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Confessions of a Professional Networker

My oldest daughter, Kate, loves horses. There’s a horse park next to the soccer fields where she started playing when she was four. She watched the horses during the game, and would always ask me to take her to see them when her game was over.

Then as soon as we climbed out of the truck she would ask me to ask if they would give her a ride. I  always said, “No” and this went on for several weeks. Finally I said, “Kate, It’s your job to ask for a ride, but I have a better idea. You can’t ask directly…so let’s try two things – pay a compliment, and ask what the horse’s name is.  Tell the rider something you admire about their horse, it’s color, markings, the way the mane is braided, or the saddle, then ask about the horse’s name.”

Incredibly, half the time, the rider would invite Kate to sit on the horse or even offer a short ride in the parking lot.

This describes my approach to networking, or meeting new people in any environment. It works as well at forty as it does at four. First – be fearless – nothing bad will happen from paying compliments, and if you ask to connect with someone, either by exchanging business cards or through LinkedIn, the worst that can happen is they will say “no”…or ignore you. The best outcome is that you’ll find some common ground and a way to help each other solve a problem, achieve a goal, or launch a connection. The most valuable people give you access to information or relationships you have few other ways to reach. Great connections have little in common with you and almost no overlapping knowledge and experience. The co-worker who sits next to you at work and lives in your neighborhood can do little to expand your worldview compared to these people:

Connect with people who matter – people who are open to serendipity and the power of relationships. People who have established a personal brand and communicate their thought leadership or expertise in any area.

Connect with people who are geographically distant in your industry, or physically close in other industries.

Connect with people who are in completely different industries, and geographically removed, but have similar interests, educations, or other shared experiences that you can leverage to connect.

Connect with authors, speakers, and researchers – they are very open to new connections and easy to reach if you share a positive comment or thought about something they’ve produced or created.

Connect with billionaires and investors – they’re actually very accessible and frequently seeking new ideas.

Connect with LIONS – LinkedIn Open Networkers. They self-identify as people who are open to new links.

Placement surveys show that 75% of all jobs that pay >$100,000 are found through a candidate’s network. That’s an incredible statistic…so how do you put your network to work? For existing connections send a brief email that describes your strengths, experience, and what you’re looking for. Never ask for a job directly, rather, request that your contacts alert you of anyone in their networks who could benefit from your skills and experience.

What about new connections?

Here’s a proven road-map to build local connections and secure their help to find a new opportunity in your hometown.

1. Find a list of the fastest growing or most profitable companies in your City or State – usually published by the local business journal.

2. Select 25~30 companies that your skills could be well-suited for.

3. Search LinkedIn for LIONS (LinkedIn Open Networkers) that are well-positioned on that list. The world is full of people who want to help you – all you need to do is ask. And the more senior the person the more likely they appreciate the power of chance meetings.

4. Send a personal note to the LIONS or other people you identified from companies on your list. Say this:

“Hi, I found your profile on LinkedIn while researching XYZ company. I’d like to connect with you and would be delighted if I could buy you a cup of coffee sometime in the next two weeks for a chance to learn more about what you do?”

This works – especially for sharp candidates who have been out of the workforce for an extended period. Initiative catapults you to the head of the line. Nearly half the people I have shared this technique with end up in a job that was designed for them. Experience has shown me that a personalized request, like the example above, will yield about a 40% acceptance rate for people with a complete LinkedIn profile. And the final meeting rates will exceed 25%. Furthermore, half of those meetings result in a new connection revealing information about unpublished openings in their companies – hidden jobs. It doesn’t take many cups of coffee to heat-up your search.

I’ll wrap up with two more tips: in business credibility matters and it’s customary to use a senior manager’s firstname, even if the CEO. Don’t use “Sir” or “Ma’am” when speaking with someone about their company or in your introduction – it signals weakness or insecurity and reduces your position. Finally, the next time you encounter a networking event, look like a pro – carry your business cards in your left pocket, so you can pull one out as you shake hands with people you meet. Place the cards you receive in your right pocket. This prevents cards from getting mixed-up, and you can maintain eye-contact while delivering your card. It’s a small step, but deliberate, meaningful improvement will add up over time and turn your into a confident networker.

Please “Like” this and pass it along if you found it helpful.

Paul’s talk – “Personal Branding and Digital Footprints” is a discussion about how people connect, learn, and grow. He introduces ideas and techniques you can apply to achieve your goals, enhance your career, and help other people along the way.

Paul Laherty leads Deloitte’s relationship with several major airlines. Over the past fifteen years he’s led teams in Sales, Marketing, and Finance at American Airlines, Advito, Travelocity, Diio, and Cornerstone Information Systems. Paul’s an instrument-rated pilot, writer, speaker, world-traveler, former Army Officer, a husband, and father.  He helps people and organizations achieve significance, travel safely, and think differently. Paul publishes at paullaherty.com, and is open to connecting on LinkedIn at LinkedIn/paullaherty, or twitter @paul_laherty.

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What I Learned Connecting With Unicorns – The Top 100 STRATEGIC Social Sellers

Tony Hughes published a list of his top 100 strategic social sellers – “Unicorn’s” in Tony’s parlance. I was connected to three of them when I read the article, but I was curious about how they made the list and what contributions they made to their followers, so I invited each of them to connect with me. This turned into a meta-social-knowledge acceleration program.

Over the three days I pushed out invitations nearly half accepted my request within twenty-four hours. Twenty-five percent of the time I found their email addresses somewhere in their profiles, in a few other cases I dug it out from blogs or company websites. For the majority I simply indicated they were a “friend” and sent a two sentence email: “I’m a Tony Hughes fan and found you on his Unicorn list. I’d like to connect with you on LinkedIn and follow your work.” It doesn’t get easier than that.

Eleven people sent me a “thank you” email, and most were personalized, but also included highlights and links to additional resources they created for people related to social media, linkedIn, sales force training, and other powerful content. I received several offers to write guest posts on blogs, and found one connection ten minutes from my house – we’ve already made plans to meet in-person.  Craig Elias actually called me while I was still cranking out requests. We had a powerful conversation on a range of topics. His “Trigger Event Selling” process resonated for me and I’m looking forward to spending more time to incorporate his ideas into my work.

