Are You Scared of Technology?

Chances are that you are… But wait, there’s good news too.Technophobia is a RealityI Really Hate Computers! Am I a Psycho?

Defined as "a persistent, abnormal, and unwarranted fear of technology or computers", each year this so called technophobia causes many people needless distress. Doctors have long recognized that some people have fears of technology for irrational reasons. It appears to be a protective mechanism raised by the subconscious mind after some sort of computer-related scare or trauma. The treatment is long and expensive and the condition itself is very costly to the patients as it prevents them from living normal lives in a society that greatly depends on technology.

Fortunately, these instances of technophobia as a medical condition are fairly rare. Most cases of common-place technophobia are related either to wrong presuppositions or technological failures caused by poor planning and other external issues, but not technology itself.

Real Life Examples

Many of our fears are driven by presuppositions. Imagine you’re walking a busy street and all of a sudden notice on the sidewalk a small device with wires, battery and a blinking LED. What would you think? That is exactly what caused wide-spread panic in early 2007 when such devices were found in Boston and other cities. It also caused temporary closure of roads, bridges and waterways. It turned out to be a creative marketing effort of Turner Broadcasting to promote their new adult cartoon “Aqua Teen Hunger Force”. The blinking LED was actually the image of the cartoon’s main character. A presumption driven mainly by the video industry (how many of us have actually seen a real bomb?) lead the bystanders to jump to the wrong conclusion.

On the other side of the scale there are different technological scare examples in which the human factor played a major role. At the end of 90s after investing over $60M, Bank of America abandoned a new computerized system which was supposed to be the most advanced in the banking industry. The California Department of Motor Vehicles abandoned a project to replace a 30-year old database system after investing $44M and 6 years of effort.

In each of these cases the major reason for scraping the project was inability of management to sell the long term vision to their staff and the resulting employees’ resistance to change. Many individuals, who were affected by the failing technology projects, inevitably developed a “sour taste” toward technological changes in general. I.e. now they have a presupposition that a change in technology is evil.

Status Quo vs. the Wind of Change

Workplace Stability

Tom Pendergast, a researcher at Pepperdine University (California) identifies workplace stability as a situation in which both employees and management have a large emotional stake. Over time people develop balance between their job demands and personal lives which results in equilibrium or homeostasis. When a sudden change occurs, the created imbalance may hurt both job performance and personal life.

Change Management

Any organization has a set of developed procedures or norms. With bringing in a new technology some norms inevitably change. For example in a retail store, taking petty cash from the cash register for various reasons was a norm. Now, with introduction of a computerized point-of-sale system it is required that every cash payout is accounted for. Such change of the norm, if left unchecked, may cause resistance, stress and conflict. On the contrary, the same new procedure, if presented as the means to protect employees from being unfairly accused of stealing money from the till (which now becomes impossible as the computer tracks each cash drawer opening), the change of norm will win support and willful acceptance by both the management and the staff.

What Do We Really Fear?

The Collins English Dictionary defines technology as 'the total knowledge and skills available to any society for industry, art, science etc.' People generally feel uneasy about technology. We recognize that we are dependent on it but at the same time we feel in a vague way that we are in thrall to an alien influence.

William Reville, a scientist form University of Cork argues that when we fear technology we really do fear ourselves. Technology is not unnatural – it’s just an extension of ourselves designed to empower humans with the abilities to do things faster, better and in a more precise manner. Therefore, when we fear technology we actually fear our own inability to use it properly. Any technological advances of the past: steam engine, electricity, telephones, automobiles etc. were subject to the same harsh criticism as today’s advances in chemistry, genetics, physics, computers etc. Even in light of obvious advantages, our constant fear is that if misused, technology may harm rather than benefit.

Propensity for Change

And yet progress cannot be stopped. Some people welcome technology as soon as it becomes available while others may still be way behind. Researchers have shown that there are four major categories of business technology users regarding the speed of the technology adoption.

Early Adopters (13%)

These are the technology champions – the geeks and nerds as they are known to the uninitiated. They get new technology as soon as it shows on their radars. They pay a premium price to be ahead of everyone else. They run into all the caveats and bugs. They often fail miserably but the technology gets a chance to mature on their bones.

