Hacking is Real - The Tale of Leroy Kharma and the Russians

Disaster Recovery Worshop (Breakfast)

Before I get started on the tale of Leroy Kharma and the Russians, let recommend a workshop on Disaster Recovery that is being offered by Dan Frederick and Datto on Sept 20, 2019. 

To Register: https://claritech.ca/disaster-recovery-workshop or click on this button.

Cybercrime

For years I’ve been reading articles and listening to the news about companies getting hacked. The list of companies that have experienced cybercrime is very long and the volume of data compromised is huge: Top 10 of the World's Largest Cyberattacks

If you use email there is a good chance that someone somewhere can find a password that you are using - right now - or a password you have used in the past. Guaranteed. 

The consequence of cybercrime (hacking) is either a public relations disaster or the company ends up paying thousands of dollars in ransom to restore access and data. Either way, companies lose money. In 2016, the University of Calgary paid $20,000 to 2 men in Iran who were later charged but not arrested by the FBI.

Oh No, Not Us

Screenshot_20190830-124834 V2.png

But nothing like this has ever happened with our company or with me personally until a week ago when I got a call from someone who had a strong European accent that sounded Russian. 

I could hardly understand what he was asking me: “Are you Mr. Nelson?” (“mister” was my first clue - no one calls me mister). I asked him who was calling and he didn’t give me an answer. At this point, I know someone with a Russian accent was asking who I am and not giving me a straight answer - Hmm, something was not right. 

I hung up but he kept calling me on my cell. I mentioned that Jeff Nelson was a good friend of Vladimir Putin’s (the only Russian I could think of, off the top of my head). He laughed. I hung up again. He kept calling but I didn’t bother answering. Then he stopped. A felt a bit of relief until my phone beeped with a note from Messenger. This was not a pretty sight.

The Russians Are coming

This guy, who’s name I never did get, was sending me a message from an account that I was familiar with:

Leroy Kharma, are the names of 2 dogs. One is mine (Kharma) and the other is the name of a dog owned by a friend of mine who used to work with us. We set-up this account on Facebook a few years ago as a way to look at other pages without logging in as ourselves. We haven’t used the account in recent years. I checked and Leroy Kharma had about 9 friends - not very many.

But getting a message from this account and having an old password listed was disturbing. That got my attention. 

So far what I knew was:

  • Someone had my cell number - but that’s no big deal because it’s all over the Internet

  • This person had a strong European accent - probably Russian

  • This person had access to an old password - that’s strange but not unrealistic

  • This person (I’ll call Rushacker) had hacked into a profile on Facebook - alarming!

  • He had an email and a password - alarming X 100!

  • He was sending me messages from that account - frightening!

  • He was offering to “help” - that sounds expensive!

Screenshot_20190908-092655 v2.png

Not Looking Good

Wait for it... Here it comes - another message asking for $10,000. Let’s assume this is USD (a well-known currency in Russia). In CAD that would be just over $13,000. Not a fee I would like to pay. 

It is hard to see in the screenshot and I have cut out confidential information but at the top of the image, you can see that Rushacker had logged into a Google My Business account for one of our past clients. This was getting very serious. 

I quickly made some calls but it was Friday before a long weekend. All I was able to do was leave a message. I backed that up with text messages and emails. 

Luckily, I got a call back in about 5 minutes. I explained the issue and my contact escalated the problem to their IT department. Within 10 minutes they called back on a conference call with everyone important in that company. I was impressed. I explained the details and they said they would take care of it. 

Close Call

I then called my business partner and he checked his email and our bank accounts. Nothing had been compromised but we changed a bunch of passwords anyway. The summary is that no harm was done. But the reality is that we were attacked and our barriers were breached. We had one small hole in the dike and - I’m not going to lie - it was scary! I had visions of no access to our email and our bank accounts drained. 

IT security is not my forte. I know a little but probably just enough to get me in trouble. We rely on Dan Frederick and his team at Claritech.ca to backup our data file and for advice. 

Prevention is the Key

The current infrastructure and protection against cybercrime in our company are as follows. We use:

  • Gmail: Secure Email for Business which includes the entire G Suite of products

  • Complicated passwords https://passwordsgenerator.net/

  • We are learning to use LastPass with vault protection for passwords.

  • 2-factor authentication with our cell phone (this is what I think really saved us)

  • Bitdefender on our workstations to protect against threats from viruses, trojans, etc. 

  • Passwords on our cell phone and computers

Learn More

Dan and Datto are hosting the workshop at our facility. You are welcome to join us. 