Their generosity wasn’t confined to LinkedIn – it spilled onto Twitter where I generated eight new follows. Profile views on LinkedIn generated activity on my website when viewers clicked on links to articles only available on paullaherty.com. Celina Guerrero even commented on my latest article on LinkedIn.

This is an accomplished bunch – they didn’t make the list by sitting around to catch up on television. Most have authored one or many books, host their own blogs or websites, all of them are active on social media, and only a few have conventional W-2 jobs. Several have sales training backgrounds including with Miller Heiman and the Anthony Robbins Companies. Several lead social media or sales force effectiveness teams at bigger companies. They’re Act-On, Infusionsoft, and Hubspot fans. Pipeliner CRM actually has four people on the list, while only four or five were official LinkedIn Influencers, two are current LinkedIn employees. As a group they’re deeply curious – since the tools and techniques they’re expert in didn’t exist when they started their careers. They are selfless givers who recognize the rewards for help and knowledge freely given allows them to earn income from the trade-secrets and valuable approaches locked away for the exclusive use of their paying customers.

Here’s the big secret – great content isn’t always behind a pay wall and it doesn’t have to come from a book.

  1. Craig Elias’ “Trigger Event Selling” – A powerful framework to focus people who are ready to buy – don’t waste any more time.
  2. Aaron Ross’ “Why Sales People Shouldn’t Prospect” – This is a goldmine and should be read by anyone who doesn’t have sales experience but touches the process.
  3. Jill Konrath – From Topsalesworld, “Why Half-Baked Ideas are Perfect Sales Conversation“
  4. I’m already a huge Colleen Francis fan and subscribe to coaching content at EngageSelling.com, but she provides free resources there too, and it’s always relevant and professional.
  5. Michael Brenner published “How to create an army of social contributors (for free)” It’s excellent – and I recommend another project he was involved with, Business 2 Community.

During my call with Craig we discussed techniques – I asked him what he would have done earlier – and he explained how useful webinars could be to reach people. He suggested two ways to increase participant list size and engagement: first, partner with a company that wants to promote a product or service, to provide the foundation; next, find other experts who complement your skills to fill in gaps or expand the  scope. Great advice. Did I mention it was free? And he called me – all I had to do was answer the phone from a number I didn’t recognize. We’re old friends now.

Anything is possible if you just focus on how. Thank you Tony Hughes!

Please share, tweet, and comment if this was helpful.

Paul’s talk – “Personal Branding and Digital Footprints” is a discussion about how people connect, learn, and grow. He introduces ideas and techniques you can apply to achieve your goals, enhance your career, and help other people along the way.

Paul Laherty leads Deloitte’s relationship with several major airlines. Over the past fifteen years he’s led teams in Sales, Marketing, and Finance at American Airlines, Advito, Travelocity, Diio, and Cornerstone Information Systems. Paul’s an instrument-rated pilot, writer, speaker, world-traveler, former Army Officer, a husband, and father.  He helps people and organizations achieve significance, travel safely, and think differently. Paul publishes at paullaherty.com, and is open to connecting on LinkedIn at LinkedIn/paullaherty, or twitter @paul_laherty.

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Self-Confident Networking

Successful people are self-confident. Confidence alone doesn’t make you successful, but it’s so important it’s worth studying in detail.

Confidence has several ingredients – how we act, look, feel, what we say, and how we say it. Our body language, speech, and delivery influence people around us.  Amy Cuddy taught the world how “Your Body Language Shapes Who You Are” in a TED speech watched more than twenty-million times. We convey a lot of information about ourselves, our status, and how we’re feeling through our posture, body language, and how we move to establish personal space.

How do confident people act, walk, and talk? You know it when you see it. Let’s look at an effective teacher – the Military. Drill and ceremony rehearsals, confidence courses, the “gas chamber,” where Soldiers and Marines are inoculated against the fear of being hit with “tear gas” through the experience of being exposed to it. On demolition ranges where they learn how to throw live hand-grenades – safely. Airborne school, where Soldiers are turned into Paratroopers, and on countless missions, deployments and real emergencies that challenge participants to control their emotions to keep fear in check.

Early in my Military Police career I witnessed how attitudes affected preparation, readiness, and performance. I watched a five foot three inch, hundred and ten pound women control her fear to subdue a violent man twice her size. Phrases I half-believed then I embrace completely now – “fake it till you make it”, “when in charge, take charge, and when you’re not, act as if you are.” Confidence is not a substitute for competence, but it trumps alternative ways to approach life.

Training can be designed to teach tasks that together form skills that Soldiers or business-people master before they are qualified. Drown Proofing is a good example. It begins as a series of easy-to-achieve tasks. Soldiers are taught how to stay afloat and to make a flotation device from their clothing. The training culminates with a fully-clothed soldier, complete with kevlar vest, helmet, rifle, and boots thrown into the water. To pass, they need to stay afloat, no style points – as long as they don’t panic, they’ll get through it. And that’s true for anything you do in life – don’t panic.  More dramatic than conventional drown-proofing, this image shows Marines inside a helicopter mock-up as it rotates into water – you can watch the entire video on youtube here. This specialized training increased the survival rate for helicopter passengers caught in a forced-landing on water by several hundred percent.

Marines a modular Amphibious Egress Tank

Lessons learned in the Military can be applied to business. Networking is to business what drown-proofing is to Marines. Research on networking conducted at Harvard University adds evidence on this topic.

“Basically, the more “powerful” the person, the less they view “networking” as a “Dirty” activity. The lower power the person, the more they view it as a shameful chore. One implication for practice is that, to foster the advancement and effectiveness of professionals at low hierarchical levels, organizations need to create opportunities for emergent forms of networking, as those who need instrumental  networking the most are the least likely to engage in it.”

People I work with don’t need to do more good things better, they need to stop doing one thing poorly or step-up in situations where senior leaders wouldn’t hesitate. Usually it’s a single self-defeating inaction, or belief that stops them from moving forward. Self-confidence is the most common element their focus can fix to achieve the results they want. Think about how this could apply to you.

Gavin de Becker points out that young circus elephants are tied to a post with heavy chains they can’t break. Over time, they learn to stop trying, and eventually, as adults, they can be restrained with the flimsiest rope. What ropes are holding you back? Are you afraid, or lack confidence, or self-worth? Learn to be fearless.

