The Age of Alexa: Is it time for contractors to join the AI revolution?

“First they ignore you, then they laugh at you, then they fight you, then you win.” 

“Alexa play lullaby music.”  “Alexa, what’s the weather going to be like this weekend?”  “Alexa, add milk to the grocery list.”  “Alexa, find me a plumber . . .”

This morning I asked Alexa to find me an HVAC contractor.  Alexa provided three recommendations.  None of them were the “big” players in town.  Traditional SEO practices would have provided predictable, seemingly nepotistic search results.  Not Alexa.  Alexa’s criteria is notably different than other search engines. Alexa is not a “pay to play” info-system.  Alexa’s criteria are democratizing search results in favor of the consumer rather than the search engine.

My family uses artificial intelligence for simple things like playing bed time music for our daughter.  We are starting to test it for slightly more complicated tasks such as ordering groceries or finding a service provider.  We are one of over 50 million households who have seamlessly adjusted to our talking black tube (has anyone questioned the weirdness of that?).  That number–50 million–is forecasted to double by 2020.  Contractors should take note.  AI is re-shaping lead generation and the relationship between consumers and technology in as much as e-commerce is challenging the power structure between businesses and consumers.  It is time for contractors to consider capitalizing on the potential advantages of AI as a lead source that customers trust.

Alexa, Cortana and similar AI devices utilize unique criteria when recommending products and services.   For example, Alexa will only give a contractor’s website consideration if Amazon has certified the site metrics.  Sound fishy?  Don’t you have to basically open your books to participate in certain box store programs?  Here’s the link if you’re interested in certification: https://support.alexa.com/hc/en-us/articles/200450354.  Non-certified web sites will not be considered as a search results option.  Additionally, Alexa’s algorithms give preference to contractors who are participating in its home services program.  Non-participants will most likely not be considered or be given tertiary attention at best.  Low traffic websites will not be well ranked.  Finally, Alexa considers three months worth of unique visitors and page views in order to determine a “Long Tail” score.  Information about the importance of the “Long Tail” effect can be found here: http://www.longtail.com/about.html

At this time Alexa is brand agnostic.  Notably, so are most HVAC consumers.  Alexa doesn’t care if a contractor is affiliated with a dealer loyalty program.  Alexa doesn’t read Consumer Reports.  Alexa cares about consumer behavior more than contractor of manufacture talking points.  It evaluates contractors from the consumer’s point-of-view.  Alexa recommends a business based on traffic, the company’s site metrics, and the Long Tail behaviors.  This may very well be the new face of lead generation: Populist optimization.

For the time being manufacturers and their marketing partners will be flummoxed by AI.  Some companies have already built relationships with Amazon and others, attempting to embed their home control devices with AI.  That’s a good start providing that contractors operate in a manner that is compliant with AI discovery criteria.  For now the dog is still wagging the tail.

Two days ago I asked a friend if he’d consider joining an AI home service group.  “I’m already in X, Y, and Z” box stores and I don’t need another expense,” he said.  It’s a valid point.  Box store programs are incredibly costly without considering the additional management and personnel requirements that owners are expected to assume.  Leads generated via artificial intelligence devices represents potential cost savings–reduced staff, paperless processing, and speedy on-line payment systems.  It may also represent another version of subjugation for the contractor who refuses to see a lead as the point of entry in to a cross-selling and long-term relationship with the consumer.  Consumers are increasingly attracted to seamless, high-touch purchase experiences.  I’m unconvinced that box store lead generation and sales models satisfy those descriptions.  As box stores stridently adopt e-commerce options I’m not sure they are either.

I remember when box stores started selling heating and cooling equipment.  There were a few smirks and a few skepticisms.  We all know how that experiment worked out.  Most of you reading this remember the bomb-drop effect that Nest had on the HVAC industry as well as its frantic response to a non-traditional competitor (despite a bevy of beneficial functions the industry has yet to market their products with similar efficacy).  AI represents another non-traditional shift in the HVAC industry.  It may also be the next iteration of the box store.  Amazon is playing a long game.  They have what every business wants: incalculable amounts of consumer data.  Contractors need to decide if they are ready to integrate artificial intelligence in to their marketing and advertising strategy.  Personally, I think it’s time.

