Digital Transformation Insights Organisational Change Uncategorized

Why You Should Be Thinking About Network Automation.

Networks have always been a critical part of any IT infrastructure, but despite increasing demand and complexity, network operations have not changed dramatically in the last twenty years.

Becoming an early adopter of innovative practices can be a gamble, even more so when an organisation is reliant on a technology to work. If network connectivity is down, everything is down regardless of how many redundant servers, databases and applications organisations might have.

Network solutions have evolved with the rise of SD-WAN, SDN and Cloud Networking, but a conserative ‘if it’s not broken, don’t fix it” approach has stifled innovation with regards to network operations. Network Engineers are still manually connecting via SSH to network devices to perform configuration and troubleshooting tasks.

The networking world has tentatively sought validation from other industries to accept and adopt automation. DevOps demonstrating predictable outcomes over the last few years, coupled with demands from users, applications and businesses has forced the industry to rethink both practices and attitudes.

What Is Network Automation?

Often appearing under the moniker of NetOps or NetDevOps, Network Automation is the process of automating the operations of physical and virtual devices within a network. NetOps has taken inspiration from DevOps but focuses on transforming network operations within an organisation. Although both drive efficiency, speed up internal processes and improve agility, whereas DevOps often adopts a risk tasking, iterative approach, NetOps prioritises uptime and minimises risk.

What Are The Benefits?

The benefits of more stable, scalable and resilient networks have teased the industry from eering on the side of caution. Alongside being a huge technological advantage, network automation has allowed organisations to achieve crucial business goals.

Increasing Operational Efficiency: Automated provisioning allows organisations to accelerate service delivery to customers from weeks to just hours. Automated change management shrinks maintenance windows from hours to minutes, minimising downtime and business impact.

Cost Reduction: Replacing lengthy, repetitives (and often error prone) taks with automation greatly reduces man-hours and cuts costs dramatically. Replacing manual tasks with predictable, repeatable network changes will increase productivity and create simpler management tasks.

Staff Retention: IT professionals, like most, do not like to be inundated with boring repetitive and monotonous tasks. Alleviating such tasks allows professionals to perform more fulfilling tasks that lead to drive business growth and personal development.

Compliance & Risk Management: Financial institutions and other industry-regulated organisations very often rely on security audit reports from the distant past. Automated security audits ensure that network device configuration is compliant with best practices and industry standards at all times.

Why Now Is The Right Time To Automate?

Network Automation has been mooted as a method of delivering more efficient services at a reduced cost, while freeing up IT teams to innovate. But what validation factors have led to the practices being adopted considering years of hesitancy?

Maturity Of DevOps: As discussed earlier, NetDevOps looked to validation from DevOps which has become a mature approach in organisations across the world. It has proved to be hugely valuable and transformed systems provision and orchestration in the deployments of all scales, giving the endorsement to transfer the concept into the network world.

Proliferation Of Tools: Six to seven years ago, organisations would have faced the daunting challenge of developing tools from scratch. There is now a great variety of open source tools available – Python libraries (Paramiko, Nornir, Batfish), automation platform Ansible, CI/CD tool Jenkins and many more. Spinning up a first automated use case now requires far less investment.

Network Vendors & Producers: Predicting this coming trend, vendors and producers introduced best-practice automation guidelines for their hardware and software. Many of the latest network devices and platforms deliver rich API interfaces to provide specialists with unparalleled flexibility to automate.

Knowledge Sharing: Becoming accustomed to NetDevOps has become easier thanks to the amount of information, courses, blog articles and guides available online. A greater number of resources also allows Network professionals to remain familiar with the latest technologies, trends and tools.

Digital Transformation Insights Organisational Change Uncategorized

7 Mistakes People Make When Facilitating a Workshop

To say we’re not a fan of meetings would be a mild understatement… People scrambling in late, half the people in the room not knowing why they are there and the ones that do wish they weren’t. Sound familiar?  We’ve been long-standing proponents of canning meetings altogether and replacing them with workshops.

To gain maximum value from a workshop, however, you’ll need a great facilitator. These arbiters of truth oversee proceedings to ensure the right people are in the room to have conversations that solve actual problems. 

 It can be a tricky business, but here are the top seven simple mistakes I’ve seen facilitators make and that you should avoid!

Pretending to be an expert on the topic.

1) Pretending to be an expert on the topic.

The clue is in the title: ‘facilitator’. Unless you are an expert in the particular field or industry, don’t pretend to be!

Your job is to facilitate or guide the real experts in the room through the discovery process to generate conversations and ideas. Faking knowledge can ultimately reduce the trust people have in you and even lead outcomes in the wrong direction.

Letting people in the room run the session.

2) Letting people in the room run the session.

Too often I’ve seen facilitators lose control of the class, so to speak. Remember, you are there to guide the session to achieve the best possible outcomes for the participants. Upfront communication is key to make sure everybody knows why they are there. Make sure agendas, purpose statements and expected outcomes are shared before any session.

*If the conversation starts to wander, use a creative “car park” to capture ideas that can be discussed later.

Not sticking to the plan.

3) Not sticking to the plan.

There are so many different processes/ styles to facilitate a workshop and I’m not going to pretend to know them all. Whichever you choose, trust the process to get the outcome everybody wants. Don’t be tempted to chop and change on the fly otherwise the session can become confusing and ultimately less constructive. If it’s clear something has to change, take a break and reassess.

