4 Questions Every Small Business Must Ask About Artificial Intelligence

From Siri to Alexa, customers are becoming accustomed to AI-powered solutions and soon they will expect the same for their local businesses. Sure, an AI rollout can be daunting, but by adopting a strategic approach and adding smart software, small businesses will not only be able to differentiate themselves from competitors, but compete with the industry giants as well.   While many overcomplicate the technology, AI’s behaviors are predictable – it’s merely an advanced system that is trained, not told. AI mimics the human brain in the way that it learns. It starts with no information, and after being given thousands of pieces of information, is able to understand and make predictions about data it has never seen before.   AI will become a threat to small businesses if owners believe it won’t impact them, or isn’t already impacting them. The fact is, AI has the potential to drastically help companies of all sizes work smarter and more efficiently than ever before.   Before acting on an AI rollout, here are the top four questions small businesses should ask themselves:   What is it you are looking to achieve with AI?   AI can provide great value for sales, marketing, finance, HR, customer service, and more. Hone in on what exactly you are hoping to achieve with the use of AI – where do you need to increase productivity?   By setting highly focused goals, you will be able to develop a plan that prioritizes specific applications for AI technology. This way, small businesses can slowly adapt and familiarize themselves with the software, that will, overtime, drastically enhance the bottom line.   The most immediate benefit of AI is that it will provide immense efficiency. There will be less time entering data and more time getting valuable insight to augment decision making. There’s a mass amount of data waiting to be analyzed and AI will guide businesses on how to act.   What data has already been put into a system of record?   You’ll never hear the words “too much data” and “AI” used in the same sentence. AI systems become more accurate and effective as the volume of data increases. The big industry players have been accumulating business intel, reporting, and have already moved on to predictive analytics.   The first step in your AI project is to systematize your business. With the widespread adoption of cloud based solutions (SAAS) and the rapid reduction in the cost of storage and processing, the first step is to start instrumenting all elements of your business. Your website, your marketing activities, your sales – including the business that you “win” and “lose.”   Unlike huge, multi-national companies that are able to capture and process peta-bytes of data, small businesses have had access to significantly less data. This is changing with the adoption of cloud-based products and services and the availability of open data sets from governments and other providers. The goal for small business owners is to have the appropriate systems and infrastructure needed to go and analyze data and extract even more business value.   What is your ability to explore your business data and understand what’s going on objectively?   If you’re looking at the raw data it’s easy to “torture the data” to get the answer you want to be there – don’t fall victim to this habit.   Your goal is to generate several hypotheses from the data. Examine outliers and the associations between data elements. Be careful not to draw conclusions too early though, as outliers could be caused by “bad data” that needs to be cleaned up, and the relationships may not be strong enough to make any definitive conclusions. We often allow our personal biases and expectations get in the way of looking at data. The numbers don’t lie, but if we look at them expecting certain results, we may end up manipulating the information to meet our expectations. In order to take full advantage of AI, we need to be able to trust the numbers.   You don’t need to use expensive tools; use the reports and dashboards that are built into the tools you already have and approach the problem with an inquisitive mind. Look for the unexpected and when you detect something that’s interesting, create one or more hypothesis to explain what you’re seeing, and then set about to prove or disprove it.   Is your technology provider on the path to add these capabilities into their product to further automate and provide more meaningful insights?   AI will not provide any benefit if small businesses lack the IT infrastructure to support it. Start by upgrading your approach to IT – move toward a cloud-based resource that can support AI once implemented. Data is a prerequisite to introducing AI into a system, and a paper system is useless when it comes to incorporating AI.   Make sure your goals are aligned with the direction your software is going. If it doesn’t seem as though your software provider is working toward the same future as you, it might be time to consider another option. It’s important to ensure your provider is taking steps to remain relevant in the future of technology.   If you’re just getting started on the business analytics journey, begin by using the reports and dashboards that your systems have today. Become familiar with the digital assistants that are already on your smartphone; explore what they are already able to do and stay current with how these systems are evolving.   By making an effort to understand and embrace AI, small businesses are optimizing operations, improving customer-service, and growing their bottom line. Imagine where your company would be if you didn’t embrace the uncertainty of the internet or didn’t go mobile in the age of the smartphone. Artificial intelligence is the newest technology adding efficiency and intellect to small business – don’t be late to adapt; be better, faster, smarter operators with the use of AI. First published in Forbes

