Tag Archives: risk_management

Eight Common Myths about Business Risk

It seems everyone has an opinion about cholesterol. Most people know there are two types, good and bad. If you ask a friend, he or she will tell you to eat more of the good kind, and less of the bad. Makes sense to me.

Now, I’ve learned that’s bunk. There’s a bad version of good cholesterol that causes disease. And I learned there’s a good version of bad cholesterol. Confused? Me too. From now on, I’m just going to refer to cholesterol by its chemical designation, C27 H46 O. That seems so much simpler.

The word risk suffers from the same confusion. Like cholesterol, risk is a thing. Neither good nor bad. What gives risk its mojo is context. As The Economist reported “Though changing appetites for risk are central to booms and busts, economists have found it hard to explain their determinants . . . the willingness to run risks varies enormously among individuals and over time.”

What is risk? Webster defines it as “possibility of loss or injury.” In most business contexts, risk has broader meaning, which I describe as uncertainty toward achieving a goal. Risks live in the gap between predictions and the actual result. The outcomes can be positive or negative.

Marketers and business developers have long used risk as a competitive weapon. “Buying from our company right now will protect you from falling hopelessly behind your competition.” Such a great pitch! We’ve all used a flavor of it. But risk has always been a two-edged sword. Myths about risk skew assumptions and drive expectations into weird places.

Myth #1: “Customers decide based on facts!” Facts are only part of the decision-making apparatus. “Any decision relating to risk involves two distinct and yet inseparable elements: the objective facts and a subjective view about the desirability of what is to be gained, or lost, by the decision,” wrote Peter Bernstein in his book, Against the Gods.

Myth #2: “Most customers perceive risks the same way.” If every person had the same risk appetite or capacity, our financial markets could not function.

Myth #3: “Anything a vendor can do to mitigate risk will be rewarded with more and faster sales.” If only it were that straightforward. Using that logic, wouldn’t it be compelling for many executives to simply stick with the status quo? While most buyers don’t want to absorb unnecessary risk, every solution creates new risks. So promoting the singular message of risk reduction might ring hollow. The key is to help buyers identify opportunities for eliminating unneeded risks, and to help them identify intelligent risks that are likely to return value to the company.

Myth #4: “Products with short time-to-value are less risky than those with longer time-to-value.” Contrary to some sales assertions, there is rarely certainty about value achievement. If you latched onto this logic, buying a lottery ticket for next week’s drawing would be less risky than buying a US savings bond.

Myth #5: “Showing a prospect the cost of inaction will lead to a sale.” But that’s only one side of the coin. Once funds are committed and a project has been initiated, companies often can’t turn back. That can put them in a riskier position than companies that have retained their financial and technological options.

Myth #6: “Our strategy is fine. We just need to execute!” Strategic risk can have devastating consequences for shareholder value. Boo.com, Pets.com, The Learning Company. During the Tech Bubble, these companies and many others suffered significant losses in market capitalization because they had strategies that proved disastrous.

Myth #7: “My company doesn’t have ethical risks.” I often hear, “that sort of problem can’t happen here.” But it can. Almost everyone knows of a former co-worker (or more) who pushed the ethical envelope when selling to customers.

Myth #8: “Most risk can be managed with careful measurement.” Measurements help, but not every major risk can be easily measured or predicted.

Just like cholesterol, what’s bad risk in one context might be good in another. So it’s best to recognize that the labels people slap on aren’t necessarily accurate in every situation. Debunking myths about risk, and moving beyond its pejorative meaning will help people think about risk in new ways. Not as something that always has to be faced down and avoided, but as something that, when embraced intelligently, opens new opportunities.

Revenue Risk Management Part 2: How a Risk Audit Can Help You Achieve Your Sales Goal

By now, you know your revenue target for 2014. Let’s cut to the chase: will you make it?

If you’re feeling uncertain, you’re not alone. Risks are swirling everywhere, some known, some not. When revenue risks are identified, they’re often labeled pipeline or funnel problems, and shunted off to Sales and Marketing, where they can be managed.