If you are tight on time you can have a look at these articles by a good friend of mine, Yogi Schultz:

A guide to reduce cybersecurity risk at warp speed

9 habits that lead to successful cyber security

Let me know what you are doing to safeguard your IT infrastructure, systems and data. I’d love to learn more. 

Revenue Catalyst: Glossary of Definitions

Measure

Measures are just the numerical data, no more. They are the result of quantifying. 

Metric

Metrics are calculated from measures and are developed to show the extent of marketing and business success.

Normally, metrics are associated with one or both of two qualities:

  • They track over time

  • They show proportion to something else

Number

Any measure or metric.

Impressions

Impressions.png

An impression occurs when an advertisement or another image that represents the company is shown to a viewer. Ideally, the view is in the market selected by the company and they have the opportunity to see the advertisement, message or post related to the company and its products. To track impressions, a sum of impressions shown for a specific channel or campaign is calculated for a given period of time.

Visits

Visits.png

A visit occurs when contact is established between the company and someone from the market. A visit can be a phone call, an email, a visit to a store location, a click to a website or a visit to a social media site. To track visits, a sum of visits to a specific location, digital or physical, is calculated for a given period of time such an hour, day, week, month or longer.

Prospects

A person becomes a prospect whenever a company records the contact information of someone who is in the market. Ideally, this person has expressed an interest in the company and its products. The information from the prospect could be from a website, a social media site, a landing page, a phone call, a loyalty card, or an event. To track prospects, a sum of the prospects, such as new contacts, is calculated for a given period of time.

Offers

An offer occurs when a price for a product is shown or given to a prospect in the market. Examples of offers include proposals, quotes, estimates, rate cards, pricing on a web page and pricing within a store location. To track offers, a sum of offers, such as new quotes or proposals, are calculated for a given period.

There is a multitude of ways to present an offer. It could be on an e-commerce website, a quote, a rate card, a sign, or verbally (redundant… said above). The method of delivery and the format depends on the company and what is best with their prospects. 

Ultimate Outcome

The desired behavior of the members of the market influenced by the marketing investment and effort.

The ultimate outcome is not always a sale. Some examples include buying a product, voting for a candidate, booking an appointment, or obtaining a résumé.

Leading Indicators

Leading Indicators are measures of marketing activity that need to occur before or in advance of generating prospects, quotes, sales and revenue. A good example is subscribers to your eNewsletter (or Blog). 

Conversions

Some people use the language of “micro-conversions” and “macro-conversions” to classify indicators and outcomes.

The definition of a conversion depends on the situation. A “macro-conversion” is generally an online sale or an online sales prospect. A “micro-conversions” is some other measurable behavior by a visitor such as signing up for a newsletter, liking your Facebook page, or watching a video. Many of these “micro-conversions” are prospects.

KPI

Key Performance Indicators (KPIs) is a measure or a metric deemed by the marketer to represent the success or failure for an outcome. KPIs are typically levels in the middle the Intentional Marketing System which are critical to the success of the organization in meeting targets. Each company will have a different set of KPIs related to marketing, however, common KPIs are:

  • The volume of visits in the market that come to the website, a social platform, or location

  • The volume of prospects gained

  • The volume of offers presented to the market 

In each case, the more the better but the quality of visitors, the prospect, and person accepting the quote is important. At times the quantity decreases as the quality of visitors, prospects,  and people accepting the quotes increases. KPIs may be represented visually in charts, which are often shown with trend lines to indicate direction of change or positioned against targets. 

Target

A desirable minimum or maximum number for a measure or metric to be accomplished by a certain date.

Market

The people whom a marketer wishes to influence.

For simplicity, we assume that the “market” is people, but it could be companies or some other entity.

Acquisition

Attracting and creating customers.

Retention

Keeping customers.

Consumer Buying Path

The stops that consumers often take before arriving at the ultimate outcome. For many products this may be:

  • Need Recognition & Problem Awareness

  • Information Search

  • Evaluation of Alternatives (e.g., Test Drive)

  • Purchase

  • Post-Purchase Evaluation

Reach, Frequency and Impressions

The three foundational media measurement concepts are:

  • Reach - The number of people in the market exposed to the message

  • Average Frequency - The average number of times that people in the market are exposed to the message within a time period (usually one week)

  • Impressions - The number of times the message was shown to the market group

  • Impressions are based on Reach x Frequency, that is – the numbers of persons exposed to the message x the average frequency of exposure is the number of impressions

Brand and Transactional Marketing

Two types of marketing commonly practiced by companies

  • Brand marketing has the intent of strengthening brands of products or services by making promises, reducing risk and conveying symbolic value

  • Transactional marketing has the intent of enticing a sale within a short time frame

Unaided and Aided Survey Questions

Characterize the type of answer requested of the respondent

  • Unaided questions ask the respondent to reply suggest the answer

  • Aided questions provide a list of choices and ask the respondent to choose

Line of Business

A general term which often refers to a set of one or more highly related products that serve a particular customer transaction or business need.

