1. They discount the wrong things

If you’re a baseball team, don’t offer discounted season tickets as one of your perks. I had one National League Executive tell me “Season Tickets are by definition a loyalty system. We’re already rewarding them for volume purchases.” Think about your high margin items by offering a discount on parking or concessions.

There are always going to be loopholes in whatever discounts you give. I watch extreme couponing. I remember the grocery store paying my dad to buy cornflakes. Extra-plain Cornflakes that I had to choke down every morning for a year. Give incremental discounts that are large enough to be noticed by your customers, but not on bread-and-butter products that they make the COO roll his eyes in company meetings.

A great example of this is a national grocery chain that discounts its bulk coffee. They’re already making solid margins on this line of business, but their customers have no real compelling reason to keep their coffee purchases in-house. The grocery chain came up with a stair-step program where customers could “unlock” a 10% discount by purchasing a predetermined amount of coffee. This kept margins high, and increased the volume 30% of a profitable part of their business.

2. They spam their best customers

I love it when Drugstore.com reminds me that I have a bonus $10.00 in Drugstore cash that I need to burn before the end of the month. You’re never going to make an enemy by doing that. I’ve noticed that they contact me most frequently when they have good news for me, and keep the “check out our ‘Brand X’ line” emails to a maximum of once a quarter. Yep, I take advantage on their sales, but I also stay loyal and buy from them every time instead of chancing it with another, less reputable website that might save a couple of bucks here or there.

There are a few lists that I’ve been on that have felt like spam right from the get-go. This usually happens when I get put on a list halfway through a marketing campaign that unbeknownst to me was started a month beforehand. I get a bunch of messages with their company-specific jargon and catch-phrases that I just don’t understand. I feel disconnected from the company and I won’t have any second-thoughts about unsubscribing. The best companies are the ones who have one or two emails for people who have just joined their club to ease them in. Take me out to dinner first.

3. They overestimate how involved their customers want to be

Every day I see a car with an “Apple” sticker on the window. Not every company out there has a loyal enough following to the point that their customers will turn their cars into moving billboards. Don’t assume that clients will wear your swag just because you have a happy customer. It doesn’t mean that you won’t get to that point, just don’t make the mistake of thinking that you’re more involved in your customer’s lives than you really are.
Case-in-point- DIRECTV. I’ve been a subscriber for a few years and I get sick of their constant emails. I even get sick of hearing that they’ll give me a hundred dollars for referring a friend. I buy all kinds of extra packages from those guys, but their customer service is just so difficult that I will never be excited to hear from them. I fall into the category of “once there are other options for Sunday Ticket, I’m out.” Yet somehow, I get calls from them, packages of stickers, and emails 4 times a week (including the ones that tell me that prices are rising on my next bill.)

It’s all a matter of perspective. We allow our customers to peek behind the curtain as much as they like, but not all of them want to be involved in the minutae. Want to have a daily check-in call with your team lead? Sure thing. Want to find know what tools we use to automate our regression testing? Maybe, maybe not.

If I’m in the market for 100 lbs of Boudin, the merchant should probably find out why I’m buying it in order to help uncover which parts of the process I would care about. They’d probably ask a lot of questions.  Are you reselling it? Do you have any allergies? How drunk are your guests going to be? Do you want to see the slaughter-room? Why not? Where are you going?

We’re as transparent as our customers need, it’s not a one-size fits all. That being said, there is a minimum. We don’t want a check from you only to have you disappear until the final product is done. With our iterative development process, we need feedback from our customers as we introduce our solution gradually. We don’t want to cook up a couple of hundred pots of jambalaya only for you to tell us that you don’t like okra. Iterative releases are like the sample cups.

Tour the facility, put on a hairnet, grab that cleaver.

We’ve all heard of a vendor that has prestigious mailing addresses on Madison Avenue, K Street, or Rodeo Drive. Meanwhile the work is being done out of a Starbucks. Not necessarily the type of people to bet the ranch on. However, if they’re upfront with how their business is done, talent can overcome infrastructure.