In truth, once revenue risks reach the high-energy, caffeinated world of business development, they’re often handled differently from other risks. Instead of getting managed, revenue risks are just re-distributed. Sales executives accomplish this feat by embedding them into quotas and productivity targets. Then, those are plopped onto the waiting shoulders of the sales and marketing team members. “Risk flows downhill,” to paraphrase a more popular adage.

When actual revenue doesn’t meet goal, management ratchets up the numerical targets for lead generation, “customer touches,” outbound sales calls, and booked appointments. This tactic works until it doesn’t. The many causes for failure can be consolidated into a single term: burn out – a state reached when an employee experiences an epiphany like, “Gee. I could work just as hard somewhere else for way more coin.”

For many companies, dealing with revenue risk channels bucket-loads of corporate spending into bleeding-edge marketing automation, new sales methodologies, and myriad other short-term projects that contain the words social, collaborative, and content. The benefits of all this spending has always been a little mysterious. “Where’s the ROI?”, people love to ask.

When there’s vague understanding of risk, the outcome is a hodge-podge of loosely-joined marketing assets, promotional campaigns, customer data, and software applications.  “We’ve got social media pretty much covered!”, some executives tell me. Sorry, but without comprehensive revenue risk management, a company’s online presence appears more like a biz-dev Maginot line.

More marketing leads won’t help achieve goal if the sales staff is not competent in getting a first meeting with a prospective client. Investing in marketing automation is useless when there’s dysfunctional sales leadership. Honing a lucrative sales compensation plan doesn’t matter if the company can’t get a quality product out the door. Award-winning loyalty programs and creative marketing content won’t excite any COO if customers can’t pay their invoices. And fancy webinars won’t convert prospects if current customers hate the company’s service.

You can see the evidence of disjointed risk management in the revenue results for almost any organization. The fallacy is in not viewing revenue risk as a strategic business challenge, one that involves every department—not just sales and marketing. A revenue risk audit enables risk management by exposing all risks that are consequential in disrupting sales. It’s a planning tool for deciding which projects to undertake and determining how to invest in them. At the end of the audit, you can expect to have a clearer view of the risk potholes you’re likely to encounter, along with knowing which ones are cavernous. Here are some tips:

1. Include the whole company. Don’t limit the audit to sales and marketing.
2. Don’t confuse risk management with risk avoidance. They are not the same.
3. Embed risk analysis into all of your operational planning. In addition, use it for sales coaching and account reviews.
4. Expect that some risks will be common across departments. Not all risks fit neatly into a single category.
5. Link every significant risk to one or more specific internal controls.

For audit and planning purposes, revenue risks can be separated into categories. (Note: though I have used Sales throughout the many of the audit questions, they apply equally to marketing and other business development functions.)

Internal risks

Strategic risk.
1. Has the sales strategy in place been proven successful at the company, or elsewhere?
2. Are customer needs and buying habits known?
3. Are customer needs and buying habits volatile?
4. Do the company’s revenue generation channels (direct/indirect/online/bricks-and-mortar) enable strategic and tactical flexibility?
5. Does the company’s management clearly understand the steps its customers use in making buying decisions?
6. Does marketing and sales management monitor future industry trends?
7. Does the company maintain a multi-layer sales organization (e.g. territory/district/region)?
8. Do sales compensation policies conflict with any of the company’s strategic objectives?

Marketing alignment risk.
1. Do the company’s brands have a positive reputation?
2. Does the company’s pricing strategy support its cash flow requirements?
3. Are the company’s social media assets fully integrated into its marketing automation and sales systems?
4. Do Marketing and Sales operate using the same business definitions and taxonomies?
5. Do the company’s marketing automation tools use a single data repository, shared by all departments?
6. Do the marketing and sales teams view each other as mutually valuable and supportive?
7. Are the company’s goals for marketing sales congruent with each other?

