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Raw Stats Don’t Tell You What You Need to Know

April 2, 2015 By Alex Grgorinic

For those of you who are hockey fans and enjoy watching Don Cherry on Coach’s Corner, it is always interesting to hear the perspective that Grapes brings to a situation. Highly entertaining at times, but often, it is wisdom that is rooted in a lifetime of experience.

One of the stats that always rings loud is that “It is not the number of shots that matters. It is the number of quality scoring chances that matter.”

I love the phrase. It harkens back to the early days of the web when it was all about counting the number of eyeballs that viewed your website. The implication was that some proportion of those visitors would flow through and become customers. But, as the dot-com crash infamously demonstrated, eyeballs do not have a direct correlation to the acquisition and growth of customers.

In marketing and sales, it is no different than hockey, it is the quality scoring chances that matter. This is the statistic that matters the most. Yet when the sales results for a company are not materializing, there is often a parade of numbers from everyone in the mix. All of those whose primary activity it is to contribute to achieving more sales, want to step up.

The talk is all about the number.

The number of flyers distributed. The number of emails sent. The number of phone calls made. The number of customer visits made. The number of demos performed. When the pressure is on, it is all about the number. Everyone wants to be driving up their number, with the “hope” that it will all translate into more business.

But as one of my earliest bosses said to me, “hope” is not a word that works in sales and marketing. It is not a verb we can use. Hope does not advance the sales process. And hope does not close orders. So you better stop hoping right now.

The number that matters most, and gives us the best reason to believe that it will translate to more sales, is the number of “quality” opportunities. And from a business perspective, the question to ask is what makes up that “quality” opportunity? What are the parameters to measure? What are the sequence of activities that will cascade together to arrive at a “quality” opportunity? It is these parameters that will make up a meaningful data set that can be analyzed and used to shore up weaknesses in the process.

Now here is the tough part.

It likely will not be apparent what sequence of activities, or what combination of channels will be the ones that work for you. At the beginning of addressing your market, it makes sense to have some level of activity with several different marketing and sales tactics. But the key is to seek out and monitor the customer journey, and whether your efforts are impacting decisions made along that journey. If they are not, you will not arrive at quality opportunities; i.e. the ones that are closeable.

And even if by some stroke of luck, you set up an effective channel right from the start, there is an undertow. Customer behavior just doesn’t stay the same. You need to keep an eye on it. If things stop producing the level of results that are expected, just increasing numbers will not result in your customers changing their habits in your direction.

Finding the right parameters is the start of building your marketing and sales processes. Tracking them and evolving them is what will enable you to better predict and direct your business.

Filed Under: Demand Generation

The Wheel of Fortune of SR&ED

March 26, 2015 By Alex Grgorinic

If you have had a chance to watch or play Wheel of Fortune, you know that each game starts with an unknown phrase with a set number of letters. It is a puzzle-type of game, where the category of the phrase is given; and then individual letters are chosen by the player. As more letters are chosen, the phrase begins to take shape. As the game progresses, strategies can be used to make the next letter picked a revealing one. At some point, even before all the letters are revealed, it is possible to deduce what the phrase is. Game over. The puzzle has been solved.

As much as Wheel of Fortune is America’s game, SR&ED is Canada’s game for every company that engages in the development of technology-based products.

Being able to effectively compile an SR&ED project report is the end game. If you get this done right, you will maximize your SR&ED refund. And there is nothing like an SR&ED refund. It just gives that incredibly good feeling of found money.

But at the beginning of any development project, who really wants to think about the SR&ED component of the project? It seems counterproductive. After all, SR&ED is not what defines the success of the project. It’s just a nice tax incentive that you really don’t want to miss out on.

So at the beginning, it seems best just to take the Wheel of Fortune approach. The phrase to be solved is blank. And I have never seen anyone guess the phrase starting with a completely blank puzzle. And so it is with the SR&ED pieces of information that will eventually make up the SR&ED claim. You don’t exactly know what they are going to be.

But as your development moves on, those tough-to-solve problems which need to be overcome, will emerge and take shape. And here is where the important part of the game comes along. If you can leave some kind of trace of the technological uncertainties that you are uncovering, it’s value to the SR&ED claim will only grow as you move forward.

On Wheel of Fortune, when a player guesses a letter that is a part of the phrase, Vanna does her job – she turns the letter around. Or rather, in our high tech world, she taps the blank to have the letter appear. And oh how so many people have marveled at Vanna’s job. She turns the letter. That’s it. Of course the implication is, anyone could do that.

