Friday, September 12, 2008

It's The Leverage, Not The Technology

I've had an idea percolating in my mind for a few days that just won't go away. It finally came together today during my early morning walk. Two contrasting experiences as a customer with two different very different companies have shown me that the real heart of success and failure of e-commerce is not in how advanced your technology is as much as how you leverage the technology you have. Intellectually, most of us already know this. However, there is no better way to drive an idea home than seeing it in real life. In this case, even though the two experiences are separated by several months, comparing the two makes this idea crystal clear. Take the ride with me for a moment or two and you'll see what I mean.

Dish Network. I was a customer for a long time...had one of their satellite dishes hanging off the side of my house. Loved the service. Being deeply involved with NASA stuff, I also. got a kick out of getting my TV from a wireless satellite signal. Neat technology. All in all, I was happier than a pig in slop. Then one day, during an NFL playoff game at that, the signal just dropped off for about 30 seconds. Nothing but white noise and snow from my TV. It all came back after 30 seconds, so I just wrote it off as a one-time glitch...until it happened again a few weeks later. As time passed, the frequency gradually ramped up to several times a day. So I called customer service for Dish Network. First, they suggested I try several diagnostic steps. Performed those steps but learned nothing about the problem. We went back and forth for several days, as the frequency of the problem's occurrence continued to increase, without obtaining any resolution. Finally asked them to send a tech out to the house. The response to that request was a reminder that, as the owner of the equipment, I was ultimately responsible for whether or not the service worked in my home (Dish Network defined successful service as validation that the signal was transmitted by the satellite, not by whether or not the customer could actually received or utilize the signal - SOA enthusiasts, do you see the analogy and recognize that defining the service is critical?). The customer service rep proceeded to inform me that a Dish Network tech could come to my home to assist me with my problem, but that the visit would cost $ another $100 per parts, regardless of whether or not my problem was ever resolved. I pointed out that I could also resolve my problem at no cost, as the local cable TV company was advertising a special of free installation, with no service start-up fees, for Dish Network customers switching to cable. The technology is nowhere near as nifty, but the cost of resolving the issue at hand was much cheaper. The response from the Dish Network customer service rep: "would you like to be connected to our account termination department?" I decided at that moment to "vote with my wallet" (if you don't like the service or the product, take your money elsewhere) and announced that yes, I believe I would like to speak with the termination people. Made the switch to cable. Been happy every since. Had a minor service issue last month, but the cable company came out and fixed it...for free. Dish Network had really nifty technology, but did not do a great job of leveraging that technology to bring value to a customer (me).

Zappo's. Lately, I've been buying my shoes from Zappo's. My feet are as wide as a couple of gunboats. Local shoe merchants don't stock my sizes. Zappo's does. Earlier this week I ordered a new pair of walking shoes in preparation for Oracle OpenWorld 2008. Wasn't in a big hurry for the shoes, so I ordered the cheapest possible shipping service. An hour or so after I placed the order, I received an email from Zappo's entitled "Good News". I was informed that Zappo's upgraded my shipping to overnight (free of charge) and had already pulled the order to go out later in the day. My new shoes showed up on my doorstep the next day. Nothing in terms of ground-breaking technology making this happen: probably an order fulfillment app and a business rule based on geographic proximity to a Zappo's distribution center (I live within a few hundred miles on one) coupled with some type of event-driven alert. The technology that made this happen is nowhere nearly as cool as satellite signals. But Zappo's delivered that technology to really provide a customer (me) some additional value - got my new shoes much sooner than promised or expected with no increase in cost. Pegged my customer satisfaction meter, which leads to increased customer loyalty in the form of repeat business and customer referrals. Want to guess where I'll buy my next pair of shoes or which company I refer to my friends and neighbors?

It's not the technology as much as it is how you leverage the technology. The big win is to leverage technology for generate business value (a la Zappo's). The time you upgrade technology is when you can leverage the upgraded technology to drive new or increased business value. We'll hear a repeated message from Oracle at OpenWorld later this month (a message we've been hearing repeatedly at OOW for the past few years, especially regarding Fusion technology): do what makes sense for your enterprise. Well, this is the kind of thing they're talking about.


Your OCP Advisor said...

Great insights and thanks for a peek inside the brain of a thought leader!
I couldn't more agree!
With every new software release (and upgrades), new features are advertised as major wins. I always look forward to case studies how existing (and perhaps new) features are leveraged for greater business value and not just for sake of utilizing a budget.

Anonymous said...

Excellent post. I say this knowing full well that I'm making fun of myself, but I find that one of the problems with technology is that it is the geeks who are enthusiastic about it. Being geeks we often define our enthusiasm pretty far away from a value proposition that impacts a "real" customer. I think the key is exactly as you say, first define what you are trying to do and how that impacts your business -- THEN look at technology to help you.

Doing it any other way gets you in the Dish network situation wondering why your great technology is not appreciated.

BTW I had a similar Zappos situation, they are awesome. I cannot think of anything more exciting then next day shoes ordered online.

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