Sales enablement risk.
1. Does management use proven, effective techniques for ensuring consistent, positive customer experiences?
2. Are there adequate administrative support resources for marketing and sales?
3. Are effective Customer Relationship Management (CRM) and Sales Force Automation (SFA) tools in place and being used?
4. Has the company successfully deployed tools to measure and manage marketing and sales productivity?
5. Has the company demonstrated repeated competency in executing effective marketing campaigns?
6. Does the sales team have adequate knowledge to hold face-to-face conversations with prospects and customers?
7. Do sales team members have adequate situational awareness for every opportunity?
8. Do sales team members use consistent, effective communications that buyers consider valuable?

Sales-force effectiveness risk.
1. Has sales leadership been proven capable?
2. Do they inspire confidence?
3. Do they instill a positive, challenging culture that includes encouraging intelligent risk taking?
4. Do they have demonstrated skills for effective coaching and mentoring?
5. Are sales team members self-motivated?
6. Are sales team members passionate about what they are selling?
7. Are sales team members strictly money-motivated?
8. Does the sales organization use a repeatable process that matches how customers buy?
9. Does the sales team have a formal process for knowledge capture, knowledge sharing, and organizational learning?

Information risk.
1. Is the data used for CRM/SFA, and other marketing automation, accurate and timely?
2. Can data be captured efficiently?
3. Is there significant latency between the time data is collected to the time information is made available to staff?
4. Do different departments within the company use the separate, non-integrated customer data repositories?
5. Have the causes of all past IT security breaches been mitigated?
6. Are IT security procedures in place to ensure that information is not available to unauthorized persons?
7. Does the company maintain privacy standards for customer information?
8. Does the company have strong governance over IT security?

Talent risk.
1. Does the company know which competencies customers value in its employees?
2. Does the company use hiring practices to cull which candidates are likeliest to have those competencies?
3. Is the company unable to fill positions due to shortages in the talent pool?
4. Does the company offer employees flexible work arrangements?
5. Could the company sustain the loss of key personnel without operational interruption?
6. Does the company have an ongoing program for professional development for all customer-facing staff?
7. Does the company experience higher-than-average turnover customer-facing staff?
8. Has the company recently experienced turnover in senior management?
9. Does the company’s compensation plan enable employee income at or above market rates?

Product risk.
1. Are the company’s products easy to counterfeit?
2. Are the company’s products unprotected by patents and trademarks?
3. Is the company’s product line segmented into different pricing tiers?
4. Does the company have a reputation high-quality, reliable products?
5. Does the company’s competitive advantage rely on rapid product innovation?
6. Are the company’s product life cycles shortening?
7. Is it easy for customers to find substitutes for the company’s products?
8. Are there low switching costs?
9. Are the company’s products subject to sudden changes in demand?
10. Does the company maintain an adequate innovation pipeline for new product development?

Operational risk.
1. Is the company’s supply chain subject to frequent disruptions?
2. Does the company experience frequent product quality or delivery issues?
3. Does the company consistently meet its order fulfillment targets?
4. Does the company have significant excess, obsolete, or slow-moving inventory?
5. Does the company have old, unsupportable production equipment or IT infrastructure?
6. Do the company’s profits and operating costs compare favorably with industry averages?
7. Does the company conform to industry best-practices for project management?
8. Does the company have a high number of unresolved customer complaints?
9. Are the company’s customers dependent on customer support in order to use the company’s products or services?

Legal risk.
1. Are the company’s intellectual properties protected with enforceable contracts?
2. Does the company regularly review sales proposals and customer contracts for liability risk?
3. Does the company enforce violations of its sales agreements?
4. Does the company experience frequent legal disputes with customers or employees?
5. Are the company’s products and intellectual property protected in every country where it operates?
6. Does the company maintain and provide written guidelines for its social media policies?
7. Are the company’s sales and business development practices compliant with the Foreign Corrupt Practices Act?

Ethical risk.
1. Do senior corporate leaders consistently model ethical behavior?
2. Does the company have a reputation for unethical sales practices?
3. Is the company transparent to its stakeholders about its sales strategies and tactics?
4. Does the company have guidelines for Corporate Social Responsibility?
5. Are employees offered high financial incentives for meeting revenue goals?
6. Does the company have strong internal audit controls?
7. Does the company exercise tight internal governance over business practices, particularly in marketing, sales, and procurement?

