The “S” Curves of radical and incremental innovation

The “S” curves of radical and incremental innovation-StratoServe

Following a 2014 LinkedIn piece Sharpen the Saw, cut the Tree or look for non-Trees?, here is some more detail on the “S” curves of innovation (first published in 2014 and updated 2020). The “S Curve” innovation thinking is attributed to Richard Foster (1986) and made famous by Clayton Christensen in the book “Innovator’s Dilemma,” where he discusses how each successive computer hard drive industry got wiped out.

[Note: Due to the great interest of our dear readers this post was updated in January 2021]

What are the “S” curves? Each of the above S curves represent a technology platform. Movement up an “S” curve is incremental innovation while stepping down on a lower new “S” curve now, may lead to radical innovation, as the new “S” curve surpasses your existing “S” curve. There is a risk that the lower “S” curve does not get better. We only hear of technologies that won and we don’t remember those that lost. So trying out a new technology when you are doing great in your current technology is scary!

The Cost and Performance Y axis, Time on X Axis: If you look at the Y axis you see performance going up and cost coming down. Just as time goes on. In other words over time a particular S curve and technology platform gets improved. This improvement is through factors such as experience, techniques like 6 Sigma, more adoption by customer. The adoption by customer mean higher sales volumes and costs keep going down. However there is a catch for each S curve.

And that is the limit to improvement on the same technology platform. This has happened in numerous industries where dominant players in one “S” platform refused to jump down to a lower “S” curve. And became extinct.

Why is it so difficult /scary to jump onto a lower “S” curve? No one wants to come down in life by choice. And a lower “S” curve can mean less efficient performance and higher cost. It sometimes means a complete rethink of your revenue model. In the example of the music industry records,cassettes, CD’s were sold in stores and a large number of people found employment just in the sales side of the industry. With streaming music on Spotify and Apple the distribution channel and employees have disappeared.

The music industry, as shown in the image above , is a great example to understand “S” Curves:

  • 1970’s Cassette Tapes: You had workers who specialized on manufacturing cassette tapes, there were specialized suppliers and of course the Sony Walkman that made music cassettes so special. Cassettes came in 60 minutes and then 90 minute formats. Avid listeners (the final consumers) tried getting the 90 minute cassette that must have involved a lot of incremental innovation by suppliers and personnel in the plastic music cassette industry. You can visualize six-sigma and total quality programs at cassette factories, that reduced waste and defects in the product.
  • 1980’s Music CDs :The next “S” curve involved CD’s.. Suddenly you had music on CD’s that improved quality a whole lot and “Sony Discman” became popular as the cassette industry started dying, just as vinyl records had died before that. The CD industry had its own players and supply chain. CD’s went on improving and you could buy rewritable CD’s. Cars had CD players and around 2006-7 had both a Cassette player and a CD player.
  • 1990’s MP3 Player: Next off course you have the MP3 player, iPod and literally thousands of songs on your device and then the iTunes store on the cloud. The MP3 players and cloud also require a new set of employee skills and a differently skilled supply base. This is not shown in the picture.
  • 2007…. iPhone, Music Cloud of Spotify and Apple: As Tom Friedman points out in his book, Thank You For Being Late, 2007 was a tectonic shift year starting with the iPhone. If you work in any part of the music supply chain you need to adapt to the new “S” curve of cloud music. Today’s new cars do not have CD players and will allow you to connect the car audio to your phone. Or your Spotify account.

If you think about each industry, it ignored the march of technology and refused to get started on the next technology “S” curve from the current technology “S” curve. This reluctance was because at the early stages, each new “S” curve looked unattractive from the existing “S” curve.

You see that the dominant players in each technology type became extinct just because they thought that the upcoming technology was too much behind- and will never catch up. And there was a lot of resistance to change from within. By the time the new technology ( second and third curves) became really comparable in performance and cost – the incumbents of older “S” curves were too far behind.

The takeaway for all types of organizations is to have the courage to invest time, energy (more than merely money) at successive “S” curves that seem less attractive today but have the potential to vastly surpass what you offer your market today. About StratoServe.

Why Cleaning your direct mail list matters

After the pandemic cleaning your email list matters more than ever. If you do direct postal mail or snail mail, it’s worth cleaning those lists too.

Cleaning and decluttering make you happier

Frankly, cleaning everything became necessary in 2020 with COVID-19. People were washing grocery bags and sanitizing everything to try and stay ahead of the virus. But as we get out of COVID, maybe it is time to clean our mailing lists! Cleaning and decluttering make you happier. Conversely, a messy workplace or computer desktop adds to anxiety and stress.

Unsubscribes: bad for marketers

From a marketer’s perspective, unsubscribes are bad. For it makes email marketing platforms worried that you are a spammer and are violating the CAN-SPAM act. A range of solutions has emerged that check your email list for deliverability, analyze open and click rates, and can segment your list.

From a customer’s perspective, an entire industry has developed to try and trim your ever-growing inbox. Because as consumers, we sign up for something like “deal alerts” for flat-screen TVs, and then we buy that TV but do not unsubscribe from the five businesses that we signed up for. There is a slew of solutions that encourage you to unsubscribe from lists that you are no longer interested in.

Email Marketing: cost-effective

In a digital marketing world of shiny new options in digital media, we underestimate the power of good old email. 60% of small businesses do not use email marketing primarily because of all the glamorous talk of other forms of digital marketing. Compared to all other forms of digital marketing, email marketing is the most cost-effective. One estimate puts a $42 return on 1$ investment in email marketing.

Intuit ( TurboTax, Quicken) must have thought it through before paying $12 Billion to acquire Mailchimp in 2021. Mailerlite was acquired by Vercom for $90 million in 2022 according to TechCrunch. The marketing industry must be onto something.

Cleaning email lists: some marketing questions

Here are some questions to ask as you clean your mailing list for B2B and B2C campaigns:

  • Who is taking the action you asked for? Whether buying something or signing up for a meeting, a prospect who did what you requested is on their way to becoming a customer. This is the bottom of your sales funnel and should be considered a customer. It’s now time to enter the details into your CRM system. For high-value customers, it is worth your time to have a conversation and find out why they bought. Just that people are pretty involved immediately after they buy, and their decision process is fresh in their minds. Talking to new customers soon after purchase gives valuable clues to content that might resonate with prospects.
  • Who is clicking? Some folks open every email, but only those interested will click on an action “Buy” link. If they bought, you have the data from the point above. Clicking (sometimes multiple times) on action links indicates interest.
  • Who is opening? Opening an email is enormous. Even for the smaller segment of people who open all emails.
  • Who is not opening? Anyone on your list who is not opening can be placed in two buckets (a)The email is not reaching the inbox. It might be going to the spam folder. (b) There is something wrong with the email itself for eg, in B2B, the person has changed.

