Tag Archives: Social Business

Social Media ROI

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Every now and then I hear that it is hard to find out what is the ROI in doing social media. Honestly I find such statement to full of baloney? The old adage “there is no such thing as a free lunch” comes to mind… why would a business take the time and money and do social media without knowing what the ROI is ?

Sadly most business think about social media is all about awareness… The problem with awareness is how do you know, what is working?  And how do you know that because of a social media campaign people are coming and buying and how many more people are they bringing based on the experience they had on your website, your store, etc.  Awareness is nice to have, but that awareness needs to mean something.

Before starting a social media campaign … understand what outcome you want to drive i.e. define success 

Just like when you take on any new business venture there is a success criteria that you have in mind. You may not hit the target in a straight shot manner but you want to minimize the variance between you want to be versus where you get to … (which is why I have always wondered my christopher columbus is called a great discoverer because he was way off the mark on reaching India but that is a blog for a different day) . The same concept applies when you start a social media campaign… what is the outcome that you want to drive ? Is it to Maximize buyers of your product and services? Is it to minimize the time to discover you product and services or is it to make sure that influential people are talking about your product or service … So know the outcome you want to drive … and please let it not be “awareness”. Here are some examples of how can you calculate some elements of Social media ROI.

Net Promoter Score

When you start a social media campaign, the ideal state is to know the economical value of each of the followers you gain on twitter or have an additional like on your Facebook page. In order to understand Net Promoter Score.

Start with the baseline on where you are at before the campaign. Know when the campaign ends … please do not keep a campaign running for long time otherwise it is a useless process

My example of calculating a Net promoter score is as follows  :

An additional follower on Twitter brings in 5 additional followers (amplification factor of 5)

NPS = Net increase in sales / Net growth of Twitter follower based on the campaign

Now you can know the amplification factor and you know the economic value of each follower

Spending

When you run a social media campaign, it is best to run a campaign with a special URL. Why a special URL ? Well thanks to the wonders of the web we have entered a new world of behavioral segmentation instead of the age old demographic segmentation.  The web allows for great flexibility to learn and know exactly what potential clients are doing when they get to your site. When you run a social campaign have a customized URL and have your website instrumented with your favorite analytics tools.  With your customized URL you can validate if you see increase in purchases based on the social media campaign.

Net increase traffic = Traffic after campaign – Traffic before campaign

% of Buying versus visiting = # of Purchases/ #Net Increase in traffic

A good barometer would be at least 10 % of visits generated are actually buying … but if your visits are just 10 people from the whole campaign …then there is something that is generally wrong with your site.

Loyalty

How many users are returning ?? This question is usually looked over as we are usually smitten by net new transactions  versus existing ones. Remember the existing clients are the ones that got you here and yes those new clients that you acquired via the campaign if they return to the site and purchase more, well that is good too.  Thanks to Cookie technology on the web, marketers and technologists know whether you are new visitor or returning visitor. In this case you want to look at

% Returning visitors = #Returning visitors/ Net increase in total traffic

% Purchases made by Returning visitors = # of Purchases/ #Returning visitors

if the Returning visitors percentage is high (i.e. over 50%)  that means the most responsive group to your campaign has been your existing client base .. which is a good thing … but then you have to ask yourself the following questions

Are these clients bringing new clients ? ( Going back to our NPS discussion)

What are the additional things are they buying ?

What is the average size of purchase for returning clients ?

These are the kind of questions that will help you develop and maintain a social media program and increase investment in social media outreach programs

Earned Media Value

If you end up using an agency to do your work… then it makes sense to hold them accountable for the work they are delivering. Thanks to Web analytics we can hold them accountable if there is a white paper campaign based on the business goal you have identified then  make sure you have elements in place for the right attribution of such efforts and have identified the right KPI. Don’t just stop at looking the #of downloads or the # of Shares of your content … look how that actually impacted the overall sales or whether or not the link back actually helped your ranking on Google’s SERP results.. these things matter. You can also look at overall sentiment data as well such as

# of Negative Mentions/ # of Positive Mentions  (High percentage means you have brand problem)

If you are resolving issues via Social media as in support then you want to look at things like

Avg. time to resolve an issue

# of complaints received/ # complaints resolved

Frequency of contact with the client on the complaint

These are just some examples of Earned Media Value. You are building a presence for your brand and with your community.

