“The Bear” on Business

Finally, the real reason that Erickson is a stack ranking guru.  (See these posts for context:  Guru of Stack Ranking and Stack Ranking Guru.) 

7.     Mountain Biking, anyone?

One of the things I enjoy doing outside of work is mountain biking.  I would thoroughly enjoy the opportunity to take any of our top 300 customers mountain biking in one of the mountain biking capitals of the US: Colorado.  I have one such invite outstanding for this summer - please notify me directly if you regularly purchase fiber based bandwidth and you’d like to come along!

Erickson explains why lacking a solid stack rank, his team might expire from exhaustion.  (See these posts for context:  Guru of Stack Ranking and Stack Ranking Guru.)

6.   Mark Vreeland will work 90 hours a week …

At least he promised me he would … for a week or two if necessary.  Mark works in my group and runs off-net solutions for Zayo Bandwidth.  Normally when a Zayo rep quotes a type II circuit, quoting is done via a tool that Mark has produced.  However, if a specific building can not be found in the tool, our reps utilize an alternate process to notify Mark that they need an ICB (Individual Case Basis) type II circuit quote.  Many of the ICB circuits that Mark needs to quote are complex.  Ever heard of Pequot Lakes, Minnesota? One of our customers wanted a 10G WL to this small Minnesota town ~50 miles from our network.  We relish the opportunity to spend a fair amount of time piecing together such solutions for our top customers (including this customer). Why?  Because their network is our mission.

What would happen if we started trying to come up with solutions for customers who were not target customers (say 10,000 customers)? Well, either Mark and his team would need to work 90 hours a week every week (a string of about 5 or 6 of those would probably force me to begin a search for a new head of off-net solutions - don’t worry Mark!).  Alternatively, we’d need to hire a significant number of additional staff to provide type II solutions for customers.  It’s highly likely that we would end up destroying value if we added additional staff to focus on 10,000 potential fiber based bandwidth customers.

Examples of other organizational impacts that are driven by knowing our top customers include:

• Knowing which products to develop
• Determining which customers will be assigned dedicated organizational account teams
• Understanding what types of reps to hire (selling a $100K/month 10G WL deal is a ‘bit’ different than selling a converged T-1 … both are different than selling a 10 Meg Ethernet 5 node meshed ring)
• Knowing how to staff the engineering organization (Hosted IP Centrex from Broadsoft is a ‘bit’ different than a 400G WL box from Infinera)

This post is a continuation of prior posts on the topic of stack ranking your customers.

As companies get bigger, stacking across the whole organization might not be the best approach. I think this is particularly true for companies that have multiple lines of businesses. That is, having a single list that cuts across lines of business might be useful to only a few people in the organization. For most people, it would cause only confusion.

For example, is it really important for GE to have a co-mingled list of important prospects that cut across its many disparate lines of businesses? I can’t imagine why.

However, it does make sense that each business unit to have its list. Zayo Group has three business units. Envysion is a completely separate business. When these business units have reviews with me, I expect them to communicate which customers (and prospective customers!) they see as most important to their success. I want to witness that their command over this intelligence is constantly improving.

Whether or not an executive team knows which customers and prospects they should focus on is a huge and fundamental question. If not, my view is the management team is stumbling around in the dark.  If so, I believe they are likely to have a more focused execution.

Consider Envysion, Zayo Bandwidth, Onvoy, Zayo Managed Services, and NGT–all companies that I am heavily involved with.  How would I stack rank these entities on the Customer Stack Ranking scale?  I’ll give you my thoughts tomorrow.

Matt Erickson, the boy-wonder allergic to new buildings, shares his 5th reason that stack ranking is important as a management tool.  (See these posts for context:  Guru of Stack Ranking and Stack Ranking Guru.) 

5.    I am smart enough to pick up the phone…

Escalations and firedrills can be minimized by running an effective organization; however, no matter how effective an organization is, escalations and firedrills will arise.   By understanding which customers are important, it makes my job easy when I get an escalation.  Last week I remember two such escalations.  One was for a single site enterprise customer that wanted to purchase 20 megs of bandwidth (i.e., not a Zayo top 300 target customer).  Another was for a top 50 target customer.  When I got the escalation for the top 50 customer, I picked up the phone and call Andy Sred (Andy runs OSP for Zayo) at 7:30 p.m. on Friday night and said, “Andy, I need your help.  We need to do better on this lateral.  What can we do to bring the cost down?”  When I received the escalation for the 20 meg customer I picked up the phone and called Andy and said, “Andy, no need to ask your team to work extra hard for this customer.  Make sure your team knows to focus on the top 50 customer.”  I then picked up the phone and called the sales VP on the 20 meg account and said, “Why are we spending so much time focusing on 20 meg opptys?”

Matt Erickson’s 4th example of why customer stack ranking is necessary hits home.  (See these posts for context:  Guru of Stack Ranking and Stack Ranking Guru.) 

4.     I’m not smart enough …

To solve complex P&L allocations and understand how resources are mapped to many disparate customers, products and verticals.  I am smart enough to do 7th grade math.  That’s good news as the economics involved in selling bandwidth services to a targeted list of customers are relatively easy to understand and don’t require much more than basic models and assumptions.