Early Majority (30%)

More cautious that the earlier adopters, these technology enthusiasts reap the most benefit because by using an already somewhat matured technology they get way ahead of their competition. They also help the technology to become more affordable and user-friendly to the general public.

Late Majority (40%)

The late majority is the conservatively-minded people who eventually get on board pushed by losing the business advantages, peer pressure and other business and social phenomena. They gain less immediate benefit than the early majority but are able to sustain and improve their operations and receive long term advantages in various areas of business. They get a mature technology: normally it means a higher upfront cost but lower ongoing/maintenance cost compared to the less mature technologies.

Laggards (17%)

People in this category get into technology only because they realize that otherwise they will lose their business. Often it is too late though. The technology is mistakenly seen as the last resort and as such is taken reluctantly, without proper planning and budgeting. The laggards are scared of technology and as they fear it they become superstitious about it. They come to think the technology is some sort of dark magic and as such will change their lives instantly the moment they sell their souls for it. The result is often a miserable failure. Only well planned and budgeted technology can help, and it is certainly should not be “the last resort”.

Strategy for Success

Tom Pendergast, the earlier cited researcher, offers the following steps to ensure success of a technology project.

Build on the Old
Both employees and management probably spent years in developing their workplace culture. A smart manager will recognize the coming changes and will build the new procedures on the foundation of the old and proven techniques. They will preserve value and build on existing competencies whenever possible.

For example, a new computerized POS system at the store will allow using handheld data collectors to do physical inventory counts. The essence of the physical count process will not change, however using technology will make it easier and faster. Sell to the employees an idea that the more frequent physical counts will lessen the shrinkage and as the store saves more money the employees will be given a bonus as the result of it. You will not find more enthusiastic adopters of the new technology after such a pitch, even if the adoption requires a little bit of learning.

Identify Rationale
The working culture of an employee is a mixture of formal, informal and technical norms. A change in any of these may bring significant emotional resistance. Without seeing the rationale behind the change some people may even start thinking that the it is designed specifically to make them feel uncomfortable and to drive them off the job.
A thoughtful manager will explain the rationale of the change, disclose the implications and picture the future advantages both to the company and to the employee herself. For example, with a new computer-based POS system the store now can use a customer loyalty program which rewards the customers based on their shopping activities. While the cashier is now required to type in the customer information (which to some may look like an annoying extra step), the loyalty program will bring the customer back more often. As the store makes now more money on the returning customers, the cashier will be given a pay raise accordingly - which is a great incentive.

Avoid the Unknown
When the nature of the coming change is unknown it creates uncertainty, fears and anxiety. Many people do not understand electronic black-box technologies. Lowering the level of anxiety will lessen the resistance to the new technology.

E.g. explaining that many people do not understand how a gasoline engine works but are still able to drive the cars brings the issue on the familiar ground. A computer is just a tool and does not differ much from a familiar TV set. Realizing that the buttons on the computer screen do not actually exist (we just “click” onto electronic images generated by the computer program by using a virtual pointer – which is also just an image on the screen), may certainly give a new perspective. This concept was put well in one of my favorite movies The Matrix: “Remember Neo – there is no spoon. When you realize that you’ll see that it is not the spoon that bends – it is only yourself.”

Recognize the Influence of Others
Employees are not likely to adopt a change if they have no support from the peers and management. Employees, especially those who are unfamiliar with the complex technologies, need to be reassured that they will not be held responsible if something goes wrong. The biggest mistake the retail store manager or owner can make is to put an employee in charge of the new technology while not being personally intimately involved with the project. The employee will feel like a potential scapegoat from the beginning and that personal fear will stand on the way of the success.

The manager must know and be able to use the new system better than her employees. Related to the above categories of adopters, the management must be in the “Early Adopters” category within the organization. Though they will make most of the mistakes by themselves, it will help them to teach and guide the less experienced employees through the caveats and speed bumps of the new system. While some senior employees may be designated as the project “co-champions”, all team members must constantly feel full support of the entire organization from top down, especially from the “top”.

