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Is your business Customer Focused & Customer Centric?

May 31, 2013 in Attitudes & Behaviours, Brand & Reputation, Education in Sales, Sales Culture, Sales Driven Organisations

As with many things these days, words or expressions get bandied about with little regard for what they really mean.  For instance, when we ask people how they define ‘Prospecting’, the overwhelming response is ‘Cold Calling’. Prospecting is far more than cold calling: it can happen anywhere with new, existing or lapsed accounts – anywhere you are trying to uncover and develop new business opportunities.  And with social networks abounding, very few people ever have to make a true cold call.  See what I mean?

And so we enter the confusing world of whether a company is Customer Focused or Customer Centric.  What do these terms mean anyway? Does it really matter which one we are?

Well, yes it does – quite significantly as it turns out.

What we at Barrett have observed is that few company executives appear to understand the difference between being customer-focused and customer-centric.

Customer Focused
Me

Customer Centric

 

 

The Client

 

Customer-focused organisations generally structure sales so that they can maximise their return. That is, they look at how they can get more business from their customers by delivering a level of service that is slightly better than their rivals, and sometimes – though not always – offering a lower price. This often means that salespeople are trained to uncover buyer needs and offer solutions that address those needs. In short, customer-focused organisations address customer needs only in so far as these are self-serving and address the organisation’s goals and imperatives.

Customer-centric organisations, on the other hand, explore ways to satisfy the needs of their customers at the same time as delivering greater value, making it easier and a more delightful experience for their customers to buy from them – considering incremental sales only as a result of the degree to which customers have been satisfied.  Customer-centric organisations do this in the unequivocal belief that by demonstrating superior Customer-Centric behaviour, by investing heavily in making the customer’s experience unique and pleasurable, they will get increased support (and profits) from an expanding, loyal, customer base.  This means they also invest in their people to enable and empower every member of the customer centric organisation to make decisions on the spot to address client’s issues, needs, etc. Their company stories are centred around the customers success and how their founders and employees helped their customers succeed. By placing their people at the centre of their business, customer centric organisations coach and support their people to be and do their best so the business and its customers thrive.

This all sounds lovely but is being Customer Centric better for business?

Yes Absolutely!

The following companies are example of those organisations that are doing very well – consistently – across a number of dimensions including: customer loyalty, revenue, profitability, staff retention, leadership, etc. by being Customer Centric

  1. Nordstroms (USA up market retailer much like David Jones in concept)
  2. SAS (Scandinavian Air Services)
  3. Ritz Carlton

 

nordstrom_p1030099

With respect to Nordstroms, when asked at a recent investor meeting to quantify what the Customer-Centric approach had cost the organisation, the chairman’s response typified the philosophy and also demonstrates the difference between Customer-Focus and Customer-Centric behaviour.   John Nordstom (the chairman) responded by telling investors that the cost to the company was far less than the profits it had made from customers returning time and time again to buy apparel at their premium priced stores.

Locally, companies like Bunnings are also moving in this direction by hiring knowledgeable staff i.e. retired tradies, husband and wife teams; people who have real experience in home maintenance, gardening, building, etc.  who are empowered, proactive and interested in helping their customers.  We had  such an experience on the weekend with a Bunnings team member, who it turns out, makes guitars as well, who helped our son prepare to make a skate board using his knowledge of woodwork.  The other staff we interacted with were equally happy and helpful. It was impressive.

Contrast this with Customer-Focused behaviour…

In November 2012 the respected consumer advocacy group Choice published a report on the levels of service and Customer-Centric behaviours amongst Australia’s leading retailers.

Furniture and white goods giant Harvey Norman was found to deliver the very worst levels of service. However, when approached for comment, chairman Gerry Harvey said the consumer group Choice got it wrong, had a private agenda and that Harvey Norman’s service was fantastic.

7701Harvey Norman is undoubtedly Customer-Focused.  It tries hard to stock its stores with a range of products priced at an attractive level. It has staff roaming the floor who give the appearance of being interested in helping their customers. It spends huge sums on television advertising, trying to convince hard pressed customers to visit their stores for a great product, great prices and service. But someone has missed the plot. Either Choice has totally misread the realities or Harvey Norman has lost touch with its customers.