Please “Like” and share if you found this useful!

Paul’s talk – “Personal Branding and Digital Footprints” is a discussion about how people connect, learn, and grow. He introduces ideas and techniques you can apply to achieve your goals, enhance your career, and help other people along the way.

Paul Laherty leads Deloitte’s relationship with several major airlines. Over the past fifteen years he’s led teams in Sales, Marketing, and Finance at American Airlines, Advito, Travelocity, Diio, and Cornerstone Information Systems. Paul’s an instrument-rated pilot, writer, speaker, world-traveler, former Army Officer, a husband, and father.  He helps people and organizations achieve significance, travel safely, and think differently. Paul publishes at paullaherty.com, and is open to connecting on LinkedIn at LinkedIn/paullaherty, or twitter @paul_laherty.

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Sales Planning for Start-Ups

The right focus, at the right time, has enormous influence on top-line and bottom-line growth for any company, but it’s especially true for new ones.

At the moment a company’s founders decide it’s time to add a sales team there are usually more issues to think about than who. “Sales” is used as a catch-all for a long list of activities and documentation that need to be rolled-out before the sales production line is running smoothly. Hiring a traditional salesperson first, before sales-support, and a marketing-driven lead-generation engine is in-place is a recipe for disappointment.

Chief Marketing Officers and Business Development VPs must understand the evolution of effective selling techniques to identify skills and timing that will achieve the best results for their new company. Professional selling is about leading the customer to imagine how your product will improve their condition.

Before there were Challengers: In the 1800’s through 1925, producers and collectors were recognizable personas of formal selling – also referred to as Hunters and Gatherers. Producers were the highly-compensated sales people who secured new business, while “collectors” were low-value operators assigned to gather fees and payments.

In 1925, E.K. Strong published “The Psychology of Selling.” Strong formalized descriptions and methods to handle objections and focus on features and benefits. This approach stood until the 1970’s when research created SPIN selling (Situation, Problem, Implications, Needs). SPIN segmented customers by size and sales by product complexity. The approach was popularized by Neil Rackham’s book, “SPIN Selling.” By then procurement organizations were seeking ways to control costs through various negotiations frameworks. McKinsey & Company introduced the McKinsey 7S process and procurement embraced it as a way to vet suppliers.

Contemporary sales thinkers, leaders, and sales trainers are driving high performance through programs based on the Corporate Executive Board’s research and 2011 book, “The Challenger Sale.” Written by Matthew Dixon and Brent Adamson it’s based on surveys from more than 1,200 companies about their B2B sales performance. Dixon and Adamson identified five sales personas and their occurrence rates: The Hard Worker (21%); The Challenger (27%); The Relationship Builder (21%); The Lone Wolf (18%); and the Reactive Problem Solver (18%).  They noticed that in low complexity sales, there was little difference between performance rates among the five types. But as product & service complexity increased Challengers separated from the pack as they generated a higher share of companies’ sales and profits.

Five Sales People Profiles

Challengers thrive: In complex environments with multiple stakeholders in the buyer’s organization. The Board’s research found that as product complexity increased performance separation began to favor Challengers over other sales personas.

Challenger Advantage

Here’s how Challengers do it. “A Challenger is defined by the ability to do three things – teach, tailor, and take control – and to do all of this through the use of constructive tension,” (Dixson and Adamson 2011).

Challenger Skills

Teach, Tailor, Take Control – great news – it’s possible to teach other personas and mid-performers how Challengers apply those skills in the buying process. Challengers don’t tell – they create business partnerships to uncover meaningful insights; they see the world from the customer’s point of view and generate ideas to help them grow faster and more profitably. Challenger selling engages the whole organization to think about ways to generate value for customers. Simply put, the Challenger method can be learned. The trick is to understand the mechanisms Challengers use to manipulate the buyer’s path.

Challenger Path

Marketing automation: The arms race between sales and procurement has been accelerating.  Contemporary marketing automation strategies, enhanced through lead-scoring programs offered by Act-On, Hubspot, Pardot, Infusionsoft, and others, are force-multipliers that allow sales and marketing organizations with a few employees to close complex deals with large customers, faster, at a higher-rate.

It doesn’t take an active imagination to realize what a Challenger could accomplish if they were handed a list of prospects who poked around the company’s website, viewed pages with information about implementation schedules, and opened a pricing page multiple times over the previous four days. Marketing automation is a goldmine. Want to see it in action? Download the beacon viewer extension from ghostery.com, once it’s active on your browser visit your competitors and other leading companies’ websites and check out the tools they’re using to track visitors.

Summary: For CMO’s, finding someone who understands the customers’ business and has the bandwidth to position the seller’s products in a meaningful way, earlier in the decision-process, will make a big difference to their new organization’s success. And if you don’t need a Challenger, you might not need a sales team. Sales people cost far more than sales and marketing automation programs, so a solid plan that incorporates both is necessary to drive success from each. A Challenger mind-set, along with a comprehensive list of lead scores from the new company’s prospective customers creates a good starting point.

Ideas and Suggestions:

  • Identify customer personas, and determine those customers’ “consideration paths” to buy your products, then organize content to respond to what you already know.
  • Launch your website early to accrue benefits the Google search algorithms bestow for site age.
  • Focus on meaningful, relevant content to drive participation on your site; refine your meta tags, keywords, and messaging to achieve low bounce rates, and increase visitor times on-page to drive higher organic search results – read “Call to Action” Bryan and Jeffrey Eisenberg’s e-commerce classic if you don’t know what this means.
  • Hire a good marketing person to create and publish sales collateral, marketing materials, and develop content that buyers will exchange personal information to get their hands on.
  • Launch a marketing automation program to capture buyer interest and develop a sales pipeline.
  • Now you’re ready to hire a Challenger sales leader.

Slides: From “The Challenger Sale.”

Coaching Sales & Marketing
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Productivity and Performance

Productivity is a catalyst that boosts self-confidence. Several months ago I sat next to Jason Womack on a flight to Los Angeles. In his book, Your Best Just Got Better, Jason describes strategies to become more productive. I adopted several immediately, but he also pointed out the need to understand why we do what we do, to do more, or to eliminate it from our lives. As a career coach I frequently encounter people who have the skills and experience to tackle any job in their field or profession, but they’re missing a key ingredient. Self-confidence.

