Archives for category: Strategy

I was asked the other day what the average SaaS customer length is. I responded confidently that I thought it was about three-and-a-half years. My customer disagreed, though not without some uncertainty, and felt it was longer.

So I checked online, as you do, and I couldn’t find my three-and-a-half years statistic anywhere. Perhaps it was a customer I’d worked with previously that I was misremembering as an average. Anyway, I couldn’t find an average figure for customer churn anywhere. That’s because it depends.

It depends, of course, on the amount of customers you lose, otherwise known as your churn rate. Your average SaaS customer length is 1 divided by your churn rate. So if your churn rate is 5% per month, your average customer length is 20 months, which isn’t great. If it’s 10% per year, then your average SaaS customer length is 10 years, which is a whole lot healthier. Naturally, you can only make these calculations with a good body of data and some history behind you.

If you’re new to the game, then you need to do some research around average churn for the sector you sell into, or the size of company you sell into. To generalise grossly, churn rates tend to be lower the larger the customer you work with, since the deals tend to be bigger, more complex, more embedded, with a higher cost of sale, to generalise on the reasons as well.

If you want to read more on this, you might find this article, this one and this one useful.

 

One of the most difficult challenges with sales training or sales effectiveness – and in fact any kind of change – is overcoming engrained behaviours. It’s only through repeated application of the new way, with all the pain and discomfort that comes with it, that the new way eventually becomes the accepted way and a second nature thing.

I was reminded of this recently in my table tennis endeavours. I’ve been playing competitively for decades, and I’ve always concentrated on putting the ball in different corners to move my opponent around. It is deeply and completely subconscious, after a million-plus repetitions.

I’ve been studying a lot of table tennis matches on youtube over the last few months, as I look for new ways to compensate for my gradual decline in fitness and sharpness due to Father Time’s relentless advances. I’ve noticed that a lot of the top players hit a lot of shots into the crossover, which is the awkward spot on the right hip – of the right-handed player – between the forehand and the backhand, effectively jamming them up.

This is not new. One of the first things we were taught as kids was hit to the corners against a short opponent, and into the middle for a tall player. Maybe twenty years ago our local club had a coaching session with a guest coach who again stressed the crossover tactic and quoted the statistic that the then star player in England, Desmond Douglas, would hit up to 40% of shots down the crossover.

I’ve been trying this with renewed effort over the last few weeks and – it’s really, really difficult! The sport is very quick and you don’t have much time to plan and execute. I find myself instinctively following my subconscious, time and time again.

The answer? As with sales, I need to practice more, and compete less, to untrain and retrain myself.

It’s well known that you pay more for branded products than their generic or knock-off equivalents. You get what you pay for, as the saying goes, but also you’re investing in the brand’s equity and goodwill, which comes at a price.

I was in a homeware specialist the other day, looking for an ‘Egg Perfect’, one of those clever things – or clever yolks as the Irish would say, and I like the pun in this context – that you pop into the water with your eggs and it tells you when they’re done to your preference by changing colour.

The price was €9, which I thought was a bit steep, but i’m familiar with the brand and they last ages, so I bought it. On the way home I dropped into a local store that sells almost literally everything. I’ve blogged about it before, in fact. They too had immersive egg timers, the generic versions. The price? €2.

So the branded version was 4-and-a-half times the cost of its imitator, a 350% difference. Which, I suppose, is not as bad as the difference between a Gucci handbag or a Rolex watch and their me too counterparts.

The proof’s in the pudding, so we’ll see how the two of them perform over time. Still, I did feel pained when I saw the €2 version. That’s a difference of about a pint and a half between the two of them.

I skim-read a fascinating article the other day that covered an interview with former FLOTUS Michelle Obama.

In it, Ms Obama talked about what she described as Imposter Syndrome, the feeling that sooner or later someone’s going to uncover you as someone who’s blagged their way in to position of status or seniority that’s above their station. I hadn’t heard it described that way before but I immediately latched onto it.

