Over 15 years ago, Blockbuster asked us about disruption. We analyzed broadband and compute market signals and trends, demonstrating that DVD’s would go the way of VHS. Execs were stunned, Blockbuster could not move away from their now obsolete store fronts.
5 years ago, we worked with the leadership of the National Association of Broadcasters at the Consumer Electronics Show. We talked about disruption and walked through the market signals and emerging trends to a stunning conclusion: Netflix and YouTube were broadcasters. Today, that’s easy to see. Now Facebook and Instagram have become broadcasters as well.
We’ve walked through similar exercises for real-estate, manufacturing, construction and medical devices; examining market signals and stunning executives every time. Market signals are emerging trends; AI (Artificial Intelligence) block chain, and crypto currency will have a profound impact on finance, trading and risk and commerce in general. An unstoppable flood of intelligently coded data.
Market forces are like water, dams can be constructed and water can be channeled yet the force remains. The key to managing disruption is in the navigation, just like on the water. Some executives are stunned and some are stimulated.
Here are some interesting market forces for disruption:
85% of the jobs in 2030 will be new jobs according to the Institute for the Future (IFTF) For example, the dating industry in the US is $3Bn per year, £225 million in the UK. I’ll let you do the currency and per-capita conversion. What’s really interesting is the niche job of dating profile photographer. Not everyone can be Kardashian and 90% of the dating profile is all about the photo.
As Forbes previously reported, Freelancers made up a mere 6% of the workforce in 1989; 43% of the U.S. workforce will be made up of freelancers by 2020. Not everyone will drive an Uber or be a dating profile photographer. New unheard of job roles are emerging and accelerating; blockchain engineer, cyrptocurrency manager and drone traffic controller. But one thing is clear, Freelancers can disrupt individuals and organizations.
All this is good news for the economy while raining accelerating cycles of disruption for industries, organizations and individuals.
Brookings characterized the mid-sized Inc. 5000a companies as "vital to the economy" because of their performance:
Just 29 percent of fast-growth companies are in traditional high-tech industries, such as IT services, software, and computer hardware, the study found. Retail, construction and government services are fast growing as well.
The study found four factors positively associated with high-growth company density: a large college-educated workforce, a substantial number of people employed in high tech, a significant share of the population at the prime age for entrepreneurship (35 to 44), and high business formation rates overall.
Netting it out, no industry or company or individual is immune from disruption. Does your organization have disruption acceleration plan? A plan that identifies market signals and trends, then creates alternatives to extinction or success? Do you? Will you be stunned or stimulated?
a Meet America's Greatest (and Most Inspiring) Entrepreneurs This Year, https://www.inc.com/inc5000, January 2018
Not all customers are created equal, some have a much higher propensity to buy. Can your team put a bullseye on those most valuable customers, focusing marketing, sales and support to ensure resources are allocated properly? Can your team create an ideal customer or buyer profile? Did you know that Ideal Customers are ten times less likely to churn or leave, than those that don't fit the profile?
Your most valuable customers cost less to acquire and are more profitable. Now, what attributes do they have? At the basic level there are five steps to identifying your most valuable customers.
Define the objective along with 5 to 7 variables that are distinct and contribute to the outcome. Test for dependency. Demographics or firmographics such as annual revenue, profit, industry, employees, people in the household, miles from a certain location, number of purchases, value of purchases, and so on. This exercise requires a fundamental understanding of the outcome and contributing variables. It also requires a certain amount of curiosity and bias aversion. Are there outliers, not in your current data set, that drive the outcome? Consider weather, commodities, consumer confidence, wholesale price index or other publicly available data.
Take all the data from your records, all the customers who bought in the past 6-months or year, filter out those 5 to 7 defined contributing variables and calculate the mean and standard deviation for each.
For every customer in the set, compute difference between the values in that customer and the entire set, divide by the standard deviation of the set. This yields standard scores between the variables so they can be compared on the same scale.
Next, compute the summary score for each customer or the average of its standard scores.
Order the customers from high to low based on those summary scores and the desired outcome. Watch for the patterns to emerge, you’re now ready to build your propensity to buy formula. Customers above the 80th percentile are your most valued customers. Now you can apply your resources to prospects who look like those customers; and focus your support efforts on the top 80th percentile.
Does this approach apply to B2B, B2C, and Non-profit? Yes. Start-ups or enterprise sized organizations? Definitely.
What if you don’t have the all data necessary? Companies like Dun & Bradstreet make a living compiling and cataloguing data on businesses. Geospatial and consumer data is more readily available today than ever before. If you need data to fill in some blanks, there’s a list for that.
Getting started requires your organization to do some primary research up front; structured interviews with personnel, buyers, consumers is a great place to start. Validate and refine the contributing variables. Be mindful of bias, look for the outliers. The reward for running this exercise is championship performance, can your team afford anything less? Ascendiosa can help.
Author: Mark Miller is Ascendiosa's Chief Commercial Officer
With a tip of the hat to Michael Lewis and his bestselling biopics on baseball, collateralized mortgage failures and bias, why isn’t your team playing moneyball?
In today’s artificially intelligent, cloudy, internet of things, rough and tumble business, data is king; yet relatively few organizations architect for it, analyze it and optimize from it. There are still enterprise marketing teams who don’t have a data architect on staff, yet they’ve got analysts and stacks of reports that don’t translate into revenue. Customer Relationship Management software has been around for three decades and thousands of organizations collect customer data, yet relatively few can calculate customer lifetime value or propensity to buy. Programmable controllers that generate log files have been embedded in products and devices for decades, yet few product companies can define the user experience and asset lifecycle from the data generated.