To Prove Marketing’s Value, a CMO Must Learn to Speak Like a CFO

As Rod sat outside the conference room waiting to be called in to present Marketing’s quarterly results to the board of directors of his Fortune 50 public company he reflected on how marketing is changing. What a long strange trip it’s been from the Grateful Dead song “Truckin’” keeps popping into his head. Rightly so, Marketing has become overly complicated and just a bit weird. Not just because of the myriad of technologies that CMOs like Rod have been buying in an attempt to understand and manage holistic customer lifecycle relationships. But despite the plethora of channels, content and ways to attract-engage-convert customers, ROMI (Return on Marketing Investment) is only slightly more predictable than it was five year ago. “I have lots of analytics and detailed metrics on conversion and performance but consistently accurate predictability of marketing generated revenue? We’re not there yet,” thinks Rod. That lack of predictability is a problem on many levels, not the least of which is that Boards expect it. Rod is one Chief Marketing Officers (CMO) that participated in a qualitative study on emerging marketing trends funded by Marketo. The marketing leaders interviewed were with B2B or B2B2C companies ranging in size from the Fortune10 to early stage start-ups across financial services, manufacturing, high technology and SaaS industries. Marketers have abandoned educating the rest of their organizations on the importance of marketing specific metrics and have dropped using terms such as TOFU, MOFU, MQL, etc. in conversations with Sales, Finance or other parts of the organization. By talking about marketing programs and investments in financial terms, CMOs have seen an unprecedented level of alignment occur across the organization. With Sales the conversation is not about leads but pipeline, customer engagement, conversion and close rates. In an ideal world CMOs would like to have more strategic conversations with their CEOs and Boards about the value of activities and the impact of investments that are not directly tied to revenue. Reputation, awareness, customer experience, tracking cohort customer groups, pipeline by channel, influence of communities/digital properties, and how to drive growth are a few of the topics CMO would like to talk about. But having been burned in the past, CMOs keep the conversation strictly on revenue. Rod knows his CEO and board expects him to routinely report out revenue forecasts based on current and alternative marketing spend scenarios as part of evaluating business strategies that management is considering. He needs a data science team, help from the CIO and strategic MarTech vendors to build a predictable model that includes all the channels, programs, conversion rates, target industries and customer segments. Having spoken with a handful of progressive CMOs that have built credible market models, Rod knows it’ll enable his team to focus on where the strong and weak points are in the marketing stack, understand why and whether it’s an execution issue or a customer/market shift. The team would be able to spot market shifts – buyer, industry, competition, economic – and respond faster by changing attraction, retention and product programs. Rod’s longer term vision is to do historical benchmarking as well as against competitors. Being able to model, in detail, LTV of customer lifecycles would enable his team to un-complicate marketing and increase their precision in forecasting revenue by defining and aligning touchpoints, content and offers to customer journeys. Marketing has the real, hard data to prove its contribution to the topline – as long the language the CMO speaks is financial. The rising sophistication and transparency of marketing ROI is enabling every CMO to have a credible seat at the board table. The real power of the market model lies in its ability to link metrics and programs to what the Board and his CEO cares about – leads, pipeline, wins and market share. As the CEO comes out of the conference room to call him in to present, Rod stands up confident his conversation with the board can go to a new level and that he can demonstrate, tangibly, the importance of what marketing is and can do. First published in CustomerThink