What people are really concerned about is knowing that your company uses ethical business practices and isn’t tricking them into false beliefs. We provide this transparency to our customers by having weekly face to face meetings to review hours spent on their projects and what value they will see from those hours spent.

Business transparency is a strong business practice that helps strengthen a company, strengthen the relationships between the company and its clients. How can your company be more transparent?

Growing up I read a lot of Calvin and Hobbes. I’ve got every anthology including the leather-bound edition. As much as I love reading them, I find myself having to refocus halfway through a single strip. I tend to think that I know the ending to a given strip or series, and I skip ahead.

Oh, this is the one where he collects all the UPCs and gets a propeller beanie. I’m going to flip a few pages and see the look on his face when he doesn’t take off!

I always thought I had read every single Calvin and Hobbes. There was nothing about that kid and his tiger that I didn’t know.

A couple years ago, I was going back through my old collections and I found that I definitely hadn’t read every strip. In fact, I found that I had skipped most of the large Sunday illustrations because over the years I was skipping pages, thinking oh, I’ve read all of these storylines before.

It turns out those Sunday illustrations were the best. They were the ones that had cool stuff like T-Rex’s riding in fighter jets! (Spoiler alert for the shockingly Randy Quaid-less ending of Cowboys vs. Aliens).

I find that this same pattern shows up if I’m talking with a client who has a familiar problem. I have to focus myself on what they’re telling me so I don’t jump ahead in my mind to what I think the solution is. If I do that, I’ll miss out on all of the really important stuff they’re sharing- things that I wouldn’t have thought could be a part of the problem or answer. I want the Sunday edition of their story, I don’t want to hear the first panel and flip to my ending.

If a company is looking to become more agile, if they’re looking for an object-oriented development approach, or if they want us to modernize their legacy system, I have to put away my jump-to-conclusions mat- I might surprise myself and discover something I wouldn’t have found otherwise.

For my Mom’s birthday I decided it would be nice if I bought her a computer. (Moms are funny; she had purchased three PCs for my brother and me before we were out of the house, but she never had the desire to learn to use one herself.)

We went out to the electronics store one day to pick out the one that she wanted. Her two biggest requirements were that she needed to access washingtonpost.com, and she wanted to learn to play Scrabble online. We ended up picking out a pretty generic machine with a decent amount of memory and some antivirus software for all of the “free iPod” ads I was sure she would click on.

This was six years ago, and she was happy as she could be. I was too, albeit completely unprepared for how good she would get at Scrabble. Then I had to go and screw it all up.

I stopped by the house a couple of months ago and brought with me a copy of Windows 7. I figured she hadn’t upgraded in six years, and she’d be cool with me installing it. Not the case. After I left I got a phone call from a very angry Mom. She sounded like I did after I installed Vista.

“I can’t find my pictures. I wanted to put my pictures from New Zealand on Facebook.”
“Everything’s different.”
“Can you come over and change it back?”

Looking back, it was a sneaky move on my part. I should have asked before I acted, but I thought I was doing her a favor. As a more technically experienced person, I was projecting my own values on to her. I knew Windows 7 was better than her seven year-old XP, but I didn’t stop to think if she would think so too.

A lot of times people ask me about the best way to transition their employees to a new piece of software. I always ask them, “Why do you want to change? Does your team also see a problem?” Of course you shouldn’t make your decision on whether to change software based solely on what your employees think about the current system. However, it’s important to anticipate the feedback from the people who will be learning the new product as well as those who will be measuring its success. Do they see the reason for the change? What is your plan to train them on the new technology? How much user error can you absorb after the change is made? Getting them invested in the reasons for the switch as well as the plan for transition is the key to avoiding a mutiny.

By Eric Sollenberger:

The BCS formula has determined that Auburn and Oregon will square off in the BCS National
Championship Game. What does this have to do with your company’s legacy system? More
than you might think.

