros and cons of each option.

leo02Buy Rewards

+: Delivers instant gratification, even if members have to pay more than reward points to “get something now”

-: Dilutes the brand image e.g. why is an airline selling headphones, as in the case of Lufthansa WorldShop offering Bose headphones for 87,000 miles or EUR 299?

Earn Rewards

+: Aligns perfectly with the basic objective of a “loyalty program”, namely, to drive loyalty

-: Denies instant gratification

+ / -: Tacitly prods the member to earn the additional reward points required to pick up whatever it is that caught their fancy, which, in turn, means they need to do more of whatever they need to do – generally, buy more product – to earn those extra points. Given industry standard Earn Ratios of 100:1 (Spend INR 100 to earn 1 reward point) and Burn Ratios of 4:1 (Redeem 4 reward points to get a gift worth INR 1), it requires INR 400 in additional sales to deliver every extra reward point. This could be a substantial source of additional revenues for many businesses. While this is obviously a plus for the brand / retailer, I’m in two minds about whether it’s a positive or negative from the member’s perspective and would welcome any comments from readers.

In the overall analysis, I suppose there’s no right or wrong answer to the question that forms the title of this post. Brands need to weigh the benefit of providing instant gratification on the one hand with the potential loss of additional revenue on the other while deciding whether to let members buy rewards or earn them solely via greater loyalty.

Why Dial Volume Is An Important Inside Sales Metric

Friday, March 20th, 2015

dv-fiThis blog post is about a controversial topic in B2B technology inside sales. Writing it won’t endear me to Inside Sales folks. Implementing the guidance contained in it won’t earn brownie points for sales and marketing leaders. Nevertheless, since dial volume pushes the revenue needle, I must go ahead.

Cold calling remains an important element of business development in B2B technology products and services. Every cold call begins with a dial, which is the action of picking up the phone and calling a potential customer.

A dial results in one of the following outcomes:

  1. Wrong number (caused by poor list quality)
  2. Line is busy (can happen often if you’re calling the contact’s direct number but rarely if you’re calling the board number of his or her company)
  3. Call is attended by switchboard operator or contact’s secretary (Gatekeeper)
  4. Call is picked up by contact (Right Person Connect).

RPC is what inside sales people are really after. The other three outcomes are largely wasted efforts. Therefore, it might be tempting to dismiss them as worthless and focus only on measuring RPC and other downstream metrics like appointments, proposals and orders.

However, that would be imprudent for more than one reason:

  • It takes 5-6 dials to get through to the right person, so unless enough dials happen, there wouldn’t be adequate RPCs
  • Later stage outcomes take longer to materialize
  • In our core market of big ticket B2B technology, inside sales rarely owns proposals, orders and other stages at the bottom of the funnel.

FUNNEL-METRICS

Against this backdrop, Dial Volume provides a useful way of measuring the performance of an inside sales organization in the short term.

Furthermore, as we learned recently, dial Volume can also serve as early warning of problems in the inside sales process.

At one of our customers, the dial volume was well below the industry average. When we dug deep, we found that the inside sales team was working in an open plan office that got noisy for a couple of hours every day. During this period, the inside sales team avoided making calls lest the prospect on the other end of the call was put off by the background noise. This was the right decision. However, it was a “local maxima” solution that caused a larger problem: Not enough leads.

We intervened with the company’s top management and got the inside sales team moved to a closed office. With no more disturbance, the inside sales team started delivering much higher dial volumes. This resulted in a sharp increase in RPC and lead volumes, eventually leading to a manifold increase in sales pipeline.

We were able to take this midcourse corrective action early on – instead of six months later after noticing a weak sales pipeline – only because we measured Dial Volume from the start of the campaign.

In closing, just as EPS is the most important metric the day before a company announces its quarterly results, Dial Volume is the only thing that counts at the start of the sales funnel. Measuring it early on ensures that that there are no surprises with achievement of more important metrics like appointments, deals and revenues during the later stages of the financial year.

How Does My TELCO Know You’ve Dialed The Wrong Number?

Friday, March 13th, 2015

mnown8Until recently, whenever people couldn’t reach me on my mobile phone, they were greeted with a message from my mobile network operator saying they’d dialed the wrong number. This happened whenever

  • I was too busy to take the call
  • I’d switched off the phone
  • The network was congested.

Naturally callers wondered how my MNO knew that they’d dialed the wrong number without knowing what the right number was!

