b.cognosco
Where leaping to conclusions is my primary form of forward motion.
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Saturday, February 22, 2003
Macintosh
I used Macs for years -- nearly a decade -- and finally gave them up for a host of reasons. But I recently had my first encounter with OS X and the command-line interface. It's cool. Now I find this Konfabulator thing that can create almost any sort of widget within the GUI. You certainly can't do that with Windows.Things change -- what was old is new again. The cycle goes around and maybe, now that I don't have to give up my manhood to use a Mac (we all know real men use GUIs by choice, ready to dive at a moment's notice to the command-line) I should re-evaluate. I certainly don't have any delusions about Windoze -- the OS that's just (barely) good enough.
There's still that little problem with the serious price premium (and no, I don't recognize any "status" premium -- I don't give a damn.) I've got to justify the machine on its merits. But OS X is starting to look more like a winner every day...
Konfabulator is here, Konfabulator is here!!! - Konfabulator is a Macintosh program-thing that works in OSX and was created by some Sun engineers. It's javascript, and it works with XML. If you have a Mac with OSX then just got to the site now. HURRY!. You can try it for free, and then it's $25. Konfabulator lets you create desktop widgets, which can do anything you want (i.e. have a little clock, or calender, or news). The site already has a bunch of free widgets that you can download and try out.
Leo Laporte of TechTV says these widgets are like what Active Desktop was supposed to be for Windows, "except this works." Konfabulator uses quartz technology (which is built into OSX, which allows the widget to be semi-transparent, or to fade out and other really slick looking stuff).
Oh did I mention that it uses XML and can do news feeds? Let's see, what could that mean? I wonder how long it will take before someone creates a widget for news feeds? Not long, because it is apparently pretty easy to write the widgets, even if you aren't a programmer. Goddammit. I need a Macintosh!
[Ernie the Attorney]
Customer Conundrum
In the new Bank of America television commercials a young lady wants to open a checking account, and as the bank representative runs through a litany of services -- online banking, online bill pay, etc. -- she replies to each that she wants it for free. At the end of the commercial she says, "I just don't think I should have to pay for any of it." And the bank rep replies, "Well, neither do we."A little over a year ago I ended an eight-year relationship with Bank of Abuse, when their fee structure became so onerous it looked like they were going to try and charge me $3 for talking to a teller. I never voluntarily joined BoA, but through a series of mergers they became my bank by default. By the time my account came under the actual BoA banner I was paying more in bank fees than I had ever paid in my life -- an average of $25/month for a standard, household, joint checking account with DirectDeposit. I've no doubt that BoA was trying to get rid of me as a customer, and they did a fine job. But apparently it worked too well and customers left in droves. This was all done in the name of Customer Management and focusing on MVCs (most valuable customers), which was quite the mantra for big CRM consultants over the past few years. Turns out the shoot-from-the-hip dumping of customers wasn't all that smart and banks, among others, are now running as fast as they can in the other direction. Hence, the 180-degree pivot on consumer banking customers by BoA.
In a white paper entitled The Customer Profitability Conundrum: When to Love 'Em or Leave 'Em strategists from Booz, Allen, Hamilton and the Wharton School examine this new reality:
"Some of my clients now tell me theyre sorry they listened to consultants five years ago when we told them to get rid of unprofitable customers," says Chris Dallas-Feeney, senior vice president in Booz Allens New York office. "In banks, where I spend a good bit of my time, executives in the 1990s were told to get out of the mass market and focus on more affluent, profitable customers. Today, theyre saying, To heck with that, we want to serve every customer we can. As consultants we have to amass significant evidence to prove a particular customer segment is a dog and therefore you shouldn't bother."
According to Wharton marketing researcher Peter Fader the idea doesn't work because you can't readily predict the value of individual customers, especially in the consumer sector. As Fader says,
"Despite our desire to explain everything a customer does, much customer behavior is very random... It's hard to look at the past and say with confidence this is a good customer and this is a bad one."
At the recent CRM Technology Decisions conference this theme was reinforced, as speakers talked about using customer data to model business behavior and build collaboration, not as a culling mechanism. Certainly, some customers should be invited to leave, but far more often the business needs to simply learn to serve customers in a way that makes them more profitable. Did BoA make a mistake in firing me? I don't know, but according to Wharton marketing professor Barbara Kahn, firing customers should be a last resort.
"Its more expensive to acquire a new customer than to retain an existing one," Kahn says. "Its even more expensive to bring back a customer that youve gotten rid of. Its costly and its a mistake you dont want to make."BoA now seems to think it's worth spending a lot of money to win some of those fired customers back.