*I facilitate a lot of workshops and they can often feel like they’re not on the right track (particularly at the start), but each time I’ve trusted the process and there have been some incredible outcomes.

Forgetting to keep time.

4) Forgetting to keep time.

Facilitation 101. Make sure you track the time for every step of the conversation. If you don’t, discussions will drag and before you know it your workshop has descended into another fruitless ‘meeting’. The imaginatively named Time Timer ( is one of the best apps for timekeeping. 

Illegible or tiny handwriting

5) Illegible or tiny handwriting.

How will people understand what’s going on if they can’t read your notes? Exactly. ALWAYS WRITE IN CAPITAL LETTERS ON POST-IT NOTES SO EVERYONE CAN SEE. Ideas will be flowing like fine wine so it’s important people can quickly refer back to notes. “What does that say?” is an awful waste of time. Once you become more experienced, you’ll quickly become more efficient at capturing what someone has said in just a few words.

Lacking communication &/or preparation.

6) Lacking communication &/or preparation.

People should arrive energised and excited for a workshop. I love to share a short two-minute video with project summaries prior to the day so people know exactly what the purpose of the workshop is and what to expect. Arrive early on the day, set up tables, pens, paper, water… You’re the facilitator, everything should be in order so when people arrive the magic can begin.

Workshop 7 tips decision maker
Not inviting key decision-makers.

7) Not inviting key decision-makers.

The purpose of workshops is to get **** done! Decisions will often need to be made on the spot before pursuing certain ideas, particularly with design sprints. The last thing you want is for an idea to go all the way through to prototyping before a senior team member shoots the idea down. It’s a quick way to waste a week. ‘Decision-makers’ may be short of time, so just make sure they’re present for core decision touchpoints for a thumbs or down. If it’s down, you can quickly pivot. Pivot!

So there you have it, 7 simple mistakes to avoid when facilitating a workshop. If you enjoyed this, you might also find our 10 Tips To Workshoppin’ Like A Pro helpful.

For any further questions, or if you’d like me to facilitate one of your workshops, don’t hesitate to get in touch.

Book a free session today to explore how we can help you achieve better outcomes.

Agile Digital Transformation Insights Lean Startup Organisational Change

I Googled ‘Agile’ — and wish I hadn’t.

I Googled ‘Agile’ and discovered my worst fears. Confusion and mis-information about Agile software development, how it works, and how to make it effective as a method of digital solution delivery.

Following on from the short, rather poorly animated video, let me share a slightly more concise and coherent insight on how Agile should work and how it’s possible to make it a means of delivering exceptional outcomes. Spoiler alert: it’s probably not what you expect or want to hear, but please know I’m here to support you if you feel in the slightest bit unsure about what to do next.

The methods used to build solutions with software haven’t changed significantly for 30 years. And even though we’ve lived in the The Age of Agile for almost 20 of those years, the time it takes to deliver solutions, not to mention quality and efficacy, are still falling short of expectations.

Beyond Agile, examined why software development failed to meet the lofty aspirations of the Agile Manifesto founders. The book also explained how to avoid some of the classic mistakes of Agile software development.

A talk given by one of the creators of the Manifesto for Agile Software Development, Dave Thomas, underlines the dysfunction caused when the principles of the manifesto are misinterpreted or distorted to fit an enterprise IT agenda. He half-jokingly attributes the downfall as our tendency to turn adjectives into nouns; so instead of the title Manifesto for Agile Software Development, people turn it around a truncate it to — Agile Manifesto, thus losing its meaning and purpose.

Beyond Agile explores many of the noteworthy lightweight methodologies in use today, some of which pre-date Agile. This provides context and explains why software development often fails to meet expectations. Another founder of the Manifesto for Agile, Alistair Cockburn, puts it simply:

“The Agile Manifesto was the product of seventeen people from different schools and backgrounds. No one person is responsible for the words we came up with — it is clear that it was the product of all seventeen people. The addition or removal of any one person would have changed the outcome, something we recognised and discussed at the end of that meeting.

Whether you think ‘Agile’ saved the world or poisoned it, be sure always to recognise that it grew from a rich compost (joke intentional) of backgrounds. The next time you read a would-be history of the Agile movement, look for all those names. If you don’t see them, it is not a history; it is one person’s recounting of their journey, years after the event (as indeed, this one is).”

Cockburn’s statement gets to the heart of why Agile is such an enigma: few people bother to understand or respect it for what it is, choosing instead to follow second-hand interpretations of the manifesto or, worse still, adopt a consultant’s cheap imitation of it.

Agile often fails, not because it is inherently flawed or lacking in some respect, but how people interpret and apply the principles. The Agile Manifesto and its core principles are, in fact, quite logical and straightforward. The problem with Agile is it was released into the world and then distorted by people unwilling and unable to think about the true meaning and purpose of the method. Kent Beck, the creator of Extreme Programming and another of the creators of the Agile Manifesto, calls this the ‘staring dog problem.’

“If you try to point something out to a dog, it will look at your finger,” he explains. “If you explain an idea in terms of concrete practices — like test-driven development, pair programming, continuous integration — people will fixate on the practices and stop thinking.”