People tend to be keenly aware of the value of even slight informational advantages, and open to the idea of using data to gain those advantages. So why is so much conventional wisdom false? Not only in sports but across the whole of society. Why have so many industries been ripe for disruption?
The challenge is, the larger your organization is, the longer you've been in business, the harder it may be to play moneyball; organizing and capitalizing on a data model that creates competitive advantage. Smaller organizations, even individuals, can set themselves apart today. Setting the stage for disruption of incumbents.
Just like baseball, not all players are of equal value; likewise for prospects and customers. There are discrete factors exposed in the data by insightful analysis. Similarly, there is inherent bias that needs to be discarded; often before the data is gathered, analyzed and optimized.
One of the interesting keys to Lewis’s financial biopics is, the real-life protagonists don’t come from the classic mold. They are outsiders who found the outliers, people with unique backgrounds and insatiable curiosity, who are capable of identifying discrete factors and discerning the value.
The Oakland A’s did it and a single protagonist managed to identify the subprime mortgage meltdown. There are no shortage of tools to accomplish what you need to optimize outcomes based on data, so why isn’t everyone doing it? Improve your chances of success, accelerate growth, Ascendiosa can help your team play moneyball.
Author: Mark Miller is Ascendiosa's Chief Commercial Officer
Often times private equity firms can squeeze value out of tarnished and known logos with stagnant growth trajectories. Efforts are mostly aimed at squeezing bloated operating expenses. Sometimes, it doesn’t work out so well, the most recent news on TPG and Silverlake’s woes with Avaya tell a great story.
This past week, reports in the Wall Street Journal1 and other sources swirled around the sale of Avaya’s contact center business to stave off bankruptcy. TPG and Silverlake acquired Avaya for $8Bn back in 2007, selling off the contact center business may bring in $4Bn, which could be applied in part to that pesky $6Bn of debt outstanding. Squeezing operating expenses was not enough or perhaps too much.
Revenue growth is fueled by great corporate and product strategies then propelled forward by sharp marketing and sales strategy and execution. When private equity firms buy tarnished logos, they replace the corporate heads, revise the strategy, slash expenses and often miss important factors when evaluating the product shortcomings and the market place in their due diligence. In the case of Avaya the evidence comes from loss of market share prior to private equity acquiring and Moody’s ratings agency reporting in August that Avaya “needs to constantly reinvest in new products and platforms to maintain its position.”
Today there is a tremendous amount of money in private equity, looking for undervalued companies. How can they tell if the product portfolio is too far gone? The keys can be found in:
Companies are failing faster these days as innovation accelerates and routes to market diversify; the number of tarnished logos will expand. As more money swells the private equity markets, competition for deals will accelerate. Sharpening the due diligence process and diagnosing the product portfolio capabilities as well as corporate talent, marketing and sales performance accurately can greatly enhance outcomes for private equity firms. Ascendiosa can help.
1. Avaya Weighing Bankruptcy Filing
Author: Mark Miller is Ascendiosa's Chief Commercial Officer
Today it is the seller in B2B who needs to be more thoroughly aware of the market, the buyer’s mindset and their own organization’s messaging. B2C sellers arrived at this realization much earlier, now crowds rate products, restaurants and services on social media. Amazon reports that most filtered searches are for products based on 4-stars or higher, not brands or manufacturers. Consumers trust other consumers.
After speaking at a recent event, a soon-to-be client approached me indicating she had searched the web on her smartphone, looked at our organization and decided to come hear what we had to say. She had some questions about next steps. During our conversation she lamented a common refrain, “we don’t get any leads from our website.”
As a sales leader or chief operating officer, one question you want to ask your marketing pros, what's the bounce rate on your website? Bounces are single visits where the visitor leaves without clicking on the next link. A high bounce rate indicates your website could be a dis-qualifier. People visiting may determine that your organization does not have the necessary products or services to meet their needs or worse yet, is unskilled. They will come to that conclusion based on the appearance of your website on their smartphone. Today, over half of all web searches originate from mobile devices. Yet many websites don't render properly on a mobile device. In April Google, who owns 65% of the search market, changed their search algorithm, downgrading non-mobile ready sites. If buyers can’t find your website or read it, you are disqualified. You’re not getting any leads from your digital footprint, but your competitors are.
Have you contributed to, commented or shared your company's blog? Buyers will search for your organization and you. Showing up for the meeting and having the buyer ask you about your organization's current blog could result in an embarrassing moment. Because let’s face it, if you aren’t current, why should your buyer trust what you have to say?
Does your organization have clearly defined terms and metrics for demand generation, market qualified leads and sales qualified leads? If not, you are losing valuable leads and revenue potential. Are you getting reports from marketing on demand generation from your digital strategies? Who’s reading what? What’s been re-Tweeted? Which topics garnered the most impressions? You need to know which 3 people from your buyer’s organization downloaded your company’s white paper or interacted with your company’s blog post.
Early in my career a mentor counselled me, all selling is relational, even commodities. We were selling petroleum products in bulk at the time. And while price was important, I learned that relationships trumped price time and time again. At the core of relationships is a level of trust between seller and buyer. If the buyer can’t find you, can’t read what they find or doesn’t like what they find, trust will not follow.
With 69% of the B2B buyer’s journey occurring prior to sales engaging...
1 2016 Annual Report, 9th Annual Research Project, Sales Benchmark Index, pg. 4.