One: It sounded like a good idea at the time.

As strange as it may sound, the BCS system was created to solve a problem. The old
way of crowning a national champion failed for the first time in 1992. Mark Brunell’s
Washington Huskies had won their bowl game and finished the season undefeated. In
most seasons this would have been enough to secure the national championship, but
this year was different. The University of Miami (featuring Dwayne “The Rock” Johnson)
had likewise finished the regular season undefeated and pummeled Nebraska in the Orange
Bowl. Although The Rock would go on to claim to be “The People’s Champion,” the national
title was declared a tie. Everyone threw a big fit because there were two national
champions, and America doesn’t do ties. Something had to be done—and the solution
was to be the Bowl Championship Series. The BCS ranking formula would include the
opinions of people who talk about sports on TV, coaches who are allowed to vote for
their own teams, and six computers that would calculate secret algorithms. What could
possibly go wrong?

Like college football, businesses grow and change over time. Systems evolve naturally
around activities and tasks that are of higher value to the bottom line. Back in the
day, it was easy to tweak the system. Putting a file in a different inbox, or firing
the guy with messy handwriting was how things got done. Then businesses grew and grew
and grew, until they could produce no more without bringing in an IT expert to automate
everything. To quote the slick talking software-salesman: “Using this great new
system of expensive software that only a couple of people understand, your business
will be free to expand, and the system probably won’t have to ever be changed! Even
if some minor adjustments have to be made, I’m sure it would be no problem to find
someone who can do it right, and every employee will have no problem at all adjusting
to the new features. What could possibly go wrong?”

Two: It usually works. But even when it does, it freaks you out right up to the
end.

For the most part, the BCS rankings put together the two best teams in the country.
It provides us with an entertaining game and a great excuse for some New Year’s Day
laziness. With the exceptions of 2003 (LSU/USC), and 2004 (USC/Auburn) there haven’t
been co-national champions since the BCS formula was implemented. Surely a system
that works 85% of the time can’t be bad.

Although it usually works, there’s the potential for disaster every time.
Every November, there is a possibility that 3, 4, or sometimes 5 teams would have
a legitimate claim to play in the looming national title game. Fan bases get all worked
up, and Lou Holtz gets so flustered he can’t speak.

Legacy systems are the same way. If you’ve survived a few screw-ups before, you’ll
survive them again. As long as the orders go through the same way each time eventually
you’ll get your funding/paycheck, and there’s probably not a reason to change anything.
We know a lot of people who’ve been dealing with the uncertainty of a faulty system
for years. At crunch time, they bite their nails and prepare for the worst. Then at
the last second, everything usually comes together—the system that’s held up with
duct tape comes through yet again. But hey, they’re no worse for the wear.

Three: The guys who designed it spend more time counting their money than fixing
the problems.

It’s
almost cliché to skewer the NCAA and money-hungry college Presidents. Yes, they make
loot hand-over-foot while the masses demand a playoff. But give them credit—they designed
a system that usually delivers what consumers want and supplies enormous profits for
their schools. After all, boosting revenue for the universities and conferences is
one of the most important parts of their jobs. Without this revenue, schools would
be forced to slash research budgets, cut programs, and generally lose their ability
to equip young men and women with the tools needed to succeed in the world. Sure,
they’ll listen to important boosters and the bully pulpit that is the NCAA, but they’re
not going to rush to change anything unless it’s worth their while.

As opposed to the NCAA, the software team you selected usually builds exactly what
you tell them to. That might be the problem. Chances are your vendor is not going
to know your business as well as you do. The development team should understand the
“who, what, when, and where,” and most importantly the “why.” This involves some up-front
commitment in time, and a little bit of back and forth between the two of you to ensure
that they get it. Ideally, the vendor that you choose should be able to listen to
your requirements, but also be able to make suggestions about something that might
work better in the long run.

Four: It’s the only game in town.

Every year people discuss boycotting the national championship game. There’s always
the guy at the bar who says, “I love college football, but I’m not going to watch
the BCS games until they put in a playoff.”