Is the Harvey Norman response, as opposed to the Nordstroms response typical of the difference between Customer-Focus and Customer-Centricity?  Well, let’s look at the results:

  •   Harvey Norman’s results for 2012 were 39.2% down on the previous year
  •   Nordstrom’s results showed  13.5% improvement, 2012 over 2011

So you be the judge.

In short, Customer-focused companies do some things that superficially address customer expectations, driven by their desire for improved profit performance.  Customer-centric organisations make meaningful changes in order to address their customer’s expectations, expecting and getting reciprocal support.

After all it was the late Peter Drucker – the great management guru of the 20th Century – who said: “The purpose of business is to satisfy its customers’ needs. The consequence of satisfying customers is improved, continuous profits…”

And you know it when you enter a customer centric organisation because everyone you speak to in the organisation is focused on you; they are interested in what you have to say and want to help you get what you need, they are genuine in their support and everyone seems to have the same set of principles and values they operate from – there is consistency across the board.

Outcome: you are left feeling safe, valued and cared for.  And usually you want to come back for more and perhaps even tell your family and friends about what a wonderful experience you had.

You can watch an entire presentation on Customer Centricity given by Peter Finkelstein at the recent Swinburne University Business Forum function:

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

Does your sales team or culture need a detox?

May 2, 2013 in Attitudes & Behaviours, Ethics & Values, Sales Culture, Uncategorized

It doesn’t take much to sow the seeds of discontent in business today, and the potential for creating dysfunctional, “toxic” sales teams and culture is much easier than you think. There are so many things that can and do go wrong.

We at Barrett have met and worked with a great many sales teams across all sorts of industries over the years. In all honesty, we are yet to come across the ‘perfect’ sales team. That doesn’t mean to say that there aren’t great sales teams operating out there, because they do exist, but like every great team, their greatest can ebb and flow. Just think of sports teams and their fluctuations towards greatness or loser status.

look-after-sales-cultureCreating and keeping a healthy, productive and vibrant sales culture, just like a great sports team, requires constant vigilance. Besides getting the right athletes, facilities, training and medical staff, how much effort is also being put into creating the right kind of club and team culture in the sporting world to ensure success and greatness? Just think ‘leadership team’, values, ethics, and the right character qualities.

Selling is not an exact science – there are just too many variables at play (markets, products, competitors, customers, production, customer service and marketing, to name a few) any of which could easily shift and change levels of success overnight. In all of this, defining the right kind of leadership, culture and sales infrastructure is critical to a healthy sales teams culture.

Leadership & Culture
Keeping a handle on the best way to lead and manage a sales team and create a vibrant sales culture is often a very tough job. However, it always starts and ends with clear, strong, decisive ‘adult focused’ leadership from the top – not just from the sales manager(s). Paul Roos, the former Coach of the AFL Sydney Swans and 2005 Australian Sports Coach of the Year is one of Australia’s most admired sporting personalities whose leadership skills, ethics and philosophy transformed the way he, his coaches and the players approached their work as an elite football team with great success. Like the Sydney Swans, the Geelong Football Club followed similar lines, and these two AFL football teams have been at or near the top of the competition for the last decade and have 5 premierships between them to prove it. Taking a ‘complete’ or holistic focus with a culture of strong leadership, respect, humility, team, underpinned by clear values, desired character traits and proper infrastructure is central to their cause.

Great business leaders respect selling, whether they, themselves, have been selling directly or not. They ensure that there is a moral compass guiding their actions and a higher purpose beyond profit that steadies their ship.

Sales Infrastructure
The business leader and/or leadership group also know that sales can be messy so they make sure that the key foundations or sales infrastructure is in place so whatever happens they have something specific to refer to make conscious adjustments as changes invariably occur. The Sales Atom is an illustration of what a robust sales organisation should contain, allowing leaders and their sales teams to optimise the primary activities of sales, in a highly customer-centric sales support structure.

The Sales Atom:

sales-atom

Without such a sales infrastructure and a moral compass in place, toxicity can take hold and then things start to fall apart often with tragic consequences. Sadly, over the years we have borne witness to some really ugly sales teams and cultures. Thankfully, not too many but enough to know they do exist. These toxic sales teams turn up, more often than not, in industries that have low barriers to entry and where no real expertise or applied knowledge is required of the sales people. These companies and industries often have little or no respect for formal education, a distinct lack of customer centricity and are ‘profit only’ motivated often at the expense of their customers and staff. This often leads to less than respectable reputations for integrity, ethics, transparency, customer centricity and offering genuine value.

