Yesterday, when writing about The Mind Of The Customer, I touched upon why the practice of bundling irritates, even angers, customers.  Bundling comes in many forms, not all of them enforced, not all of them intrusive.

It is normal and natural for a company to try and sell that which is on the truck, as it were. Where it becomes unnatural is when companies work hard to include products and services they know the customer does not want, by creating artificial “bundles” that contain their “most wanted” goods with their least wanted ones.

Bundles can and do offer choice. Some of the consequences of bundling are less than savoury. For example, in the early days of mass mobile, some telcos practised designing “out-of-bundle” products. Wait for it: the bundles were designed not to be used. The most egregious example? “Inclusive” minutes and texts you couldn’t get at. So customers would have predictable “out-of-bundle” costs, using products designed to capture that market. Still sends shivers down my spine when I think about it.

It’s easy to understand why these things happen. Often it’s as a result of incentives that militate against the customer. Private companies tended to focus on profit maximisation, and owner-managers understood the importance of customers for life. As they scaled up (and often went public) the focus moved from profit maximisation to revenue maximisation, and the idea of a lifetime relationship with the customer began to fade. Large public companies, focused on “shareholder returns”, often worried even less about churn: they’d either hold on to their customers via pseudo-monopolies and regulatory capture, or just not care: many were paid for revenue, not profit.

So the very idea of a “customer for life” weakened, even though numerous studies have shown that it is far more profitable to engage with an existing customer than with a new one.

It must have been sometime in the 1980s that I started hearing the term “stakeholder returns”, suggesting that people other than shareholders had the right to expect some return. Staff. Partners.

And customers.

In today’s environment, the customer is more than just a customer; more than just an “advocate”; she’s a channel, creating leads by recommending your product or service to her friends; she’s your partner, suggesting improvements to your distribution and supply chain; she’s your co-worker, trying out new products and giving you quick and accurate feedback.

If you’ll let her.

And if you don’t, she’ll find someone who does.

[Incidentally, the recent Economist Schumpeter post on restoring faith in firms is worth a read in this context: Companies’ moral compass: Some ideas for restoring faith in firms].

Back to bundling. The least intrusive form of bundling is when the company sets its salesmen sales quotas with specific product/service mixes. You can sell all you want, you’ll always make the base commission, but if you want the multipliers and to make the “Club”, then you’ll have to hit targets for the mix of products. Sensible, you say? At least the incentives are less likely to militate against the customer. But sometimes these structures can have hilarious consequences:

At one firm I worked at, we were slowly exiting the production and sale of calculators. Large, desk-based, industrial strength, calculators. So some bright spark decided to include a target for calculator sales in the product mix for “Club”.

First, the salesmen sold them to customers.
When they ran out of customers who’d buy them, they started giving them away, eating the costs out of their commission.

When the customers started saying “No more” to the free calculators, they started making up customers to “sell” the calculators to.

When their partners objected to the stockpiling of calculators, still in their packing, in their garages, something had to give.

I was present the day the City of London police called on our offices in Dominant House, Queen Victoria St (It’s now called Senator House, and it’s still opposite the Seahorse pub). Apparently they’d found a very large number of calculators in the Thames, and wondered if we’d been burgled. The calculators were found just off the pier near the Samuel Pepys, the favourite watering hole of the company’s City salesmen.

Strange, that. No burglaries known. Just hundreds of calculators in the river.

Incentives.

Introduction: The Mind of J. G. Reeder

 

I must have been around 8 or 9 when I contracted jaundice. It was awful. I can still remember the horror of watching my eyes and skin go yellow, watching everything I touched stain yellow,  feeling feverish all the time, unable to sleep, unable to relax. I have no idea how long I suffered from the disease, but it felt like months to me. To make matters worse, I wasn’t allowed any fried food, any spices (not even salt or pepper), any traditional sweets, any fats. All I can remember eating is boiled vegetables and a despicable skimmed-milk dahi. Yecch.

And of course I couldn’t go to school. Or see anyone or play with anyone. I had one regular visitor, an old crone who came in to the room I was quarantined in; she would come in, pour hot water into a silver bowl my mother gave her, drop some needles into the water, add some red powder, swoosh it around, mumble something completely unintelligible and then disappear until the next time. And that was meant to heal me. Hmmm.

No school. No friends. No food worth writing about. TV hadn’t made it to India. We had radio, we had a gramophone, but the supply of electricity couldn’t be relied on.

No nothing.