Cost of fan acquisition

This is also an overlooked element on social media campaign. People tend to forget that social media is an investment and it does not come free. There is work involved and the cost is not just promotional material cost.  The cost of fan acquisition includes the following elements

  • Cost of the team involved in Social media outreach (Companies that do this wrong have a common pool of social media “experts” or have one person dedicated to an entire brand). Remember with social media you reap what you sow.
  • Time spent on researching the topic before developing the campaign ( there are ways to calculate this .. such as Looking at the hourly rate of the person hired and amount of hours spent on research)
  • Then obviously campaign development
  • Campaign execution and testing
  • Iteration

On the last point of iteration… believe me you will be iterating a lot during the campaign.  Although a lot of might be assuming that a social campaign can be time bound and it can be, but social program do not finish as the next social outreach starts as the prior one ends… all of this is all series a iteration.

Recommendation

This blog is by no means exhaustive… but it is a list of things that have worked for me. If you have any additional ideas and thoughts please feel free to share. I have value your opinion good or bad.

Don’t forget if you do social media with a goal and purpose in mind… you can have a lot of fun.

The world has not changed. It is just the medium that has

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Unlike my past blog posts this is more of me just being reflective on the way the world has evolved over the past decade. People say the world has changed and I believe that the world has not changed but the medium has changed. Those who don’t understand the medium, well they believe the world has changed.
It is funny that these days traditional companies still view their service to their clients based on products and offerings and ignore the complete “experience”. Yes I know experience is a catch all term but in the context of this blog the term “experience” is the culmination of both product and services.
I will be the first to admit, this is not something new, but if you look around the Internet. You will think everyone has found this new talisman to profitability called “experience” or even better “Delighting your customers”. To me terms like “Delighting your customers” does not mean much, what is more valuable is what can you do for them that will make them look better in the eyes of their clients.  That is more meaningful, because you can focus on the kind of jobs you clients want to accomplish.
The web was founded on the principal to allow humankind to collaborate irrespective geographical and political boundaries (it took a while to get there) but it has not changed one thing our innate tendency to be social (matter of fact it has amplified it exponentially). Which is why the power of Web of equalizes the people who consume a service with the people who produce a service. Social computing has now allowed people to be more informed about a product and service and also understand what other people like them think about the “experience” before they commit to such a service themselves.
As most of you know I am very big Apple fan, the reason for that is Apple as a company does not do everything well, but the things that are part of my day to day routine, it does extremely well. Which is why I as a consumer will pay premium for that kind of service. Yes there is a market for a Samsung type client but that is not a demographic that belong too.
What is amazing is that most smaller companies and some big have figured out the engagement aspect of the web and have really created a fan following, where as the rest of the industry is still using the web as an online brochure for their company. In the future companies that will survive are the companies serve their clients well and use the web channel effectively to engage and build a community around them.
There are still companies that still believe that slow and steady wins the race. But unlike in Aesop’s Fables I imagine today’s world there is a big hare competing with 1000’s of tortoises and each tortoise covers piece of the track they are going to race in and they do it really well. By racing like that the hare has already lost the race before it even started because each slow tortoise is a specialist in a micro conversion (i.e. each segment) which all work together in the context of the macro conversion (i.e. win the race).
Companies of the future will all have passionate user base and community. They will have a 1000 tortoises racing and that will enable a more fluid and complete experience against the bigger hare (unless the hare come forward with a 1000’s hares themselves).They will value more what each of their peers has to say instead of “vendor speak”. They will focus and engaging rather just being consumers.
So the net is nothing has changed except the medium ….. and some are just figuring that out
You can contact me @ kkanakas on twitter with your comments

3 ways to research an Opportunity

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I know I am not an entrepreneur but I do know a thing or 2 about intra-preneurship. Working in technology company, every now and then you come across new cool things. Being product manager in my prior incarnation, I have been called a buzz kill  when it came to taking out the “coolness”  from the shiny new thing (Although I must confess I do enjoy working with cool things too). 
          When I am look at cool technology especially since I am in the business of selling software. I have to ask myself the following questions:

