Another ClickZ article and a WebmasterRadio podcast

Hi folks,

If you enjoyed my ClickZ by-line article on the SEO potential for private gTLDs, be sure to read part two in the series, detailing new SEO techniques that become possible using your own gTLD.

And here's a podcast in which I give an overview of new gTLDs and their potential marketing benefits.  I recorded this podcast last week while I was at SES Chicago to present on SEO and new gTLDs.

Tim Callan in the BBC and ClickZ

Last week I had some nice press activity.  See multiple quotes from (and a picture of) Tim Callan in this BBC article about new gTLDS.  And here's the Tim Callan by-line about gTLDs and search engine ranking in ClickZ.

A few timely things

Hey folks, today I have a few short, unrelated things to say.

1.  Sorry I haven't posted much for the past month.  I've been insanely busy with the new job and all.  In the past seven weeks I've set foot on four continents and have been to the East Coast four times.

2.  Speaking of setting foot on various continents, later today I'll be presenting on the marketing opportunities for new gTLDs at the BrandMAX conference in London.  Last week I gave a similar presentation at iStrategy in Atlanta, and it was very well received.

3.  And speaking of new jobs, here's my first ever vanity release.

Permission to fail isn't permission to be stupid

As a follow on to my earlier post on the topic, note that permission to fail isn't permission to be stupid.  Nor is it permission to not really try to succeed, nor permission to be defeatist about things.  You have to be trying to succeed or your failure is true failure.

And as a general rule we should expect to be succeeding much more often than we're failing.  If you're trying something monumentally difficult like discovering a unified field theory then that's probably different, but most of the time we're doing things that have been done many, many times before.  We're creating profitable direct mail campaigns or making advertisements that work or figuring out what our customers want and giving it to them.  If you're frequently failing at tasks such as these, then maybe something else is wrong and you should look into that possibility.

When I grant permission to fail, it comes with the condition that the James Bond employee is doing her best and is performing up to her ability (or preferably a little beyond it).  It comes with the condition that she is making every decision for a reason, and in each case she knows what it is.  If you do that, everything's cool.  If not, it's not.

The leader is the follower

Following up on my recent reader question about strategies for market leaders, one of the biggest things to understand is that the leader is the follower.

I'll explain.  If you're the market leader in your space, that means you're doing better than anyone else is.  You have more customers and are making more money.  Likely you're more profitable and have better economies of scale.  You have better brand awareness and probably more overall affinity and preference than your competitors do.  Word of mouth works to your advantage and you win the SEO war.  You get a guaranteed mention anytime anyone in the press or blogosphere talks about the category, and you're automatically invited to all RFPs.  It's a pretty good position to be in, and all else being equal, these advantages tend to cause leaders to continue to win.

Smart challengers are aware of these advantages and therefore try not to play against the leader at its own game.  Instead challengers typically try to differentiate themselves in some way from the leader.  They need to prove that they're better or that they better serve the specific needs of a segment, geography, or situation than the leader does.

I've mentioned in the past that leader and challenger strategies are mirrors of each other.  If the challenger's success depends on differentiation, then the leader is well advised to eliminate or minimize that differentiation.  And thus we find one of the paradoxes of market behavior, which is that innovation occurs not in the companies that are best resourced and have the most customer feedback and can bring new products and services to market most efficiently.  Innovation tends to take place on the struggling, starving fringe of the market, where companies are motivated to innovate.  Then what happens is some of these innovations take off, and when they do, smart leaders move to cover them quickly.  The power of the leader typically is what brings these innovations into the mainstream, not the original inventiveness of the challenger.

So it turns out that the effective leader strategy is to be a follower.  Challengers will come along and try to differentiate themselves.  Keep a close eye on these innovations.  Some will obviously be good ones.  Some will not be so obvious.  Cover the good innovations as quickly as you can, choking off the oxygen to these smaller, more poorly resourced usurpers.  Keep an eye on the questionable innovations to see if they gain traction.  If they do, they're good innovations and treat them appropriately.  If not, someone else burned up his money on them so you didn't have to.

A great visual metaphor for this situation occurs in Formula or NASCAR racing.  Oftentimes you'll see one car trying to pass another.  The front car will have a natural tendency to stay in front by virtue of the fact that it's blocking the other one.  So to pass, the second car must be on a different stretch of pavement than the lead car.  The second car must differentiate itself.

So what does the lead car do?  It moves to block the second car.  When the second car bobs left, the lead car bobs left.  When the second car cuts to the right, the lead car cuts to the right.  In this circumstance it's actually the trailing car that's calling the shots, the trailing car that's deciding where both cars will go.  And the leader is pursuing a smart leader strategy and covering every move before the challenger can take advantage of it.

More writings on gTLDs and SEO

I recently wrote about why there's good reason to believe that controlling your own gTLD can positively impact SEO.  This socialmediatoday post covers much of the same topic, and SearchInsider goes into depth on the idea that you can create an entire gTLD that is optimized to do well in search.

Finally, I went into detail in my first post about why to believe that quality content in a TLD might be rewarded in search.  We also have seen the opposite, in which exceptionally poor content can punish an entire TLD.

New gTLDs and SEO, part 2 of 2

Last time I described the reasons to be optimistic that a well chosen gTLD filled with quality, relevant content can become an SEO enhancer.   I don’t know that  your own TLD will immediately cause your pages to rocket up the rankings on the first day you go live (although I don’t know it won’t either), but no matter how Google treats your TLD in and of itself, there are definite additional opportunities to improve search engine optimization if you control your own domain space.

Opportunity #1: Increase search term density in domains

One well understood SEO technique is to maximize the density of search terms in the domain.  That’s the idea behind using subdomains for SEO purposes.  By eliminating useless words like .com, you can increase that density.

Opportunity #2:  Place the most critical search terms in the second level domain

A common Google behavior is to grant better position to pages with the searched term in the second level domain.  That’s why microsoft.com does so well on the term microsoft.  Unfortunately it’s a difficult fact to make use of since any term with competition for search position most likely doesn’t have the appropriate domains available.

Once you control your own domain space, that all changes.  You can generate as many pages as you need to, focusing each on the most perfectly relevant term you seek to win.  You can add and remove pages and content as you will to optimize your results.

Opportunity #3: Generate more clicks in any given search position

I’m not aware of any research looking specifically into this question, but it seems likely that a friendly domain will gain more clicks in any given search position than an old-fashioned TLD will.  Let’s say you search on laptop.  The page at laptop.bestbuy is highly likely to contain useful product information and be a place you can purchase.  That’s a strong cue for a consumer to choose this result over other results.  Or let’s say a search turns up login.usbank (or for that matter login.paypal).  I can imagine the typical visitor feeling more confident that she’s visiting the real bank and not some phishing site - and therefore choosing this option over others.

Remember, nearly 100% of the extensive SEO effort that goes on in the world is for purposes of bringing more visitors to your site.  The traffic is the true goal.  Search position is just a method of gaining this traffic.  If there turns out to be a method of increasing clicks from the same search position, that’s tantamount to improving your position in search results.  Being in the #9 spot but getting the same number of clicks as the guy in #8 is every bit as good as being #8.  Over time, especially as consumers learn to look for your friendly domain, I expect that preference will just continue to increase.

Note also that these three opportunities apply to your paid search results as well.  SEO value influences search placement, potentially putting your listing higher than just your pure bid value would lead one to expect.  And increased preference for your listing can increase the return on your SEM spend.

Future proof your SEO strategy

Of course, we’ll have to see exactly how everything shakes out.  The algorithms don’t exist today, as do neither the TLDs nor the content under them.  So we’ll all be exploring these ideas together.

One thing about which there is no question, however, is that only those of us who obtain our own TLDs will have the opportunity to participate in this upside.  Whatever SEO improvements the world identifies, only those on control of a domain space will be positioned to take advantage of them.  Right now companies must decide if they want to be a part of that progress, however it shapes up, or if they prefer to sit on the sidelines and let others overtake them.

