Hybrid Models and Being All Things to All People

Microsoft is out with Office365 and, well, it’s typical Microsoft.

Why can’t I simply point to a URL and get going in the same way I can with Google? Regardless of what you or I might think about Google’s attitude towards our privacy, you have to give them credit for keeping things simple while Microsoft seems determined to complicate matters.

Office365 may have a pretty good feature set but the high degree of complexity required just to get to the point that you are using the app is a major turnoff.

Hybrid models are like this, they try to leverage the on premise assets that established companies bring to the table but in the process they fail to live up to the reason why people prefer cloud based services… simplicity. In typical Microsoft fashion they appear to have started out with a very complex collection of overlapping requirements and at every turn decided to add something new in when perhaps what they should have done is a process of reduction.

Start with complex and relentlessly strip away what is not necessary to compete with Google, which is who they are clearly targeting with this release. Strip it all down to the essentials and be unwavering in the pursuit of an amazing customer experience in the first 10 minutes. That is how winning products are built today.

I am not a huge fan of Google Apps but they certainly make the process of getting started with Google Apps straightforward. As you use it you discover that it is a pretty competent collection of applications for most day to day tasks and the collaboration capabilities hit a high note.

Even though I am a Mac user I still reliably work in Office on a daily basis and, despite having tried alternatives, I consider Office to be the best and most complete office productivity suite ever conceived. It really delivers, almost ever app is class leading (don’t use Entourage or the replacement to Entourage) therefore I am precisely the kind of user predisposed to Office365 but I can’t pull the trigger…. but like Dennis I find myself wondering how Microsoft could have missed by such a wide margin.

Dennis provided an update to his earlier post but the summary still stands:

1) The site is one big hot mess… trying to deliver to customer groups as diverse as individuals to large enterprise IT pros.

2) Can’t I just go to a URL and start using the product?

3) Hybrid models suck… the point is to not cannibalize the on premise business by relying on it as a key value driver, but what this fails to recognize is that I don’t need on premise and in the cloud to work together, I just need each to work individually.

4) Terrible terrible consumer branding, please try next time to deliver something that doesn’t look like it came from Microsoft.

5) Too many product dependencies with other Microsoft technologies that should be playing a supporting background role rather than being thrust in front of the user as a requirement to just get started.

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Voice of the Customer is Dead

Voice of the customer (VoC) programs have been popular from the moment that businesses first started having customers and in recent years the formality of these programs has increased and books have been written and many conference agendas populated with experts on the subject.

VoC is dead and social is the reason.

Paul Greenberg recently noted at the Enterprise 2.0 event that business technology is not undergoing a technology revolution, the revolution is one based in communication and as a result business is being forced to adapt and innovate.

Companies of all sizes are directly connecting with individual consumers and are now able to scale these interactions. The result of this is that methods built around sampling and proxy are no longer necessary or productive. Why would you collect data that you have to interpret, extrapolate, filter, and subject to latency when employees can directly tap into customer communities for direct and immediate engagement?

To be clear, voice of the customer is not an obsolete concept… Voice of the Customer programs are obsolete and will increasingly be co-opted and replaced by customer communities.

This is one of the more interesting consequences of the mass market adoption of social networks, they serve to break down the barriers that exist between customers and employees. Whether or not the firewall exists doesn’t matter, the fact remains that employees are becoming accustomed to interacting directly with customers regardless of whether they are in the customer service org or something entirely different.

Companies are themselves recognizing that their competitive strategy requires being attuned to customer needs and engagement, a point that Josh Bernoff recently made quite well in an outstanding research piece called Competitive Strategy in the Age of the Customer.

Bernoff’s key points are that competitive advantage no longer continue to derive from backoffice technology focused on productivity and efficiency but from customer facing technology that delivers customer insights which can then be acted upon from a market and product perspective.

Companies that obsess about customers end up investing in technology differently than other companies because they build their business around the one piece of intellectual property that cannot be replicated or commoditized, customer insight. As a result, Forrester is recommending that companies budget according to the following priorities:

1) invest in real-time insight to build products that customers will embrace.

2) Spend more on customer experience and customer service to build relationships.

3) Fund sales channels that deliver intelligence about customers, not just the push.

4) Shift marketing from one-way ads into useful content and interactive marketing.

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CLV, Cohort Analysis, and Survival Curves

Customer Lifetime Value (CLV) is an important metric in any SaaS business, it explains the potential for profitability and more directly the extent to which a company should spend to acquire customers, measured as Customer Acquisition Cost (CAC).

