What happened to eBay?

As I write this eBay's stock still remains at 2/3 its 2004 price, and eBay is still trying to figure out how to get back to the growth numbers it enjoyed in the late 90s and early 00s. I wrote about eBay's strategy on cleaning up its marketplace a year ago, but I didn't delve into eBay from a product management perspective.

Making the assumption that eBay is struggling, what do they need to do to right the ship? I really don't think this is that hard. First off, eBay has some strong assets:

1. They have a large base of buyers and sellers


2. They have the ability to scale their search, display, and transaction processing

And, since eBay's business model is predicated on a) listing fees and b) selling fees, if eBay has an issue, it's probably on the buyer experience side. If you have a happy buyer community, the listing fees and selling fees will follow.

I don't claim to have all the answers, but I know where eBay should start. It's Reagan's First Rule of Product Management: define their target customer! As a longtime customer of eBay, it is apparent that eBay is all over the map chasing new customer opportunities. They started off in collectibles, added cars, solicited commodity items and new products, etc. In doing so, they've lost their niche - their one area they can claim for their own.

eBay can certainly stretch their brand beyond their core (which I assume is the collectible and used item market); however, they can't do it at the expense of their core. eBay can certainly revisit the question of who their target customer segment is, and they may determine it is different than when they started. But they simply can't be all things to all people. Ask Sears. GM. Dell.

And, once you've defined that segment, no future product decisions should interfere with that segment!

As I've talked about in the past, I don't buy or sell on eBay much anymore. What used to be several transactions a month has become a transaction or two a year for the past three years. And gee that's the same time period that eBay has struggled with its stock.

Define your target market, eBay. You have the assets to win that space.

My five second rule for prospecting

A LinkedIn Question got me thinking about this, so decided to blog about it. It's about my "secret" to successful sales when I was doing consulting.

In a previous life I did my own independent consulting, doing software, architecture, and strategy for my clients. I sold my own services - no third-parties, no brokers. So I had to be good at creating my own prospect pipeline.

I learned cold-calling, prospecting, and pipeline management while on the job (I did consulting for about eight years before I went to work directly for one of my clients - Whirlpool). It was quickly apparent that the difference between an engaging conversation on a phone call, or a return email/phone call was my ability to communicate to the other person "what's in it for me?" as quickly as possible. If I got the right message across, I was granted more time to give the other party a reason to keep listening. Repeat.

I dubbed this "the 5-second model"... basically you have five seconds to give the other party you are trying to convince a reason to give you five more seconds...until the other party is asking engaging questions. At which point you will have an engaged prospect and you can throw the 5-second rule away and enjoy a normal conversation.

To be clear, the "5-second" internal is a metaphor for being concise and to the point. Your timing will vary.

Your 5-second windows should revolve around the following, and in the following order:

• What is the prospect's problem that you are trying to solve?


• (optional) How are you aware of said problem?


• What can you do to solve it?


• Why are you credible in solving it?

While this sounds obvious, I see this rule broken all the time, including when people call me. You can't break it, and persistence is not a substitute for the 5-second rule.

So, why does this rule work?

• People are busy. Duh, right? Unfortunately, a lot of people don't respect the time constraints of others. The 5-second rule respects those constraints.


• People's cognitive thinking follow the 5-second rule. When confronted with a cold call, people generally ask "what does this person want?", "how did they find me?", "can this benefit me?", "can I trust this person?", "how can I learn more?". The structure above addresses those questions.
  

What's does this rule mean from a practical standpoint?

• Research will yield a better result. While you could call lots of people as, say, a divorce attorney hoping to get lucky and stumble upon someone in marital dire straits, you can be more effective if you knew your audience ahead of time. In my case as a software consultant I researched the projects my prospect was working on, the technologies they used, and their current staffing levels and gaps.


• No chit chat. Not in the first 30 seconds, anyway. Don't ask about their day. Tell them who you are only in the context of it being relevant to their problem. Get to the point!


• Focus on the prospect's problem, not your solution. It may not be immediately apparent how your solution solves their problem. You can use one of the 5-second slots you've earned to talk about the solution and the fit to the problem.


• It works regardless of delivery mechanism. Email, phone, brochure, you name it.

Try it. I was successful targeting VPs, GMs, SVPs, and even CXOs using this approach over eight years.

Understanding where battles are won

With online content and information services, I tend to stay fairly loyal to one particular service, occasionally heading to their competitors to give their service a try. Things like search, maps, travel, news, and financial content (as opposed to financial services like my bank or brokerage) fall into this category.

I continue to find that Microsoft and Yahoo just don't get where I believe the battle for customer loyalty is won in this space - the input. Assuming each is "pretty good" at returning content from search, the differentiator comes down to who understands what I am asking?

I just tried to find directions on Live Maps (or whatever it is called) and a) I couldn't figure out even how to get to that functionality and b) Live Local Beta (which is where maps.live.com redirects) couldn't understand my input!

Likewise with Yahoo - every time I try their SMS search, it hiccups and gives me a laundry lists of formats to follow. Contrast that to Google. I type in "weather 98065" and guess what I get? The weather for zip code 98065. I could also type in "98065 weather", "weather for 98065", etc.

Google does the same with Calendar. I was at my son's first soccer practice, I got the soccer schedule, and I opened up my Windows Mobile device (a T-Mobile Wing for anyone who cares), navigated to Google Calendar, and just started typing in games as single-line text entries - "home soccer game 6pm sep 14". And it worked. I didn't need to ask for format, and I didn't have to go through the frustration of retyping on an unfriendly input device like a mobile phone.

What service am I likely to use? One that has rigid entry constraints? One that requires a user manual to use? Not hardly.

I don't know if Google's SMS search results are better than Yahoo's. I never get that far on Yahoo!

What absolutely shocks me is the number of sites that still think in terms of form fields instead of open text. Or the number of sites that can't recognize a phone number in the format "xxx.xxx.xxxx". Wow, 10 years after Google showed us a better way of text input, we are still thinking in Cobol.

I am convinced this is where the battle line for customers is won. And I believe it is the reason for Google's success in the search space. Would love to see the data, though :)