  • e.g., Stores such as Staples and Future Shop now have a product line of business (they sell things) and a service line of business (they service and maintain products such as computers).

  • e.g., Internet marketing businesses may offer a website development line of business and a separate SEO service line of business.

Testing an Idea: Intentional Marketing

As some of you may know, Joanne O’Connell and I are co-writing a book. The latest title for the book is “Measure Twice, Cut Once: A Guide to Intentional Marketing”. My contribution to the title is the first part. Joanne’s contribution is the second part.

QUESTION: What do you think of the title?

As part of the concept of “intentional marketing”, Joanne and I have develop a new image to replace the traditional marketing funnel. Have a look at the description below and let me know what you think.

—————————————————-

Intentional Marketing System

The obvious challenge with any business is the need to acquire new customers. Startups need new customers in order to generate revenue. Established companies need to meet the demands of customers who move, change brands, grow older, change technologies or levels of interest. These customers can leave the company and become past customers. As a result, companies need to find and acquire new customers in order to sustain or increase revenue.

So, how do you locate, or attract new customers?

There are many strategies and techniques to generate new customers - figuring out which techniques are essential and perform well is what business is all about.

Broad strategies include: 

  • Increase Market Share - develop aggressive marketing campaigns 

  • Use New Channels - try marketing channels that you have not used before

  • Expand to New Markets - target new demographic groups or new industries

  • Expand to New Areas - target new geographical regions

  • Diversification - develop new products and services

  • Develop Strategic Partnerships - develop strong relationships with other companies

  • Re-position Your Company - rethink the solutions you are offering to your market

(https://www.bdc.ca/en/articles-tools/business-strategy-planning/manage-growth/pages/8-strategies-to-grow-your-business.aspx)

Regardless of which strategies a company uses, they all have one thing in common: it costs money to acquire new customers no matter how you do it. The cost associated with acquiring new customers is called the average customer acquisition cost. 

This metric is often miscalculated, misunderstood, or it is always underappreciated. But if you start managing this metric then you can put more money in your pocket. If you don’t manage your average customer acquisition cost then you can actually end up having much less money in your pocket.

In addition to this metric, most companies nurture (herd) people through a journey from first contact (or first impression) to a purchase. Only a fraction of the people that see an advertisement actually make a purchase. Each stage of the journey has levels. In marketing this concept is often described or diagramed as a Funnel. However, instead of customers flowing down a funnel we prefer to think of customers as having to move up to succeedingly higher levels or platforms. Gamers would refer to this as “leveling-up”. 

2019-08-19 - Intentional Marketing System - Levels.png

The idea of the Intentional Marketing System model is that people are attracted to the company or product at the lowest level where Impressions occur and the the company has to keep investing in marketing in order to move people up to higher levels. Of course, there are a few losses at each level of the customer journey toward buying a product - that is the cost of marketing. 

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QUESTION: Do you like the idea illustrated in the image above of “leveling-up” as an alternative to traditional marketing funnels?

Digital Marketing Doesn't Always Work - 6 Reasons Why Not


(Photo by  Ashley Batz  on  Unsplash )

(Photo by Ashley Batz on Unsplash)

It doesn’t happen often but every once in a while I have a customer who complains that digital marketing isn't working. In this post, I want to look at why that happens and what are a few things that you can do to improve the effectiveness of digital marketing.

1. Not Spending Enough

(Photo by Jeff Nelson)

(Photo by Jeff Nelson)

I shouldn't have to say this but marketing requires an investment. You actually have to spend money in order to make money. When it comes to product development business owners understand that in order for innovation to happen there needs to be a capital investment. However, when it comes to marketing, many business owners seem to shy away from investing enough in marketing to make it work properly.

When you have developed a campaign, you hope that the campaign will get a return on your investment. In other words, if you spend money on marketing, you hope for a return of more revenue.