Custora is a company that provides an analytics platform specific to customer value and survival, which is a cohort analysis of customers acquired month by month to analyze how quickly each group churns out.

CLV forms the foundation for a probability model through which a company can forecast future recurring revenues, because every SaaS company exists within the frame of every customer renewing their contract at the end of each billing period (month).

The cohort analysis weights the group of customer acquired in a given month with their probability for renewing. Think of it this way, every customer has a coin they flip at the end of the month, renew or cancel, and in any given population of customers you want to know what the probability weighting of coins are for renewal; the cohort analysis provides this weighting while the CLV estimates the value of an individual customer in that population.

The customer survival curves are valuable for a couple of reasons, the first being the rather obvious benefit of seeing where most of your churn is happening, however this leads to a more insightful analysis about the type of customers you are attracting as a company. Simply put, if the customer survival curve is very steep, as in a fast falloff as churn chips away at each cohort, then the conclusion you can draw is that you are attracting the wrong customer for your product.

Churn is a naturally occurring factor in all SaaS businesses (and all non-SaaS businesses!). The point is that you have to strategize around managing it down to a number that is equal to or better than the average for your peer group and analytics such as what Custora provides are a good investment to make in this area.

At Get Satisfaction we have used a variety of homegrown and data services to instrument our business for day-to-day management and long term planning. We worked with Custora under their previous company name and then I let the service lapse as I built up an internal data warehouse of performance tracking metrics. I missed the dashboard and analytics drill downs that Custora provides, which because they are very focused around a specific problem set tend to be more useful than endless spreadsheets, so we are back to using Custora for customer retention analytics.

 

From RSS to Glassboard

Marshall wrote a feature post on a new company spun out of NewsGator:

Glassboard, which will open to the public next month, will allow iOS and Android users to share text, photos and in some cases location with small groups. It is built with Microsoft Azure as its back-end and will integrate with Microsoft’s forthcoming Office 365.

NewsGator is right to spin this off and Walker, Nick, and Brent are the right core team to lead it, and NewsGator CEO J.B. Holston has deftly walked through a minefield as he rebuilt the company on enterprise software for employee collaboration.

Marshall has been an advocate for RSS from the earliest days but he is wrong to pin the blame for consumer RSS’ demise on random factors like flash games on Facebook, the wounds here are self-inflicted for the most part.

Consumer RSS apps failed to recognize that the presentation layer for feeds by itself isn’t that interesting, and neither is the repository and syncing of content aspect. By the time these apps figured out that discovery, sharing, and organization (now popularly called curation) were really important to users the market had passed them by.

Products like Flipboard and Feedly have done remarkably well, disproving the notion that consumers don’t want apps for consuming content, and online services like Reddit and Stumbleupon drive big traffic numbers for content publishers.

The elephant in the room is clearly Twitter and Facebook, which are increasingly used to drive referrals to content sites. You simply cannot talk about the demise of RSS without having a pointed conversation about how Twitter in particular has changed how a content feed looks.

I wrote about it repeatedly and still believe it to be a major reason behind the demise of RSS. The web is moving from pages to streams and, ironically, RSS is still oriented primarily around a page… despite being a feed.

Lastly, RSS simply doesn’t give publishers any reason to support it for consumer facing activities and as long as this remains the case then RSS will continue receding into the background for consumer activities. I am deliberate about the use of the term consumer because for backend piping of content from one service to another, RSS in the form of JSON will grow in importance and contribution.

Additional posts I have written on this:

Is Twitter Killing RSS?

There is No RSS Market

Consumer RSS: 1999-2010

 

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Breakin’ All The Rules

I received an email from someone Group SPR alerting me to some graphics that were created at Disrupt and sponsored by, apparently, GE. The email declared that I was “allowed” to republish this story if I include the link back to the site.

The graphics are the story, there is no text, and each graphic includes GE’s logo and the artist who created the panel, along with their Twitter handle. I have a problem being told what I am allowed to do when the PR flack is the one sending me unsolicited email, just like I have a problem with PR people sending me embargoed stories unsolicited. In the words of Rambo, “you asked me I didn’t ask you”.

Here’s one of the graphic, I’m not linking back to the site and if SPR or GE wants me to take this down then I will… after they send me a takedown notice.

PS- I’m not even sure what the graphics are trying to communicate or why anyone who wasn’t there (e.g. yours truly) would even care.