Kent is calling out that often we’re unable to make the cognitive leap between practice and application. Scrum and other so-called enablers of Agile fail precisely because they compensate for lack of intellectual integrity. They shroud important ideas like user-centricity and fast iteration in rituals and catchy names. The Agile manifesto left too much room for interpretation and not enough specific rules. It feels like we’re back where we started in the late twentieth century with powerful technology and tools but no idea how to make them relevant to the ever changing needs of our enterprise users and customers.

Beyond Agile, describes three outcomes Agile practised well delivers:

  1. Eliminates (or at least reduce) waste in software development;
  2. Creates software that people use; and
  3. Delivers projects on time and budget.

An analysis of fifty thousand software projects conducted by The Standish Group in 2015 found 29% of projects was successful (meaning they were delivered on time, on budget, and to a satisfactory standard). The remainder, 71% were either failures or failed to meet expectations. Just think about that for a moment: starting a large-scale technology project, there’s only a 1 in 3 chance of success. Not very good odds. The same report in 2018 showed the situation got worse, with only 23% of projects successful and 77% unsuccessful.

Other sources corroborate these stats. In a paper presented to the 7th International Conference on Knowledge Management in Organisations, Stanley and Uden proved that software projects typically overrun their budgets by two hundred per cent, and exceed their scheduled completion dates by fifty per cent.

But it’s the cost of project failures that’s the real issue here. It’s nothing short of tragic:

– The cost of re-worked and abandoned systems costs the US economy an estimated $75 billion per year;

– In Australia, $5.4 billion is wasted each year on IT projects that don’t deliver value or are abandoned completely;

– One project alone — the infamously abandoned National Health Service patient record system in the United Kingdom — cost taxpayers £10 billion.

To put those numbers into perspective, the United Nations estimates that a yearly investment of $267 billion would end world hunger by 2030. A meagre $175 billion per year would eliminate extreme poverty globally.

It’s been almost two decades since the Agile Manifesto was written, and even longer since Winston Royce published Managing the Development of Large Software Systems. But little has changed and no single methodology has improved software development; it’s still a hugely expensive and wasteful endeavour that rarely meets expectations. And that’s hard to accept, in any era.

It shouldn’t be beyond humans to come up with a better, more reliable way of developing software solutions. Just as garment makers and car manufacturers in past centuries industrialised their domains, so too software coders need to do the same. Digitisation begets automation.

Methods like Beyond Agile address some of the shortfalls, but it’s by no means a silver bullet. The method requires skilled people, disciplined practices, full engagement with users and problem owners.

When I Googled ‘Agile’ I was hoping for the answer to some of the more taxing questions surrounding the method. What I came away with was this: to make Agile software development successful, there are four areas that align closely to the original manifesto principles:

  1. Start by defining the challenge or problem to be fixed
  2. Define the project outcome in terms of a quantifiable measure
  3. Describe the first 6–12 features or functions the solution must have
  4. Identify the first half a dozen users you’ll engage at the outset and throughout.

Rinse and repeat.

Digital Village is a community of IT professionals dedicated to providing flexible IT project team solutions in an authentic Agile way to enterprises in Australia and New Zealand.

Agile Digital Transformation Insights Organisational Change Scalability

Excel: So useful it’s dangerous? Here’s the solution…

Excel is probably the closest thing we have to the perfect tool for analysing & reporting on data. It’s greatest downfall, however, is that it doesn’t really scale beyond a single user, and the result is organisations find their data and IP locked up in un-verifiable (but easily shareable) files.

James Diekman, who’s recently joined the Digital Village network as a Producer, sat down with DV co-founder Luke Fabish to share his solution.

[Luke Fabish] Hi James, we’re pumped to welcome you aboard as a DV Producer – could you tell us a little about yourself?

[James Diekman] Thanks! I’ve been in the IT industry my entire career, starting out in support to more recently becoming a Microsoft specialist consulting to government agencies and large enterprises which has been super exciting. I’ve got a passion for business applications and leveraging them to solve business problems and getting involved with the Power Platform community and also not for profits.

[LF] Hey, that’s great James. Recently we were talking about one of the technologies you work with, Microsoft Power Platform, and about how it has the potential to solve one of the biggest problems affecting IT in organisations… Excel is used for everything! What are your thoughts on that?

[JD] Completely agree! Use Excel for what it’s good at – analysing data. Don’t use it as a store of record, it simply wasn’t built for that and you’re missing out on turning your data into valuable insights. Also it’s not just Excel… We often see Word, OneNote and good old Microsoft Access heavily used because it’s all the users had at hand. These products have been around for eons.

[LF] So could someone who’d normally open up Excel to get a job done use Power Apps just as easily?

[JD] Absolutely. Organisations, however, need to look at PowerApps as a better way to capture data that can be stored in a common data service. From here organisations can start to automate processes they were never able to before because the data is stored in one place in a structured format. Start adding more applications and more data and you start to build up a valuable data estate that you can analyse and interpret by levering new technologies like artificial intelligence (AI).

[LF] That sounds amazing! So what you’re saying is we can solve some of the problems introduced by the pervasive use of Excel as a data store?

[JD] Yes… from simple problems such as versioning, multiple users, and data corruption to relating and querying large data sets. Thousands of disparate Excel files are of little value. Leveraging tools like PowerApps and the Power Platform allows you to turn data into business insights you previously didn’t have available to you before.

[LF] Thanks so much, James. For me, the big takeaway seems to be the ability to remove complexity and open up a way more collaborative approach to data than is possible in Excel on its own.