That guy is a liar. He is going to cave in and watch the sport he loves, played at
the highest level for the last time until September. People have the option to watch
the FCS Playoffs, but I doubt 50 million TVs will tune in to watch football games
that are apparently being played at Roland Garros.

The flaws in a legacy system are similarly well known. There’s generally a sense of
resignation that you have to make due with what you have. You can’t just stop using
it; after all, business would grind to a halt. Your other option would be to update
it, and most people don’t even know where to begin with a project like that. You use
it and learn to tolerate it, because you don’t have any other recourse. Sometimes
the devil you know is preferable to watching Eastern Washington vs. Delaware.

Five: It’s only going to be fixed when the problem becomes more costly than the
solution.

Great
news NCAA football fans! ESPN has a deal with the BCS that will guarantee the rights
to air all of the BCS games through 2014. For all that’s broken with the BCS, they’re
still being paid $125 million per year just for the rights to broadcast the games.
Like it or not, the BCS is nothing if not profitable. That’s not going to change until
there’s a run of consecutive co-champions, or a viable alternative with a smooth transition
is offered. Mark Cuban, the ball is in your court.

People ask, “When should I do something about our legacy system?”

It’s simple math really.

How many orders/grants/contracts has the system cost you? How much time do you spend
worrying about, fixing, or paying others to handle issues with the current system?
What is your hourly rate? Add those numbers together and you get an idea of how much
the legacy system is costing you. From there it’s pretty simple to figure out what
your budget should be and when you will recognize a return on that investment. Maybe
it makes sense to keep using the current one in spite of all its flaws. Maybe there’s
a place in this world for somewhat serviceable broken-down systems that used to be
fast. After all, Mark Brunell still has a job.

If you have run the numbers and realize it is time to invest in a way out of your
legacy system, Headspring would
like to speak with you and we hope you will contact
us. Helping enterprises out of legacy systems is what we do best. If you select
another vendor, please do due diligence and choose well. You will be frustrated if
the “solution” is a brand new legacy system. Example: BCS

One: It sounded like a good idea at the time.

As strange as it may sound, the BCS system was created to solve a problem. The old way of crowning a national champion failed for the first time in 1992. Mark Brunell’s Washington Huskies had won their bowl game and finished the season undefeated. In most seasons this would have been enough to secure the national championship, but this year was different. The University of Miami (featuring Dwayne “The Rock” Johnson) had likewise finished the regular season undefeated and pummeled Nebraska in the Orange Bowl. Although The Rock would go on to claim to be “The People’s Champion,” the national title was declared a tie. Everyone threw a big fit because there were two national champions, and America doesn’t do ties. Something had to be done—and the solution was to be the Bowl Championship Series. The BCS ranking formula would include the opinions of people who talk about sports on TV, coaches who are allowed to vote for their own teams, and six computers that would calculate secret algorithms. What could possibly go wrong?

Like college football, businesses grow and change over time. Systems evolve naturally around activities and tasks that are of higher value to the bottom line. Back in the day, it was easy to tweak the system. Putting a file in a different inbox, or firing the guy with messy handwriting was how things got done. Then businesses grew and grew and grew, until they could produce no more without bringing in an IT expert to automate everything. To quote the slick talking software-salesman: “Using this great new system of expensive software that only a couple of people understand, your business will be free to expand, and the system probably won’t have to ever be changed! Even if some minor adjustments have to be made, I’m sure it would be no problem to find someone who can do it right, and every employee will have no problem at all adjusting to the new features. What could possibly go wrong?”

Two: It usually works. But even when it does, it freaks you out right up to the end.

For the most part, the BCS rankings put together the two best teams in the country. It provides us with an entertaining game and a great excuse for some New Year’s Day laziness. With the exceptions of 2003 (LSU/USC), and 2004 (USC/Auburn) there haven’t been co-national champions since the BCS formula was implemented. Surely a system that works 85% of the time can’t be bad.