But of course, it is such a crucial part to the whole process. The letter must be turned so that it is recorded. Can you imagine if no one recorded the letters as they were guessed? And just went ahead and proceeded, with the foolish thinking that they will remember. Of course they wouldn’t remember. As the game moves on, the whole mental effort and strategy is bound to shift several times. And what was very memorable when it happened, starts to get hazy as things go on.

Your SR&ED process is not so different. When information that will contribute to the SR&ED claim is uncovered, someone needs to do Vanna’s job. Capture a record of it somehow. If you don’t, the details will most certainly start to fade.

When you get to the end of your project, you can compile your SR&ED claim. How onerous the process will be, will be directly related to how much of the puzzle is showing in the traces that you have left. If no one has done Vanna’s job, you will have the equivalent of staring at a phrase full of blank letters within a certain category. You are out of luck. If you are fortunate enough to have a few letters showing in the puzzle, as happens in Wheel of Fortune’s bonus round, you might have a chance depending on the letters. And of course, if you solve the puzzle, you get the money. My suggestion, play to win and record what matters.

Filed Under: SR&ED

No Marketing + No PR = No Name

March 18, 2015 By Alex Grgorinic

Guglielmo Marconi is a name that is synonymous with radio. And while it is true that he was granted the first patent in the UK in 1896 for wireless telegraphy, his ability to secure his place in history as the inventor of radio had a lot more to do with a different set of skills. His recognition as the father of radio had a lot more to do with his promotional abilities, the markets he nurtured, and the strategic partnerships he created, than it had to do with his inventive abilities.

When it comes down to the technological breakthrough, Marconi had introduced the spark-gap transmitter for the purpose of wireless telegraphy. A technology that puts out broadband pulse of energy, with quite an inefficiency. Early wireless telegraph operators had to have headsets that acted like a vice on their heads with ear pieces jammed tight, in order to make out the faint sounds of those weak signals. And this technique itself, relied on the use of an induction coil, invented by Tesla. (But that is a story for another time).

Radio as we know it today – the transmission of voice – was really invented and driven by the Canadian, Reginald Fessenden. But I bet even the contestants on Jeopardy would never know it.

In 1900, Fessenden combined a spark-gap transmitter with a 10 kHz interrupter, in order to generate a continuous AC signal which could have its amplitude modulated by way of a carbon microphone which he put in series. It worked. From his initial breakthrough, he realized that he needed a better source for the continuous AC so he commissioned Westinghouse to build a 100 kHz source. And so was borne the Alexanderson alternator. In 1906, Fessenden made his first voice broadcast which was received by a number of ships at sea. Quite a breakthrough.

So, would you rather talk, or dit dit dit dah dah dit dit… ?

As it turns out, effective promotion had a lot to do with whose name is remembered today. Marconi intuitively knew something about getting people’s attention and interest. One of his great successes was transmitting the race results for yachting competitions to New York City through the early 1900s. It certainly got him noticed and associated with wireless. And breaking major news such as the sinking of the Titanic, associated Marconi strongly as the source of the medium. And although Fessenden’s work drove the development of the Alexanderson alternator, Marconi was quick to adopt it to upgrade his wireless telegraph network.

Fessenden, on the other hand, did not find an effective way to promote his breakthrough in voice communication. And the general marketplace did not see the value. Even though he had on the order of 300 patents, his investors’ myopic vision resulted in the patents being sold to Westinghouse. And so Fessenden’s name is lost in the annals of the patent office and scientific journals of the time. What a shame.

Getting people to listen to your message in one form or another is a big deal. Letting the product speak for itself doesn’t do the trick. Building a following is what is needed. Whether each follower buys the product or not, is just as important as them buying into your message. With each follower you gain, your message gets amplified. And as history has shown, your ability to out maneuver your competition is more than just enhanced, if you are able to hold on to your followers.

Filed Under: Demand Generation

SR&ED Audits – Never What You Expect

March 6, 2015 By Alex Grgorinic

I recently had to go to traffic court to serve as a witness to a traffic accident. Although the case never actually made it to the trial, there were a number of traffic violation cases which served as a source of entertainment during my wait. It was particularly interesting to watch the cases and the variety of defenses.

Purely by coincidence, a friend of mine was the court recorder. So I had a chance to chat about the different effectiveness of the defense representation. The insights were somewhat surprising. There were defenses mounted by lawyers and there were those mounted by paralegals, but I couldn’t tell you who was who. My guess would have been that it was the lawyers who were the ones that were winning. But as it turns out, it was the paralegals who ruled. They knew the Highway Traffic Act inside and out better than anyone.