 

Podcast #10: Felicia Simmons is one of the best Territory Managers in her company (and probably the country).

For this week’s podcast I interviewed Felicia Simmons.  Felicia is a Territory Manager and a recent recipient of her company’s “Top 10” award–an award given to the top 10% of salespeople nationwide.  In other words, she’s very, very good at her job.  In this podcast we talk about empathy, new business, and the best practices she utilized in order to be one of the best (as well as what to do with your career after that happens).  I hope you enjoy it and thanks for listening.

Matt

 

Facebook is a Flaming Dumpster but Your Business Should Stick with It.

“The question isn’t ‘What do we want to know about people?’, it’s ‘What do people want to tell about themselves?'” — Mark Zuckerberg

“Distraction serves evil more than any other mental state.” — Stefan Molyneux

I don’t think anybody was shocked to learn about the data scraping scandal and subsequent Congressional hearings.  Mr. Zuckerberg’s behavior during the hearings  confirmed many people’s opinion that he’s very similar to his character in The Social Network–an insecure, spiteful, and lonely genius.  Our society is already facing a loneliness problem and Facebook only seems to make it worse:  https://www.psychologytoday.com/us/blog/talking-apes/201801/does-using-social-media-make-you-lonely.

Furthermore we cannot ignore Facebook’s literally murderous potential.  Every Facebook user is complicit to a degree:

“A squirrel dying in front of your house may be more relevant to your interests right now  than people dying in Africa.” — Mark Zuckerberg

Facebook is not apolitical.  You cannot use the platform and exonerate yourself from the fact that it was used and is used to foment mass murder in Myanmar:

https://www.cnn.com/2018/04/06/asia/myanmar-facebook-social-media-genocide-intl/index.html

Consider the following letter written directly to Mark Zuckerberg on behalf of various Myanmar human rights organizations:

“Dear Mark,

5 April 2018 Yangon, Myanmar

We listened to your Vox interview with great interest and were glad to hear of your personal concern and engagement with the situation in Myanmar.

As representatives of Myanmar civil society organizations and the people who raised the Facebook Messenger threat to your team’s attention, we were surprised to hear you use this case to praise the effectiveness of your ‘systems’ in the context of Myanmar. From where we stand, this case exemplifies the very opposite of effective moderation: it reveals an over-reliance on third parties, a lack of a proper mechanism for emergency escalation, a reticence to engage local stakeholders around systemic solutions and a lack of transparency.

Far from being an isolated incident, this case further epitomizes the kind of issues that have been rife on Facebook in Myanmar for more than four years now and the inadequate response of the Facebook team. It is therefore instructive to examine this Facebook Messenger incident in more detail, particularly given your personal engagement with the case.

The messages (pictured and translated below) were clear examples of your tools being used to incite real harm. Far from being stopped, they spread in an unprecedented way, reaching country-wide and causing widespread fear and at least three violent incidents in the process. The fact that there was no bloodshed is testament to our community’s resilience and to the wonderful work of peacebuilding and interfaith organisations. This resilience, however, is eroding daily as our community continues to be exposed to virulent hate speech and vicious rumours, which Facebook is still not adequately addressing.

Over-reliance on third parties

In your interview, you refer to your detection ‘systems’. We believe your system, in this case, was us – and we were far from systematic. We identified the messages and escalated them to your team via email on Saturday the 9th September, Myanmar time. By then, the messages had already been circulating widely for three days.

The Messenger platform (at least in Myanmar) does not provide a reporting function, which would have enabled concerned individuals to flag the messages to you. Though these dangerous messages were deliberately pushed to large numbers of people – many people who received them say they did not personally know the sender – your team did not seem to have picked up on the pattern. For all of your data, it would seem that it was our personal connection with senior members of your team which led to the issue being dealt with.

Lack of a proper mechanism for emergency escalation

Though we are grateful to hear that the case was brought to your personal attention, Mark, it is hard for us to regard this escalation as successful. It took over four days from when the messages started circulating for the escalation to reach you, with thousands, if not hundreds of thousands, being reached in the meantime.