Examples of Toxic Sales Teams

Here are two extreme examples of highly dysfunctional, toxic sales teams and cultures that create very poor customer experiences and as well as wreak havoc in companies and across industries:

no rules1. The Wild West Sales Cowboy Culture: 

  1. no clear boundaries, guidelines or standards about how we sell around here
  2. no moral or ethical guidelines in which to operate so everything is up for grabs; sales people and managers can say or do what they want… lie and cheat the customers and each other to get a deal
  3. a climate of gossip, personal attacks, yelling, sniping, and undermining when things don’t go right or the market is tight or whenever they feel like it.
  4. sales leadership is either nonexistent or so loose that no coaching of any kind occurs and, instead, sales managers bark orders at sales people telling them what to do. 
  5. leadership (if you can call it that) creates and operates a climate of fear, keeping salespeople anxious about their jobs security, never giving constructive feedback or anything useful to make effective change. Bullying is their preferred strategy for change. They want ‘hungry’ desperate people (you know the huge mortgage, children, living on a knifes edge, etc.) because they will perform, won’t they? Sure but for how long?
  6. The sales environment is made to be overly competitive – internally. Salespeople are pitted against each other, sales territory lines are blurred and this creates a climate where everyone is out for themselves; taking leads from other salespeople, justifying their actions, poaching clients, etc. Bloody battles may ensure and sales lives can be easily lost.
  7. Often the salespeople earn most of their money via commissions with little or no base salary to give them earning stability which can lead to desperate people doing desperate things, especially when times are tough.
  8. It’s all about the results, the numbers, how much money is coming in and nothing else. Nothing about how you got business, how well you sold, nothing constructive or tangible at all.
  9. The leaders, and less so, their salespeople can come across charming at first but you often find there is an undercurrent self absorbed narcissism where the sales leaders have a high attraction rate of new sales staff but a low retention rate because when people find out what is really going on they leave fast. Sales managers are nothing more than ‘super salespeople’ who see their sales people as a means to an end i.e. a means to their big fat bonus and often take over the sales call to get the deal at the expense of teaching and coaching their people. ‘It’s all about me’ Is what you see.

At the other end of the spectrum we have:

leading based upon fear

2. The Totalitarian Sales Robot Culture:

  1. Micromanagement on scale never seen before. These sales cultures often reside in ‘call centre’ environments where process is mapped and everything must either be timed, recorded, ticked or measured in such micro detail that no space is given for salespeople to manage the ambiguities that inevitably come with human interactions. 
  2. Everything is scripted within an inch of its life taking any human interaction out of the equation and turning salespeople into robots.
  3. People are frightened to stray outside of the rigid structure leaving customers frustrated because no one can solve their problems. Passed from one level to another, customers can often be lost in a maze of indecision and buck passing.
  4. Managers are just that: managers. They are obsessed with managing process and numbers do no lead, coach or inspire their teams. 
  5. There is no respect for salespeople’s time and personal requirements: they are seen as galley slaves where even their toilet and lunch breaks are counted and timed and penalties administered if they are late.
  6. Salespeople are kept on a tight leash and cannot use their initiative or problem solving skills to create better solutions even if they wanted to. Instead, as customers, we are met with resistance and rigidity and sometimes outbursts of anger.
  7. Sales managers or team leaders are often patronizing, policing agents hell bent on control and power – no room for people.
  8. Humanity is ignored and people are bored in this joyless environment.
  9. These sales cultures are the equivalent of factory sweat shops.

 

Where does all this toxicity lead to?

  • High turnover of staff
  • A culture of blame and denial
  • Dissatisfied customers
  • Unhappy, disengaged staff
  • Poor sales results
  • Poor reputation which further impairs the recruitment of new staff
  • And more…

A fish rots from the head down – a toxic sales culture is definitely a leadership issue. You might occasionally, inadvertently hire a 600lb sales gorilla who can wreak havoc however, a toxic or healthy sales culture and team is entirely a reflection of senior leadership.