Jason’s book caused me to analyze my activities before sales trips. It occurred to me that most of the items on my checklist could be described as self-confidence boosters, but I also evaluated what I need to be at my best:

  1. Good night of sleep.
  2. Coffee.
  3. Showered and dressed.
  4. Only view emails once I’m prepared to respond to them.

I’ve lived long enough to know my flaws – and peak performance requires down time and an adjustment period to reflect, rehearse, and wind-up before I walk into a client meeting. I tailor each discussion to the customer’s needs; I challenge their approach to create tension and demonstrate proficiency; and I teach them how my products will drive their business. All of this gives me control over the buying process to steer ideas and decisions into my strengths. This is why I want to be on the ground a day before meetings with International clients. For me, there’s too much at stake and too much to lose…even if same-day travel flows smoothly it diminishes delivery preparation.

It’s tough to be productive when your ‘chores’ haven’t been done. Here’s my pre-trip checklist:

  1. Haircut.
  2. Favorite clothes / clean – pressed.
  3. Notepad / pen.
  4. Coffee / dressed / groomed.
  5. Electronic devices powered up – power adapters available.
  6. Itinerary / schedule / map / transportation options.
  7. Be on-time.
  8. Site reconnaissance – visit the office before your meeting to determine how long it will take to get there.
  9. ID / passport / currency.
  10. Data and voice active (mobile phones while traveling).
  11. Music / headphones.
  12. Glasses / contacts / supplies / medications.
  13. Local knowledge about tipping, credit card useage, other customs.
  14. Hardware has network connectivity / back-up plan if network is unavailable.
  15. Thank you cards – Always Be Ready.
  16. Be productive during delays – see above.
  17. Treat yourself to an airport spa or airline clubs when traveling.
  18. Use the arrivals lounge for a shower / fresh clothes.
  19. If the day matters – upgrade yourself to a suite. The space will make you feel better and injects confidence.

I hope this list triggered ideas to put you in the right mindset. Here’s one to end on and it’s worth repeating. “Don’t review emails on your cellphone until you’re ready to take action.” Adopting that best-practice has eliminated anxiety from my routines so I stay focused to make my best even better.

 

 

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How to Handle Turkish Carpet Sellers

Hagia Sophia

Travel to unusual places can challenge you in new ways – especially westerners who are not accustomed to aggressive sales people. These are entrepreneurs who stand guard over bus stops, train stations and tourist locations to offer themselves as guides, or to grant you wi-fi service at their “Uncle’s” store. They ask where you’re from and then tell you about the time when they were an exchange student in your hometown. Another favorite is to ask about your area code, and then announce their Brother lives in that part of New Jersey, and that’s how they know it.

istanbul

Their goal is to push you into a sales-funnel, wrapped in hospitality, and fueled by your guilt to repay something helpful they produced early in the exchange. They understand western manners – the quid pro quo polite people live by. They insist on serving hot tea and hold it up as a custom in their country that guests must be treated like royalty when they step across the threshold into their store.

Rugs are my favorite. In your home they become obvious conversation starters – no one could miss that interesting silk runner inside your front door. It’s a status symbol that will remind your neighbors that one time you attended a conference in Istanbul or a bus tour through Morrocco, or a back-packing misadventure in India. Once you have a cup of warm tea in hand, you owe them a chance to show you two or three carpets. They’ll show you the inexpensive cotton one, then move up to the wool, before pulling down the gorgeous silk rug you’ve been eyeing since you sat down. The small wool rugs are about the price of your hotel room, so they don’t seem like a huge commitment. Besides, when would you be back in Rajasthan, or Turkey, or Morrocco, or wherever this pitch happened to be?

ist univ

The tea is good, so you start thinking about what your significant other will say when FEDEX shows up with a tube at your front door. “Oh, that?” you’ll say, and remember how guilty you felt about trying to leave before the entire show, and picturing the small mountain of rugs they’d already pulled down and rotated to demonstrate how the colors change when you look at it from the other angle, and how, when you flipped them over it became a “summer” rug to keep the floor cool. You’re starting to sweat like the assistant who was pulling down enormous carpet rolls, all the while insisting “this is easy – you deserve to make a good choice, and you can’t do that unless you see many colors and these amazing, hand-woven, carpets made by the woman you saw in the room we passed-by earlier.”

Turkish Carpets

“Hey – at least I didn’t buy the hand-made 8’x10′ silk rug from Pakistan!” You weren’t even going to buy the small wool rug until they showed you the enormous shipping log that listed three people from your hometown as sophisticated travelers who commemorated their trip by purchasing the biggest silk carpet in the store.

How do you travel to India, Pakistan, Turkey, Jordan, Morrocco or any other country without buying a carpet that looks completely out of place in your New York loft or California contemporary? You thank them for the tea and say, “maybe someday, but not today.”

Paul Laherty has participated in several carpet presentations, and so far, has managed to avoid an awkward conversation with his wife, the decorator, and architect in their house.

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How Great Airlines Treat VIP’s

Several months ago a friend asked me to create a framework for a major airline’s Entertainment Desk to service Los Angeles-based movie studios and television networks. I had a few ideas – but first the background:

Transcon: The JFK<>LAX market is the most important air market in North America. Five airlines carry >11,000 passengers between these cities each day and host celebrities, bankers, tourists and high net worth travelers on sixty-four non-stop departures (thirty-two per airport). American dominates the market with the largest aircraft and highest frequency. They operate ageing twin-aisle 767-200’s with a three-class configuration and International Flagship Service. United caters to the same crowd and operates with more efficient three-class 757’s, while Delta, Jetblue and Virgin America offer two cabins on a mix of 737’s/A320’s.

Historically movie studio’s and other entertainment customers selected American or United as their primary carrier in this market since creative talent and executives are allowed to fly in the forward cabin (why pick a two-class aircraft when three-class is offered?) These corporate customers routinely achieved >90% share in the transcon market. More recently, Delta enhanced their two-class product to include a lie-flat International business-class seat and increased to seven daily frequencies while United pulled back to six. This competitive action has re-ordered the Transcon marketplace and Studio travel managers tell me that travelers prefer Delta’s Premium cabin to AA’s out-dated 767’s and United 757’s.