New gTLDs and SEO, part 1 of 2

There is a great deal of interest and debate surrounding the question of how the new, upcoming gTLDs will affect search engine optimization (SEO).  With quite a bit of help from some of my new colleagues at Melbourne IT Digital Brand Services I’ve looked into this question, specifically in regard to gTLDs that are in the control of the organizations who are using them (as opposed to new community domains like .bank).  I am confident that properly used TLDs represent an opportunity to improve search engine performance.

First the caveats:

• All SEO techniques are just tools, and they need to be used well to yield good results.
• No SEO technique is a miracle worker.  Some ambitions will be outside your grasp no matter what you do.  Nobody but Apple Corporation will be ranking first on the term ipod any time soon.
• Results may vary.  Some people will get better results than others.  That’s how it goes in SEO-land.
• SEO takes time.  Results are never instant, so you have to be patient and determined.
• SEO is a subtle and elusive practice.  You’ll have to get your hands on your own SEO program with your own content and your own target keywords to optimize it for your needs.  There is no other way.

Google keeps mum on its search algorithms for very good reason, but we can draw some sensible conclusions based on our reasoning and behaviors we can observe in Google search.

For starters consider these facts:  Google is in the business of using all available information to offer the most accurate relevancy possible in its results.  TLDs have the potential to be giant screaming indicators of a site’s content.  Therefore it’s hard to imagine that the rocket scientists in Mountain View will categorically ignore this indicator without at least checking it out to see if it makes results better.

We have good evidence that Google is using TLD information to influence search results today.  For example, you can easily find a myriad of instances in which preference appears to be given to .gov and .edu sites for appropriate search terms.

Search on texas.  The top result is the state of Texas’s site at www.texas.gov.  Second is Wikipedia’s entry on Texas.  Now, there’s no way that the state of Texas has optimized its site to the level where it can go toe to SEO toe with Wikipedia.  What’s happening here?  Google is giving great weight to the fact that this site has a .gov domain.  (Note that texas.com doesn’t show up until #30.)

If you believe that in Texas maybe civil servants are SEO savants, then I’ll point out that the same happens for new york city, memphis, phoenix, dade county florida and many, many other place names.  The common thread?  Place names and .gov.

Search on harvard and you see the same exact thing with .edu.  This time Wikipedia is #5, behind four .edus (and with more .edus below).  Again, we see the same for princeton, ucla, johns hopkins, and lots of other educational institutions.  Again, it’s the .edu addresses.

I consider that pretty compelling empirical evidence that Google is prepared to use TLD information to influence search results when it feels they improve the results’ accuracy.  But on top of that Google has, in fact, applied for a patent on using TLDs as a contributor to search relevancy.  Patent application 12/468,195, filed by Google Corporation on June 17, 2009 states in part,

These pages can be differentiated and identified by, for example, a list of domain names; top level domain extensions, such as .biz, .com, .org, .edu; or web sites.

These two pieces together tell us that Google explicitly has considered how TLDs enter into determining search ranking and that the search engine uses this information today.

Now, how do we know what Google will do with any individual TLD?  We don’t.  But returning to the earlier point, we know the search engine’s mission is to index and present all available information in the manner that’s most useful to searchers.  If the entity that controls a certain domain space uses it well, we should expect in the long run that this TLD will become a useful indicator.  Likewise, if the entity floods it with useless content, then that TLD may actually be punished by Google.  For companies that control their own gTLDs that’s good news since they can ensure that this domain space is filled with relevant, useful content.  In fact, the content they would include even without SEO considerations is very likely to fit that description.

In my next post I’ll explain other opportunities to improve search engine performance using your own TLD.

The one standing order that all knowledge workers should have

In my career I've held and managed a lot of knowledge worker positions, particularly positions where a considerable amount of strategic thinking is required for success.  Over the years I've evolved a single standing order that everyone who works for me has.  It's quite simple:

Always know and be able to articulate the reasons you have for making the choices you do.

That's it.  As I've written in the past, you hire brains, not bodies, so it's essential that these brains are switched on and doing what they do best.  It's easy for anyone - especially as we become comfortable in our jobs - to kind of turn it off and fly on autopilot.  But since knowledge workers essentially have been hired to think, if you go onto autopilot you're not doing your job anymore.

Note that the rule is to know and articulate your reasons, not anticipate what reasons I would come up with.  That's a critical point.  I don't have the reasonable expectation that nobody who works for me will make a mistake ever (and I wouldn't want them to be that cautious anyway), and I also don't expect anyone to channel my own decision making and become a Tim Callan satellite.  Not only would these expectations be impossible to deliver on, but they wouldn't yield the best results anyway.

But it is reasonable for me to expect that you're always doing the best you can, that you're taking the knowledge, experience, and reason available to you and using them make the best decisions you're able to make.  So long as the people who work for me are doing that, we're good.

New gTLDs are on the way

We're about to reach a sea change moment in internet naming.  Starting early next year, organizations will be able to apply for their own Top Level Domains (TLDs).  TLDs are the rightmost strings on internet addresses.  We're all familiar with .com, .net, .edu, and the like, but if you include country code TLDs (ccTLDs), there are nearly three hundred of them in total.

This system has clear inherent weaknesses.  How do I know if I need to find a specific domain at .com or .net?  Do I look for a non-US business under .com or the appropriate ccTLD?  What is the relationship between physical geography, national jurisdiction, and an internet domain?  Is bit.ly really in Libya?  What percentage of .co, .me, and .tv domains are for entities located in Columbia, Montenegro, and Tivolu, respectively?  And how come nobody seems to have a .us domain?

Not to mention the bigger problem of what happens when all the useful words are taken.  Believe it or not, we're facing that problem on popular domains like .com and .net.  In particular, all legal strings of five or fewer characters are owned by someone on the .com TLD.  That presents problems for businesses, charities, individuals, etc. who are looking to create sensible web addresses to communicate with the public.

I've long imagined that this naming system would require some kind of alteration as time went on.  We're seeing a step in that progress (though surely not the last) coming up next year.  When internet naming corporation ICANN opens for applications early next year, interested parties will be able to apply for their own TLDs.  Since they won't be ccTLDs, they will go by the term general TLD, or gTLD.

New gTLDs could serve a number of functions.  The obvious ones are naming spaces to serve a specific customer or type of content, such as .bank or .secure.  There also is a great deal of interest in TLDs for cities (.paris) or for specific companies.  It's easy to imagine the benefit of, let's say, .sony.  In this case Sony could stand up sites at viao.sony, playstation.sony, movies.sony, customerservice.sony, etc.

Pundits are speculating that there will be thousands of gTLD applications, and I believe it.  I, for one, am going to be fascinated to see how this whole things plays out.

The customer persona: When to use it and when not

One of the hot emerging tools in the marketing world is the concept of the persona.  The idea behind a persona is to take a clearly definable segment of your customer base and invent a prototypical member of that segment.  You detail that member in quite a bit of depth.  ("Here is Roger.  He's 27 years old and has an IT degree from San Jose State.")  Your persona should contain the key information about what drives purchase decisions.  These data include:

• Roger's key motivators at work
• His key objectives
• His important worries
• His connection to the budgeting process
• And the like.

You write it all up in a crisp document - some people include a picture - and circulate it for everyone in your organization to see, so that they know what this meaningful segment of our customer base looks like.

Do bear in mind that Roger is not a real person.  I didn't find a customer and detail him.  What I did was use my knowledge of many customers in this segment to create a composite who was the most accurate representation of what is typical among this segment.  Your persona should not be an outlier on any meaningful quality of the segment.  If the majority of your buyers in this segment have MBAs, then give Roger an MBA.  If the majority are male, make Roger male.

Also note that personas need to be fact-based.  You need to take genuine knowledge of the customer and use it to answer these questions.  If you don't have genuine knowledge (and if the questions matter), then go get it.  Otherwise you're not disseminating customer knowledge, you're just engaged in MSU.