  • Does this new solution or cool technology solve a pressing problem?
  • Is the problem big enough that a potential customer is willing to pay for it ?
  • Does the opportunity match with my ability or my teams ability to deliver a solution?
  • Are the profits worth taking the risks?
Granted that one cannot be a complete expert in everything but that is where your ability to research comes in  and I am not talking about going on the internet and searching on the topic.  The internet is one of the few tools in your quiver that you use. 
The first thing you need to do is a frame the problem by asking yourself the following question:
What is the problem you are intending to solve ?
By answering that question you have identified the problem area/s you are going to research (It is critical for any venture actually_ .  Once you have identified the problem then  these are the following 3 areas that I would look at to evaluate the opportunity further:

1 – Meeting with Clients about a potential problem to be solved

Clients will tell you what their specific problems they are facing without even prompting and also the jobs they want to get done. Some might go to the extent on how you should help them to get their job done.  To me clients are a great source innovation. Now if you believe the Henry Ford’s old adage (which I do) “If I had asked my clients what did they want ?  They would have said faster horses”. But when working with your client base, the framing of the question needs to be different   instead of asking them the opportunity problem ask them the kind of work they are trying to accomplish. You may find some surprising inputs that might validate the opportunity at hand. Too many people expect their clients to just get it and understand the problem space they are going after or intend to go after.

2 – Meet with your Business Partners and Sales force

Both of these constituents are hungry to look at new opportunities and they are usually one of the few sources of validation. Business partners are useful because their business depends on you being successful and they also have access to first hand knowledge of why they are being employed by your clientele. 
Your sales force is the other constituent (if you don’t have a sales force then you should go back to doing #1). Sales always wants to win and as they should. They are one of the strongest advocates of  your products/solutions and they would be first one to let you know why they are losing on certain opportunities

3 – Internet based 3rd party research

The internet is truly a boon to doing tertiary research. You can get access to papers written by some well established analyst at a large analyst firm or you can take the simple route of trolling websites where your potential user base gets together to exchange and share ideas. I would go as far to say that trolling forums is just as effective as reading up on analyst papers (there is an art to it, but it can be done). It is called social listening. What do I mean by social listening ?  Well in the “internet of things” there are congregations of people in the virtual world building relationships especially on forums like “Linkedn” or even “Twitter” for that matter. Sometimes, all you have to do is join the right group or follow the right hashtag and you can get your answer/validation of the opportunity at hand. The analyst paper will probably give you a better idea of the market size but these two efforts combined provide a winning combination.
Let me assure you these are not fool proof activities and sometimes no matter how much research you do you may deliver a dud sometimes (just do it fast enough, so that you can course correct early on).
What are some of your ways to research an opportunity ? Appreciate any insight you can provide.
You can contact me @ kkanakas on twitter with your comments

Product Management: 5 Ways statistics can help product managers

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Statistics was never one my favorite topics but I was reintroduced to it when I went back to school  and now I cannot stop talking about. It also helps that BigData is now affordable to a lot people, cheaply I might add and the fact the predictive analytics is “in” thing right now.
                          I usually get a chance to talk to few new product managers and I am always surprised how little value they give to statistics in general. Yes doing regression analysis on variables may not sound cool but if you master a few techniques you can actually go far. In this blog I document 5 areas where a little bit of statistics can help

Segmentation

If you are product marketer or product manager this is one activity you have to do. Segmentation is critical activity even in the context of a startup.  If you need to create a new niche in the marketplace or focus on a particular type of client archetype or experience this is key. One statistical technique you can use effectively is regression analysis to see which independent variables influence the dependent variable. If you don’t know what I am talking about I would recommend the following books as a great primer on statistics
Heads first Statistics or Statistics in a nutshell  both book happen to be from O’Reilly media because they are actually useful books

Value Analysis  

Every once in a while you are asked what is value or how do you know what is valuable to your client base. In statistics there is a tool you can use called Conjoint Analysis.  Conjoint analysis let you look at different aspects or features and figure out how to maximize and identify the right features and function to deliver by looking at the data (which you should have after meeting your clients). One of the best explanations of Conjoint Analysis is given in the book Marketing Metrics. Conjoint Analysis is very powerful tool and can also give you broad insight into managing your requirements better for the various products you bring to market

 

Analyzing trends 

Trends are the anathema of product managers especially if  the trend has already taken a foothold in the marketplace.  Obviously the most simple way to spot a trend is a to plot on a graph and see the trend (if you are doing that, it means the trend has already taken hold and you are late in the game). In order to stay ahead of trend and if you are constantly engaging with your clients, you should be able to see what variables are important to them. There are some tools like binomial distribution that can help in identify a trend manifesting in a sample survey you with your client base. Binomial distribution can always provide a good proxy for a full blown research effort but they can offer a quick an dirty way to get an idea of what is going on.

