Great Software Systems Need Psychologists and Statisticians

Psychologists and StatisticiansTraditionally the team of people that get together to build software systems consisted of programmers, designers, and system architects. Over the last several years the prominence of designers directing the charge has lead to a dramatic improvement in usability and system interfaces. However, this team is still incomplete.

In order to build a valuable software system we need to include psychologists and statisticians in the development process. Why, you say? Because software requires users to enjoy engaging with the system while generating business intelligence, not just static reports.

The Case for Psychologists

The number one problem with most software tools is a persistent lack of adoption. Whether you blame it on overly complicated interfaces or a lack of technical competency on behalf of the users, the problem is the same. Oftentimes the assumption is made that employees of a business will adopt a software tool because their boss told them to. This is true in the long run, but the length of time it takes to force adoption is expensive and emotionally draining for the development team, managers, and employees themselves. Let’s face it, no one wants to go to a software training seminar to do the job they’ve been doing for 1o years.

Designers frequently adopt the role of the psychologist when they are involved deeply in the planning phase of the software. This is a step in the right direction but it doesn’t lend itself to generating the behavior changed required to push user adoption. Designers naturally make things beautiful. They don’t usually like adding instructional text to help a first-time user figure out a feature. They don’t think about adding a congratulatory statement after successful completion of an action to give the user an emotional reward.

Psychologists spend their time thinking about human behavior, and how to change it. In the world of software development this can include:

  • Cues to take action
  • Encouraging textual statements to build confidence
  • Explanatory text to remove fear of making mistakes
  • Congratulatory statements to create satisfaction
  • Points systems to track and reward performance

The need for psychologists to be involved in product planning and development applies to business and consumer-facing software. Anytime you want to change a person’s behavior, you need to have someone thinking about the real world psychological barriers that inhibit success, and work to address them from the outset.

The Case for Statisticians

Almost every software system in existence has some level of reporting associated with it. Whether the report is a simple CSV data export or a more sophisticated analytical report that merges a few values together, the goal is to create business intelligence. Unfortunately, most reporting tools fall short of creating business intelligence, instead they simply create business information.

We constantly hear about the wide-ranging uses for “big data” and how it changes everything. Many of us are left wondering what this means in our businesses and software systems. A system does not have to involve large data sets to deliver on the promise of business intelligence. What is needed is a more thoughtful approach to reporting and data analysis. That’s where the statistician comes in.

Any business with a customer database could benefit from better data analysis. Things that a business should want to know about their customers include:

  • Source of customer (marketing source)
  • Value of customer (current and lifetime)
  • Satisfaction of customer (likelihood to return and refer)
  • Profile of customer (demographic, income level, geographic location)

This information is usually available from your existing customer database, but the issue is how to pull it together, analyze it, and represent it effectively. Programmers are not suited to design the types of analytical methodologies required to generate this type of business intelligence. Statisticians are best suited to segment customers, determine profiles of likely customers, predict lifetime customer value, and extrapolate the satisfaction of the customer.

A statistician can be brought in to evaluate an existing customer database outside of a software system to give guidance to the business on where to spend marketing dollars, employees to train, and products to recommend. However, the opportunity to drive continuous improvement is built into the product from the outset. The entire set of reporting tools should be architected by a statistician to get the most effective output possible.

Summary

When a big system is being contemplated or built, it’s critical to have the right team assembled to generate the maximum value from the software. Designers, programmers, and system architects need to make friends with psychologists and statisticians. If you are on the buying or building side of the equation, make sure to invest the time and money in these areas. You’ll be thankful when users adopt the software without force or intense training, and when you can make actionable decisions from the output of the system.