My dad, realising I must be crawling out of my tiny skull, gave me a break. He offered to bring me back as many books from the Calcutta Club as I wanted, every night; all I had to do was to give him the list. And so a habit was born. I read every day, all the time, sometimes nine or ten books in one day. Sleep was not easy in my condition, and I craved mental stimulation.

By then I’d already covered the traditional “child” spaces of Richmal Crompton and Anthony Buckeridge and Enid Blyton and Frank Richards et al; I’d already delved into the plays of Shakespeare and Shaw, the poetry in Palgrave, and most of what passed for modern classics then: Cervantes, Swift, Carroll, Twain, Dickens, Eliot, Austen, Hardy, the Brontes, you know what I mean. He then introduced me to the world of mystery/thriller/detective fiction, and I fell in love, starting with Chesterton’s Father Brown and Edgar Wallace’s Just Men. Phillips Oppenheim, Sayers, Baroness Orczy, Charteris, Christie, Creasey, Spillane, Erle Stanley Gardner all awaited me. Once I was through them, I could move further afield into humour and even adventure, and the family “holy trinity” of PG Wodehouse, Max Brand and Rex Stout. So no Alistair Maclean, no Hammond Innes, no Nevil Shute, not as yet. And a long time before I could be allowed to appreciate people like Guareschi’s Don Camillo, or Carter Dickson’s locked room mysteries. Before I could discover Ross Thomas and Ross Macdonald and Donald E Westlake. The list is endless.

Father Brown was fabulous, I can still remember reading about Flambeau’s dairy operations as if it were yesterday. And Edgar Wallace was brilliant. It was Wallace who introduced me to Mr John G. Reeder. Here’s an excerpt from a Reeder short story, The Poetical Policeman:

 

 

John G Reeder had the mind of a criminal. He quietly went about his way solving the most outlandish crimes because he could think like a criminal.

I’ve heard talk about companies becoming customer-centric for decades now, and most of the time it’s been lipstick on a pig; too often, people find it hard to put themselves into the shoes of their customers.

To think like a customer, to have the mind of the customer.

 

 

The Mind Of The Customer

 

As a customer, there are two big things that are designed to discomfit, irritate, alienate, frustrate, sometimes even anger me.

The first is when a human being acts like a machine; and the second is when a machine acts like a human being.

There is nothing more frustrating than having to deal with a human being who quotes rules at you. Not regulations or laws. Rules. How often have you been faced with a situation where the person “serving” you goes all jobsworth on you: “I’m sorry sir, rules are rules. You will notice it is one minute past eight, and I stop serving at eight. If we make an exception for you, where is it going to stop? No sir, rules are rules.” [Usually said while inspecting fingernails, no eye contact, usually when there is no one else waiting to be served, and usually when the person could have served you faster than the time it took to spout the rules.]

Almost as frustrating is when machines act unpredictably. Like when the ATM dispenses cash to one person, chews up the card of a second, then reverts to business as usual after that. Or when the IRIS machine at Heathrow works/stops working/works.

Next on the list is the bundle.

What a delight. Not. This is where the company looks at what it’s got, knows what the customer wants, and more importantly, knows what the customer doesn’t want. But they need to sell what the customer doesn’t want. So what they do is they make a new thing, one which contains both. A bundle. You want to fly to Istanbul for the Champions League Final? Yes we have flights, but only ones that come with hotel rooms. You’re OK with that? Great, here are the flights. And five nights hotel accommodation. Yes, five nights. All our one-night packages are sold, sorry.

And finally, the Gold-Paved Cowpaths.

This is a particular modern specialty, where advances in technology are used to protect and fossilise historical business models. The best example I can think of is region coding on a DVD or game disk. Take what you did yesterday, and enshrine it by corrupting today’s technology. There was a time when there were different video standards in operation around the world, and it was not possible to play the videos of one region in another. PAL and SECAM and NTSC and all that jazz. The DVD threatened the way the industry worked, and so the industry chose to invest in technology to mimic the old world by creating new, artificial, constraints. Pave the cowpaths indeed. With gold. Pfui.

These are simple examples. In each case, try and think of the customer who would want what was being provided. A rule-bound human. An unreliable machine. A basket of products containing some stuff you want. And a lot of stuff you don’t want. Constraints placed on how you use stuff in order to prevent constraints on how they sell it.

Too often, people start off trying to think like customers, but soon they revert to their traditional ways of working and thinking and acting. Which is why historical monopolies find it hardest to think like a customer. And why airlines and banks and telecoms organisations struggle with engaging their customers.