Cleaning is not glamorous, but cleaning your marketing list will make your marketing more effective, and you’ll be happier!

About StratoServe.

Privacy: Direct Customer relationship data is more important than ever

Your direct customer relationship data are more important than ever
Your direct customer relationships are more important than ever

In a world moving towards digital privacy, it’s even more important to value your direct customer relationships. And direct customer data.

Digital Marketing and Privacy

As discussed in earlier posts ( see third-party cookies, Apple iOS ), the key issue is that a third party should not have access, without permission, to what is going on between a first party and a second party. To recap: the first party is the business and the second party is the customer. The first party could be an online store, and the second party would be a customer who buys something from a store. Thus, if you are on one app on your iPhone – other apps should not track you unless you permit them to track you. In the cookie world, third-party data aggregators could track you across the web. The goal for advertisers is to chase people around the web with ads after they click on a product and demonstrate interest.

In the offline world, law enforcement in democracies is not allowed to look at anyone’s EZPass records, just to fish around, without a court order. Disclaimer: We are no legal experts!

Long-term Customer Relationships as marriages

A great piece of academic research is a 1987 piece on “Developing Buyer-Seller Relationships” by Dwyer, Schurr, and Oh. They build a neat case, based on sociology, of the parallel between human marriages and long-term customer relationships. Written much before the Internet, they decry one-night stands (today’s Tinder) in favor of long-term marriages ( say eHarmony) regarding customer relationships.

Why? because:

  1. Long term-customers help pay the bills and salaries.
  2. Long-term customers are much easier to serve simply because they have learned how your organization works. And you have learned how they work, particularly in complex B2B transactions.
  3. New customer acquisition sounds sexy but is estimated at seven times the cost of keeping current customers happy.
  4. Long-term customers are far easier to study and work with for developing both radical and incremental innovations.
  5. You can observe all their actions on your website and adapt your offering to suit their interests. Thus Amazon and Netflix suggest what you might like, and Google and YouTube have tailored search results based on your search history. And Facebook/Instagram/TikTok offers “feeds” and ads based on what they know about your liking based on clicks, likes, and shares.

Mailing List Providers were the original Third Party cookies

Mailing list providers were the original third-party cookies. They gathered contact details of different demographics, and you could buy lists to mail (junk mail) to them. You could opt-out, and for a $2 fee, you can opt-out at the FTC. Similarly, you can opt-out of junk calls. You cannot opt out of list providers collecting your data, you can only opt out of junk mail and calls.

In direct mail, telemarketing, TV infomercials – a response was the only data point based on which the entire field of direct marketing evolved. Responders joined your customer list.

With the Internet, the mailing list providers were reborn as third-party cookie providers who picked up your behavior on one website and then used your behavior on other sites as “demographics” for advertisers.

This is what digital privacy advocates object to. Digital privacy advocates want consumers to be able to give or deny permission to be tracked.

But big tech companies require you to login

What people do not realize is that as soon as you log in to any website – you become a second party to the website. Your behavior is observable and monetized by tech companies, and to us, it is fair. You cannot expect a tech business to have any revenue model and provide services for free.

Google, Facebook, or Amazon serve paid/sponsored ads based on your behavior and observed preferences. See a recent article on How Google’s in-house marketers are adapting to a shifting privacy environment.

In other words, as far as we can tell, there is no privacy issue for a business so long you focus on current customers, including web visitors.

Opportunity is in your current customer list

For all businesses, your most valuable data is your current customer list. Smaller businesses like restaurants generally are too busy to stay afloat, and most do not have a list of emails or contact numbers of all customers who visit them.

Other small businesses like gyms have a customer list but do not seem to be doing a lot of marketing around them.

We suggest you look at your current customer list, and web visitors carefully as they give you valuable clues on how to grow your business.

About StratoServe.

Quiet Quitting does not work in the knowledge economy

Quiet Quitting does not work in the knowledge economy

“Quiet quitting” is quite the rage on TikTok and has now appeared in mainstream media, including NYT, WSJ, NBC, Fox, etc. Gen Y Millenials (born 1981 to 1996) and the younger Gen Z (born 1997 to 2012) are particularly influenced by this trend of quiet quitting. The most influenced might be Gen Z, about 60% of TikTok users. The trouble is that these are impressionable young people growing up into teenage and young adulthood.

Naturally, managers are quite alarmed because it turns out that we are increasingly moving from the information age to the knowledge age. And to become a knowledgeable expert on anything needs 10,000 hours of work, as Malcolm Gladwell highlighted.

Everyone cannot become an Instagram/TikTok/YouTube star, just like most people are not able to make it to stardom in Hollywood or Broadway. And to sustain stardom in social media is hard and needs a lot of “work” ( yes, 10,000 hours), the very thing that quiet quitting objects to. Becoming a TikTok star involves posting frequently and making a persistent effort to come up with posts, graphics, and videos that inspire, outrage, and generally resonate with your audience.

What is Quiet Quitting?

As far as we can tell, quiet quitting is working your hours without putting your heart and soul into it. If you are a Barista at Starbucks you deliver the coffee with or without a genuine, enthusiastic smile. Is that a problem for Starbucks? Yes, it is because suddenly, the $5-10 fancy latte does not seem that special to the customer. More importantly, if a Barista serves without enthusiasm and spirit the bigger loser is the Barista, as we explain next.

Concept of Karma

Disclaimer: We do not claim expertise in theology or religious studies. Please consult whatever source or religion you prefer.

Organized religion arrived with agriculture. Agriculture is much harder sustained work than hunting and gathering. Authors like James Suzman point out that religion was needed to manage agriculture. People started living as a community in the village and domesticated animals with the goal of agriculture. Working on a farm involves hard deadlines. Feed the animals on time, milk the cows on time, and collect eggs on a timely basis. You cannot delay seeding or harvesting.