I’ve visited the store of my MNO – a leading UK-headquartered global telecom company with operations in India among many other countries in the world – to find a solution. As soon as I complained about this pesky problem,  one of its agents would whip out their mobile phone and call my number. When their calls went through, they’d beam and proudly declare that the problem was “solved now”. They were simply not able to understand that my problem was intermittent nor geared up to diagnosing an irregular problem. So, I gave up on trying to get any resolution from my MNO.

Life went on, I forgot about this problem since it used to happen infrequently. This was until last month. Due to network congestion, many subscribers of my MNO, including me, found our mobiles going off the grid several times a day. And, what was previously an intermittent problem became a regular feature. I couldn’t ignore it any longer and decided to tackle the problem myself instead of going back to the MNO’s office and hearing the same old story that it was “resolved now”.

I did a little bit of testing with the many mobile phones in my household. When I called my mobile from another mobile and rejected the incoming call, I got the “you’ve dialed the wrong number” message. However, when I repeated this on another mobile, I heard a different message saying the subscriber was outside the coverage area or had switched off their mobile.

Hmmm. For the first time, it struck me that maybe the problem was specific to my connection. Moments later, I was able to crack the problem: It was in the voicemail settings I’d configured several years ago.

mnown9

When I lived in Germany and UK, voicemail was a part of the business culture in both countries. Therefore, when I bought my first mobile phone in 2003, I immediately configured the voicemail settings on the connection. However, since voicemail never caught on in India, I’d completely forgotten about the feature soon afterwards.

Through the years, the original MNO changed hands twice, with my contract moving to my present MNO a couple of years ago. Through these frenetic M&A activities, the VM number got jettisoned, which is why any diverts to my voicemail went to a non-existing number that was reported as a wrong number by my MNO.

Once I cracked the root cause, the solution took no time. I simply disabled my original voicemail settings for all four scenarios under Settings > Call > Call Forwarding > Voice Call.

mnown-fi

All’s well that ends well but I don’t know why my MNO couldn’t come up with this solution during my multiple visits to its stores over the years. Or why the succession of MNOs bothered to carry forward my VM settings for all these years when they jettisoned the associated VM number without ever informing me. If only they’d jettisoned the settings along with the number, I’d have been spared this years-long irritant.

Don’t Lose Deals By Belaboring Business Value – Part 2

Friday, March 6th, 2015

In Part 1 of this post, I’d pointed out how B2B technology vendors risk losing a deal by belaboring business value all the time. In this post, let me illustrate this warning with the example of a vendor that failed to heed it and lost the deal – and more – as a result.

I was recently helping a customer hire some sales people. Around this time, I heard of this new job portal that sourced candidates who’ve already resigned their existing jobs. With its focus on JIT hiring, the startup differentiated itself from the run-of-the-mill recruitment agencies who cold call to seek out requirements from the ground up.

Potential employers face a major pain area, namely, candidates not joining after accepting a job offer because they use it to negotiate a better package in their existing jobs. By staging a pool of job aspirants who’re already serving their notice periods, this startup seemed to provide a solution to this widespread pain point. Therefore, I headed straight to its website.

On its homepage, I found “sales” to be a trending skill. I was pleased to see this since many job portals contain only techie profiles. I immediately clicked the sales hyperlink and was presented with a screenful of job seekers in sales.

mynoticeperiod02

Based on the summary provided against each entry on this page, the third candidate seemed most suitable for my needs. When I clicked it, I was promised additional details by completing a form:

mynoticeperiod03

I wasn’t very happy that I had to provide my contact info at this stage. Nevertheless, the form looked clean. Besides, I could empathize with the marketing manager’s lead generation target! So, I entered my coordinates and submitted the form.

I then expected to see more details of the selected candidate on the next page or receive an email immediately with his or her resume.

However, neither of that happened.

Instead, the following day, I got a call from someone from the startup, wanting to “understand my business needs and my specific requirements”. I told him, duh, why doesn’t he first send me the additional details as promised by the lead form and we’ll talk later? The guy didn’t know what I was talking about – he evidently didn’t know the steps I’d taken on his website before contacting him.

In other words, the startup didn’t recognize that I’d already traversed the top and middle funnel stages by myself and was now at the bottom of the funnel, anxious to push the hiring process forward by interviewing the candidate and discussing fees and other engagement details.

By belaboring business value at the wrong time, the vendor not only lost my immediate business but also wiped out my initial positive impression of it.