Curious Log

Author: Wribhu

  • Embrace APIs – Digital Banking Toolkit

    Digital is the latest buzzword in banking. Not only are the bank boardrooms echoing with digital keywords, its what seems to be driving the pitches at most IT and Management Consulting firms.

    And rightly so !

    When the data tells us that 9% of the population already uses Mobile Banking, we know that Digital Banking Revolution is already upon us.

    India Internet Statistics
    Source: We are Social

    In the last article, I mentioned, how the Digital Banking Journey will be different for each bank and why it might be a good idea for the banks to play to their strengths.

    Equally important is to acknowledge and understand, that partnerships will be essential in this journey.

    And what enables partnerships to work (apart from a culture and mindset) is a technology architecture that is geared towards APIs.

    APIs are like Legos – you own some, some you borrow – but put together you make something exciting.

    While the consumer technology companies understand this, banks have traditionally been slow to embrace deep connects into their systems. The risk is too high ! After all banks have been trusted with the consumers money and data.

    But to stay viable, banks will need to embrace partnerships, learn to publish and consume APIs, while still not compromising the customer promise.

     

  • Digital India – its already here

    Today’s the launch of the Digital India initiative and quite a coincidence that I had an experience which makes me believe that Digital India is already here.

    Digital India

    Here’s what happened.

    I was in Mumbai and called for an Uber. I started talking to the cabbie to understand the target market for a specific use case for mTuzo . We are pitching to banks that with mTuzo we can help move their debit card customer from an ATM only to ATM + POS relationship.

    So I asked him which bank account he gets his Uber payments in – it was a SBI account and it was his choice. Uber gives him complete freedom to choose the banking partner.

    Next I asked him if he had a debit card for that account . Turned out he did.

    I asked him if he’s been using that card at ATM or for shopping also. As expected he had been using it only for cash withdrawals.

    Probing further I asked him what if he got 15-20% discount if he shopped using his debit card, would he consider switching from cash to card. And his response just stumped me.

    He said he’s already used his card for online purchases at SnapDeal. He did his first purchase using COD (cash on delivery) but once he was sure that they delivered just fine, his next transaction was through his debit card,

    Let me repeat that – a 30 something male who has been driving a cab in Mumbai for last 10 years, is only schooled till class 10th, who uses his debit card only for cash withdrawal, has used it online at SnapDeal.

    And what really really shocked me was his first purchase on SnapDeal. I can bet you will never be able to guess it.

     

     

    Take a few guesses…..

     

     

     

    …….

    He bought a selfie stick for Rs 300 (after a 66% discount). A selfie stick !!!!

    I rest my case, Digital India is here.

    Maybe we need a Digital Bharat initiative.

     

  • Mood as the context for marketing

    Something very interesting happened while I was using the Linkedin App on my mobile. I liked an article and pop came the message from Linkedin checking if I would want to share my love of the Linkedin App itself.

    The timing of this “Rate us on PlayStore” screen intrigued me.

    mood based marketingDo folks over at Linkedin believe that if I have read a lengthy article and liked it, I am in a good mood?

    If you ask me, may be I am. Atleast for sometime.

    And since that mood is caused by the content that was delivered on the Linkedin App, Now might be the best time for ask for a rating. I would rate them much higher.

    Maybe they didn’t do this on purpose and this was just a coincidence.

    But it still piqued my interest in “Mood as a potential context for marketing“.

    Did a quick Google and found that both Apple & Microsoft have applied for patents long ago on Mood based ad targeting. If this is at play, its surely super exciting stuff.

    Why?

    For one, mood is a very strong context. I remember once being told that the reason behind gorgeous women in skimpy clothes selling electrical switches was to get the predominantly-male-customer distracted and lower the apprehension about the product itself. If that’s been working for ages, surely a more trackable and insight driven model will be more successful.

    Also, this might help “push” marketing be more effective. Google driven pull marketing works predominantly on context – what is the customer looking for actively right now. Imagine products and services being thrown just at the right moment. Feeling all mushy thinking about your partner, and pop comes the mention of a romantic cruise. Imagine how hard would it be to not buy it then n there.

  • Play to your strengths – Digital Banking Toolkit

    Nadal is the king of clay. Given a choice of surface, I guess he would choose clay 9 out of 10.

    We all get it – one should play to one’s own strength. Its obvious in sports, but most of us fail to apply the same rule(s) in business.

    keep-calm-and-play-to-your-strengths

    As most banks embrace digital, this is one rule we should not forget.

    Look at the bigger PSU banks in India – it’s fair to assume that they have a big list of areas to focus on when it comes to going digital:

    • Channel migration of customers onto internet banking and mobile banking
    • Higher activation and spends on their credit cards
    • Straight Through X-sell campaigns
    • Improving the customer on-boarding experience
    • Reducing TAT for customer transactions and queries
    • …..and so on

    It sure can be overwhelming to look at such a big list. One might also be tempted to look at the success stories of the likes of ICICI Bank, Citibank or HDFC Bank and try to replicate their strategies.