One of the fundamental ideas in Hinduism and later Buddhism is the idea of Karma or duty. When you do your duty sincerely as an offering to God without expecting any personal benefit or results, you are blessed and are rewarded in this life or your next birth. It turns out that when you work and derive purpose, meaning, and satisfaction from work – it becomes like play. Results follow incredibly, although Hindu scripture sternly asks you not to look for personal benefit. Since you are not thinking about any personal results or benefits you are completely free of “attachment” to the fruit of your efforts. This is naturally very hard to do, but if you can do it there is no stress while doing the work. And certainly no stress after work hours. The relevant verse from the Bhagwad Gita is Chapter 2, Verse 47.

In Christianity, the Calvinist Protestant work ethic is “work is worship,” and scholars believe this was a big driver of the Industrial revolution. And if you think about the success of America since its founding days by the pilgrims.

From the Industrial age (Henry Ford/ Taylor), we moved to the service age, and we believe that Gen Z and younger Gen Y are confusing the upcoming knowledge economy with the service economy as they justify quiet quitting.

Service Economy vs. Knowledge economy

In the service economy, you had the Quick Service Restaurant (QSR) worker who went through work training at, say, McDonald’s. The model of such training is wonderfully explained in the Netflix movie “The Founder.” However, today just observe the kind of specific requests that the customer has, for example, a burger with mayo and no lettuce. It does matter to the customer if they get what they ordered and the order taker and kitchen can get their act in sync. The competitive landscape has changed as you notice the extreme personalization at Subway. Or the special feeling at Chick-Fil-A.

A QSR worker focused on making a customer happy is likely to learn more about customer service than a student taking a marketing class. And that knowledge is tacit because the worker “knows” but can’t necessarily explain the steps that lead to customer happiness. (Oh well, a marketing class will help such an engaged worker far more than an inexperienced or disengaged worker). And that knowledge is valuable in creating more growth opportunities for such a worker in other industries or as an entrepreneur even in unrelated fields.

Our dear readers would know plumbers and electricians who know and care about what they are doing and a majority who do not. Both groups are qualified, have passed exams, and yet have been quietly quitting for years. Services like Angi and HomeAdvisor have high valuations because they try to separate the quiet quitters in the trades.

Moving up the knowledge chain, consider orthopedic surgeons. As pointed out in an earlier post Propublica has a public database of surgeons with fewer vs. more complications, as evidenced by repeat visits and insurance claims. Consider this: all surgeons are competent, qualified, tested, and certified. A majority, though, are like the majority of quiet quitting plumbers. They have personal competence, but someone in their team might drop the ball, and they don’t have the dedication to see that all pieces of their process (eg good physiotherapy after surgery) are working well.

To summarize, in every field of work, you already have many folks functioning as quiet quitters.

We just can’t afford the younger Gen Z to start quiet quitting.

To any quiet quitters among our dear readers: We confess to quietly quitting on many fronts but then recall the words of a mentor, “Every morning I wake up to a fresh start and convince myself that I have zero laurels I can rest on”!

And so we soldier on. And urge our dear readers to do the same.

About StratoServe.

Why Apple privacy hurts display ads more than search ads

Display vs. search ads and privacy

Display ads on the Internet are all those banners you see on websites and social media that sometimes chase you around (remarketing) the Internet. Display ads are like the old media ads on TV, Radio, Newspapers, and Magazines that rely on circulation data for audience targeting. Compare the ads you see on US TV evening news to Football games. You will likely see far more medicine ads on the evening news than watching a game. Media planners figure that many evening news watchers are older folks with various ailments, and the medicine ads should resonate.

Search ads are the ads you see after you search for something on Google, Bing, etc.

Here is a great video from the Wall Street Journal that has Apple’s Craig Federighi explaining the privacy changes that Apple has put in place:

iPhones have over half of the US market and tend to have customers who have higher incomes. It turns out that only between 16% -37% of iPhone and iPad users allowed apps to share data.

According to an August 12, 2022 article by Salvador Rodriguez of the Wall Street Journal, Apple wanted their standard 30% of Facebook Ads revenue generated due to the data sharing. Facebook refused. And there was talk of having an ad-free paid Facebook product. Google pays billions to Apple to have the privilege of being the default search engine on Apple products. Other iPhone apps will likely have to charge for all those free apps without ad revenue.

After all, companies that work on these apps need to make money. We will discuss consumer privacy and the free apps issue up in a future post.

This is an existential crisis for all advertisers involved in display advertising. This includes Facebook, Instagram, Snapchat, TikTok, Twitter, and, yes, Google display advertising.

Where does the data for targeting display and search come from?

To understand why display advertising is so hard hit by iPhone users not allowing apps to share data, it’s useful to recognize the nature of first-party, second-party, and third-party data.

First party data is the direct data that a business receives from customers. For websites, free analytics tools like Google Analytics will report things like what search term or ad landed you on a certain page, how long you stayed there, what you saw next and so on. Loyalty cards/logins are a great way to gather first party data. All tech, social media platforms we use insist on logging in so that they can track our behavior on their platform. That behavior is very helpful in serving up relevant ads.

Second party data is data you gather from another business for their first party customers. This is through a business deal where one business shares data of who is doing what on their platform so that you can improve your platform’s ad effectiveness. For example, if you are a seller on Amazon, the commission goes towards Amazon serving up your product and ads to relevant Amazon customers and searches.

The real power in display advertising is from third-party data, ie, those data points about your behavior collected from your browser about what you do on other websites. However, because of third party browser cookie privacy objections that data source is drying up.

Enter big and smaller tech. Apple, Google, Facebook, Microsoft, Amazon and yes Pinterest, TikTok, Yelp. They are the second party who are taking over the third party role. They have their own first party relationships with their users who browse their services (after logging in) for free. All their user behavior data is worth it for advertisers running display ads.

When we live on our phones and don’t talk to even family members, the phone software owners viz. Google for Android and Apple for iOS are very powerful. As far as we can tell Google has a revenue path through ads but Apple needs to get their money from Apps who must in turn charge users for apps or/and have an ad revenue model.