Here is another example from Matt Erickson on why customer stack ranking is important. (See these posts for context: Guru of Stack Ranking and Stack Ranking Guru.)

3. Hablas Espanol?; Praat u Afrikaans?; Hal tatakallam al-lugha al-Arabiya?

All telecom is not the same; understanding which language to speak is extremely important. Having a top customer list tells you which languages are the most important: the higher a certain set of customers are on the list, the more we need to be fluent in their language.

Hablo Espanol? – O puedes entender la razon que un LSO aumentar es importante (are you able to understand why a LSO augment is important – all of our carrier reps sure better!) Are we experts at understanding our customer’s language? How many foreign languages can one learn to speak?

Messaging – A large majority of small business owners don’t care that Zayo has a fiber network, some medium-sized businesses care and all major wireless providers care. Think messaging doesn’t matter? Think about an example from another industry: clothing. Very few of Neiman Marcus’ customers think price first, some of J.Crew’s customers think price first and nearly all of Wal-Mart’s (clothing) customers think price first… Wal-Mart would take a huge hit if they implemented Neiman Marcus’ marketing strategy. Can anybody think of Wal-Mart telecom companies that implemented a Neiman Marcus approach?

Marketing tools/maps – Wireless companies, content companies and RLECs all care that ZB owns its fiber network. However, they all ask very different questions about the network. Good luck getting network maps right if you haven’t clearly defined your target customers.

PR and website – The same key principles apply…

Matt Erickson strikes again. (See these posts for context: Guru of Stack Ranking and Stack Ranking Guru.)

2. Every physics student understands and remembers everything the first time…

That is if his first name is Albert and his last name is Einstein. Repetition is important in any organization; it’s especially important in a dynamic organization like Zayo Bandwidth. Do you know what you’re repeating? With a focused, targeted list of customers the messages that we share both across the organization and to our customers become clear. Without that focused, targeted list of customers, we’d need to actively recruit only Einsteins.

Matt Erickson was nice enough to offer an explanation of his first example. (See these posts for context: Guru of Stack Ranking and Stack Ranking Guru.)

1. John Scarano (Zayo’s COO) won’t let me hire a couple of ex-Soviet planners to track sales activity…

Understand that to be truly successful selling fiber-based bandwidth to 10,000 target customers (probably representing 100 different verticals), you would require several of Gorbachev’s finest. Managing 300 targets (across no more than 10 verticals) is achievable. The higher the customer ranks, the more Zayo Bandwidth actively reviews the account and asks questions such as:

• How does funnel activity/account penetration look (are we making progress with the right customers)?
• Are we effectively selling across regions (are top customers purchasing across the Zayo footprint)?
• What key drivers are enabling sales (what is working, what isn’t)?

Maybe Matt will be kind enough to explain #2 though 7 as well.

I asked Matt Erickson of Zayo Bandwidth to provide some examples of how we apply Customer Stack Ranking to better our business.

Sandi Mays told him, “It’s a blog; make your post snarky.”’ 

“Snarky?” I questioned. 

“It’s a blogging term,” she chuckled at me. 

Judging from Matt’s chuckling, he acted like he understood her. Or maybe it was part of his allergy. (Matt is allergic to new buildings, no joke.)  So I received Matt’s guest blog and here are his examples: 

1.     Scarano (Zayo’s COO) won’t let me hire a couple of ex-Soviet Planners to track sales activity…

2.     Every physics student understands and remembers everything the first time…

3.     Hablas Espanol? Praat u Afrikaans? Hal tatakallam al-lugha al-Arabiya?  

4.     I’m not smart enough…

5.     I am smart enough to pick up the phone…

6.     Mark Vreeland will work 90 hours a week…

7.     Mountain biking, anyone?

So there you have it—the Guru’s guru-ish list. Snarky? I suppose. I guess you get what you pay for. Ummm—thanks Matt!?! At least I don’t feel guilty for yesterday’s post.

Have you ever seen that title on someone’s business card? Okay, so maybe it is only a portion of someone’s job—but I consider it a very important responsibility. A particular person in the organization should own the target customer list. This person is probably a mid-level, savvy marketing person.

Every month the person should “publish” an updated list. It should be posted in a place that is readily accessible by those in the organization who need to see it. It should either be on an Intranet dashboard or within the customer relationship management (CRM) system. If the company holds regular staff meetings, it should have a regular 10 minute spot on the agenda.

The Stack Ranking Guru should be very proactive in refining the list. Every month, the list should get better and better. Input from the sales teams and Internet research are two prime examples on how to re-assess prospective customers. In a subsequent blog entry, I will give examples on how to refine the list.

It is very important that everyone in the organization respect the list. That is, the official company list, not the opinion of the Guru who owns it. If someone in the organization doesn’t agree, he or she needs to make a case on what should be different. If someone doesn’t think the Stack Ranking Guru is correct, the case can be “appealed” to higher level manager.

So why, you might be thinking, would anyone care if the list is inaccurate? The answer to this question is actually a good test of whether the list is being used effectively. That is, people will care because there are implications as to where a customer falls on the list. I will expand on this in a later post. For now, focus on the following point: If people don’t care, you have work to do.

Does your company have a Stack Ranking Guru?