Dec 13, 2024 | Communication, Marketing, Social Media
It’s never been easier to reach potential customers, yet the reality is that most outreach efforts are being ignored. Digital tools have flooded inboxes with a tsunami of generic, unsolicited messages. Once, nearly everything got opened — now, email open rates are as low as junk mail rates.
We are all increasingly wary of scams, which feed the above
Cold calling by phone is similarly suffering.
I would get two or three cold calls a day, none of which get a response beyond a blocking of the caller number.
Text messaging is going the same way, rapidly.
The vital question for marketers is obviously how do you break through this barrier of denial.
Here are four suggestions.
Quality personalised content. This takes time, money, but most particularly intimate understanding of the behavior and competitive context of your defined best customer prospects.
Relevance and timing. Focus on the most relevant communication channel and be very sensitive to the business cycles that impact your best customer prospects. Failure to do both will mean your message will be just another piece of auto-generated blurb.
Authenticity: This is a much used and overused term. Nevertheless, standing out by being real, transparent, and trustworthy in a sea of automated noise is essential.
Value driven engagement. Another of those overused cliches is ‘engagement’. However, it is a cliché for a reason. Providing immediate, clear value in every interaction through the conversion process, building trust at every stage is essential. Your prospect must see the value that makes it worthwhile to move a further stage through the conversion process.
Refining these strategies by continuously testing and improving them will give you the edge over mass produced blurb in the crowded to overflowing inbox facing your prospects every morning.
While this is easy to say, and write in a blog post, it is very hard to do. You need an expert, to direct the process.
Dec 9, 2024 | Communication, Management
From time-to-time leaders and managers must deliver bad news.
Delivering bad news is one of the most stress inducing actions any manager and leader must undertake from time to time.
My technique over the years has been what I call ‘delivering a Sh*t sandwich’.
The bad news sandwiched between two pieces of better news.
For example:
‘Sales are going well and are above budget’.
‘Sales in your area are poor, your colleagues are carrying your short-comings and are becoming very tired of that’.
‘We are sending you to the ‘Harvard improve your sales skills course’ next month hoping it will help you improve.’
This generally works quite well.
The alternative as demonstrated by the following story I found from an anonymous source, is to deliver some outrageous and imaginary really bad news, which then makes your bad news seem like a huge relief in comparison.
“Dear Mom and Dad
I’ve dropped out of school. Bob and I have moved to Alaska. His penal officer has found him a job, and we live above the gas station where he pumps gas. The doctor says my pregnancy is coming along as well as can be expected.
Love,
Jane
P.S. There’s no Bob, I’m not pregnant, and I didn’t drop out of school. But I got a D in chemistry. I just wanted you to read this with the right perspective.”
Note: this last technique also works in reverse.
Rolls Royce no longer display their cars at auto shows. In that environment, they are hugely expensive vehicles, with many very good, and much cheaper alternatives. Instead, they now display at air and boat shows, where by comparison, a Roller is pocket change.
Dec 4, 2024 | Change, Strategy
Too few people running manufacturing SME’s understand in sufficient detail the value of understanding and managing their product portfolio with one eye (at least) on their break-even point and burn rate. To my mind these are critical measures that should be reviewed and interrogated as a standard part of being a responsible manager.
The break even point in a multi-product manufacturing operation will vary depending on the gross margin from the differing mix of sales. This has been to date a challenging calculation, dependent as it is on a variety of variables, particularly the forecast of sales volumes of the product portfolio. However, it is a perfect use case for AI to be deployed, so there is no longer an excuse.
The ‘brother’ of break-even is your burn rate.
Every business has a burn rate, the ratio of cash in to cash out. It is a critical calculation, particularly in a start-up environment.
It tells you when you will run out of cash.
When seeking a capital injection, your burn rate will be one of the first numbers isolated by a potential funder.
A potential investor or lender will always ask two critical questions:
- How are you going to spend the money?
- How long will it last?
The general use of the term is in relation to startups, but it is just as important, albeit not as top of mind, in an ongoing business.
It is really a simple calculation. The ratio of cash you are spending every period, to the cash you are collecting, divided by the cash in reserve. In a crisis, that period may be daily, or weekly, but it is most often monthly.
Startups are inhabited by optimists. Nobody but an optimist would put themselves through the wringer of creating a start up. As a result, it is almost inevitable that revenue forecasts will be inflated, and costs receive too little critical thought. That is until almost too late, at which point the hatchet comes out, and potential funders run for the hills.
Dec 2, 2024 | Branding, Innovation, Strategy
A phenomenon in my local area, Sydney’s inner west.
