Tuesday, June 19, 2018

New INC Magazine Blog Post by Kaplan Institute Exec Director Howard Tullman

Your Loyalty Slip is Showing
There are a million and one "rewards" programs that are growing increasingly indistinguishable. What many companies don't understand is that it's the customer experience that matters most, not the prize in the Crackerjack box.
By Howard Tullman Executive director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology @tullman

Today the best businesses-- in retail, in hospitality, and even in health care-- aren't simply selling products or services. They're selling the whole package: the experiential journey; the feel-good buzz; and the "be-back" soon. It's increasingly critical to swiftly move the consumer along this path from connection to engagement and attachment and from there to a continuing commitment. Loyalty and "locked-in for life" are the dream and the desired state. But these days, achieving that dream is way more complex and multidimensional than an occasional upgrade or freebie.

More and more affluent consumers no longer have a "favorite" or preferred product or service within an increasing number of verticals. And Alexa is the next nail in the coffin of the big brands because consumers just want their cornflakes or batteries, or their meal kit and it don't much matter anymore who makes the stuff as long as it's delivered to their home the same day.

It seems to me that millions of merchants, marketers and managers just don't get it. Loyalty only lasts as long as you deliver--each and every time-- and no one owns anything more than the moment you've got to earn my business. Loyalty programs are everywhere these days, but for that very reason, they're losing their impact and their perceived value-- unless they're backed up and enhanced by the way your people and your procedures operate. Your programs need to incent and reward regular and continuous engagement and repeated transactional activity.

This is especially essential because the days of churning one-off customers are over - it's too costly, it's too hard, and the resultant and constant need to replace the clientele can kill any company. In a world where you've got to focus on keeping the customer coming back-- a world in which the customer cares less and less about owning anything and more and more about utility, convenience, speed and ready access-- you and your team have to manage every part of the path and every step in the journey to be successful.

It's a journey that begins before the customer even gets there, with often inflated expectations and sometimes unrealistic anticipation, and then moves to the delivery of the "thing" itself. Finally, provided that you don't manhandle the mood or snuff the satisfaction, the customer has fond memories that last long afterwards and, most importantly and far more precious than gold, produce favorable WOM (word of mouth) and authentic, heartfelt recommendations. Your best promoters and influencers aren't the paid shills and cynical celebs; they're the passionate people who lived their dream and can't wait to share their stories with others.

But even your favorite fans will tell you that they're not prepared to pay up for your products simply because they buy into your story (or brand promise) unless your offerings meet all of the other components of their constantly morphing consideration set. We're talking about assembling and purveying a bundle of bargains, behaviors, and benefits that are consistently better than the other alternatives.

The truth is that, if you disappoint me when I walk through the door or beat me up when I'm about to leave, you can be sure that I won't be back. But as obvious as this may seem, every day we see actions, processes and systemic shortcomings that are designed that squander customer satisfaction. You can give me all the points that are possible, but if your people or your procedures piss me off, that's the impression I'm coming in or going out with and you're not likely to turn me around with special discounts, package deals, special show access, or anything else after the fact. Because in customer service, you don't get a second chance to make a first impression. If your staff and services don't sync up with the really swell promises you've made, see ya.

How hard can it really be to do these basic things right? My shoe salesman knows my shoe size and preferences by the second time I'm in the store because he keeps track on his own little 3x5 customer cards. And I feel that he cares about me and also about not wasting my time. I'd call that really small data, but it matters, and it works. Businesses can't afford any longer to assume that one size fits all - we know that it doesn't, and the data are there to enable differentiation and mass customization.

But I can still go into some of the most expensive hotels in any city (where I've stayed a dozen times before) and be treated like a stranger every time. Wouldn't it be nice if they "knew" me, even just a little bit? Many of these places don't even know that I'm a part of their loyalty programs because the back-of-house systems aren't connected to and available at the front desk. And that's just the beginning of the BS that the business traveler suffers.

How about the "our check-ins aren't until 3 pm" story? And, of course, if you make a fuss or scream loudly enough - wonder of wonders - they suddenly find a room for you. But why should you have to shout and get upset. And why should it be so hard to figure out that a certain number of rooms need to be turned over and cleaned up and ready to go by 10 or 11 a.m. - maybe not for the tourists, but for the road warriors. They do it in Europe on a 24-hour cycle - why can't we figure it out? What's at work here is pretty simple - the entire process is designed to suit the schedules and the needs of the housekeepers and maids, and not the customers. It's all inside out and tough on you rather than customer-centric and responsive to a recurring, regular and simple- to-solve issue.

