Category Archives: Improving Your Business

A Business Case for WiFi Hotspots

Wi-FiLately I have been asked a number of times if there is a business case to be made for providing a large outdoor WiFi hotspot network. Today I will look at the two issues that answer that question:  1) the hardware available today and;  2) the revenue opportunities.

Hardware Issues. The WiFi industry is currently in a state of what I call ‘between’. This often happens when a new standard is being introduced. There have been existing hotspots on the market for many years. But the whole industry is moving towards implementing Hotspot 2.0, which is a standard that allows for roaming between hotspots the same way that cellphones roam between cell towers. But since the coverage distance of a hotspot is far less – around 250 feet at most from a hotspot – roaming is even more of an issue for WiFi.

With Hotspot 2.0 fully implemented, a customer can automatically log in when walking within range of a hotspot. But more importantly they will maintain whatever they are doing  (such as a web session or IP phone call) without interruption as they move to a new hotspot (as long as they don’t hit a dead area). But the units on the market today can best be characterized as pre-Hotspot 2.0 and they do not yet include all of the features needed to fully support roaming. This means any units you buy today are going to need an upgrade eventually to a standard that is not yet fully defined.

The units on the market today are also very expensive compared to older hotspots. The manufacturers are concentrating on high-capacity hotspots that can handle as many as 500 simultaneous users. These are complicated hotspots with multiple antennae and cost as much as ten times as the old simple hotspots. But these are what are selling and they are made for stadiums, event centers, busy shopping districts or places where there will to be a lot people. But a citywide deployment doesn’t need many hotspots with that huge capacity, but rather much cheaper and lower capacity units that also do Hotspot 2.0.

Revenue Opportunities. The revenue opportunities for an outdoor WiFi network are not clear. I don’t know of any hotspot networks that have been able to pay for themselves. But there may be new revenue opportunities coming that could improve the picture.

There are two traditional WiFi revenue opportunities. One is to sell access to the WiFi network by the hour, by the day or by the month – traditional ISP services. There are customers in any town who would prefer WiFi to more expensive cellular data if you can create good enough coverage. You can sell this to individuals or in bulk to large employers in a town that have employees who work outside. The other traditional revenue opportunity it to sell dedicated hotspots to restaurants and other businesses that want to offer a branded hotspot for their customers. This will require that you (or somebody) provide a broadband connection to that customer to feed the hotspot.

There are two revenue opportunities on the horizon today. The first is to offer WiFi phones. These phones are being offered today in two ways. First, there is the WiFi-only phone like Cablevision is offering and that only works on WiFi. Cablevision prices this at $9.95 per month for an existing cable customer and it’s nearly all margin. But there are several wireless resellers (and now also Google) who sell WiFi phones that will roam to cellular when WiFi is not available.

The primary issue with copying this business plan is that the companies doing it have all created a proprietary system that works only on a specific phone. That is not something easy for a smaller company to work out. There are some cheap Chinese WiFi-only phones available, but if you choose them you are competing against people’s preferences to use an iPhone or a Samsung Galaxy by forcing them to your handset choice. This is not likely to be very popular until it becomes an app that will work on any phone.

The other new revenue opportunity is to sell wholesale WiFi access to others. I know Cisco has been touting this opportunity for several years. But I have yet to hear of anybody who has been able to monetize the idea. The cellular companies love it when customers use their phones on WiFi, but that’s a far cry from them being willing to buy time on your network on their customer’s behalf.

My conclusion of all of this is that it looks a tough business case today to build a citywide WiFi network. Right now the network hotspots are too expensive for a mass deployment. But there are vendors working on lower-cost hotspots. It also makes sense to wait until Hotspot 2.0 is fully fleshed-out and functional rather than buy a network with undefined future upgrade costs. And on the revenue side, while it sounds interesting to sell bulk WiFi, I have a hard time recommending this as a business plan unless you have presold some large customers like a utility or other carrier to buy bulk access to your new network. I have always been leery of ‘build-it-and-they-will-come’ business plans and I could recommend this only if there is a clear path to monetize it.

Should You Consider Open Source Software?

grayLinux1600There is a big shift going on in the software world that you should keep an eye on. More and more large companies are moving big parts of their software platforms to open source software. The question I raise today is whether or not it’s now time for smaller companies to consider doing the same?