Although it usually works, there’s the potential for disaster every time. Every November, there is a possibility that 3, 4, or sometimes 5 teams would have a legitimate claim to play in the looming national title game. Fan bases get all worked up, and Lou Holtz gets so flustered he can’t speak.

Legacy systems are the same way. If you’ve survived a few screw-ups before, you’ll survive them again. As long as the orders go through the same way each time eventually you’ll get your funding/paycheck, and there’s probably not a reason to change anything. We know a lot of people who’ve been dealing with the uncertainty of a faulty system for years. At crunch time, they bite their nails and prepare for the worst. Then at the last second, everything usually comes together—the system that’s held up with duct tape comes through yet again. But hey, they’re no worse for the wear.

Three: The guys who designed it spend more time counting their money than fixing the problems.

It’s almost cliché to skewer the NCAA and money-hungry college Presidents. Yes, they make loot hand-over-foot while the masses demand a playoff. But give them credit—they designed a system that usually delivers what consumers want and supplies enormous profits for their schools. After all, boosting revenue for the universities and conferences is one of the most important parts of their jobs. Without this revenue, schools would be forced to slash research budgets, cut programs, and generally lose their ability to equip young men and women with the tools needed to succeed in the world. Sure, they’ll listen to important boosters and the bully pulpit that is the NCAA, but they’re not going to rush to change anything unless it’s worth their while.

As opposed to the NCAA, the software team you selected usually builds exactly what you tell them to. That might be the problem. Chances are your vendor is not going to know your business as well as you do. The development team should understand the “who, what, when, and where,” and most importantly the “why.” This involves some up-front commitment in time, and a little bit of back and forth between the two of you to ensure that they get it. Ideally, the vendor that you choose should be able to listen to your requirements, but also be able to make suggestions about something that might work better in the long run.

Four: It’s the only game in town.

Every year people discuss boycotting the national championship game. There’s always the guy at the bar who says, “I love college football, but I’m not going to watch the BCS games until they put in a playoff.”

That guy is a liar. He is going to cave in and watch the sport he loves, played at the highest level for the last time until September. People have the option to watch the FCS Playoffs, but I doubt 50 million TVs will tune in to watch football games that are apparently being played at Roland Garros.

The flaws in a legacy system are similarly well known. There’s generally a sense of resignation that you have to make due with what you have. You can’t just stop using it; after all, business would grind to a halt. Your other option would be to update it, and most people don’t even know where to begin with a project like that. You use it and learn to tolerate it, because you don’t have any other recourse. Sometimes the devil you know is preferable to watching Eastern Washington vs. Delaware.
Five: It’s only going to be fixed when the problem becomes more costly than the solution.

Great news NCAA football fans! ESPN has a deal with the BCS that will guarantee the rights to air all of the BCS games through 2014. For all that’s broken with the BCS, they’re still being paid $125 million per year just for the rights to broadcast the games. Like it or not, the BCS is nothing if not profitable. That’s not going to change until there’s a run of consecutive co-champions, or a viable alternative with a smooth transition is offered. Mark Cuban, the ball is in your court.

People ask, “When should I do something about our legacy system?”

It’s simple math really.

How many orders/grants/contracts has the system cost you? How much time do you spend worrying about, fixing, or paying others to handle issues with the current system? What is your hourly rate? Add those numbers together and you get an idea of how much the legacy system is costing you. From there it’s pretty simple to figure out what your budget should be and when you will recognize a return on that investment. Maybe it makes sense to keep using the current one in spite of all its flaws. Maybe there’s a place in this world for somewhat serviceable broken-down systems that used to be fast. After all, Mark Brunell still has a job.

If you have run the numbers and realize it is time to invest in a way out of your legacy system, Headspring would like to speak with you and we hope you will contact us. Helping enterprises out of legacy systems is what we do best. If you select another vendor, please do due diligence and choose well. You will be frustrated if the “solution” is a brand new legacy system. Example: BCS