Client Satisfaction analysis 

I am big fan of Pareto Charts or most commonly known at the 80/20 rule. You can  identify the top issues that matter to clients and focus your efforts in remediating those top concerns in your overall user experience. There are plenty of credible examples of how to develop a pareto chart but the simplest explanation that I have read is on a blog written by blogger Duncan Haughey. Please check out his blog at the following URL:  http://goo.gl/4E2VV

Quality

The definitive book in this context is Katrina Maxwell’s book called Applied Statistics for Software Managers 
There simple regression analysis techniques that Katrina highlights that can be used not only by software managers but these techniques are applicable to anyone launching a new product whether it be software or hardware manufacturing
As you can statistics can be applied very effectively in product management activities and just like everything you can provide context. I do want to emphasize just looking at raw data would not do, you actually need to get out of the office and talk to clients and get the data.  You can use other 3rd party research to do the same.  The emphasis on using statistics will start to happen more and more in every one’s jobs as Big Data infrastructure continues to be accessible to people.

You can contact me @ kkanakas on twitter with your comments

Social Media: 5 Rules to engage in social media

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I don’t claim to know everything about social media and honestly I am learning more everyday by listening my friends on Facebook, my connections on LinkedIn and my followers on Twitter. It annoys to me to no end when people use social media as a way to broadcast their own voice. Social media is not another broadcast mechanism, it is way to engage.




Rule #1: Don’t just broadcast take genuine interest in the people you connect with. Do you really want to be the person that you encounter in a social outing that just talks about himself or herself.  Remember “The Jimmy” episode from Seinfeld, you really don’t want to be that.



Rule#2: Don’t try to be everything to everyone. You cannot make everyone happy. As a Canadian one of my favorite band is the Bare Naked Ladies and I can’t help but use few lines from their song “Everything to everyone”


“You know all the right people 
You play all the right games You always try to be everything to everyone Spin around and fall down, do it again You stumble and you fall Yeah why don’t you ever learn Spin around and fall down, do it again”

This relevant even in Social media. Narrow your focus, if you want to have a following, focus on few areas. You don’t need to be on every social media outlet possible, focus on few and focus on those topics that are close to your values and interest. Believe people will appreciate you for that


Rule#3: Write with a purpose. This is the hardest part and builds on top of Rule#2. The areas that I like to focus is on Product Management, Strategy, and Social Media. That is pretty much what you are going get on this blog. If your not clear about your purpose in social media, you are not going to get far

Rule#4: Give something of value to your audience.  If you expect your audience to do something for you, you need to give them something first that is important to them. I would recommend that people the book “Influence” by Robert Cialdini
Try it out and you will see engagement happen


Rule #5: Keep at it. It is easy to give up. It always takes an effort to get things going. Some times things take off quickly some times thing don’t. Don’t be discouraged, use it as a learning experience, improve and keep at it. 




These are just 5 simple rules that can help when you want to start interacting in social media . So if you are blogging, tweeting, Pinteresting, Facebooking, or whatever your social media platform you use, these rules should apply to them equally. Just one request though, figure out where you want to engage with your audience instead of taking a scatter shot approach. That will also be helpful.

You can contact me @ kkanakas on twitter with your comments

Strategy and Execution – Web Presence and Vanity Metrics

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What does being on the web mean? I have asked myself that question several times. Does being on the web mean having a presence mean just another way to show that are you are on board “this shiny new phenomenon”? Well I am glad to say we over that phase. We have now realized that web is valuable and crucial channel to communicate, conduct commerce, and interact with people.
The days of passive information consumption are gone and static web sites where content is not refreshed regularly are destined to be irrelevant. On that note I promise to all my blog readers to be more frequent with my postings, I have so far been posting only 2 month and I promise to post more frequently going forward.
Now back to the topic at hand, typically when people ask about web presence it is either one of the two elements that define web presence for companies. These are what I call the rockstar elements of your web presence. They are mostly focused on the following:
·      The Website
·      Social Media
But let us go back to the fundamental questions. Why is your company on the web?  
What do you intend to do with your website?
 Generally from a marketing perspective, companies treat web presence as another medium of communication i.e. they treat web presence in the same vein as Television or Radio. The problem with that type of thinking is that unlike those in the traditional media, the web is an interactive media. Which means when you publish something that is irrelevant people will not engage with you. The reason why I am making this statement is because even today (yes, in this day and age), there are people that measure the success of a website with the number of hits.  Real metrics are actionable and Vanity metrics are just a great show and tell effort and most of us are too old for that.

