Are supermarket customers a means to an end, or the end?

Are supermarket customers a means to an end, or the end?

May 18, 2016 | Customers, Marketing, retail

Woolworths has delivered in spades to shareholders in the last 20 years, but the rot had set in a decade ago.  The seeds of the rot were assisted in my view by a lack of credible competition, and management losing touch with the subtle changes happening in consumer attitudes and behaviour that added together began making a noticeable performance difference 5 or 6 of years ago.

Can it be reversed, we will know in another 3-5 years.

New CEO Brad Banducci appears to be making sweeping changes at Woolies, ditching his fancy CEO office for a workstation sends a string messages, stronger yet is the message to his troops that it is not just desired that they get into the stores, it is mandatory.

Getting the executive decision makers close to the retail action……..what a novel idea!

Former Executive chairman Paul Simons who pulled Woolies out of the gutter in the late 80’s after returning from a gig as MD of trail-blazer discounter Franklins, was famous for turning  up unannounced in stores, checking the minor details of the way the store was operating and presented to consumers, talking to floor staff, and espousing frugality as a great virtue. He must have been dismayed at the way Woolies followed Coles into an extravagant head office, seeing it as a sign of executives isolating themselves from the interaction with  customers in stores, where retail success is won or lost.

In the 80’s the Morrisons chain, then  concentrated in the North of England before they expanded south, was a leader in produce merchandise. Their stores were the best I had seen to that point anywhere in the world. In a store one  day near Leeds during a visit to the UK, complementing the manager on the display during a conversation where I was sucking his brains, he pointed to an elderly gent in a brown cargdigan carefully stacking apples on a shelf, ‘that is the reason’ he said, “Mr Morrison turns up in a different store every day, so everyone is on their best game‘. I introduced myself, complementing him on his stores, I recall he said ‘did  not matter what happened elsewhere, it was the little things in the stores that made the difference’.

I never forgot that conversation, it reminded me at the time of the words of Paul Simons, and of Reg Clairs the real architect of “Fresh Food people” who I came to know very well after he retired from Woolworths.

It seems Brad Banducci heard it also.

You would think Woolies would have learnt from their experiences, plenty of opportunity to so.

They took over Dick Smith, and stuffed it up by ‘corporatising’ and in the process removing the things that made it successful. They watched the challenges and mistakes of BBC hardware in the early days of big box hardware, as Bunnings set the pace, then a decade later deciding to take on Bunnings with an inferior customer offer from a position of significant financial, branding and logistical weakness. Meanwhile, they had made a great start with Thomas Dux modelling Harris Farm, but again throwing out the things that delivered the early success in favour of more of the same from Woolies head office, arriving at the current place where Dux is being closed down.

Mass market retailing is a schizophrenic occupation.

On one hand, it is the advantages of scale that that deliver profitability, but at the retail selling face it remains a highly personal business. Get the balance wrong in either direction, and the financial results will follow. Allowing the financials to drive decision making  inevitably results on the focus being taken off the customers, and they will react accordingly.

The absolute best way to overcome objections to a sale

The absolute best way to overcome objections to a sale

May 16, 2016 | Customers, Sales

Over many years and considerable experience in developing sales programs, one of the regular stumbling blocks is how to respond to objections.

The single best way I have ever seen to overcome a sales objection is to articulate the objection before the sales target gets the chance to do so. That usually shoots it down in flames as a serious objection if the conversation continues past that point.

For example, a while ago doing an assessment of a client’s sales efforts I sat with one of their sales people as they made the initial contact over the phone after the lead had been qualified by a reasonably robust process. My clients product is a quality offering in  a crowded market that has a number of cheaper offerings without the value added capabilities and guaranteed longevity. The qualification process filters out many of those for whom the feature additions will add no or little value, so those with whom we were trying to have a sales conversation had been judged to be genuine leads with a need we could fill. However, in the early parts of the conversation almost always  price was raised as a problem, and often it ended the sales process before it really got started.

When we turned the scripts around so that the sales personal brought up the premium pricing, acknowledging it was not for everyone, as not everyone values the assurance that comes with the quality built in to the design and fabrication of the product, price was removed as a barrier to the sale.