On the other hand, when you use the increasingly available data to combine and drive the in-store and the online connections with your customers and you build powerful loyalty programs that offer both monetary and experiential perks and other advantages, the impact on the bottom line couldn't be clearer. My favorite story for some time now has been Ulta Beauty (www.ulta.com) whose whole business is hyper-personalized and where more than 22 million members of the rewards programs account for over 90% of sales. They use their information and back-office tools to augment and improve the in-store engagement and create the very clear message that you, your presence and your time are all valued and much appreciated.

The seamless combination of "hurry" (time sensitive) and "heartfelt" (sincere and authentic) is a wonder to watch. It's a one-on-one feeling delivered on a massive scale and no one does it better today.

Thursday, June 14, 2018

Leadership Interview

Howard Tullman
& General Managing Partner of G2T3V, LLC
How did your early life inform your leadership development?
When I was 10 years old, I was a magician at children’s parties. The job was not about doing the magic or handling the kids. It was about managing the parents, because they all wanted to stand behind me and see how the trick was done. Dealing with adults at that early age was a confidence builder for me. My parents were also a very big influence. They were the most unconditionally loving parents you could imagine. But my mother and father were also very demanding—they wanted their kids to excel.
Tell us about the best leadership advice you've received.
When I was a trial lawyer, I interviewed with the most successful lawyer in the country at that time. I decided not to work for him, but he shared something interesting with me. He said that life is generally divided into three buckets: work, recreation, and family. He said that if you enjoy and love your work, if you are doing things that are important not only to you but to other people that you are creating jobs and futures for, then you can focus on work and family. Your recreation is already covered in your work.
A corollary to that observation is that you’ll always have more work but you only have one family. Your work is what you do but it’s not who you are. It’s very easy for an entrepreneur to get completely consumed with the idea that the business is everything. Startups have a lot of hills and valleys. Having family as a solid base makes it easier to take risks in other areas of your life.
Describe your leadership style.
I want people to learn and get better. I believe in modeling the behavior that we expect of our people and our companies. Talent and creativity are great but ultimately what trumps both of those is pure hard work.
There are two key leadership skills that everyone needs to learn: triage and iteration. You spend every single day prioritizing your time. As Steve Jobs used to say, “It’s what you say no to that’s most important.” Sometimes you need a competent tyrant rather than a committee. I think that the truth only hurts when it ought to. Good leaders are strong editors.
What advice would you offer to emerging leaders?
A startup is very much akin to a family in a lot of ways. You must make room for all kinds of people. Entrepreneurs often fail because they think they’re going to hire people just like them to build a business. You have to make room for different personalities, talents, and interests. After work, some people want to just go home, some people want to go out together and have a beer, and some people are halfway in-between. You can’t have effective innovation without inclusion.
What leadership skills are essential in shepherding organizations through significant transitions?
The co-working space isn’t merely real estate, and I think a lot of places that come to see us and try to steal the secret sauce don’t understand that. Our structure creates an opportunity for everybody to smash into each other all the time. When you’re building an ecosystem, these collisions make 1871 successful. People get the definite feeling that they’re not alone; there’s a lot of lateral learning happening in our space. Part one is to give people the tools and the resources they need to increase their likelihood of success. Part two is to only let the right people in. If you pick your inputs right, you are more likely to have successful outputs.

Interview By Jennifer Miller & Bria Smith

Tuesday, June 12, 2018

New INC Magazine Blog Post by Kaplan Institute Exec Director Howard Tullman

Don't Make Me Repeat The Password Lecture Again
In a world where we're reliant on third party WiFi, we all need to do a better job at protecting our data. The penalty for not being vigilant is growing every minute.

Executive director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology @tullman

Any entrepreneur or road warrior hears some new horror tale about hacks, scams and identity thefts just about every other week. Interestingly enough, these are usually fairly-credible, peer-to-peer conversations rather than media scare stories. Most recently, I've heard half a dozen versions of complaints and some serious instances of financial losses based on the porous and insecure nature of hotel and airport WiFi.  In fairness, these providers couldn't make it any clearer or disclose the risks more directly on their websites-- these are not the usual disclaimers buried in the T&Cs.  Unfortunately, we don't really have much in the way of connectivity choices when we're on the road. You can carry your own hotspot or use your phone and run down your battery, but the vast majority of us aren't gonna do that. So, the trick is to figure out what you can do, realistically and practically, to protect yourself.
As we're forced to rely more and more on third-party-provided WiFi, and it becomes increasingly ubiquitous, the scale of the security problems and the prospective losses are only going to continue to grow. And honestly, as long as it's not happening to a family member or a relative, we've gotten so accustomed to these commonplace tales of woe (and worse) we tend to dismiss them as the risks of the road. In addition, I have to admit that we stupidly assume (and often think smugly to ourselves) that the victims must have been lazy, sloppy or careless and that this kind of stuff could never happen to us. Until it does; and then, of course, it's too late.

