Automated Love

Return Path is launching a new mini feature sometime this week to our clients.  Normally I wouldn’t blog about this — I think this is mini enough that we’re probably not even saying much about it publicly at the company.  But it’s an interesting concept that I thought I’d riff on a little bit.

I forget what we’re calling the program officially — probably something like “Client Status Emails” or “Performance Summary Alerts” — but a bunch of us have been calling it by the more colorful term “Automated Love” for a while now.

The art of account management or client services for an on-demand software company is complex and has evolved significantly from the old days of relationship management.  Great account management now means a whole slew of new things, like Being The Subject Matter Expert, and Training the Client.  It’s less about the “hey, how are things going?” phone call and more about driving usage and value for clients.

As web services have taken off, particularly for small businesses or “prosumers,” most have built in this concept of Automated Love.  The weekly email from the service to its user with charts, stats, benchmarks, and links to the web site, occasionally with some content or blog posts.  It’s relatively easy (most of the content is database driven), it reminds customers that you’re there, working on their behalf in the background, it tells them what happened on their account or how they’re doing, it alerts them to current or looming problems, and it drives usage of your service.  As a bonus for you internally, usually the same database queries that produce a good bit of Automated Love can also alert your account management team when a client’s usage pattern of your service changes or stops entirely.

While some businesses with low values of any single customer value can probably get away with having a client service function based ENTIRELY on Automated Love, I think any business with a web service MUST have Automated Love as a component of its client service effort.

Breaking Up Is Hard to Do, Continued

My colleague Ed Taussig had a great comment on this posting that I thought I’d share since no one ever reads comments on blogs.

Firing someone should always be considered an opportunity for “Lessons Learned” – i.e. was there anything that as a manager I could have done differently to avoid getting to the point of having to fire someone in the first place?

Was it a failure to interview/hire properly in the first place? Was there a failure to mentor them or to give them constructive feedback before the problem became irreparable? Did I make an effort to find out what might be affecting their performance?

There will be times when the answer is none of the above and that there was nothing you could have done differently.

Even when there was something you might have done differently, it’s not a matter of assigning blame, but of learning something from a bad experience.

All excellent points, Ed. Thanks for the contribution!

Dumb Money

I don’t have a counter cliche to Fred’s two-for-one this week on Passing the Hat and Ponying Up, but I’ll counter with a different, somewhat related Fred cliche that I was reminded of today when reading Paul Graham’s essay entitled A Unified Theory of VC Suckage (form your own opinions of it, but it’s nothing if not thorough and experience-based).

There’s nothing worse than dumb money backing a dumb idea or management team.

The dumb idea or team can destroy an emerging sector pretty quickly, and the dumb VC behind the deal will just keep ponying up.  For the record, the converse is also true — there’s nothing better than smart money behind a great idea and solid team.

The classic dot com version of dumb money is the company who decides to give away its core service for free (the one where they compete with other players) in order to try to make money at something else.  It could take 2 years and a ton of VC money before that company is out of business, having figured out that they needed to charge for their core business — and that process can wash out other companies in the process who are being smarter and more conservative about things.

So instead of just cheering that your competitor is dumb, dig in and look at how smart the money is behind the company.  If the money is dumb, too, beware!

For Whom the Bell Tolls, Part II

Great news for fans of Vonage and other Voice over Internet Protocol (VOIP) services.  Today, the  The Wall Street Journal (that link may only work for a week or so) reported that FCC Chairman Michael Powell just drove a successful vote to declare VOIP an interstate service, exempt from state regulation and really paving the way for much smoother and broader adoption.

I’ve received a number of comments on my earlier posting which sang the praises of Vonage and VOIP, and apparently not everyone has had the same positive experience as we’ve had with the service.  But it’s still going strong for us!

For Whom the Bell Tolls, Part III

My original posting singing the praises of VOIP and Vonage in particular (for those of you who haven’t tried Voice-Over-IP, it’s still working great and unbeliebaly cheaper than traditional phone service) was met with a criticism by my colleague Tom Bartel, who said Vonage in particular didn’t allow him to keep his particular phone number.  This is something that varies carrier by carrier, area code by area code.

So Tom tried an alternative service in Colorado called Lingo.  So far, he seems to be having the same positive experience that we are in NYC.

Everyone’s a Direct Marketer, Part I

I had breakfast a few weeks back with John Greco, the new CEO of the Direct Marketing Assocation, and was telling him why I felt it was essential that interactive marketing be included in the DMA’s mainstream mission and not regarded as separate.  The substance of my argument was that the Internet has turned every company into a direct marketer, whether they know it or not, whether they like it or not, and whether they care to act like one or not.  I was happy that John agreed with me!

I’m going to write a three-part posting on this topic.  First topic:  Why is this happening?

1. The mechanics are now ubiquitous.  Every company’s web site, every keyword to drive a customer to the site, every link to a customer service rep, every email that goes out to a customer list — they’re all direct marketing mechanics that pre-Internet, only specific categories of companies like catalogers or fundraisers employed to drive business.  Now, every company has or does these things as a cost of being in business.

2. Mass marketing is no longer quite so mass.  Audiences are becoming fragmented across hundreds of TV channels and millions of web sites.  I heard a great speech the other day by Strauss Zelnick, one of Return Path’s investors and the consummate media executive, which crystallized this point for me with the following example:  20 years ago, a mass marketer could reach 80% of American women by running a commercial on ABC, NBC, and CBS at the same time at certain times of the day.  In order to achieve that same reach today, a marketer would have to advertise on 120 channels (and I’d add, thousands of web sites).  This fragmentation means that marketers have to get increasingly microtargeted and innovative in order to reach customers and prospects.

3. The balance of power has shifted to consumers.  Don’t like that ad?  Use TiVo to skip it.  Hate popups?  Install Google’s toolbar to block them.  A company you’ve never heard of is emailing you?  Report them as a spammer to your ISP.  Hate phone calls from telemarketers?  Sign up for the Do Not Call List.  Permission is here to stay, and companies that “get it” will win the day with massive databases of customers who have requested to be marketed to via email or other channels.  But all of that’s direct and not very reliant on the mass advertising machinery that propelled companies and products to greatness in the past.

Next up in the series:  Why is this new to some companies, and what lessons can companies who are new at it learn from traditional direct marketers?

Now, This is What Blogs Are All About

In case you missed it, this article from Peggy Noonan in today’s Wall Street Journal is a great follow-up to my rant yesterday about how blogging isn’t going to eviscerate commercial email.  This is what blogging is all about, not replacing marketing tools and techniques.

Developer User Guide?

Tom Evslin wrote a two-part series this week called “Managing Programming for CEOs” (links here for Part I and Part II).  The first is pretty funny, and the second has some good thoughts in it, especially around milestone creation.

But if Tom’s had the experice he relays in Part I in real-life over and over, I have a suggestion for him:  get a great head of development he can trust, and work closely with him or her over the years to build a relationship of mutual trust so those issues are no different than they are with functional managers of other departments.  We are fortunate enough at Return Path to have two such individuals in Andy Sautins and Whitney McNamara (a fellow blogger).

More on the Quick Flip

In case there’s anyone left that reads my blog but not Fred’s, he wrote a great follow-up posting today about the "quick flip," and how entrepreneurs and VCs have totally different (but reconcilable) views on these things.

But Hopefully More Fun Than Insurance

Return Path’s Chief Privacy Officer, Tom Bartel, has a great posting about the importance of focusing on privacy and data security within your organization, however large or small.  The lessons of the past quarter — ChoicePoint, B of A, etc., certainly lend a lot of credence to his argument.