Business Intelligence and “Tribal Knowledge” – Part 3

In Part 2 of this series, we ended by say just how valuable it is to begin unlocking the "tribal knowledge" that is undoubtedly resident in the minds of the people you have working in your business enterprise.

Taking another look a the client's situation I have been referencing in this series, the client has a complex sales cycle that involved multiple individuals and organizations in the processes of funding and purchase decision-making. To refresh our collective memories, here's a list of the participants we have previously identified:

• The school district, including administrators and, sometimes, board members
  
• The school(s) and the school(s)'s administrators
  
• Teacher(s)
  
• The school(s) and/or school district's IT department
  
• Government programs and associated bureaucrats
  
• Not-for-profit or other sponsors
  

Now, it seems clear, each of these participants that may be involved in the process of a single sale to a school or district will likely have somewhat different motivations for buying the products offered by my client. For example, what excites a teacher about using the product in his or her classroom will probably have an influence on the school and school district's administrators. But in order to get the administrators to look upon the purchase favorably will involve other satisfactions and assurances than those required by the teacher alone. The same may be said for all of the potential parties involved.

Asking the right question to unlock "tribal knowledge"

While looking at current sales accompanied by geographic, demographic or even salesperson correlations may be helpful in seeing some patterns that can be leveraged to increase Throughput, if an organization is going to come up with real breakthrough offers – so-called "mafia" offers, because they are offers that can't be refused – will probably require more than that. It requires unlocking tribal knowledge so that the firm's mark can be segmented and the "offers" can be ever more targeted and effective.

When many companies begin this process, they begin by asking the wrong question (in my opinion). They ask their sales and marketing team something along this line: "Why do our customers buy from us?"

Of course, this makes sense, doesn't it? This question correlates to the data the management team looked at in Part 2 of this series. They looked at differences between Category A sales and Category E sales and now they want to know why so many customers in Category A bought from us.

The right question to ask, however, revolves around what is keeping the company from making more money tomorrow than they are making today, and that question would be: "Why did so many potential customers in Category E not buy from us?" After all, it is the lack of sales that is keeping the organization from increasing Throughput; therefore, it is essential to find out what is keeping sales from happening. In theory, all of the prospects have already been exposed to the factors that caused those who already purchased to decide favorably.

Unlocking "tribal knowledge" to identify patterns and constraints

If my client's team were to begin by sitting down with their sales team, they might put forward a challenge something along these lines to them:

"I want each of you to list the 5 top things – from your experience – that keep you from selling more (fill in the blank)." (The blank might be a product, a product line, in specific geographic areas, or in specific demographic categories.)

[Note: Ideally, it would be good to correlate the results of this into a Current Reality Tree to further unlock potential root causes, as there likely are some that should be addressed. However, let us leave that aside right now and just consider the matter with regard to "business intelligence."]

Discussions evolving from the resulting list of sales inhibitors – along with some provocations to think below the surface – might result in some fascinating factors emerging. The results might lead to understandings similar to this hypothetical list:

• It seems like it is easier to sell Product A into school districts where the administrator is younger and, therefore, more likely to be attuned to technology in education.
  
• It seems like it is easier to make a strong and effective ally of a teacher with more than 5 years in service, but fewer than 15 years. (This might be because the less experienced ones don't have the confidence to bring new ideas to their administration and the ones with more than 15 years in-service are "stuck" in their old ways.)
  
• It seems like it is more difficult to sell Product C into inner-city school districts with high populations (fill in the blank with an ethnicity).
  
• We have not yet discovered how to interest upper-class suburban school districts in our Product Line B.
  

Now, from the tribal knowledge the management team has just begun to unlock, there should be a two-pronged approach to moving forward:

1. Statistical verification
   
2. Development of new "mafia" offer concepts
   

Which portion of this two-pronged effort should receive the major emphasis should be guided by another tribal knowledge factor – intuition – which is right far more often than it is wrong. If the team intuitively senses a strong, "YES! We've hit on something that rings true." Then, the emphasis should probably be given to the development of breakthrough thinking for new "mafia" offers to overcome the constraint and in Throughput.

On the other hand, if the team is more reserved about an emerging concept – if they believe it has some validity, but would feel more comfortable if it could be further corroborated, then the team should put the emphasis on statistical verification.

Statistical verification

The process of statistical verification gets us back to "business intelligence" in an information technology sense. However, it is likely that the appropriate demographic data is not presently available to the firm at this moment. For example, school or school district administrators' and teachers' years in service is probably not a data point currently being collected.

In this scenario, if I were on the management team at this client, I would strongly suggest that we take two or three years of sales history and take a survey. If the firm presently has excess capacity, then take some of the excess capacity resources and put them to the task of calling these customers to gather the demographic data in question: "Years in service."

[Note: If the firm is going to have this done, there might be other demographic data that has come to light and may be of value as well, such as the inner-city ethnic composition of the schools and school districts. And, by the way, while this survey is being undertaken, I would add another element: Gather email addresses and permission to correspond with these parties electronically with occasional messages "including helpful news about technology applications in education and other valuable education insights."]

Similarly, even without formal data accessibility or a lot of detailed research (although much would probably readily accessible via the Web), the firm's team could probably add reasonably accurate demographic data regarding "inner-city" versus "upper-class suburban" schools and school districts that could be used for further analysis. These data may be refined and made more accurate as time and data availability allow.

Once the demographic data is collected, it will be a relatively simple matter to see if there is a real statistical correlation matching the team's intuitive sense regarding years in service for administrators and teachers.

Development of new "mafia" offers

As we said above, a "mafia" offer is simply an offer constructed in such a way that it is simply too good to be refused. This means understanding the motivations of the market segment you are approaching and, as the organization grows in its application of this powerful blend of tribal knowledge and business intelligence, its ability to segment its market into smaller and smaller elements will grow. This will tend to increase the firm's ability to offer even more targeted "mafia" offers.

Going back to some of the examples mentioned above, consider the following:

• It seems like it is easier to make a strong and effective ally of a teacher with more than 5 years in service, but fewer than 15 years. (This might be because the less experienced ones don't have the confidence to bring new ideas to their administration and the ones with more than 15 years in-service are "stuck" in their old ways.)
  • Example question to ask: How can we develop a "mafia" offer that will convince teachers with less experience to become a stronger and more effective ally in bringing out products to their superiors?
    
  • "Mafia" offer concepts: This might involve a "hand-holding" offer with more direct involvement with the teacher in this process, or simply providing more effective "ammunition" so the teacher feels better equipped to address questions from his or her superiors in administration.
    
• 
  
  
  It seems like it is more difficult to sell Product C into inner-city school districts with high populations (fill in the blank with an ethnicity).
  • Example questions to ask: What can we learn about the specific culture (ethnicity) so that we can construct "mafia" offers that will overthrow the reticence exhibited by this culture in adopting our products for education?
    
• We have not yet discovered how to interest upper-class suburban school districts in our Product Line B.
  • Example questions to ask: What are the objections raised by those in upper-class suburban school districts when approached regarding Product Line B? How can we develop new "offers" that overthrow these objections?
    

Hopefully, if I have been clear, you are beginning to see how power the blending of tribal knowledge with computer-based, low-cost business intelligence could be to help your firm segment its market and create breakthrough "mafia" offers that should lead to increased Throughput.

Contact me rcushing@geewhiz2roi.com if you have questions or would like assistance in applying these techniques effectively in your organization.

©2010 Richard D. Cushing