    Will that work? Chances are it won’t !

    Why? Because those banks are different. Different in terms of their customer profiles, their capabilities and their partner eco-systems.

    When I look at the RBI’s data on ATMs, POS, Credit and Debit cards for Nov 2014 – its clear to me that for PSU banks, ATM presents a unique opportunity.

    Digital experience starts from a conversation, an interaction or a transaction – and for PSU banks these are happening in plenty on their debit card portfolio at the ATMs.

    SBI has 23.6K onsite and 22K offsite ATMs.And they had 2.4 crore ATM transactions !

    Their digital strategy should have a clear ATM story:

    • What opportunity does the ATM transaction present ? E.g. the bank knows where the customer is at that point of time. Using solutions like mTuzo they can share Offers-near-ATM and migrate customers from ATM to ATM+POS.
    • Citibank has just launched Funds Transfer functionality through ATMs. Or one could do mobile recharges.
    • PSU banks do not have an aggressive sales culture. This could be used to their advantage at the ATM, where its not a warm body pushing a product but maybe the thank-you screen which is “suggesting” a product basis past behavior of the customer.

    Hence, for any bank embarking on a digital journey, its imperative to ask – What is our strength?

    And align the roadmap to play to these strengths!

  • Why is Financial Inclusion important?

    Financial Inclusion is a common theme across multiple initiatives both by governments and private sectors across economies. Especially in the developing world, it would be safe to say that Financial Inclusion must be in the top 5 priorities of the respective governments.

    But why exactly is Financial Inclusion important ?

     

    Financial Inclusion takes an economy towards more equal opportunities

    Financial access is a key component towards providing equal opportunities and equal access for growth for various segments of the society. Just like education, nutrition and healthcare access are critical in driving growth of a population, so is access to finance and payment instruments. The Better Than Cash Alliance (Bill & Mellinda Gates Foundation) says in its 2014 report for the Australian Presidency

    Studies show that broader access to and participation in the financial system can reduce income inequality, boost job creation, accelerate consumption, increase investments in human capital, and directly help poor people manage risk and absorb financial shocks

    And why exactly do we need to work on removing inequality?  As Christine Lagarde (MD, IMF) said in her  June 26, 2014 speech at Mexico, the need for removing inequality goes beyond moral principles. It is a key ingredient for sustainable growth.

    Inequality is not just a moral issue—it is a macroeconomic issue. Our research tells us that countries with higher inequality tend to have lower and less durable growth. Inequality chokes the prospects for individuals to realize their full potential and contribute to society. Whether it is through personal experience or empirical evidence, one thing is clear—growth has to be more inclusive, and for this finance has to be more inclusive

    Financial Access can increase investments

    Whether it is individuals or small/medium firms, access to finance, builds the environment and comfort for savings and investments. This could be because of multiple factors:

    • Access to credit
    • Access to easy, safe, reliable means of savings and investments
    • Triggers and reinforcements (social, system-driven) that induce a culture of saving and/or risk-taking, investing etc

    Financial Access provides security/insurance

    The impact of negative scenarios is significantly high for those who have no financial security or insurance. The ability of an individual or a community to bounce-back from a calamity is directly related to the access of funds made available during such times of need. Insurance has the other advantage of providing mental peace and a mindset where the poor are not constantly worried about basic sustenance.

  • Digital success needs a matured partnership mindset

    I believe that smart matured digital players will need to develop deep  partnerships.

    Let me explain why.

    With the growing consumption of digital media, there is considerable noise that a consumer is now exposed to. This would mean that the brands have a fast shrinking window of opportunity where they have their prospects attention.

    Most brands do understand this and hence have started investing heavily in better designs and more meaningful content.

    But when it comes to acquisitions, it seems that this underlying assumption is usually forgotten. Maybe the acquisition teams are overwhelmed by the amount of digital data they are expected to digest and optimize for. In order to increase the leads volumes, most brands usually explore new partners who have possibly captive audiences.

    In many cases these captive audiences are merely email id lists/bases that the partner has sourced not even built. And this might be the root-cause of my recent bad experience with a MNC Bank in India.

    I have been using a premium variant of this bank’s Credit Card very regularly for the last 8-10 years. I have my email registered with the bank’s card team where I regularly receive official communication from the bank.

    Interestingly I received am email for a gold card from the same bank on the same email id. This wasn’t a proposal to downgrade the plastic, but an email to take up a new card from the bank. I was confused. So I checked the email headers and discovered that this was sent by some partner of the bank who had my email id on its base.

    The bank didn’t scrub the partner’s base for emails already registered by existing customers. I can understand why the bank would not want to scrub and give back a base to the partner. Because then the partner could do a delta check and figure out which email ids are registered with the bank.