How Ethical CEOs Lead Unethical Companies

We all know or heard of someone who did something they shouldn’t have. A long time ago I worked with someone who was responsible for setting up international sales events. She would book the venue on her credit card, get reimbursed and then cancel it, pocketing the cash. There is little disagreement that this is unethical behavior. But it took a while before the company acknowledge the behavior and addressed it despite her actions being common knowledge. What about questionable behavior that an organization seems to accept as OK? Actions like making decisions that impact your bonus without really looking at the facts, pressuring a prospect to buy more product than they really need, writing marketing copy that stretches the facts beyond truth, or positioning yourself as an objective intermediary where you have a financial interest in the outcome. If an organization’s culture implicitly condones questionable practices does that make unethical behavior ethical? Multiply the implicit acceptance of questionable behavior to a grand scale and you get situations like Turing Pharmaceuticals, Enron, Uber, the financial meltdown, and the list goes on. These are not anomalies but routine events to which we all exclaim shock at not having foreseen the impending crisis. If leaders are generally ethical and want to do the right thing, how can so much go so wrong? I asked Margaret Heffernan, best-selling author of Willful Blindness and her response was not what I expected. Instead of being told about the corruption of society, tyrannical bosses, and the fallacies of hyper-capitalism, Margaret responded that it’s a function of human nature to “turn a blind eye.” By only seeing the error in retrospective, we engage in willful blindness. “This is not a function of intelligence,” said Margaret during a recent interview in San Francisco. “All through history these situations happen, it’s just much more prevalent today.” Her book is full of stories about leaders ranging from ship captains to Wall Street traders who inadvertently stepped astray of ethics believing they were playing by the company’s rules. Speed and complexity play major roles in explaining why unethical corporate behavior is on the rise. “Speed is very fashionable,” explains Margaret. “We believe that in order to be competitive you need to be the fastest which accelerates business cycles and our proclivity for working 7 x 24.” Leaders, managers and employees feel they need to run faster to keep their job or move ahead. “The problem with speed is that the faster you go, the less you see and the even less you feel,” shares Margaret. Speed is particularly dangerous for CEOs. Pattern detection becomes blurred because you pick up less data and good decisions are rooted in knowing and having the right data. Complexity is our other love affair. In the quest for agility we have achieved the opposite. Complex markets, distribution channels, product families, and staffing models has resulted in organizations that are too complex to manage. CEOs and management teams long ago lost the line of sight from problem to solution. Sales and Marketing struggle to connect and have a meaningful relationship with their customers. We’re unable to manage these complex global organizations as we’ve seen in the retrospective analysis of troubled financial institutions, automotive manufacturers, technology companies and economies. The inability of the governments to stimulate their economies and other countries to resolve the spreading immigration crisis are proof points. So what is a CEO to do? Margaret’s advice is to change how they manage. She points to three truths discovered while researching her book. 1. Employees almost universally believe their bosses don’t want to hear any bad news or information that challenges commonly held beliefs. 2. Business leaders understand that they don’t know what they need to know and rely on their employees to tell them what is happening in the business. 3. Every organization has fundamental orthodoxies about things that cannot be talked about. Her advice to CEOs is to consciously slow down. Companies like Eileen Fisher, an apparel and design company which also happens to be a winner of the Great Places to Work award, slowed down their production and design cycles along with their decision making. The result was a dramatic increase in their profitability and competitive stance. In the fast paced world of fashion, this seems counter intuitive and is a good example of why we need to un-complicate our lives. Next, CEOs need to change how they communicate. By slowing down, CEOs and their teams can have more meaningful conversations about the business, data patterns, and thoughtfully evaluate different courses of action. Conversations should:

  • Take longer,
  • Draw in a wider range of stakeholders and audiences,
  • Allow for more organizational dissent, and
  • Gain wider buy-in and consensus on key decisions.
What about social media and its promise to cut through the clutter of complexity? Transparency, trust-based, relationship-driven, and viral word of mouth, social media should turn the tide on unethical behavior. “Possibly,” shared Margaret, “but the jury is still out on that. While social media may get companies closer to the buyer, it is still in a nascent stage.” Some companies are starting to figure out that the social media’s real power is to tear down internal silos and blind spots, giving everyone a clear line of sight of business problems and their solutions. But it will take time. In her work with CEOs around the world, Margaret’s found that leaders who slowed down and stimulated meaningful discussion and dissent around appropriate, meaningful topics did remove blind spots and the pressure to cut corners. That realization, in turn, drove a cultural movement to question the beliefs the organization held as truths. The perceived boundaries that everyone naturally constructs as a way to deal with speed and complexity were torn down along with that associated behavior patterns and opportunities to engage in questionable behavior. She’s found that CEOs that take this bold move “see” more opportunity, clearer and more often. “Leaders that are no longer blinded become very energized as their companies feel brand new,” said Margaret. Take the time to think, unpack and slow down, it’ll make you more profitable, successful and ethical. First published in CustomerTHINK