Between apps on your iPhone, the data sharing allowed Facebook to observe what you did on Google search or the Spotify app. What songs you like gives valuable clues about your preferences. An advertising platform like TikTok would not know that you are a Machine Gun Kelly fan. You might reveal something on TikTok about your singer preference, but the full picture is pretty incomplete if you have not allowed tracking on Spotify on your iPhone. Advertising becomes wasteful, costs vs. results for advertisers keep going up, and we are back at the saying by Wanamaker (1838-1920) “Half the money I spend on advertising is wasted,” at least for display ads.

Machine learning alone might be able to outweigh behavioral targeting for ad networks, according to a great paper (2021) by Omid Rafieian and Hema Yoganarasimhan. We can be sure that data scientists at Facebook etc., are working hard on this angle.

Google search relies on what you put on the search bar. Your first party party data and all the results you see, including search ads, are relevant to your search terms. Just bidding higher will not get you the top spot in Google search ads unless your ad and landing page experience matches the search intent of the searcher. Google’s search ad business model focuses on making the searcher happy just as the free top results. It takes years of SEO to get on the first page of organic or free results. Paid ads can run on the same day. If the searcher is kept happy with relevant search results- the ad revenue follows.

To summarize, online display ads are cost-effective for the advertiser when backed by third-party or big tech second-party data. Search ads are effective because they rely on first-party data that is the customer’s search term. A caveat is that if you have several competitors with better campaigns and landing page experience, competing at the Google reverse auction keeps increasing your costs per acquisition. You start wondering if the “Half the money I spend on advertising” quote still stands!

If Netflix is getting into display ads could Apple get into search ads?

The shocking news that Netflix is getting into advertising in partnership with Microsoft begs the question whether Apple will get into search advertising.

Netflix has troves of data on our behavior on the platform, and that’s great for display advertising. Users are wondering if they might be able to fast-forward the ads when they come.

As for Apple, Scott Galloway writes that Apple would get into search and search advertising. The iPhone currently uses Google as the default search engine.

We disagree with Galloway. We believe that the carefully cultivated Apple upscale image that allows those ridiculous product prices would be too much at risk if Apple got into the ad business. Ad business for Apple would be seen as too hypocritical given its holier-than-though privacy stance. The outcry on Twitter and social media would be just too damaging.

But never say never when everyone is looking for revenue streams.

About StratoServe.

Doctors with Fake reviews? Why big data can solve the problem

Some Doctors and Dentists seem to be putting out fake 5-star reviews. This goes beyond fake reviews on Amazon and Google. Because now you are talking health.

Healthcare involves trusting the provider. Much more than you need to trust a seller on Amazon!

This post explains why businesses and customers look for 5-star reviews, how “fake it till you make it” works for companies and individuals, Why in the digital big data world, fake reviews will be found, and finally some tips to protect yourself; in the meanwhile, from fake reviews.

Why businesses and customers look for 5-Star Reviews

Businesses look for five-star reviews because that helps increase their rankings in any listing on Amazon, Google, Yelp, etc. And customers seem to look for reviews before even putting the product on a shortlist or brand consideration set. If you have a 3-star rating, you could be on the 5th page and are almost guaranteed not to be seen. So the incentive for businesses to find 5-Star reviews is enormous. Best of all, the company is exempt from declaring Caveat Emptor or “Buyer Beware.” They never put out a paid ad with their name on it. So what can a poor business do if customers say five stars? Seems to be the stance. Besides, fake reviews are much cheaper than advertising, as freelance marketplaces like Fiverr show.

Specialized services like ZocDoc for doctors verify reviews for doctors diligently. Not so for your typical directory type local lists on Google, Yelp, HomeAdvisor, etc.

Two-sided marketplaces like Uber put the passenger on the dock as the driver can rate the passenger. Since both sides rate each other, the customer is better behaved than in airlines.

Customers “believe” in five-star reviews because it makes the choice problem easier. Somehow we feel we are entirely “off the hook” from the “Buyer Beware” principle. After all, we reason, so many 5-stars and glowing words can’t be wrong.

If our dear readers were to ask themselves, they would hardly be able to list two or three products, brands, or services they consider 5-star from all their experiences. So the logic of why we accept five-star ratings is inexplicable.

To summarize, puffery in paid advertising is accepted and discounted by businesses and customers alike, but 5-star reviews seem more accepted by both. Academic research (see a great article in Marketing Science by Sherry He, Brett Hollenbeck, and Davide Proserpio) finds that low-quality new products on Amazon get an uptick from fake reviews, but that does not last. After all, you can’t fool all the people all the time! More seriously, any business that seeks to endure needs to provide value as assumed by the customers.

Fake it till you make it?

Going by the analysis of Amazon products in the above article, the businesses probably never intended to try and match performance to the five-star reviews. Customers, after buying, were unhappy and gave out multiple one-star reviews.

At the individual level, “fake it till you till you make it” seems good advice for anyone trying to build up your confidence for any challenging situation. It’s like giving yourself “fake 5-star reviews”. A guru of this view is Harvard Professor and TED talk speaker Amy Cuddy. An implied assumption is that you are working hard to match up to the “fake reviews” you are giving yourself.

If only fake review businesses felt as responsible as individuals who give themselves 5-star pep talks and 5-star reviews!

Big Data can find fake reviews.

Recently Amazon sued 10,000 Facebook group admins who ran marketplaces offering fake reviews. Amazon has 12,000 employees delving into the data for fraud and abuse and has been complaining to Facebook since 2020. Some of the Facebook groups are large, with 40,000 members. And these groups are spread out globally. The Amazon blog from June 2021 maintains that their systems (based on data) can stop 99% of fake reviews from being posted in the first place.

Based on trust, Amazon has a clear business incentive to keep its retail engine running. Fake reviews erode trust, and no matter how easy the Amazon Prime return process is, the customer feels let down and harassed after being conned by highly rated products. It’s not clear whether the rest of the big names (Facebook, Google, Yelp, Trip Advisor) providing reviews have a direct business incentive to check fake reviews.

The FTC has become more active in curbing fake reviews. This year there are some FTC guidelines about soliciting and paying for reviews. If you think about it, FTC guidance applies to larger businesses, and very few of the 1.7 million small companies on the Amazon marketplace might know about the government’s steps.

Most small businesses are honest and want to develop repeat customers and genuine referrals. The honest businesses become the biggest casualty when a section in their industry indulges in generating fake reviews. They lose new business, and dissatisfied customers spread bad news about their industry. The Better Business Bureau tries to do the right thing, but its results are too low on Google to have any significant impact. Small businesses generate 50% of the GDP, and fake reviews continue to hurt the entire economy.