If you want to understand something about the mind of the customer, then go read the Cluetrain Manifesto. It may be 14 years old now, but it’s a great place to start. [Disclosure: I have a chapter in the 10th Anniversary edition, but without any financial interest]. Here’s a quote from the book:

 

A coda: Amanda Palmer and the Art of Asking

 

Some of you find it hard to engage with me when I write long posts. So I’m going to stop here. Instead of carrying on, I’m going to link to the video of Amanda Palmer’s talk at TED recently. She says more about engaging with people in one video than I could in a lifetime. Thank you Amanda, thank you TED.

 

I’ve been thinking about the mind of the customer for years now, and trying to do something about it; it’s part of what attracted me to Cluetrain in 1999, part of what attracted me to what Doc Searls and crew started doing with VRM, part of what attracted me to the Maker Movement and to open source. It’s part of what attracted me to Marc Benioff and to joining salesforce.com.

More to follow, sometime over the next few weeks.

In the meantime, please let me know what you think. Where do you see companies “thinking like customers”? Why do they succeed where others fail? These are the kinds of questions I want to tackle over the next few months here.

 

Tomorrow is Oscars night. And there’s a possibility that I’ll stay up to watch the ceremonies “live”. Not because I’m a huge cinema fan. I’m not. I used to be. The only reason I’ll stay up is because the cricket is on a little later, and I may consider making a night of it.

It never used to be like this. Growing up in Calcutta, India, during the sixties and seventies, going to the movies meant something.

For one thing, we had real movie halls. None of this modern smelly-shoebox-with-popcorn-cola-floors stuff.

 

In those days the buildings were awesome. You felt you were going somewhere special just by walking in to the cinema lobby. Air conditioning. Bright lights and dazzle. Thick carpet underfoot. “Elegant” music. People dressed up as if they were going out. Because they were. Going out, that is.

[The buildings above may not look much to you: they’re mainly art deco installations seen a decade or more later, in the austere times of the Second World War. But they were still there when I was born, in 1957, and very much part of my childhood and youth. Elite. Metro. New Empire. Globe. Lighthouse. Minerva. Tiger. Those were the Seven Sisters of my upbringing.]

Going to the movies felt special.

The feeling of special-ness continued as you left the lobby and entered the cinema hall proper. There was only one hall, one screen, none of the modern ten-screens-in-a-shoebox-alongside-a-strip-mall nonsense. And it felt gigantic when you walked in. The aisles were wide, with ushers waiting to show you to your seats. There were queues, but space enough to deal with them, and people enough to help you. And there were ice-creams and chocolates and pop corn and soft drinks on sale. There were even programmes on sale for the film you were about to watch. If it was a musical, there were little booklets of lyrics. You felt special.

The “stage” itself had real, heavy curtains, probably the only curtains in the whole city that were operated electrically. At least it looked as if they were operated electrically. For some reason, the projections would start before the curtains were drawn open, so that you would see the folds and the frills undulate with print before disappearing for a while.

The seats were plush and comfortable. And everything was dressed up to the nines.

The lobby had bars. Real bars, with enough people serving behind the bar to let you get a drink with just a few minutes queueing. Or you could sit down at a table and wait to be served. You could even take your drink in to the cinema.

The entertainment wasn’t just about the main event. Of course you had trailers and advertising. But you also had at least one short film beforehand, sometimes two. Sometimes they were cartoons, but not always. And you had intermissions. At least one, sometimes two. Time enough for you to go to the restroom, get an ice-cream or a drink, talk to people about what’s happened so far, and then sit down again. If you were late for some reason, the ushers had torches that they used to help you, shining down discreetly on the floor in front of you. And there was space enough for you to get to your seat without making everyone in the row stand up. All you had to do was stoop to minimise getting in the way of people.

The entertainment tended to be wholesome, often formulaic. Indian censors made sure that what you saw was U if you were under 18 and A if you were old enough. But you didn’t care, you went for the experience, and to be treated like royalty.

And at the end of the film the national anthem played and everybody stood quietly and then went home. Usually chatting excitedly with the people they came with.

What happened to all that? I get told it was TV and VHS and DVD and streaming, but somehow it’s not that simple for me.

Going to the movies used to mean something.

Today, when I go to see a play in the West End, many of the things I associate with seeing a film as a child and young man are present. Of course theatre ticket prices reflect that.