This is not quick enough and highlights inherent flaws in your ability to respond to emergencies. Your reporting tools, for one, do not provide options for users to flag content as priority. As far as we know, there are no Burmese speaking Facebook staff to whom Myanmar monitors can directly raise such cases. We were lucky to have a confident english speaker who was connected enough to escalate the issue. This is not a viable or sustainable system, and is one which will inherently be subject to delays.

Reticence to engage local stakeholders around systemic solutions

These are not new problems. As well as regular contact and escalations to your team, we have held formal briefings on these challenges during Facebook visits to Myanmar. By and large though, our engagement has been limited to your policy team. We are facing major challenges which would warrant the involvement of your product, engineering and data teams. So far, these direct engagements have not taken place and our offers to input into the development of systemic solutions have gone unanswered.

Presumably your data team should be able to trace the original sources of flagged messages and posts and identify repeat offenders, using these insights to inform your moderation and sanctioning. Your engineering team should be able to detect duplicate posts and ensure that identified hate content gets comprehensively removed from your platform. We’ve not seen this materialise yet.

Lack of transparency

Seven months after the case mentioned, we have yet to hear from Facebook on the details of what happened and what measures your team has taken to better respond to such cases in the future. We are also yet to hear back on many of the issues we raised and suggestions we provided in a subsequent briefing in December.

The risk of Facebook content sparking open violence is arguably nowhere higher right now than in Myanmar. We appreciate that progress is an iterative process and that it will require more than this letter for Facebook to fix these issues.
If you are serious about making Facebook better, however, we urge you to invest more into moderation – particularly in countries, such as Myanmar, where Facebook has rapidly come to play a dominant role in how information is accessed and communicated; We urge you to be more intent and proactive in engaging local groups, such as ours, who are invested in finding solutions, and – perhaps most importantly – we urge you to be more transparent about your processes, progress and the performance of your interventions, so as to enable us to work more effectively together.

We hope this will be the start of a solution-driven conversation and remain committed to working with you and your team towards making Facebook a better and safer place for Myanmar (and other) users.

With our best regards,”

I was hopeful during the Arab Spring.  The promise of a grass-roots digital uprising was inspiring.  I don’t feel that way anymore.  We’ve all been duped.  Google and Twitter will also probably come under investigation.  Hopefully these organizations will sincerely begin to live their principles, adopt a pay-per-use format, or agree to institute internal and external oversight.  Or, as Google claims, “Don’t be evil.”

Considering Facebook’s irresponsible and complicit violation of individual data, why aren’t businesses running from Facebook?  Should you run?  Mozilla and Pep Boys have announced that they’re pulling their spending.  But that’s about all I could find.  Businesses in general are giving Facebook a pass.  “We at Clorox stand by Facebook as an essential partner in building our brands,” said Eric Reynolds, CMO.  AT&T, Proctor & Gamble, Verizon, PepsiCo have all decided to stick with Facebook.

Perhaps these companies differentiate the relationship an individual has with other users rather than individual users and brands.  More likely is that these companies believe that demonizing Facebook is wrong because it could have been any platform, any user base.  More likely, and hopefully, Congressional hearings will create real accountability–“Sunlight is the best disinfectant.”

It’s too early to see if the #DeleteFacebook movement will find traction.  It feels lightweight–if 50 million users quit there’d still be another billion regular users from around the world, in places where social communication is important.  There are too many people who don’t feel an affront to the Cambridge Analytica controversy.  There are too many people who say, “Go ahead and take my data, I don’t have anything to hide.”

To its credit Facebook has already taken action.  Last week it announced that it would remove ad targeting options that rely on consumer data from outside companies.”  Given Facebook’s dominance, they probably don’t need outside data for ad targeting.

For businesses, Facebook will continue to be another means of extending their brands with connected consumers.  Facebook branding helps a business create a holistic view and connection of their consumers.  Well-told brand stories improve loyalty among target demographics.  The Cambridge Analytica controversy will pass–it will not dent Facebook’s dominance.

Ultimately, business owners will have to come to terms with privacy and personal data issues on their own–reconciling the risk and reward and return.  For me and many others it business owners it leaves the question: Is it better to work with the devil that you know than the devil that you don’t?

