The world of business is a funny place, full of all sorts of people saying all sorts of things. In most cases these people like to give the impression that their businesses is invincible and ground-breaking, offers the best possible options in the market and is due to grow above expectations in the coming years.This is not due to deceit, but rather is something that is honestly believed by those who say it.
Of course we all know that statistically and logically, they can’t all be right. Some businesses are saying things which simply aren’t true in the context they are explained. While these companies may wish to be honest and open with their existing and potential customers, the fact is that the competitive environment they inhabit requires them to think in this way; demands that hard truths are kept internal, or, even better, are ignored completely.
This trend is not just common, but rather ubiquitous: businesses, as a rule, are extremely bad at identifying and discussing their own weaknesses. This is what partly explains the trend of consultancy within business and the whole industry of ‘Problem-solvers’ to help a company recognise and overcome their flaws. These often don’t come from a fundamental failure within the business model, but rather from a focus on the wrong aspects within the business itself. This can happen for many reasons but often it is because the wrong things are prioritised.
While each company is different, and faces different challenges both internally and externally, problems with operations are often caused by a desensitivity to non-urgent needs. This means that they are often unwilling to reinvest in critical areas, with growth stunted thanks to a blinkered view. They are missing vital opportunities developed by thinking creatively or utilising their existing knowledge in more effective ways.
The influence of Finance and the tricks played on Customers
There are some people who like statistics. They like to use a single figure or simple set of statistics to understand a vastly complex set of relationships. These people are better known as Financiers, and their influence runs deep within the core of all businesses, both successful and not.
The problem with statistics is that they offer few options for the real world. A statistic cannot tell you the impression that a company holds, the values it espouses or the true feelings of those who use its services. Thus, financiers are wholly unable to say anything relevant in these areas.
Of course that’s not to say that finance and statistics aren’t useful – far from it – they can be extremely important in recognising customer uptake or highlighting areas of concern. They are tools for guiding Managers towards the areas where a problem may well exist.
There are other tools which are often not as well practised as finance, and therefore not seen as popular in the same way. While every business should be focusing on these areas, only a few are able to show the flexibility and integrity to do so.
To illustrate my point, Von Mises, who was part of the Austrian School of Economics – an establishment dedicated to highlighting the importance of alternative factors within business – explains: “”There is no sensible distinction to be made in a restaurant between the value created by the man who cooks the food and the value created by the man who sweeps the floor”
In other words, if your restaurant sales dry up, you should not necessarily assume it is the food which is to blame. Instead you should take a more balanced look at the whole dining experience to discover what’s happening. That’s not to say that the food, ie the product, has no responsibility for making sure people return, but rather that the food – ie. The product – is not the only thing which matters in the context of a dining experience.
What you don’t know can’t hurt you
In the context of business, ‘sweeping the floor’ equates to improving the way in which a product or service can be enjoyed. In most cases selling a product is not difficult: it just requires connecting with a person who needs it. The problem comes for many businesses when there is competition.
Let’s take an example. A Phillips TV. There are many options out there, all different prices and specifications. For many potential customers though, it is not the spec of the TV (such as the resolution, refresh rate or colour pallet) but rather the cost which is associated with a particular brand which makes a difference. If the customer can be convinced that Phillips TV’s represents a promise of build quality or price value, the chance of closing the sale is increased exponentially.
The problem is changed by this context: a salesman would find it more effective to sell the idea of the brand, and what the brand represents, rather than the technical specifications.
Transferring this idea more broadly, when a company makes claims about their additional services, things which support their product sales such as customer support, data protection or future-proofing, these too form a context in which the product or service is enjoyed. Too often businesses are so keen to reduce any negative association that they actively work against themselves.
Some examples of this may be:
- Not letting customers share their experience online.
One of the main ways that people asses their choices is to recognise the experience of others. Many companies have not been able to fulfil particular obligations or not invested properly to support their user base. This leads to the spreading of negative comments on social media and media streaming sites, which are then moderated by site owners – who choose for them not to be shown.
Note that often this does not precede an increased spend or fresh look at the customer support process, but rather a suppression of comments from real customers.
- Not investing in proper Data Protection for customers
Hacking is a twenty-first century problem. Many business leaders are simply not capable of understanding how to ensure their IT systems are fully protected. This in part is due to a lack of proper guidance by the data protection community but also highlights a conflict of interests for those who do not appreciate the value this process can have.
The statistics for the number of companies who are hacked everyday and how much data is taken is staggering. Everyday companies who have not fully protected their processes are targeted and become liable for huge fines.
Just some examples from last month
“Three Mobile admits that hackers have successfully accessed its customer upgrade database after using an employee login. 6 million customers’ private information is at risk.” – 17/11/2016
“Hackers manage to get their hands on personal and sensitive information of over 130,000 US Navy officials after a laptop of an HPE Navy contactor is hacked. The breach was acknowledged on October, 27th. – 23/11/2016
“Customers of takeaway food app Deliveroo have their accounts hacked and run up bills for food that they did not order.” – 23/11/2016
“Computer systems at San Francisco’s transit system, Muni, are paralyzed following a malware attack. The author of the attack asks for a ransom of $73,000.” – 25/11/2016
“Hackers are blackmailing the customers of Valartis Bank, a Liechtenstein bank, asking victims to send 10% of their funds to a Bitcoin address or have their bank accounts details exposed online.” – 27/11/2016
With the stunning rise of ecommerce, the process of securing servers and, in-turn, customer data has become far cheaper and more effective.
- Not updating or upgrading technology
This example applies more to service providers, who offer, as part of their sales technique, a ramp of improvement in the future. Like all things, people feel let down if a promise is made and not kept. This applies to specific details but to more general ideas about things like future development as well.
Companies should consider their scope for improvement and how to communicate this effectively to users.
Steps you can take to protect your future
The great thing about these factors are firstly that all of the options available to manage them are affordable. Secondly, in many cases they require changing perception rather than reality – for example if you already run PCI scans on your server environments, then just ensuring that your customers are aware of this important fact is enough.
- Produce case studies, user testimonials and setup potential customers with existing customers via informal calls.
- Ensure regular PCI Scans and Vulnerability testing for server environments(click here for more information) with the proper controls around storing encrypted customer information.
- Ensuring a cycle of reinvestment and forward thinking strategy within business. While this may be a challenge, the level of preparedness for a situation is directly relational to how well a situation is managed.