Think Different


Think Different

By Paula Bernier, Executive Editor, TMC  |  August 05, 2013

The words in the headline above once served as the ad slogan for Apple (News - Alert), which of course changed the tech world as we know it. This slogan came to mind as I started writing this piece, which will discuss two disruptive customer-related concepts, both of which have been introduced by gents named Matt.

Let’s first turn our attentions to Matt Gorniak, COO and co-founder of startup G2 (News - Alert) Crowd, which is unleashing a new rating system that – in the company’s own words – it hopes

“will spell the end of Gartner's Magic Quadrant.”

But Gorniak says these reports have lost their magic in an age in which people want input and opinions from real users as opposed to one or two analysts who have probably never used the software being assessed.

“Buyers don’t really want to hear from the analysts, but it’s a crutch from the ‘80s,” says Gorniak.

What’s more, he says, the Gartner (News - Alert) Magic Quadrant model is no good for the vendors in the markets it considers either because it’s costly for those companies, which he explains have to buy access to the analysts.

“No one really knows why they are where they are” in the Magic Quadrant reports, he says, adding they often contain some companies that also have multimillion relationships with Gartner.

Gorniak knows all this because he experienced it firsthand while at his former employer BigMachines, which he says spent $75,000-80,000 on the Magic Quadrant.

A better way to assess the players in such markets as CRM and marketing automation is to go straight to the sources – the companies and individuals using these solutions, says Gorniak.

“We’re in a social world now, and it’s easy to identify experts,” he notes.

To enable that, G2 Crowd is building a trusted site for software reviews. Those with experience are invited to log in to the site through LinkedIn (News - Alert) to rate and review select software. That way, readers can see the profiles of those doing the reviews. And the site has built-in logic that excludes employees of the software companies under review, as well as their competitors.

G2 incents people to do the reviews by offering iPad Mini giveaways and providing a gamification system that can help reviewers publicly position themselves as experts in a field if they are prolific and do reviews that are well received by the target audience.

The Grid, which is the name of G2’s offering, leverages real-time algorithms and big data to rank vendors into quadrants based on reviews from the site. Vendors will be ranked as "Leaders", "Innovators", "Challengers" and "Caution." 

Casual visitor can browse categories for free, and G2 Crowd will provide for sale summarized reports and spreadsheets. CRM and marketing automation are the first product categories G2’s Grid, which launched in beta this February, will address.

Now I’d like to talk aboutMatt McNerney, president at Ipsos Loyalty, Research & Consulting, who did a presentation titled  What is the Wallet Allocation Rule?” at Allegiance’s (News - Alert) May VoCfusion event in Las Vegas.

McNerney noted that there’s been plenty of customer satisfaction talk and work in recent years, and that’s great. But he indicated that in today’s competitive marketplace, customer loyalty isn’t enough to succeed; it is important to grow share of wallet.

Fewer than one in 20 companies achieve consistent business growth over a period of five years, he added, yet all companies are asked to achieve good growth each year. That means that they either need “more yield or more field.”

Most managers believe better Net Promoter scores result in better business performance, he added, but that alone doesn’t translate into increased wallet share. To illustrate this point he noted that Kmart reported its highest customer satisfaction rate the same year if filed bankruptcy. Meanwhile, WalMart had an initiative to improve the appearance and aisle width in its stores, which did make customers happier, but didn’t ring up more sales, he said.

What organizations should be doing is looking not only at customer satisfaction but also at the competition, and their own rank in the market, he said, adding that Ipsos offers an online tool called the Wallet Allocation Optimizer to help them do the math.

“You don’t have to change the metrics you’re using, you just have to use them differently,” he said.

For example, it would be very helpful for a store to know that only 3 percent of its customers shop there for beauty products exclusively. That means there’s a huge opportunity there to bump up sales for beauty products. Armed with this information, the store might want to assess its beauty production selection and pricing, which if adjusted could increase the brand’s rank and per customer spend in this category.

Edited by Stefania Viscusi
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