Provide Support
Talking about support, we need to mention support of a different sort: the technical support. None of the business technological systems become fully operational immediately after installation. It takes time and patience of both the management and staff to gradually learn to start using the computerized system at its full capacity. Therefore, ongoing technical support is a “necessary evil” so to say, which must be included in the cost estimation. Some systems are more user-friendly than the others but there still may be hidden obstacles which are difficult to overcome without having an expert handy. Budget properly for appropriate training and support options and you will avoid the most common pitfalls of the technology implementation projects.

Give Incentive
There may be someone on your staff who will lose due to the technology change. Changes sometimes lead to losing the job status or the jobs themselves. In the 1800s French workers were throwing their wooden shoes (sabots) into the machinery because of the fear of losing their jobs (sabotage). Attention to emotional and financial needs of those who are to lose is an essential and mandatory managerial task.

A wise manager will also give financial incentives to the employees who are the first to learn the new system or volunteer to co-champion the project and succeed in it. This will help to keep an upbeat morale during the technology implementation phase which may be a bit bumpy ride.

Implementation Checklist:

Success in adaptation of the new technology will give better business results, greater productivity, improved bottom line and increased employee and customer satisfaction. But in order to be successful the managers must start with analyzing the new technology’s impact on the current organizational norms. Once the work culture is better understood and the issues addressed, the technological change may be implemented with less resistance and far greater chance of success. Here’s a checklist for technological change:

• Identify the organizational norms. Are there any formal/informal norms to be impacted? (Yes/Some/No)
• Will the new planned system build on the existing values and procedures? (Yes/Some/No)
• Identify who on your team will benefit from the change (Staff A, Staff B …)
• Identity who will lose because of the change (Staff C, Staff D, …)
• Have you developed a compensation plan for the losers (Yes/No)
• Do you have a strategy of “selling” the change to the employees? (Yes/Partially/No)
• Have you identified the (co-) champion of the new technology project? (Yes/No)
• Have you budgeted for employee training and support (Yes/Somewhat/No)
  

Conclusion

• Technology is knocking at the door and your standing in the ostrich position will not make it go away. Without technology automating business operations you face various disadvantages: from too much money walking out the door of your store to overpaying your suppliers and vendors. Regarding retail technology today is the time of the late adopters. The time of abacus and late cash registers has long gone and your competition is perhaps already way ahead of you by providing better service, attracting more customers, making more and losing less – all thanks to the smart technologies they use. If you’re still not there, just wait a little longer and even voodoo magic will not help.
• The technology is not scary. It’s just a tool to improve the quality of life (in our case, the life of a business and its employees). Unless you ride a donkey to work you have no reason to fear a computer. Even if you’ve had bad encounters with technology in the past it doesn’t mean that all technology is bad or that you can’t handle it.
• Changing your perspective may bring new revelations. For example, one myth says that the retail technology is too expensive: you may need to pay $5K-$7K for just one POS computer! Just change a perspective for a second: is that expensive to pay, say, $150 monthly for a system that saves you thousands of dollars each month? Don’t think so. If you agree with such assessment, please ask about a leasing option.
• Do your diligence due, analyze the strengths and weaknesses of different products and vendors, find success and failure stories, discover all pro- and contra- arguments, evaluate different products. Google it all – the good, bad and ugly, there’s plenty of information available. Keep a long-run perspective: you want to deal only with the vendors who will be there for you tomorrow. Don’t buy “on price” as the cheap solutions most likely have absent or very poor support and lack many important features absence of which may not be visible at first glance.
• Do not delegate research to the third parties (i.e. to “a nephew who’s a computer wiz”). Only you as a business owner or manager are able to make the business decision about why a particular technology solution may or may not work for your business. If you need a technical advice – fine, ask a technician, but only after you‘ve answered all related business questions by yourself. A computer technician – even if he’s a dear nephew or the best son-in-law or whatever – does not know your business as intimately as you do; and he also comes from a completely different angle. Sometimes they will even advise you against a particular technology solution only out of fear of losing their share of technical support service with you.
• Invest your time and heart into the technology project. Designate a project co-champion (as you may not be available at all times), but do not leave your employees to do it on their own. Take the full ownership of the project – from the inception to the end. “Not knowing much about computers” is a lame excuse: when shopping for a new car you won’t delegate it to a local mechanic. Instead, you’d go out and test-drive all cars by yourself even if you didn’t know much about the gasoline engines. Investing your personal time and effort into selecting, building and learning the technology solution for your business will result in much more certain successful outcome.