Open source software has been around for decades and used by programming purists who never trusted software from big companies like Microsoft. I can remember free versions of spreadsheets, word processors, and numerous other kinds of free software as far back as the early 80s. The free software never got much traction for a number of reasons, the primary of which is that it made it hard to share your work with other people not using the same free platforms. But a small business, or a writer, or anybody who created content just for their own use was able to get by without paying hundreds of dollars every few years for the latest Microsoft Office upgrades.

Small ISPs were the first group that I can remember using open source software for commercial purposes. In the early days of ISPs, when AOL and Compuserve were signing up millions of customers, there were a few thousand local ISPs that sprang up around the country. These small companies provided more personalized ISP services than the giant companies and catered largely to business customers. Some among these ISPs wrote software that took care of basic ISP functions like operating an email server or a DNS server and made this software available to other ISPs. I can remember recommending this software to telephone companies that were getting into the ISP business, with the reasoning that because it was open sourced it was constantly being improved (and it was free). But many of the telcos could not get over the trust factor of using something ‘free’ and instead went out and spent upwards of $50,000 on software that didn’t even have all the features and functionality of the free software.

Linux is the best-known open source software. At its peak it was only installed on about 1.5% of PCs, but the Linux kernel is now built into android and is on billions of phones and devices. I think it was the experience with Linux that gave large corporations the confidence to start using and even contributing to open source programming. This move has been further pushed by the need to deal with hackers. In the last few years open source software has dealt better with hacking, both because it has fewer vulnerabilities, but also because the software recovers much faster when problems arise. And this makes sense. Widely used open source software has hundreds of smart programmers watching after it and responding during an emergency where large corporate software might rely on only a small handful of programmers. Also, the small bugs in open source software are being tested and tweaked all the time whereas vulnerabilities on commercial software are often never noticed until it’s too late.

Today we are seeing some of the biggest tech companies take the open source approach with some of their software. Companies like Microsoft, Google, and Facebook have accepted an open source philosophy for some of their software and have joined a legion of numerous fortune 500 companies that now rely on open source for some of their critical systems. The big companies are growing dissatisfied with the large operating systems like Oracle or PeopleSoft. While there are many things they like about these mega-software systems, there are parts of the big software systems that don’t work well for them and that are too hard to customize for their use. And these huge software systems are incredibly expensive. By the time a large corporation buys a large software system and then pays again to customize it for themselves they will have invested many millions along with having to pay big annual software maintenance fees.

Corporations also started breaking away from the large software packages when they found that more nimble software existed to handle some of their critical needs, such as the way that Salesforce has become a standard for CRM. Once they broke away from part of the big program systems it became easier to consider open source solutions for other needs.

As these large companies allow their programmers to work on open source platforms, those platforms get even better. Where Linux was largely written and maintained by people who also worked other jobs, there are now fleets of corporate programmers who are working to add to and improve open source software.

It’s not always the easiest thing in the world for a smaller company to make the transition to open source. Open source software doesn’t come in a nice neat package with dedicated customer support and training. But when I look around at my clients, I see them still spending a relative fortune on software for such things as billing systems, CRM systems, and hardware monitoring and interface software. Any small carrier who is spending more than a few hundred thousand dollars a year on traditional software might be better off to instead hire a programmer or two and let them find and implement open source software. It’s a bold move, but if it’s working for the big corporations it might well work for you.

KPMG’s Cloud Survey

Cloud_computing_icon_svgLate last year KPMG published the results of a survey on cloud computing. You can see the results here. The survey was given to 500 CEOs, CIOs, and CFOs of large companies with annual revenues of over $100 million.

You might ask why these results matter much to anybody who is smaller than that. I think it matters because in the IT world, what the big companies do moves downhill to the rest of us. As an example, if the large companies, with all of their buying power, move away from enterprise level routers, then the rest of us will be dragged in that same direction as the market for enterprise routers stops evolving and dries up. The large companies collectively have the majority of the buying power in this market.

When cloud computing got started a few years back the original sales pitch for the change was all about cost savings. Cloud vendors all touted that it was far cheaper to use computing resources in large data centers than to own your own computer resources that includes a dedicated staff to operate an IT network. And while cost savings is still part of the reason to change to the cloud, it’s no longer the only reason. The survey found the following reasons given by large companies for using the cloud:

  • Cost savings – 49%
  • Enabling mobile work forces – 42%
  • Improving customer service and partner interfaces – 37%
  • Understanding corporate data better – 35%
  • Accelerating product development – 32%
  • Developing new business lines – 30%
  • Sharing data globally – 28%
  • Faster time to market – 28%

In a similar survey from 2012 the responses were primarily about cost savings. For example, the emphasis on enabling a mobile workforce then was only given as a reason by 12% of respondents. What bought about such a big shift in the way that large companies think about the cloud in only a two year period?

