Day: May 21, 2007

Rex = King

Here is something new that I have not seen before. Rex & Co. have an agreement where you convert home equity into cash. The “loan of cash” is paid back when you sell your home or in 50 years whichever happens first. You pay no interest or make any payments, you pay at the end of the agreement. You are selling a portion of your equity in the home. That could amount to much more than what you received in cash at the start of the agreement. What would you call that?

William brought up Seth Godin’s “Blow up your homepage” entry. What do people expect when they click a URL? First and foremost it would have to be information. Either that page sign.gifmoves them through an entry point or they can click/search for further information. It would seem to be like an encyclopedia. You look up the entry, get the volume and start scanning the information to see what is relevant, look at the acknowledgements and proceed. Using the Oxford English Dictionary on-line gives you a similar experience without turning pages. You can just search and click. There are two keys here.

  • A focus on what you want, exactly. They say that to get the answer you have to form the proper question.
  • A good search facility for your site. The best sites have search results highlight the phrase when you move to the different pages.

All of that said Seth has said something that won’t go away easily. What should a homepage look like?

The eternal quest for an algorithm

There is an interesting article on Improving New Account Opening that has some great points, all valid. But we seem to be talking in circles at times. We develop something and the bad guys develop something that defeats what we have built, then we develop something and the bad guys develop… well you get the message.

Maybe we need to step back a bit. We are always attempting to develop some solution that is a complete algorithm for our problem. If we can synthesize or boil down the problem into a totally logical fashion then we can program it and this technique will solve the problem. Most times this works but then the problems occur with the exceptions. Those things that we haven’t thought of in a totally logical fashion. There is always the random point of existence. That is life. Personally that is the beauty of life. Business wise that may be the problem you end up dealing with.

Can we handle problems only through algorithms? Yes but only to a certain point. For larger organizations it is vital to do this, for smaller ones they have an advantage in using the human factor. We need to use our human facilities to handle what the algorithm can’t. Now if we are dealing with costs we choose the least cost method, business is business. But if we are building a business on relationships, on word of mouth marketing, on giving service that one can be proud of, then the least cost method doesn’t work. We need to be able to manage those situations on a personal basis. Without the intervention of a person when needed, people will say you are just like the rest of the businesses that they have had to deal with and don’t care. And that doesn’t make them very happy. Maybe that new account doesn’t have a great credit rating but instead of summarily rejecting the application call the person and ask the reason. I remember asking a young person that question. Her answer was that she broke her leg at work and between Employment Insurance, Workers Compensation and the insurance company she didn’t receive any money for close to 6 months. Her credit was “bad” but all her reasons were “good”.

So when you begin to build your model to manage risk consider this — include the human component in the process and in dealing with the exception. It may cost you a little more but you will be building something that people want, appreciate and respect. And they will tell their friends.

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