Archive for April, 2009
In Business, Timely Renovation Avoids Restructuring
Posted by Cordi in Practical Advice on April 29th, 2009
During this serious recession the business news is driven by stories of job losses, forced mergers and bankruptcies. The question that must be asked is whether these events were inevitable or are the result of management failures?
I would argue that these events were not inevitable. They happened because executives focused on doing whatever was necessary to “make the quarter (revenue)” without considering that these decisions could have mid-term and long-term consequences. High tech companies, auto manufacturers and major banks and insurance companies currently under duress based their most important decisions on a common, but flawed, assumption: they could grow their way out of the consequences of bad short-term business decisions. When a business assumes inevitable growth, it forgets that both history and gravity tell us a different truth.
In the technology industry, Sun realized too late that hardware was no longer a differentiator – especially when associated with proprietary operating systems. Sun never made the total commitment to JAVA and its other software products – turning itself a cheap acquisition target for Oracle.
GM did not misinterpret consumer sentiment toward larger vehicles over the last decade. For proof, one needs to look no further than the SUVs offered by every major import vehicle manufacturer after the success of the Chevy Tahoe. The GM mistake was to build that consumer sentiment into their revenue strategy and fixed operating costs. Their competitors were more realistic in their model mix and their (business) operating model. Toyota has both its hybrid Prius and its SUV Pilot – but neither model is encumbered by high labor costs, expensive retiree benefits or out-dated factories.
Neither Sun nor GM’s failure was inevitable. If the assumptions underlying short-term strategic and operational decisions had been tested against potential consequences developed in mid / long-term scenarios – the outcome for either (or both) would have been different. The short-term plan would have been modified to incorporate mitigation strategies for mid / long-term impacts resulting in a corporate renovation over time rather than an urgent restructuring.
Businesses that take the extra 10% time to plan their present and their future in tandem will continuously renew themselves – and, by so doing, insure their survival in lean times and their prosperity in good times.
@Cordi and Associates Inc. All Rights Reserved
www.cordiconsulting.com
4/28/2009
In the 21st Social Media is a Catalyst to the Science and Business of Marketing Research
Posted by Cordi in Practical Advice on April 24th, 2009
I just listened to a Pod-Cast this morning on a product called Clarabridge extolling the virtues of getting to know your customer through elegant data mining algorithms. The mining is done against a variety of online commentary sources where anonymity is considered equivalent to reason or objectivity.
This Pod-Cast was less than an hour after I finished the morning paper – which included a well-written column – “Is Twitter still cool?”. – If everyone is out there doing it, is it still cool? (Chris O’Brien, www.mercurynews.com) –.
I know that I have many more people following me on Twitter than I am following and that makes me feel guilty about not posting some narcissistic nonsense every day –. Not guilty enough, however, to motivate me to post something –
Maybe I am more cynical about all of this – After spending many years engaged in performing market research and applying the results, I believe the fundamentals are still true
There are more sad love songs than happy love songs, because people who are happy DO IT rather than singing about it
A fool with a tool is still a FOOL
Marketers are deluding themselves, if they think that mining the random ravings of random folks on public social media sites is going to give them a more realistic idea of the success of their product versus classic market research validated by sales data (leads, conversions, costs, maturity curves etc).
We know something about customer behavior
80% of consumers buy a product or service because they need or want it. They take it home and use it, like it or don’t and just move along (to which Goodwill, Salvation Army, and local food pantries say “amen” ) –
Self-nominated customer feedback comes from the 20% that really love or hate the product
A profitable and growing business needs to understand the 80%.
Random feedback, even if well analyzed, is a risky basis for making future commitments of time, money, or other resources –. Data mining and analysis of social media comments does offer some insight into avenues that should be pro-actively explored to determine if they are or are not real predictors of future behavior. By offering some specific avenues of exploration, data mining reduces the time and cost of market research while, at the same time, making classic market research techniques more important than ever!!
This is a topic that is going to continue to challenge both the marketer and the market researcher as social media spread across more and more of the developed/developing world.
@Cordi and Associates Inc. All Rights Reserved
4/23/2009