I know we’ve barely scratched the surface here… The Power Platform is at heart a powerful system for rapid digital transformation that can provide deep and integrated value across an organisation’s entire digital landscape.

Want to learn more? We have an upcoming live event with James where he’ll be highlighting the breadth of capability that Power Apps can bring to an organisation (plus he has some great tips for getting the I.T. department on board with it as well).

So to learn more about rapid innovation and digital transformation with Microsoft’s Power Platform, register for our upcoming event here.

Digital Village Live-Stream
Accelerating Digital Transformation
Customer Success Digital Transformation Insights library Payment Solutions

Are Payment Platforms in Australia on the Right Track?

by Paul Scott, Director and Board Advisor at Digital Village

Photo by Ronaldo de Oliveira on Unsplash

Payment Platforms are often referred to as the rails on which commerce transacts. It’s an interesting analogy, given the gauge of rails used today on most of the world’s train tracks were established by the Romans over 2,000 years ago, and has not changed significantly since in most parts of the world. Payments Platforms haven’t been around for the equivalent of seconds, but we have multiple incarnations, and none entirely seems to meet customer needs.

Technology can be tricky bedfellow. Take payment platforms for example. Before ‘digital’ was even a twinkle in John Vincent Atanasoff’s eye, banks were using multiple payment reconciliation methods — all paper-based of course. Records were kept in dusty ledgers scribed with ink pens by crusty men in starched shirts and voluminous morning coats.

Roll forward 90 years, and here in Australia, we have an abundance of digital payment platforms. Which is odd, because usually when technology replaces manual processes, you’d expect some degree of consolidation, streamlining and a leap forward — innovation perhaps.

Eftpos was born some ten years later and stands for electronic funds transfer at point of sale. It’s principally aimed at credit, debit and payment terminal transactions. Its also owned by the big four banks via a company called Cardlink.

BPAY was established in 1987 by the big four banks in Australia. It was the world’s first phone-based payment system. Nowadays its a full-blown digital bill payment platform.

The New Payments Platform is owned by 13 banks. It’s the new kid on the block, formed in 2013 and launched to the public in 2018. They were given an innovation mandate and launched an instant settlement process which uses phone numbers, email addresses as well as ABN’s.

Between them, each of the three principle payment platforms serves every business and consumer in Australia, but why three? Well, it’s a result of several factors, federal, industry institutions, regulators and the banks all had a hand to ensure the applecart remains upright.

Now there’s a move to seek consolidation, but just how long that will take and what the composition of the outcome could look like is anyone’s guess. There’s a bucket-load of vested interest and the glacial pace of change in banking to consider. In their wisdom, Australian Payments Council chair Robert Milliner has been appointed as the independent convener of a special industry committee examining NPP Australia’s proposed merger with BPay and Eftpos.

Robert Milliner

Not content with the existing complexity APC’s decided to have Milliner’s committee operate within a NPP-owned subsidiary, Industry Administration Committee Pty Ltd (ICA).

The purpose of ICA is to establish a governance framework for “making non-binding recommendations” on the merits of merging NPP Australia’s operations with the two domestic payments schemes.

The technology aspect of this is interesting. It’s a classic case legacy myopia. The core systems underpinning BPAY and Eftpos are 40 years old. Ask any digital solution builder what they’d recommend its likely to be ‘Reno’ versus ‘Doer-Upper’. In other words, it would be easier, quicker and better to build from scratch. Why? Because it takes 1/10 of the time to build the equivalent of 40 years ago and costs a fraction of what it takes to consolidate and build on top of existing computer code.

Speaking to people like Andrew Walker — the Impatient Futurist and you understand the logic. He’s spent a career showing retailers, banks, and insurance companies that building and consolidation on top of old systems is a waste of money and never delivers the desired outcome. Better to start with a blank screen, start solving one problem at a time and deliver outcomes users need.

Likewise, a senior executive in one of the three principal platforms explained it as follows: “Another industry insider concluded: “I feel the big four banks, in their current form, are not good for Australia, particularly over the longer term. They need to innovate, with a view to extending their business into a ‘platform’, with open support and collaboration for new entrants. An ecosystem if you will. Only this will deliver useful products and services to the Australian market and ensure the ongoing relevance of the big 4.” He concluded: “Otherwise, bring on the ‘asteroid’ for these dinosaurs.”

What happens next? Well, major shareholders in each of the platforms — the banks — will examine the landscape, sound out the regulators and oversight boards and decide what they can get away with. Sorry, I mean they will have an epiphany, recognise the extraordinary opportunity they have to leap forward with a new technology solution to payments people want and need. Maybe.

Agile Customer Success Digital Transformation Insights Lean Startup System Engineering

What Dev Teams Are Missing.

UX designers, check. QA designers, check. Developers, check. The list goes on… but most highly-trained dev teams are missing a vital piece of the puzzle.

Software development is an inherently technical activity but without solving a real human need a project has no purpose. So why are those with the most immediate needs, the arbiters of purpose in this instance, missing from the team?

Standard processes for software development demonstrate the issue (sometimes jovially).


Customers and end users, the foremost experts on the business and its goals, are the critical missing piece from software development.

Aren’t they included already?

Well, yes… but not enough.

Towards Customer-Centric Software Development: A Multiple-Case Study found that, even in organisations with a high level of customer focus, that customers were only present at the beginning and end of the development process.