My humble suggestion is that now's the time to start thinking about how to be smart about the situation before you have to be sorry. My thought is simple: if you can't control the pipes, try to control and protect your passwords. Yes, I know that you've heard this lecture a million times before and yet most of us are too "busy," too lazy, or too uninformed to actually invest the modest amount of time that it takes to substantially boost the odds in your favor. In this context, I'd say that being too busy is, in fact, just another word for being lazy. There's not much I can do to help anyone unwilling to help themselves.

It would take about an hour to follow a few basic steps to improve your password protection while it can take weeks to repair and try to restore your credit and financial identity if you get hacked. You should take the time to do the math. And, for now, I'm just going to focus on the facts of life these days and then you can decide how to proceed.
First, the guys on the other side are getting smarter, faster and a lot nastier. They're growing in numbers, the hacks are easier to accomplish, and they're better equipped-- especially because the tech and capital requirements to take your money are trivial. In addition, ploys and scams are spreading and being shared across markets and even countries at a very rapid rate because of the increased communications and connections across the dark web.
 Second, we suckers continue to make it easier and easier for the bad guys to break in. The most frequently used password today is still "123456". Fifth on the list is "111111" and No. 8 is "password."  It takes most brute-force hacking programs less than a few seconds according to a recent survey to figure out any password of 6 characters or less and more than 40% of all passwords today are 6 characters or less.  Other very popular passwords are equally infantile including: "qwerty" and "123123".  And more than half of us use the exact same password on multiple sites so once the hackers are in, they can move quickly from site to site.
And finally, the middlemen (hosting services, connectivity providers, social platforms, etc.) aren't doing jack to help us help ourselves by requiring us to be smart about our personal security. They don't care if you get ripped off as long as you can always get right back on their service or network with the least possible friction and in the shortest amount of time. Every six months, some of these services make you change your password, but they don't insist upon or enforce even the most basic complexity requirements.
What should you do?
The best and smartest thing to do is to use a password manager/vault, a single location for all your passwords that requires only remembering one password--hopefully one with a minimum 8 characters with a number, letter, capital letter and a symbol as part of it. There are several players in the space, but Keeper Security (keepersecurity.com) has one of the biggest user bases and is the best for my money because it provides both individual and enterprise-level solutions. More importantly, Keeper Security employs a zero-knowledge approach, which means that the site has no idea what's in your vault or any ability to get at it. You spend less than an hour and build an Excel spreadsheet with all your stuff (which you probably already have) and then it's imported into your Keeper vault and the next time you visit one of your regular sites, the Keeper system will automatically supply the appropriate sign-in data.

The next best thing to do is to bite the bullet and adopt two-factor authentication (2FA), which I admit can be a pain in the butt on a plane or if you're not connected somehow, but otherwise it's as easy as pie. This is another simple way to deploy an additional layer of protection and just requires that you take an extra minute to enter a security code sent to your phone to confirm that it's actually you trying to get into your site. For sure, this is an essential fix for your primary social media sites because they are the connectors and links to many other sites where you used Facebook Connect or something similar for Twitter to sign into a bunch of third-party sites.  Biometric security such as facial recognition and fingerprint readers, which are also 2FA, are becoming more prevalent, too, but that's a subject for a future column.
Right now, a password vault and a 2FA are quantum leaps in de-risking your online exposures and a very small price to pay (in terms of time and treasure) to avoid major headaches. And, if you're like everyone else and somewhat intimidated by the length of your password list (or never heard of Excel), at least work on the top five sites you visit all the time and get those fixed and protected. It's a 99/1 world in terms of anyone's web activity (we go to the same, very few, places almost all of the time) so, if you at least pay attention to the most important sites, you've got a fighting chance of dodging a bullet.  But the smart money is still on the hackers and it's not really a question of "if", it's just a question for most of us of "when". I'd rather be safe than sorry.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.


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