Kay Dean, Online Fraud Review Investigator from Fake Review Watch, has been doing great work in highlighting online fake review scams. Check out her YouTube channel :

It’s timely for big players like Google, Yelp, and Facebook to recognize their responsibility and huge data power. Going by the Amazon suing Facebook Group Admins story, probably different companies have already developed data models. Identifying fake reviews is conceptually straightforward, as the next section explains.

Meanwhile, how do you protect yourself from Fake Reviews?

Till reviews become more honest, here are some things to watch for:

  • Ask yourself how many reviews, as a customer, did you post in the last six months?
  • How many were five stars?
  • Now, look at the product reviews – all 5 star is dubious.
  • Look whether the five stars are concentrated over a certain period. If yes, those are probably paid for fake reviews.
  • Look at the 1-star or 2-star reviews. If there are none- it’s too good to be true.
  • Look at the photos of the reviewers – if they are all good-looking – they are stock photos, as Fake Review Watch explains.
  • Read the text comments around 4-5 stars and 1-3 stars, generic comments don’t mean much as many fake reviewers have never really used the product.
  • Buyer Beware: pay by credit card and check the return policy.

About StratoServe.

Why Authentic Value Proposition ?

Authentic Value Proposition

The lingering pandemic, the Ukraine war, supply chain problems, and inflation has all types of organizations reviewing their “value” proposition. The idea of an explicit contract in B2B and an implicit contract in B2C used to involve fewer parties. If there were a bitter dispute, arbitration, courts, or government regulators would step in and try to sort things out. No longer valid in the world of instant social media. Think of Elon Musk’s Twitter purchase situation.

For everyday business, it’s simply keeping your promises to your customers. Our experience is that Elon Musk is pretty good with Tesla in keeping customer promises. No matter how the Twitter acquisition plays out.

Since marketing is about customer value, it’s essential to clarify the idea of value proposition in these challenging times.

Value Proposition in Marketing

The value proposition has been about what you “tell” the customer about the value you provide. For example, here are 7 Best Value Proposition examples from WordStream. And a comprehensive academic article integrates scholarly work in the field by Payne, Frow, and Eggert 2017. Their working definition is:

A customer value proposition (CVP) is a strategic tool facilitating communication of an organization’s ability to share resources and offer a superior value package to targeted customers.

Page 472, Payne,Frow and Eggert, (2017)

The word “proposition” is misleading.

It promotes the USP ( Unique Selling Proposition) idea. USP suggests that you say how you are unique and different from the competitor. Your focus seems to be on merely communicating your value to the customer. Not living it. The value proposition does not make it mandatory for the back-end value partners to buy into the value proposition. The value chain partners include the distribution channel like retailers and distributors, the organization and all its employees, suppliers, and the supply chain. In other words, at your factory, the factory manager, the janitor, and the intern would know the value proposition from day one. Not only would they “know” the value proposition, but they should actively buy into that value mission of the company.

In other words, the value proposition as part of the mission statement should be in every pore of the company and its stakeholders. That would be authenticity.

Why is authenticity more important today than ever before ?

Before the Internet and Social Media, you needed a team dedicated to dealing with public relations. Others in the organization or value chain were not supposed to talk to the press about the brand. If consumers spoke with a journalist- those comments could become widely available. But this was very rare. Often journalists would put out expanded stories based on PR releases. Or the company itself would offer paid advertising on traditional media like TV, print, and radio. Yes, in times of a product recall and health concerns, the media would be on top of the story following the “if it bleeds, then it leads” journalism principle.

The above scenario has changed radically with social media. Traditional media considers highly popular (or viral social media posts) essential sources of building a TV or newspaper story. As a result, PR departments may become extinct, as an announcement by Tesla indicates. Similarly, advertising is becoming more in tune with society’s current priorities. Why? Because it’s straightforward to find what’s on everyone’s mind from social media. Once brands have a sense of what their target market is thinking- they fall in line with their messaging for the brand.

So how do you make your value proposition more authentic?

  1. Why stay with the truth for the value proposition for everyone? As pointed out, the value proposition is historically a “pre-sales” thing. The pre-sales team handles the value proposition in many organizations, from consulting machinery to complex software projects. And then there is a different team that implements. Truth is simple, but mixed messages to various stakeholders are complicated. Everyone has access to social media. If there are contrary messages to pre-sales and implementation teams, it implies that if there is any mismatch between what the company says and does- you can expect to hear about it. More vocally for negative experiences. So it makes sense to stay with the truth of what you are promising your customer. It keeps things simple, and if you communicate internally and intensely, your employees, suppliers, distributors, and other stakeholders will hear you. They will support it if they understand and it does not involve more work.
  2. Should our value proposition change? Yes. Constant changes in the environment, social mores, technology, competitors, and customer expectations call for alert ears on the ground. Constantly ask: Is the customer experiencing value as we say we deliver? In enduring brands, you will find that the core value proposition does not change. See Coca-Cola, for example. Refresh the world endures- make a difference seems more recent.
  3. What is the biggest challenge in delivering an Authentic Value Proposition? The biggest challenge is not necessarily in the good intentions of company leaders. It’s in the implementation where things get lost. Mere communication is not enough. Review Company policies and processes in every function for consistency and support of delivering the value proposition.

In summary, an authentic value proposition is one where the brand keeps its promise. It involves the challenge of everyone believing that the company is honestly trying to deliver the value promised.

About StratoServe.

Why B2B Technology markets makes switching too easy

Don’t try to hold B2B Technology Client hostage

B2B Technology markets can make switching by the customer too easy. Existing or legacy technology can become too cumbersome to use . Or refuses to realize its promise after trying for years. The client, in despair, becomes willing to try a new supplier. That supplier is willing to transfer the legacy system.

The solution is not to become sticky by merely embedding your technology in the customer’s processes. Or make the customer a hostage to your technology. Instead, it’s useful to think of what we learnt in the industrial B2B era as we continue to compete in the knowledge economy. But first some background.