The authors found four key challenges with this approach:

  • Indirect access to end-users led to a lack of understanding of the reasons behind customer requirements.
  • Feature prioritisation is done based on employees’ opinions and is not continuously validated with customers.
  • Testing is seen as an opportunity to identify defects but not to validate mismatches between customer needs and product offerings.
  • A lack of systematic ways to collect, analyse and incorporate customer data into the product development process.

What’s the real problem?

By omitting the customer and end-users from the delivery team you are working on hypothesis (and to some extent guess work).

Even projects undertaken with extensive and painstaking research are based on what a potential solution could look like. This hypothesis isn’t tested until the end of the development phase when complete features are presented to the users and customers.

And now for the grand reveal… The software has been built to the customer’s specifications, or has it been built to the team’s interpretation of the customer’s initial specifications? Without fully understanding the customer’s situation there is a high chance of building the wrong software.

This of course has a huge impact on budget, schedule and, worst of all, the trust between the client and team.

So how does putting the customer and users into the project team help?

Shortening feedback cycles is a central principle of Agile delivery. By embedding key stakeholders within the team, feedback cycles are reduced from weeks to days.

Developers can demonstrate early prototypes and benefit from the unique expertise and feedback that only customers and end users possess. Rather than thinking, “what would the customer want?” at key decision points they can be asked directly.

No grand reveals, no surprises. A product is developed in collaboration with the customer and ultimately the people that will be using it.

Customers and users are busy people – do they have two jobs now?

Obviously we can’t expect the customer to be turning in 40 hours a week, that would be slightly impractical (and rather unnecessary). Attending weekly team meetings and being able to respond to questions from the team is enough.

The point is to ensure the developer feels comfortable making a call to the customer or uses to clarify a requirement or gain feedback on an early version. Essentially, you remove the subjectivity and guesswork to ensure the right product is being built.

Sounds nice – does it really work?

Digital Village recently completed the first iteration of the Race Around Australia project and was rolled out for a successful pilot in NSW schools. Program manager Emily McLachlan was deeply involved in reviewing the work in progress and making critical feature decisions and prioritising application features.

Her involvement allowed the delivery team to frame technical decisions within the needs of the department, schools, teachers and students, which reduced uncertainty around the product to practically zero.

You can read about the project’s success here.

Next Steps

Convincing busy professionals to attend another meeting/ create time for the demands of a project team sounds, well, trick. In fact, the hardest part may be convincing people who feel somewhat out of their depth in a technical project to participate in delivering it.

With the right support, however, non-technical stakeholders like clients and end users can provide invaluable contributions to a project delivery team.

The first step, of course, is a conversation with project stakeholders. Luckily that conversation will be about how they can save money, reduce risk and enjoy the benefits of their new software as soon as possible. We have a suggestion…

Working closely with the customers means the team will share the customer’s disappointments and triumphs, and hopefully shifts the team’s mindset from focussing on feature delivery to customer success.

Customer Lifetime Value Customer Segmentation Digital Transformation Insights library

How lifetime value is like a relationship: you live, you learn, you grow

by Suraj Pabari, Partner in Customer Analytics at SingleView, a data consultancy in Australia.

Source: Pixabay


  • We can use RFM scores to define segments within our customer base.
  • These segments can be used to define relevant actions that we can take with customers to increase their overall lifetime value.
  • Key segments include ‘Superstar’ customers with high RFM scores, for which you could develop a premium service; ‘Promising’ customers with mid-range frequency and monetary value, for which you can run loyalty schemes to increase spend and frequency; ‘At Risk’ customers with low recency, for which you can send targeted messaging with a possible discount to bring them back.
  • Run experiments to test these different ideas, and start by focusing on the largest audiences that will drive the greatest impact, with clear success metrics and the next steps to scale the action.

How can I take action using lifetime value scores?

As you can see from the previous post on RFM segmentation, it is quite easy to get excited with your new RFM scores and to start generating elaborate experiments. However, the goal of any new project should initially be to keep any action simple and easy to implement.

The main action from the RFM scoring is to create a few key segments. You want the segments to be large enough in scale so that you can actually see a difference when you run experiments using the segments. You also want to make sure that the segments are updated on a regular basis, and easy to export, so that you can easily integrate them into your marketing platforms.

What segments could you create? I often focus on the following three segments, as I have found that running experiments with these segments has driven significant revenue impact. Feel free to play around with the RFM ranges for these segments based on your goals.

  1. Superstars: High value customers with RFM score 555 (or if you want to sum the individual RFM scores then you can segment those customers with a total score between 10–15). These customers are your ‘superstars’ and should be treated as such. This is the concierge, the airport lounge, the free delivery, the ‘free bottle of champagne on the birthday’ type of customer. These customers are already loyal so whilst they may not need a ‘buy one get one free’ discount, they do need to know that they are special. As an example, with one of our beauty client, we were discussing how they could send gift baskets to these top customers over Xmas. How might you treat your best customers if you want them to stay? What type of service might you provide?
  2. Promising: Customers with high R, and mid range F and M (4–5)(2–3)(2–3). This is where building loyalty is important. Send these customers a voucher, an incentive to get them to spend more and spend more frequently. Start a loyalty scheme. In Australia, we love our coffee, and cafes tend to have a lot of customers in this ‘Promising’ segment, with many customers who come back occasionally. These cafes sometimes use loyalty (‘buy 10 get 1 free’ schemes) to develop these Promising customers into Superstars. For this segment, you want to push your brand to the top of their list of options so that it remains top of mind for your customers and they have an incentive to keep coming back.
  3. At Risk: Customers that are likely to churn, with RFM score ranges of (1–2)(4–5)(4–5). Initially focus on the customers with the low recency score, and high frequency and monetary value scores, the ones that you most want to save. Why do you think these customers aren’t coming back? How can you test this hypothesis? Since this customer group may not be too big, try personalised messaging or calls to remind these customers that they are important. Or more simply, send them an e-mail to convince them to come back, potentially using a special offer to bring your brand to their top of their consideration set.