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Content Marketing

Content MarketingToday’s small business owner or digital strategist for a larger organization is constantly thinking of how to reach a prospect and convert them into a customer. There are differences in this process when your customer is a business versus a consumer, but in general there are four major steps:

  1. Awareness
  2. Engagement
  3. Purchase
  4. Retention

There are a lot of options when looking at executing this process, some free and some expensive. If you are lucky enough to have a large advertising budget and brand recognition you can afford to ignore tactics like Content Marketing. However, if you are like many small to medium-size businesses that are looking to maximize your return on investment then you have no choice but to embrace content marketing.

Content marketing can take a number of forms and be applied in a variety of marketing strategies. The overall theory of content marketing is that you are going to provide informative or entertaining content to your prospects and customers. Every stage of the customer acquisition cycle can benefit from content marketing.

1. Awareness

Awareness campaigns can be the most expensive part of the customer acquisition cycle. Paid advertising online and offline dominate this area. Social media has made the process of generating awareness much more cost effective for both B2B and B2C organizations. Personally I am not a fan of paid advertising in offline channels such as radio, billboard, newspaper, and television advertising. Unless your budget has several zeros at the end of it, then you don’t have enough money to get a good ROI. Paid online advertizing can be a very effective way to drive targeted leads to your website, where the focus turns to generating engagement from the first visit, otherwise the cost of the click was wasted.

For social media awareness, the key is to use content that drives interest. Almost every business owner will instantly assume that there is nothing interesting enough about their business or industry to generate awareness through social media. And to be sure, it’s easy to see why a link to the Affordable Car Act will not be viewed or shared often. The key for generating awareness on social media is to make sure that the content you are posting or linking to is either entertaining or informative AND relevant to the people you want to attract.  Hilarious cat pictures from Buzz Feed will generate clicks, but not from the people you want to target. There are several ideas on how to post to social media to maximize awareness. Generally in this phase you are trying to get people to Like, Share, Forward, Re-Tweet and Comment. That means that general entertainment or shock-value are more important than deep information, though it must be connected to your industry.

2. Engagement

When a person becomes aware of your organization or product through some type of awareness campaign, it’s then time to push for them to engage. This is where content marketing goes beyond entertaining posts and needs to focus on the needs of the person who has landed on your website, blog, landing page, or email newsletter. Because content is just about the only thing most businesses can easily give away for free, it is the best carrot to use for engaging the visitor.

Some businesses can present a discounted offer for services as the carrot, but oftentimes the visitor is not ready to commit to visiting the business after hitting their page. Even if this is a one-time transaction for something as simple as transmission repair, the visitor is likely to click around and review the content of the website before engaging with the offer.

Almost every business needs to earn the trust of the visitor to their website before a purchase decision will be made. Providing resources is one of the best ways to build this trust and begin a relationship. Downloadable PDF white papers, ebooks, article libraries, video tutorials, infographics, email newsletters, and the like are all great examples of free resources that a business can provide to a visitor to drive engagement. Creating this content requires an investment of time and/or money, but it can live on your website forever. Some businesses will chose to require the visitor to provide contact information before gaining access to the information. This should be reserved for truly high-value content where the visitor is willing to sacrifice anonymity for access.

3. Purchase

A purchase decision is made by an informed person that trusts the business they are about to buy from. If you have not provided enough information or proven your trustworthiness then you have a significantly reduced chance of capturing a purchase decision. Information can be gathered directly from you, your competitors, or third party sources. Providing enough information to allow a visitor to feel educated through your website is the most effective way to avoid losing your prospect to a competitor. Frequently purchase decisions are not made upon initial contact with the prospect. That’s why engagement is so important to keep a person aware of your business and build trust during the process.

Building trust is especially important for web-only products and services. Large companies have built trust over years of serving customers and advertising campaigns. Smaller businesses have a lot more to prove. Website design, navigability, and content all contribute to the feeling of trust that must be established with a prospect before they will pull out their credit card, pick up the phone, or request information.