Today, when I go to see the opera, I get all the things I associate with seeing a film as a child. People are dressed up. The queues are orderly. And there’s enough space for everything. Not a shoebox in sight. Of course opera ticket prices reflect that.

There’s at least one cinema venue in London that feels like the good old days, and I love going there when I can.

The rest of the time? I still go to the movies. But it’s not the same.

There are a lot more screens everywhere, mostly empty. Everything is smaller, dirtier, more commoditised. Nothing special.

Nothing special in the UK, nothing special in India, nothing special in the US. Somehow it’s all become about multiplexes and shoeboxes and any-colour-you-like-so-long-as-it’s-black.

You know something? People will pay good money, real money, to feel special.

Going to the movies used to mean something. And I hope it will, again.

Because feeling special is a Good Thing. If the theatre can do it, if opera can do it, so can film.

 

Photo courtesy of Dionna Raedeke

 

The act of sharing involves two or more people. At least two.

Sharing involves participation. Active participation. By two or more people. At least two.

Not two anythings. Two people. Not machines. People.

In the past I’ve written about the role of design in sharing; about why people share, and what people share; if you’re interested in the subject, please just search for “share” on this blog and you’ll see dozens of posts. Today I want to concentrate on another, critical, aspect to sharing.

Speed. And intensity.

Any activity that involves two or more people needs to be based on something tacit, an understanding of the reciprocity implied within the relationship(s). We humans are subtle creatures, and our understanding of reciprocity is nuanced, shaded, complex. So the reciprocity is not necessarily either short-term nor crude. You don’t expect that everyone will buy everyone else a drink when there are “rounds” at a bar, at least not in the same evening. But “over time” you expect a balance. You don’t expect that everything you do for someone else is going to be reciprocated in the same currency by the specific recipient: there’s an altruistic pay-it-forward mentality in many of us. We are not, in the main, manipulative creatures; our expectations of reciprocity are probably better described by a sense, an expectation, of “fairness” rather than a mechanical give-and-take. Compromises are involved, trade-offs do happen, but usually not in any simple short-term bilateral space.

Instead, we have this notion of fairness. Sometimes this extends into something even harder to describe, a sense of what is “reasonable”.

So when two people meet and start to build a relationship, when they begin to share things — time, experiences, views, beliefs, ideas, anecdotes, whatever — there is a need to watch for these human notions. Notions of what is fair. And notions of what is reasonable.

[All this has nothing to do with technology. Not yet anyway.]

Most of us seem to be able to pick up the signals to determine what the appropriate levels of reciprocity are, in the context of fair and reasonable. And then we put that learning into practice as we navigate each relationship. It’s a voyage of discovery, one where the pace and the depth of the conversation is  tacitly negotiated by the parties involved.

And relationships grow and flourish as a result.

These things, natural to us in the world of flesh and blood, are much harder to achieve in digital space. But they matter nevertheless.

In a digital relationship, you do have to care about what you share, how much you share, and how quickly you do it. Sharing is meaningless unless what you share is appreciated by the people you share it with.

Appreciated. Now there’s a good word. Appreciation is about estimation of worth, appraisal. It is also about something increasing in value.

When you share something, think about who you’re sharing with, why you’re sharing. Think also about whether the person or people you’re sharing with will appreciate your action.

Because the value of sharing comes in the appreciation.

 

Image courtesy AFP via The Coffee House

 

Monsoon. A word that evokes wonderful memories in me: the welcome smell of parched earth receiving badly-needed nourishment; the happy sound of mud-heavy footballs kicked by mud-heavy children wearing mud-heavy clothes and boots; the joy of splashing through waist-high flooded streets on the way to school in the morning. Monsoons were always happy times for me.

The 1974 monsoon was a bit special, the months preceding the rains were drier than normal, and the monsoon was wetter than normal.

Data taken from Weatherspark’s historical weather records for Calcutta, West Bengal, 1974

I remember the rain for another reason. Physics class. A particular question. And the sheer joy of working on the answer. The question was taken from the Resnick and Halliday Physics books; I think Part 1 was correctly referred to as Resnick and Halliday while Part 2 was Halliday and Resnick. The strange things one remembers after nearly forty years. Anyway, the question was simple. And here I’m paraphrasing:

Drops are falling steadily in a perpendicular rain. In order to encounter the least number of raindrops while travelling from point A to point B, would you travel at (a) your fastest speed (b) your slowest speed (c) some intermediate speed? Explain your answer.