The reason is that the cloud was originally a hardware transition. It let companies stop having to buy and maintain expensive computer systems and a large staff to operate them. Executives were tired of constantly being told that their systems were obsolete (and in our fast changing world they usually were). More importantly, executives were tired of being told that it was too hard to accomplish whatever they most wanted to do and they felt that their IT functions were often holding back their company. Many executives thought of their IT department as a black box which they didn’t understand very well.

In the last few years it has become clear that the cloud is not just a substitute for hardware and staff, but is also a catalyst for changing software. Large corporations have often been locked into huge software systems from companies like Oracle or Microsoft. While these packages did some things very well, there were some functions where they were just adequate, and other functions for which they were downright horrible. But the computer systems and IT staff tended to make everything work with a few integrated software packages rather than support a lot of different programs for various functions.

At the same time there has been a revolution in network hardware and a shift to the efficiencies of using large data centers, there is also a host of new software on the market that is extremely good at just a few functions. Companies have found that while they were breaking free of the restrictions of an in-house IT network and staff that they have also been able to break the bundles of the large software packages.

And this can be seen by looking at the claims that the respondents to the survey made about what they have already been able to achieve through the cloud:

  • Improve business performance – 73%
  • Improve the level of service automation – 72%
  • Reduce costs – 70%
  • Better integration of systems – 68%
  • Introduce new features and functions – 68%
  • Enhance interaction with customers and partners – 67%
  • Rapidly deploy new solutions – 67%
  • Replace legacy systems – 66%

Most of these results reflect changes in software as much as they represent just changing computer platforms. This is not to say that a shift to the cloud is seamless. For example, there is a lot of corporate anxiety about the security of their data. But overall, the large corporations are so far very happy with the shift and most plan on transitioning more to the cloud. Smaller companies are going to feel the tug to move to the cloud for the same reasons. It’s likely that you can save money and begin using newer and better software after such a change.

Why Isn’t There a Cable Headend in the Cloud?

dish-731375I saw an article earlier this year that said that some smaller triple-play providers have decided to get out of the cable business. Specifically the article mentioned Ringgold Telephone Company in Georgia and BTC Broadband in Oklahoma. The article said that small companies have abandoned over 53,000 customers over the last five years, with most of this being recent.

I’m not surprised by this. I have a lot of small clients in the cable business and I don’t think any of them are making money with the cable product. There are a myriad of outlays involved such as programming, capital, technical and customer service staff and software like middleware and encryption  And all of these costs are climbing with programming increasing much faster than inflation. And there is pressure to keep up with the never-ending new features that come along every year like TV everywhere or massive DVR recorders. I have a hard time seeing any cable company that doesn’t have thousands of customers covering these costs.

But small cable providers are often in a bind because they operate in rural areas and compete head-to-head with a larger cable company. They feel that if they don’t offer cable that they might not survive. But it is getting harder and harder for a company who doesn’t have stiff competition to justify carrying a product line that doesn’t support itself.

I’ve written several blogs talking about how software defined networking is going to change the telecom industry. It is now possible to create one cable TV head-end, one cell site headend or one voice switch that can serve millions of customers. This makes me ask the question: why isn’t somebody offering cable TV from the cloud.

There are big companies that already are doing  headend consolidation for their own customers. For instance, it’s reported that AT&T supports all of its cable customers from two headends. A company like AT&T could use those headends to provide wholesale cable connections to any service provider that can find a data pipe to connect to AT&T – be that a rural telephone company, a college campus or the owner of large apartment complexes.

This wholesale business model would swap the cost of owning and operating a headend for transport. A company buying wholesale cable would not need a headend, which can still cost well over a million dollars, nor technical staff to run it. In place of headend investment and expense they would pay for the bandwidth to connect to the wholesale headend.

As the price of transport continues to drop this idea becomes more and more practical. Many of my clients are already buying gigabit data backbones for less than what they paid a few years ago for 100 Mbps connections. The only drawback for some service providers is that they live too far of the primary fiber networks to be able to buy cheap bandwidth, but the wholesale model could work for anybody else with access to reasonably priced bandwidth.