So do you do you want your business and your sales team to be the place where people have their sales careers destroyed or a place where people can launch or evolve their sales careers?

The choice is yours.

 

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

How many clients and sales are you losing out the back door?

April 24, 2013 in Attitudes & Behaviours, Brand & Reputation, Customer Service, Sales Culture, Sales Driven Organisations

Are you aware that it is six (6) times more expensive to acquire a new client than it is to retain an existing client?

Keeping clients onboard and engaged with your business is just as important as your sales team finding new business sales with new and existing clients, however many businesses do not pay enough attention to the back end of their business leaving client retention to chance.

Have you ever mapped the whole value chain of your business and looked at where your clients engage with your company?

How many client touch points are there? 

The more client touch points there are across your business the more chances you have of either:

  • impressing your clients and keeping them engaged with your business due to great service, great solutions,  great ideas and due respect for your clients’ custom OR
  • losing them out the back door due to poor service, poor communications, non-user friendly systems and resources, difficult complaints handling procedures or just plain indifference on the part of  the client services team or other departments

customer-retentionToo many business leaders complain about poor sales results yet they don’t address a major sales issue – the retention of existing clients and repeat business.  For example, one Barrett client reported recently that their sales team brought in 4,500 new accounts in one year while their service/operational teams lost just over 4,000 accounts because of poor service and indifference to client priorities – ‘It’s not my job’ was the catch cry down the line.  Fed up and frustrated their clients just stopped doing business with that company and no one asked why… until recently and now the real reason for declining Sales Growth is emerging.  This company is not alone – losing good quality sales and clients due to disconnected or disengaged staff beyond the sales team is a real problem. 

So before you lay blame solely on your sales team for declining sales you may like to look at the following information: 

-          Over 68% of clients leave a business because they are upset with the treatment they have received from the people in that business.

-          However, between 54-70% of clients who complain will nevertheless continue to be clients if their complaint is resolved effectively and respectfully.

Prior to the internet one study revealed that happy clients, or clients who have their complaints satisfactorily resolved, told 3 to 5 people while one unhappy client told eleven people, who in turn told five other people.   Now clients can tell about their experiences with suppliers and service providers to hundreds and thousands of people in an instant using social media.  The exact numbers are not specific but with technologies like Twitter and FaceBook companies reputations and brands can be made or broken by client feedback almost instantly.

Clients have more options than ever before and if sales and service experiences are poor they will feel less loyalty as a result. Clients want products and services faster, cheaper and better from whoever will provide them. That means that as a sales and service provider, the competitive advantage for your company rests with you and your people across the entire value chain. 

Client loyalty develops as clients feel a connection with a company and its staff. After all, most companies have the same “stuff”; it’s the genuine understanding of someone’s needs and priorities, the effective delivery of products and services that meet and satisfy those needs, and the genuine offer of service that causes product and company differentiation.

Customer Loyalty is rewarded

Customer Loyalty is rewarded

Organisations that provide superior sales and service experiences can charge more, create greater profits and achieve greater market share, because clients will generally perceive more value and be willing to pay a premium for superior advice and service.

When companies have a commitment to sales and service across their entire value chain it raises the bar of competition. The only way companies can effectively accomplish this is through their employees. As the competitive bar goes up, the quality of employees must go up equally.

Having a better team is good for the individual employee, good for the company and very good for the client. When a company is committed to a proactive sales and service culture, its corporate culture will change to absorb this new dimension, first becoming an integral part, and then becoming the driving force causing amazing results to take place.

The subsequent culture is automatic and infectious. Employees will demand it of new employees, and the corporate culture becomes even stronger because employees have taken ownership.

If you want client loyalty and repeat sales you need to make sure that everyone in your business understands: That selling is everybody’s business and everybody lives by selling something. 

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au 

How much valuable selling time are you wasting?

March 27, 2013 in Education in Sales, Sales Culture, Sales Leadership, Sales Management, Sales Motivation & Rewards, Uncategorized

When it comes to sales productivity and sales performance many companies are shortchanging themselves and, unfairly blaming their salespeople for poor sales performance results.