Suddenly, there are electric cars everywhere from manufacturers I had not heard of a couple of years ago. That is in addition to the venerable brands, Volvo, MG, Lotus, and others now owned by Chinese investors, leveraging brand heritage.
China now is manufacturing very good EV cars at a fraction of the cost of traditional manufacturers. They have established technically sophisticated and innovative supply chains and are discovering and leveraging the benefits of technology. The US, Japan and Korea can only wish for the cost base the Chinese now have across their industry. Chinese manufactured EV’s now control 40% of the biggest market in the world, China.
Central planning pointed Chinese industry towards EV’s, and assisted development, while western manufacturers relied on lobbying and subsidies to maintain the dominance of petrol and diesel. The only real innovation over the last decade they have undertaken has been in racing, particularly F1. The logic expressed was that the innovation would ‘trickle down’ into our everyday cars.
It didn’t work so well with economics, but that lesson has been ignored.
Tesla may have started the ball rolling, but China has given it momentum, and now delivers 60% of global EV registrations, and accelerating.
The acceleration of global EV market penetration, perhaps hobbled only by the shortage of recharging infrastructure, and the time necessary to recharge has come at an astounding pace.
It is a classic case of don’t just change the rules, change the game.
Steve Jobs did the same thing with the iPod, then the iPhone.
The header is by DALL-E, and highlighted the further takeover of the auto industry by using Pirelli, now Chinese owned, on the track hoarding.
When you need to think differently about your strategy, revise your thinking, and figure out how to compete in the future, call someone who has seen it before.
E&OE. This analysis of the comparative costs of EV manufacturing came out a week after publishing the post. It delivers numbers that highlight the problem faced by western legacy car-makers. https://www.linkedin.com/posts/juergenstackmann_544-minutes-worth-watching-ed-conway-ugcPost-7271897558170456065-ETSC?utm_source=share&utm_medium=member_desktop
Nov 25, 2024 | Change, Governance, Strategy
Should the ACCC have approved the $8.8 billion reverse takeover of Sigma pharmaceuticals by Chemist Warehouse?
Chemist Warehouse is by far the largest competitor in the $17 Billion retail pharmacy market. Sigma pharmaceuticals is a wholesaler serving all pharmacies, and holding a major share. On the surface the reworked Chemist Warehouse/Sigma pharmaceuticals company could exert undue competitive pressure on retail pharmacy competitors. They would be in a position to dictate price and terms by virtue of their scale. Surely not a good outcome for retail prices.
On that basis when recently asked my view I asserted that the ACCC had made a mistake in allowing this transaction. It seemed on the surface that the power of the combined group would logically result in higher barriers to entry, less innovation, the lessening of competition logically leading to higher prices.
However, on the flip side, is it the role of anti-competitive legislation to protect competitive enterprises in a vertical?
Retail pharmacies make anywhere between 25% and 65% of their revenue from non-prescription sales. The latter number being Chemist Warehouse share, the former being the bottom end of all other retail pharmacies. In effect, pharmacies operate as competitors to Woolworths and Coles for a big chunk of their revenue.
We have a paradox here reflected elsewhere in the economy, most particularly in the retailing of food and groceries. Should regulatory authorities be required to interrogate just the horizontal market for competitive pressure, or should they also reflect on the verticals in operation that serve as the supply chains?
Coles and Woolworths over the last 40 years have effectively created what was 20 years ago an oligopoly. They had swallowed up in one way or another almost all of the competitive retail chains, and the power of the wholesaler serving independent retailers was significantly diminished. To facilitate their own supply chains, they built and continue to innovate through the supply and logistics chain to squeeze costs out, in any way they can, while maintaining a good return to shareholders.
Aldi launched into the Australian market in the mid 90’s. They deployed a different business model offering a limited range of house branded products at discount prices in low rent locations. As the number of ALDI stores increased driving market share, so did their competitive impact on the market increase. Currently it would be wrong to consider Coles and Woolworths an oligopoly, as Aldi is a growing, and apparently financially viable competitor.
After consideration, I concluded that the ACCC had in fact made the right choice in allowing the Chemist Warehouse Sigma pharmaceuticals reverse takeover.
At the other end of the scale, we have the privatisation of natural monopolies where competition is next to impossible. The obvious example is Sydney airport, a privatised public monopoly that has conducted innovative programmes to gouge the travelling public. Such a natural monopoly should never be privatised.
It is stupid and naive in the extreme to think that a private corporation would not leverage their pricing power to the benefit of their shareholders when customers had no option, and no alternative was likely to emerge. Promises of regulatory profit limitation have proven to be a politically useful mirage, its true nature only apparent just after the ink has dried.