How Leaders Should Ground Business Strategy in Customer Success

Why is customer centricity such a challenge? Theories abound ranging from customer ownership delegated to someone other than the CEO; a culture that does not appreciate the link between employee engagement and customer success; lack of in-depth customer understanding; processes that don’t consistently deliver a valued lifetime experience; or a perspective that customer engagement belongs to marketing, to name a few. From my experience working with Fortune 100 to 5000 companies across a wide range of industries, these ‘theories’ are at play but they are not the root cause of the challenge. That lies in their business strategy. Setting business strategy is as critical to an organization’s success as having delighted customers. The first sets direction and focus. Done correctly it enables employees and partners to align their efforts, resources and plans to achieve the measurable and time-bound objectives of the organization. The second, delighted customers, is the path to market share growth. Yet many business plans lack specific goals or objectives for customer success. The two are one; not separate. The role of the annual business plan is to get everyone in the organization to have a shared vision of the future and agree on what needs to be done, when, by whom and with what resources to achieve target end state. Only through planning can we confirm that everyone sees the same thing and has worked through the issues to reach that point of acceptance. Not only does everyone in an organization need to sing the same verse from the same hymn from the same book, they need to also sing it with the same level of gusto. It sounds trite but it can be hard to achieve. Most organizations have no problem setting goals. Goals are broad statements of the company’s aspirations for the future, stated in external business environment terms, are generally enduring and often not measurable. Rarely do companies struggle with setting goals around revenue/profitability, mindshare, reputation, market share, product mix, thought leadership, organizational agility, culture or customer success. A typical customer success goal is worded along the lines of: “To maintain solid, sustainable customer relationships with the highest level of loyalty and sustained satisfaction.” The challenge comes in defining objectives. Objectives are internally focused and defined in financial, statistical or numerical terms. Performance against measurable objectives is the prime indicator of whether the related goal is being achieved. While goals are stated in multi-year terms, objectives are time bound and stated in quarterly, monthly and/or annual terms. Planning teams inevitably get stuck on setting objectives for the ‘customer success’ goal. They get stuck because the company often views customer delight / loyalty / satisfaction (pick your favorite label) as a separate set activities loosely related to other goals. Nothing could be further from the truth. Customer success is interdependent as well as part of all other goals. Miss any goal’s objective and it will have a direct impact on achieving customer success. Two things typically happen at this point. An epiphany occurs on the depth of the interdependency between the rest of the business plan and customer success. Or management focuses on putting customer success in a box. Most companies opt for the latter because addressing the interdependency is seen as “opening Pandora’s box”. Their focus, incorrectly, is on finishing the plan instead of planning a path to assured success. The missed opportunity is on the road less traveled. Companies that invest the time to understand their current and future target customer groups’ lifetime ‘value’ expectations and match them to the organization’s strengths, weaknesses, market opportunities, threats and resources consistently develop more achievable strategic plans in good times as well as bad. Best-in-class companies do this matching across a number of internal and external scenarios to identify where the ‘rubber meets the road’ in achieving true customer and company success. Not only are their plans more consistently achieved, their companies also have significantly greater internal alignment, are more agile and innovative. The most common push-back to this approach that I hear is “it takes too long”, “we know our customers”, “our business strategy is not dictated by customers”, and/or “we don’t have time to overhaul our strategy”. None of these are really true; they are just excuses for not getting outside of one’s comfort zone and seeing the many shades of future reality. Leaders looking to ground their business strategy in customer success can start by: 1. Journey map the lifecycle of their highest value current and target customer groups. 2. Map interactions, their associated emotional and value states. 3. Conduct a detailed SWOT, emerging trends and competitive chessboard analysis. 4. Co-create with highest value customer groups a higher value-producing, distinctive customer lifecycle experience. 5. Evaluate current 12 to 36-month macro-strategy against #3 and #4, identifying areas of change. 6. Define the target end-state and timeframe for change area. These six steps will give you a solid start down the path of customer-centric business strategy. The key is to not boil the ocean, be too attached to sacred cows, and limit future opportunities by screening them based on today’s resources and market states. The holistic focus enables employees to understand the key interaction/process activities, emotion/culture intersections, and internal/external variables that drive preference, engagement and market share growth. Embracing the interdependency of customer success turns the platitude of customer delight into a tangible, achievable reality.