About the author: Anthony Ludmilin is a technology evangelist and expert, founder of Retail Hero – a Microsoft Gold certified Partner specializing in retail technology solutions. Visit http://www.retailhero.com/ for more information.The article extensively draws on a research paper titled “Easing the Fear of New Technology” published on the Pepperdine University web site in 1998.

A Question of Loyalty

Everyone in retail and service business these days speak about customer loyalty. It seems as if it has become a sort of a fashion item – if you don’t have a loyalty program in your retail store, your place is in Alberta’s Dinosaur Park with all those bones …
There are out there numerous “experts in customer loyalty”, “customer loyalty coaches”, “loyalty marketing consultants”, various researchers and even spiritual healers and gurus specializing in the matter – look it all up on Google!

However, one might want to stop for a second and think for himself: what does the “Customer Loyalty” term really entail? Is it just a buzz word, another marketing trick or there really is some substance to it? If it is not a trick, do I need it? And if I need it – how do I obtain it?
The antonym to the word “loyalty” is “treachery” – not a very ear-pleasing word. It seems that a person (or a business) cannot survive if they don’t have loyal supporters, because they are surrounded by armies of the treacherous enemies. Well, may be it isn’t that bad, but the emotional life of a person or cash flow of a business without loyalty will definitely suck.
Apparently, the loyalty is not just a buzz word and is something everyone needs. So, the next question is: ‘how do I obtain it’?

Let’s see. A synonym to the word “loyalty” is “faithfulness”. Many people understand that having true faith, or “being faithful” is an act of active trust based on the informed opinion, good will and compassion practiced consistently over an extended period of time (not to confuse with the “leap of faith” which denotes a mindless, emotional, potentially disastrous act). As a result, the loyalty is based on the informed opinion (or “practical experience” or otherwise “knowledge”) and requires some additional components which operate on both sides of the interaction over a period of time.

Now, let’s see how customer loyalty is achieved in business. A business transaction is an unlikely combination of demand (read: “Can’t delay any longer!”), offer (read: “Here you come!”), list prices (“You, greedy pig!”), marketing (“Over-promise and under-deliver”) and careful evaluation process (“Bah, humbug!”). (Please Adam Smith and Karl Marx forgive me for such frivolous interpretation!)

In the struggle between flame and ice, yin and yang of the businesses, emerges a new relationship which can be loyal or treacherous. If the experience of the struggle has been rather positive on both sides (it’s weird how a positive relationship may appear out of struggle, not?), the relationship may last and remain loyal, at least until the next encounter. If not…
As a service and consulting company we know for sure that customer’s experience is all for getting repeat business. If we’ve been proactive, responsive, polite and nice on the phone, willing to meet the customer’s needs, bending over backwards to fulfill and exceed the promises, generous with recording billing time, yet knowledgeable and not overpriced, we’ll see the customers come back. That shows on our track record. For instance just in a couple of months after receiving the Microsoft Presidents Club inclusion for the first time in June 2008, in addition to the new sales Retail Hero acquired dozens of existing customers who defected from (read: “lost their loyalty to”) their original RMS VARs. Reason? Word of mouth - better service, better expertise, better rates…

Huh? Just stop there. Did I really say “Better prices”? How did that come into the picture? What it has to do with loyalty? Aren’t we willing to “give the world for those who love us”? Apparently not, at least - not in business. Business loyalty has its very much earthly price - if the price is too high the loyalty disappears, disregarding whatever is the “customer service experience”. I seriously doubt that the word of mouth would bring us new customers if our prices were even 10% higher than that of the competition.
With Retail business it’s even worse. The customers vote with their wallets, not hearts. Posh and trendy Retail stores spend billions of dollars on “customer loyalty programs” in which they train the clerks to provide the “best customer experience”, but the shoppers still loom to the discount outlets where they have zero customer service but much lower prices.