MSU = Making Shit Up

Some people are persona die-hards.  Many people never use them.  I'm somewhere in the middle.  I believe the extent and nature of my use of personae is directly connected to the needs of my company.

When to use personae

• When you have clearly defined segments that differ from each other in meaningful, actionable ways.
• When you have enough facts at your disposal to be confident that your personae are accurate.
• When this knowledge is not already ubiquitous or second nature to a large number of people in the organization.
• When more compelling facts are not available to govern your decision making instead.
• When the company is positioned to take advantage of increased customer understanding.

And of course you wouldn't use them when circumstances are more or less the opposite.  To wit,

When not to use personae

• When you don't really understand who your target customers are.  Under these circumstances personae can make speculation into gospel and stifle learning and innovation.
• When you lack a relatively small number of clearly defined segments who would warrant changes in your approach to them.  If there's only one meaningful segment (as I once read is true of premium wine buyers), then the persona is less important.
• When everyone in the organization already has a deep appreciation for the facts that govern purchasing behavior among your customers.  In this case personae can just turn into busy work,
• When more indicative data (such as metrics and statistical behaviors) are available to drive decision making instead.  Many e-commerce businesses, for example, have clear factual understanding of how consumers behave in different circumstances.  This knowledge is more compelling in making appropriate decisions than a persona would be.
• When the company can't apply them.  Sometimes it's an all-hands-on-deck situation.  Or the high priority initiatives are so crystal clear that your actual behavior won't change based on personae.  In this case they again turn into a distraction from the real goals and are best omitted until you have a chance to use them properly.

What will my new job mean to the Tim Callan on Marketing and Technology blog?

In light of yesterday's announcement about my decision to join Melbourne IT Digital Brand Services as Chief Marketing Officer, one obvious question is what will it mean to the Tim Callan on Marketing and Technology blog?

It will not mean that I discontinue writing this blog.  As I've explained in an earlier post, I created, authored, and ran a very active and widely read security blog when I was at VeriSign.  During those five years and 439 posts, I often thought about interesting marketing, sales, or technology topics that were outside the very specific scope of that blog.  When I eventually decided to kick this blog into production, it was so that I had a place to discuss those topics.

I don't see how my new job will cause me to have fewer of those ideas.  If anything, working in a vibrant and interesting technology space tends to give me more of them.  I don't share confidential information on this blog, and I'll continue not to do so when I'm working at Melbourne IT Digital Brand Services.

The only potential obstacle is that I might get super busy and have trouble finding time to write.  But I was super busy at VeriSign, and I still managed to put up eighty posts a year, so I figure I can handle that as well.

Tim Callan to join Melbourne IT Digital Brand Services as CMO

I'm very pleased to announce that today I accepted an offer to join Melbourne IT Digital Brand Services as Chief Marketing Officer.  The company provides software and services to monitor and protect your online corporate identity - including domain name registration and management, online brand protection, and new gTLD consulting services.  In addition to being a successful, well run company, Melbourne IT Digital Brand Services offers a very high value benefit to corporations at reasonable prices with very little effort needed on the customer's side.  I was a customer in a previous life, and I was always impressed with how much I got for the budget I spent.  Now I look forward to introducing others to this opportunity as well.

I'm taking a couple of weeks off to tend to some personal affairs before plunging into this next adventure.

Why I love a good metaphor

My career has put me in the position where I often am explaining complicated matters.  It might be how a technology works, or how an ecosystem functions, or the behaviors of certain markets or segments of the populace, or any number of elusive topics.  In these circumstances I have found that there's no surrogate for a metaphor or an analogy.

Let's take the example of when I was on the other end.  Early in my career I was in charge of product management for a line of products that depended on sophisticated image recognition technology.  We were soon to release a new image recognition engine, and the VP of core tech (whom I'll call M) and I had retreated to a conference room to figure out how we'd describe the new innovations in this engine.

M kept speaking in similes.  "It's like a map of Florida," she would say and then elaborate on that analogy.  Or "It's like a pointillist painting."

The conversation wasn't coming to resolution with the alacrity that I desired, so I rather impatiently said, "Why don't you stop telling me what it's like and just tell me what it is."

M looked at me for a moment and then turned and wrote a very long mathematical equation on the white board.  It was utterly unintelligible to me, as one needed a Ph.D. in a specific field of mathematics even to understand how this technology worked.  M said to me, "That's what it actually is.  Now, let's get back to talking about what it's like."

And that's where the analogies come in.  A responsible analogy can distill down the important aspects of a complex subject and make the salient points intelligible to large numbers of people who are missing the highly specific information, background, or education to make sense of the direct details.  In my seven years at VeriSign I was dealing with issues of security and trust and therefore found myself frequently discussing locks and safes and automobile air bags.  These familiar items provide an understood context and framework that we all can grab on to.

Strategies for market leaders

A reader recently e-mailed me with this question,

There are many books / experts on what to do as the "new guy" taking on the market leader, but ... what would you say if it is the other way round? When you are the big guy v the new entrant ankle biters.

That's a great question, and I'll try to get into some detail in later posts about leader and challenger strategies.  There is much to say on both.  Let me start with a few general principles here.

1. Leader and challenger strategies are mirrors of each other.  In other words, if the challenger has a certain technique it can use to usurp the leader's position, then the leader's strategy is shaped in part by the presence of that challenger's strategy.  The leader's play is to neutralize the challenger's play and vice versa.
2. Therefore, all those challenger books and experts are leader books and experts as well.  Know your enemy.  These are the weapons that will be directed at you.  Study them and make your plan to defeat them.
3. Every strength is a weakness.  Leaders have lots of strengths.  Savvy challengers will be looking for the vulnerabilities that lie in these strengths, the ones the leaders can't afford to walk away from.  Wise leaders look for their own vulnerabilities before others find them, and then they try to find ways to plug the holes.
4. Innovation will happen, whether you want it to or not.  Leaders tend to prefer the status quo as a general rule.  Smart challengers will try to break the status quo.  Oftentimes leaders find themselves in the position of resisting change.  That's a dangerous game to play.  Change is like a river.  Sometimes you can block it for a while, but the pressure just builds and builds, and when it finally does come it's fierce and devastating.  Smart leaders recognize that rivers cannot be blocked permanently but that sometimes their exact path can be influenced.  Smart leaders seek to influence that path.
5. Stay nimble.  Another fact that can't be denied, especially in the technology space, is that no matter how well we think it out, we'll always be surprised.  To stay on top you have to accept that you can neither control nor predict the market.  You can help direct and shape it, but you have to be humble about even that.  Instead, you must keep your eyes open and be prepared to change your assumptions and plans based on what the market throws at you.

"Only do what only you can do"

About a month ago I listened to this great NPR interview with Thomas Dolby, and at one point he proclaimed loyalty to the philosophy "Only do what only you can do."

While it sounds like an old adage, it was not one familiar to me.  I like this phrase a lot.  It says to find what you have to offer that's unique and special.  Use that and build on it rather than just being a commodity.  It says to concentrate on your strengths and make them stronger rather than concentrate on your weaknesses.  It says to value what you are and find ways for others to value it as well.

I'm reminded of a story I heard in an interview with iconic and enigmatic actor Christopher Walken.  He described how early in his career he wasn't meeting with much success and started to try to be more like everyone else, those people who were getting the parts he wasn't.  Walken had some kind of older acting mentor who told him, "One day someone's going to need this unique quality you have, and when that time comes you're going to be the only person who can provide it to them."  Clearly in his case it worked, and part of what makes Christopher Walken a successful actor is the fact that he's not really like anyone else.

This advice is good advice not only for an individual career but also for a brand or a product or a company.  Ask yourself what you have that's better or different or more powerful than anyone else can produce.  Make that the foundation of your offering.  That way what makes you special is also what will make you great.

Every strength is a weakness

When you're looking at the competitive landscape, it's good to remember that in every strength lies a potential weakness.  That's true of your competitors, and that's true of yourself.  Your success depends on exploiting the weakness that lies inside your competitor's strength and preventing the competitor from doing the same to you.