Customer Experience Is A Culture Problem

Customer experience has undergone a dramatic transformation over the past four years.  Beginning as a new software category promising to help companies delight, convert and retain customers to where it is today, a business discipline, focused on aligning culture, strategy and processes to audiences’ lifecycle expectations. The road has been a bumpy one. The software category matured, fragmented and is consolidating as vendors and users, alike, tried to achieve the promised ROI – revenue growth from customer loyalty.  Companies ran into multiple roadblocks mostly from employee fear, resistance to change, lack of internal competences and mistaken belief that software could bypass change management. Vendors, on the other hand, introduced a steady stream of features at a cadence that outpaced the capabilities and understanding of the most sophisticated users. An impasse has been reached.  Frustrated users are taking a step back to evaluate why delivering the experience customers valued was so hard.  Robert Tas, chief marketing officer of Pegasystems, a strategic applications vendor for marketing, sales, service, and operations, summed up five key barriers as:

  • Companies structured around products instead of customers,
  • Treating digital experience as a ‘check the box’ and not understanding what it means,
  • Line of business-centric funding model that doesn’t benefit anyone else,
  • Disconnect between employee expectations with them being treated as consumers and how they ultimately treat customers , and
  • Not closing customer feedback loops and being transparent.
“Customer experience is not a technology problem – it’s a culture problem,” states Tas. Breaking the culture paradigm requires different perspectives. “Customer experience is a disruptive business phenomenon,” shares Tas.  “As companies become more data, customer and digital centric, the speed of change will reduce barriers to entry and obsolete organizations.” Customer experience is in the process of being redefined. It’s not software that automates engagement or predicts which customer an employee should or should not pay attention to.  Customer experience is about all-inclusive strategic alignment between the customer’s engagement expectations, brand promise and the company culture behind the brand.  To win, CEOs must be maniacal about that alignment. One company that has taken this to heart is Qumulo, an enterprise data storage vendor.  Karim Fanous, vice president of customer success, implemented a three-prong strategy to align the company to key customers and their lifecycle expectations:
  1. People – empower front-line employees to do what is right to meet customer expectations. Fanous takes a different approach to hiring customer success managers. He hires seasoned practitioners, storage and system administrators, that have scored high on empathy skills. These employees have the maturity and experience to make the right decisions and serve as advisors to customers that add value to every interaction.
  2. Engineering – is required to ‘man’ the customer support center and answer support calls. Having the employees who design the product address customer complaints, questions and concerns results in better designed products that can be produced with fewer defects.  In short, they take more care in doing their job because they are directly accountable to customers.
  3. Automation – to remove complexity from the user interface of products. Fanous found that the ease of product use directly correlates to repeat purchases and higher NPS scores. Ease of use, however, cannot come at the expense of missing product features, value add or differentiation.
Other best practices that Qumulo has adopted include a dedicated Slack channel for every customer that is accessed by all employees; monthly check-in customer calls by sales, customer success, engineering and product managers; and full transparency on company business decisions and performance. The CEO of Qumulo, Peter Godman, is equally maniacal about customer alignment. He mandated a customer-first policy across and up and down the organization. Godman openly engages with all employees to reinforce the importance of Qumulo’s customers and celebrate the successes.  Achieving cross-organizational customer alignment didn’t happen overnight. It took two years and Fanous will tell you that the job is never done. Customer alignment is still a nascent discipline with evolving best practices.  Practitioners are just starting to understand the role behavior, emotion and cognitive marketing have on the intersection between customers and brands, B2C as well as B2B. That’s not to say that CEM/CX software is going by the wayside. Software plays a part in analyzing data to discern intent and context which enables companies to make more effective strategic decisions and interactions to sustain alignment.  CEM, CX, MA, CRM and analytics vendors are not there yet in terms of understanding their role in this evolve discipline.  One thing is for sure, customer experience is not a marketing or customer service ‘thing’.  It is deeply rooted in your business strategy and touches every corner of the organization. If the ROI you sought from embracing customer experience hasn’t been something to write home about, it’s time take to take step back and assess your approach.  Don’t be afraid to hit the reset button on your customer alignment initiative and come at from a fresh approach.  Start with first deeply understanding the customer from the outside-in, aligning company values and culture to, and define your business strategy around the customer. The advice I give clients is simple: Focus on employees first, then customers, followed by simplifying processes and institutionalizing it with technology. First published in Forbes on May 9, 2016