4. Retention

Everyone knows that it is cheaper to keep your existing customer than it is to acquire new ones. Using content marketing to retain customers is a simple way to stay in front of them while providing useful information. Some products and services may require deeper explanation over time, giving the marketer plenty to talk about via automated emails with instructions, tutorials, videos and more. Other products and services do not actually “need” follow up communication to get the desired value. For these products and services it is all about becoming an authoritative source of information and advice.

This can apply to something as mundane as air conditioning repair. The service was completed and the customer will likely not speak to the business again for many years, if ever. The goal is to get that customer to advocate to their sphere of influence about the great service they received. One way to stay in front of the customer is to send information about saving energy, changing filters, what new models can do for energy bills, etc. There are two goals here:

  • Stay top of mind
  • Give opportunity to forward email to a friend with an offer attached

Keep it Simple

Implementing content marketing does not have to be overly complicated. The idea is to create and maintain a conversation with everyone that comes in contact with your brand. Spending time developing helpful content is time well spent for every business. Take a moment to think about what you do for people and why they look to do business with you, then talk about it. Now let’s start writing!

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Gamification for Business Software

Gamification for BusinessesIf you have been in the business of software product development or just paying attention to technology press, then you’ve likely heard the term, “gamification.” This is just a fancy way of describing the idea of giving small rewards for actions, usually within a digital environment.

However, you could easily say that gamification has been around since the early days of bribing your child. Remember back to your childhood. Think about the times you were offered a treat for cleaning your room, or desert for eating your vegetables. You weren’t receiving a monetary reward, rather a gift that had value to you. Some gifts are easy to identify as valuable, like ice cream to a child. Other gifts may be more difficult to assign value to, like a digital sticker on an iPad app. The underlying correlation is the value the recipient gets from the reward, be it physical or virtual.

This biological desire for reward is being baked into all kinds of things in our life. Every video game ever made gives its users some type of reward for playing. Casinos have mastered the art of coaxing us out of hundreds of dollars so they can “reward” us with a free buffet.

Rewards are also very common in the business world. Sales people live and die by the monetary and status rewards tied to hitting sales goals. Non-monetary rewards are just as common. Think about the “Employee of the Month” award, the “Preferred Parking Space” award, or simply ringing a bell when something good happens. It’s all designed to stimulate workers to work harder for the company to receive a reward that they perceive as valuable.

As today’s worker spends more and more time using software tools, businesses need to find a way to motivate workers beyond giving them more money. Monetary rewards are difficult to give to workers that don’t drive revenue for the company, as it can be very expensive. There are lots of people inside your organization that work very hard processing information, fulfilling orders, answering customer questions, and otherwise making the business work.

The challenge is to create virtual rewards inside business software applications that make the average worker want to do a better job while working inside the software. This is where gamification plays an important role. Oftentimes a worker performs the same set of actions over and over again in a software program. As expected, this can become quite boring very quickly, leading to mistakes and reduced performance. Depending on the sets of actions performed within software, the appropriate gamification mechanism will vary.

Business software typically involves actions such as; data entry, document retrieval, information processing, order fulfillment, information retrieval, reporting, etc. Each of these actions can be tracked for rewards based on speed or accuracy against a set goal. Or if there are multiple workers performing the same task, those workers can compete against each other.

Regardless of the function or method of defining success, the important things to keep in mind when designing gamification into business software are:

1. Alert the user immediately after an action that points are being added or subtracted based on the performance. This is important to remind the user that things are being tracked and will be used in the “game” to reward them.

2. Show the score of the user and their competition. A user should know where they stand against the stated goal or how they compare to fellow office workers. This information should be openly accessible to all workers so that peer pressure and competition drive improved performance.

3. Translate success inside the application to acknowledgement and reward outside the application. Let everyone know who is winning the “game” and reward them accordingly. Rewards can take any form, even a simple congratulatory email distributed throughout the organization. Recognition is a sincere reward to the recipient.

Business owners shouldn’t think of gamification as a gimmick. Instead it should be seen as a productivity tool that keeps workers on task and boosts morale throughout the organization. These techniques can be used in any industry across almost any job function. Let’s get gaming!