 

 

 

Selling is Storytelling

“Storytelling reveals meaning without committing the error of defining it.” — Hannah Arendt

The first 30 seconds of Star Wars Episode IV.  The first ten minutes of Raiders of the Lost Ark.  The music in Jaws.  Unforgettable ways to tell incredible stories (which may be both dating myself as well as admitting that I’m a fan of 70’s classics).  Any  film maker’s goal is to tell the best story out of pride or artistic sensibility as well as to keep the audience talking about the film and seeing it repeatedly.

Storytelling is the best and most underutilized method of selling something.  It’s narrative, engaging, educational and immersive.  Storytelling replaces the obvious “feature, function, benefit” method with collaboration and the tacit participation that occurs between the storytelling and the listener.  As such the listener becomes part of the production, co-creating the meaning.  It’s also enjoyable to listen to a well told story.

If you’re looking for a better way to sell your products, try replacing the traditional pitch with a five step storytelling process:

Start by asking yourself: “How are people using my product?”  Consider the various ways in which they are not only using the product but enjoying the product.  For example, they may have purchased the product in order to save money.  But how does saving money make a person feel?  Responsible?  Smart?  Safe?  Remember, people don’t buy products, they buy how products makes them feel.  Start with the feeling.

Next, when have your customers experienced a “moment” when they know they’ve made a great decision buying your product?  Was it when they came home from a long day at work and their home feels perfectly calm and cool?  Was it when they opened a utility bill and realized they’d saved money that month?  Was it when they opened their phone and accessed the product remotely?  Every customer has a moment when they smile and silently say to themselves, “This was a really good decision.”  Isolate one of those moments and use it to introduce the conflice.

Conflict is the basis for action.  The second step in storytelling is to identify the problems that your customer wanted to resolve before meeting you.  This is the conflict: The customer wanted X and had to resolve Y in order to accomplish their goals.  Be specific.  Use a true-to-life scenario.

Third, how did the customer find you and your product?  What brought you together?  Why were they interested in your product or your company or yourself?  Clearly there’s something preferential about this process and this is your chance to highlight that preference (not in a boastful manner, please).

Now it’s time to let go of the “FFB” part of the story and replace it with a description–not of valves and motors–but choice and reason.  Remember the old adage: “People don’t buy a two-inch drill bit, they buy a two inch hole.”  Talk about choices your customers have made and the reason behind those choices.  The reasons will be logical and emotional.  Here’s what they won’t be: technical.  Furthermore, this illustrates the correlation between price and value without you having to do the tedious work of explaining it to the customer.

Finally, your story will have a resolution.  This is the impact of using your product.  Ideally it will be expressed in terms of a return: time, money, convenience.  It’s always positive.

As a young salesman I was taught to sell benefits rather than features or functions.  It’s still ok advice assuming that you’re familiar with the product and use it on a regular basis.  Selling the benefits of a new car makes sense because the customer most likely has a base line for conceptualizing improvements.  Selling benefits is more difficult if the customer doesn’t have prior experience with the product.  At that point benefits become esoteric–so we look for comparisons (gas mileage, dimmer switches, etc).  Comparisons are fine but they still assume the customer is interpreting them accurately.  Stories are the best.  Based on real-life scenarios an inexperienced customer can project himself in to the narrative.  Told well, stories carry emotional heft that’s otherwise lost by comparison or data.  Stories are immersive in that the customer will project himself in to the conflict.  And we all appreciate a story that ends well.  There’s relief.

Before you sit down for your next meeting consider the audience.  You’ve hopefully gained their attention.  Ask yourself: What are they most likely to be interested in?  Another one-dimensional product pitch or a four-dimensional, well told story that illustrates the product without committing the error of defining it.

 

 

Editorial Update/Correction: E-Commerce for contractors is happening right now. My interview with Justin Riley.

CORRECTION: My original blog post had an incorrect URL for Mr. Riley’s e-commerce website.  I have included the correct address here:

http://www.diycomfortdepot.com

Thank you and apologies to Mr. Riley.

I’m very excited to share this interview with you.  The guest is Justin Riley.  Justin is at the forefront of contractor-driven e-commerce sales.  In the podcast we discuss his journey in to the e-commerce world, the lessons he’s learned as well as how  e-commerce is re-shaping his sales and customer service model.  With all the current “sturm and drang” regarding this topic I encourage you consider the impact that e-commerce will have on your company in the near future.