Financial risk.
1. Does the company have adequate financial capacity for its risk exposure?
2. Does the company have adequate cash flow to provide on-time payment for suppliers and employees?
3. Does the company have sufficient liquidity to sustain its operations?
4. Does the company consider cash flow needs when making project decisions?
5. Does the company have adequate controls over cash receipts and disbursements?
6. Does Sales provide Accounting with forecasts that are valuable for planning purposes?
7. Do customers consistently pay invoices within the specified terms?

Internal/External (Mixed) risks

Customer risk.
1. Does the company have diversified base of clients?
2. Do the company’s channel partners offer access to valuable markets that are difficult for the direct sales channel to enter?
3. Do the company’s customers face high technological or cost hurdles when switching suppliers?
4. Does the company have deep, highly collaborative ties and connections in customer accounts?
5. Does the company have higher-than-average customer churn?
6. Do customers perceive the company’s products as highly differentiated from other offerings?
7. Has the company recently experienced high attrition in its customer base?
8. Has the company recently lost one or more large customers?

Supplier risk.
1. Are the company’s sources of supply consistent and reliable?
2. Do the company’s suppliers adhere to standards for Corporate Social Responsibility?
3. Are the company’s suppliers engaged in labor or environmental practices that are banned in the developed world?
4. Does the company have a diversified base of suppliers for key components?
5. Do the company’s suppliers have a history of providing high-quality, reliable materials?
6. Are the prices of the company’s supplies or raw materials stable?
7. Does the company source critical components from countries that are undergoing trade sanctions?

External risks:

Economic risk.
1. Are the company’s operations significantly impacted by general economic conditions?
2. Are the company’s sales dependent on low interest rates and the easy availability of investment capital?
3. Does the company depend on revenue from areas of the world that are experiencing economic instability?
4. Do the company’s trading partners operate in countries that have volatile exchange rates?
5. Are the company’s customers prone to radical changes in demand based on general economic conditions?

Competitive risk.
1. Does the company operate in a highly competitive environment?
2. Are the company’s competitors considered the innovation leaders in the market?
3. Can the business development team articulate and explain the company’s competitive advantage?
4. Are competitors able to offer similar products at consistently lower prices?
5. Do competitors offer superior products?
6. Do competitors have superior financial strength or other significant advantages?
7. Does the company lack insights into competitors’ strategies, products, or pricing?
8. Does the company operate in an industry with low or few barriers to entry?
9. Are substitute products threatening the company’s core products and services?
10. Is the company unusually vulnerable to foreign competition?

Regulatory and compliance risk.
1. Does the company have significant government contracts?
2. Is the company currently under investigation for non-compliance?
3. Is the company subject to pending governmental regulation that could significantly change its daily operations?
4. Does the company fail to comply with regulatory requirements, including OSHA?
5. Does the company’s internal governance monitor regulatory compliance?

Political and social risk.
1. Is the company vulnerable to changes in demand based on political or social conditions?
2. Does the company or its management have a poor public image or receive negative publicity?
3. Does the company have significant operations in foreign countries that are experiencing social unrest?
4. Is employee safety, work/life balance, and social welfare unimportant to the company?

Industry risk.
1. Does the company sell its products in an industry that is declining, unstable, or distressed?
2. Does the company sell its products in an industry that is prone to business cycles?
3. Does the company sell its products into an industry with a poor public image?

This list is not intended to be exhaustive. There are additional questions that need to be asked. And not every category of questions will matter equally for every company. Some best practices to follow for your company’s audit:

  • Focus the purpose of the audit on planning and control.
  • Structure questions to yield a “yes” or “no” answer.
  • Be objective. Don’t inject bias or vendettas into the audit.
  • Perform risk audits regularly to expose trends.
  • Prioritize the risks that should be managed.
  • Track business development costs carefully to understand how effectively risks are covered.

