Archive for July, 2017

Use And Misue Of Personas In Marketing

Friday, July 21st, 2017

Buyer persona is the bedrock of targeted marketing. HubSpot provides a succinct definition of the term:

“A buyer persona is a semi-fictional representation of your ideal customer based on market research and real data about your existing customers.”

A sample persona is shown below:

Persona-based marketing has become increasingly popular in recent times, both in B2C and B2B realms. Maybe it’s only me but I see a strong correlation between PBM and the rise of Facebook Ads, which is arguably the first platform to provide the ability to run ads at scale segmented by buyer attributes like demographics, behavior, and preferences. (In contrast, Linkedin Ads helps you target ads by title and Google Ads, by purchase intent.)

We develop personas for companies in IT, BFSI and other technology-intensive industries. After doing that, we create persona-specific messaging and content for our customers’ technology products and services. Campaigns based on personas help our customers’ offerings resonate better with their buyers’ goals and preferences, thus accelerating lead flow and improving lead-to-deal conversion rates.

Like all popular tactics, persona is susceptible to overuse. A few marketing professionals have already started panning personas e.g. Marketoonist, which lampooned personas in a recent article with the following cartoon:

The article went on to say:

“Marketers have more customer insights at their disposal than ever. Buyer Personas can be one useful tool to turn this customer data into a story. They can help capture an abstract target audience as a tangible character sketch. But buyer personas are only as useful as what they help you to do. Marketers can get carried away with the fiction. I’ve literally seen “watches Game of Thrones” in the personality sketches of buyer personas for enterprise software. These personality-driven personas may read well, but aren’t necessarily actionable.”

Reading the reference to Beatles in the cartoon, I was reminded of an ad released by one of my ex-employers years ago. The company had just become the distributor for Sun Microsystems in India. The launch ad proclaimed in bold letters, “Here comes the sun”. Even if you’re not a Bealesmaniac, you’d recognize the name of one of the band’s most popular songs in the copy.

Given this experience, I wouldn’t dismiss references to music bands in a buyer persona so easily. The key is to use them – as well as automobile brands or TV shows – in the right context.

This is where I think Marketoonist has gone wrong: Its cartoon depicts a classic case of misuse of persona.

I’m not alone. Like commenter ALLEN ROBERTS says:

“Like any complex tool, personas can be misunderstood, misused, and give crap results, but in the right hands, and right context, can be very useful.”

The misuse stems out of targeting the persona at Sales. While the output of personas can be shared with sales, personas themselves are meant strictly for Marketing.

Now, let’s see what can happen if the persona described in the aforementioned cartoon is consumed by Marketing – i.e used in the right way. Based on this persona, Marketing can shape the content, messaging and medium of the software in the following ways (if not many more):

  1. Pepper the marketing collateral of the product with Acura-related terminology. From personal experience of marketing ERPs, an enterprise application offers tremendous scope for flaunting a wide range of terms. Slipping in an Acura-related term or two in the product and / or marketing collateral is a piece of cake!
  2. Seek product placement and / or advertising in Game of Thrones
  3. Lace the ad copy and demo videos with Beatles lyrics and background music respectively.

Needless to say, a campaign based on such persona-shaped elements will have a higher success rate than a “spray-and-pray” campaign, as my ex-employer’s Sun launch ad did.

Beatles was popular at the time. The reference to the band’s popular song “Here comes the sun” in the copy of the ad for Sun servers elicited an immediate connect with the thousands of Beatles fans in the target audience. The ad elicited a chuckle or two from the early adopters of the product and triggered a strong brand recall for the distributor amongst prospective buyers of RISC-based servers for years to come. (If you knew that the product manager of the company’s Sun division went by the initials of SUN, you might even spot another pun in the copy!).


Ergo, in the right hands, personas – including the one described in the cartoon – can be very valuable.

That said, everything is not hunky-dory in the world of personas. In a follow-on post, I’ll describe three ways in which personas are misused nowadays. Stay tuned.

How To Fight Card Payment Surcharge And Take #CashlessIndia To Next Level

Friday, July 14th, 2017

I recently read the following tweet:

I replied back pointing out that:

He replied back with the following tweet:

@logic was implying that merchants will definitely pass on the MDR cost to consumers.

Even if that’s true, he was confusing MDR for Surcharge. While both amount to a charge on card payments, they’re not the same. By definition, MDR is borne by a Merchant whereas Surcharge is slapped on a Cardholder. There are many other differences between them. Before I list them and explain why they matter to a common man, here’s a graphical depiction of how a card payment works.

The key entities in the so-called “card payment value chain” that processes a card payment are as follows:

  1. Cardholder: The consumer that uses a credit or debit card to buy something e.g. John Doe, Jane Doe
  2. Merchant: The business that sells that “something” to the Consumer and receives payment via payment card e.g. ASDA, Big Bazaar
  3. Issuer: The bank that issues the card used by the Consumer e.g. Barclays, State Bank of India
  4. Acquirer: The bank that issues a Merchant Account and POS (or POS alternatives like Bharat QR) to the Merchant, both of which are required for the Merchant to accept card payments e.g. Citi, HDFC Bank
  5. Card Network: The company that owns the infrastructure – aka “rails” – for processing card payments e.g. Visa, MasterCard.