How can that be? Well too many businesses pay salespeople for business development and then lumber them with non-revenue, non customer oriented activities such as administration, unnecessary internal meetings, service delivery or transactional account problems.  And whilst acknowledging that these are very much a part of managing the client’s experience and classified under the sales portfolio, the haphazard manner in which these are structured does little to encourage optimal live and productive sales activity on the part of the sales person.

stop and reflect on what is optimal for their business

stop and reflect on what is optimal for a business

In a recent study conducted by Barrett we found that amongst salespeople in Australia, South Africa and Europe, too many companies are restricting the effectiveness of their sales forces by overburdening their salespeople with functions that should and could be performed more efficiently by a Sales Support team and other non-revenue generating functions in the company.  However, often too busy to stop and reflect on what is optimal for their business, companies rarely take the time to actually look at how their salespeople are investing their time.

Interestingly though, when companies perform a Sales Activity Assessment on their sales operations including running time-in-motion studies on their field sales teams and speaking to customers,  they often find  that the their salespeople are doing anything but selling.

Here is an example of a recent sales activity assessment time-in-motion study on the activities of a large Australian field sales force that was experiencing a steady decline in sales revenue.   Their results were compared to an international benchmark for sales activities.

The international benchmark for sales activities in major cities, against which this company’s sales force activities are being compared reveals that salespeople on the road (as opposed to call centres) spend time, in each of the six areas of sales activity, as revealed on the table below…

Sales Activity

Model

Barrett Client Company

Prospecting

15.46%

6.95 hours

6.0%

2.70 hours

Face-to-Face Selling

18.90%

8.51 hours

19.0%

8.55 hours

Servicing Customers

16.80%

7.56 hours

13.0%

5.83 hours

Organisational Activities

22.02%

9.91 hours

36.0%

16.20 hours

Travelling and Waiting

19.01%

8.55 hours

20.0%

9.00 hours

Personal / Miscellaneous Activity

7.82%

3.52 hours

6.0%

2.70 hours


Note:
   “Face-to-Face Selling” is defined as those meetings where the intent of the sales person making the call was to induce a purchase, as opposed to relationship building, service, problem solving calls etc.

As can be seen from the Barrett Client Company study, whilst there are differences in some of the areas, particularly the amount of Organisational Activity (Client company x 36.0% against a model of 22.02%) and Prospecting (Client Company 6.0% against a model of 15.46%), in the crucial area of face-to-face selling, there is no great variance between the client company and the model.

Specifically in the Barrett Client Company study you will notice that the salespeople in this business are being pulled into Organisational Activities and Servicing Customers  49% of the time which means the sales person time is spent in administration, organising and transactional customer service activities instead of being invested in what they are paid to do, and that is selling.

This issue is not only the problem of this company.

What is also evident, from both the Barrett Client Company study and international models is that salespeople have very little time to perform their primary responsibilities – i.e. induce a purchase (face-to-face selling).

Note: The International Benchmark presented here does not equal the notion of Best Practice.  It is just representing the current state of play in the field sales force world.

doing internal jobs

Organisational Activities and Servicing Customers

We understand that a field sales person cannot be Selling 100% of the time, however, giving salespeople the space and time to sell is critical.

As a sales person we need and want to do as much as we can for our company and our customers. But in the end, a sales person’s and a sales team’s success is going to be measured in terms of targets achieved or missed.

So if you are in a sales team that spends 15% or more of its time on these distractions it’s time to talk to your sales management and senior leadership group.

Ask what they expect:  More Sales or more time on Service & Deliveries?

If it’s the latter, ask them to reduce your sales targets so that you don’t feel as if you are underachieving.  If you do then you’ll soon find sales management and senior leaders will find other ways to address these distractions that keep you from selling and instead let you get on and sell.

If this is an issue for you and assess your Sales Team’s Sales Intelligence and current perception of their roles or conduct a Sales Activity Assessment on your business please contact us on (+61) 0395330000 or email contact@barrett.com.au

Remember everybody lives by selling something.