Delta’s progress may slow soon. United is rolling out a new product now, while American announced new three-class A321’s will roll out in January 2014, to replace their current product. This upgrade includes lie-flat seats in first and business-class. JetBlue also jumped-in and plans to launch A321 service in 2Q ’14, that will include private pods in first-class. Before it’s even started, 2014 is shaping up to be a disruptive year for the Transcon market.

The Desk: Superior airlines also compete on the ground and offer services tailored to their best customers. The Entertainment Desk is dedicated to a very specific group of clients, and should make a market in first-class seats between New York, London, Miami, and Los Angeles or offer access to private jets where feasible. The desk exists to expedite difficult and unusual requests. The Entertainment Manager facilitates requests to seat Talent, their Agents, Studio or Network Management, Publicists and others with the Talent – or create a plausible denial when discretion requires it. This function is not a discount mechanism to clear waitlists and upgrades – Airlines must offer a high-touch, guaranteed service.

Winning airlines create hope during every crisis – airlines should move mountains to support their customers. Clients should believe their Airline’s Entertainment Team will do everything possible to fix the problem or propose alternatives that will improve it materially. This group is not motivated by money or cost – service matters. The George Lucas expression – “do or do not, there is no try” applies. An Entertainment Desk is an airline’s service ER. Employees must be able to reach into a PNR to grab a torn artery – when the Entertainment Desk calls premium services at LAX, JFK, MIA or LHR, the response should not be, “Who is this?” Rather, “What can I do for you RIGHT NOW?”

Examples: Airline’s will solve requests like this on a daily basis: NBC called since Alec Baldwin’s Assistant booked late and needs the seat right next to him for his publicist or agent. The Entertainment team will call Sony, or Paramount or Fox, or AMEX or the owner of that seat to get it done – or suggest moving both of them to a pair of seats that are available. Great airlines block First-class in the transcon market one week each May to allow studios to grab space to attend the “Upfronts.” They empower their team. No one should recite policies designed for 99% of the 250K travelers you handle every day. Accept that these are special customers and start from that assumption. The team should be “accessible” 24/7 via cell and have GDS access from home. They’ll only receive 10-15 emergency, after-hours, calls per year… but it’s a gesture that sets winning airlines apart from their peers.

The Entertainment Manager must have an exceptional relationship with the airline’s premium service managers in LA, New York, London, Miami and Nashville, and should be known across your system and alliance – and that means they need to be included in global premium service meetings and updates when you have them. This person must be available at all times and have a back-up who can assign seats or clear space. Overbooking capabilities are recommended.

Entertainment Managers must be quick to challenge requests and propose alternatives when operational hurdles prevent the studio request from being granted as requested. A “customer focused” attitude should be real; once a carrier earns a customer’s trust and loyalty they will choose that vendor every time. In those rare cases when the carrier “burns” their customer – the most senior executive available should issue a mea culpa, in-person, and a offer a range of options to fix whatever it is they didn’t solve three days earlier.

Additional examples to work through now: On one flight the President of a network was removed to accommodate a Federal Air Marshal, while two subordinates, both top-tier frequent flyers were left on the flight. Revenue Management based their decision on the customer’s lack of a frequent flyer number. The customer didn’t have one for two reasons: 1. Security – to maintain anonymity; 2. She was authorized to fly private and rarely flew commercial  (the plane was not available that day). In this case the General Manager intervened and found a seat, but you can see how an airline’s policies are not designed around premium travelers in marginal cases. Airlines service customers who fly to NY Commercially, then to Miami by private jet, before they will discover that their MIA->LAX segment was cancelled because they no-showed the LGA->MIA flight. Great airlines step-up to fix it when a VIP is standing at the ticket-counter and flights are oversold all day.

This desk also makes “meet and greets” happen (not ‘space available’, they make it happen) and they treat airport assistance companies as valued partners. Great airlines speak in guarantees. This is hard for commercial airline managers to do, but it’s necessary to win. Great airlines are discrete – they don’t tolerate employees who call TMZ or tip-off the paparrazi. This desk can call flight ops and ask the Chief Pilot to introduce himself to the guest in 3A and to ask the VIP passenger if there’s anything they need. This desk says, “Sure, I’ll approve your oversize, outrageous pet in first-class (at the window), as long as the handler is seated next to it” No discount…this isn’t a discount desk – service focused. This person will need LHR to clear a closet in First Class on a 777 to accommodate the CEO’s spouse’s Cello. And you will need authority to offer 150,000 miles for an apology without advance approval.

Finally, I recommend a $100,000 TAC budget to invite agents and managers to take one or two trips annually to London or New York (and a thorough understanding of the Foreign Corrupt Services Act to keep you out of trouble). When offered a chance to show off your product – do. This isn’t a discount crowd, so treat them accordingly.

There’s more, but airlines that empower their teams with “authority and resources” to do anything the FAA, TSA, DOJ, and the DOT allow, to take care of their best customers, will have unlimited success.

Aviation Sales & Marketing Travel Management
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Measuring Web Site Quality With Net Promoter Scores

Mike Premo, ARC’s President, gave a presentation during the CTDA conference in Lake Las Vegas last week. Mike showed us how ARC has turned to the Satmetrix Net Promoter Score to measure their performance. It turns out ARC’s score is a 70 – which basically means a lot of their customers are raving fans. See more about other companies’ scores here.

The Satmetrix Net Promoter Score is gaining traction as a way for retailers to measure key performance indicators that lead to increased profitability. I like it because it’s simple and offers powerful insights about your company’s performance. Keeping in mind the profit equation is profit = revenue – costs, then NPS can help.

NPS

Let’s look at the online retail world where site bugs can have an outsized impact on NPS, but are difficult to quantify in other ways. Bugs lower revenue. When they affect a Website’s shopping or check-out paths their impact will show up initially as lower conversion rates and higher bounce rates. Fatal errors and other bugs that annoy customers to the point they shop elsewhere will also reduce visitor numbers to your site over time. Since it’s difficult to measure this effect it’s easy to ignore. Online Travel Agencies (OTA’s) face another problem – interactions across different lines of business. Visitors who start their search for a particular product, flights, may end up purchasing a hotel or package (usually flight plus hotel).