Know your risks, make your number. As the saying goes, if it were easy, everyone could do it.

For Part I of this series, How Menacing Is Your RAR – Revenue at Risk?, click here.

Author’s note: Most bloggers encounter writer’s block, and many of us have adopted techniques to avoid the problem. For many years, my dog, Fido, has faithfully and kindly provided me a gentle diversion to clear my mind when I’ve become entangled with too many thoughts, ideas, words, and sentences. By giving Fido a hug, a pat on the head, or a prolonged scratch behind his ears, I have been able to overcome many confounding moments when the words I wrote didn’t match what I wanted to say. Since I began posting blogs in 2007, this is the first one I have completed without him, and I dedicate it to honor his memory.

Proving ROI Doesn’t Mean Squat Without Disclosing Risk

Originally published 7/8/10

Put a big, fat glob of risk in your product pitch, package it as “excitement,” and you have a powerful sales tactic. Even a disclaimer plays a crucial role, not that it would matter to a buyer to read one:

“Do not attempt. Really. Do not do this. Stunts performed at sanctioned events. Specially equipped rally vehicle. Professional driver. Closed course. Obey all traffic laws, always drive safely and wear your seatbelt.” Right! Where can I get one of these cars to test drive? Such statements are motivating when the target buyer is male, 18 to 29 years old.

In a different, far away sales universe, the B2B salesperson sells his or her product to an older, equally risk-aware buyer, but without testosterone’s helpful property of making risk seem wildly appealing. B2B buyers avoid stupid risks. But salespeople frequently toss all risks into the same negative bucket, and choose not to discuss them. Finding risk transparency in B2B sales is about as common as finding a teenager without a PDA.

It’s easy to say you’re transparent, but harder to be transparent. Here’s a personal example for how not to do it: One prospect I worked with had installed—and de-installed—two mid-range ERP systems in four years. I was there because the company was preparing to rip out #3 as well. As vendor-victim #4, the company’s CEO told me point blank, “we need you to tell us everything that could go wrong with your solution.” “What don’t you already know?” was the unsaid reply that flashed into my mind. But even that sarcastic response would have been better than the feeble one I offered. I was totally unprepared for the conversation he wanted.

Why? Risk discussions weren’t part of my sales tool kit. My kit had the expected implements: Problem/Solution/Benefit statements, features and capabilities collateral, key differentiators, and a smidgen of Return on Investment fluff. No risk insights adding weight to the bag. Salespeople are rewarded for mowing down concerns about their own products, and for raising them about competitors.

Would a street-smart salesperson disclose that just yesterday, his company’s chief software architect took an unannounced sabbatical to go mountain biking in Peru with his girlfriend? Or that his CEO has discussed selling the company in the next 12 months? Stuff happens, and it’s classic FUD (Fear, Uncertainty, & Doubt) material. When our sources are credible, we spread this about the other guys, never about ourselves.

How transparent a salesperson should be about such sensitive matters tiptoes into the shadow of the Ethical Elephant, and I’ll stick to the periphery. Anyway, there’s a more pragmatic side to this discussion. Prospects aren’t deer in sales headlights. Not anymore. They’re fully capable of learning about risks. But as many salespeople know from we’re-putting-this-on-the-back-burner-for-now conversations, prospects are also prone to the stasis of no-decision purgatory. Could risk confusion be one cause? Could salespeople be more valuable by intelligently guiding buyers to recognize and consider the risks that change creates—even if it means discussing their own?

Author Sharon Drew Morgen believes they can. In her book, Dirty Little Secrets: Why Buyers Can’t Buy and Sellers Can’t Sell, and What You can Do About It! she wrote, “Until buyers understand, and know how to mitigate, the risks that a new solution will bring to their culture, they will do nothing.”

Risk matters. If it didn’t, the shortest closing sales pitch, “nobody ever got fired for buying IBM,” could not have helped sell tons of IBM iron and services against arguably superior technology. But the sword cuts both ways. One thing I’ve learned: when I haven’t identified my risks, they will be identified for me—never a good thing. Too much perceived risk and my opportunity is toast. Too little, and I might win—but when the first glitch occurs, my prospect will never forget how I over-promised and under-delivered.