How we loved that question. Boys battled with beakers, twirled their test-tubes, studiously engaged in getting wet while “learning”. Others sprinted from point to point, yet others walked slowly and purposefully, as if they were wearing cement boots. Some preferred discourse to action, so addas formed. Deep discussions on the difference between “encountering raindrops” and getting wet. Lots of arm-waving, lots of pontificating. It was a microcosm of Calcutta traffic, because children from other classes and years went serenely about their business while all this was going on, and miraculously no one bumped into anyone else. Not a drop spilt from beaker or test-tube.

We observed, we imitated, we tried out, we refined, we discussed, we argued. We learnt.

And we laughed.

Incidentally, the question of how to approach travel when it’s raining continues to excite scientists. Take a look at these papers: Whether or not to run in the rain (2012) or Walking or running in the rain: A simple derivation of a general solution (2011) or Is it really worth running in the rain (1987)

Learning from observation and trials. Learning by copying and imitating. Learning in groups. Learning with laughter. The DNA of memories I have of school and of university. Phrases like “How did you do that? Could you show me? Where did you find that out? Can I watch you? It doesn’t happen when I try, what am I doing wrong?” …. these were the phrases of childhood and school, with teachers there to facilitate learning rather than just to teach.

I still learn mainly by watching others and trying things out.

Take cooking. So much of food preparation is about tips and tricks, observation, trial and imitation. Here’s a small list of what I’ve learnt by watching others. Want your whole grilled fish not to warp or tear when you’re finishing it off under the grill for that crisp golden look? Then take a knob of butter, rub it against the grain of the scales so that tiny slivers of butter get under the scales. Then, when you apply intense heat, the skin won’t contract faster than the flesh, and everything looks the way you want it to. Want to peel garlic without the stickiness and the mess? Take the cloves, put them under the blade of a large knife, then slam the blade with the flat of your hand. Hey presto the cloves are peeled. Don’t like the sound of that? Then just put the separated cloves in a cocktail shaker and shake very vigorously for a minute. Same difference. Want to make ultra-thin pancakes for Peking Duck? Roll the flour into a long thin cylinder, maybe half an inch thick. Chop cylinder into 3/4 inch bits. Then take one bit at a time, slice in half, moisten with oil, put the two halves back together. Then take the re-integrated bit and roll it out into a pancake using a standard rolling pin. Steam the result, you’ll find you can peel the pancake into two ultra-thins.

The ability to observe. The ability to imitate. The ability to try it out for yourself. The ability to get quick feedback. Four critical requirements for learning.

We’re in the midst of a digital revolution. Everything that happens can be observed by more people than has ever been possible before. The internet is a copy machine, the ability to share and to imitate has never been cheaper. Tools continue to be invented to make it possible for all of us to be able to try more things for ourselves than we could ever do before.

This digital revolution is a learning revolution. As long as we don’t waste it. Waste happens when we constrain the ability to observe, to imitate, to try out, to get feedback. Particularly when we have the opportunity to make it all affordable, ubiquitous.

Education drives the solution to so many of our perceived problems. Education is so incredibly accelerated, assisted, augmented by digital infrastructure. If we let it.

We who are here on earth today can make a difference to that earth by ensuring that we don’t waste this incredible opportunity, of using digital infrastructure to enfranchise everyone, to provide the opportunity for all to learn.

Battles like SOPA and PIPA and ACTA are not about access to films and TV and music and books and magazines. The internet was not conceived to be a new delivery mechanism for Hollywood.

There will be more SOPAs. More PIPAs. More ACTAs. Because change is difficult, and some are more affected by change than others. We don’t have as many farriers or blacksmiths or fletchers as we used to have. We don’t have as many gramophone manufacturers or tape recorder makers or VHS rental shops as we used to have.

Digital infrastructure disrupts many forms of publishing industry. That very disruption, while apparently affecting those industries adversely, allows for education to scale in ways we couldn’t ever have imagined. Just look at what’s happening with MOOCs.

And the publishing/entertainment industries don’t have to be affected adversely. They just have to learn to create, market, deliver and price differently. Like everyone else is doing.

So when you see the next SOPA or ACTA rear its ugly head, think of the changes that good education can bring about. Changes to do with climate, the environment, water, energy, nutrition. Changes that enable more to be gainfully employed. Changes that teach people to fish rather than to receive fish.

That’s what the battle is about. And you know something? I’m singin’ in the rain. Because it’s over.