Who else feels that from time to time? More accurately, who hasn’t felt in a weak moment that they’re one misstep away from being exposed as a fraud, or at best under-qualified for the role they’re performing?

This is a normal reaction from time to time, normal at least for people who are pushing themselves, moving up the ladder trying new things, joining new groups, doing the one thing every day that slightly scares them. It’s a natural symptom of progress. The first time you step up there’s new things to learn and uncertainty before you get dug in. Then you have to move again before you get too dug in.

It seems too that since the article above others have identified with it and shared their stories, which you can read about here.

There’s nothing like a familiar sound to bring you back and connect you with something.

The other day I heard a wood pigeon coo-cooing somewhere in the estate where I live. It’s not a very familiar sound to me now, but back when I was a kid doing my homework in the bedroom that looked out onto the back garden of my childhood home, it was a very familiar sound. It instantly reconnected me to my past in an unexpected and not unpleasant way.

Sound and the hearing part of our senses have of course always been very important to a brand. We can all remember signature tunes from our favourite shows, programmes and global brands. A few examples: the 4-note signature of the UK’s Channel 4, the 5-note signature of the McDonalds ‘I’m loving it’ campaign, and the ‘Holidays are coming’ refrain from Coca-Cola for around this time of year.

Sounds are a key thread of how we identify with a brand and of the overall brand experience, along with the sights, touches, tastes and smells of the things we like to use or consume. They evoke an instant feeling and connection.

Emails are tough to manage aren’t they? You blink or go away for a couple of days and all of a sudden your inbox looks like a war-zone.

Are you an active email manager or a laissez-faire kind of a person? On the one hand you can spend a few extra moments sorting out every single email the first time you read it, deleting it or filing it, which aggregates to hundreds of hours. On the other, you file nothing, maybe delete nothing, safe in the knowledge that you can search for emails and do an emergency triage if your storage limit gets tripped.

I take a different approach to my work emails and my personal emails. With my work emails I leave everything in the inbox or sent items, searching for stuff when I need it and doing a periodic cull of large attachments to relieve storage and aid computer speed. I knew a colleague who was a very successful salesperson and religiously kept his work inbox down to a handful of emails, all the time. How he did it I’ll never know.

With my personal emails – and many of the emails I get are subscriptions to emails from businesses – I try to delete and file, keeping my inbox as clear as I can. Inevitably it mushrooms out of control and I have to spend a few hours every 6 months getting the inbox and sent items down to a reasonable level, deleting stuff I should have and filing other emails away into folders that I’ll rarely access.

The trouble is, the periods immediately preceding a seasonal wipe session are less than serene. Like now, for instance…

I want to revisit the theme of an erstwhile post on how I often give businesses one chance and then they’re gone. When you think about it, it’s no chances, as their first slip up is their last. One chance would be their second chance. Anyway, with the irony of the blog title behind me, let me tell you a story.

I used to have almost all my insurances with one company: houses, cars, even tyres. I’d inherited them as a supplier from my Dad. Anyway, one day I had a car accident. A tourist driving a hire car in front of me and my boss – we were heading to hit some balls one lunchtime – missed his roundabout turn-off for the motorway, took the next turn, which was also ours, went 10 yards and attempted an immediate u-turn, forcing me to take evasive action and break my suspension on the far kerb.

The tourist admitted no blame – in fact he said .’you did not see me?’ – we exchanged details and so began a sorry saga which took months to resolve. My boss was not deemed an independent witness, I provided all the information I could, and ended up chasing the insurance company’s insurance company to try and resolve it. The last time I phoned I was told, ‘oh we’ve already settled the claim 50-50 with the other driver’s insurance company.’ I was furious, not at the injustice of the other driver lying, since many people will lie and cheat to get out of something, but at the fact that my insurer had let me down as a customer and failed to even let me know the result of the case.