Let's say you're the market share leader in your category.  That's a strength.  The weakness is that your customers by definition will be more varied than your offering and a competitor can target segments more specifically than you can.  If you have lots of revenue, a strength, the weakness is that you can't make moves that might endanger that revenue.  An extensive feature set has the weakness that someone can beat you on ease of use by focusing on a few key tasks or solution sets.  Clear positioning has the weakness of locking you into that position even when the market changes or new opportunities arise.  Even assets like a large sales team or a hefty budget have the weakness that you tend to lose your agility and responsiveness and everything becomes cookie-cutter rather than customized.

The reason exploiting the weakness in strength is so important is that your competitor will never walk away from that asset.  After all, it's a strength.  And that means you can continue to exploit this weakness for years to come, slowly grinding away at your competitor with it.

Let's take an example.  Say you're second or lower in a market with a dominant leader.  That leader has a strength, which is broad appeal to buyers in this category.  Great.  That means you can identify one or more segments with specific interests or needs in the category, gear your product offering to them specifically, and promote yourself as the solution that is special just for them.  The market leader won't be able to back away from its position as the solution for the broadest set of customers and therefore will be hamstrung in fighting back.

That's the basic exercise, and I've found that there are always opportunities to turn a strength back against a competitor.  And likewise sometimes they have turned my strengths back against me.  It's marketing judo, and it's a key weapon in your arsenal.

RSS feed added to Tim Callan on Marketing and Technology

In response to a request from a few months ago, I finally got around to digging in to the rather robust set of Blogger customization tools and have added an RSS option at the upper left.

Is Twitter just Mafia Wars for business people?

Somewhere along the line you reach this point of critical mass when strangers start showing up as followers all on their own.  Although as of writing I have a mere 186 followers, not a good showing at all by Twitter measures, I appear to have hit that point.  Every day I'm added by one or more people who I don't know and have never encountered and have no good reason to know who I am or what I have to say in 140 characters or less.

Some of them may be legit.  Maybe they're readers of the Tim Callan on Marketing and Technology blog who have subscribed to the Tim Callan Twitter feed to see the new posts when they come out.  That may be, for a few, but no way people in this number are wandering in on their own for that reason.

No.  Rather, these people are using the accepted best practice of subscribing to other people's Twitter feeds in hopes of getting them to subscribe to one's own as well.  If you buy the social marketing how-to books, they'll all tell you to do exactly that.  Well, I can tell you from personal experience that a lot of people appear to be buying these books.

Let's take one of the several from today as an example.  I'm not trying to libel anyone, so for our purposes I'll just call him J.  J. subscribed to my feed today out of the clear blue.  J follows 1386 people and is followed by 935.  He's a marketing hired gun, and my guess is he found me by looking at a list I'm on or because I am followed by (or more likely am following) a tweeter who is J's ideal target market.

So yes, that's another follower for me.  Manna from the Twitter gods, I suppose.  But on the other hand, I don't actually delude myself that J will ever read any of my tweets, let alone click the bit.ly to get to my blog and then read my posts and be affected by them and change his behavior as a result.  I suppose it's possible, but I'm not holding my breath.

For me that doesn't matter because I wasn't seeking to add a follower.  It's irrelevant.  But let's look at J's behavior.  J is out there adding Twitter feeds to his list in hopes of picking up extra followers who will reciprocate this behavior.  I don't tend to follow strangers just because they followed me, but others might.  So let's just say that it works, and this method yields a return follow often enough that it's an efficient way to add followers.  I'm prepared to assume that's the case.

So what?  What is the value of incrementing your Twitter score if it doesn't actually have any effect on extending your influence or brand name?  Sure, it would be great if I could have more than 1200 targeted influencers hanging on my every word and all I had to do was sit and click buttons in Twitter all day.  That would be marvelous indeed.  Too bad it's not true.

I see a lot of this behavior with services like Twitter and LinkedIn.  The effort of incrementing a score for its own sake.  How many of us really have 2000 people to whom we need to be LinkedIn?  How many of us genuinely can follow 20,000 Twitter self-publishers and gain any value from them?  Damn near zero, that's how many.

So why do people do it?  It's the illusion of progress, just like Mafia Wars.  In Mafia Wars and all the other Zynga games I've (briefly) experienced, the exercise is to increment your score for its own sake.  If you're a level 1000 gangster, you need to get to 1001.  If your farm has a million dollars in the bank, you need to get to two million.  Nothing actually changes in the game when you do.  No exciting and interesting new challenges open up to you when you hit the milestone.  Instead you make your number larger, larger than it's ever been before.

This false accomplishment isn't unique to video games, however.  You see it in the link gathering or friend gathering activity I described above.  In the real world accomplishment is hard.  Having successful careers and marriages, raising good children, educating yourself, purchasing homes and cars, staying thin and healthy, all these things are difficult to do.  They require talent and more than a little luck and above all sweat equity.  They require work, and they take time, and they bring heartache, and sometimes they fail.

That's one of the reasons, I believe, that games are popular.  I can play Mafia Wars or World of Warcraft or (my personal recent favorite) Fallout 3, and I can be highly confident that success is available to me in the near future if I just work at it.  Much easier than my job and my personal life and all those other things.

And we see the same with these social networking sites.  If you're supposed to be a marketing consultant but business is a little slow, you can sit there and link to thousands of people and tell yourself you're accomplishing a goal.  If you're a writer and can't get anyone to read your novel, you can build a list of Twitter followers and imagine you're promoting yourself.

But it isn't genuine accomplishment.  It's false accomplishment, illusionary accomplishment.  It's no more useful, really, than being a high level in Mafia Wars.

James Bond management: Permission to fail

The two most critical aspects of James Bond management are the employer's trust of the employee and the employee's trust of the employer.

The employer must trust the employee's ability and intention.  In terms of ability, the employer must be confident that given the freedom to make decisions, the James Bond employee will in the aggregate make them well enough that overall results will exceed those of a micromanaged, non-James Bond employee, which I refer to as a hand puppet.  Let's repeat that because it is important:

A James Bond employee will make decisions on her own.  In the aggregate the quality of results will be better than it would with a hand puppet.

In other words, you're paying for a brain that is blessed with experience, knowledge, and the ability to reason.  You're not paying for fingers to type and a mouth to talk and legs to go to meetings.  Those are simply the tools that brain uses to succeed.  If you fail to take advantage of that brain, you're not getting everything you paid for.

The employee's trust needs for the employer are a little more complicated, but ultimately it boils down to the idea that the employee needs to understand that she's expected to be a James Bond employee.  The employee must understand that expectations are high and that within the bounds of her purview she's the ultimate decision maker.  But most importantly of all, the employee must understand that the managers have her back.  The employee must be able to trust that if she sincerely does her best, that management will stand by her whether she succeeds or fails.

In short, employees need permission to fail.  You as a manager have to accept that sometimes your people will try something experimental, or take a worthy risk, or just throw ideas at the wall to see if they stick.  Done intelligently and with purpose all these methods are valid parts of your repertoire.  But employees can only do so if they won't be penalized for taking a flyer that doesn't work.

I once worked in a corporate environment where nobody noticed your successes and everybody noticed your failures.  As you might expect, this environment completely stifled innovation in even the smallest form.  That was because individual employees had everything to lose and nothing to gain by making changes.  If you had an idea that was 90% likely to revolutionize your business for the better and only 10% likely to amount to nothing, you'd never execute on it.  That's because the smart employee would do the math as follows:

Likelihood of career upside - 0%.
Likelihood of career suicide - 10%.

Nobody in her right mind would take a 10% chance of assassinating her reputation with no chance of gain.  People actually reasoned this way, and the company suffered for it.