    Nevertheless the bottom line is that the customer experience was significantly compromised.

    So what could the bank do? What should other brands do?

    Partnerships in Digital WorldI feel they need to pick & choose partners carefully and then deeply integrate with them. They should in fact look at sending emailers from their own servers so that scrubbing is done real time and the partner just gets a report of how many emails were shortlisted for the blast rather than a list of which ones were shortlisted or rejected.

    Even if the partner is just worth the customer base it holds, banks would need to step up and control the subsequent stages of the lead generation process. On personalized platforms like emails, its customers can not be treated like New To Bank (NTB) applicants.

    In today’s world, we talk about data quality and data velocity. Maturity in both these aspects is possible only through an eco-system mindset and not in the current vendor-client approach.

    It would definitely add to the cost of acquisitions. And there might be other better, cleaner solutions but the current process just does not cut it.

  • Big Data, medicine and Dr Gregory House

    I am a big fan of House. BIG FAN !

    I guess what I really like is the infectious curiosity of Dr Gregory House and the very extreme personalities of the characters at this clinic.

    In my overly simplistic understanding of medicine, there are two parts to it – diagnosis and treatment.

    And our Dr House excels at the former. He is able to connect the seemingly unrelated symptoms with behavioral patterns, genetic history and what not. And it is fascinating how the power of inference and hypotheses testing leads his team to find the true nature of what really inflicts the patients.

    dr-gregory-house

    What I wonder is that this might have been a super impressive set of scripts way back in 2004-2012 (yes the series is that old), but would it be as impressive in today’s age and time.

    Experts say that Big Data or analytics is effective if the 3Vs are encouraging – volume, velocity and variety. In case of healthcare they talk about a 4th V – veracity or data accuracy.

    Increasing number of our records are getting digitized – so the volume surely is exploding.

    Wearables that track real time pulse, Blood pressure etc are already an expected norm. Patient specific information is definitely flowing at a very high velocity within the healthcare eco-systems.

    Variety of data, might get addressed when data-sets from individual data-networks (like EMR co’s, hospitals, health insurers etc) are purged for confidential and individual data and insights shared on a common platform/network.

    Given all these indicators, do you see a time when Big Data scientists will put a Dr Gregory House in every hospital that can afford such systems? The trick might be to find the best set of tests to conduct to confirm the existence of disease(s), and this is something that machine-taught algorithms can do nicely.

    Would machine learning really help connect dots in the medical outliers?

  • Lessons from “David & Goliath” by Malcolm Gladwell

    Lessons from “David & Goliath” by Malcolm Gladwell

    “David and Goliath – Underdogs, Misfits and the art of battling giants” is the new book from Malcolm Gladwell which is based on the premise that maybe we have all been looking at the David and Goliath story completely wrong.

    david-goliath-malcolm-gladwellGladwell starts by discussing specific details from the Biblical story to build the case that David the shepherd boy should have been the favorite in that battle. We all got it wrong because we were fixated on the giant that Goliath was, because we believed that it would be a close quarter battled where size, strength (of warrior, their sword and armor) would matter. But it wasn’t to be.

    He dips back into the classical economic theory to talk about the marginal utility curve being an Inverted U curve. And if we believe that its an inverted U curve, then there comes a point beyond which the marginal returns decrease. Or in other words, the same things that were an advantage at one point may become an advantage on the other extreme of the spectrum.

    As always, Malcolm backs his hypotheses with solidly researched stories.

    • One of the interesting stories is that of an Indian software engineer (who had never played basketball before) coaching his daughter’s team to national finals. How this outsider looked at his team – a bunch of self proclaimed nerdy girls, and how he looked at the traditional way of playing basketball. His gameplan – play the full court press – was something that was so unexpected that they just surprised their opponents all the way upto the finals where their opponents did the same to them.
    • The whole debate about class-size vs quality of education is again something where there is no clear answer and the reason is that the impact of an increase(or decrease) in class size depends upon which part of the curve the class currently is. It seems that if the class size is too small – there is no momentum in discussions and the intensity of possible interactions might be overwhelming for the kids. On the other hand, if the class size is too big the number of potential interactions may become too high to manage. Hence it seems the ideal class size is between 18-24. This is a great analysis for all those anxious parents who have been using the teacher:student ratio as a way of convincing themselves that they are giving their kids the best education possible. Apparently there is a simple rule in Israel – as soon as the class size crosses 39, they start another class.
    • Another interesting debate that is brought up is whether its a good idea to be a big fish in a small pond or a small fish in a big pond. And Malcolm does this on a very sensitive topic. Should you always choose to go into the top most college that you have an offer from. I am sure, you know what he is hinting at. And apart from some well curated data on college choices and subsequent career success, he also brings forth the choice that the emerging bunch of impressionists made in Paris. The economic principle discussed here is Relative deprivation – comparing with peers and then deciding how we want to feel.
    • Capitalization Learning Vs Compensatory learning: There is a detailed discussion on the lives of some very successful people who were dyslexic and how they managed to “compensate” for this apparent disadvantage. It seems that people who can build on compensatory learning (which is actually a very had and difficult approach) develop their own set of tools to thrive in their chosen fields. E.g. the trial lawyer who couldn’t read properly but had compensated this by listening and remembering things.