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Putting Government Data to Use

SafetyCheck Louisville AppA couple of all-star technical entrepreneurs, Michael Schnuerle and Eric Roland, put together a fantastic app called “SafetyCheck” during this year’s Code for America Hack-a-thon. They won first place in the competition and launched their app for purchase in the iPhone App Store.

This app pulls in updated crime data and runs an algorithm to determine the safety rating of the exact location where the app is being used. Push notifications can be activated to alert you proactively when entering an area with a high score, indicating a large amount of crime. The algorithm takes into consideration the type of crime to weigh more serious offenses heavier. Future updates will account for population density to further refine the rating system.

Michael and Eric have demonstrated how simple tools can be developed to provide insight into the world around us with information that has been difficult to obtain in the past. Michael has been a strong advocate of the Open Data initiatives that are permeating local, state, and federal government agencies. The value of having access to this information may not be immediately obvious, but seeing simple apps like this give us a glimpse into the future use cases of this information.

We still have a long way to go before government information is readily accessible in a machine-readable format. Manual tasks are frequently part of the process today. These manual processes usually involve exporting data from an internal system and then uploading it into another format that is used in applications. Unfortunately this reality is slowing innovation because it limits the scalability of business models that rely on access to this information, especially if it is needed in real time or accessed nationally.

So much of the value in government information is stored at the local level, from individual property records to crime reports to tax liens. Getting this information from the local entities is where the “rubber meets the road” when building applications that rely on it. Before major innovation can happen with products and services that use this data, new tools will need to be created to get data out of local systems more efficiently with fewer manual steps.

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Consumer Facing Business Applications

Consumer Business Application“Every business is a software business.” This statement may be overused but it happens to be true. Just about any organization, from a mom-and-pop business, to a franchise owner, to a healthcare company, to a major corporation, are all using software to improve their business.

Improvement comes in the form of increased worker productivity, streamlined operations between vendors, and improved customer service. At the core of these outcomes is the communication process between the parties, particularly the structured communication required to keep information organized and business moving without the need for complex interpretation.

As consumers we are all familiar with unstructured communication, such as status updates on Facebook,  tweets on Twitter, or emails between individuals. This is free form communication between a couple of people or to a larger audience. This format is expressive and entertaining to engage with. Unfortunately, businesses do not run on free form communication like this. Businesses require structured communications, such as registration forms, applications, questionnaires, and the like. The gulf between these two communication formats is the reason that most software development is either done for businesses or for consumers, rarely for both.

Consumer software applications are all about expressive free form communication that generates engagement from users, whether they are generating the content (writing things or posting pictures), acting on the content (liking, commenting, or sharing), or just viewing the content (scrolling through a feed, looking at pictures, or watching a video).

Business software applications are primarily focused on collecting information (registration forms, applications, or documents), processing information (reviewing data and documents), generating responses (proposals, bids, invoices, and orders), and evaluating results (productivity reports, sales reports, accounting reports).

Today’s most advanced consumer software converts information from business software into a consumer-friendly format that allows for purchasing decisions to be made or inquiries to be submitted. Think travel websites and real estate websites. The consumer is presented with a mountain of information with the ability to sort and filter as desired, then act upon when ready. On ecommerce sites the action is purchasing or preparing to purchase the item. On lead generation sites the action is usually an inquiry.

This consumer action step is the front line of engagement between a consumer and the back end business application. It is in this area that a lot of innovation can happen. I like to build systems where the consumer can go deeper into the business work flow, supplying structured information and completing tasks needed for providing service. This kind of action can happen all at once, like completing an online application for services, or over time, like completing an e-learining course.

The opportunities to enrich the interaction between consumer, business, and other vendors, is where new productivity gains will be made. As the world moves toward self-service tools for consumers in everything from healthcare to legal services, the interactivity provided to a consumer will be at the heart of innovation. The lines between consumer software and business software will be blurred further and further.