For this discussion the site architecture for flights, hotels, packages and cruises is designed as discrete shopping paths with a bespoke checkout process that ties into consolidated back office accounting and reporting systems. Great online marketers design intuitive paths that minimize customer frustration, but bugs can undermine every designers’ best efforts. Customers will tolerate errors in their own way and may forgive slow response times but bounce when an ad flashes at them. Once the customer chooses a product, an error during checkout, or a price jump (we’re talking about travel here) can drive customers away before the transaction is complete and these problems add up. How much do bugs cost?

Most Web sites track numerous statistics and site performance metrics to uncover friction points or areas to improve, but these reports often miss interactions across paths or temporal changes. I’ll set up an example and describe several assumptions to show you how. For simple math, let’s assume that Hotel and Flights each drive 40% of an Online Travel Agency’s site traffic, while Packages and Cruises account for another 10% apiece. There are many use cases, but most leisure travelers who are flexible about their destination and timing will search for flights fist, and then hotels. This experience suggests that the ratio of flight searches to completed checkouts is higher than it will be for Hotels. Moreover, once a customer settles on a specific flight, they’re able to begin shopping for a hotel. But what if the customer experienced a major bug during checkout? They’ll leave the site and never become a hotel shopper. In this case the poor experience with the flight path caused the customer to search another OTA and they never showed up as a visitor in the hotel path.

Bugs are typically rated by their frequency, severity and location in the purchase path. Frequent, severe bugs that occur during payment have the greatest effect on financial performance since the customer was extremely likely to complete their transaction. Digging deeper you’ll find a second layer that’s often missed too, since the customer has already invested a lot of effort in the process, they are more likely to bolt later in the path to avoid finding the same bug the next time around. Sharp marketers must estimate this behavior to gain better visibility over a particular bug’s impact. Managers who identify a bug that occurs during 1% of visits when typical conversion is 100% would incorrectly assume that the bug will lower conversion by the same amount. That’s wrong from the start if, as most travel sites know, buyers visit to shop many times before they make their purchase, so errors in early parts of the path that frustrate visitors and interfere with shopping will drive shoppers away and site visitors will decline over time, thus conversion rates may decline by 1%, but shoppers may decline 10% too, which would compound the losses and be indistinguishable from other problems.You might spot this by tracking changes in the ratio of new visitors to returning visitors but this metric is affected by new browser and device releases and doesn’t provide the detail you need.

In the previous example as one line of business drives a customer away permanently, than visitor numbers in the other lines of business will experience a steady decline. Once again the bug’s effects are invisible in the conversion rates throughout the checkout path, and it will be unclear why direct visitors and returning visitors have declined. The OTA will need to spend more on paid search to drive ever more new customers to their leaky bucket.

This thought exercise demonstrates that it’s important to measure bugs across the enterprise and the Site’s 1-N list should be discussed widely and in the context of corporate strategies about staffing, and marketing spend. The Net Promoter Score can rescue Travel Agencies from internal bug lists and give you actionable intelligence about the ways you might be preventing sales. NPS is independent from the hidden correlations and mountains of data that overwhelm online marketers and site-health professionals each day. Fix the biggest problems and watch your revenues and profit climb.

For more information about these topics check out Avinash Kaushik on twitter @avinash Author, Web Analytics 2.0 & Web Analytics: An Hour A Day | Digital Marketing Evangelist, Google | Co-Founder, Market Motive; Bryan Eisenberg @TheGrok, Marketing Optimization & use the Data expert (small or big data), keynote speaker & New York Times best selling author. Austin, TX  bryaneisenberg.com; and great dashboard ideas: Juice, Inc. @JuiceAnalytics “We craft applications that help people understand and act on data.” Reston, VA · juiceanalytics.com

Sales & Marketing
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Loyalty Programs that Work

Background

Contemporary loyalty programs generate power by transforming dreams into action. The Marina Bay Sands hotel pictured above epitomizes the aspirational destinations customers enjoy through participation in a travel loyalty program. Great loyalty programs inspire customers to choose the host company even when less expensive alternatives exist. So when the search for profitable customers drives you to create a loyalty program, here is how to do it right.

There isn’t a single recipe, but certain ingredients are known to taste better and every compromise you make to the set of principles outlined here will reduce the number of people you can influence. When applied carefully these principles will improve customer engagement and lead to higher profits and lower costs. Exceptional loyalty programs offer meaningful value. That value is accrued seamlessly without obstacles. Great programs are transparent and customers understand them intuitively; they eliminate friction at every turn.

Loyalty is measured by the number of customers you inspire to select you over and over again. Loyal customers spend more than average customers, they do it more frequently, and they’re more likely to stick with you after a bad experience. Your Customer Relationship Management team has segmented your customers thoroughly and you know how much your best customers are worth, and numerous white-papers and empirical research conclude loyal customers are responsible for a disproportionate share of business profits. But how do you inspire customers to remain loyal? More importantly, how do you convert ‘good’ customers to behave more like your most profitable, loyal disciples?

To answer those questions and for a thorough understanding of the loyalty space its worth exploring consumer and business loyalty programs including American Airlines’ AAdvantage program, Delta’s Skymiles, the Citibank AAdvantage credit card, Capital One cards, Starwood Preferred Guest for Business, Starbucks Rewards, and a host of business-to-business programs designed to engineer loyalty or drive customer retention. I’ll focus on travel industry programs and a few non-travel schemes.

History

Loyalty programs have spread to include everything from hotels, rental cars, sandwiches, haircuts, oil changes, and home mortgages. Many of the largest programs allow customers to transact with partners on both sides – earn and burn. Before Capital One credit cards, AAdvantage Miles and AMEX Rewards Points, companies rewarded consumers with “green stamps” from Sperry and Hutchinson (S&H). Greenstamps were literally stamps awarded to customers at the point of sale for a variety of behaviors. They started in 1896 and continued through the mid 1980’s. Retailers, supermarkets and other retailers purchased “Greenstamps” from S&H to issue to their customers and once the customer accumulated enough stamps they would redeem them for products from an S&H catalog. At their peak in the 1960’s S&H’s reward catalogs were the most widely distributed publication in the United States, while they issued more than three times as many stamps as the US Postal Service.