I immediately cancelled all of my insurance policies with them. Their customer service team called me back, stuck to their version of events and that was that. It was like dealing with an enormous slippery snake, with staff hiding under its slithery skin.

Once chance – and gone.

Strategy and execution, as any good business school will tell you, are the Siamese twins of success. They both need each other, and they both need to keep each other close. One doesn’t work without the other. To strategise without executing is to do nothing, to put nothing into action. To execute without strategy is to ‘spray and pray’.

While the two exercises are equally valuable, in the consulting world they’re not deemed the same. Strategy work is the stuff that happens at the beginning and is of a relatively high value since the inputs directly affect the end result. Execution is following through on the decisions of the strategy, doing the work, putting the work out there and reviewing the results. It is perceived as of a lower value, since executing is basically doing what it’s been told to do by the strategy. A junior officer following the orders of a senior commanding officer if you like. Still a vitally important role.

This perception of value can have a direct effect on day rates and fees. From a consulting perspective, strategy is generally a collaborative exercise, at the customer’s premises and involving a number of people, where skills of facilitation and leadership come in. Execution can often be done on one’s own, from the home office, as it might involve building product, designing messaging, writing content, and putting together the communications assets to help deliver the message and transfer the information.

Indeed, you could almost say that strategy is consulting, whereas execution is about contracting. Strategy happens less often, and commands a higher price, whereas execution lasts for longer and involves more days’ work, but at a lower rate.

And this is the double-edged consulting sword of strategy and execution, as we strive to find the right balance between days in the saddle and fees coming in, between more stimulating work and less stimulating work, and between taking on work directly and delegating it to others.

Down for maintenance

The other day I was in a hurry to check the status of a flight I was taking later that week. I needed to know if I could fit in an appointment before leaving for the airport. When I went onto the website this is what I got.

For a company of this stature, and for a company that transacts online at this kind of scale, I find this flabbergasting. Such a website shouldn’t ever be down, certainly not at peak hours. This was 17:00 on a week day.

When I worked in the cyber-security business, the standard service level agreement for a cloud-based service was what they call ‘five nines’, or 99.999% availability. In some quarters, four nines wasn’t seen as sufficient for an enterprise’s mission-critical systems. To put this in perspective, five nines availability allows for total unscheduled downtime – assuming uptime is calculated on a 24/7/365 basis – of just six minutes, for the entire year, if my calculations are correct.

Which leads me to conclude either that this is one of those moments of unforeseen torture for a company that sets itself the highest standards of transactional availability, or that the company is in fact a bit sloppy or laissez faire with its customers’ goodwill.

In the time it’s taken me to write this post, I checked back on the site and it was back up, so perhaps we can give Ryanair the benefit of the doubt on this occasion.

There are two types of business-to-business client. I found this out in my first job after my MBA in the 1990’s when I worked for a design and marketing agency and had to get out there and sell.

The first type of client is the type that respects your work, trusts your expertise and domain knowledge, and generally takes your advice.

The other type of client is the type that wants it done his or her way, tells you what they want, because they know better, even though what they want may not be the best for them. They respond to what they want to hear rather than what they need to hear.

The one factor that affects this division is the amount of experience and and expertise you have with regard to your client’s industry. The less you have, or can demonstrate, the less likely they’ll be inclined to take your advice and the more command and control their approach becomes.

You know the saying: ‘you get the clients you deserve’. Clients also get the agencies, suppliers or delivery partners they deserve.

The term ‘client’ is also problematic for me. We used it in the agency and some companies still use it, depending on their sector. It puts the customer on a pedestal. I agree that everything stems from the customer, and that we all should be customer-centric, but when you elevate your customer to almost divine status it makes it hard both to have a peer-to-peer relationship that’s based on trust and to strike a fair deal. Then you have a vendor/supplier-client relationship that’s unequal and approaches that of a slave-master relationship. That’s what the term ‘client’ feels like to me.