Some trends that I am excited about involve a third party service provider that specifically focuses on pushing a consumer through a business process, so that the business has a complete “file” on the consumer they are serving. The goal is to take work of collecting structured information and processing it out of the hands of a business that may not be optimized to do this function. These third party services oftentimes take the the form of a call center with a highly interactive web portal for the consumer, all of which is shared with the business. Just about every industry will likely see these type of specialty service providers appear to help consumers interact with consumer-facing business applications.

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Profile Your Existing Customers First

Customer ProfileCustomer Profiling is a helpful process for almost any business. Segmenting customers based on their common traits and reasons for purchasing is how smart marketers drive more conversions from the same number of leads.

Most of the time the idea of customer profiling is relegated to attracting new leads and customers. However, I’ve noticed a common theme with companies that I have worked with and talk to:

there are thousands of existing customers sitting in a database that have already done business with the company, but no one is bothering to market to them.

I think that customer profiling is a strategy that should start with the existing database of customers. We all know that current customers represent limitless opportunities to up-sell, cross-sell, and generate word-of-mouth referrals. We take for granted that our existing customers will be loyal and that we have already maximized their value by getting them as customers in the first place.

I would argue that the best marketing opportunities that many companies have is with their existing customer database, whom they already know many key facts about. Creating profiles around your existing customers should be relatively simple compared to creating customer profiles around prospective leads. You already know who they are and what they bought. You’ve got the answers to the test in hand.

So let’s say you create these general profiles from your database of several thousand existing customers. Some of those profiles are going to stand out as up-sell opportunities, some for cross-sell opportunities, and then there will likely be a larger group that won’t fit either of those categories. This could be especially true if your product or service is infrequently purchased, i.e. insurance, mortgages, automobiles, etc.

After going through the work of creating profiles, now the fun begins: messaging and communicating.

Creating multiple messages and segmenting the communication of those messages to your contact database is not a small task. No message can live on its own. There needs to be a string of communication and relevant resources to allow those who are interested to walk down the road to becoming a bigger customer. It is pointless to create a single advertisement that targets a customer segment, then push a call to action in the same way you would for a brand new lead. You have to put in the work to create the message and the sales funnel to take your reengaged customer from piqued interest to repeat buyer.

The same holds true for the larger group of customers that are not obviously looking to buy more from you themselves. Your objective for this group is to get a word-of-mouth referral within their group of friends. This may take the form of a piece of content that can be easily posted as a Facebook status, or it may be a referral discount code, or maybe even as subtle as a prompt to email a resource to a friend. Certain segments of customers are going to be more responsive to this kind of messaging. In general, females are much more likely to talk about a positive experience with a friend or directly share a resource with someone who is looking for a solution. This is pure gold for you.

This strategy of profiling your existing customers is going to require upfront work in analyzing your customer data, extrapolating the cause of their purchase decisions, then creating appropriate content for each segment. You have to be willing to commit to spending the time, and probably hiring the talent to make this idea become reality. Most businesses, especially those with a big customer database that hasn’t been put to use, don’t have the in-house talent to pull this off. At the end of the day, this is a data-driven content marketing strategy. And it’s a very good one.

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Three-Stage Responsive Websites

Let me start by admitting that I am a junkie, of the Marketplace variety. For those of you that haven’t listened to the best business radio/podcasts out there, you should. Marketplace is part of American Public Media and plays on NPR, though I most frequently listen through my Stitcher iPhone app. It is highly informative and very witty.

While listening recently the host mentioned their “spiffy new website.” I rarely go and check out websites, but I felt I should see what was so “spiffy” about it.

Like all news sites they have articles, pictures, audio, and some video. But, what was most impressive about their updated website was its “responsiveness” to the size of the browser viewing it.