    Watch the Video from Talks at Google here:

    The key lesson that I took away from this book is that start-ups in garages would continue to dethrone big companies because beyond a certain point, their size, capital, processes, existing customers – start becoming their biggest disadvantage.

    And when going head-to-head with a Goliath, don’t play by their rules. Make your own rules, where their disadvantage can be exploited.

  • Why mobile payments must arrive soon

    I try to go walking on most weekdays. And I prefer to do so light – carry just the minimal stuff.

    On my way out for a walk yesterday, I stopped by to take some cash along with me – just in case.

    And this got me thinking, with my smartphone (& earphones) I do not need so many other things.

    I know the time(so that I am in time for that movie), can listen to music while I walk, I can track my work emails (allows me to stay away from my laptop) , I know I can be reached anytime if the need arises(through calls, SMS, messengers etc).

    I can track my workout (and its just amazing what all some of the fitness apps can do), click high resolution photos while I am on the move and share it with my friends & family.

    But I still need to carry my wallet when I go for my walk. I do so, because I might want to buy fruits on my way back. Or I might get a call from home to pick up some other groceries. Its usually not a planned spend but I want to have the confidence that I have money available to spend when I am out for a walk.

     

    I don’t like the feel of the wallet while walking. I would love my phone – which is the digital swiss army life in most our lives – to be able to do that. I would want my phone to give me a sense of financial security too.

    Swiss army phone

    I know business strategists would say this an isolated and small use case. And I agree. But my point is, its a matter of time. While mobile has brought all these solutions into one gadget, payments cannot stay away for too long.

    But then again, its not just me. When my mother goes out for a walk, she carries her phone and a small purse. Does she spend money every day – No. Would she go out without money/purse – No. Would she go out without her phone – No.

  • Crowdsourcing from a captive audience – New approach to complimentary breakfasts

    Crowdsourcing is all the rage. And restaurants seem to have caught the fancy.

    There is this guy who is spending a good time just getting real feedback before he decides what and where of his restaurant. A few restaurants have decided to skip the printed menu completely. Who wants to pay professional photographers when the customers can click the dishes with their smartphones and create a more powerful visual menu?

    Crowdsourced restaurant

    So let’s take the example of the first guy – are restaurants keen to know which dishes to keep in their menu? In most of the cases – Yes !

    Does crowdsourcing help? Yes !

    The data becomes more reliable with increasing volume.

    But the challenge remains that if the customers are not repeat (as Groupon showed us) and if they are just looking for the next cullinary adventure, then crowdsourcing might not be too helpful at all. 

    Why? Because we may be using the knowledge of segment A to cook and serve a dish for segment B ! There is no positive reinforcement for the individuals who gave feedback. Do they go back and see their feedback implemented?

    But take the case where a restaurant has a captive audience.

    Let’s say you checked into a hotel. Chances are the breakfast is complimentary and most of the guests would end up eating at the in-house restaurant. And on most days, in a typical hotel, there would only be a small majority of non-guest walk-ins for breakfast.

    So shouldn’t the hotel/restaurant try to understand what the guests would like for breakfast? Well I guess if I recommend this to a 5 star hotel, they would say “Sir, our breakfast spread has been carefully crafted after years of research on what our guests typically like. Thats also the reason you will see so many dishes and cuisines. We really care about what you want… Blah Blah Blah”

    But consider this. There might be a Bollywood festival in town and suddenly there are more Indians who want Aloo Parathas.Or a Tamilian wedding with guests staying in the hotel, who would all love a dosa.

    Well it need not be so drastic, but wouldn’t it be great if the restaurant could ask me what I would like to have. And then maybe come up with the dish over the next few days of my stay. If there are others who like it. Would it not make me thrilled, would it not make me feel special. My guess is it would.

    It would also make the chef’s job so much more challenging and exciting.

    And also allow the hotel to stay connected with the guests – guests are not just a room number or ID in their CRM systems.

    What do you think?

    —————————————————

    Image Credit : http://mashable.com/2014/03/19/dinner-lab-crowdsourced-restaurant

  • School for future politicians

    I was super excited by the political experiments that were happening in the capital when Aam Aadmi Party was launched after the successful India-Against-Corruption movement. But my excitement didn’t last too long.