The wholesale concept could be taken even further. One of the more expensive costs of providing cable service these days is settop boxes. A normal settop box costs over $100, one with a big DVR can cost over $300 and the average house needs two or three boxes. The cost of cloud memory storage has gotten so cheap that it’s now time to move the DVR function into the cloud. Rather than put an expensive box into somebody’s house to record TV shows it makes more sense to store video in the cloud where a terabit of storage now costs pennies. Putting cable in the cloud also offers interesting possibilities for customers. I’ve heard that in Europe that some of the cable providers give customers the ability to look backwards a week for all programming and watch anything that has been previously broadcast. This means that they store a rolling week of content in memory and provide DVR service of a sort to all customers.

The ideal cloud-based cable headend would offer line-ups made up of any mix of the channels that it carries. It would offer built in cloud DVR storage and the middleware to use it. I think that within a decade of hitting the market that such a product would eliminate the need for small headends in the country. This would shift video to become a service rather than a facility-based product.

There would still be details to work out, as there is in any wholesale product. Which party would comply with regulations? Who would get the programming contracts? But these are fairly mundane details that can be negotiated or offered in various options.

It is my hope that some company that already owns one of the big headends sees the wisdom in such a business plan. Over a decade, anybody who does this right could probably add millions of cable lines to their headend, improving their own profitability and spreading their costs over more customers. AT&T, are you listening?

 

How Valuable are Your Worst Customers?

Numismatics_and_Notaphily_iconEverybody who sells cable is used to the fact that some of your customers have a hard time paying their bills. Such customers will get disconnected a few times a year, but since they really want cable they usually come back when they have enough money to pay the disconnect and reconnect fees.

There is another small percentage of your customers who are deal shoppers. They will bounce between you and your competitor and take the latest and best deal they can find. These are the customers who will call and insist on a new deal the day after their special pricing deals ends.

I’ve always wondered about how valuable such customers really are to a cable company. To some degree cable companies spend most of their advertising budget chasing these customers. You have to wonder how valuable that advertising is in a mature market where new installs come mostly from people moving back and forth between competitors.

I have clients who have decided to stop spending big money on advertising, and almost universally they lost customers over time. But that is not automatically a bad thing if what a company loses are the customers who churn, those who don’t pay their bills or customers who chase specials.

There are a few recent examples of bigger companies that have tightened credit policies and who have stopped chasing the marginal customer. Let’s look how that affected them.

The first example is Cablevision. During the most recent quarter they implemented policies that are aimed at getting rid of marginal customers. They significantly tightened credit limits, stopped offering lucrative win-back incentives and eliminated any promotional pricing for customers who pay late. Just during this last quarter these policy changes impacted Cablevision customers and they lost 56,000 video customers, 33,000 voice customers and 23,000 high-speed Internet customers in the quarter.

These losses are significant for Cablevision. They lost 2% of cable customers in just the third quarter while losses for all of 2013 were 2.7%. They lost 1% of both voice and data customers when those customer bases had been growing for the past several years. So clearly the new policies is chasing away customers at a much faster pace than historical and in fact has turned growth of voice and data customers into losses.

The other big company that recently tightened credit policies is DirectTV. They report that they lost 28,000 customers in the third quarter of this year and they attribute most of that to the change in credit policies. To put this into perspective, DirectTV had 20.25 million customers at the end of 2013. But in the fourth quarter of 2013 the company added 93,000 customers compared to the customer loss in this recent quarter.

So it’s clear from these two companies and from the anecdotal evidence that I’ve gotten from my clients that having tight credit policies will shrink growth or even cause a customer loss. But does that mean it’s not worth it?

If most of the advertising budget is spent going after these marginal customers, and if promotional pricing is given to the same small percentage of customers over and over again, does it make sense to spend as much on advertising or to be aggressive with win-back programs? Additionally, my clients tell me that marginal and bad debt customers cause most of the activity and effort in their customer service groups.

Every company is different and there is no right answer for everybody. Cablevision has obviously done the math and their rationale for the change is that it is shedding the customers with the lowest margins that also require the biggest effort to maintain. They think in the long-run that they will end up a little smaller but with a more stable and profitable customer base. That’s a bet they can probably afford to make with over 2 million customers, but it’s a lot riskier for a smaller company to contemplate taking this same position.

But this is food for thought. Every company has customers that cause more effort than they are worth and perhaps every company would be better off with tougher policies. It’s worth asking yourself if you should have win-back programs with huge discounts that try hard to never lose a customer. It’s worth asking if you really are better off keeping customers who don’t pay you three or four time a year.

