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|In: Policies and Procedures|Last Updated:

Journalists and professional marketers know that if all the statistics in the universe were piled in a stack, the whole awesome mass of them would lack the persuasive punch of a single anecdote. Why? Because most people, for most issues, make decisions emotionally and use logic to justify their emotional decision.

Anecdotes appeal to the emotions. Statistics appeal to reason. It’s not a fair fight.

Think about your organizational rival in the next cubicle. He picked the help desk problem tracking system your organization uses, and it’s a disaster. And the clod chose it because the sales rep happened to be pretty, and he’s having marital problems. If he’d looked at the performance statistics, industry ratings, and other objective facts instead, he wouldn’t have made such a bad choice.

We all know of stories like this, and they prove my point, don’t they?

Actually, they don’t. I just used an anecdote to “prove” my point. I haven’t proven anything. If I’d said, “The Farfinkel Institute just released a study showing that 74% of all product decisions do not include a fact-gathering phase,” I’d have proved my point (or the Farfinkel Institute would have proven it). Of course, you’d have fallen asleep in the middle of my explanation.

Next time you listen to a political debate, keep your anecdote-detectors on full scan. No matter what the issue, you’re more likely to hear illustrative stories than statistical facts in our marketing-driven policy dialogs.

Yes, I know what Mark Twain said about lies, damned lies and statistics. Yes, people can contrive misleading statistics. That’s nothing compared to their ability to script tailored anecdotes. Think of it this way: an anecdote is just a statistic with a sample size of one. You can “prove” anything at all that way.

We fall for this stuff all the time. Want an example? How much time, energy, and budget have you expended on disaster recovery planning and virus protection? Compare that to the time, energy and budget you’ve spent researching hardware design problems and software bugs, in implementing preventive maintenance problems, and in instituting administrative quality assurance programs.

Pause to reflect on this question before continuing. Then consider the following two items:

Item #1: Ontrack Data Recovery (the gods of pulling data off of trashed hard drives) recently published a study attributing 44% of all problems to hardware problems, 32% to system administration mistakes, 14% to software bugs, and 7% to computer viruses, and 3% to natural disasters. (Reported by Investors Business Daily, 9/18/96, summarized in Edupage.)

Item #2: In a recent editorial, BugNet (www.bugnet.com), made a similar point, demonstrating that problems from software bugs are 100 times more prevalent than problems from viruses.

(Why the discrepancy between the two reports? Ontrack only counted episodes leading to data loss, while BugNet tallied all problems.)

Do these two items lead you to think your efforts may be misplaced? Good. Without a doubt, computer viruses have been overhyped as a threat. They’re characterized as digital AIDS or Ebola, when in fact, as with biological viruses, most cause minor, annoying symptoms – computer colds and flu.

(These statistics, of course, don’t reveal the overall seriousness of the different threats. Natural disasters, for example, may only contribute to 3% of all episodes of data loss, but I’d bet they contribute to more business failures than all of the others put together. That makes business recovery planning worthwhile regardless of its statistical rank. Statistics devised by other people often won’t serve your purposes, which was Mark Twain’s point.)

Don’t fall for manipulative opinion-shapers who use story-telling as a substitute for facts. On the other hand, when you’re trying to persuade, make sure you do illustrate your points with examples that add some punch to your dry statistics. You need to engage both halves of your audience’s brain. That’s a matter of clarity, not distortion.

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|In: Leadership|Last Updated:

The Internet is:

a) A vehicle for completely transforming society.

b) A source of useful information.

c) A new venue for marketing and commerce.

d) On the verge of collapse.

e) Excedrin headache #3.

I’m guessing most readers of this column would choose “e”. That’s too bad, because the Internet can be a great route out of the corporate slums for all of us in Information Systems.

Aren’t you tired of being viewed as a Money Pit? Focus on reducing costs and increasing productivity and that’s where you’ll stay. Like it or not, lots of companies see us as a necessary evil – money they’d rather avoid spending but are stuck with, like payments on a failing car.

No, you want to hook up with Marketing. That’s where the fun is, because that’s where revenue comes from. Revenue gets respect. Revenue gets glamour. Revenue gets … funding!

Right now, companies see the Internet as an intriguing marketing opportunity. Embrace it and get on board. If you need help, this is a great opportunity to flog my new book, Selling on the ‘Net, (National Textbook Company) due out mid-September, co-authored with my friend, father and great guru of direct marketing, Herschell Gordon Lewis.

Marketing has three basic goals: acquiring new customers, reducing customer defections, and increasing volume with current customers. While you’re lunching with your new marketing-director friend hearing details of your company’s plans for accomplishing these goals, point out that while the Internet has a lot of sizzle, several other technologies have much more potential. “What might those be?” he or she is sure to ask.

I’m glad you asked. Of a long list, here are four.

Data Warehousing: Here’s the perfect platform for a killer marketing database. You can use it strategically, to understand who buys what – information you can use for corporate planning.

You can also use this database for tactical marketing. What you know about each current customer’s recent buying habits helps you create tailored offerings to more effectively increase per-customer volume. You can use the same information for targeted marketing to non-customers, selling each one products and services popular with demographically and psychographically similar current customers.

Electronic Mail: Yes, plain, ordinary e-mail can become a powerful marketing weapon, and no, you don’t have to become a spammer. Do you have a customer newsletter? Offer it to customers via e-mail as an alternative to paper. Just set up a list server and make it easy for customers and prospects to subscribe.

Correspondence with subscribers isn’t spamming, it’s service – they’ve already expressed interest. Send them customer satisfaction surveys by e-mail. Use them as informal focus groups for refining ideas about new products and services. Use your imagination. E-mail, because of its immediacy and informality, cements customer relationships far better than any paper alternative.

Computer Telephone Integration (CTI): Here’s a wonderful technology. It has huge potential, but no logical internal sponsor until you came along. Add screen-pop to your call center (that is, automatically display customer records before transferring calls to call center agents). Add intelligent call transfer, where transferring a customer call from one employee to another also transfers the computer screens.

Add data-directed call routing, where information about a caller in your databases (or data warehouse) determines who should receive the call.

The secret to successful CTI: every customer contact must enhance the relationship. Every customer service interaction becomes a (soft) cross-selling opportunity and every sales interaction becomes a customer service opportunity.

Electronic Data Interchange (EDI): EDI, the electronic exchange of formal documents like purchase orders and invoices, has never lived up to its potential due to the extraordinary difficulty of converting EDI transmissions into database updates. Turn this to your advantage: customers who successfully exchange EDI transaction sets with you are unlikely to leave you for a competitor – it will cost them too much.

There are other customer-facing technologies, too. Let someone else maintain the accounts payable system. In this Olympic year, go for the gold.

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