The 1,000th StrategyAudit post.

Aug 1, 2013 | Change, Governance, Marketing

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The first post on this “StrategyAudit” blog was on March 30, 2009, and I wondered at the time if there would be a second.

Where were the ideas going to come from?

Would I have the discipline to just keep at it?

Would anyone care?

Now, a thousand posts, and four and a half years later, at least one of those questions has been answered, and much to my surprise, I have stuck at it. The ideas still come, mainly because I see things, read things, make connections that previously I was unaware of, but now I write down, and sometimes they turn into posts.

Does anyone care? