Blue Ocean Strategy Innovation in Transactional Banking

Through one of my LinkedIn groups a fellow group member – Munib Karavdic raised a question as to whether a new St George product is an example of a Blue Ocean product. I originally set out to review the site in question and draft a quick response but ended up turning it into a blog post…

So I had a good look through the promo site. I can see a number of BOS principles reflected in this product.

Before I share my thoughts lets look at the existing Australian market space of transactional banking – largely a vacuum of innovation – bitter red oceans of competition. I suspect the last really innovative move was ING launching their internet only transaction accounts which has since been eroded into a red ocean. In reality it’s nothing more than poor tit for tat incremental changes. I think even NAB’s recent elimination of fees is simply a red ocean reaction.

Given the information at hand, I can see some clear elements of Blue Ocean thinking in this product; though some aspects of it might not qualify (i.e. the flat $5 fee per month – is that really lowering costs for the customer? If so, how is this communicated by presenting it as a flat fee when their competitors are promoting fee removal?).

What I find interesting is that I can see how they are appealing to their tiers of non-customers in a couple of interesting ways – primarily through 3 key strategies:

Savings Targets

Helping customers develop good savings habits

I see this as a really interesting attempt to move the idea of a transaction account away from being something you get in the mail every month to an interactive tool that you want to receive.

As we all know, setting up young people with good savings behaviours is important for their financial future. I think this is a reasonable attempt by St George to promote and support positive financial behaviour (as opposed to the disgraceful behaviour of some banks – ‘oh you’ve maxed your credit cards – let me give you more credit).

Budgeting Tools

Simple graphical tools for those customers who aren't numerically minded

This is the bit I think has real traction. This appears to be a legitimate attempt to help non-financially minded people make sense of the flows of money in and out of their lives. Whilst many of us might think it’s a simplistic representation of a financial situation – if it works for the customer then – it works. This isn’t new as some credit card companies already to this – but providing it as a service on a transaction account is. What I see here is the bank realising they have this data anyway to so why not aggregate and package the data so that their customers can use it and potentially modify their behaviours. What’s that you say? Banks and altruistic behaviour make strange bedfellows…

Round Up

An interesting approach to rounding...

I’m not sure what they are thinking with this feature. Whilst I get the virtual coin jar idea I’m not sure it’s solving a problem. But if this feature is another way of forced saving by stealth then in reality it’s a positive. Personally, I think there is more merit in rewarding account holders with bonus interest for every coin deposit they make over a certain amount.

Is this a Blue Ocean product?

Tough question to answer given the information provided – as I can’t help but feel they’ve missed some critical factors that (if included) would have created massive barriers for their competitors – chief amongst these is any form of measure of engagement and contribution. Deep down, this still smells like a bank product. I’m not quite seeing how they understand or recognise participation – and in my opinion – this is the holy grail

Have they really erected competitive barriers – I don’t have enough information to say yes or no. Maybe they have if you look at it in the context of their 3 peers. But I would argue not if you were to look into say the second tier of banks or more importantly the mutual sector (i.e. Credit Unions) where engagement measurement is more natural and intrinsic.

I think St George deserves praise for launching this initiative – but I can’t help but feel someone – more than likely a credit union is going to see this and really seize the day – particularly in terms of engagement that isn’t based on traditional bank metrics (i.e. share of wallet). I guess time will tell!

Tough Questions to ask Your SaaS Vendor

Smart Company – An Australian online business magazine ran an interesting story today about the proliferation of software-as-a-service vendors and the attraction of this model for SME’s.

Whilst this isn’t news, Michael’s story delved into the important issues surrounding the need to ensure your SaaS vendor has the right infrastructure, expertise, and security in place to protect your business data.

Ask questions and review the provider’s written policies. Your questions should cover the:

• Type of facilities and security arrangements in place – reputation and history are important.
• Infrastructure and virus protection used.
• Backup procedures and storage – think business continuity planning.
• Privacy policies.
• Level of data encryption to protect website transactions.
• Hardware and power redundancy.
• Qualifications of operations staff.
• Hours and procedures of site monitoring.

I think Michael only addressed half the issue. In reality customers need to also examine what contracts and legal terms are in place to govern data ownership. As we’ve seen in the US this year, when SaaS vendors go bust it gets very ugly very quickly for customers.

So whilst your data might be secure what are you going to do if the service is shut off by the Administrators?

Customers need to be asking questions including:

1. Do you have clear ownership of your data AND the right to demand your data from the vendor or whomever is in control of the vendor if the service is shut down for a period of more than X hours?
2. What recourse do you have to get your data in a timely manner?
3. Is the vendor obliged to warn you in advance of a likely shut down of the service?

Now let’s take that a step further.

Data is one thing, but what about the customisations you have built into the SaaS solution? The sales reports, the sales process, the email templates, your marketing campaigns, your business dashboards, knowledge base, quote templates, and document library – do you see the broader issue? Yep, the data’s secure but we’re screwed as we can’t get it and nor can we get our customisations.

So whilst it’s important to ensure the vendor has a proper data centre and knows what they are doing you need to ask a lot more questions and be prepared to put the vendor under a pretty harsh spotlight. Your ability to operate your business depends on it. The worst case scenario is you pay a premium to get your data back and are then faced with having to implement a new CRM system – more implementation cost, more training cost, more unproductive hours.

These types of issues are why we chose to partner with SugarCRM as the core CRM platform that we recommend for our customers. No other vendor in the CRM space provides customers with the options and peace of mind as SugarCRM.

Here’s why two key reasons why I make that statement:

1. SugarCRM can be deployed on your own infrastructure, Sugar’s Cloud, or a hosting partner of your choice
2. If you choose a hosting provider it’s a very simple process for them to extract the system structure and send this to you so that you also have a back up of the CRM system – in addition to the system data.

This is peace of mind. This is SugarCRM putting control in your hands.

SoftwareShortlist – Changing how software is sold

I was introduced to a new service this week called SoftwareShortlist. This service aims to change the information dynamic around software from vendor-led to customer-led. Given one of our goals is to help SME’s make the right software decision based on their needs – this service appealed to me. This YouTube video gives you a good intro:

Having dealt with many dozens of SME’s over the years one of the complaints we’d often here is that vendor sales reps were more focused on punching out deals and maximising their revenue/commission rather than solving customer problems in a meaningful way. As Axel Schulze from Social Media Academy rightly pointed out earlier this year – the world is changing and the sales profession needs to change or find itself marginalised if not redundant. I agree with Axel – though I’m more optimistic that sales will adjust.

In my opinion, SoftwareShortlist is another example of how the world is changing for sales people. Using Web 2.0 technologies the service is going to take information control away from the vendor and the sales person and put it in the hands of the crowd – the information is being democratised. As customers use SoftwareShortlist and develop their own opinions and needs away from the control of the vendor the challenge therefore is how the sales team adapts to this new world.

What will the sales person be doing that couldn’t be done by an inside sales person? Or the vendors active contribution to the community’s knowledge pool?

SoftwareShortlist is still in Beta, but for now the idea has merit and I hope we see the service grow quickly in the future.

Are Social Media Obligations and Responsibilities Mutual?

Many of us would have read the story recently about Za’s Brick Oven Pizza restaurant and their run in with a South Carolina Twitter celebrity. It’s an interesting lesson about the power of the crowd and how sometimes this power can be misused (either intentionally or unintentionally).

As someone who is active in social media, generating income from working in the space, consulting to companies, and providing solutions I’ve long advocated the basic principles put forward by the luminaries like David Meerman Scott (as an aside – did you know that David is coming to Australia next month – don’t miss this…) Brian Solis, and Axel Schultze – be open, be transparent, contribute and expect nothing in return, accept feedback, listen, engage, and most of all be honest.

But as I read this story and thought about the ideals that we strive to live to I was struck by this notion that sometimes consumers don’t seem to live to the same set of expectations. So there’s no mutuality in this social media thing… Is this fair?

You don’t get to play by the old rules any more, and it doesn’t matter what business you’re in. You don’t get the old privilege of anonymity – Sonia Simone

So we as vendors can’t live by the old rules! But what about consumers who choose to use word of mouth tools (like Twitter) to make a complaint that they know full well is going to spread; is there an obligation or expectation on them to take an active role in the resolution?

Is it fair on the vendor if a customer rants on Twitter and then decides they don’t want to talk, that they want to move on!

Or have we entered an age where consumers won’t accept mistakes period?

Or worse, have we entered an age where minor transgressions become internet headlines? My dish arrived 2 minutes later than I expected so it’s death to the reputation of this restaurant… I have to admit I don’t like this model where a consumer can rant and run. It goes against my core values of fairness and accountability.

How should we deal with those that decide to rant and run – do we as active members of the community have a right to turn the tables and call out consumers who do a seagull?

Sports Teams and Social Media – are they doing it right?

The immersion of sport and social media continues with Sports Illustrated recently publishing an article recently regarding sports stars using Twitter. Whilst it’s interesting to watch a tool like Twitter being used by sports stars like Cadel Evans, Eli Manning, Lance, and the Shaq etc; I’ve had this nagging thought that the bigger opportunity is being missed by the players, clubs, and sporting leagues. Are they doing the right thing?

Wanting to kick this around further, I took the opportunity to sit down and chat social media with former AFL premiership winning player – David Thorpe. David is an astute businessman, a legend salesman and a guy who can see the big picture quickly. I was explaining the basics of social media and to help David I put it into a sports context – how could his former team in the AFL – the Bulldogs use social media to grow membership and game day attendance.

Two things emerged from my conversation with David that would help crystallise my view of the missing link.
Firstly David made the comment:

AFL clubs have the best membership base of any code in the country. They’re very good at getting and keeping members. It’s a very tribal sport.

This is an interesting point. They have a strong base of customers; they don’t need another tool to market to their members/customers.

David made a further comment that has proved crucial

In my day (the late 60’s and early 70’s) we would be out on school visits conducting clinics with the kids. The club would give us tickets to give away to the kids at the clinic. These weren’t just single tickets – they were family tickets as our goal was to get the family to the game and get everyone into the sport.

Our goal was to NOT give away the tickets to just the kids in our teams jerseys. We were under instructions to target kids in opposition jerseys along with girls – giving them tickets to the game.

This was when the light bulb came on for me (and is in fact the key second point). Their unstated aim at the time was to attract “non-customers” – this bit is important, as examining how you can attract non-customers is a core premise of Blue Ocean Strategy. This link explains non-customers.

So now I was thinking about how a team could use social media as an innovation tool so as to break down the barriers for non-customers?

So I took this defining thought and got the team together – this wasn’t just one idea but two:

1. Create an integrated social media strategy that connects to the broader community; and
2. Utilise this platform to engage with non-customers

We know a lot of clubs are publishing newsletters, have their key players writing blog-type articles. Many of the teams in our national competitions have multi-media rich sites – but they still follow the monologue model of communication. We wanted to go beyond this and develop a strategy that would give a club or league a clear sustainable advantage in how they connect with the community.

In most cases where a sports star is using a tool like Twitter (or Facebook), the model looks like this:

The intersection of sports stars and community via Twitter

If we look at the major leagues and teams around Australia, the model looks like this:

The Sports Club intersection with their communities

A good example being the Brisbane Bronco’s website – rich in multi-media and information but engagement is limited to signing up for an email newsletter. This is a monologue. Dialogue is left to the community via the numerous sports forums and communities.

The real potential for clubs and players is where they bring everything together and use social media to develop a dialogue with the community. In simple terms the model might look like this:

Social media will allow the club and players to connect to the community and have a dialogue

The intersection points (all 4 of them) is where social media delivers for everyone. Using tools like Twitter, Facebook, and blogs, the club can deliver a consistent message and provide the opportunity for the community to contribute and engage at a much deeper level than we’ve seen so far.  The goal is to move beyond the monologue and the use of canned blogs.

Objective #1 – A practical example

The first thing we need to do is have a high level strategy that makes sense and could be executed by a team or league. As a test case we looked at Brisbane based sports team – Logan Thunder. Logan Thunder participates in the Women’s National Basketball League in Australia. They’re new to the competition having been admitted in 2008. They already have a reasonably strong following and are located in the middle of large pool of prospective customers. What was interesting for us is that women’s basketball generates a lot of forum traffic as followers dissect games, players, and coaching performances so it seems we have a community that has some level of familiarity with social media tools.

The tools that I can see as being relevant for Logan Thunder include:

1. Creating a blog or blogs and using these as the first point of information distribution
2. Using a Twitter account to further distribute information about games, clinics, player updates, sponsor mentions, and community announcements
3. Using Facebook for the team, players, and coaching staff; creating fan pages, distributing team, player, and competition information. Facebook could also be used to allow fans to vote for their favourite player post-game

Because these tools can all be integrated, it becomes relatively simple to deliver consistent information for the community to absorb and engage with. This is the dialogue bit.

How would Logan Thunder put this into action? The ideas that we noted aren’t exhaustive by any means but we could see real value in such activities as

• Any time a player is in the community or at a school running a clinic they encourage the participants to follow them on Facebook and Twitter
• Newsletters, game information, community activities originate from Facebook and are then cross populated into Twitter, the team blog, and into the forums
• Involve the sponsors within these tools – for example a sponsor focused Facebook app that allows fans to vote for their favourite player – a fan who votes gets a prize along with the most popular player
• Get the coach involved in blogging with pre and post game reports, coaching tips, and mentor sessions for up and coming coaches
• Allow fans to Tweet from the games and feed these tweets into Facebook, and the team blog – this is already happening in Super 14 rugby
• Promote the teams social media footprint into the forums – encouraging the active contributors to engage with the team – Remember: make them love you or dislike you – just don’t leave them indifferent

These are our early thoughts and ideas and they’re by no means exhaustive. We can see some really interesting benefits coming out of this approach and given the cost is so low, we’d like to see teams and leagues get on the social media train because it’s not going away.

As I noted way back at the beginning of this post, we identified two key objectives in terms of how sports teams and players can take social media participation to the next level.

Objective 1 – Develop and execute a social media strategy – we’ve covered that here

Objective 2 – Utilising Blue Ocean Strategy and Social Media to attract non-customers – So we’ve connected to our members/fans, now what? How do we attract the non-customers? What does research on Facebook show? What groups of non-customers use social media tools and how could we reach out to them?

Workload permitting I’ll publish part 2 around the middle of June. Ideally we’d like to workshop some of the Blue Ocean Strategy ideas with a team – we’ll have to see if anyone’s interested.

Sales Leadership – Simple Tips from a Master

I’ve been a fan of Jack Daly for a few years now. I really like his simple approach to sales and his infectious energy. He’s also what I consider to be one of the real gentlemen in sales.

He published two good lists a few days ago that I want to share with you as he’s encouraging us to have a thrive mindset (as opposed to a survive mindset). I’ve taken the top 10 points from each list

SALES MANAGEMENT CHECKLIST

1. Rank sales staff performance and deal with poor performers
2. One on Ones with each Sales Professional minimum monthly
3. Sales Meetings twice monthly min
4. Recruiting basket of at least 20 we are courting
5. Recruiting courting process built around a touch system
6. Inspect the baskets (pipeline mgt) min monthly
7. Inspect key activities of Sales Professionals
8. Training, training, training: to include role practice, joint calls, training calls, coaching calls and building a success guide
9. Key account focus
10. New hire orientation

SALES PROFESSIONALS CHECK LIST

1. Goal setting
2. Key activities tracking
3. Touch system design and maintenance
4. Data base management
5. Sales meeting participation
6. One on ones with Sales Manager
7. Inspect the baskets prep (pipeline mgmt)
8. Training, training, training: Role practice, joint calls, training calls, coaching calls
9. Web 2.0/social sites proactivity
10. Model the masters

Bottom line is in any market, the key is proactivity and having your head in a positive place. If we wake up each morning deflated and defeated, don’t expect the day to get any better. Fret less about the results and stay focused on consistently doing the right activities, and the business will come. The question to be asked is who is ensuring that these checklists get done? Don’t expect people to be cheering about doing all of this, and having people “in their stuff”. Very few players on sports teams “enjoy” the coaches “in their stuff” during practices, yet all celebrate the victories. It’s time we went about posting some victories!

Jack makes some good points with these lists. Simple stuff, but it’s how well we do the simple stuff that counts

Accountants and Blogs

I had a very interesting discussion with the Marketing Manager for one of Australia’s premier tier two accounting firms about whether an accounting firm would get any value from one or more of their partners having a blog. Clearly my view was that a blog was essential and would add tremendous value on a number of fronts. This was a view not shared by my coffee partner.

Two key barriers dominated the discussion before we could get to the exciting bit about the possibilities and thinking about these barriers led me to a deeper understanding of how to position blogs in the B2B world.

The barriers were:

1. Accountants are boring
2. You have to be so technical in what you write – people won’t want to read this

Here’s how I dealt with these barriers.

Accountants are boring

OK. No argument here.

In reality though, accountants are in a very strong position as trusted advisors and can use this position to communicate on a number of different levels.

Firstly, this firm has multi-dimensional relationships with their clients. What I mean by this is that they often deal with the Financial Controller or the CFO, along with a number of the executive team – CEO, Chairman, GM-level. What they have is an audience that wants different things from them often around the same subject. A blog represents a simple way for the Partners to communicate a variety of messages – ranging from semi-technical op-ed pieces to general business commentary. As long as they think about who they are communicating too, they can easily write highly engaging posts that communicate the depth of expertise and care that I know this firm has.

An accountant’s blog needs to be technical

Clearly no one is going to spend time reading about the riveting changes to AASB 45c. But what people will spend time reading is where a Partner seeks to share some experience or advice that is relevant. Examples might include:

• Sharing an experience around how they’ve helped another client
• Sharing a client success story – give us some happy news amongst the doom and gloom.
• Mentioning pending business deadlines and suggesting where a client should be in terms of their business preparation
• Discussing common misconceptions and encouraging a conversation on the topic

The simplest analogy I gave the marketing manager is that the partner needs to view a blog as an extension of the types of business discussions that they might have when meeting 1 on 1 with their largest clients. It’s all about the conversation.

Here are two links I passed onto this client to help them get comfortable with the idea of an accountant’s blog:

• Chris Brogan’s 27 Blogging Secrets; and

• Pro Bloggers 13 Quick Tips to help your blog stand out

I’m quietly confident I’ll get a chance to work with this firm on the introduction of blogs to their business. If we do get the green light, you’ll hear about it first here.

Salesforce.com – behind the times but applauded by the analysts

Tech Target reports today that Salesforce.com is moving customer service into the cloud and allowing integration with communities, discussion groups, forums etc. Whilst the analysts are (yet again) falling victim to the relentless PR machine that is Salesforce.com what this release actually says is two things.

Firstly, they are way behind the times when it comes to innovation in customer service. What SFDC has announced here was actually pioneered by RightNow Technologies and Lithium around 3 years ago. RightNow Service was integrated into the Lithium community platform providing a complete customer experience solution that focuses the overall customer care experience. So why is it news that it’s taken SFDC 3 years to catch up?

Secondly, they still don’t get this whole social media/web 2.0 space. Their approach so far has been to latch themselves onto other people’s ideas and let hubris take over. I particularly liked the comment from SSPA VP Ragsdale – “They’ve done a good job of latching the Salesforce brand with the FaceBook brand”. Many SFDC customers must be truly confused as to what all this means.

Innovation in customer service (or customer experience management as it is rightfully called) is being done elsewhere. Here’s a good example – Greg Gianforte – not spewing out noise or grandstanding, but actually getting out into the field and talking to real customers, listening to real business issues and bringing this back into his organisation.

Ragsdale rightly comments that as many organisations are new to social networking and many of the web 2.0 ideas and need help understanding how to leverage these ideas and technology components – something we’ve been championing at Smart Selling for a while now.

Is Twitter the Great Never Was?

Twitter is a tool that is dominating the social media scene at the moment and it’s only now that some dissenting opinions of the tool are emerging and I have to admit I’ve been reluctant to speak out having witnessed first hand how quickly the Twitter freaks shout down any dissenting opinion.

I’ve studied Twitter for a while now and have taken a cautious approach to building a network. I find Twitter amusing and a sometimes useful source of information.

I can clearly see how Twitter can be useful for companies operating in the B2C world. Its gives an interesting insight into what consumers are thinking and talking about. As a listening tool it has immense value. It’s good to see people using Twitter to scoop the traditional news services.

My key concern though is that I can’t see how Twitter is going to be of any use to companies that operate in the B2B world – particularly if they are what I term B2B sales organisations.

Here is what I think Twitter won’t do anytime soon:

• Twitter is not going to help a B2B company keep on top of public opinion.
• Twitter is not going to generate sales leads.
• Twitter is not going to give a B2B marketer an insight into what his suspects, prospects, or customers are thinking (or not in any useful way).

Sure, keep Twitter in your social media mix as it’s generating lots of noise about plane crashes and stuff, and the technology has potential (though I am more of a Plurk fan) In advising our customers on social media strategy I generally keep Twitter in the mix due in some part to the amount of noise it’s generating in the press and in part as I can see the potential in the product. Realistically though I wouldn’t recommend investing time or resources into Twitter as I’m yet to see that it’s going to contribute in a meaningful way to a social media initiative.

Selling in the field – Open Source Delivers

Sometimes it is difficult to find relevant and tangible examples of how the open source architecture/model drives unique value for end users and partners when examining only business benefits.  In many cases, the ROI is there, but it is hard to quantify in hard dollars due to so many variables at play.

I want to share with you an example of the power and value of open-source. Pramati Technologies has released iSugarCRM, a free application for your iPhone that allows users to access SugarCRM via the Apple iPhone. The application has full offline sync and works across all SugarCRM modules.

There are two value benefits that I want to highlight as they are unique to open source. Firstly, Pramati are offering the application free of charge. An equivalent application on iApplications will cost north of USD 150 per user per year.

Secondly, if you tried to use this type of application on closed proprietary solutions like Salesforce then you’ll need to be using their top-shelf Enterprise edition plus you’ll being paying additional mobile application fees (a double-dip).

I’ve not been a big proponent of mobile versions of CRM solutions primarily as I’ve felt the mobile devices and the communications platform have not been up to scratch. My opinion has changed this year as 3G has taken hold and new, better devices such as the iPhone, the better, richer range from BlackBerry plus the smart devices offered from companies such as HTC and Nokia.

iSugarCRM opens up a huge range of possibilities particularly as version 5.2 of the SugarCRM product moves further into the social media/social networking world.

The Smart Selling team are in the process of road testing the application over the Christmas break so we’ll post back here once we’ve got some feedback to share.