Olson’s Observations

As long time readers of this site know, I am a very big fan of person to person interaction in business. It worries me that it is so hard to talk to a person these days as a customer. I feel as if that can’t be good for the world. Humans generally like to be able to interact with other humans so why have we gone and stripped out this communication from business (i.e. customer service, customer relations and even sales to a certain extent)?

One word: scalability.

We did it to make companies more scalable. People don’t scale. The more customers you have the more you need to spend on people to manage and help those customers. At least that was the case until you could automate customer service with computers, FAQs and a host of other things. Yay! No more scaling issues. Or so we thought.

Now, after years and years of this scalable method of working with people (i.e. not having people work with other people), people are fed up. They want to talk to humans again (hell, someone even felt compelled to start a website that tells you how to get to a human the fastest on a number of corporate phone trees) but corporations are resisting because, you got it, it doesn’t scale.

I have to wonder if this is a bit off the mark. If you look at the problem head on you can see that people don’t necessarily scale but what about the after effects of providing scalable (read: very poor) customer service and sales?  Yup, you guessed right, poor word-of-mouth which could be one of the biggest business killers.

Word-of-mouth drives a lot of business and yet businesses haven’t taken a lot of time to look at and understand it. If they did they would want to provide better customer service and by better I mean get good people to actually be there for the customers and empower those people to help customers.

Better customer service and support will bring along with it positive word-of-mouth which could actually make having people around to talk to customers a scalable proposition.

Think of it this way: if a customer gets to talk to a great human being who helps them through an issue or to find the right product they will feel loyalty toward the company providing such great service. This loyalty will not only translate in more revenue coming in from the person who was positively effected it will also translate into that person telling their friends about the company and then those friends telling their friends and so on. Now that’s scalable.

I need to see if I can get more data to back this up but I will say this: there are companies that have realized this idea already and it is a big differentiator for those companies.

One of the companies who figured this out early on was FeedBurner. OK, I may be a bit biased but hear me out. At FeedBurner we worked really hard to provide a great experience for our users. Everything from our interface down to the fact that, if you needed to, you could talk to a human being - a real live FeedBurner employee - whenever you needed to.

The fact that humans were available to talk to and help users showed users that we were really there for them and that we really cared about their experience. This in turn generated a lot of great blog posts and other word-of-mouth for FeedBurner which drew in more users (without us having to reach out) and contributed a lot to the success the company ultimately realized.

That is how you leverage human to human interaction to generate word-of-mouth which makes human to human interaction scalable.

Other companies can, and are, doing this as well and I think that it’ll change business for the better. At the end of the day it’s all about people and we shouldn’t ever forget that. It’s always about people.

This post has been in the works for a while but Micah Baldwin - the new BD guy over at Lijit - really got me to want to sit down and finish it. I had the chance to meet Micah about a few weeks ago when he was in NYC. We headed over to the Lombardi’s Pizza after the Bug Labs meetup (which was a lot of fun) and, as fellow BD guys tend to do, started talking shop.

One of the questions which we spent a bit of time talking about (and one we both get a lot) is: Is business development the same as sales?

Honestly, it is hard to say what business development is and isn’t whereas sales is much more of a process and a science and, therefore, much easier to describe. Thats said, I would say that the question about what it is BD guys do and whether or not BD is simply a fancy title for sales is justified and one that should be explored.

While there are a lot of things in sales and business development have in common they do differ on a couple points and Micah posted about one of the major differences soon after our dinner at Lombardi’s.

Micah’s main thought is that the big difference between sales and business development is the allotment of risk.

Sales typically involves a B2C type transaction where a product is sold to a consumer who pays a set (or relatively set) price for that product. The product presumably relieves some pain for the consumer and the salesman is able to bring in revenue for the company. It is a win-win situation with low risk on both sides (but I would argue most of the risk really lies with the consumer since the risk for the salesman can be - at least somewhat - mitigated through process).

Business Development on the other hand requires shared risk. In other words, business development is more about long term partnerships where driving revenue for both sides is the main concern.

BD is all about funding a way for two companies to work together in order to achieve mutual success via increasing revenue and/or finding new sources of revenue.

Micah said it best when he said:

Remember, with a Sales person, money is exchanging hands, while the Business Development person only has a contract with expectations for success.

Of course the less systematic approach of business development makes BD really hard to track. With sales you can simply track how many widgets were sold but with business development you need to track the results of the deals that were closed which may not be immediately evident.

Good business development is all about planting a lot of seeds and cultivating them so that deals will blossom and improve not only the company the BD person works for but also the companies that are on the other side of the table.