Where the banking industry erred was in its belief that technology could somehow invert the free market model. They thought they could find and deal only with customers interested in what they had to sell, and avoid having to figure out how to provide what customers wanted -- that was, and still is, the lure of CRM. But technology is no substitute for common sense and businesses that dedicate themselves to ever smaller sets of customers may soon find themselves chasing the stampede as BoA now does. The value in CRM is in providing a channel for customers to tell you how your business can do more, not less, and in opening your eyes to new markets, new products, and new opportunities for growth.
Friday, February 21, 2003
Unintended Consequences
The law has unintended consequences -- and our elected officials are finding themselves hoist on their own petard. It is routine and accepted procedure for Senators, Representatives, and even the President to sign-off on laws they don't understand (many they haven't even read) based on little more than simplistic summaries by junior aides and policy wonks, greased with current opinion poll results and lobbyist dollars. What this usually means is that We, the People take a drubbing while the gub'mint official moves on to the next big fund raiser.But now they've signed McCain-Feingold, apparently without reading it, and they are the ones dealing with the consequences. There is a certain poetic justice in visualzing a Congressmen with "A sort of slack-jawed amazement at how far this thing reached" as they come to terms with what they signed. It is good for consequences to fall on the master instead of the slave...
Does Congress understand its own laws? - Apparently, not. And the proof is that they didn't even understand the full implications of McCain-Feingold finance reform bill. At least, that's what this N.Y. Times article suggests. [Ernie the Attorney]
Lies, Damn Lies, and RIAA Statistics
More on the statistical malfeasance of the recording industry, courtesy of Tim O'Reilly and Mac Wizards Music. The Mac Wizards article uses the RIAA's own statistics (which our Congressmen are apparently incapapble of interpreting on their own) to highlight the industry's gross misrepresentation of fact.
In RIAA Statistics Don't Add Up to Piracy, George Ziemann of Mac Wizards Music takes an analytical look at the RIAA's reported statistics on the impact of file sharing. And what he comes up with is enlightening.Yes, CD unit shipments were down 10% in 2001. But in terms of revenue per title, 2000 was the best year in industry history. In both 2000 and 2001, there were fewer new CDs released than in any year since 1993, and revenues per title were WAY up (to over $500,000 per title, from a decade-long average around $400,000.)
George's tabular rendition of the unit and dollar sales for the RIAA over the past decade, taken from the RIAA web site, is a great resource for those interested in judging the RIAA's piracy arguments for themselves. [Tim O'Reilly]
The Rule of Idiocy
There appears to be a heated competition afoot for who can develop the most boneheaded attack on American liberty -- and it all seems to ooze out of Pennsylvania. Which is worse, former PA Gov. <strike>Uncle</strike> Tom Ridge's terrorist propoganda at Ready.gov, or this crackpot attack on the Internet by PA's self-annointed national social savior and Attorney General Mike Fisher ?
[...] Pennsylvania's attorney general, operating under a highly unorthodox state law passed last year, has so far instructed Internet providers with customers in the state to block subscribers from at least 423 websites around the world.The law is unusual because it places risks of a $5,000 fine on companies providing Internet connections to websites with illegal photographs, not on the pornography sites themselves. [...]
Is there something about being elected to a public office in America that deprives a person of basic common sense and a connection to reality? I'm not even worried about corruption anymore. I feel like I'm living an episode of the Twilight Zone.
Liberties Group Fights Net Block. The Center for Democracy and Technology will try to convince Pennsylvania's attorney general to disclose details about the state's unusual efforts to force Internet providers to block visits to websites containing child pornography. [Wired News]
Thursday, February 20, 2003
Real Numbers From Music Industry
More evidencethat looking at real financial numbers for the music industry is key to gutting their entire position on digital music sharing. We should not begrudge publishers legitimate fees for legitimate services, but we should never have let them recast the file sharing argument as one of protecting artists. It's a patently bullshit argument and will continue to fall under close scrutiny.
Who Gets Hurt When You Pirate Music?.There's a case study in the NYDaily News -- apparently a propos nothing but this Sunday's Grammy Awards -- that breaks down the cash flow of a hypothetical hit album by a hypothetical rock quartet. It illustrates all the people that get paid along the food chain, including some odd recoupable record company expenses, like a 25 percent "packaging deduction" and a 15 percent "free goods charge," off the top, most of which the label keeps.
The bottom line is that a gold record (500,000 copies) selling at $16.98 will gross roughly $8.5 million, of which each member of the hypothetical quartet will pocket about $40,000. (The case study doesn't take songwriting royalties into account.)
So for every $16.98 album you rip, you're costing a performing artist about 34 cents, and the lawyers, producers and labels about $16.64. [Over the Edge]
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