The whole experience resonated with me and the comparability to the SR&ED audit process. Many first time claimants believe that they are prepared for an audit. The best that I could acknowledge is that they may be ready for an audit. But being prepared is a completely different matter. I would argue that one can only be prepared if they have actually been through the process. It’s a bit like learning to swim. You can understand all the steps. But it’s not until you get in the water that you find out how it really works.

The SR&ED process is not like any audit that you have ever participated in. Whether it be a financial tax audit, or an ISO audit, there is no comparable. The audit process is part of CRA’s business model. Make no mistake about it. It is about the money.

CRA does not mandate any special process to follow in the pursuit of SR&ED. Your regular development processes are just fine. Or so they say. The reality is that you will walk through those regular processes as you seek to show where the qualifying work occurred. During the discussion, the CRA reviewer will be the most engaged listener that you have ever met. And in fact, they may be quite keen about all the work discussed. Unfortunately, in the back of their mind, they are building a case, mostly against you.

The main difficulty is that you are unable to ascertain whether you are winning or losing. Generally, it is an arduous task to recall large amounts of project details that may have occurred on the order of 12 month ago. Hence a great amount of effort is exerted to put together the picture as the auditor continues to probe. And as you are driving yourself to a pretty good level of mental fatigue, you are often putting things in everyday language, that is in fact implicating you in the case of non-SR&ED.

Your great epiphany only comes at the end of the project review, when that highly engaged, highly empathetic auditor presents his opinion against you. And then it is impossible to recover. It behooves you to take an SR&ED audit as a serious threat to your claim. No one enjoys the unexpected persecution. Review your claim with someone who has been through the process. This will help you to sooth the process and maximize your chances. It still is not an easy process, but it is better to have a life vest if you have never been in water before.

Filed Under: SR&ED

Saving Your Way To Prosperity

February 27, 2015 By Alex Grgorinic

Quite a ludicrous strategy.

Yes, I expect that perhaps you have heard stories of individuals who have gone this route. But it really turns life into a meager existence. Saving your way to prosperity can easily translate to starving yourself into prosperity. That measn going without. And going without does not turn you into a strong and healthy being, able to endure the struggles that are thrown your way.

Yes, defence wins games. It preserves your position. It protects your lead. It prevents the competition from taking advantage of you. And when you are under attack, defence saves the day. But you still need to put points on the board to get ahead of the other guys. And at times, offence even turns out to be the best defence.

Business is not about stagnating with the status quo. It is about growing and evolving with the needs of your customers and marketplace. And the nature and quality of your customer engagement efforts plays a pivotal role. It’s about keeping the direct lines of communication flowing. Putting out your marketing messages, your marketing content and seizing opportunities for direct dialogue with prospective customers.

In times of uncertainty, times of slow moving economies, or times of changing economies, there is a force that naturally pushes you into a defensive mindset. But you must remind yourself that the uncertainties do not automatically translate themselves into a period of attack.

In fact, it is exactly this pervasive defensive mindset that can create opportunities that would not ordinarily be there. Many established companies, especially large ones with a lot of moving parts, will be quicker to slow down or lock down. The financial exposure from just one large project, or the aggregated exposure from multiple projects, may just be too risky. And the company may have to hibernate while uncertainty levels are high.

And while the rest of the world is in slow motion, companies that are continually and actively maintaining a market dialogue, can better determine where to invest their efforts.

Let’s take a look at a couple of examples.

The dotcom crash that started in March 2000, gave way to an economic slowdown and recession that lasted through to the first quarter of 2003. Smack in the middle of that major downturn, on October 23, 2001, Apple introduced the iPod. The rest is history. It has completely transformed the company. I still remember Bill Gates being quoted, and saying it in a most astonishing manner: “… And the record labels agreed to that?”, when commenting on the iTunes offer of $1 per song.

And a more recent one.

The sub-prime mortgage crisis started at the end of 2007 and triggered both a financial crisis and The Great Recession which finally broke in June 2009. An 18 month recession, triggered by real estate lending, had spread globally. And again, smack in the middle of it, in 2008, Lauren Rottet quits her firm to start her own international architecture and design company, Rottet Studios. Her colleagues thought she was crazy. Within 4 years, her firm had offices in in New York, Houston, Los Angeles, San Francisco and Shanghai, and had done several iconic hotels.

How did she do it?

Minimized all expenses except for marketing and PR. Could she have succeed as quickly in a normal economy? Maybe not. Her established competitors would more likely have stepped in to prevent her growth.

Your demand generation system, and your sales force, must keep you in dialogue with your market. In slower economic times, both prospective customers and existing customers may be harder to reach. But that is exactly the time when your engagement strategies have to be at their best. Whether there is a turning point in the market, or whether the market is really changing, having effective market communication strategies is what will keep you in the game.

Filed Under: Demand Generation

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