It worked almost every time multiplying the ‘conversion rate’ which was in this case gaining  the face to face opportunity to demonstrate the product in an operational context. From there, the sales conversation rate was already pretty high.

Following is a list of the common other barriers to completing a sale I have seen. Being creative about the manner in which they are handled has a great impact on the conversion rates.

Lack of perceived value in the product

Lack of urgency in purchasing the product

Perception that an alternative is superior

Internal politics in your customers business

Lack of funds to purchase

Personal issues with decision makers

Conflicting corporate initiatives

A no decision no risk attitude

Lack of trust in your company

Lack of personal rapport with you

Your inability to communicate effectively with them

Now you have a list of the possible objections, workshopping the responses is extremely useful

In short, make a feature of the things that you think they will object to, and remove it as an objection before a potential customer has the time and opportunity to bring it up themselves.

How to get lucky!

How to get lucky!

May 2, 2016 | Customers, Innovation, Management

‘Getting lucky’ has some pretty specific connotations in Australian vernacular,  but has much wider implications in business.

My old dad used to say “the harder I work, the luckier I get”. He would usually be saying it as he reached for his last bob while playing a round of golf, or chasing the bream off the beach in the morning.

‘Lucky’ has many faces.

Dad also had things to say about the nature of luck in business, things that have stuck with me over the years and informed the way I advise those I work with.

Luck comes with hard work……

Luck does come with hard work, but working hard to dig a hole will just get you a deeper hole, and sometimes that is not the answer. You have to be able to be selective at what you work at, and swap horses when you need to.

Luck come to the prepared mind.

This old saying is also true, and recognises that preparing your mind to recognise and act on the so called ‘luck’ when it happens is hard work. This work usually happens over a long period, and is usually the result of some level of collaboration. Alexander Fleming  ‘discovered’ penicillin in 1928, his lucky observation informed by previous work by others over a long period. It was not until 10 years after later that is was turned into a product by Howard Florey, driven by the demands of war, and funding from the Rockefeller foundation.

Luck comes from learning.

Thomas EdisonIt seems to me that ‘luck’ also favours  those who treat ‘bad luck’ not as a setback, or indication that they should cease and desist, but as an opportunity to learn and build something better that sometimes, magically overnight after 20 years, comes together in a new way. Thomas Edison’s famous words telling us that the discovery of the light bulb was the result of 9,900 failed experiments says it all.

 

Luck come from seeing what others miss. 

See what others missThen, there is also those who see opportunities as they emerge by, and have the sight to recognise them, and balls to act on them. Steve Jobs was a master at this. He saw a whole new world in combining the existing functionality of the telephone and MP3 player with the then unused touch screen technology that had emerged from NYU labs and demonstrated publicly for the first time in 2006.

 

‘Luck’ rarely just arrives, although it does happen. As a kid I knew a bloke who bought a single Opera House lottery ticket (when 200k was a lot of money) for himself on special occasions, and then won it. That seems like luck to me, but luck is usually a function of several of the above working together.

Where will the retail gorillas make profits tomorrow?

Where will the retail gorillas make profits tomorrow?

Apr 20, 2016 | Customers, Marketing, Operations, retail, Strategy

Coles and Woolies are locked in a battle for share of the customers wallets and throats that becomes more complicated every day.

The competitive landscape has changed. The old model of them against each other and independent wholesaler supplied groups, has been spiced up by Aldi, Cosco, and the tide of competitive business models evolving both in store formats such as the convenience small stores around commuter points, farmers markets, and digitally enabled sales.

Those sales I call ‘Beyond Checkout’ cover everything from online ordering with home delivery to the evolution of old fashioned drive thorough pickup.

In my view the battle is a losing one for the gorillas without significant change to their operational culture. Their current business models are based on mass merchandising, not easily made compatible with the personalised service delivery and the  lower volume specialised products now being sought. You need go no further than the disappearance of Thomas Dux for evidence.

Having said that, I see 5 general areas for operational innovation of both the gorillas that would deliver ongoing profits, and sensitise them to the changes happening beyond the walls of their stores.