Responsive websites are the latest approach to accommodating the variety of screen sizes used when surfing the web. Surprisingly few major websites have adopted this strategy to adjust the display formats of their content. I tested all the major TV networks and have not seen one yet.

What really impressed me about the Marketplace website was that it not only had a viewing mode for a full size screen (laptop, desktop, full-size tablet) and a mobile screen, but it also had an intermediary size for in-between devices. Think iPad Mini, Kindle Fire, Samsung Galaxy Tablet, or even the very awkward “phablets” that are becoming popular.

This three-stage responsiveness was something that I had never seen before. It was well executed with easy-to-read content and well-positioned and sized photos, along with logical navigation options. Whoever built their new website was really forward thinking and should be commended for the effort. I’m going to stay on the lookout for more three-stage responsive websites and plan to develop projects this way in the future myself.

Full Size View

Full Size View

Tablet View

Tablet Size

Mobile View

Mobile Size

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DIY Recommendation Engine

Reccomendation EngineI was recently talking with a young entrepreneur that is working on an exciting project in the men’s fashion space. One of the important characteristics of the project is creating a detailed profile of a user’s preferences.

I don’t know the first thing about fashion, so I wouldn’t really know where to start if I were trying to create the framework of the user profile. The concept of using data collected during interactions on a website to personalize recommendations is not new, but it is very challenging. Netflix is famous for its recommendation engine, especially the million-dollar contest it ran to crowdsource a more accurate version.

As we talked about issues specific to his new company, my mind started to wander a bit. I started thinking about the process of learning a user’s preferences. It can be a lot of work to assume preferences based on clicks and hovers.

Maybe the value of the recommendation is strong enough to ask the user to tell us what she likes and doesn’t like. What if the process of describing her preferences was part of the fun? For items that can be visually represented, why not use a simple gamification approach like the old Hot or Not website, where a user selects photo A or photo B as their favorite?

We all know the addictive nature of looking at pictures online. It’s the core of almost every popular consumer website. If I were presented with a sequence of images and asked to pick my favorite, I would almost certainly participate. This is doubly true if I were interested in seeing what was recommended for me. Sure I’m doing the work of data mining for the website, but it doesn’t feel like work, so why not.

There are thousands of businesses that could benefit from understanding their potential or existing customers’ preferences. This would allow them to focus their marketing efforts to deliver the best reward to the ideal customer every time. One of the biggest obstacles to doing this kind of targeted marketing is finding out what current and potential customers actually want. Perhaps using an entertaining methodology of gathering those preferences would streamline the collection of this information.

If Facebook has taught us anything, it is that we are willing to publicly announce who and what we like. From friends to brands to articles, there is no limit to our desire to express our opinion about the things we are presented with. Product developers and business owners that want to make personalized recommendations can get started by making the process of expressing ourselves as fun as liking photos on Facebook.

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Public Speaking – Forget the Notes

Public SpeakingIt is frequently referenced that the number one fear of most people is public speaking. I am not one of those people. I enjoy getting in front of a group of people and delivering a passionate speech – it’s quite fulfilling.

I am a member of a local Toastmasters group here in Louisville, which gives me a great opportunity to speak about a variety of topics, almost none of which are about work. The best part about this group is the detailed feedback that is given. This is the kind of thing that doesn’t happen in traditional speaking environments. No one cares enough to tell you that your hand gestures were distracting, or your eye contact was lacking, or your vocal variety could use work. This kind of feedback can dramatically improve your skills and confidence.

Recently I tried an experiment with a couple of speeches that I had to give over the course of consecutive weekly meetings. I discovered something about the preparation process that had a big affect on my confidence and delivery.

I should add a small disclaimer. I never bring notes of any kind with me when speaking. I find that written notes are a distracting crutch that inevitably leads to an awkward moment of trying to find your place in your notes to remember your next line. Secondly, I am notoriously bad at preparing speeches for my Toastmaster group. I frequently write my speech at 10pm the night before, and then usually finish it up very early in the morning. This being said, I don’t spend a lot of time rehearsing.