These are even more important questions for fiber providers to ask. In networks where it costs $1,000 to $2,000 in sunk costs to add a new customer a fiber provider can’t afford too many mistakes. Fiber providers ought to consider having credit checks, required deposits, install fees, term contracts or any other tool that helps to insure that a customer stays long enough to pay for the cost of adding them. Perhaps Cablevision is right and what matters is not that you get every customer possible, but that you get the right customers.

What Data Do You Store?

dumpsterI’ve read several blogs this year by Isaac Sacolik who has coined the phrase ‘dark data’ to describe anything retained by a company that is not a part of the day-to-day operations. In the old days this data would have consisted of the old paperwork that companies kept in file cabinets. But today, since everything is now electronic, companies can amass a mountain of emails, text messages, IMs, spreadsheets, word document, pictures and all other sorts of information.

I know in the old paper days that once a year I made all my employees take a few hours after New Year and toss out older paperwork. I refused to allow a proliferation of filing cabinets and we rarely kept anything more than a few years old. So each year I dealt with old data by tossing anything that was more than 3 – 4 years old.

But everything has changed today. It’s not unusual for companies to have computer systems or cloud systems that capture electronic information which might be kept forever if there isn’t a specific policy or plan to get rid of it. Storage is getting so cheap that it’s tempting to just keep everything.

But Mr. Sacolik points out that dark data can be a potential source of value to a company but is more likely to be a threat. Every day we read about companies getting hacked and records being copied and the big problem with dark data is that you probably don’t even know what it contains.

In the old days there was less risk of something really damaging being kept because the process of having to explicitly write and type memos meant that somebody had to go out of their way to put something damaging in writing. But it still happened. I remember being a witness in a lawsuit against one of the RBOCs where the normal legal discover process uncovered an internal memo where a VP said they wanted to put the plaintiff out of business. That smoking gun meant game over in the legal process.

But today, because everybody can write emails there is a much larger change that employees are saying things that you would not want to see the light of day. And it’s likely that unless you get into a lawsuit and you look at emails that you even know that damaging emails exist. The dark data you are keeping might detail illegal or unethical activities, embarrassing employee behavior or details about trade secrets that you would never want to see published.

While discover in a lawsuit could be damaging, the real danger comes from being hacked or from actions taken by a disgruntled employee. One would have to assume that somebody that hacks a company will have no compunction against using whatever they find for financial gain. There are likely many things in your email records that could either harm you or help a competitor.

The obvious answer to this issue is to have a policy to deal with data retention, and then to enforce it. That is not always as easy as it sounds because there are often many unofficial copies of dark data and you can’t assume that the copies on your corporate storage are the only copies of data that exist. Employees make copies of data on computers. And there are files stored with off-line storage devices and even on myriad thumbnail drives. The biggest problem with electronic data is that it’s so portable.

But there are steps you can take. Certainly there are tactics that can help protect you from being hacked. This starts with not putting really sensitive data onto public storage. But it also means taking basic precautions like always using encryption in both storing and transmitting data outside the company.

But perhaps the best precaution of all is to have a policy to get rid of old things. Every company has packrats who never want to get rid of anything. But if you believe there is value in your dark data one has to wonder why you aren’t mining that value. The chance are that you are going to be better off by getting rid of old data. There are restrictions of course. There are IRS rules for the retention of financial data and you may have contractual requirements, particularly if you work for government entities that require you to keep specific data. But the vast majority of the things you keep have little or no positive value and at least some of it can be damaging. So get out the electronic dumpster periodically and toss things away.

Can Web Experiments Go Too Far?

Numismatics_and_Notaphily_iconI remember a few months back when there was a big stir in the Facebook community when it was announced that Facebook had been experimenting to see if they were able to influence the moods of Facebook users. They gave some people very upbeat feeds and gave others more negative feeds to see if the different feeds would influence people’s moods positively or negatively. And as one would suspect it did impact people and there was a difference between seeing puppies and kittens versus bus wrecks and war stories. But Facebook got caught and they issued the appropriate apology and promised they would never do it again.

I find the whole story amusing since people are experimented on every day on the web. I’m not sure that everybody gets that the vast majority of our web experience is funded by advertising. Most of the sites that people enjoy are there because of advertising, and web advertisers experiment on us every day trying to find that one technique, that one color scheme, that one catch phrase that will get more people to buy what they are selling.