Now, when I'm at the helm it goes differently.  You're welcome to take chances that are well reasoned, plausible, and beholden to good risk-reward math.  You will never be punished for taking these chances, even if they don't turn out.  Nobody wins at the poker table who hasn't played some losing hands, and likewise you can't win in the corporate world if you're unwilling to try things that aren't guaranteed to work.

Now that still doesn't mean you behave stupidly or thoughtlessly or randomly.  Those are still unacceptable.  But it does mean you have some room or explore and learn.  Thomas Edison famously tried thousands of substances as filaments before he found the one that made light bulbs commercially possible.  Your James Bond employees need the same ability to learn empirically.  Give them that, and they'll improve your business in ways you literally never thought of.

How online shopping has changed quality of service in the travel industry

One phenomenon you see on a cruise is the fact that the cruise company is highly adept at extracting additional revenue from passengers.  It’s a huge exercise in upselling.  You pay extra for drinks and shore excursions and room service and photographs and a myriad other things.  You even pay extra for soda and water.  While cruises and guided tours are the most advanced in this practice, you see the same basic idea applied by airlines, hotels, and rental cars as well.  An obvious example is the surcharge for checked baggage on the airlines.

Here on the cruise I heard a number of other passengers say, “I wish they had just charged me a higher price and then didn’t make me pay for my sodas,” or similar sentiments.  I’ve similarly heard a lot of people moan about the checked baggage charge that comes with air travel.

So if these practices are making customers unhappy, why does the travel industry continue them?  Wouldn’t someone identify this opportunity to differentiate from the competition and include all the extras for free?

No, clearly not.  But why would that be?  The answer is internet sales.

Online travel sales have created an environment where the primary decision point for choosing a flight or vacation or rental car is price.  You go to Expedia (or whatever) and choose the cheapest option that meets your criteria.  Even sites that try to account for other factors (like TravelZoo) still put huge emphasis on price.  And when we all shop for our trips or vacations, we select the lowest price.  Those sites don’t say that this flight comes with free baggage checking - or a meal or a blanket and pillow – while that flight does not.  But it does say that this flight is ten dollars cheaper than that flight.

So with nothing else to go on, you’ll choose the cheaper flight.  Even if it’s a dollar cheaper.  There’s a little more information that goes into choosing a cruise, but the same basic pressure applies.

Now, if you’re in charge of pricing for one of these services, you have no choice but to squeeze your basic, published price down as low as possible.  You have to win the price comparison in this environment.  One of the ways to do that is to carve out everything you can and make it an extra.  Charge for meals instead of including them.  Charge for drinks.  Charge for baggage.  Etc.  That way you win on Expedia, get the sale, and when the customers show up and realize they have to pay to checks their bags, they’re already locked in.

If you happened to have an airline that didn’t sell on these sites, you could differentiate by not charging for these things and promoting that fact in your marketing.  That’s what Southwest does.

So you see, we’re doing it to ourselves.  We all could change this behavior easily by not always choosing the lowest price, or by not shopping on web sites for our travel.  But somehow I don’t think that’s going to happen.

One advantage of James Bond Management

My wife and I are in the midst of a long cruise, and I’m reminded of the last extended vacation we took.  I work in an industry where people tend to drive pretty hard, and I certainly fit that mold.  A few years ago we took a two-week vacation to Greece, and when a crisis communications task came up, I found myself sitting beside the pool in Crete on a conference call to deal with it.  Even though in principle I was supposed to be off the clock and out of touch.

This trip is different in that I’m able truly to put aside those other concerns.  Since I’ve left VeriSign/Symantec but haven’t landed at my next company, it’s been fairly easy to let people know that I’m going to have a few weeks of down time.  They’ll wait.

Comparing the two trips, it’s interesting to notice that I’m not significantly more relaxed this trip than I was on that other one.  Yes, I had to keep an eye on e-mail.  And yes, something came up that forced me to break vacation mode and deal with it.  And yes, the people at the poolside bar gave me a hard time when the call was over for doing work while I was supposed to be getting away from it all.

But in reality is was no great hardship, and the reason is James Bond Management.  I had a strong set of James Bond employees in place at VeriSign at the time and had James Bond relationships with most of my peers in the cross-functional team.  As a result I felt I could have faith in the fact that they would be independent, would exercise good judgment, and could execute on their objectives.  That means the call in question was an efficient, high level conversation.  I was given the facts and could rely on their accuracy.  We discussed options, with ideas coming from all sides.  We mutually agreed to an execution strategy and assigned ownership.  I had a high degree of confidence that the individuals who signed up for tasks would deliver on them or would let me know if they couldn’t.  Then we signed off.

How wonderful is that?  I compare that to managers I’ve seen (or had) in the past who can’t trust and can’t delegate.  One of those managers in that situation would have been stuck on multiple calls and would have been logging into e-mail and dealing with lots of issues to manage an unforeseen business challenge.  I, on the other hand, got to enjoy my time off and still have an excellent resolution to the issue.  And I could really relax, knowing that James Bond was there to take care of me.  I don’t see how a manipulator of what I call hand puppets could feel the same way.

Causation, correlation, and World of Warcraft, part 3 of 3

My previous post describes a double-experience mechanism in World of Warcraft and the fact that it appears to be a deliberate product decision by Blizzard Entertainment to increase the average number of characters per active subscriber.  This decisions feels like the kind of thing a product manager or strategic manager would do based on a statistically relevant correlation between number of active characters and other preferred behaviors, such as propensity to continue subscribing to the service.  See my previous post for caveats around these guesses, but for our purposes today let's assume that all of the above is correct and indeed that the preferred behavior is increased likelihood of continued subscription.

That would make perfect sense.  A big business like this one, which appears to be in excess of one billion dollars per year, is exactly the kind of thing in which increased retention is worth a whole lot of money to the company and for which product initiatives would definitely be on order.  After all, each tenth of a percent of increased retention means more than a million dollars a year to the company.  That's worth spending a little time on analysis.

But here's where we run into the problem with causation and correlation.  Just because there exists a correlation between number of active characters and retention, that doesn't mean that gaining characters is the direct cause of increased retention.  It may be that as time progresses players tend to pick up characters and also tend to increase their overall retention rate.  It's a reasonable scenario that a veteran WOW player might tend to have more characters going and also have a much higher likelihood of continuing the service than a newby would.  But in that case both of the observed metrics owe themselves to a different cause:  Number of years as a player of the game.  In this case, there is a correlation but no causation between the two metrics.  Convincing a newby to have more characters does not necessarily increase retention.

Or maybe the causal connection goes the other way.  Perhaps the super-satisfied WOW player can be identified in part by having a large number of active characters.  Obviously these players would have a very high retention rate.  But again, artificially convincing non-super-satisfied players to add more characters doesn't necessarily address this need.  In either of these scenarios, spending product roadmap time to build out these features and changing the game environment away from a more equitable, less arbitrary state would be wasted, as it wouldn't really address the need the designers have for the game.

It's interesting to notice when these errors occur that we always attribute the characteristic we don't care about (number of characters) as a cause for the characteristic we care very deeply about (retention).  You would never look at these two factors and conclude that driving up renewals is a good method for increasing the average number of characters per player.  Because after all, shareholders don't care about number of characters per player.

Now, all we have to do is look at the stats around World of Warcraft to see that the Blizzard folks are doing a lot of things right, so even if the above speculation is 100% true I wouldn't weep too much for them.  But this basic lesson is applicable to any business with a large installed base or a large run rate or lots of traffic or any other situation that will lead to the temptation to engage in data mining.  And most businesses aren't sitting on the money-printing machine that is WOW.  So in general we would be well advised to try to make these decisions as effectively as we can.

In conclusion, am I saying not to engage in data mining?  Absolutely not.  I do it all of the time.  But I am saying to be careful about drawing conclusions that aren't supported by the data.  In particular I frequently watch people mistake correlation for causation, and that can send you down a path where you're spending your resources and giving your customers a convoluted experience without gaining the benefits you think you are.

Causation, correlation, and World of Warcraft, part 2 of 3

This post examines the phenomenon of data mining as applied to a real world example that anyone can observe.