Thanks for listening,

Matt

Please note: there are a few scratchy parts of this interview because I was recording because of my phone connection at the time.

 

“If young people love it then it’s the future.” E-commerce becomes a mandate for contractors.

 

The World Economic Forum at Davos is underway.  This morning a panel of experts including Jack Ma spoke about the importance of e-commerce in small businesses.  His remarks forecasted the e-commerce future–one in which smart contractors will be viable and thriving because of their e-commerce capabilities.  To be even more clear: e-commerce is a mandate and the next small business accelerant.

Contractors are often reluctant to accept the idea that e-commerce is feasible.  It’s time to let go of doubts or skepticisms.  E-commerce is happening.  The question a contractor needs to be asking is: “What are the implications if I sit this one out?” or “What will my life look like if a manufacturer sells products directly to the consumer?”  As Jack Ma put it, “If we cross our arms e-commerce is going to belong only to the Big Guys.”  

Consider the fact that in 2016 Amazon accounted for 53% of on-line retailing.  Or that Alibaba generated 750 BILLION dollars in revenue in 2017.  While Toys ‘R Us announces additional store closures and Nordstrom is downgraded because of their worst financial performance since 1972, a 29 Filipino woman named Theresa Fernandez-Ruiz builds Rags2Riches as a way to help community artisans sell low-cost products around the world.  Theresa Fernandez-Ruiz made the Forbes 30 under 30 list last year.

“Imagine if the barriers to doing business aren’t there.” — Theresa Fernandez-Ruiz

Everyday contractors deal with the clunky process of generating leads, dispatching sales people, service technicians, calling customers, following-up, installing equipment, servicing equipment, repeat, repeat, repeat.  E-commerce simplifies many of the traditional customer service and sales processes.  And while the applied side of the industry will be resilient to tectonic shifts contractors who want to capture an early advantage should take heed: Business as usual isn’t going to last forever.

“E-commerce is going to replace traditional ways of doing business.” — Jack Ma

There is a generational shift happening as well as a shift in the ways consumers rely on e-commerce to simplify their lives without a middle-man.  People in their 20’s and 30’s are buying homes and making home improvements.  They are digital natives and will be so forever.  Raised on e-commerce platforms, many view the traditional purchase process as a nuisance.  Contractors should use e-commerce to increase accessibility and ease-of-use among these buyers.  Equally important is the fact that e-commerce is a perfect growth engine for small businesses who can act nimbly, monetize their web platforms, and create an entirely new level of consumer engagement in order to capture a broader audience.

“This (e-commerce) is for young people and small businesses.  If young people love it then it’s the future.” — Jack Ma

All of this–e-commerce, the internet of things, direct-to-consumer selling–it’s all daunting.  But it’s here and any contractor who wants an advantage in the market should quickly move in this direction.  It challenges all of the traditional talking points, from quality control to workmanship, to the necessity of a sales team, to the manufacturing of equipment itself.  But have these talking points really worked?  Have they really been so earth shattering that they cannot be rewritten or in some cases abandoned?  Most likely  the contracting industry is going to learn how to layer these stories within their e-commerce platforms.  People want quality products, a low-hassle experience, and a price-to-value ratio that makes sense.  Ma’s closing remarks at Davos provide a snapshot of this new world:

“In the future there won’t be ‘Made in the USA’ or ‘Made in China.’  There will only be ‘Made on the internet.’

Empathy, Listening, and the Small Business Roller Coaster.

Very few B2B professionals that I’ve worked with have owned a business.  It matters in that this inexperience may truncate an understanding of the volatility inherent in small business.  As Phil Knight wrote, “For an entrepreneur every day is a crisis.”  That’s an important thing to keep in mind.  It should change the way you sell.  When you ask for a customer’s time you’re asking them to not do something else–and there’s a cost associated with that detraction.  Talk a whole lot less.   Listen for understanding and respect that their agenda (stay alive and grow) may be different from yours (buy my products).  Don’t ask glib questions.  Ask well-prepared questions and take excellent notes.  Follow through like your life depended on it and honor 100% your commitments.  Don’t show up empty-handed to a meeting.  Swag does not a meeting make.  Share provocative content that improves their business in some way.  Be incredibly easy to do business with.  Learn how your customers make money.  Thicken your value by deepening your empathy and improving the quality of your engagement.  Go on the roller coaster ride with them instead of standing on the sidelines.  That may not having anything to do with features, functions, or benefits.  But it will eventually.