Says John Knapp, a strategic thinker and owner of the “Cornerstones Consultancy” in London, UK:
‘…The notion of a 'Loyal Customer' or worst still 'Owning' a customer is just total arrogance or at the very least a delusion. To achieve 'Customer Loyalty' you would need to supply 100% of your customers needs, 100% of the time. You would need to have convinced them that your competitors’ offers were not worth straying for, that on this occasion buying from a competitor because they are closer to home isn't worth saving their valuable driving time.’

As no one is perfect, there’s no way for to meet 100% of the customer requirements. Thus, we cannot be very serious about customer loyalty.

Or can we? In Retail, unless you exclusively sell the living water and it is not available anyhow else, even by mail order directly from Shangri-la, you are doomed to compete for the customers by enhancing the customer service and dropping prices.

The first part requires significant investment into business planning and staff training (and everyone knows that nothing can be as treacherous in Retail as investing into training of the staff who typically are quite disloyal). The second part directly hits the bottom line and does not even guarantee the result by itself.

So what is the answer to the “Customer Loyalty Question”? Our observations tell us that a balanced, technology-oriented approach to the customer loyalty in Retail may be the best answer.

While staff training is important, the technology can be used to enhance the shoppers’ experience. For example, if you keep track of your customers and know the history of their purchases, you may offer them one time special discounts on the products which are of particular interest to them (you could tell by analyzing their purchase record). As these are small, “one at a time” individual item price drops, it will have minimal effect on your profits compared to the “80% Off, Everything Must Go!” campaign – and yet it will have a positive meaning to a satisfied customer who will feel “special”.

Knowing additional information about the customer (i.e. the names of the customer’s pets at a pet store) allows the cashier to be proactive and add a personal touch to the sales transaction.
However, remember how we said that the true loyalty may only be obtained on the both sides at the same time? Without the customers reciprocate your efforts and actively participate in the program, what is the worth of all these “loyalty points” you give them?

One of Retail hero’s latest customer loyalty programs, fully integrated with Dynamics RMS, is “Happy Checks”. In this program the customer collects points while shopping at the store. These points are converted into personalized coupons, or “Happy Checks” which are printed and mailed to the customers, along with some brochures and promo material. Because the “checks” have expiration dates, the brings the customers back to the store faster. Yet, because of the first class mail communications they receive from the store on a regular basis, the customers feel “special”.

Some of our fist users have reported and incredible 60% customer return rate within the first couple months since implementing the program! That’s the way of increasing customer loyalty in retail business.

Some Things Should Never be Bought on Price

BBC News, April 9 2008: “Oasis Budget Airline Stops Flying. Oasis Airlines first flew in October 2006, offering flights from London to Hong Kong for as low as $100. It later added the flights from Hong Kong to Vancouver…” Apparently, the airline abruptly locked the doors and engaged into liquidity on April 7th, 2008 while “…there are hundreds of people stranded including children returning from the Easter school holidays…” Some customers lost thousands of dollars in pre-paid tickets for high-season travels. Soaring fuel price and increasing competition is blamed for the downfall…

When I read that, I paused for a second to reflect on the fact. While I’ve never travelled to Hong Kong I still do understand that it is pretty far from either the UK or North America. With applying simple logic I can tell that the airline ticket price must more or less depend on the distance. Therefore I’m wondering how a in-season ticket to Hong Kong may cost about only 1/10th of an off-season ticket to Australia when it is pretty much the same distance, at least from the California’s coast? Do they use 80-years-old plywood biplanes to Hong Kong? Donkey piss for gas? Trained monkeys for pilots? I hope not! May be the owners are just very decent human beings whose goal is not to fill the pockets with profits - as their "greedy" competition does, but to serve the community in humility and self-denial? Give me a break. I’d more believe in using trained monkeys for pilots…