Back to “Proving the ROI.” Accounting Professor Bob Kemp told me this year that business decision makers ask three questions about value: what do I get, when do I get it, and how certain are the answers to the first two questions? Déjà vu. That’s what the CEO wanted to know. And because his company was a candidate for the Guinness Record for Most Scrapped ERP Systems, he was screaming for help. But without a clue about my own assumptions and without understanding the CEO’s risks, I was only slightly more useful to his decision process than a Ouija board.

Which risks did he need to learn? Ideally, the causes for the failures of his first three ERP systems. But most salespeople don’t have the luxury of performing detailed project retrospectives. A general rule of thumb: any risk that has high likelihood and high impact on a financial claim, estimated performance improvement, or outcome is a candidate for discussion.

Had Steve McConnell’s 660-page book, Rapid Development, been available at the time, I would have presented this adapted list of project risks:

Feature creep: escalating the project by adding new feature requests

Gold-plating: insisting on the “latest and greatest” technology, instead of “good enough.”

Software defects, interoperability problems, and operating system instability

Schedules developed without factoring constraints

Inadequate software design and poor usability

“Silver-bullet” syndrome: expecting software or technology will solve problems they’re not intended to solve

Weak personnel: not having the right talent in the job at the right time

Communication problems and interpersonal friction between developers and customers.

You’ve probably already recognized the same risks can occur for customers and vendors. But discussing these risks would have provided me the opportunity to describe how my company managed them.

How much better would my meeting have been had I brought these risks to the forefront? How much more effectively would my prospect have been able to make calculations about financial return and estimate time to value? How much more trust could I have fostered in the buying experience? Much. For all three questions.

Oh—the outcome of my sales call? Despite fumbling the CEO’s question, I won the order. After three failed vendors, he was running out of alternatives. Best of all, my software ran on IBM.

Five Incredibly Exciting Ideas for Managing Revenue Risks

We’ve all endured small talk at networking events. “. . . and last year, when my daughter and I stayed with one of my sorority sisters, she discovered this weird mole on her leg, and . . .” Your fascination maxes out in the first five seconds as your mind wanders to other things, like whether you remembered to close the garage door that morning. Slipping out of such conversations can be a useful skill, especially this time of year. Better if you can do it politely.

Fortunately, there’s a rejoinder tailor-made for truncating dull conversations. Just say “. . . before you launch into that, could I share some ideas I read about managing revenue risks?” The sort of thing you’d say to ditch an encounter on Chat Roulette if your mouse wasn’t working. You will be rewarded: “. . . Hey, I just saw someone who I really need to talk to. . .” Off into the crowd goes your new acquaintance, and her untold dermatological mystery, while you move on to the bar. You can thank me for the idea by sending a Starbucks gift card.

But let’s say, by chance, this individual happens to be a CFO or an enlightened VP of Sales for a fast-growing company who tells you, “Great! That could really help my company’s performance. I’ve got time.” Game on! You will be ready. And you can speak with the same passion and fervor as a TV evangelist, because once you’ve scratched away the dry wrapper, risk management is pretty darn exciting. You’ll want to begin by sharing best practices. But call them something catchier, like five killer risk rules your competitors haven’t yet figured out.

1. Define risk broadly. Don’t just provide a forecasting spreadsheet or draw a sales funnel on the conference room white board, and leave it at that. In fact, there isn’t anything in the breadth of Enterprise Risk Management that couldn’t have an impact on revenue. That includes strategic, financial, operational, compliance, and reputation risks. So if your sales strategy planning doesn’t consider all of these categories, you’ve left something out.

2. Recognize both the opportunities and downsides of risk. Many organizations think of risks as undesirable, as something to reduce or eliminate. But all organizations take on risks, and the most promising sales opportunities often involve heightened risk. The management challenge is to take on ones that align with the company’s overall strategy, and that are not too high for what the company can accept.

