Here’s a little something I’m noticing as a trend, particularly with businesses that possess both a “bricks” and “clicks” presence. The idea of “core competency” – the main product or service your business delivers and charges money for – is getting confused with “market differentiation” – the element that would cause a customer to select your business, service or product over your competitor’s. Confusion arises when the business owners/managers are blind to the fact that their market differentiation has evolved and rests upon their online customer interface rather than remaining closely aligned with their core competency.
Let me give you a mock case study to illustrate. Imagine you and your business partners have a passion for growing and distributing organic bamboo for use in a wide variety of products. You develop specialized facilities and soon are producing the highest quality organic bamboo available for use in clothing, household products and flooring. Your production facilities are close to your major markets. Business flourishes as demand for this new renewable raw material increases and you have proven to be able to deliver reliably. This is a very exciting time and you and your business partners are proud to be producing an environmentally-sound product that is so well-received.
Over time, you notice that the bulk of your orders are coming in through your web-based ordering system, something you hired a third-party to develop at start-up on a whim. It is stable and relatively error-free. Everyone in your company is focused on producing this top quality raw material and learning more and more about this product and what it can do. No one has been hired to, literally, mind the online store. No one “in-house” has developed, or been hired for, their technology expertise. After all, the online ordering interface is working fine, right? If it ain’t broke, don’t fix it.
Time passes and competitors begin to crowd your previously-lucrative market. Not surprising, really – if you can go out and learn about this product and invest in its production, so can they! Soon, your customers have a choice between six producers, each of whom can supply identical quality product and deliver it equally as reliably. Your core competency (high quality bamboo delivered reliably) is no longer differentiating you in the market. It is likely that your competitors will be trying to knock you off on price – but there is one other differentiator here. The online customer interface which, in your case, likely does not measure up to the interface developed by the more recent market entries. The newer sites provide faster interaction, the ability to repeat previous orders with a few clicks, and easier “sub and switch” options. A customer ordering with your competitor can do so in five minutes or less where the same order on your site can take 10 minutes or more.
Here is the thing that makes this trend really interesting to me: many businesses start out focused on their core competency and outsource their technology support, including their web presence. Conventional business wisdom suggests that it is possible to outsource all but your core competency. I would argue, based on what I have seen repeatedly over the past while, that companies that choose to outsource the element that becomes their market differentiation are in a deeply weakened competitive position.
I have three things to say about the tension between core competency and market differentiation:
Understand that market differentiation can shift. The paternal side of my family descends from generations of village butchers in rural England. My father, who became head of the meat department at Harrod’s before the age of 30, eventually traveled the world before settling in London, Ontario to open a butcher shop on Richmond Street. He knew his stuff – breeding, livestock, animal husbandry, care of meat products, preparing meat products … you name it. If he were still alive in this more fast-paced age and suddenly observed his customers switching to the meat counter at Loblaw’s, he would be at a loss to respond, I think. He would be inclined to respond within his comfort zone, to do more of what he knew, but do it better. Higher quality, cleaner displays, more variety. This response, while admirable, would overlook what has become the market differentiation element now – convenience. Of course, there has been another shift towards a niche market of “green” meats – organic, hormone-free meats. Dad might have been able to jump back in on this differentiator.
Know your business model. I mean, really know it. What are your customers paying for? Is your core competency really as strong as you think it is? Or is there some other distinguishing element – customer service, online access/interface, corporate culture/brand – that your customers are really paying for? When in doubt, ask! There is a multitude of online survey and polling tools ready to be deployed for this very purpose. Learning what makes your customers pick you over your competition may be critical to your long-term survival. Understand that the answers could change rapidly, depending on competitive forces.
Where technology has become a critical differentiator, acquire in-house expertise. You don’t need to develop an entire IT department – in fact, I still support the outsourcing of IT functions for most small and medium-sized enterprises. However, you need one senior person in-house who knows your business model inside-out, who knows your market, and who understands the critical elements of your technology infrastructure. This person needs to be able to represent YOUR critical business needs when managing your IT suppliers and needs to be able to speak “tech-speak” fluently enough to be able to negotiate and manage a portfolio of IT requirements. I have seen this go two ways. Either a non-technical manager becomes interested in the technological aspects and develops the experience and expertise, or a technical manager is hired and has to learn the business. Ask yourself which is easier – learning about deployed and available technologies, or learning about your business?
Companies that let their outsourced IT suppliers “lead” their tech development without adequate in-house knowledge can face situations in which the solutions provided are deeply inadequate in terms of supporting core competency or delivering continued market differentiation. This is a costly outcome, both in terms of the simple bottom line ROI of a tech solution, and in terms of the potential loss of market share. If you feel too close to properly analyze where you stand in the tension between core competency, market differentiation and technology infrastructure, an unbiased third-party review might help.
Posted in
Business Strategy,
Entrepreneurial Strategy,
Managing Technology,
Technology
Tags:
business model,
core competency,
differentiation,
infrastructure,
market differentiation,
market forces,
online customer interface,
outsourcing,
Technology
It was October 2, 2008 – the night of the one English debate scheduled here in Canada between our political leaders in our federal election campaign. It was, not coincidentally, also the night of the Vice-Presidential debate in the US which pitted the solid and stern Joe Biden against the folksy patronizing “charm” of Sarah Palin. The US debate held much more promise for drama than our five earnest and exceedingly polite political leaders.
Three of my fellow political junkies joined me at my place and offered to make home-made pizza to sustain us through a few hours of channel-hopping between these debates. It was an offer I couldn’t refuse!