What were those airline customers thinking about then while buying those $100 tickets? I guess they just happily calculated how much they had saved. But it could surely save them trouble if they thought in a bigger perspective. One should always think carefully when they encounter something extraordinary cheap. All flags immediately should immediately go up. Why it is so cheap? Is it stolen? Is it made of a mix of pure lead with grain of cyanide? Or is it because someone is so desperate to sell the product at any price because they can’t sell otherwise? If so, what good is in it for me? Can't my incredible savings turn into some devastating losses?
It seems that it doesn’t occur to many people that according to Adam Smith, in order a business must be making money in order to keep running. The received profits are re-invested which in turn results (not always, but hopefully) in better products and services. Re-investments are also directed into training the staff, implementing newer and better technologies and making the processes more effective and less costly. If there are no profits there’s nothing to re-invest. Even in the age of trading virtual money earned in “Second Life” for carbon credits it doesn’t take a major in Economics to understand that the old laws still apply.

And the main law is simple: if the company is making no money it eventually goes out of business. When? Any second – you don’t know when.
Now, it may be OK to buy cheap jeans or sunglasses on sale at bottom-rock prices because, honestly, you don’t care if the manufacturer will be around tomorrow or in a minute from now. However, it is NOT OK for anyone to buy on price something which is considered to be a long term investment or even a product with future delivery. To be honest, to do so is just plain stupid.

Let’s take technology as an example. When you buy a computer you look at the prices and think for yourself: “I’m smart and I do know how to shop. I’ll go online, find the cheapest computer possible and order it”. When it arrives at the door you notice that it has only 30-days warranty. As it took 35 days to receive it, it’s already out of it. OK, not the cheapest. You go and buy from some more respectable vendor. It comes with 1 year “limited” warranty, which means that if the hard drive fails, you got to ship the PC to the manufacturer and get back in few weeks. It may be OK for a computer used for playing “Online Poker”, but doesn’t seem to be a compelling option for a PC on which you run your business. For a business computer you need something very robust which comes with onsite service and lengthy full warranty. Of course, such a thing costs more – but that’s the price of insurance that will keep your business running if the technology lets you down.

Let’s talk about software. You need a piece of business software (such as a POS system for a Retailer). You go to the manufacturer’s site and find that the price is such and such. Now, you also find that the manufacturer only sells the software through authorized resellers called VARs (Value Added Resellers). They are called so for good reason – because they do not just push boxes , but employ trained staff who will answer questions and help with any aspect of the software. In order for them to develop expertise in the product, the manufacturer gives them (them, not you) margins so they can make profit which may be re-invested into training and business building. Now, you go online and find a reseller who sells the software with huge discount. By just using logic you figure they probably don’t make any money on the sale. But it’s cheap! You’re happy to cheat the system and save couple dollars.

However, before you reach for the credit card, you should really think of consequences. As you know they’re making no money on the sale, how much expertise do they have in the product? Will they be able to support you if you run into a problem or have question? Will they not even go bankrupt before you receive your product but after your card was charged?
OK, you may think that you don’t need any support as you got a nephew (a high-school computer whiz) who will take care of the software. Well, does your nephew know your business as well as you do? Does he have any experience with POS software or related retail business procedures?

Let’s try to see the “I got nephew” logic work in other life examples. When you get seriously sick, you don’t go to a nurse for diagnosis and prescription, do you? You go to a trained doctor. The nurse may help in administering the prescription when the diagnosis is clear and a treatment plan is in place, but it takes a doctor to make the diagnosis and lay out the plan.
When you want to secure the title of your property you may go to a notary pubic just to witness the signature. But then you’re completely on your own with the issues regarding legality of the document itself. If you want security and and peace of mind, you should go to a trained, bonded, professional lawyer. Of course it is more expensive! But the lawyer can provide such guarantee and security because they’ve been making money which has been invested into training, research and building expertise over the years.

Is the point clear yet? There are some things which you should never buy on price. Investment in the business technology (either the “technology” means just one POS computer for a small mom-and-pop shack or a total IT solution for a large national chain) is one of them: a retailer just can’t afford buying technology on price alone… Unless of course they want to find themselves flying in a plywood plane driven by a monkey when the donkey’s piss is about to end and they are still 10,000 miles away from the destination…