Whenever you are implementing any of these changes, do so with a controlled experiment. As an example, if you wanted to test a premium service offering for your high value customers, randomly segment them into two groups. Give one group the premium service, and do not give the other group the same offering. Set distinct control and test groups, and keep everything else the same. Then observe how spending varies over a fixed period of time.

Never just implement a change without an experiment. In the above example, if you were to run this premium service with all customers, and you saw frequency of purchase improve, how would you know that the positive change was a result of the service offering and not the result of some other factor, such as good weather?

But what about using this data to acquire new customers?

A lot can be said about finding ‘lookalike audiences’ to your high value audiences and importing them into your marketing platform to prioritise. These need to be tested just like anything else, with clear experiments with clear success metrics (are you looking for a greater number of clicks, a higher conversion rate, or increased spend?) I often like to think about the time vs reward of developing these experiments; it’s important that the audience size is large enough to drive significant change in core metrics to be worth the increased time and complexity in management of these lists.

I hope you now have a better idea about the different ways you can use the RFM scores to develop segments, and develop experiments to drive increases in overall lifetime value.

In the next post we will be discussing the “whys” and the “hows” of predictive lifetime value modelling (versus historical lifetime value modelling with RFM). This model uses customer behaviour to predict how many times a customer will visit, what they will spend and the likelihood that they will churn to give us an estimate of lifetime value. You can also use this data to understand which customer attributes (age, gender etc.) are correlated to your high value customers.

How do you currently segment your customers? What actions do you take for the different segments? Add your comments below.

Customer Lifetime Value Digital Transformation Insights library Organisational Change

You thought finding toilet paper was hard. How about finding your most valuable customers?

by Suraj Pabari, Partner in Customer Analytics at SingleView, a data consultancy in Australia.


  • Currently, many businesses value customers based on their first purchase. As a result, they may under-invest in customers that would be higher value over a period of time and over-invest in lower value customers.
  • However, we can value customers based on their lifetime value, which is the total spend of the customer over a given period of time.
  • One way to measure lifetime value is to segment based on recency, frequency and monetary value.
  • By calculating RFM scores for our customers, we can segment our customers and understand the highest value customers,as well as those with low frequency, low average spend and those who have not visited for a long while.
  • We can then take action based on these segments to increase long term business revenue.

What do we mean by lifetime value?

You acquire a new customer. Not only that, but the customer returns again and again, spending hundreds of dollars every time they return. This customer must really love you! However, traditionally, you value this customer based on the revenue from their first purchase and now, this customer does not look so good. In fact, you would pay the same for this superstar customer as you would pay for his discount-seeking neighbour, who only bought something because it had a heavy discount. But do not fret, as we are moving to a new world, a world in which the customer is valued based on their total spend over a defined time period… or their lifetime value. Now, you can more easily find the valuable superstars and give them that star treatment with the hope that they stay with your business, and help you discover more just like them, transforming your business into a business of superstars.

The problem with big shiny things

Let’s imagine an extremely technical person in your business spends six months on building a model to predict the customers that will churn in the immediate future. They tell you that they have found a number of relevant features that predict churn, such as delay in bill payment, location and even age. They even excitedly proclaim that they have refined the model to the point where the model can find almost 90% of the customers that will churn. You are excited! You decide to run an experiment by showing ads to customers that are likely to churn to try to prevent them from leaving. However, clicks are so low, that you see no difference in churn rate. You go home, dejected.

Can you relate? After nine years in the Marketing Analytics space, I certainly can. And I’m not the only one.

We often hear buzzwords about things we ‘should do’. ‘Optimise to lifetime value,’ they say. ‘The customer journey is complex, implement a custom attribution model,’ is a common recommendation. ‘Most of your sales are occurring offline, why not connect offline data?’ is often proposed as a solution. You spend time and money on these pet projects, thinking they will transform your business and you divert resources away from your acquisition marketing efforts. The results are often far from impressive.

Should you avoid these types of projects? Absolutely not. The intentions of these projects are generally sound. However, my learning has been that these projects only work when you think about ways that you can use these programs to drive value before you invest significant resources. Write these specific actions down. Get endorsement from other teams that need to be involved. Quantify the value (with some justifiable logic!)

One particular project that often can drive a high cost despite demonstrating a low return is ‘lifetime value’. However, hopefully by the end of this article you will realise that lifetime value can drive significant business growth, in ways that are neither time consuming nor expensive.

The most valuable customers are the ones who have spent the most, right?