What are Vanity Metrics?

Page Hits: if you currently use page hits as a measurement and refuse to believe that there can be a better measurement metrics beyond page hits, well you may not find my this post useful (so you are better off not reading any further because you are likely to get offended)
Based on the diagram above, if I put analytics a contributor to your web presence. But you can only get good analytics if your web presence encourages your community to do something. Page hits mean nothing!!! I repeat Page hits mean nothing!! If you run a web based business and get 4 million hit a day but $0 to show for.  You have ask yourself are you successful ?
Unique Visitors:This is another one of these metrics that means nothing. Ok you know how many unique visitors you got but it does not tell you whether these unique visitors did anything
Time on site: This again is a “wannabe” useful metric. If spend 2 minutes on a site or 10 minutes on a site. What does it mean? I mean think about it. What is this metric saying?
Number of Shares/Likes:With the advent of social media this apparently means something. If some one likes the content you have produced, well that is good. Ask yourself the question “So What?”. Will these folks who share your content actually will be your most vocal advocates. Advocates, now that is something.
Now that I have bashed these metrics, I would usually add an “it depends” clause, but I am not going to. These are useless metrics no matter what the context is. If your audience does not know what web metrics are, these measurements make you look intelligent but you will eventually be called out.

What are Real Metrics?

Like said earlier real metrics are actionable, which means you can actually do something with the information. I am big fan of Pirate Metrics. Pirate Metrics is a term coined by venture capitalist Dave McClure (you can checkout his blog at http://500hats.com). Pirate Metrics are 5 distinct elements of building a successful business. They are as follow:
·      Acquisition: How are people made aware of you?
·      Activation/ Registration: Do the visitors subscribe, use etc.?
·      Retention: Does a one-time user get engaged?
·      Revenue: How do you make money from such activity?
·      Referral: Do your users promote your product?
If you carefully look at the first letters of all the elements it spells out “AARRR” like a Pirate, hence the term Pirate metrics.
Here are some examples of Real metrics
Conversion Rates: Typically when you have a website you want people to do something i.e. buy or download something etc.  Conversion rates for a e-commerce site would be like a number of visitors who buy something
Top Keywords driving traffic to the site : The terms people are looking for to reach your site or associate with you.
Cost of customer acquisition: The money spent in having a visitor buy something
Enrollment: How many clients become free trial users? (If you are using a Freemium model to do business)
Usability and Reliability:  How many problems, issues reported in the forums ?
Churn: How many users and clients leave in a given period of time?
Customer Lifetime Value: How much are clients worth from the initial acquisition to an ongoing relationship?
These are the metrics that actually give you insight on taking the right course of action with your client base. I would not recommend that companies go metrics crazy and get into a analysis paralysis mode.  What I would recommend is that have in mind what your target clientele is and have one metric that matters at each stage of the project. Just like everything else in business focus is an important element.

You can contact me @ kkanakas on twitter with your comments

Product Management- How to develop a ROI model

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This is one of the topics, which causes certain people to either to scratch their heads or completely ignore it (as it is usually associated with the price of something which by the way is completely wrong). I apologize for sounding clichéd but return on investment is about value not price.  Imagine this scenario, I am watching a hockey game on TV and at the final 10 minutes of the game my wife requests that I put the dishes that are in the sink into the dishwasher. Now I am in a quandary do I forgo watching the last 10 minutes of the hockey game to please my wife or miss out on the winning moments of my favorite hockey team and miss out on crucial water cooler conversation at work. Believe it or not this is also a ROI problem. ROI is an integral part or our day-to-day lives. Not all opportunity cost is financial as evinced by the scenario I presented, although it does make the lives of a lot of people interesting if outcomes such as this could be measured.

So when you start looking at deriving a ROI model, you need to go back to the basics. You again start with what is the problem you are going to solve? ROI represents a customer’s expectations from their investment measured against   goal elements like time, money, or resources along with the status of clients to the business. 

