You Had Me at Hello

The Power of Live Chat

By Candy Parks - Director, Integrated Insight

I’m just a Mom.  And this summer, I was a Mom getting ready to send her baby off to live and go to school in New York City.  When you are a Florida girl born and bred, and have lived your entire life in Florida, there is nothing quite as overwhelming as New York real estate.  Not much intimidates me, but the challenge of finding an apartment in Manhattan did. 

After searching and haunting a multitude of web sites, I figured out that it was ludicrous to try to do this without a broker.  I reached out to friends and family and learned that there are two key brokers for the New York rental market.   Feeling desperate and stressed, I reached out to both.

One rainy Sunday afternoon, I hit both web sites.  The first was pretty standard.  I had to register and fill out a profile outlining the details of what I was looking for.  (And it took 72 hours to get a response.)  And the other site was an answer to my desperate Mother’s prayer.  Within seconds of hitting the home page of www.bondnewyork.com, I was greeted by a live chat pop up.  Normally, I avoid these because I’m totally put off by the scripted and sanitized messages that any robot can deliver.  True to my state of desperation, I responded.  And to my surprise, I got a response back that told me I was interacting with a ‘real’ person with a personality.  I even made a comment to that effect, and low and behold, I discovered the person on the other end had a sense of humor to boot.

I was totally engaged.  And I became a fan.  My chat partner not only sent me links to valuable resources, he also expressed empathy saying, “I know as a parent you are really concerned about the safety of your son.”  I fell in love.  Every other person I had interacted with basically said, “What you are looking for doesn’t exist.”  Suddenly, I had someone who not only understood me, but was willing to help me – and felt confident he could do so!  He said he would have someone call me.  My heart sank.  I’d been through this before.  If you aren’t buying a house in the Hamptons, most New York brokers don’t want to deal with you – especially if you are looking for a ‘cheap’ apartment.

To my surprise, I got a call within an hour.  Suffice it to say that Brian is now a member of my family.  He held my hand, reassured me, and suffered my endless e-mails as we searched for the right apartment for my son.  We found it, and we found a friend in Brian.  And Brian found a loyal client for life.  My son may be a poor college student today, but he’s a New Yorker for life.  And Brian will forever be ‘his guy’ when it comes to finding apartments, and someday, that house in the Hamptons.

And it all started with a pop up.  “Hello, how can I help you today?”  And that pop up was followed by sincere, genuine, humorous, and empathetic interactions.  There is true power in live chat.  But the key is ‘live’ - not robotic.

Looking for a great return on investment?

Hire an Industrial Engineer

By Joni Newkirk - CEO, Integrated Insight

Many large companies such as UPS, Amazon, Ford and Disney rely on a pool of Industrial Engineers (IEs) to ensure complex systems work efficiently.  The term itself may lead you to believe the IE’s work is limited to industrial environments, but nothing could be further from the truth.  Today, IEs can be found in just about every industry and supporting many disciplines from operations to finance to information technology, and even sales and marketing.   While the Industrial Engineering or Operations Research discipline is typically perceived as a cost cutting measure, those who leverage IEs effectively know they can just as easily be the catalyst for improved revenue as well.   Ensuring decisions that impact costs do not negatively impact revenue and vice versa - understanding the impact of revenue decisions on costs -  is critical to maximizing profits. 

Industrial Engineers solve problems, often times problems you didn’t even know you had, but your customers may suffer through daily.  They have a knack for looking at a system or process and figuring out how it can be done better, typically leading to improved product or service quality, and profit.   Leveraging a skill set that includes statistics, human factors engineering, operations research, economics and management, IEs have the ability to view the organization holistically.  I have found them particularly effective in solving cross-functional or inter-divisional issues where the proverbial ball is often dropped and improvements are not only harder to identify, but often difficult to fix.  Not surprising, Industrial Engineers are often tapped for management and more than a few Fortune 500 companies have IEs in top executive positions including Mike Duke, CEO of Walmart and Tim Cook, CEO of Apple.

Leveraging the talent of an IE is advised for any organization interested in optimal use of resources.   With an average starting salary and benefits of $100K-$120K, an Industrial Engineer with strong management support and access to people and processes within an organization can easily pay back the investment multiple times year over year.  Small businesses as well as larger organizations would benefit from the versatile skills and breadth of experience IEs bring.  Consider the following:

•  For a company like Six Flags that generates $1.07 billion in revenue with a 20% margin, a 1 percentage point improvement in margin is worth approximately $11M, or a 5% improvement in the bottom line.
• In a company like FedEx, with $42 billion in revenue and where labor comprises almost 40% of total operating expenses, a 1% reduction in labor cost would be worth $161 million, an 8% increase in net income.
•  A 50-unit chain restaurant with 200-seat venues and an $18 average check that can reduce table turn time and increase covers through improved ordering and kitchen processes, will yield $3 million in increased revenue for each minute of improvement.

Let your next hire be an Industrial Engineer.   Money-back guarantee.

Texting vs. Talking

Does face-to-face win the race?