There are countless examples of how experiments are done on users to find out what works and doesn’t work. The companies that run these experiments are often open about it and not apologetic like Facebook was. For example, just last month Google announced that it was launching a major set of experiments to improve its performance on cellphones. They’ve gotten very good on computers but are not getting the same results from phones. Google’s ultimate goal is to be able to track people’s purchasing across all platforms so that they can know when somebody sees an ad on a cellphone but completes the purchase on a computer.

Most big companies that sell things on the web experiment with their web site to see what best influences the number of sales or clicks they get. The process of experimenting with website design is called Conversion Rate Optimization (CRO). That’s a fancy way of saying that that a company will change subtle things about their site to see if it makes a difference in sales. They can change everything from color, fonts, pictures, message, layout etc. to see what is most effective. The web sales process is basically one large ongoing experiment on customers.

What works often defies logic. For example, Trip Advisor found that having a blue background was more effective when a customer came to their site from Google but that having a yellow background was more effective for customers who came straight to Trip Advisor. They have no idea why.

The subtle differences that come from CRO can make a big difference in results. For example, Google revealed earlier this year that using a different shade of blue on search results caused more people to click links and this one change increased their revenue by $200 million for the year.

This is not to say that all such CRO changes are ethical or as easy as changing colors. For example, some web sellers use techniques like using deliberately confusing language to get people to buy or click something. Or they may trick customers into checking boxes that give away the right to return a product. And web sales have always used techniques like hiding expensive shipping prices until the last step of the process. There has always been an unsavory side to sales and it’s no different on the web that has its own version of high-pressure sales techniques.

You can take some advantage of CRO with your own website. If you are trying to sell broadband products or add-on features on the web you should be taking steps to maximize your sales. You may not have the time or resources to conduct continuous CRO experiments, but you can still take advantage of the process. For example, take heed of the companies that are successful at selling on the web. Some of the most successful sellers of web telecom services are the various companies that sell VoIP services, so you might want to look closely at their web sites or to similar companies and compare them to your own. What colors are they using? What’s their mix of text and pictures? Do they use full sentences or phrases?

I often browse carrier web sites and I see many that are terrible at describing their products and prices. Too many companies build a website once and never really look at the design again for many years. This might be acceptable if your website is used for nothing more than to provide basic information about your company. But if you are hoping to drive any sales from your web site you have to put more effort into the details. Don’t be afraid to experiment a bit with different ideas, different looks, different presentations. And if you do, take notes so that you know what worked and didn’t work.

When Customers Comment

comment-boxPew Research Center has released another interesting poll that looks at how people interact with each other on social networks. There were two primary findings from that poll, which are both things that most of us have observed but that were interesting to see validated.

The first is that social networks tend to have a suppressive impact on the willingness of people to express personal opinions on a social network. On sites like Facebook and Twitter people tend to hang out with people of a like mind and this creates what Pew calls a ‘spiral of silence’. This is something I have always thought of as peer pressure. When people are on the same network with their kids, their parents, other relatives, their coworkers and their friends they tend to be reluctant to share views that they know are contrary or controversial to the views shared by their ‘friends’ on the social sites.

The study was conducted by looking at how willing people were to discuss the Edward Snowden – NSA story about the government spying on apparently everybody in the world. It turns out that people were less likely to discuss the topic on Facebook and Twitter (42%) than they were when talking live with somebody (86%). It’s obvious that the peer pressure of a social network stops people from expressing views that they might freely express somewhere else.

That’s interesting, but the other finding is that an opposite thing happens when people post on other sites like newspapers or customer service sites. There, the peer pressure seems to have the opposite effect and people tend to pile on to negative comments made by others. It’s almost as if seeing a negative comment gives them the courage to also say something negative. Anybody who owns a web site with a customer service contact page that that allows public comments knows about this phenomenon. On such sites many people will say things that they would never say in public and comments can quickly escalate and get incredibly nasty.

This creates a real dilemma for a company that wants to maintain a place for customers to comment, seek help or ask questions on the web. Many companies have shown that having a public forum can be an extremely effective way to identify problems that they might otherwise never know about. And the web creates a way to respond and often solve problems quickly.