The card payment value chain is also called a “4-corner marketplace”. Created over 50 years ago, it’s subject to the so-called “network effect”, which explains its popularity and longevity. The Merchant incurs a cost for using this infrastructure to accept card payments. This cost is called MDR or Merchant Discount Rate.

With the basics of card payment out out of the way, let me come back to the key differences between MDR and Surcharge. They’re as follows:

  1. MDR is the fee incurred by the Merchant for accepting card payments. Any charge levied by the Merchant on a consumer paying by card (over and above the price of the product or service purchased by the Cardholder) is called Surcharge. As we’ll see shortly, Surcharge need not equal MDR (and often does not)
  2. Set by the Card Network, the schedule of MDRs forms a part of the Merchant Account signed between the Merchant and the Acquirer. As a consequence, MDR is pre-defined, strictly regulated and ranges from 0.5-3% depending upon the product purchased and the type of card used for payment. (For the sake of convenience, I’ll assume a uniform MDR rate of 2% during the rest of this post.) On the other hand, Surcharge is totally arbitrary – it’s whatever the Merchant says it is. I’ve come across Surcharges ranging from 2 to 10%. In other words, Merchants slap Surcharge – masked as ‘Convenience Charges’ – that’s as high as 5X of the MDR cost they incur
  3. MDR is deductive. That is, if the sale value at the till is £100, the acquirer retains £2 and passes on £98 to the Merchant. On the other hand, Surcharge is additive. That is, against the purchase value of £100, the consumer incurs a cost of £102 at checkout (or even higher, if the Merchant passes on costs in excess of MDR to the Cardholder).
  4. Being deductive, MDR attracts no taxes. Whereas, being additive, Surcharge attracts taxes. So, the total debit the Cardholder sees on their statement is even higher than £102
  5. In return for MDR, a Merchant gets many freebies from the Acquirer e.g. fire insurance for store. Cardholder gets nothing for shelling out Surcharge.

In case all this sounds a bit technical, that’s because it is. However, there’s a reason why it matters to an average John / Jane Doe consumer and impacts the adoption of card payments.

I’ve made no secret of my distaste for Surcharge. The way I see it, MDR is the Merchant’s cost of doing business – if they don’t accept card payments, they can lose business. Like rent, electricity, employee and other costs, Merchants have to recover their card processing fees from their sales and can’t pass it on to me explicitly. If a Merchant still insists on a Surcharge, I can walk out and buy the same thing somewhere else without paying Surcharge.

Armed with this knowledge, I flatly refuse to pay Surcharge for paying with my credit card.

When Merchants try to justify their demand for Surcharge on the grounds that they pay this fee to banks, I turn the last point mentioned above to my advantage and fire back: “You get fire insurance for your store by paying MDR. Will you give me fire insurance for my home if I pay you Surcharge?” When they hear this, many Merchants quietly accept my credit card without any Surcharge.

Of course, my tactic only works when there’s a human being on the other side whom I can challenge with this logic.

Whenever a website demands a Surcharge, I abandon my shopping cart and rant to the company via Twitter.

Somtimes it works!

I know you “can’t win ’em all” but that’s no reason why you shouldn’t try!

I know many people who use cash because they don’t want to pay extra charges for using their cards. This is a serious stumbling block in front of greater spread of digital payments. I hope this post gives such consumers enough ammunition to fight Merchants’ demand for Surcharge so that they pay by card without incurring any extra charges and, in the process, take the adoption of #CashlessIndia to the next level.

Indian IT: Turning Crisis Into Opportunity

Friday, July 7th, 2017

At the end of my blog post entitled Indian IT – Crisis Or No Crisis?, I reflected on the zeitgeist about the looming crisis faced by the Indian IT industry due to growing automation, digital challenges, H1B restrictions and Trumpism-driven Middle America outsourcing.

Even if these challenges are real, there’s no need to panic. The industry has been through several crises in its 30 year history and emerged from each of them stronger than before. I predict that the same will happen even this time.

But not if it continues to bury its head in the sand. The Indian IT industry can escape the dark clouds on the horizon only by taking a few concrete measures on a war footing. I suggest the following imperatives for the industry in which I’ve spent over 20 years of my professional life:

  1. Go up the services value chain
  2. Target the CMO organization
  3. Set up component factories
  4. Rethink fixed price deals
  5. Redefine digital transformation

#1. GO UP THE SERVICES VALUE CHAIN

No, I don’t mean develop products. For reasons highlighted in my blog post entitled “Going Up The Value Chain” Is Wrong Path For Indian IT Services Industry, the industry’s DNA is in services. And services has a lot of headroom for growth, as highlighted recently by Mr. N Chandrasekharan, ex-CEO of India’s largest IT company Tata Consultancy Services and currently Chairman of TCS’ holding group Tata Sons. So there’s no need to jump off the services bandwagon.