We were glued to the set, providing our own commentary as things unfolded. At approximately the mid-point in the debates, about 10:00 p.m. EDT, my Blackberry started vibrating. And vibrating, And vibrating. I glanced at it and was horrified to see that hundreds – eventually thousands – of “bounce-back” error messages were being delivered to my e-mail in-box. You know the kind of message you get when you send an e-mail and have mistyped the address? You get a “Mailer-Daemon: Error” or “Unknown Recipient” or “Undeliverable” or some such. A bounce back.
What does it mean when hundreds or thousands of these bounce-backs appear in your e-mail in-box? It means that your e-mail address has just been spoofed. In other words, an e-mail spammer or their designated web-bot has somehow either catalogued your e-mail address from some source (your website, or someone’s address book online) or has simply randomly generated an address that matches yours. They then insert your address into their “Sender:” or “Reply-To:” fields in a spam message and then, to your consternation, they hit “send”. YOU get the bounce-backs – they don’t.
Your e-mail address also may get tagged by spam filters as being possible spam – not a good outcome if you rely on e-mails and have technologically savvy clients with whom you would like to reliably communicate.
There is also the matter of the thousands upon thousands of e-mails that come pouring into your in-box, effectively obliterating your ability to identify and respond to your REAL e-mails. At one point, in the middle of this spoofing storm, I was watching the e-mails pour into my web mail in-box and attempted to highlight masses of them and delete. I could not highlight and delete fast enough to keep up. I managed to delete over 1,000 messages from my mail server before bed, but by the time I shut my machine down, there were over 1,200 messages … and counting. When I got up in the morning, my in-box intake had slowed and there were a mere 6,177 messages. The flow had slowed to a trickle. Somewhere in there, I found out later, were two notes from students of mine and three personal messages of some importance.
I have three things to say about e-mail spoofing:
- An Ounce Of Prevention Is Worth … About Eight Ounces Of Cure: The standard admonishment for keeping your e-mail out of the hands of malevolent spammers is to suggest keeping your “real” e-mail address offline. Don’t use your most important e-mail address to sign up for distribution lists, or to enter online contests, or to interact with discussion boards, blogs, forums or wikis. Get a separate web-based e-mail address for these purposes (i.e. hotmail/gmail/yahoo or similar) and keep your corporate or “real” personal address for “real” correspondence.
I do endorse this as a strategy, but I also know there are times when you might want to use your corporate domain name online for marketing purposes. I also know that spammers are getting very clever about acquiring e-mail addresses from web-based address books, facebook, and other sources. To be honest, if you have been out in the virtual world with your main e-mail address at any point in the last 10 years, that e-mail address is likely on a list somewhere. If you haven’t been spoofed yet, you are living on borrowed time. Brace yourself.
- Folder Filters. Here is one way you can “cope” with the coming onslaught of totally useless bounce-backs that may be headed your way. Note the subject line of most of these undeliverable message alerts. They contain unique words like:
- Undeliverable
- Daemon
- Unknown recipient
- Delivered
… and so on. Set up your e-mail software with filters that recognize these words in the subject line and direct all incoming messages labelled as such into the appropriate folders. This can be set up either within your desktop e-mail progam (i.e. Outlook) or at your mail server. I would recommend that you set this up at the server level to keep this virtual riff-raff as far away from your own equipment as possible. I would also recommend you do this NOW and not wait until your in-box is groaning from the weight of incoming bounce-backs.
- Create and Activate a Sender Policy Framework (SPF). What!? Another three-letter acronym? Yes – sorry. This one also takes a bit of fiddling to set up, but the end results are quite worth the effort. This link will explain the technical details, giving a blow-by-blow on how to set this up for either a corporate-owned domain or something like a gmail account.
What is a Sender Policy Framework? It is a tiny piece of programming that the owner of a domain name can, more or less, attach to the information about their domain name that is distributed to Domain Name Servers. Think of Domain Name Servers as giant digital phone books that are continuously self-replicating and updating at key points all across the Internet. If you own a domain name, say something like lizworks.com, your local DNS knows exactly where all the relevant files for that domain name are kept, and will automatically direct your browser there. Most domain owners also use their domain to direct their e-mail – and here is where the fun begins. Through an SPF, you can identify all the computers (by domain name) that are authorized to send e-mail FROM your domain. Let’s say you send mail from cogeco.ca at home, from your corporate domain name at work, and occasionally from gmail when you are traveling. You can set up an SPF that says to the DNS, “Look, if the e-mail you received from my domain came from one of these three places, it is legit. If it did NOT get sent from one of these three places, it did NOT come from me!” For specific details on how to implement this, please visit OpenSPF.org.
This is not a perfect solution and, certainly, companies with thousands of employees would find a simple policy like this to be restrictive. However, the more we can all adopt this sort of policy, the harder we are making it for the spammers to take advantage of our valuable virtual assets.
My two experiences with e-mail spoofing have shown me that it really is like a storm. My address was used for, I’m guessing, a single giant spam “send” and then the spammer moved on to the next name on their list. The bounce-backs do wind down, usually over a matter of days. However, untold damage was done in terms of my e-mail address now being listed – perhaps on the basis of more than one instance – as a potential spam source. Don’t let this happen to you – take a close look at the SPF approach and implement it if you can. Truly an ounce of prevention worth many pounds of cure.
Posted in
Managing Technology,
Technology
Tags:
coping with an e-mail spoof,
e-mail,
e-mail spoofing,
openspf.org,
preventing e-mail spoofing,
Sender Policy Framework,
SPF,
spoof