But you need to have a thick skin if the comments on your site take a turn towards the ugly. One angry comment can lead to another until your site is flocked by angry people, many who might not even be your customers. All of the social media experts I read recommend that a company must engage customers in this sort of situation rather than withdraw or delete comments. They say experience shows that when a company addresses hostility in a reasonable, calm, persistent and truthful way that the company will be viewed as more human.

If you can further demonstrate that you are willing to solve some of the problems that caused the comments to escalate it’s quite possible to win some of your detractors over to your side. It seems that the phenomenon of piling on to negative comments, perhaps described as negative peer pressure, can be defused by reasonable tactics by a company.

You can’t wade into such a situation and just try to mollify people by being nice. That is the sort of behavior that people expect from customer service reps on the phone and they generally don’t like it on line. Instead you can feel free to disagree with people as long as you are doing so with facts and respect.

There are going to be angry people that you cannot mollify or even have a discussion with and sometimes the comments might get so vile that you will have little choice but to delete or ignore them. But when people have legitimate concerns and they go overboard in expressing unhappiness and frustration you can usually win them over by providing facts and solutions. After all, anybody complaining on your site obviously has a vested interest in your product or service and they generally want to like it. Your job in this situation is to help them do so.

Getting the Biggest Bang from Your Web Presence

GooglelogoSearch Engine Optimization (SEO) is the art of getting your web presence noticed by web search engines. There are two ways to get noticed – buy your way to the top of a search or else maximize SEO if you don’t pay. Google will move anybody to the head of the search results if they are willing to pay for the privilege since that is one their major sources of revenue. For example, if you start typing in the word ‘American’ into Google, by the time you have typed the first three letters ‘American Airlines’ will be at the top of the search results.

But hopefully your company website, blog or other web pages don’t share a name that is similar to one of the big companies that are willing to spend the money to be first. SEO is about the steps you can take to make sure that non-pay web content can get noticed.

Every search engines is a bit different in how they rank web content in the search process, and those definitions change all of the time as the search engines tweak their algorithms. But there are enough similarities that SEO is able to make some decent generalizations about those steps you can take to improve the ranking of a web page.

In writing this article I took a look at how my own company, CCG Consulting, is ranked in a Google search. As it turns out, there are a whole lot of companies with the name CCG and even a number of them who are also consultants. There is CCG in a number of different fields such as engineering, networking, banking and cardiac research – there is even another CCG Consulting in the telecom field that specializes in helping MDUs and similar properties with telecom issues.

Because there are a lot of similarly named firms, and none that have paid to be at the top of the list, it is hard for any firm named CCG to get noticed. This blog you are reading appears in the middle of the first page of the Google search but my web site doesn’t appear until the third page of the Google search results.

This makes sense to me when you consider the way search engines do their rankings. One of the best ways to understand SEO is through something clever called the Periodic Table of SEO Success Factors. This shows the various factors that influence a search result and also ranks those factors by influence, from strongly positive to strongly negative.

Things like quality of content, use of keywords, the ability of a search engine to ‘crawl’ or read the page all are factors that have a strong influence on the ranking in Google. And there are also things that lower a search engine ranking such as having hidden pages that only a search engine can see but not humans, or buying links to try to improve your ranking.

I am not disappointed in the rankings for my web site because I don’t count on people finding me through a Google search. I maintain a web site mostly as a way for others to verify that our company exists and I don’t count on it as much of a marketing tool. Also, if somebody already knows me and searches for CCG Consulting and also types in the world telecom, half of the first page of search results are about my firm. Since I work in a very specialized market I know that a lot of my targeted potential clients already know about me from other sources such as this blog or Linked-In.

But these search results matter a whole lot to any company selling products to people that they don’t know. Let’s consider the example of a competitive carrier that sells the triple play services in Akron, Ohio. One would hope that when somebody searches Google for ‘Internet’ and ‘Akron’ or ‘cable TV’ and ‘Akron’ that this company would appear high on the search results. This is important because this kind of search is how a potential customer moving to that market might find their new ISP. If this carrier wants to be considered by new customers then they need to understand the way that search engines work. Otherwise they will miss out on the opportunity to sell to new customers.

It’s easy to find ways to communicate with people who already know you or who are already your customers. But it’s important to also think about how people who don’t know you are going to find out about you. I know that companies use things like billboards and newspaper in the hope of getting noticed and for building brand awareness. But I also recommend that you go to Google and Bing today and search for your company in the same way somebody who doesn’t know you would do. Don’t search by your company name, but rather by your products and market.