    Personally, I felt sad that the Kejriwal goverment decided to quit. As an observer and eternal optimist I was hoping that this experiment would last longer. My own random ideas of what happened/should have been done e.g. –

    • AAP should have just focused on 2 or 3 problems and delivered on them.
    • AAP didn’t seem to have a first-100-days plan in place – I guess they were never hoping to form the Delhi Government
    • One cannot open up multiple simultaneous battle-fronts. You can not alienate everyone and make blanket accusations. They seem to have been in a continous conflict with almost everyone.
    • As a disruptive force their tactics were suited to be a good opposition player but not as the party mandated to lead the administration.
    • They needed a Chanakya – a sound strategist – who could make sense of all the chaos they were in and maybe compounding day-by-day
    • People will start discounting your words if you just keep on complaining. Share some good news, be generous in showering praises too. They failed miserably in doing so.
    • As a leader you cannot be dragged into every debate. You don’t need to respond to every accusation and charge. All extremes are bad. A prime minister who doesn’t say anything is as bad as a chief minister who talks way too much.
    • And many more…

    But one thing was very clear. In the Indian context someone who understands the beauracracy might not always be a good leader. Difference between working and getting work done.

    School for Political management

     

    And hence I thought, why don’t we have a School for Political Management – something which arms future political leaders with the right kind of tools, skills, exposure. A school whose core objective is to churn out graduates who would be comfortable in the political arena, who would “understand the system” and hopefully bear strong moral and ethical standards.

    I see it as a good business proposition. Imagine the kind of demand from political families where politics is what the next generation is supposed to get into. Its what the local strongmen would want to go to, to polish their rough edges. The school would give all graduates vaccinations against Foot-in-the-mouth disease, that plagues some of the top wannabe leaders right now.

    The school could have an interesting mix of curriculum:

    • Indian Constitution and Law : Hopefully any grad from the school who takes charge of law ministry, would know that they cannot summon the judges. The Judiciary is not under their “control”. As the democracy matures, lawyers will continue to play an increasing role in politics. A strong understanding of the law can help draft stronger policies and hence action.
    • Basic Management principles : Esp stuff on leverage, delegation etc. As a minister, you cannot do all the work on your own. Your ministry is effective if you focus on removing hurdles, drafting right policies & programs and empowering an efficient administration that delivers on the ground results.
    • National and Political History:  Way too many lessons to be learnt from domestic and global history. There was a time when Lalu Chalisa was sold at Bihar railway stations and if someone had ever suggested that Lalu might be jailed, it would have been a case of very vivid imagination.
    • Public Speaking
    • Internships: Work along with a state or national level minister. Understand first hand the challenges in the ministry, how the administration works. There is considerable merit in the age old Marwari tradition of letting the next generation dirty their hands as an apprentice before they take charge of the business.
    • And since no college is taken seriously unless it has some global affiliation – this school would have tie-ups with the leading counterparts in other countries. Special sessions with visiting Presidents/Prime Ministers would be arranged – given that this college would produce tommorow’s leaders – it should not be impossible to arrange.

    So what do you think? Would this help? Should it be a 1 year or a 2 year course?

    How do we screen the candidates? Coz I believe we would get way too many applicants. And this would surely be a price-inelastic demand.

  • Impact of un-utilized assets : A Mathematical Model

    A few weeks back I was wondering what happens when we buy a car but don’t drive it. While the automobile industry witnesses a growth but is it something that increases the drag on the economy.

    I spent a few hours to work on a very simple model to find what happens in various consumption scenarios.

    Approach:

    I had to create a simple-one -product economy. Hence  I assumed that

    • Our economy produces cars each worth Rs 12 lakhs.
    • Average utility lifetime of the car as 1lakh miles
    • Additional spends required based on consumption as 5 Rs per mile

    I also simulated 6 different scenarios from a household’s perspective. namely:

    • Scenario 1: Normal usage. Uses for full life of the product
    • Scenario 2: Stops using after a time. Does not sell it or buy another
    • Scenario 3: Stops using and sells it off but doesn’t buy another
    • Scenario 4: Stops using, doesn’t sell and buys another which is used
    • Scenario 5: Sells this and buys another which is used
    • Scenario 6: Doesn’t sell, buys another, stops using that also and buys a 3rd

    Once these assumptions were plugged in, I calculated a few ratios and interesting things emerged.

     Unutilized Assets

    1. The value derived from each product drastically changes between two similar scenarios where the old stuff is traded vs where it is not sold. Does this mean that in a resource constrained economy, a market place optimizes the return of invested resources through higher utilization?
    2. In the scenario 6, income generation is highest for every 1 Re spent by the households. So maybe hoarding is a good strategy when domestic income generation is important. On the contrary imagine if we do this in categories where we import the products – we might be supporting Chinese economy more than we ever wanted to.

    Not knowing fully well what these ratios meant, I spoke to my Professor friend Dr Dash who gave some very interesting path of analysis. Essentially what he mentioned was that I should look at this top down rather than at a micro level. He also mentioned about ICOR – Incremental Capital Output Ratio – how much additional capital do we require for each unit of GDP increase. E.g. an ICOR of 3 means we need 3 Rs for every 1 Re contribution in GDP.