This makes perfect sense until you are the one cutting the check and spending the money, then things get dicey. The campaign that you've developed could work, but it might fail. Failure means that you spent money and you did not get the revenue that you had anticipated. Success, on the other hand, means that you invested in the campaign and you were able to reach your revenue targets. If you succeed, everyone thinks you're brilliant. If you fail, everyone thinks you're an idiot. Luckily the companies and people that I work with think that I’m only an idiot occasionally.

2. Not Experimenting Enough

(Photo by  JJ Jordan  on  Unsplash )

(Photo by JJ Jordan on Unsplash)

I wish that marketing was an exact science but it isn’t. There are so many variables and so many unknowns that a lot of times it seems like campaigns are developed on intuition and creativity only. I wish that marketing was more scientific and exact. But it isn’t. Marketing is all about experimenting, testing, and adjusting.

On occasion, I listen to Terry O'Reilly on CBC and his program called Under the Influence. I love listening to carry and the stories that he has to tell. It all sounds so wonderful and easy but when you're in the trenches it isn't so easy. Terry tells wonderful stories that often and with a successful outcome. Occasionally Terry tells of a situation where there were difficulties or failures. Those are the stories where I learn the most. 

One thing that I do know about marketing and advertising is it seems to require a lot of experimenting. You try this campaign, then develop a new one. You try this marketing channel, only to switch to another. You try this message and then change it. You try this price point but it’s too low, so you increase. You try this market and then that market. Some work some don't. The one nice thing that I will say about having worked in the industry for over 20 years is that a level of experience does help. There's a little less guesswork when you've been around the block a few times and skinned your knee trying to jump over fences. Experience doesn't mean that everything goes perfectly but it often means that you make fewer mistakes and less catastrophic errors. 

3. Not Understanding Macro vs Micro Conversions

Many people have written on the topic of macro and micro conversions but Avinash Kaushik was the person who brought this concept to my attention first. This was probably in 2008. Have a look at his blog post, “Excellent Analytics Tip #13: Measure Macro AND Micro Conversions.

A macro conversion is the end behaviour that you want a person in your market to do. An example would be to buy a product. Another example would be when a prospect fills out a form requesting that someone in your company give them a call. A macro conversion is what I tell my clients is “The Ultimate Outcome”. 

A micro conversion would be any behaviour that shows that a prospect is engaging with some information related to your company. An example would be signing up for a newsletter, adding a product to a shopping cart, signing up for a free trial, commenting on a Facebook post, watching a video and or liking a tweet on your company's Twitter feed. The bottom line is that you want many micro-conversions - lots and lots. 

4. Not Using Technology Well

From Jeff Nelson

From Jeff Nelson

I could go on and on about companies not using marketing technology well. It seems that owners and leaders will spend oodles of money on production equipment and then refuse to make adequate investments on tools for marketing. Often the tools for marketing includes software. And often a subscription is required. I get that. But as I mentioned at the beginning of this post, effective marketing requires an investment. Tools are needed for customer relationship management (CRM), email marketing, marketing automation, lead nurturing, functional websites, event management and tools that help measure the effectiveness and performance of marketing.

If a company doesn’t have the right tools in place, marketing will fail.

5. Not Understanding Attribution

(Photo by  Tomas Sobek  on  Unsplash )

(Photo by Tomas Sobek on Unsplash)

One of the major difficulties in marketing is attribution. Attribution involves assigning a marketing channel or marketing campaign to a specific sale. There are many types of models for attribution. For example, the last interaction model assigns the attribution of a sale to the last marketing channel that the buyer identified. First interaction model would assign the sale to the first impression or first exposure that the buyer had to a company and its products.

In the world of digital and social advertising, this type of data is readily available on most platforms. An example would be Google Analytics. However, in traditional advertising, it can be difficult to attribute a sale to a specific marketing channel or marketing campaign. When a person walks into a restaurant, sits down and purchases something off the menu, it is uncommon for the servers or management to know how this person came to be in this restaurant. This person may have seen an advertisement on TV a billboard listen to a radio program with an advertisement or maybe seen an advertisement in a magazine. 

The bottom line is that the owner of the restaurant may never know which marketing channels are working unless they ask their guests these critical questions: “How did you hear about us?” and “What motivated you to come to our restaurant today?” These questions and the resulting answers are critical for understanding attribution.

Once you understand attribution, then you can determine which marketing channels and which marketing campaigns are working. Easy!