Let me start by stating that I have seen the practice of data mining and the obscurity of causation versus correlation (all of which is explained in the previous post on this series) occur over and over again in real businesses in which I've worked.  I don't want to discuss the inner workings of those businesses since I had a privileged view on them, so instead I'll pull an example from a popular online game that anyone can see, World of Warcraft (WOW).

A couple of caveats first:  I am not and have never been an insider at Blizzard Entertainment or for the World of Warcraft products.  I know no such insiders.  I also am not a WOW player, although I know people who are.  I'm building this example on something I (or anyone) can observe and my own hypothesis about why Blizzard designed its product that way.  I may be flat-out wrong.  However, that's not important.  Even if this hypothesis is completely incorrect, we can still use it to illustrate how data mining affects business decisions and the potential fallacy therein.

That said, let's start with observable facts.  World of Warcraft is what we call a leveler, a game in which one has a character (or multiple characters - an important point here) in which one can achieve goals an increase the character's powers or abilities, which in general terms can be called leveling up.  Part of the way one levels up in WOW is by gaining points of experience, which are rewarded for defeating enemies or accomplishing other goals.  Now, there are various mechanics in the game by which characters can gain experience faster than they otherwise would to accomplish the same tasks.  For example, there's a mechanic whereby a player can meet up with random other players and mutually go after tasks ("run dungeons") together, and the players will gain more experience for the tasks than if they had accomplished them otherwise.

My first hypothesis is that the folks at Blizzard have created these rich experience earning environments on purpose to encourage certain behaviors in players, behaviors they deem good for the overall WOW ecosystem or simply for their own bottom line.  (Again, let me emphasize that these are my own speculations and that proving them correct or incorrect is not important to the lessons we can learn from this exercise.)  In the above example, I imagine that it's good for the WOW community to encourage players to meet new people and this this mechanism causes that to happen.

That's an easy one.  But let's look at another rich experience earning mechanism that might be a little less obvious.  One phenomenon in WOW is that if you leave a character dormant, the ability to earn experience actually increases.  How it works is that if your character goes unused for some period of time (what they call resting in the game), a limited opportunity will occur to earn experience at double the ordinary rate.  The longer a character rests, the larger the double-earning opportunity, up to a maximum number of experience points.

So we have a mechanism - deliberately built into the product - that encourages players to use characters they have not used recently.  Now, why would Blizzard do that?  A few ideas occur to me.

It's possible that Blizzard Entertainment wants you to do other things besides play World of Warcraft.  The company wants you to go outside and enjoy the fresh air, maybe take in a movie or spend some time with friends.  The company wants to ensure that you keep your WOW consumption to a minimum so that you live a healthy, balanced life, and this mechanism encourages that.

It's possible, I suppose, but that's not the way companies typically think.  Let's look for a more likely explanation.

My more likely explanation is that Blizzard wants to encourage players to maintain multiple, active characters rather than just focusing on one or two.  From what I've seen, WOWers tend to have lots and lots of characters.  An account may maintain up to ten characters, and people seem to push that limit.  Now, under those circumstances there are a few different ways to play the game.  One is to focus in on one or a few favorite characters and play them a lot, touching the others infrequently or not at all.  The mechanism described above encourages players to increase the number of active characters they're engaged with on a regular basis.  The longer a character sits unused, the greater the incentive to pick it up and play it again.  So Blizzard is using the carrot of increased experience points to increase the average number of active characters each player has.

That feels like data mining to me.  My guess is that the folks at Blizzard have looked into the statistics behind their user base in pretty fine detail.  After all, it's a big business with twelve million users logging more than one billion play hours a year.  I'm sure they've analyzed their user base to the nth degree.  I further guess that someone at Blizzard has determined that it's good for them if the average number of active characters per player goes up.  Maybe those players with more active characters renew their subscriptions at a greater rate.  Maybe players with more active characters are also more active in recruiting new players to the game.  Maybe players with more active characters are also more active in other parts of the WOW world and help create a richer experience for everyone else.  Maybe it's all of the above.

Either way, if Blizzard really did mine its customer data and find these correlations, it appears that the product team then chose to encourage players to have a large number of active characters on the assumption that increasing this overall average would improve these other metrics, the ones they really care about.  It could be that these mechanisms indeed have had that effect.

It could be.

But not necessarily.  Join me next time for part 3, in which we'll scrutinize this reasoning in light of the difference between causation and correlation.

Causation, correlation, and World of Warcraft, part 1 of 3

As you know, I love fact-based marketing.  One of the main ways marketers gather facts is by looking at the statistics of customers' behaviors.  Oftentimes that works great.  A/B split testing is a perfect example of statistics-based fact gathering that works really well.  You can determine which price point makes you more money (to use my earlier example) and count that knowledge as highly reliable, even if you don't understand why it's the case.

Another fact gathering method is what they call data mining.  Essentially that means taking an established business, community, or crowd of any sort and looking for patterns and trends in its behavior.  Marketers often data mine by looking at the customer base or transaction records for a certain period of time and trying to discern markers or behaviors that directly correlate to the behaviors they ultimately want.  For example, customers with this one set of characteristics are more likely to buy an upgrade than customers with this different set of characteristics.  Marketing and sales managers often view these correlative discoveries as gold strikes which will yield great dividends for the business.

Certainly data mining is a key tool in fact-based marketing, but it's laced with danger.  For this series I'm going to focus one of these dangers, the difference between causation and correlation.  I watch lots of business people engage in data mining exercises, and yet I often find that I'm the only one in the room who is alert to the difference between these two qualities, even though the difference is of Earth shattering importance.  Let's start with definitions.

• Causation:  The relationship between a pair of events or circumstances in which one of them is the direct creator (or cause) of the other.
• Correlation:  The relationship between a pair of events or circumstances in which the presence of one affects the likelihood of the presence of the other.  In the case where two circumstances are less likely to occur in tandem than the average, we tend to refer to it as negative correlation.

The difference is subtle but extremely important.  In a causal relationship, event A brings about event B (or makes it more likely).  In a purely correlative relationship, event A does not necessarily bring about event B.  Perhaps event B brings about event A.  Or perhaps both are brought about by a separate event C.


As it happens, causal relations are always correlative relationships.  Causation is a subset of correlation.  It also happens that, unless you believe in magic, correlative relationships imply some kind of causal relationship somewhere.  It just might not be the one we're looking at now.

Example:  In our house we have two dogs, Bruce and Max.  Bruce and Max tend to run around on all fours, while my wife and I tend to walk around on two feet.  Likewise, my wife and I have well developed frontal lobes, while the dogs' foreheads are pretty much full of skull.  If we looked at large numbers of dogs and humans we could see these two patterns consistently occur.  Therefore we can conclude that there exists a correlation - when looking at a population of canine and human adults - between possessing a well developed frontal lobe and walking around on two feet.  However, anyone with even a small knowledge of biology will know that the frontal lobe does not cause the walking on two feet nor that walking on four legs somehow eliminates the frontal lobe.  Instead we know there are other causes of both these syndromes, ultimately going back to a root cause, which in this case is differences in DNA between the two species.

In the above example, it seems pretty obvious.  But I routinely watch business people mine their data and then jump to conclusions without ever asking this question.  Next time, in part 2, a (conjectured) real-world example.

Why I love A/B split testing

I love split tests as a marketing tool.  Love 'em.

First, a quick definition:  Split testing is when you take a large number of potential respondents to an offer and split them up into different groups - or cells we call them - to receive offers or communications that are somehow different from each other.  If the respondents are homogeneous across the groups, then  you can reliably test how the differences in the offer or communication affect the respondents.  A simple example.  I could offer the same product in direct mail to the same list with the same creative, but in one case I could charge $99 while in the other I charge $79.  Now I have tested to see which of these two price points makes me more money.

The above example would be an A/B split test because there are two cells, A and B.  If there were three cells it would be an A/B/C split test.  Etc.  In general, however, the number of cells isn't that important to the concept of the test, and therefore I notice that in the real world A/B split testing and split testing are used almost interchangeably.