    • Assume a market size of 75 Bn USD and lets say one third of this is from private cars. Hence a market of 25 Bn USD
    • Now assume that 5% of all cars produced in a year lie idle, which means about 1.25 Bn USD worth of cars remain idle. (and this is incremental value of locked capital every year)
    • So with an ICOR of 5 , these un-utilized cars translate into 6.25 Bn USD worth of capital that is “wasted” every year.
    • But where it became tricky for me was that whether the asset is utilized or not, the GDP is impacted depending on ICOR. So is this a case of smarter capital allocation? Would this “wasted capital” helped us in producing some other more needed product or service?
    • A very interesting and probably extreme case of this top-down analysis would be the scenario where the asset is imported. In such a case, a reduction in “wasted capital” would result in better trade-balance
    • With a marketplace, if 40% of these cars are sold in the second-hand market, then we free up that much capital.
    • Moreover with cars available at a lower price, many category shifts might happen. E.g. say a Maruti Alto being sold in the second hand market might attract a person who was in the market for a 2 wheeler earlier.
  • Why I use Paytm for all bill payments except Airtel

    Why I use Paytm for all bill payments except Airtel

    Consumer behavior used to be a course that marketing folks took in 2nd year of Bschool.

    I stayed away , like most other marketing courses.

    But over the years, time and again I have seen the importance of understanding the consumer behavior – why do consumers behave a specific way, why and how are habits formed, are all habits sticky, what would prompt a habit change and so on.

    My Online Bill Payments Behaviour

    Recently I just noticed something interesting about how I pay my bills. It brought up the importance of consumer behavior yet again.

    So here’s what happened.

    Every month I end up paying some 5-6 different mobile/landline and a couple of DTH bills.

    A few years back I started paying the Airtel bills online – the process was easy and it was the same interface for all Airtel Payments – mobile or landline.

    Just one drawback – there was no “Make another transaction” button.

    One had to go back to home page, and start the flow again. I shared this with my friends at Airtel Money and quite a coincidence that this button was added on their web page (they confirmed that my raising it with them had nothing to do with the feature going live).

    Since then its been how I have paid all my Airtel bills.

    PayTm bill payment
    On the other hand, my experience with TATA Sky’s online payment was horrible to say the least.

    During one such failed attempt, I remembered about Paytm and decided to use it.

    And boy was it an amazingly designed service.

    • The UI was really neat and intuitive.
    • Credit Cards were masked and stored for easy subsequent payments. One just needs to repunch the CVV and the Verified by VISA passwords.
    • Old payments were stored and it was super easy to bring up an old payment and make a fresh one against the same DTH/mobile account.
    • In case of a failed payment to the service provider, the amount is kept in a Paytm virtual wallet that is “automatically”(this is true customer delight) picked up first during any subsequent payments and only the delta amount is required to be paid by the card.

    Needless to say my bill payments have migrated to Paytm .

    But not all.

    I suddenly realized that my de-facto reaction when making the Airtel payments was still to go to the Airtel website and not PayTm. This was strange because from a rational perspective I had no reason to not switch my Airtel payments also to PayTm.

    And this got me wondering.

    • I am not really loyal to the Airtel website, its just a question of habit I guess. Its not a strong habit to the extent that one can explain it through muscle memory. But the reality is that I followed the above steps without thinking much – picked up the bill, went to the Airtel site, paid and got it done with.
    • Is my behavior sticky with Airtel because they managed to get to me first and delivered a decent experience? If yes, then the first-mover-advantage for consumer services should be the possible stickiness-hurdle it creates for new entrants.
    • Has PayTm got me as a dedicated customer for their wallet services? Would I choose to pay at lets say Myntra (flipkart has its own wallet and Snapdeal is working on one) through a PayTm wallet? I am not too sure.
    • Although I am an avid Android user with a lot of apps that I use regularly but I still don’t have the PayTm app on my phone. Why? I am not sure. But I remember seeing their messages online and have seen their app in the Google Playstore also. Again no logic to explain this behavior. Wouldn’t the guy in charge of Data Analytics at PayTm be looking at my profile and thinking this guy probably doesn’t have a smartphone or a 3G connection.
    • Now that I have spent some time thinking about my strange behavior, would I go back to the Airtel site or migrate to PayTm? What do you think?

    UPDATE

    I have long since downloaded the PayTm app and it is now the default way to make ALL bill payments including the Airtel one(s). I no longer wait (or bother) for the bill to be delivered – PayTm manages my bill presentment and payment experience end to end.

  • How to save the Boiling Frog?

    Boiling-Frog
    Source:inflexion-point.com

    We have all heard about the boiling frog phenomenon – Put a frog in boiling water and it would immediately jump out. Instead keep a frog in cold water and heat the water slowly, the frog would just boil to death.