Buy Class and Server based B2B Technology

A key in B2B markets is the idea of “Buy Class” also called “Buy Task”. Think back to the industrial era. Imagine you produce a product through an assembly line (cars) or process (chemicals). You need to have production machines. Operators are trained on those machines. The machines need a whole lot of additional support like forklift trucks, spare part stores, maintenance folks that run the steam, forced air utilities etc. A quality control department needs to have quality control checks designed around every step of the process. Thus it’s hard to be a new supplier and replace existing machines for the manufacturing B2B customer. The manufacturing customer would go for a rebuy and buy the next model when the machine needs replacement.The machine manufacturer would be able to train the people on any innovations on the prior platform and machine. There are long term B2B relationships from the CEO down to the machine operator in place. There would be no need for a whole lot of people and process changes.

In contrast, B2B Technology systems are about making things easier after the adoption of the system. Wholehearted adoption by every user is a key in B2B technology success for the client. In the early days of Enterprise Resource Planning (ERP) companies swore by SAP compared to other ERP systems. Implementing SAP was another matter. Users joked that the full form of SAP was “Slow And Painful.” Investment traders shorted the stock of the customer company because it would take several years for the benefits to reach the bottom line. Once the ERP was implemented though, things improved dramatically as all internal data became much more visible.

Fast forward to the SAAS model of B2B technology

Fast forward to the SAAS (Software as a Service) model of B2B technology. In-house servers were out and everything was on the cloud. But being on the cloud does not make you user friendly. An entrenched player does not seem to have much of an advantage either.

Microsoft was inside every company . Yet Microsoft owned Skype did not make any headway in the pandemic. Zoom did. In education technology Blackboard was already inside Universities. They had introduced Learning Management Systems (LMS) first with servers and then on the cloud. Blackboard was hard to use but we believe they had the resources to completely redesign their product and simply replace the old product. They had University B2B relationships and had got Professors to learn the pretty difficult system who in turn persuaded students to learn it. And then a much better user experience in Ed tech happened with Canvas. Recent analysis by EdScoop suggests that Canvas has overtaken Blackboard.

Since user experience is so important everyone in technology is trying to make their product easier to use. But there is a critical difference between B2B and B2C technology marketing.

The critical difference between B2C and B2B technology marketing

There is a critical difference between B2C and B2B technology marketing. LinkedIn, Twitter,Facebook have a B2C face where you sign up as an individual (B2C). Yes they would like you to post and engage several times a day. But large segments of B2C users are generally passive. This works in a business model sense of push advertising to an audience like TV programs with varying viewership.

Advertising happens at the edge of the client organization but as soon as your B2B technology is embedded into the organization that involves any business process from accounting, finance, supply chain, inventory, human resources to marketing and customer service it’s useful to extend some established industrial ideas in B2B marketing.

Thinking for a way forward for B2B Technology
Enhance customer support and listen

Don’t have the ex-factory mindset from manufacturing. Ex-factory mindset works when there are no competitors. Recall Henry Ford’s famous quote on the Model T: “Any customer can have a car painted any color that he wants, so long as it is black.” The logic is that the product is so valuable that you take it and I don’t want to know what you do with it.

A similar mindset exists in B2B technology vendors. Some of the biggest names have practically no customer support. Many start-ups have the customer success function and that seems to be a step in the right direction.

Since the pandemic, global 24 hour customer service is excellent and affordable. Train and incentivize your operators to gather and report insights that users share so freely. Don’t zone out! The feedback is free and signals many pain points of the actual users of your B2B technology.

Avoid Feature Fatigue: Build New ?

As explained in the S Curves of innovation , the dilemma to keep adding new features (bells and whistles) to an existing product is very real and continues to the digital age. No sooner than a couple of customers or even prospects mention a feature that the product development teams start working. The reality is that features can lead to feature fatigue. Assess if the new feature will only matter to the advanced user. New features do not necessarily mean much to prospective customers.

It’s more important to have a vision for outstanding value to the client and stick to it. Just keep checking for feedback on how well the value is being realized at the customer end. Great B2B marketers of industrial products have always been interested in their customers beyond just getting paid. They keep a close watch on the final individual customer’s behavior and preferences as they change rapidly.

Closely watch the final individual customer’s behavior

For all B2B is ultimately paid for by individual customers. And customers can change rapidly. Two examples:

Learning Management Systems (LMS) : The student is the ultimate user of LMS. And today’s student is used to Instagram and TikTok. While current LMS’s do not approach the user friendly nature of giant social media companies – there is significant improvement. Working with a completely clean slate on product, based on all the market knowledge from current customers, would be a good and inexpensive approach.

Electric Cars vs Hybrid: Toyota Prius started the hybrid can in 1997. Over the next 25 years Toyota has been perfecting the hybrid car even as oil prices declined. Electric cars, including Tesla, were just not taking off without “environmental” government credits. But now Hybrid cars seem like Blackberry. No one wants to punch keys. Thus all automakers are planning to go all electric. Some automakers had the resources to do this years ago. Why they stayed in the old “S Curve” is intriguing.

If a large enough segment of consumers seem to be shifting and some start-up businesses have started a lower S curve- don’t ignore it. Put resources behind that lower S-Curve early on. Your current customer relationships are strong enough to trial it out.

To summarize: If you are a B2B Technology supplier don’t believe that you can have your customer hostage. Instead take a keen interest in the customer’s business and customer outcomes. Isn’t that the reason that your B2B technology launched in the first place?

About StratoServe.

Customer Journey,CRM and Advertising Goals

Customer Journey : Connecting the Sales Funnel to Ad Goals and CRM

The trouble is that most businesses and their leaders don’t seem to fully appreciate the value of long term customer relationships. “New” customers sound more sexy than “Old” customers. On a lighter note, Tinder sounds more exciting than eHarmony. Our marketing academic audience knows about the 1987 seminal work by Dwyer, Schurr and Oh where they famously developed their theory based on the sociology of marriage contrasting the “one night stand” (eg.Tinder) vs a “long term marriage” (eg. eHarmony). Ages before the Internet. Those interested can access the full text of their 1987 paper Developing Buyer Seller Relationships.

To summarize, your old customers pay your current bills. New customers will hopefully pay future bills as your business grows.