3. Develop a culture of identifying and evaluating risk at multiple levels in the company. A tough shift for sales organizations steeped in a can-do culture. While risk identification and evaluation aren’t the same as can’t-do, they are often seen that way: “Don’t tell me how you’re not going to make your number, tell me how you are!” One reason why many business developers rarely see the first warnings of risk. Risk assessment must be performed regularly in every department, but especially throughout Sales and Marketing—from telesales on up—so the most critical ones can be presented to decision makers.

4. Look at the total cost of risk. Risks that come home to roost compromise revenue, and increase marketing expenses for maintaining higher revenue-pipeline multipliers. But there are non-monetary ripple effects as well: lost productivity, distractions, low morale, and in the case of social media, negative publicity.

5. Senior management and business development staff must collaborate. “I don’t know exactly what they do over in Sales to make goal, but somehow, they always manage to pull it off at the end of the year!” The best companies take a different approach, recognizing that Sales is not a black box. By working together and constantly improving connected strategies and tactics throughout the organization, they are more likely to achieve success.

After you’ve shared these scintillating ideas, who knows where the conversation will go! But in case your friend says, “Thanks for the insight! Now, about the mole I was telling you about . . . . . ” maybe you’ll be lucky. If your timing is right, the caroling will begin.

Happy holidays!

Customer Information Power: An Obvious Illusion

The Chevy Nova failed with Hispanic car buyers because the nameplate—no va—had the unfortunate coincidence of meaning doesn’t go in Spanish. Proctor & Gamble’s Ivory Soap owes its buoyant characteristic to a serendipitous production error. Coca Cola’s 1985 introduction of New Coke was a marketing ploy to increase sales for its predecessor, Classic Coke.

As we say in sales, “if you believe that, I have swamp land in Florida to sell you!” Each story has been debunked on Snopes.

Another myth belongs in the same group: “In today’s environment, information power lies firmly in the hands of your prospects and customers.” It’s hard these days to read a marketing, sales, or social media blog that doesn’t include a flavor of that proclamation. Vendors must crave being whipped into submission, and bloggers are eager to oblige. “I cannot understand why marketing and sales folks continue to think and act as if they had the power,” marketing strategist Rebel Brown wrote in 2012.

Forget the popular hype—vendors still have information power, and plenty of it. In the battle for information supremacy, I’ll choose PhD data scientists, petabytes of customer information, and sophisticated predictive analytics over Joe the Purchaser, his access to online product reviews and his trusted social connections.

Recent news stories underscore this point. Customer information power? See if you can find any:

What Cruise Lines Don’t Want You to Know. If it’s safety-related, plenty. At a recent US Senate hearing, cruise expert Ross Klein, a professor at Memorial University in Newfoundland, said 79 fires have broken out on cruise ships between 1990 and 2011.“Most of these fires have received little coverage in the US press. It is a topic that the travel publications avoid and travel agents do not like to hear,” according to an article on CNN.com. Information avoidance means less searchable content. At least Mr. Klein’s website, Cruisejunkie.com, includes data about accident reports and ship inspection scores from the Center for Disease Control and Prevention (CDC).

But what if you wanted to learn more by looking elsewhere? Just for the heck of it, I checked the website for The Cruise Line Industry Association, which represents 26 companies, including the biggest, Carnival and Royal Caribbean. It offered no results when I entered ship fires in the search box. Amazing. (Interestingly, the word fires yielded some great travel destinations, but alas, no safety information.)

The Extraordinary Science of Addictive Junk Food. (The New York Times Magazine, February 20th, 2013) Author Michael Moss wrote a sentence that jumped right off the page and hit me in the head: “What follows is a series of small case studies of a handful of characters whose work then, and perspective now, sheds light on how the foods are created and sold to people who, while not powerless, are extremely vulnerable to the intensity of these companies’ industrial formulations and selling campaigns.” The not-powerless-but-extremely-vulnerable part struck me, especially in the same sentence as selling campaigns. And what is a selling campaign without asymmetrical information?