    While I don’t know if this experiment was ever done or not (one guy actually tried it and uploaded a YouTube video), or whether the frogs of today are smarter than their ancestors, but the underlying phenomenon is all too common in the corporate world.

    Companies fail to see the “inevitable change” in consumer behavior. They fail to notice or counter the growing might of a competitor.  More often they fail to see the gradual but sure detoriation in culture, motivation of their teams. All because it happened gradually.

    So I was wondering what are the ways to avoid a Boiling Frog phenomenon?

    • Get a frog from outside every once in a while : No brainer right? A frog which is not in the gradually-heated-waters would know that there is something wrong. The water is already too hot and they should jump out. Why then do most companies shy away from bringing in fresh talent? Why do we feel afraid of getting people from diverse backgrounds – unrelated industries, different academic, economic and cultural backgrounds.
    • Have a thermometer track the temperature : Consumer surveys, market research, risk metrics, red flags etc – we do it all , still this happens – you would say. Well, sometimes you need a frog who can read the thermometer ! Would you want the frog to see just the temperature, or would you want to show how much temperature has risen, or show that its now in the danger zone or better still sound an alarm loud enough that makes the frog jump out of water 🙂
    • Let the frog see that the water is being heated : If our frog was smart and put in a transparent container, chances are it would see the flame or the burner. It might also note the rising temperature in the thermometer even if it doesn’t feel the heat yet. Will it help business leaders if they have real-time feed from the market about whats really putting them under stress.
    • And if nothing works, just pull the damn thing out yourself.

    Are there other ways to save the boiling frog?

  • Recommended feature for Google Maps Application

    Gratitude First – I am really thankful for Google for the traffic layer on its Maps application. Like most others in Delhi, I have become a regular Google Maps user now, checking the traffic updates and choosing the route that I should take to reach my destination. So much so, that my driver also insists on it.

    I started tracking my typical usage behavior and interesting things surfaced. I would open the application if:

    • I am going to a new/unusual place or
    • To the usual place at a not-the-usual time,
    • I don’t know the route or the traffic conditions or both
    • Faced with a traffic build-up on my usual route to work(or back) to see how long the jam was and what was the situation on alternate routes

    And amongst the situations listed above, almost 90% of my usage was due to the last one – traffic buildup ahead of me on my usual route to work or back home.

    Also, since my daily commute is almost 40kms one side, many a times there are multiple congestion points that I encounter. And some of those develop while I am on my way. Hence even if I check the traffic at point A and see that everything is clear downstream, chances are that the situation would change when I reach the downstream point B.It can be very frustrating, trust me.

    There’s another scenario that kicks in – given the resolution at which maps open up basis my current location, I need to scroll a lot to check out the whole path. Many a times I miss out checking the traffic congestion at far-off points.

    google-maps-traffic-layerAnd this set me thinking – wouldn’t it be a great feature for Google maps to

      • allow me to set my usual route for work/home
      • jump directly to my route showing the areas with traffic build-up or

    better still, alert me even without my opening the Google Maps app that there are places where there is slow traffic. This would have been true delight.If this is possible, can we build a web-app to send traffic updates to people who do not have a smartphone. Can such users register their routes and get SMS updates? Why not?

    As I toyed with the idea, I started wondering, why hasn’t Google done it already.

    This is a very simple and intuitive need, surely someone at Google would have articulated such a need long time back.

    So I started understanding how Google Maps work and what I discovered in a quick 2-3 hours of research was the following:

    • Google has a similar feature (time to destination – work or home) in its Google Now set of widgets. But its not really the kind of delight that I was referring to.
    • Google might not want to do it – Google collects and calculates traffic data from users who are using Google Maps and sending their locations to the Google servers. This means, Google would always need higher number of users to stay-on with their Maps/location services for them to get more data-points to have a better traffic estimate.
    • And maybe independent developers also cannot do it – The Traffic heat-maps are a “layer” on the Google maps and they are provided in a similar way in the API – a visual layer that sits on top of the geographical UI. This means that any developer would not get a feed of locations/latlons along with the traffic feed. To develop the kind of app/feature I referred above, the Google traffic API would not be helpful.

     Update:

    With today’s experience I think Google should still go ahead and build this feature. I now feel that this feature would kick-in more signins into Google Maps. Why?

    If I get an alert that there is traffic in my usual path and the alert doesnt mention the specific points, I would be tempted to login into Maps and see where the blockage is. What are the alternate routes and what is the situation there.

    One challenge here is that not every one might have their GPS on and it might be tough for Google to know if the person is already on the move or not. It could choose to send these alerts only to those with GPS on. This would serve two purposes – more people would keep GPS always on, hence provide the feed to Google’s server to better calculate traffic pattern. Also with the GPS on, Google would know when the user is on the move on the pre-defined specific route.