Amazon 20 Years Ago

Jeff Bezos at his desk 20 years ago.  Everyone starts somewhere.  Keep going.

In-N-Out Burger Beats Google (and nearly everyone else)

The apotheosis of burger meals.  The double double with fries and a medium drink.  Costs you about seven bucks.  Simple ingredients, simple philosophy: Great food + great people = Great results (total sales in 2016 estimated between 640mm and 700mm).  This year In-n-Out Burger was rated the 4th best place to work in 2018.  Only Facebook, Bain & Co., and Boston Consulting were higher on the list.  It beat Google (who has a regular series of happiness meditations, free food, and insane salaries).  It beat all the heavy-hitters.  The closest fast food competitor on the list is Chick-fil-A which landed at #72.  Here’s the complete list of results:

https://www.glassdoor.com/Award/Best-Places-to-Work-LST_KQ0,19.htm

In-n-Out practices Richard Branson’s philosophy: “Clients do not come first.  Employees come first.  If you take care of your employees they will take care of your clients.”  Here’s how In-n-Out takes care of its employees (and what the service industry can learn):

1.  Progress.  Build a workforce of managers.  The right type of employees won’t chop onions forever.  In-n-Out looks for and hires people who want to improve personally and professionally.  That means that they’ve had to create and design career paths for their employees.  80% of their managers began at the bottom of their ladder.  Moreover, people are less likely to leave a company if they know there is a path–advancement.  The opportunity to advance is a form of hope.  Hope is fuel.
2. Compensation.  From the very beginning In-n-Out has always prided itself on taking care of its employees in terms of above-average compensation and job security. In an industry in which a significant number of employees live at the poverty line In-n-Out understands a simple fact: Well compensated employees can pay their bills, save a little, are happier and loyal.  Moreover, progress and compensation are joined at the hip.  In-n-Out managers are reported to earn six figure incomes.
3. Flexible Scheduling and Benefits.  From day care to co-parenting plans to second jobs, In-n-Out is known as a company that works with employees to find  schedule that accommodates their other demands.  According to Glassdoor this is one of the most appreciated benefits.  They also offer a 401K, profit sharing, paid vacations and free meals.
4. Organizational Expectations.  In-n-Out clearly defines their dress codes, customer service expectations, food handling, and the enthusiastic customer-centric attitude that has kept the company profitably expanding for over 50 years.  Do them expertly and a person can have a rewarding career with In-n-Out for a very long time.  A set of standards that are relative leaves a company’s brand open for interpretation (and aren’t really standards at all).

You may be reading this and thinking “My company does ALL of those things!”  It’s true that the service industry can offer a nice career to a person.  This is something that we keep a very well hidden secret.  We talk about a shortage of great employees but don’t hold ourselves accountable enough.  In order to make the trades attractive and deliver world-class service we have to start asking ourselves:  Am I hiring people that want a career or am I hiring people who need a job?  Am I building a workforce of managers?  Do my employees understand the performance expectations required to advance?  Am I profitable enough to pay above average wages?  Are there non-traditional benefits that I should be considering?  Are my customer service standards set clearly communicated, modeled, and reinforced or do I tolerate certain deviances?  Does my team know the purpose of my business (the real one, the deep one, the one that isn’t cliched)?

In-n-Out is the 4th best place to work in The United States.  It’s a family company that understands a simple truth: The quality of your Customer service is a reflection of how your employees feel about working for you.  That’s In-n-Out Burger’s secret sauce.

 

Podcast #8: Pat Minegar, The Obi Wan Kenobi of the HVAC industry.

Pat Minegar is the owner of A-1 Heating in Boise, Idaho.  Pat is a thoughtful and wise business owner.  In this podcast Pat shares his experience developing high-performing teams, leadership, and mentoring sales managers.  It’s a great interview and I hope you enjoy it!