To start with, let’s discuss why lifetime value is so important. The current state of measurement with many businesses can be demonstrated in the graphs below. Assume the bars represent the value of five individual customers and the horizontal line represents the cost to acquire a customer: naturally, you set that cost to be equal to the value that you will get from the customers to break even (or even lower if you want a higher margin). You can see that by optimising to this cost you end up over-investing in some ‘low value’ customers (shaded red) and under-investing in other ‘high value’ customers (shaded green).

Figure 1: The problem with optimising to the mean

In contrast, if you were to focus on acquiring more high value customers (the green bars), in many cases, the long term revenue would be higher, as can be seen below.

Figure 2: Maximise share of high value customers

So what do we mean by high value customers? The ones that spend the most money?

Not quite. Often using total spend over a period of time can be a good proxy, but it is important to take a more nuanced view. Take the example below. Which customer do you think has the greatest value to the business?

Figure 3: Looking at recency, frequency and monetary value

Were you able to guess correctly? The behaviour of the first customer suggests that they will be more loyal, as they have greater consistency and bought more recently. We saw this with one of our hospitality clients: they had customers spending a lot of money in their venues on expensive champagne, and then not spending anything for a long period; we had to think of them differently to those customers who spent the same amount, but over a more extended period. The former may have been enjoying themselves on a luxury holiday, and since they will not be coming back, it may not make sense to define them as a high value customer.

So how do we define a high value customer then?

We have a fairly simple way of measuring high value, which is based on three factors:

  • Recency = How recently the customer bought. Someone who bought a year ago is at risk of churning and may not be high value versus someone who bought last week. Note that, in some models, recency refers to the gap between the first and last purchases.
  • Frequency = Number of repeat purchases. More purchases demonstrates greater loyalty. Using frequency in this way allows us to distinguish between the tourist who came to the venue and spent a lot of money whilst she was on holiday, and the businessman who goes to the same venue every week.
  • Monetary value = Average order value. We sometimes exclude the first purchase in this average, particularly if the purchase has been driven by a voucher.

This RFM method gives us a score for each factor. The simplest way to come up with a score is to rank the value that each customer has for each variable between 1 and 5 (though the exact scoring might differ by business). As an example, for recency: bought within last week = 5, bought within last month = 4, bought within last year = 3 etc.; for frequency: 10+ purchases = 5; 8–10 purchases = 4 etc. The recommended approach to determine the actual boundaries is to ensure that 20% of the customers are in each bucket.

Now the fun begins!

With some simple maths (which can even be done in a spreadsheet) you now have three scores per customer. What does this mean?

Let’s say a customer has a RFM score of 555. Keep this customer close! They have recently bought a high value item, and will often return to buy high value items. But what about a 155? With a low recency, this customer hasn’t bought anything recently. Why haven’t they bought anything? How can we bring them back? This diagram makes it simpler to understand.

Figure 4: Developing segments using monetary value and frequency

..though note that in reality we are looking at a cube as a pose to a square!

Figure 5: RFM cube

You may already be thinking about some of the things you can do with this data. What could you do with a ‘High Spender’ to increase their frequency? Would you give the ‘Superstar’ a voucher or would you instead offer them a ‘concierge’ service? Now, rather than simply saying: “These are my high value customers and these are my low value customers,” you can answer some more complex questions, such as:

  • Who are my highest value customers?
  • Which customers are on the verge of churning?
  • Which customers have the potential to be transformed into higher value customers? How might we do that: by trying to upsell them, or getting them to return more often?
  • Who are the low value customers that you can ignore?
  • Which group of customers is most likely to respond to your current campaign?

I hope you now have a better idea about the power of LTV segmentation, and understand how you can segment your customers using RFM methodology to answer some important questions.

How do you currently segment your customers? How do you leverage the insights from your segmentation? Feel free to add some comments in the post!

Agile Digital Transformation Insights

How to go from problem to solution faster than ever before!

Whether you’re a start-up, small business or established enterprise, the need to move fast, fail faster and adapt in today’s market is crucial. Design Sprints allow you to solve complex problems in just five (or even four) days and unlock the benefits of Agile.

Agile methodology is an iterative, incremental response to the inadequacies of traditional software development and allows companies to move faster and meet the requirements of customers. The principles of Agile and the wider application of organisational agility (there is a distinction) have swept throughout Silicon Valley as businesses continue to race from idea to market.

Although I wholeheartedly think if you’re not adopting the methodology (at least somewhere in your innovation process) something is wrong, Agile is not a “silver bullet” solution… nothing is. Testing and cooperation are integral to the customer-centric principles of Agile and validating an idea can be, well, time-consuming.

Cue Design Sprints.

Developed by Jake Knapp out of Google’s Venture division, The Design Sprint is a pressure cooker, collaborative process that can take you from idea to tested solution inside of five days. Yes, really. In fact, organisations like AJ&Smart have released a 2.0 version that streamlines the process to just four days.

By the end of the Sprint, you have a tangible, tested prototype that you built together. Think of it as a crystal ball into the future: you’re able to gain valuable customer insight without committing the time and capital of building a real product. With a little bit of experience, you can also utilise the process to develop everything from complex marketing strategies to kickstarting a new business.

So what does a Design Sprint look like?

First things first, you need somebody dedicated to driving his new way of thinking. You need a facilitator. Regardless of their involvement in the business, they are able to provide an outside perspective and guide you through the discovery process. The ideas are in there, they just need to be extracted and ordered.