Scenario

Imagine this scenario you are a large bakery chain and your baked good are selling like “hot cakes”. The line from the bakery is so long that it goes on for several blocks.  The baker in the front of the line is having a hard time keeping up with the orders. The bakery manager is can’t optimize his supply chain enough and continues to pressure the point of sale staff i.e. the bakers .  The president of the bakery chain states that because of this inefficiency in their supply chain they are losing close to $600,000 at each branch and the profit per branch is 2% of revenue.  As you are aware in the bakery business every penny of profit matters since it is a low margin business.
Now you are provider of an automation system that will solve this problem. Now I want you to understand that solution cost is not the only element to consider when developing a ROI model. There are other elements involved as well such as
  • ·      Solution acquisition costs
  • ·      Maintenance costs
  • ·      Cost of integrating the system into the existing system
These costs you can classify as direct costs and then there are indirect costs such
  • ·      Adding System administrator to the headcount
  • ·      Training to the bakers on the new system
So we now know what the problem is with this bakery and we have seen problem from the baker’s, manager’s, and the president’s perspective (this element is key, you need to empathize with the various stakeholders that your are going to solve the problem for. This is one of the key components for designing your solution as well, checkout my earlier blog).  Let us now proceed to put together an estimated ROI model (it is estimated because it is not validated by the client or even realized via the implementation).
Our solution costs
Bakery Savings
Solution Cost
$100,000
Revenue/Bakery
$600,000
Maintenance Cost
$20,000
Gross Profit @ 2%
$12,000
Integration Cost
$150,000
Branches
100
Total Solution Cost
$270,000
Gross Revenue
$60,000,000
Indirect costs
One Headcount
$150,000
Training all bakery staff
$100,000
Total ongoing costs
$250,000
Total Cost
$520,000
Savings per year
1,200,000
Total Payback
Within 5 months
I understand this is trivial but something like this can actually resonate with a potential client in a presentation. If you have been listening to your community of potential clients to draw up something like this is not hard.
The above ROI model is an estimated ROI model of what the solution might potentially save the client. The alternative is that the client continues lose important clientele or go with a suboptimal solution from a competitor (Maybe this could be a topic for a future blog on competitive analysis, if the readers of my blog demand it).
It would be amiss if I did not provide proper attribution to the book  “The Four steps to the Epiphany” by Steven Gary Blank. I still believe that this is the best reference to client development.
As for what I did when faced with the quandary mentioned earlier in the blog. Well I am still happily married and I know my priorities really well J. I can participate in a different topic at the water cooler @ work. 
You can contact me @ kkanakas on twitter with your comments

Product Management – Jobs to be done

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You can do a lot by observing. you can unearth value by just observing people.  Seeing how they do things or work around things etc. I am reminded of an article written in Sloan Management review by Clay Christensen and other authors of a simple concept called Jobs to be done. Recently I was reading a book where that same statement was referred to again ( the book is called innovator’s toolkit by David Silverstein, Philip Samuel, and Neil DeCarlo) and the statement was “Most companies segment their markets by customer demographics or product characteristics and differentiate their offerings by adding features and functions. But the customer has a different view of the marketplace. The person simply has a job to be done and is seeking to “hire the best product or service do it” or concoct something with an existing solution to address the problem.
                                                               Jobs to be done is a simple concept,  yet sometimes we end up complicating things beyond all the possible means. In some cases when you are building products and you are internally focused or being driven to neutralize a competitors advantage, there is a tendency to “hunker down” and look internally  and assume what the customer perceives to be valuable. Because customers might be buying a competitors products in droves but it does not mean that you start looking inwards and come up with things that do not make sense.  At such times you should be encouraged to look more externally and identify other elements that are frustrating users. Think about it. How did innovations like micro-finance or  mobile commerce come to be? There was a job that was being addressed well by the big players and little players saw a niche filled the gap. The “Job” in the case of micro-finance was to provide financial services to communities with little income. Now I am not encouraging people to go create another NINJA loan market (we already have evidence that does not work), but what micro-finance did was that it encouraged poor villages in South Asia become entrepreneurs and especially enable women in that part of the world to come out of poverty.  I am amazed how such a complex idea so succinctly  stated still continues to make such a difference in peoples lives.