Every prospective customer is on a journey to purchase. And once you have figured out your market segment and target market, you need to meet the customer where they are at. Think of the old sales funnel ( or Purchase Funnel, AIDA model , attributed to American Advertising Advocate E.St. Elmo Lewis in 1898). In the 19th and early 20th century the Sales Funnel was used in personal selling and in traditional advertising. Today variations continue on all forms of digital advertising including Google Ads, Facebook Ads etc. B2B marketers bemoan the “long” sales cycle and B2C keep reworking everything from product, price, place and promotion (4 P’s of marketing) trying to double guess the consumer and competitors.For only a paying customer produces revenue that keeps the business running. Once there is a paying customer that customer enters the CRM (Customer Relationship Management system) of the business. This customer has a transaction history which helps in all kinds of Customer Lifetime Value (CLV) and RFM (Recency, Frequency and Monetary value) techniques that we will cover in later posts.

Because businesses should care deeply about their existing customer data, this post explains the connection between Customer Journey,CRM and Advertising Goals.

This post takes the three goals of advertising and maps them into the three stage customer journey typically used in Google Ads certification training. And finally we connect the kinds of first party data that the CRM can collect.

Awareness in the Sales Funnel maps to Inform in Advertising Goals -but can’t be usually captured in CRM

Once you have identified the most appropriate segment of the market you are targeting the Marketer must build awareness of the brand. If the target market is not aware of your brand: nothing happens. You are trying to reach the first goal of advertising. viz. trying to inform the customer. A cold database is strongly discouraged legally (CAN-SPAM) except if you are reaching out to members of a group whose emails are available publicly and you are also a member. It’s usually fine for a small business that is member of a local Chamber of Commerce to email other members from the membership directory available online. In such cases the email open rate, click rate are important indicators that your Awareness/Inform goals are getting reached. In both Google and Facebook advertising you really don’t know the contact details of who saw your display or video ads.

To summarize, except for email marketing you really cannot know who individually is becoming aware of your brand. It is thus hard to capture awareness data into your CRM.

Consideration in the Sales Funnel maps to Remind in Advertising Goals and can be usually captured in CRM

A customer in your target market can enter the consideration stage once she is aware of your brand. That is why reminding is so important in advertising to move the customer on the journey to purchase. Online, customers who are considering might fill up a contact form, newsletter signup and these names can be added to your CRM. Also if you are working off a cold email list (particularly in B2B) high open and click rates indicate consideration and it is good to try and call the person to set up a meeting. Remember an initial presentation in a B2B sales meeting is still in the consideration stage or the sales pipeline. In social media Facebook or LinkedIn does not make it easy to find the contact details of the people who liked your post. Unless you are a direct connection with that individual. In any case, we find that most people don’t seem to have their contact details on Facebook or LinkedIn. And yes they have their contact details with the social media platform and you can advertise (and pay!) to reach those who “liked” your brand on Facebook.

Customer Journey to connection with your brand: This connection to your brand can take two forms . Through social media and through a contact form:

  1. Connecting through social media: The customer may not have bought your brand yet but has entered the consideration stage of the funnel. She might be a public supporter by liking your Facebook, YouTube Instagram, TikTok or other social media posts. By publicly acknowledging your brand the potential customer is sending a social message to her own online social connections. Connecting with all these supporters through a CRM system is a little complex and we will explain in a later post.
  2. Connecting through a contact form: The web contact form or a newsletter signup gives you enough (first party) data to add the potential customer to your “Potential Customer” segment in your CRM. Now these interested folks can be part of your email marketing campaigns.

Let’s face it. Your data ( called first party data in today’s age of data privacy ) in your CRM or your Customer Database is your single most valuable marketing “tangible”asset. First they give you a chance to serve existing loyal customers better and earn a larger share of their “wallet”. Second, using your CRM data and some simple analysis you can deploy digital marketing far more effectively. Third, for both small and large businesses your “book of customers” is an important part of the valuation of your company for acquisitions and mergers.

Purchase in the Sales Funnel maps to Persuade in Advertising Goals and MUST be captured in your CRM

Past customer transaction data is your most valuable marketing asset. It tells you what the customer actually did that directly spoke to your bottom line. It help you build loyalty programs and have tiered approaches for different customers. These are the levels of loyalty rewards you see commonly in airlines, hotels, stores. There is huge opportunity to improve these programs and is one reason for high demand of marketing analytic skills.

CRM systems are available from many software suppliers. They can include activities like email marketing (B2B prospect lists) and the data can be integrated into the Financial Systems through ERP (eg. Oracle,SAP). Some functions like Call Centers are outsourced simply because the marketing leaders seem to be rewarded more for new customers rather than for providing excellent services (now called Customer Success in the start up world). We do not find much evidence that all the customer call data is integrated back into the CRM system despite software solutions out there. Once a customer becomes loyal due to an excellent experience they spread the word (word of mouth ) and can become Net Promoters, see Net Promoter Score-NPS ). The good word can be turbocharged in a social media world. It turns out that (a) You do have your customers historical data of purchases (b) You are not using that data to find customers like those customers you already love. The customer database can be analyzed in a variety of ways including the old direct mail way of Customer Lifetime Value (CLV), and Recency,Frequency, Monetary (RFM). We’ll cover more of these topics in later posts.

A customer who pays and buys is the ultimate proof that the marketing worked. However, you are never 100% sure which specific action in your marketing really helped in moving individual customers along the journey.

But that is why marketing is so interesting!

About StratoServe.

Leadership Style 2022: Jack Welch or Satya Nadella?

Which leadership style to adopt in 2022 with the Great Resignation ?

One of our all time popular posts is about Jack Welch’s leadership style.

The Jack Welch ( legendary CEO of GE ) style is what most Baby Boomers (Born 1946-1964) grew up with. Organizations exist because stuff needs to be “done” by teams of people. If you as a team member can’t deliver – you are out was the mantra. If you hold a job, you should know the outcomes expected in your job. Your manager may not communicate along the way. Or you may be hesitant to ask for help to achieve your expected outcomes.

Gen X( Born 1965-1980) was willing to go along with the Baby Boomer/Jack Welch leadership style. Gen Y or Millennials ( Born 1981 to 1996) and Gen Z or Zoomers (Born 1997 – 2012) are very different. Since the pandemic and the Great Resignation , we thought it was timely to rethink the Jack Welch style as discussed in our very popular posts on Jack Welch. Between the generations the economy has shifted from industrial to service and now the knowledge economy. Also family wealth has increased so Baby Boomers and Gen X are happy to support their adult children as needed. All this has resulted in dramatic shifts and here are three illustrations:

  1. Gen Y and Z don’t obsess as much about ownership and are happy to pay for use. These include houses (Rent, Airbnb) cars (Uber). Freed from the tyranny of fixed loan payments and more assured of parental support they feel less trapped in organizations that they do not like.
  2. Also Gen Y and Z are happy to change their jobs and locations easily as the pandemic has shown. The carrot and stick approach does not seem to work as well as it did in earlier times.
  3. Younger people worldwide are far kinder to each other. And they are more accepting of people different than themselves. They are far more open to diversity.