  • Prediction comes true – In-site search market heating up

    Not so long ago, I had written a blog post on why Bing should focus on in-site search as a way to fight Google’s stranglehold on the search space. While no one at Bing or Google heard me out on this, Techcrunch now reports on how this space is heating up. Two start-ups have already raised serious Series A capital and are focussed on just this one opportunity – Making the In-Site-search experience better.

    Bing GoogleWhile the start-ups and its investors can rest assured of acquisition offers coming their way, it is still surprising to see that Bing and other Google challengers haven’t exploited this opportunity so far.

    The Techcrunch article assumes that Google wouldnt want a great in-Site-search product as it would mean fewer hits on Google.com. While people at Google might buy this logic (I wouldn’t – better to cannibalize own product rather than let another player come in), but how can someone at Bing justify leaving this space? Beats me. Any ideas?

  • Are commission based channels low on trust

    In US car salesmen are amongst the least trusted professionals. On digging deeper one finds that they share these low rankings with advertising professionals, stockbrokers, insurance salesmen and surprisingly politicans too (Members of Congress, Senators and Governors). Have a look at the Gallup report summary below:

    Gallup Sruvey Trusted Professionals

    While there must be multiple reasons for people to trust certain professions and mis-trust few others, I am sure that the commission structure in a specific industry does lead to a low levels of trust.

    My guess is that if consumers know that the middleman involved in the transaction could be motivated by goals that clash with theirs, they try and look at each conversation from the point of no trust.

    Take for example, an online advertising agency which typically charges you 15% of what you spend on ad-networks. I remember, doing a detailed review with my agency and discovering that they were far away from optimization basis the Click-thrus and bid-rates. My first reaction was that this team is knowingly trying to jack-up the media spends and hence their cuts. It was some 3 hours later that I realized that they were not competent enough to make sense of the numbers and reports that the ad networks shared. Their intentions were ok !

    Cars, stocks and insurance policies are all complex products with multiple features and specifications. This means that there is no single correct recommendation for any given customer. 

    When the customer seeks the agent to play an advisory role (whether implicitly or explicitly) and the agent himself is paid the sales commissions, the mind starts playing scenarios. And in most of these scenarios, agent has either shortchanged or duped the customer.

     Look at the top spectrum of Gallup’s survey results. Doctors, Nurses, Engineers are all selling a service rather than a product. A doctor might give us any medicine but we feel its our symptoms/ailment that got cured. Doctor is not in the business of selling medicines but of curing.

    And here’s an opportunity for the Financial Services industry – can we find a way to be percieved as selling services rather than pushing products and eating commissions.

  • Simplest way to build trust and confidence

    Many a times, we face a situation where we feel that our team members do not have trust and confidence in us or each other. Whether its a corporate set-up or the political leadership of a country or a sporting team, trust and confidence are the key ingredients for a motivated spirited performance.

    And I think this can be done by just one simple thing – Say what you would do and do it !

    Do this and you can gradually build trust and confidence in your team. I say gradually, because its a journey best taken with small steps. When Jeff Bezos said that he wanted Amazon to be the most customer-centric company, he followed it up with key changes like empowering customer care executives to do refunds etc. Why has Infosys been the stock-market’s darling for so long?

    Fail to do this and you start depleting the reserved trust capital. Narayana Murthy had once written a passionate article about how leaving Infosys was like giving away your  daughter in marriage. But when he got his son in at the unexpected role, he lost a lot of the trust and respect he had built over years.

    And there are many ways one can fail in this.

    1. Not saying what you would do

    Are you not sure what is expected out of you?

    Or are you not confident enough to articulate it and sharing it with others?

    If its former, I guess some introspection and coaching might help. But if its latter, take the smallest of actions/goals and share it. Share it in the simplest of words, leaving minimal room for ambiguity.

    2. Should I share my chosen path or the targeted goal?

    Share an action path if thats what you can stick to. E.g. We will track query resolution time as a measure of performance for our customer care department.

    Choose a goal if you are confident of achieving it.  Do not start off with an overly ambitious goal. Strings of small success will get you the motivated team you need for the mega-win.

    3. Not doing what you said

    Did the priorities change? If yes, did you update your stated goals/path? No? Then its a failure to deliver on point 1.

    4. Did you try yet fail to deliver ?

    RockyThis is not a problem at all. Because your efforts would have been witnessed by atleast some within your team. They would know your determination and resolve to achieve the chosen goals and thats enough to build confidence. Personally I have always rooted for the underdog challenger – who is in the ring with the champion because he fought many rounds and spilled blood and sweat getting into the championship round.

    ————————————–

    The reason sticking to this simple rule – Say what you would do and do it – is so critical is that it makes it easier for others to judge and evaluate you. It sends a clear signal about your priorities and allows others to start believing in those same priorities.

    I have had the privilege of working with some really smart leaders and looking back I feel they were very clear about what they (or their teams) are aiming at and ensured they either achieved it or did their very best getting there.