Jobs to be done Old Solution New Solution
Provide
financial services to communities with little income		 Get people to put assets as collateral and charge high interest Provide the ability for the entire community  of villagers to get smaller amounts of money that they can start a business  or have the ability to payback

               The case I am trying to make is that innovating is not just the realm of the hip and  the cool but it is also about practical utility. Anything that is practical and designed in a empathetic way has a higher chance of success than something that is hip and cool and introduced way to early in the market space. I think in the current day and age where technology is improving by leaps and bounds we are losing sight of simple things that can drive innovation.

 I would encourage you to try it out yourself and let us have conversation. I can tell you based on my personal experience it has helped me to convey some of the complicated things in life in simple terms.
As always appreciate your feedback via Linkedin, Twitter, or you post your comments in the comments  section of this blog.

           

Strategy – Power of Empathetic Design

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When I was soliciting ideas for my next blog, I kept hearing things about design and its ramifications to a product user interface. To me the term design is above and beyond just the user interface of a product . I agree user interface is a key element but design has elements that go far and beyond just a simple user interface or intuitive product abilities.
Good products are designed with empathy or as I call it empathetic design. So what is empathetic design, new products and features only take off when people find useful things to do with the product or service. People who start with design in mind are not there to create new industry, they are there to create an experience that resonates close to their heart and the hearts of several other people (think about AirBnb.com). It is true that most design elements start with a frustration that an individual faces but is that problem faced by several other people. So the question is how to validate that problem? 
 As Eric Reis says in his book “Lean Startup“, you need to build something called as the minimum viable product “MVP”. Get the minimum viable product our there in the hands of people and observe what they do with your product and get validation. Empathetic design is about doing things that you can focus on and doing them well.  But when you focus on a particular feature or function you need to focus in the broader picture as well. Similar to what Tim Brown wrote in his book “Change by Design“, when Amtrak came to IDEO to design the high speed rail car, IDEO did not only focus on designing the rail car, they also focused on the entire experience of travel by train from the curb-side.  Now that is something (BTW even as I write this blog, in China they have a high speed train from Shanghai to Beijing that is faster than the acela service from Amtrak, but I bet you the curb side experience maybe significantly different between both)
As mentioned in prior paragraph focus on a few things and do them well but ask yourself these questions “are the few features that I am working on are they about to solve a problem worth solving ? and are people willing to buy your solution since the problem is pervasive?”. As I paraphrase what Larry Page said in his interview with Charlie Rose “Innovation is not innovation if it cannot sell” So to that effect empathetic design depends significantly on the premise of open value co-creation. (Apple is an exception, but their folks observe their target consumers a lot of which I proudly claim to be one)
One of the companies I admire is P&G from a value co-creation perspective. This is one company that has figured out a way to make decent margins on a commodity product “the detergent”. They find ways to sell detergent to their constituents in so many different and innovative ways (the other company that I admire is Coca-Cola, I mean sugared water really?). Going back to P&G, the company participates in many competitive industries which initially thrived on patents and proprietary technologies  etc. Now P&G openly courts innovations on their products via internet with their connect+develop program. The reason why P&G and the likes make decent margins, is because of their focus on the overall experience i.e. Some one wants to wash with Cold water there is Tide Cold etc. If there a defective box or a canister, the stores where their products are sold take the product back no questions asked (similar to what Amazon does with the overall experience). These are things that help people gravitate towards these products/services and continue to be repeat clients.  The net of what I am saying is that empathetic design is a profitable venture as long as you look at the experience and the overall utility of the product/solution.
If you observe carefully empathetically design products build on top of other ideas (in most cases existing ideas that are incomplete from an experience perspective). They usually simplify/ refine on the existing idea and in most cases it usually works. Think about it, was the iPod really a new kind of a mp3 player or was it that the iPod provided a way to carry all my music and listen to when I want or where I want. To complete the experience I have a legitimate way to download content for it as well. Now that is empathetic design at its best. 

The bottom line is empathetic design keeps the user in mind and whether you use cases in development or any other methodology in any other department it will be doomed to failure if all departments fail to have the same understanding of the problem the company is going to solve for the user.

(BTW All the companies I mentioned here are just to make a case, I am not endorsing that my experience is commonly shared, but if you look at their 10K, it proves my point. Your experiences may vary)
You can contact me @ kkanakas on twitter with your comments