By Sue O'Shea - Director, Integrated Insight

We are increasingly becoming a texting society, especially among teens and young adults. According to the Pew Research Center, texting is most prevalent among cell owners ages 18 to 29 — 97% of them use their mobile phones to send texts. The number is nearly as high (92%) for those ages 30 to 49, but falls off to 72% for those 50 to 64 and 34% for those over 65.   The amount of texts sent daily is staggering, six billion SMS (short message service) messages are sent every day in the United States, according to Forrester Research.  In the US, teenagers send an average of 60 texts a day. According to the Pew Internet research, texting is teens' most common form of communication, beating out phone conversations, social networks and old-fashioned face-to-face conversations. 

There are many case studies that show the power and success of texting as part of the mobile marketing mix.  However, texting before establishing a relationship seems to be jumping the gun a bit.  The Daily Egg blog shares a study from Leads 360 which found that text messages have as much as a 97% open rate, compared to as low as 15% for email, but the study also found that texting someone before starting to speak with and build a relationship with them significantly impacted conversion and lowered the chance of ever being able to convert that prospect again. 

So how does one open a dialog and forge a relationship?

There is no electronic replacement for the power of face to face communication that builds trust and transparency when meeting with a potential client.  Additionally, in-person communication provides feedback not available when communicating electronically –facial expressions, the tone and pitch of the voice, gestures displayed through body language and the physical distance between the communicators – all clues that provide opportunities to better understand the client and her wants and needs.  The ability to pick up on the non-verbal cues and respond appropriately are not learned and developed when the main mode of communication is texting and email. 

TIME magazine reported in the article We Never Talk Anymore: The Problem with Text Messaging  “Habitual texters may not only cheat their existing relationships, they can also limit their ability to form future ones since they don’t get to practice the art of interpreting nonverbal visual cues. As with real reading, the ability to comprehend subtlety and complexity comes only with time and a lot of experience. If you don’t adequately acquire those skills, moving out into the real world of real people can actually become quite scary”

The most successful communicators need the ability to talk and text and know the most appropriate times to use those skills.  When give-and-take is required, there is no better form of communication than putting down the smart phone and speaking to the person face to face.  If personal discussion is not an option, the telephone or Web conferencing is an acceptable second choice.     E-mail is great for scheduling and confirming meetings, phone is good for quick conversations that require two-way communication.  There is no replacement, however, for face-to-face personal conversations for any discussion requiring true dialog and relationship building.

Assuming Leadership in Goal-Setting

Beyond the SMART Goal

By Laura Iles - Sr. Consultant, Integrated Insight

Setting SMART goals is a cliché by now. The lure of a Specific, Measurable, Attainable, Relevant Goal  - so easy to check off when  accomplished! – is great.  As companies engage in annual goal-setting exercises for each employee, the SMART Goal is a simple method of providing direction and evaluating performance.

SMART is a good start, but it isn’t enough. For leaders setting goals on behalf of their team, or guiding employees in their own goal setting exercises, adding four other considerations to the mix will improve engagement and performance, in turn driving company success.

Focus

As goals are developed, it is tempting to fill our schedules with these delightfully quantifiable targets. Yet, time and energy are finite resources, and there will always be unanticipated challenges or opportunities requiring our attention.

We achieve success by defining only the most critical goals and sharpening our focus. By limiting the sheer quantity, you increase the likelihood of succeeding in the objectives you do set, while leaving space to address the unexpected.

Before defining the crucial goals for individual employees, it is imperative that executive leadership provide direction by performing the same task for the company as a whole. When management does not prioritize, employees and departments are faced with the impossible mission of “doing it all."

This scattershot approach leads to overwhelming and wasted efforts as teams diffuse their energy across too many objectives. Conversely, a firm that selects a few specific targets enhances the likelihood of success by allowing departments to concentrate their resources where they are most needed.

On a company-wide and an individual level, this exercise in clarity forces leaders to precisely define success. When you strip away the extraneous, what does success truly look like? People and companies both succeed by limiting their focus and executing on core competencies. Always ask yourself, is this the best use of time?

Respect the law of diminishing returns.

One approach to enhancing focus is to think about potential goals within the context of diminishing marginal returns. While a goal may be relevant, think strategically about its position within the context of the overarching business strategy. What is the relative importance to the business, and what opportunity costs will you incur as a result?

Given the length of time it will take your employee to achieve that goal, and the resources required to achieve and maintain that higher level of performance, ask yourself honestly:  is it worth it?

There comes a point when the returns from your improvements begin to diminish. If you consistently reach 97% customer satisfaction, the next 0.5% may drive less value than the resources your team will expend to achieve it.

We all know this intellectually, yet it’s so enticing to seize the opportunity to improve the values on the dashboard, rather than taking on the more useful, but less easily-quantified project. Bragging rights over continuous improvement aside, is this goal worth your team’s time, or is there a greater use for their focus?

If you don’t know the answer to that question, consider moving forward with a set date to review resource investment and assess relative benefits. Leave yourself open to letting go of goals that prove to embody diminishing marginal returns.   