  1. In store technology deployment.

Deploying some level of the data driven category management control to store level would greatly enhance assortment optimisation, out of stock reduction, and margin maximisation. The assumption of course is that there is staff in the stores with the nous to leverage the information  they are being given.

There is also the juicy thought that stores will be able to connect to consumers in close proximity to stores via their mobile devices geo location capability and make them offers based on their purchase patterns. Then there is the option of instore kiosks harnessing the value of instore video and personalised advertising and promotion, again catalysed by your mobile device.

  1. Leveraging existing asset

Reduction of maintenance and running costs with innovations like rooftop solar power, preventative maintenance programs, improved store security, and stores as the logistic base for home delivery. Home delivery will become more and more important to time constrained consumers, so developing a compelling offer should be high on their agendas. To date the penetration has been poor because the logistics, particularly for fresh and frozen product is really challenging.

  1. Employee productivity improvements.

With better staff training, particularly in produce, customer sensitive opening and closing times, cash register  speeds (the Aldi insistence on prominent bar codes by observation speeds up throughput significantly), much can be achieved. Self-serve checkouts currently rolling out with store renovation programs have clearly been a success with consumers, and offer significant productivity improvements.

  1. Value chain optimisation

The use of collaborative technology  that goes back into supplier production planning and collaborative volume management from the production line to the checkout has been around for years. However, there remains huge opportunities to extract benefits from inventory management for all in the value chain. The barrier is cultural, as the gorillas want all the benefit to come their way, removing the incentive for suppliers to take risks and innovate, except when under the whip.  Collaboration through the value chain can deliver great benefits when done well.

  1. The customer experience,

What is retail about, if not customer experience?

It is here that retailers can differentiate themselves in all sorts of ways.  What they cannot do is demand from head office that customers like them, and prefer their stores over the others. Store choice is a personal thing for consumers, made up of many elements, but creating a store environment where the employees are pleased and proud to be of service is a great start.

Long way to go there.

What the senior management can do is provide the infrastructure that enables that level of personalisation and service to be delivered in stores, and the leadership to create and encourage the customer centric culture that front line employees then deliver.

And a final thought: Is that the light at the end, or a headlight?

E-tailing is a huge threat to the gorillas, and while it involves capital to develop and deploy the technology, it is essentially an individual engagement and transaction. Online gets all the publicity, but still only accounts for around 6% (depending on whose numbers, and which categories you look at) of sales. The gorillas should see E-tailing as their next opportunity area, to be embraced rather than feared.

Remember what happened to the Blockbuster video business? They had the game by the throat, Netflix was just an irritation in the corner, so they ignored them.

Bamm! Blockbuster is gone.

While it is still pretty hard to stream a family roast dinner, the lesson of Blockbuster should not go unheeded by Coles and Woolies.

 

How to find your keywords, for Free!

How to find your keywords, for Free!

Apr 11, 2016 | Customers, Marketing, Strategy

Pretty much everyone engaged in the ‘content wars’ have some level of focus on keywords.

It makes logical sense to include them in your headlines, and body copy where appropriate, and while ‘keyword stuffing’ now brings the wrath of Google down on you, being sensible still carries weight.

There are a number of paid keyword tools that do a great job, but a pretty good job can be done for free just by applying some thought and a bit of common sense.

Some of the ideas I have used in preparation of this blog are:

Google auto complete. Start typing a query into Google and it gives auto options. These are nothing more than Google scanning the similar terms put into search and returning their most common responses. Ie, a keyword or phrase.

Wikipedia. Thousands of experts collect and curate information on many topics. Any page that deals  with your niche will have links and words that can be used as keywords, curated by experts.

Google related searches. Every first page of the search results give you a number of related searches at the bottom of the page. Often some good ideas are hidden in there.

Amazon. This may not be an obvious choice, but if you have a look inside a book in your niche, you will see the chapter headings. Somebody who presumably has a bit of knowledge in your niche has taken the trouble to write a book, and set out the important stuff in the chapter headings, might be an idea there?

Quora.com. Quora is a Q&A platform, for the uninitiated, so there are discussions on many topics, probably yours, so there are a range of words and phrases used that could give some ideas.