Author: Sue Barrettwww.barrett.com.au 

Hot bath turned cold – ditch the Rah Rah

November 8, 2012 in Attitudes & Behaviours, Coaching, Education in Sales, Sales Coaching, Sales Culture, Sales Results, Sales Skills, Sales Training

Have you ever heard the expression “Hot bath turned cold’? Perhaps not, however if you have been involved in the sales training industry or sales management it is a term that is synonymous with the quick, sheep dip, Rah Rah motivational sessions that business leaders and sales managers run for their sales people in the hope that they will sell more.   Sadly the opposite is true.  At the very best these ‘hot bath’ motivation techniques can provide entertainment value, however at worst they can do more harm than good.  We get a lot of salespeople saying they are sick of these types of approaches to sales training because they are left with little to show for it – they are given no real skills or tools they can use in the field. And like a hot bath whatever warmth you may have felt while in, it soon gets cold with your short, medium and long term expectations of sales success never met.

Yet many companies think that all sales people need is a bit of motivation to make them sell more so they get in a pumped up motivational speaker with a bit of sales experience to tell war stories and how you can be like them if you only do this or that.   Management’s attempts to cut corners and scrimp on effective sales training and coaching are cheating our sales people, our customers and our businesses.

continuous learning cycle

never stop learning, a little bit every day ....

Well founded research in learning and development shows that continuous learning, a little bit every day, is the way to go. Smart, savvy, successful sales people need to train like athletes. This doesn’t mean spending a lot of money on fancy training– it means creating a culture of continuous learning where practice, reflection, self-learning and coaching occur daily using applied, practical sales tools and sales processes that can be easily transferred and taught.  That is why sales training and development programs like Barrett’s Sales Essentials are delivered over 20-40 weeks in bite size chunks to enable learning and development to take place and sales mastery to be achieved which in turn produces sales results.

Sales Training needs to be an integrated process involving role clarity, clear sales competencies, sales plans, sales metrics, regular infield coaching, etc. all linked to a strategy – not some afterthought or isolated event.

Ask yourself these questions:

Q. What are you trying to change by offering sales training?

Q. Do you want change to occur as a result of the training? if so, can it be defined and measured?

Q. What is the point of doing the training?

Q. What am I trying to achieve with training?

A study conducted a number of years ago found that within one week of leaving any sales skills training program (with no follow up sessions or coaching) salespeople had lost 87% of the new skills they had learned during the training program.  Recent research by ES Research Group shows that 90% of all sales training programs result in a 90 – 120 day increase in productivity – but after that, nothing. It was only a temporary blip! Fewer than 20% of companies show sustainable productivity gains that last a year or more.

What we have found, and learning research shows, is that sales training only works if it is carefully matched to and directly supporting the use of your sales model, methodology & sales force profile and it has to be supported by Coaching in the field and real world application hence the 70:20:10 learning philosophy made known by Morgan McCall, Robert W. Eichinger, and Michael M. Lombardo.

To ensure that real learning takes place and endures, we need to emphasise and encourage a holistic approach by integrating both formal and informal elements. The most effective way to learn and develop a new skill or behaviour is to apply and practice it on the job and in real life situations. Good learning and development philosophy is built upon how individuals internalise and apply what they learn based on how they acquire the knowledge.

70-20-10-Learning-PhilosophyThe 70:20:10 formula* that describes how learning occurs:

  • 70% from real life and on-the-job experiences, tasks and problem solving. This is the most important aspect of any learning and development plan. Many organizations agree in theory, but getting it right is another matter altogether.
  • 20% from feedback and from observing and working with role models – coaching from peers, subject matter experts and mentors.
  • 10% from formal training/learning so that participants gain a solid base of knowledge and skills.

At Barrett we believe that the key elements to a successful learning process include both the “70:20:10 formula” and how individuals internalise and apply what they’ve learned.

Effective sales training can be defined as a planned program within the organisation that endeavours to bring about relatively permanent changes in employee knowledge, skills, attitudes, and behaviours. Behaviour modelling training has been found to be most effective.

To give a long term benefit, the training needs to give your sales staff the opportunity to apply what they learn in real life situations out in the field and have regular reviews as to effectiveness and efficiency of application.

Leading companies will link this to a clearly communicated and committed sales capability plan and make it a conscious part of everything: every sales meeting, every sales call, every coaching encounter  will be about sales fitness.

So forget these RAH RAH Hot Bath sessions that promise the world and deliver nothing. You know they DON’T work! Now towel on down and get selling.

Remember everybody lives by selling something.
Author: Sue Barrett, www.barrett.com.au 

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