What I mean is move up from project management to program management level within a services engagement.

For the uninitiated, a program is an aggregation of individual projects around business analysis, architecture, design, development, testing, infrastructure, deployment and communications. In addition, a program also manages relationships with other internal and external stakeholders such as business, legal, compliance, regulators, industry associations, and so on.

Historically, bulk of Indian IT companies’ revenues have come from development projects involving requirement gathering, design, coding and unit testing. Program management activities are left to the customer. Quite often, the customer outsources these activities to other IT services companies.

If Indian IT companies can start playing a larger role in the end-to-end program, they can stand to achieve a manifold increase in revenues.

Let me explain how by using the following case study.

A Top 5 UK bank was mandated to introduce a new payment system (“FastPay”) by the regulator. The bank’s Board directed its C-Suite to launch FastPay by a certain deadline. Within the C-Suite, the initiative was owned by the MD of Global Payments (“Executive Sponsor”), who had to fulfill it by collaborating with IT, IT, Operations, Product, Marketing, Legal and the Scheme Operator. Busy with the BAU pressures of running a multibillion dollar business, the MD needed someone to handle the day-to-day minutiae of FastPay’s introduction. This “someone” was the “Program Manager”, who was a partner at a Big 5 consulting firm.

The overall program structure is shown below.

The project level comprises individual projects around business analysis, licensing of new product, implementation of new product, modifications to existing systems, testing, and systems integration.

All these individual projects fold under the Program Manager. In addition, the Program Manager also leads the Steering Committee and the War Room. Chaired by the Executive Sponsor (MD of Global Payments in this case), the Steering Committee comprises of all key stakeholders and convenes on a weekly basis to review the progress of the program and make midcourse corrections as required; the War Room also comprises of all key stakeholders but convenes during go-live and at other critical program milestones.

Most Indian IT services companies – including my employer at the time – typically function in the capacity of (a) implementation partner and (b) systems integrator. For the sake of clarity, an implementation partner makes a new product work at a given company by providing consulting, training, customization, extension and other services; and a systems integrator “lands” the new product into the given company’s systems landscape by developing interfaces between the new product and the company’s existing systems. As you can see, both roles are largely technical. Typically, these vendors are not part of the Steering Committee or War Room and don’t have the ears of the program stakeholders or much say in the overall direction of the program.

In the specific instance, vendors of individual projects made revenues in the $5-8M range, which totaled up to around $40M at the program level. In addition, the program manager and the infra project manager spec’ced a plethora of environments such as development, system integration testing, user acceptance testing, sandbox, staging and production that contributed incremental revenues in the high single-digit millions for the infra workstream. All told, the program management vendor billed nearly $50M, which is 6-10X of the billing of any individual project vendor.

This is how moving up the value chain from project management to program management can result in manifold increase in revenues for an IT services company.

#2. TARGET THE CMO ORGANIZATION

While new tech initiatives can happen anywhere in an enterprise, most companies are looking at customer experience and revenue growth as the low hanging fruits to gain rapid ROI for their tech investments. As a result, technology projects are increasingly driven by the CMO organization nowadays. According to Forrester, “CMOs are the most likely C-level executives to have taken full control of their tech spending.”

The Indian IT industry has developed a keen sense of efficiency, having traditionally sold technology to the CIO organization, which is a cost-center in most companies. Besides, dealing with the CIO organization has shielded the industry from end-users of technology, whether it’s consumers or “business”. As a result, the industry has managed to get away by paying lip service to UX and by treating performance and other non-functional aspects of their software as an afterthought. These characteristics won’t help while targeting the CMO organization because CMOs are more interested in the effectiveness of technology and are driven by customer experience. Therefore, to open opportunities in the CMO organization, Indian IT needs to

  • shed its traditional cost-centric mentality and develop a revenue-oriented mindset, and
  • come out of its technical shell and gain an appreciation of how people use technology to run a business instead of using technology for its own sake.

Neither is an easy change to make but Indian IT can jumpstart the transition by keeping in mind the following realities of CMO organizations:

  • Online ads and social networks play a vital role in today’s marketing world
  • UI goes beyond color and fonts and encompasses psychological drivers like shortage, sense of urgency, and so on
  • UI, UX and CX are super important for any customer-facing software
  • What looks like a cosmetic defect to a programmer (or even project manager) could actually be a CX breakdown that could cause revenue and reputation loss, both of which are critical issues for a CMO needing immediate redressal
  • Learn to make conversation beyond technology. CMO orgs are fairly garrulous (present company included!)


Like I’d warned in Indian IT – Crisis Or No Crisis?, relying solely on coding, testing and other technical skills will no longer suffice. To successfully execute on the above imperatives and capture the revenue opportunities offered by them, the Indian IT industry will need to develop new non-technical skillsets in its delivery organization around stakeholder management, commercial acumen and marketing.

In a follow up post, I’ll describe the next three imperatives. Stay tuned.