Forums. Type your topic + Forum into the search box and up will come the forums related to your search term. Again, these are discussions on the topic for which you are looking for keywords, so there are likely to be some good ideas floating around.

Google keyword planner. This is a great tool, suffering from success. It gives only specific variations on a word or phrase you type in, there are  no similes or suggestions in there, no variations beyond the specific word or phrase you typed, no imagination or inference is applied. The obvious advantage is that you also get some data which can be very useful. On the flip side, everyone uses it, so finding a word that is different, but still relevant will not happen in this tool.

The paid tools are very good, but for a medium or small business, an expense that they often choose to avoid, as they can be expensive. No amount of keyword magic however can replace a creative and relevant strategy and Value Proposition executed with precision.

Selling is still social

Selling is still social

Mar 31, 2016 | Customers, Marketing, Sales, Social Media

Well may you ask, has it not always been so?

Sales has always been at least somewhat social, the old ‘not what you know but who you know ‘ sort of process. However, the last decade or so things have become so competitive that the numbers have taken over, and we often seem to put the social dimensions back into second place.

The numbers however, have hidden the essential truth that people buy from people  not from organisations. The social selling tools that have evolved have put another  layer onto the selling process that enables scaling of effort, but at the end, people still buy from people.

Most of my clients these days are B2B marketers, some have embraced the social platforms around, but most see them as a place to stay in touch with family and friends, and have a point of common dislike of all the cat photos infesting social media.

However, leveraging the social platforms as selling tools that span the numbers and the people aspects of selling can make sales efforts highly effective. The platforms provide leverage to your efforts and when used well can deliver significant results.

Following are a few  commonly asked questions, and my usual response:

Which of the social platforms are best to use?

LinkedIn and Twitter are the most common for B2B, but B2C is a different matter, where Facebook and Pinterest dominate, but the needs change. What is clear is that you  cannot be all things to all people  so it is more about figuring out where your major prospective customers may hang out when in a professional mode rather than a social one, and going there. No different to the old sales techniques where you joined the golf club inhabited by your target prospects.

How to I spend my time productively?

Social sites can be prodigious consumers of that most rare of resources, our time. In my experience if you join platforms based on where your prospects are, you will maximise your time by limiting it to a combination of  two networks. This implies that you have a clear view of the interests, habits and digital behaviour of your primary potential and current customers, which is a whole new topic.

How do I connect?

Connection is a two way process, you need to reach out to them, but they need to be able to see that you might be worthwhile them investing some time, no matter how little in ‘being reached. ‘ Even if you are just asking someone to accept a connection invitation, most people will make the conscious decision, Yes or No, and there are things you need to do swing the numbers to’ yes’.

  • First you need to make the choices well. If you appear to be somebody who just seeks connections at random, and it is apparent that numbers are your objective, the rejection rate will be high. Think of your own behaviour, you are more likely to reject a connection request if it is just a generic request from someone you do not know. If you appear to be discriminating in your connections, that the circles you have a may be of value to the person on the receiving end, and the request is personalised, you will significantly improve your acceptance rate. It also takes more time.
  • Second, your profile needs to be one that is attractive to a potential connection. There is lots of advice on the net about ‘personal branding’ and while much if it is just common sense and tosh, the foundation is right. Imagine you are at a social gathering, you are more likely to be drawn into conversation with someone who appears to share your values and interests than someone who is way outside your normal fields. This is human, so consider it as you fill in your profile.  Ask yourself what it is about you that might interest those with whom you wish to connect, and highlight those characteristics and experiences.
  • Third, answer the question of yourself  “what is the value I can bring to this connection?. If you have nothing, why bother, and why should they bother.
  • Finally, send them a personalised message, something that offers evidence that you have done a bit of homework, and have something of value to offer them. Better still if you have a mutual acquaintance to who might be prepared to offer you the courtesy of using their name as a referrer. Importantly do not try and sell a new connection anything.  Again, think of the social setting. When you are introduced to someone who just talks about themselves, or immediately goes into a sales pitch, most of us just want to get away as fast as possible, and it is no different on social platforms.

Having done all that, the work of sales starts.