In theory you can conduct split tests under all sorts of circumstances.  For example, large retail chains conduct them by sending different in-store promotions out to half their stores.  Once upon a time the bulk of split testing took place in conjunction with direct mail.  Today there's still a lot of split testing in direct mail and direct e-mail, but the most interesting work is happening on web pages.

That's because web pages are the dream environment for this kind of test.  Homogenizing the traffic is a piece of cake.  You can get results in real-time and change the tests as often as you like.  There are many robust tools out there to help with your split testing, and they're super easy to implement and use.

And of course because the rewards are so high.  Split testing is the single best tool for taking you out of speculation and into facts.  The example above is incredibly important in terms of that product's revenue and profit.  You can test all kinds of things - message, purchase flow, offer, product name, headline, you name it.  The depth and variety of market knowledge you can gain is limited only by your tools, your traffic, and your imagination.

The now vs. not typo

While they're unfortunate, usually typos just have the effect of being a little jarring or distracting.  At worst they make you look sloppy.  However, there is one typo of which I've been aware for many years that is a particularly damaging one.  You want to stay vigilant to keep it from affecting you.

I'm talking about the now vs. not typo.  Quite simply, that's when you mean to type one of these two words but your well-practiced fingers type the other instead.  Obviously this typo would only affect touch typists, but there are plenty of us in the world.

This typo is particularly insidious for many reasons:

• It's easy to make.  It only requires the substitution of a single letter using the same hand.
• Spelling checkers don't catch it.
• Grammar checkers don't catch it.
• It can occur both ways (now to not and not to now).
• It has the effect of completely reversing the meaning of the sentence.

This last point deserves a little attention.  Let's say you're a one-man development shop that creates apps for smart phones and sells them on the popular application stores.  You create an iPhone app called Zombiesquare.  It's like Foursquare but with zombies.  Naturally it's a big hit.  Next thing you know you have lots of requests to build a version specific to the iPad, which will take advantage of the larger screen to show the zombies in their full technicolor glory.  You go through the trouble and expense of creating an iPad version.

Now it's time to promote it.  You quickly add some copy right up at the top of the Zombiesquare home page stating,

Zombiesquare is now available for the iPad.

However, what you accidentally post is

Zombiesquare is not available for the iPad.

Wow, that sucks.  You just took your very best set of target buyers and told them not to bother.  That'll definitely cost you some sales.  All because of a stupid typo.

The other direction is just as possible and just as bad.  Think of how dangerous it is if your coupon is supposed to have mouse type that reads, "Not available in combination with any other offer," but instead states, "Now available in combination with any other offer."

So when I'm proofreading my own or others' work, I always stop on the words not and now and take a beat to ensure they mean what they say.  I recommend the same to you.

Introducing James Bond management

I've been directly managing product and marketing teams (and indirectly managing cross functional teams of all disciplines) for almost twenty years.  Over that time I've evolved a philosophy of management that I call James Bond management.

To understand James Bond management, let's use the example of - you guessed it - James Bond.  James is a secret agent, which means his job is to go into difficult situations about which the facts are sketchy at best and drive a satisfactory resolution.  The mission goes something like this:  "James, our man in Bermuda has stopped calling in.  We don't know what's up.  Here's your plane ticket and your false passport and a watch that squirts acid.  Go figure it out and call us if you need to."  Now James wings off to Bermuda and starts sniffing around and makes decisions based on what he learns.  Sometimes it turns out that the agent in Bermuda is off drunk somewhere and the problem is easily managed.  Sometimes it turns out that SPECTRE is involved, and then it's a much bigger deal.

But what doesn't happen is the folks at home sitting and micromanaging James's every move.  That's because they can't.  James is halfway around the world dealing with things in real time, and there's no way M can look over his shoulder and say, "Throw the knife now!"  The folks in London instead have employed a highly capable, highly empowered agent, and they give the agent room to do his work.

To the fullest degree that I can, I try to use the same philosophy.  Each employee is a secret agent whose purview equals that employee's job description.  Each is given James-Bond-like authority within that purview.  Just like James these employees enjoy as much latitude as they can handle, and just like James they all must hold themselves accountable to results.

Now, that doesn't mean you just throw them into the wild and say, "Good luck with that."  James Bond receives training and information and tools critical to his success, like the aforementioned watch that squirts acid.  So do James Bond employees.  James also knows where his boundaries are and when he's stepping beyond them.  James can't order an air strike, no matter how important he thinks it is.  But James can request an air strike and explain why it should happen.  Likewise James Bond employees enjoy clarity on what decisions they may make and where they become recommenders and influencers instead.

I mentioned above that James's employers take this attitude because they simply have no choice.  To do otherwise is to guarantee failure.  I contend that the same is true for most information workers.  There is an old adage stating that if two people have the exact same opinion then one of them is unnecessary.  Over the years I have gotten great results by encouraging my James Bond employees to think for themselves.  Oftentimes they've innovated wonderful improvements that I myself had never considered.

Of course, while trust and freedom are critical to successful James Bond management, they only work if your employees really are James Bonds, at least in their specific areas.  That comes about through recruiting, mentorship, and culture.  I plan to get into more detail on how to attract, create, and maximize your James Bonds in future posts.  Stay tuned.

Why I love fact-based marketing

I'm a big advocate of fact-based marketing, which means I like to focus on what we can determine objectively about the market and the customer as much as possible, relying on our own opinions and impressions only when we have no other choice.

This approach gives us many advantages:

• Accuracy.  First and foremost, the more outside information we can gather, the more likely we are to make optimized decisions.  If you discovered a new island, you wouldn't imagine mapping it by sitting down with a piece of paper and making things up.  You would go look at the actual island and draw what you see.  Yet, people map a market all the time simply by sitting down and making it up.
• Repeatability.  If the facts gathered the first time were accurate, we can have a high degree of confidence they'll still be accurate in the future.  That means we can apply the lessons we've learned over and over again.
• Teachability.  The fact-based approach is something marketers and teams can learn.  That means it can go on helping the organization be better even when entirely new individuals are involved in doing the work.
• Extensibility.  Once we're building a structure of empirical knowledge about a market and its behavior, we can start to make connections.  We can make reasonable conjectures about other behaviors we'd expect so see, even if we don't have the facts on that matter yet.  Just as physicists have used their demonstrated knowledge to reason out good hypotheses to explore new questions in physics, marketers can do the same thing.

Introducing the external-internal ratio

If you've been reading earlier entries in the Tim Callan on Marketing and Technology blog, you've seen that I tend to invent these frameworks to aid thinking about how and what to do in business.  That's what the baskets-versus-fruit parable is.  That's what the five qualities of successful experimental marketing programs are.  That's what the Seven Habits of Highly Effective Marketing Departments are.  I have lots of them.  Here's a simpler one that's a little quicker to explain, but still very useful in thinking about how you allocate your resources, time, or attention.

The external-internal ratio is a simple method of thinking about how you allocate your focus.  The basic idea is that if you're in any kind of marketing, sales, or customer service role, you want to maximize the percentage of your time and effort that directly influences people outside the company.  Better to spend an hour working on web copy than an hour working on a memo for your VP.  Better to drive out and visit a large account than spend a morning in a cross-functional meeting.  Better to focus on influencing a journalist who covers your beat than a manager in another department.

If you've taken any Pragmatic Marketing courses you're probably familiar with the term NIHITO.

NIHITO:  Nothing important happens in the office.

That's a variation on the same idea.  A bit of an overstatement, perhaps, but it makes the point.

Obviously it wouldn't make sense to be purely external facing.  For one thing, oftentimes we can use internal communications, meetings, and influence directly in the service of better external facing activities.  But with a little common sense the external-internal ratio still applies.  Building a slide deck that teaches your creative agency how to communicate better with your customers is much more external than building a slide deck explaining the business to the CFO, at least in most organizations.  Interacting with the sales team or the customer support team oftentimes counts as a highly external-facing task because these individuals are either passing on information about the market or learning ways of becoming more effective in dealing with the market.