SH-green-stamps

By 1978 competition following deregulation of the airline industry and the widespread use of more powerful computers supported expansions in airlines’ sales and marketing programs. In 1981 American Airlines launched the AAdvantage frequent flyer program (followed closely by United Airlines) and a few years later added a co-branded credit card product with Citibank. The frequent flyer program gave people a chance to accumulate credits quickly, while the Citibank AAdvantage card offered another way for less well-traveled consumers to enjoy the benefits of cheap flights. Throughout its history, American’s AAdvantage program had the highest enrollment and member participation rates among frequent flyer programs and loyalty credit cards. Over the past decade American’s partners have purchased more than $1 billion annually to distribute across 50 million members making AAdvantage one of the most influential contemporary consumer loyalty programs. Mergers have driven Delta’s Skymiles and United’s Mileage Plus programs ahead recently, while global alliances including Oneworld, Skyteam and the Star Alliance expand program reach to customers who may never step foot on a US or European owned aircraft.

Airlines operate ‘anchor’ programs that drive scale and reach that few retailers can match (McDonald’s and Starbucks are notable exceptions). The most successful travel programs have powerful, exclusive relationships with consumer banks. Those banking relationships are driving the next wave of business-to-business loyalty programs and the future looks bright.

Value Proposition

Loyalty programs must be meaningful – the accrued value must be worth managing. Customers must be able to calculate value intuitively. Earning behavior must be easy to describe, easily understood, and programs should give credit for wide-ranging transactions, not just a narrow band of profitable behavior. This is distilled to Simple, Seamless, and Comprehensive.

Global Airlines run the largest programs and typically offer a free domestic coach ticket for 25,000 flown miles. An average round trip is 2,500 miles, so travelers generate 10% of the award value from each trip. That’s a good value trade-off. Travelers who also spend $25,000 on an airline credit card have an easy way to earn two award tickets every year.

Effective loyalty programs drive customer behavior. They reward profitable behavior – they are structured to generate more frequent, higher value business from program participants. So why doesn’t everyone join your program? A look at the airlines reveals that about 50% of all passengers do not belong to the airline’s program. Customers participate in programs that are personally relevant. The public is inundated with offers to join various programs, but they will not participate unless they’re offered enough value to justify wallet-space. Marginal Airline offers end up in the trash while a favorite restaurant makes the cut by offering a free entrée every tenth trip.

Currency

Currency choice matters – it must be intuitive and the average customer should be able to calculate the currency’s value and identify the activity or behavior required to earn common awards. Consumers get it when their barber issues a card that requires ten visits to earn a free haircut. Simple, seamless, comprehensive.

The earliest airline programs called their currency ‘miles.’ Miles are intuitive – when a traveler flies between New York and Los Angeles – they’ll earn one mile of currency for each mile in the air. That’s 2,472 miles each direction in this example. Miles are the basic building block – they’re analogous to a penny. Once you ‘earn’ 25,000 mile you can redeem them for a free coach ticket (treating miles like pennies is equivalent to $250 value). Loyalty credit cards lean towards ‘Points’ and a typical value is one ‘point’ for every dollar spent. The pure credit card programs often offer travel awards as a redemption option so a currency that converts easily to ‘miles’ makes it simple for most consumers to adopt the ‘point’ system and it gives them confidence about an already well-understood earn and burn structure. In the largest programs points and miles are equivalent and fungible – it’s like a foreign exchange system, you can often trade airline miles for the same number of hotel points.

In recent years other airlines, particularly the low cost carriers adopted segment based currencies – Southwest Airlines Rapid Rewards famously offered a free round trip ticket every time a customer flew sixteen segments. It’s easy, but customers could earn a ticket after purchasing just three trips if the routing required double connections (three segments each way). The other end of that spectrum is the customer who bought eight round-trip tickets for non-stop flights before earning the free ticket.

Southwest’s program didn’t seem equitable, so Southwest updated Rapid Rewards to issue ‘points’ based on two variables – the type of ticket and the price. Now customers earn six points for every dollar spent on Southwest’s “wanna get away” leisure fares, while it takes 6,000 points to ‘buy’ the same type of ticket. A quick calculation reveals free tickets are available after spending just $1,000. It’s a good system, but it leaves program players shaking their heads to calculate earn and burn values quickly – members need to read their statements carefully.

Companies that offer separate programs for consumers and businesses should think twice before they create parallel currency and banking systems for each type of customer. Specifically, many domestic airlines offer consumers mileage-based currency through their frequent flyer program, while offering companies a spend-based, point currency in their business rewards program. A review of award menus at United and American reveals similar awards are offered through each program, but the redundant systems increase costs and management workload.

An example on the hotel side can be found in Starwood Preferred Business (SPB) program; SPB is integrated with Starwood’s Preferred Guest program and can be managed in parallel and through the same systems – this arrangement reduces the cost and eliminates currency confusion since both programs payout in similar fashion – the traveler accrues points in their individual program, while their employer accrues points in the Starwood business program. This co-mingling makes it easy on the front-desk staff too and the entire company is aligned with the program messaging.

Companies can manipulate value on both sides of the ‘earn and burn’ equation, so consumers need to be familiar with program rules on both sides – the less fine print the better. And don’t neglect cash controls – management often overlooks the cash value of their awards or loyalty currency. Robust controls must be implemented to ensure employees don’t have the ability to give points or awards away without comprehensive tracking and reporting.

Awards

Give ‘em what they want! If you sell widgets because people value them, it goes without saying that widgets should be on the award menu. In fact, your award menu should include ‘starter’ widgets, widget covers, widget ‘bonus-packs’ all the way to up ‘premium’ widgets. Airline awards begin with highly restricted, long advance purchase, mid-week, domestic, coach tickets, and move up to last-minute, international first-class, around-the-world fares. A collection of ancillary benefits are available too – including lounge passes, upgrades, cash plus program credit, reduced fees and other special awards. All priced in loyalty currency.

Hotel award menu’s include rooms, upgrades, all priced in ‘point-based’ currencies tied to spend and room-nights. Another popular option for larger hotel programs allows point transfers into airline miles.

“Earn and Burn”

Program participation must be simple, seamless, and comprehensive.  Loyalty program members should be able to attach their membership numbers or customer identification to their transactions easily. Their purchases should be tied to online profiles or a barcode or a RFID membership card. Companies should take action so members don’t need to remember their member numbers and, if they do need to remember them, companies should create as many opportunities as possible to add the number throughout the purchase or use process. Effective programs make it easy to claim credit long after the purchase.