Next, you need the commitment of your team for the intensive (but short) process. Dedicating time can be one of the biggest challenges for any business, big or small, but consider the potential wasted months developing the wrong product.

Day 1 // Definition

Kick off the first day by unpacking the problem space and validating the idea. These structured conversations are the foundation of the Sprint as we define your “North Star”. This unwavering definition of purpose will be a constant point of focus to ensure you’re solving the problem.

Who are your customers? What do they need and what drives this need? Begin to build out a simplified customer journey and kickstart the magic of the sprint process. Using a simple “how might we…” process you can begin to source opportunities and create the basis of your new idea. Through voting and a process of elimination you’ll decide which ideas to take to the next stage.

Ideating, utilising post-it notes

Having considered your customer segments, now is the time to start organising your 4-6 test subjects for the final day. Remember, the aim of the Sprint is to have a tested prototype so subjects are crucial to the process!

Day 2 // Sketch & Decide

Firstly, we want to make sure we’re happy with the idea we’ve chosen. Validation throughout the whole process is crucial to success so key decision makers must be in the room (or can drop in and out as the days progress.

We all see things differently. In fact, the collaborative effort and combined creativity of Design Sprints make it such a powerful tool when building new ideas. Lightning demos are a great way of inspiring creativity and gaining the most from the ideation stage. Take time to find things relevant to the idea that inspires you and share with the group.

It’s time to bring the idea to life. Utilising the process of Crazy Eights, everyone in the room will begin to turn their ideas into written (or drawn) product pieces and share them via a personal two-pager storyboard. Another round of voting begins…

Design Sprint - sketching
Design Sprint – sketching

The team reviews all the ideas and ultimately votes on which one to take to prototype. Make sure the ‘decision maker’ is in the room as unsurprisingly they have the final say. Decision made.

Now start to visualise the solution and transform the personal storyboards into blueprints on the wall. A facilitator will begin to draw out the idea, frame by frame, as everybody discusses how it should look.

Day 3 // Prototyping

With the blueprint complete, it’s time to create something tangible that can be tested with real customers. It doesn’t need to be a complete solution, just enough to take the potential customers on a journey and communicate the idea. The team can utilise pieces of paper to develop the prototype, or if possible, translate it using tools like Miro and Figma.

Figma prototype example

Day 4 // Test & Learn

Your customer was defined at the start of the process and should now be in the room with you. It’s the moment of the truth. Present your idea with the prototype and gather feedback. Was the feedback positive? If so, great! You can start developing the project utilising the agile methodology previously mentioned. Was the feedback average? Is there a way to pivot the idea and refine the solution? Hopefully so.

Running a test with potential customers

Was the feedback, let’s say, less than average? Maybe it’s time to scrap the idea and try something different. Trust me, it happens. But at least you didn’t invest months into R&D to discover it wasn’t what the customer needed!

Chris Sinclair is a Digital Experience Designer & Strategist responsible for working with start-ups and organisations to develop products and go to market strategies utilising agile & design sprint methodologies.

Connect with Chris.

Digital Transformation Insights library Organisational Change

Dawn of a new age of opportunity in IT services

by Paul Scott, Director and Board Advisor at Digital Village

Photo by Joshua Earle on Unsplash

Australia’s unemployment rate shot up to 7.1% in July 2020. Some sectors were worse affected than others, with travel, retail and hospitality feeling the brunt of it.

The IT sector got off lightly with less than 15,000 redundancies and around 20,000 furloughed staff out a total number of 250,000 working in the industry nationally, when you add full time and self-employed.

The ABS statistics only tell part of the story. The more significant revelation from COVID has been a realisation that the way organisations adopt and operationalise technology needs to change. Put bluntly, most organisations are paying too much for resources they don’t need — at least not full time — and when they do need them, they can’t manage them effectively to deliver business outcomes.

Why is this so? Well the experience of many organisations during COVID has been their IT has run perfectly well with either contracted in resource, shifting them to work remotely or a mix of offshore services to onshore — mainly those services involving IT support and end customer technical support. The same goes for innovation and systems development. The gig economy and rapid growth of IT services platforms like UpWork, Equal Experts and Digital Village has made it easy for businesses to pick resources they need off-the-shelf, with clearly defined outcomes at a competitive price.

The big takeaway for those who were employed during the lockdown was that remote working is both productive and often preferred. Provided there is a dedicated space at home and decent WiFi bandwidth, the overall work-life balance equation improved and the sense of being in control of one’s life also ticks up.

Many people felt stressed and unsure, to begin with, but by the time lockdown came to an end and they were able to make choices about whether to work from home or return to the office, the vast majority wanted to continue homeworking to some degree. Atlassian, Australia’s largest locally owned IT company, tells us 76% of their staff prefer to avoid their office altogether when they need to concentrate on a project. This stat, along with 40 others gathered by Hubspot, underlines remote working is here to stay and has profound implications for the IT services sector in particular.

Any organisation seeking to optimise its IT resources post-COVID has the opportunity to make some changes which both improve their capability to develop and support systems. It’s also going to be a relatively easy sell to people if they chose to move to a remote working or semi outsourced model, as most have now come to terms with the benefits and ways to make it work for them.

But there is a word of warning: “Most anyone can learn to be a great virtual employee. The top skills to learn are setting healthy boundaries between your work life and personal life and building relationships virtually.” ― Larry English, Office Optional: How to Build a Connected Culture with Virtual Teams