The first week I tried the classic preparation process of writing out my speech, every word that I wanted to say. I then worked diligently to commit to memory the six minute speech, focusing on specific lines and transitions. I truly wanted to recite the speech as I had written it. As I awaited my time to speak I scrolled through the speech on my phone, desperately trying to recall the lines. My stomach was turning and I was more apprehensive then I have been about speaking in quite some time.

When I stood in front of the podium and started my speech I could tell what was about to happen. About four lines in I completely blanked out on a sentence. It was at this point that I decided my plan to recite the speech verbatim was never going to happen. In order to get through this speech without letting the audience know what was happening, I reverted to my standby method of freestyle speaking. I made my way through the speech, making a number of the points I had planned to make, though with less colorful language and twists of words.

The final result was a success based on the feedback from my evaluator and the audience notes. Inside, however, I was a mess. I was so disappointed that I was not able to recite a speech that I had written when actively trying to do so. It was frustrating and I didn’t want to feel this way again.

The next week I decided to take a different approach. Knowing that I am far more comfortable delivering a speech where the exact words I use are not completely preordained from the written version, I would adapt my preparation accordingly. True to form, I started working on the speech at about 10pm the night before. However, this time I did not write the speech out word-for-word. Instead I created a detailed outline of the speech, including a few key phrases I wanted to be sure to recite.

The writing process took significantly less time. The rehearsal process was also different. I practiced the speech a couple of times out loud in my car before the meeting (which is at 6:45am). Of course, each time I went through it, the content was a bit different. I was creating transitions and statements on the fly, not simply reading what I had written. It felt quite a bit different to only commit the outline to memory instead of the entire text of the speech.

During the delivery of the speech I found the format to be liberating. I felt confident that I could go through the outline without getting bogged down with specific wording that would clutter my thinking. The freedom could be felt by the audience through my increased use of vocal variety, dramatic pauses, and direct eye contact. The entire experience was so much easier and less stressful.

I walked away from the second speech with definitive proof that the best way to write a speech is with an outline, not in long form. It takes less time to write, less time to remember, and allows for more creativity during delivery. Giving a speech may still be frightening to some, but the preparation doesn’t have to be.

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Pitch the Customer First

Pitch the CustomerThe concept of the Lean Startup has been spreading like wildfire throughout the entrepreneurial community. More than anything the idea is to develop the customer before you develop the product. This is the opposite of “build it and they will come” (sorry Kevin Costner).

Companies of all sizes can learn from this theory when developing a new product, business unit, or updating existing products. Part of the challenge of developing the customer before developing the product is that you must actually pitch an idea to a real life potential customer, then refine the idea until they are willing to commit to purchase – all done before you have anything “real” to show.

Of course there are ways to augment this pitch to build confidence in the mind of your customer that your idea can become real. You can do this most readily with good visuals. Visuals may entail blueprints, work flow maps, screenshots (Photoshop only), or other multimedia presentations. The less relationship you have with the potential customer the more you will have to prove yourself with visuals. If you are simply trying to sell a new widget to an existing customer who already trusts your company, then simply discussing the product idea can suffice.

The key is to get the value propositions figured out based on what the customer actually wants to buy, not what you want to build or sell. This means that initial ideas may have to be scrapped or dramatically changed based on what is learned while pitching the customer. For entrepreneurs and intrapreneurs this can be emotionally challenging, as we frequently invest a lot of thought and passion into our product ideas.

I recently had an opportunity to ask a few (very) early-stage entrepreneurs to pitch their products to “customers” to see if they could verbalize the value proposition and really answer the questions posed by the customers. Of course this exercise didn’t include real customers, but the experience was helpful for everyone, especially the entrepreneurs who had to get their messaging down to the details instead of generalizations used when pitching to potential investors and mentors.

You can read a bit more about the Open Coffee event on Insider Louisville here.

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