The article quotes Bob Drane, Oscar Mayer’s former Vice President for New Business Strategy and Development, and creator of the popular Lunchables product line: “What do . . . MBA’s learn about how to succeed in marketing? Discover what consumers want to buy and give it to them with both barrels. Sell more, keep your job! How do marketers often translate these ‘rules’ into action on food? Our limbic brains love sugar, fat, salt . . . so formulate products to deliver these. Perhaps add low-cost ingredients to boost profit margins. Then ‘supersize’ to sell more . . . . and advertise/promote to lock in ‘heavy users.’ Plenty of guilt to go around here.”

Push to Gauge Bang for Buck From College Gains Steam (The Wall Street Journal, February 12, 2013) “High school seniors now trying to decide which college to attend next fall are awash with information about costs, from dorm rooms to meal plans. But there is almost no easy way to tell what graduates at specific schools earn—or how many found jobs in their chosen field.” “Was college worth getting in the amount of debt I’m in?” one student asked. “At this point, I can’t answer that.” Pop quiz: who has the information power in this scenario?

“Last spring, the Obama administration began developing a ‘College Scorecard’ that would add salary information for graduates and average debt load to existing data . . .” the Journal article says. My home state of Virginia is one of the first states to publish salary data for graduates from its colleges and universities. According to one senior, “It’s much easier to plan when you have this information.”

New Vehicles Collect Data, the Destination of Which is Yet Unknown (The Washington Post, March 7, 2013) “Cars have long gathered data to monitor safety and performance. But their new found connectivity may allow a range of parties—automakers, software developers, perhaps even police officers—new access to such information, privacy advocates say. Because few US laws govern these issues, consumers have little control over who can see this data and how it can be used.” One Ford technologist attempted to allay consumer concerns: “We assume that you’re comfortable with whatever privacy policy [an application] has.” Thank goodness! For a second, I thought I lost my information power!

“The widespread embrace of social media has put even more information – and ultimately power – in the hands of the buyer, and that has drastically altered the jobs of the salesperson and the marketing professional,” Marketo’s Phil Fernandez wrote in a blog, What the iPad Revolution Means to The Future of Sales and Marketing. An exuberance that contributes to the myth of customer information power, and leads to another confusion: information access doesn’t equate to information power.

Steven Rosenbush and Michael Totty wrote in today’s Wall Street Journal that “companies have access to vastly more information than they used to, it comes from many more different sources than before, and they can get it almost as soon as it’s generated.” According to the article, Facebook’s daily data analysis generates about 500 terabytes of new information every day. Against the corporate nuclear arsenal of Big Data, Joe the Purchaser’s online searches via mobile web browser compares more to a pea shooter.

On beyond Facebook! “Businesses in a slew of industries are putting [big data] front and center in more and more parts of their operations,” the article reports. Meanwhile, the power challenge facing consumers is less about a lack of information than structural impediments to uncovering, organizing, and interpreting what they find. Then there’s that nagging question of personal will. How inclined is a high school student standing in front of a vending machine to look up nutritional information about the bag of Doritos she’s about to purchase right before volleyball practice? She’s carrying an iPhone, but she needs a snack and has three minutes before she has to be on the court. “Insert $1.00 and press U-5.” Sold!

I find customer information power more theory than reality. Snack foods, higher education, personal transportation—huge mature industries, each one. In 2011, there were 16 million cruise bookings worldwide. Today, you’d expect customers to be information-power dominant, especially given the ballyhoo over Customer 2.0, and the ubiquity of web access.

But there are plenty of impediments that make customers decidedly un-powerful. Choppy regulatory oversight with higher education and the cruise industry. Tight vendor control over product information with snack foods. The question of data ownership in automotive and personal transportation. Not to mention the flying mallet called Big Data that has swirled into the picture. For now, vendors—not customers—own that hammer. And that’s a huge advantage.

Customer information power? I don’t see it. But don’t take my word for it. Wait a month or two, and you can check it on Snopes.

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