6. Not Measuring ROI

Photo by  Kate  on  Unsplash

Photo by Kate on Unsplash

Management guru Peter Drucker is often quoted as saying that “you can’t manage what you can’t measure.” (For a detailed analysis on this quote have a look at http://billhennessy.com/simple-strategies/2015/09/09/i-wish-drucker-never-said-it, however, I’m going to stick to the most common understanding of this phrase and that is that measurement is important).

With this in mind, let me conclude that Company should be measuring the return that they're making on their marketing investment. Here is a list of additional posts that you can read on this topic: 

ROI and ROMI are Different. Seriously!

Measures vs Metrics for Marketing

17 Essential Marketing Metrics for Customer Acquisition

Conclusion

If you want digital marketing to be effective you will need to do the following:

  • Make sure your investment in marketing and advertising is sufficient

  • When it comes to developing new campaigns, leave room for experimenting

  • Aim to get lots of micro conversions - you need those before you can get the macros

  • Invest in good software but make sure that it is performs well

  • Be sure you understand attribution and start making the links between marketing and sales

  • Start tracking your investments in marketing and use the ROMI calculation to measure performance

Is the Marketing Funnel Porous?

Marketers and sales professionals often talk about understanding and using a “marketing funnel”. This phrase is so ingrained into our day-to-day language that we assume that our language reflects reality. But maybe this isn’t the case. Maybe it isn’t a funnel - maybe it is more like a sieve.

This became abundantly clear when I was talking about our software, Revenue Catalyst, with my cousin. I was describing the layout of a typical marketing funnel. I explained that there were levels that a customer had do go through depending on of the activities that were related to marketing activities or sales. At the top marketing tactics generated Impressions from ads and various advertising campaigns. I continued by describing that a portion of these converted into Visits, typically to a website page. I went on to say that some of these Visitors converted into Prospects of which a portion were presented with and Offer. Finally, a percentage of those who received the Offer were sold something and became Customers. It all seemed straightforward to me and could be visually illustrated to look something like this:

My cousin, Hjalmer Nelson, looked at me and said, “Oh, you mean an accelerated particle separator”.

I said, “What?” and he repeated, “An accelerated particle separator.” My mind doesn’t process new information very quickly, but I could hear something in his words that made sense. Even after he had repeated the phrase twice, I had to ask him to explain. He proceeded to tell me a story about the Gulf War, sand everywhere, tanks, air filters not working, engines stopping, and the invention of accelerated particle separators to separate sand from air before the air got sucked into the engines. The result was that army tanks could travel for miles across the sandy desert as easily as going down a paved road with no dust or sand.

I was fascinated. From a marketing point of view, what he was saying was that what we flippantly call a marketing funnel is in fact an “accelerated customer separator”, although I’ll admit that the “accelerated” part of that phrase is often not very fast and prospects become customers much slower than desired.

I did some research on Google and I found very little written or diagrammed on this topic. As a result, I made my own diagram.

Imagine a funnel with a bunch of holes in the side. It should look something like a colander, but more V shaped and with a big hole in the bottom. Imaging various marketing and advertising tactics illustrated at the top such as TV, radio, Facebook, SEO, AdWords, even Snapchat. These ads influence prospects in the target market and they start to fall out the sides of the porous funnel. Some get to the bottom and become customers, but others are lost at the top and middle of the funnel via the holes. A diagram of this “porous marketing funnel” would look something like this:


2019-07-22 - Porous Markting Funnel.png

If you can imagine the funnel spinning, then some of the prospects would exit the system very quickly at the top. Others would cling on longer and get lost further down the funnel. Ideally, an adequate percentage of prospects would flow all the way through, with some coming out the bottom as customers.

Here’s another perspective. A while back I read Jordan Belfort’s book Way of the Wolf. A movie with Leonardo DiCaprio was later made called, The Wolf of Wall Street. In the book, Belfort describes 4 types of prospect archetypes as follows:

Buyers in Heat

  • These are motivated buyers that want your product and can afford it

  • They want to buy now

  • Buyers in Power

  • These are buyers but they are not ready to buy because their pain is not acute

  • They are going to delay the decision and need more coaxing

Lookie Loos

  • These are “tire kickers” who are just trying to get more information

  • They are unlikely to buy, ever

  • They are time wasters who need to be weeded out quickly

Mistakes

  • These people never belonged in the funnel but somehow got attracted or dragged in for the wrong reasons

  • There is no chance of turning these people into customers

If we apply our concept of an ”accelerated particle separator” then the funnel would look something like this:

2019-07-22 - Porous Markting Funnel - In Heat.png

Do you agree with this concept? Is there any validity? Let me know what you think.

Jeff