When Satya Nadella took over as CEO of Microsoft in 2014, he made the reading of “Nonviolent Communication” by Marshall B. Rosenberg compulsory for the top management. Nadella’s predecessor at Microsoft ,Steve Balmer followed a version of the Jack Welch approach without the candor that Jack promoted at GE.

We got hold of “Nonviolent Communication” (Note: we get no commission for offering this Amazon link to our dear readers) and were amazed at the way candor was really executed. In the Jack Welch era, you called a spade a spade. Candor meant that you tell your people on their face that their work “sucks”. Even back then, you didn’t make friends. Legend has it that in the old GE days managers had to list their bottom 10% people and HR would find that several colleagues (now deceased) were listed in the bottom 10% . Just so that the manager could avoid firing current colleagues! The dilemma was that if you avoid offering feedback to team members things don’t improve and the whole organization suffers.

Nadella’s approach with Nonviolent Communication turned out to be a game changer for Microsoft. From morale to financial performance and stock price – everything has been only improving.

Incidentally, the Satya Nadella approach also hits the spot in a multi-generational workspace. Nonviolent Communication resonates with Gen Y and Z .

Here is a brief application of Rosenberg’s suggestions for our dear readers in their roles at any organization. Our sense is that Baby Boomers and Gen Xers become happier and this is a great path to have Millenials and Gen Z’s buy in to your organizational mission.

Scenario: You as the leader of Sales have a team member who has missed the last important project deadline. For this scenario assume that the sales team member (cross reporting to finance) was working on costing sheets for an important Request for Proposal (RFP). Some predicted prices were expected to reach the costing person from Supply Chain folks who were supposed to get predicted prices from certain suppliers. With COVID, Supply Chain issues, inflation there were a lot of moving parts to predict for the costing person. You now have a one on one Zoom meeting next week to discuss the next costing for the next response to a new RFP

Nonviolent communication suggests the following approach for your meeting with the team member.The foundational principle is to build a human connection with the other person that involves a common humanity and bonds of trust and cooperation. You are neither trying to provide a carrot (incentive) or a stick (threat).:

  1. Observation :You start with observing the facts of the situation. Since the primary agenda of the meeting is for costing out a new RFP a good way is to start by saying ” we have a new RFP coming up for -day-month. I noticed that your last costing sheets were delayed.” You team member is likely give you several reasons for the delay. It’s good to listen and understand carefully. Here it is important not to judge. For example, if you hear that “Supply Chain folks did not give me the predicted price” do not say ” You should have told me” or “Did you call them”. Hold on!
  2. State how you feel: . “I felt let down because we had to use this data for a time sensitive RFP”. Follow this how you feel statement to the next step.
  3. State your needs explicitly:” Can we figure out a way to get the next costing sheets in on time?” Here you are showing that you rely on the person and that is a great feeling for a team member.Sometimes we are not clear ourselves and at other times we think it would be impolite to clearly ask for what we need. Clearly asking means talking in a polite and friendly tone (or email). Rosenberg provides great examples of parents yelling at their children instead of calmly asking the child to address what the parent needs.
  4. Actionable item: Following from your needs you must specify a doable action item. Here it’s important to convert your need to an actionable item. Once you specify the action the recipient of your nonviolent communication has a chance of considering doing it. You should be willing to hear a “no” to your specific action item without getting upset.In this particular scenario under costing will not hurt your response to RFP’ success but over costing might. However, there will be profitability questions if you get the contract with severe under-costing. Can you add a clause to index your quote to a public index like the consumer price index? Note some data crunching is needed here. In any case what you need is the costing that is as realistic (within a range) by a certain date. You still can figure out your final quote based on the market, client’s budget etc. You want your meeting to end with “winning the heart” of your costing colleague. Performance will follow.

Consider any difficult work email you send today. Try the above steps as you compose that email. Our guess is that you will be pleased with the outcome.

About StratoServe.


Help Machine Learning – Don’t Edit Campaigns

Help Machine Learning- Don’t Edit Campaigns

You have a campaign in Google or Facebook ads that’s doing really well over several months. Maybe this was for a product that is no longer sold.

You have a new product to sell. And it seems obvious to try and make some edits in the text,images,video of the ad and change the landing pages for the new product.


Here is why:

Machine learning takes time: the machine learning process had worked over months on the campaign and had been gathering data. For Google Display ads you would get recommendations about which images are not performing well so that you can try and change them. Similarly, you’ll get recommendations for headlines and text if they are not doing well. It’s fine to edit those. Because the machine is telling you. (Sorry if you feel like a slave to the machine at this point). This is called the learning phase and although Facebook and Google mention 7 to 10 days, it’s really important not to fiddle with an ad when you set it up. Because every time you make edits – it re-enters the learning phase. While the learning phase may be a couple of weeks- campaign that has been running for a month or more has more data for the campaign settings. This includes campaign objective, geography, ad schedule,device preference etc.

Unlearning is hard: Unlearning is hard for humans. It is hard for machines as well. What happens when you change an ongoing campaign is that the machine has to unlearn and that takes a lot of time.

So what should you do?: Copy the successful campaign that you want to use for a different product. Now make your edits. If the old successful campaign is not required (assuming its a discontinued product). Pause it. The copied campaign has nothing to unlearn but you have all the content including text,images,videos running. If it is a new product its important to keep the campaign objective as traffic and not conversions. Why? because conversions take time as consumers go through their buying journey. Staying with traffic is a good idea as that gives you a chance to convert and you build data on the target market behavior.

Acknowledgement: we acknowledge the discussion with a helpful Google Ad specialist that clarified the suggestions in this post. While all the learning materials around the Google and Facebook exams do cover this point- the digital marketer is most frustrated when a campaign while approved, does not seem to be serving. We hope this post helps digital marketers.

About StratoServe

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