I challenge myself and my team to be as external facing as we conceivably can.  Do you have to have this meeting?  Can we make this meeting shorter?  Do all these people have to be here?  Are you spending a lot of time carefully crafting e-mails when you could just give it to me unadorned?  Are you making fancy presentations when you could just be sharing a few facts?  I also try to walk the walk by being a manager who doesn't require lots of internal management.  I encourage those around me to be the same way.

How I got involved in user experience design

For my entire career as a software and internet product manager and product marketer, I've been a strong proponent for focus on optimizing the user experience.  Here's the story of how it all began.

I majored in English.  My thinking at the time (which turned out to be valid, by the way) was that most people are in jobs that you can't major in, implying that most people are doing something other than their major in college.  So while many of my friends were choosing to major in organic chemistry or electrical engineering, I instead spent four years of my life on something I absolutely loved.

Coming out of college I did have the practical problem of getting a job.  I asked myself, "What salable skills do you have, Tim Callan?"  One obvious answer was writing.  So I hunted around for writing jobs, and eventually I went to work for a small Windows ISV as the documentation department.

My first job was to create all documentation for upcoming product releases.  That meant writing and layout for manuals and quick start guides and creating help systems.  So I had to sit down and explain how to use our powerful but complex products.  Complex and too often counterintuitive.  I found myself writing long explanations to make sense of obscure functions.  I found myself going to great pains to emphasize or highlight a few key product points that would prevent people from getting lost in the weeds of the product's functionality.  I found myself patiently articulating how a certain function actually behaved, as opposed to how you'd expect it to behave.

Let me give you a simple example.  Our flagship product had a calendaring function and one of the things you could do was set alarms that would go off at specific times.  It happens that there were no concepts of noon and midnight in this product.  Rather there were 12:00 am and 12:00 pm.  Now, it wasn't obvious to me which of these meant noon and which meant midnight.  I mentioned this fact to the VP of development, who said, "12:00 am is midnight, of course."  Then I mentioned it to the VP of marketing, who said, "Everybody knows that 12:00 am is noon."  Or vice versa.  I can't really remember, but then that's the point.

I took a quick survey of the employees in our twenty-person company and determined that roughly 50% of us felt that 12:00 am was noon, and 50% felt it was midnight.  In the intervening years I've discussed this topic with plenty of other people, and I can confidently say that there exists no consensus on this matter in our culture.  That make sense, of course, because 12:00 am and 12:00 pm are nonsense words.  The true, meaningful words are noon and midnight.

But this product had an expectation for what these terms meant.  You could type in an alert for 12:00 am (or 12:00 pm) on a certain day, and the program would accept it.  And then somewhere along the line, the alert would go.  But according to my quick and dirty research, 50% of the time this alert would go off at midnight, therefore failing in its function to let you know that it was time for your noon appointment.

It was easy enough to determine which was which.  At 11:55 one day I set a pair of alerts called A and P, set for 12:00 am and 12:00 pm, respectively.  One or the other popped up five minutes later and I wrote that fact in big bold letters in the manual in the hopes that users would see it and notice.  But that seems a backward approach, now doesn't it?  A better approach would be for the machines to work the way the humans expect them to.

That's one pithy example, but this kind of thing was going on all the time.  I had become familiar in college with a concept in psychology they called human factors, and right around this time the software development community was rediscovering it under the name usability.  So I appointed myself usability manager and started proposing how to change the product to be more intuitive to human beings.  I did on-the-cheap testing by walking around with a yellow pad and watching people perform tasks in the product.  As the company grew I developed a department under me and eventually got to the point where I had a full time interface designer working for me.  He was much better at it than I had been.

During that time I postulated Tim Rules of Human-Machine Interactions, which state,

1. Machines are here to serve humans and not the other way around.
2. If humans expect a machine to behave in a certain way, and it behaves differently, then the machine is always wrong.
3. Machines that defy the expectations of the target user are misdesigned, even if the actual creator understands how to use the machine.
4. To the extent it is possible, it is more efficient to create a machine that works as target users expect it to than to educate target users to change their behavior.

In the intervening twenty years usability became user interface and then user experience.  The tools got more sophisticated, with multivariate testing and heat mapping and follow-home studies and discreet choice analysis and so many others.  But these four rules have always served me.  My conviction in them has not wavered, and I continue to use them to this day.

What not to say: Internal customer

Oftentimes business speak has the primary harm of being obfuscatory or simply silly - "I reached out across the cross functional matrix to create alignment of goals and synergies" rather than "I cooperated" - but sometimes there are bizspeak terms that are downright detrimental to organizational performance because they mislead or force the wrong behaviors.  One of those terms is internal customer.

In case you're lucky enough not to be familiar with this maddening phrase, internal customer means the employee or group of employees who will directly benefit from the work you do at the firm.  There is nothing inherently wrong with having a term to describe this relationship, but in practice it's a highly loaded term that I've only seen misused.  The problem is customer.  Customers are, of course, god to any company.  Sam Walton famously said,

There is only one boss.  The customer.  And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.

I like that sentiment a lot, as do many people in successful companies.  And as a result this word customer becomes incredibly powerful.  The customer is always right.  It's what the customer wants.  Customers first.

But the phrase internal customer is a perversion of this powerful positive sentiment.  Customers by definition are not internal.  Internal people are part of our team and must all band together to delight the customers.  Customers are not part of our team and expect to be delighted, and if they're not, they'll leave us for someone else who does delight them.  The customer does not expect to sublimate her desires to anyone else's.  Internal people, on the other hand, don't have the privilege of expecting to be delighted and must constantly sublimate their desires to those of the customer.

At its best this phrase is misused by good-hearted people who accidentally credit too much importance to the wrong things.  At its worst, it is a deliberate manipulation pulled out by scheming people who seek to advance their own agendas at the expense of the company's greater good.  These people know how powerful the word customer is and know that they can create an environment where it is politically impossible to say no to them, and they do it by confusing themselves with actual customers.

In organizations I run, I ban the phrase internal customer.  There is no such thing.  If you say that phrase, I won't hear it.  My simple rule of thumb goes as follows.

If the party in question receives compensation from the company in return for goods or services rendered, it is not a customer.

Employees get paychecks and bonuses and stock options and health care and whatnot.  They're not customers.  Agencies and printers and vendors are not customers.  The people you rent your office space from are not customers.  Contractors are not customers.  Advertising sales reps are not customers.  That guy who comes and fills the vending machines in the break room is not a customer.

Resellers are not simple customers, since they make money selling our products, but they're not the same as pure insiders either, since they may be able to drop us and resell our competitors instead.  In other words, some days they're customers and some days they're not.

Now there are plenty of outsiders that are in no way customers or even prospective customers.  That's okay.  We don't tend to confuse them for customers, and they don't tend to pull power plays in meetings where multiple VPs are present.  So we can be less concerned about them.

Also be aware that the same company can be a customer and not a customer at the same time, depending on where in the organization you're interacting and what you're doing.  If the guy who fills the vending machines works for Frito-Lay, and if Frito-Lay is a major purchaser of your IT solutions, he still is not a customer, even though someone else at Frito-Lay is.  There are very occasional instances where the same individual sits in both roles, usually near the top of the organization, and we have to be cognizant of them, but that's pretty rare and usually obvious when it happens.

So does that mean this phrase is always unambiguously evil under all circumstances?  I suppose if you're in a purely internal function like IT or HR or facilities and you never, ever do anything that could directly affect an actual customer, then I suppose it's an okay phrase so long as it's confined to discussions that exist entirely inside that sandbox.  But if you're in sales, marketing, customer service, engineering, legal, finance, or senior management, forget about it.  You need to keep clarity on who is the customer and who is not.  For anyone in any of those roles, forget the term internal customer.  It'll only do you harm.