Which brings us to the third criterion for goal setting:

Be Flexible

Flexibility includes opportunities for course corrections throughout the year, as well as recognizing accomplishments that occur outside the rigid framework of established goals.

Do you have a procedure in place for restructuring goals after the initial development process? If not, why not? Existing projects take longer than expected, new projects are brought to life, critical projects become less so as customers shift their goals. As a leader, it is your responsibility to guide your employees in reprioritizing their goals.

Further, if a previous objective is dropped, or an employee takes on an additional project, have you developed a method for acknowledging the work accomplished? Achievement of set goals is one method for evaluation, but strong leaders are flexible enough to recognize and reward achievements  attained outside of these goals.  To do otherwise is to risk creating a culture where employees are discouraged from going the extra mile.

Align Objectives

The fourth stumbling block is incompatibility of objectives from one individual or department to the next. 

When employee goals are in opposition to one another, progress stalls. If one department’s “success” depends primarily on cutting costs, the other department’s on improving performance, a project that spans the two departments is doomed to mediocrity at best.

Eventually a leader will step in and make an executive decision regarding the direction the project will take, but this often requires one team to sacrifice their goals. The company loses the benefits that true collaboration might have brought, the employees feel penalized for circumstances outside their control, and the relationship between departments sours.

Achieving an individual goal at the expense of a project’s success is a small-scale version of what happens when firms chase quarterly goals to appease shareholders, at the expense of the long-term health of the company.

As a leader, it is your responsibility to ensure you are not placing your employees in the position of choosing between a good performance review and doing what’s right for the company. Proactive communication to negotiate differences and ensure aligned objectives can mitigate these all too common situations.

Achieve Success

Goal setting is a critical method to cultivate focus and drive improvements, but simply setting SMART goals isn’t sufficient. For the employee and the company to thrive, individual goals must be considered within the broader context of the company culture and objectives, and flexible enough to respond to changing situations.

Riding the Analytics Horse to Profitability

…..or Following it With a Shovel?

By Scott Sanders - President, Integrated Insight

The ability to efficiently and effectively execute can differentiate a company from others, but so can analytics.  The cost to store and manipulate data is no longer cost prohibitive making analytics a potential competitive advantage for everyone.   Borrowing a quote from Rob Neyer, formerly with ESPN and now the National Baseball Editor for SB Nation, “In business, as in baseball, the question isn’t whether or not you’ll jump into analytics; the question is when.  Do you want to ride the analytics horse to profitability…or follow it with a shovel?”

Companies today have the ability to drive competitive strategies by integrating data-driven insights and analytics to make better business decisions and optimize business processes.  The power of competing on analytics is well documented:

1)   5% to 10% net income gains from a 1% increase in price realization

2) 2% to 10% revenue gain from revenue management science.
3) 10% to 30% increase in logistics efficiencies.
4) 10% to 15% increase in product line profits from product enancements or refinements.

My favorite time of the year is finally here – college football season - and in Florida that hopefully comes with a little cooler weather.   When I asked my sixteen year old son what he thought about analytic based decision making in sports he told me sports is BIG business ”… but it is simple dad.  With the right talent and a little luck you can win and winning sells tickets.”    While there is a lot of truth to what he says, sporting franchises have begun to embrace analytics to help drive profits.  Attendance has been on the decline due to a number of factors and franchises are leveraging data to extract the most value they can from their current customer base.   They know that a fan’s willingness to pay is different depending on who the team is playing.  Wins and losses matter and seeing franchise players can command a premium.  They know that suites can drive value.   They also have seen that the day of week influences demand and so can weather especially if the stadium is outdoors.  They are developing their data playbook, understanding the devil is in the details and fact based decisions help determine risk and benefits.

Given the secondary market for sports events tickets, understanding market pricing is paramount.   Many franchises are leveraging data and systems to move from variable to dynamic pricing and the results are promising, with both attendance increases and rate improvement.  Analytically approaching pricing based on demand has resulted in 30% increases in revenue in high demand situations and 5% to 10% increases in low demand situations¹.  To put that into context, the Saint Louis Cardinals reported net revenues (revenues net of stadium revenues used to pay debt) of ~$239M and earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled ~$20M in 2012.  Gate receipts accounted for $108M in revenue.  At this level of revenue and EBITDA, assuming St Louis achieved low end of the range improvements earnings would improve by $5M to $10M or 25% to 50%.   Talk about happy owners or shareholders!

As I watched a replay of last year’s University of Florida and Florida State University football game this week it is clear.  Data insights and analytics are king, not only in optimizing ticket sales but winning football games.   The Seminoles have 3^rd and goal on the Gators 2 yard line.    Understanding the probabilities of scoring when the ball is run up the middle verses the quarterback faking a hand-off and then running to the outside, could be the difference between winning and losing.  And according to my son WINNING games sells tickets – not to mention announcers would be so much smarter.

Smart decision making is key to competing in today’s marketplace.  Getting on the analytical horse can help put you at the top of your game.

^{1Forbes, Dynamic Pricing – The Future of Ticket Pricing in Sports; 1/6/2012}