If your company pops up near the top of the first page then you are in good shape. But if you don’t, then consider what this means. If you want customers to find you on search engines you have to learn more about SEO. You might even consider buying priority at the search engines. I have several clients who have told me that they never seem to get business from people who are just moving to town, and not having web pages that get noticed is probably one of the reasons why.

How Do You Hire?

MTS_Technician_VanCBS News did an interview with Warren Buffet a few years ago where he talked about how he hires new employees. He said he finds ways to check on their intelligence, energy and integrity. He said that he when he is looking for somebody who can help him grow his business he wants a problem solver and that he wouldn’t hire somebody who lacks one of these three traits.

Buffett tests intelligence by asking applicants to solve tests or puzzles of various types. For energy he finds out about the candidates personal habits on eating, exercising, meditation etc. he also gives them an interesting test. He asks candidates to prepare a presentation for ten minutes that describes some particular business topic they should be familiar with. He then gives them two minutes to chop it down to a five-minute presentation. After that he gives them two more minutes to chop it down again to a one-minute presentation. Buffett says that integrity is impossible to assess in an interview and so for any finalist candidate for an important position in his company he does a full background check.

The whole premise for this hiring process, according to Buffett is that you can’t believe resumes.   They are obviously only going to pick out highlights of a career and will not tell you about negatives. Numerous studies have shown that a significantly high percentage or resumes include half-truths or outright lies. And he thinks asking questions about resumes is a waste of time because that focuses on what people did in the past instead of understanding what they might be able to do for you in the future.

All businesses rely on good people to make them operate and it can be a huge setback to your business if you hire the wrong people for a key role. Most companies have the experience of having made a bad hire and know how traumatic that can be for your business. So it is vital that you find the right people during the interview process. I think almost anybody will agree that the normal way that we hire often doesn’t uncover everything you want to know about a person. We typically sift through resumes and then interview the top few candidates for an hour or two. We don’t often dig very deep past the resume.

I’m not saying that we should all change to Buffett’s method because you can find many other non-traditional hiring methods that other people will swear work equally well as Buffett’s. But you really should consider changing your hiring process if it is not finding you the people you need. Finding something that works for you will take some work on your part. The traits Buffett lists as most important for his company might not be the same traits you think are most important. And certainly you have different needs to meet if you are hiring a new CFO, a help desk technician or an installer. You must determine for each job what you most want out of that position and then find a way to test for those traits.

For example, if you are hiring somebody who says they are an expert in something you need, then grill them hard about what they know. If somebody is supposed to have physical or technical skills, then get out of the interview room and into the central office or into the field and have them demonstrate what they know. If you need a good writer, have them write something on the spot. One of my own favorite tools is to ask candidates to solve a real life problem. Every company has real-life examples of problems you have recently encountered – asking them how they would have solved it will tell you a lot about how they think.

There are a number of companies around that offer tools for non-traditional hiring. There are on-line tools that offer the kinds of games that Buffett administers and many other kinds of tests. I have one client who makes everybody take a test that provides a detailed profile of their personality traits. They think it’s important to know if somebody is an introvert or an extrovert, is likely to work better alone or in teams and similar traits.

But I would caution against administering any test if you don’t feel qualified to interpret the results. I know I would not feel comfortable trying to understand a personality profile since I don’t know how different personality traits affect job performance. As an example, I recently read a university study that found that high-energy introverts often make better salespeople than extroverts. They conjectured that it’s because they have to try harder to communicate and since they are introverted they tend to stick to the basics instead of filling in quiet time with a lot of empty talk. That sounds reasonable but is counterintuitive to the way most people hire salespeople. If I was hiring a salesperson I would have a hard time trying to do so using a personality profile and I think I might find myself quickly second guessing my own judgment.

To some degree, identifying and hiring the right person is itself a talent and some people are good at it and others are not. I have one friend in the industry who has made numerous poor hires, and my advice to him was to find somebody else to hire for him. So perhaps the first place to look at hiring better is to look at yourself. I suspect that many people are uncomfortable in being the sole decision maker in the hiring process and this is why many companies use teams to interview people.

I don’t have any generic device because this is one area where everybody had different ideas, and I have seem many different ideas be effective. But I also know that just reading resumes and judging people by what they tell you about resumes is often ineffective and can lead to some terrible hires. So I strongly recommend that you find ways to test people on those traits that you think are most important for the job you want to fill. If you take some time to think about that before you leap into the hiring process you probably are going to do a better job at finding the right fit for your company.