Avoid obstacles that reduce participation. Awards must be meaningful to the customer – in its simplest form awards should have the following qualities:

  1. Meaningful
  2. Easy to earn
  3. Easy to burn
  4. Supported by seamless customer service
  5. Common currency
  6. Multiple award levels
  7. Bonus structure with point multipliers
  8. Relevant partners

Customer Service

Same rules – simple, seamless, comprehensive. Most common requests – 1. provide ‘earn’ credit; 2. Reset account access; 3. Merge accounts ; 4. Provide enrollment support; 5. Provide redemption support (complicated program rules will drive these requests up). Companies should acknowledge that customers want to communicate in different ways (phone, email, and text) and should offer customer service through common channels. If your program can’t support a live 24/7 operation, at least provide self-help online and find a way to show customers you appreciate their business.

Promotions and acquisition campaigns 

Collect the low-hanging fruit – that means a laser focus on your existing customers before you move on to new or potential customers. Advertise your unique value proposition, currency and program rules to your existing customers with your existing marketing and communication channels. As enrollments begin to climb study your data to determine characteristics your most profitable customers share and seek out non-customer populations that exhibit the same qualities or behaviors. Future campaigns should target those potential customers and develop creative A-B test groups to hone your marketing skills and test intuition about your customers. Enrollment offers should include ‘seed’ points or miles to jumpstart member participation. Follow-up campaigns should segment customers in meaningful ways including a group that have earned enough points for basic awards, but have never redeemed points or miles. The possibilities are endless, but a careful approach that combines your industry knowledge with insight about your most profitable customers will yield the best results.

Common sense and the desire to limit liability suggest acquisition offers should be richer in competitive markets, and lower  where the host has higher market share. Targeted offers and A-B tests may require you to use a promotion code system (one-time use codes are recommended to prevent wide distribution via the Web). Before you get too far down this path it’s instructive to educate yourself about ways promotions can go wrong so here’s a great Website you should spend some time on to avoid making similar mistakes.

Conclusion

This is just a glimpse into the loyalty cook book – these programs are important tools to manage the relationship between companies and their best customers. Done well,  thoughtful programs can give you an edge and drive bottom-line performance. Use this simple guide to create a solid framework as you invent your own program and embrace ideas from successful programs across multiple industries. Finally, ask yourself why programs and their components work and what conditions exist that drive customers to participate in them? Answer those questions and you’ll understand new ways to achieve better results.

Coaching Sales & Marketing Travel Management
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Profit From Foreign Exchange Rates

The value of goods and services may remain steady, but the cost depends on the currency they are priced in. Specifically, a hotel room in Europe listed for €130 would cost an American buyer $165 today, while a European booking a hotel in Chicago for $130 would pay slightly more than €102 at current exchange rates.

Consider that the Euro was designed to lock or peg exchange rates between member countries when it launched on January 1, 1999. The single Euro-area currency eliminated more than a dozen local currencies and provided transparency across Europe as people in many countries were better able to compare the value of their Euro’s in any participating country (the British are noticeably absent and trade between the island nation and the continent must still be converted in or out of British Pounds). The new currency closed at 1.19 Euros to the USD on its launch, but within twelve months had fallen to 1:1. That triggered a crisis that only abated after the Euro reached a low of 82¢ in late 2000. In 21 months the Euro lost a third of its value, a striking decline. I had just started a new job and was tasked with designing exchange rate collars for consumer financial products offered in international markets. That experience replaced the history and theory I’d been taught with a ringside view of the real-world destruction foreign exchange rate fluctuations can have on a business. I’ve paid careful attention ever since and I’m never surprised by how few people understand what these fluctuations can do. Seven years later, in March 2008, the Euro reached a high 1.578USD – almost a 100% gain from the earlier low.

Forex isn’t just for quant’s in the corporate treasurer’s office. Foreign exchange rate observations should be on every international marketing professional’s list of things to pay attention to. Here’s the short version – businesses should promote their products in places where their currency is cheap and pull back where or when their currency is expensive. Specifically, the US airlines should have promoted travel to Europe from January 2000 through 2002 to residents in North America. Leading up to Euro peak in March 2008 and even after a modest decline US and foreign flag carriers should have promoted travel to the US to take advantage of the Euro’s high value against the USD.

So what happens to revenue and profits? Most companies report their earnings in their home country currency – so when the Euro was cheap in 2000-2002 US airlines and hotels would have lost money on sales made in Europe. Hotels offer a good example. Assume Hyatt, based in Chicago, offered rooms in Europe for €130 at the low. That room in Paris, or Frankfurt would have contributed $106 in revenue. Conversely, the same €130 room converted at the Euro high in 2008 would have contributed $205 to Hyatt’s revenue. Same room, same price, very different result – remember the Euro appreciated almost 100% over seven years.

Where are we today? The Euro traded last week at $1.28, an eight percent increase in a few months, but the longer term trend has been down. Pressure from insolvency in Greece, Spain, Ireland, and Italy is mounting. As the European Central Bank implements measures to solve the crisis, it will add downward pressure to the Euro currency value. Barring civil unrest to protest against local austerity measures, travel companies should advertise the relative values in Europe to travelers from the Western Hemisphere. A quick look at the sources of financial tension in many countries, especially youth unemployment rates, leads me to conclude that trip insurance for business or leisure travel is a good idea too. The key takeaway is that Europe is on sale and will remain that way for the foreseeable future.

About the author. Paul Laherty is passionate about problem solving. He led the Americas Air and Hotel consulting teams at Advito, a travel management consulting company. Paul also managed teams in Sales, Marketing and Finance at American Airlines. His work at AA included supervising the global corporate contract team, working closely with large customers in Global Sales, and  managing the Los Angeles sales team where he met some very well-known customers. Paul managed American’s business loyalty program and he launched a loyalty credit card with American Express. He enjoys applying original research (he calls it Phynancial Fisics) to solve problems. Paul lives in Southlake, Texas with his wife and two daughters and flies a Cherokee 140 as often as time allows. He is active on Linkedin where you can view his detailed profile here:http://www.linkedin.com/in/paullaherty, follow him on twitter @Paul_Laherty or send questions to paul.laherty@gmail.com.

Sales & Marketing Travel Management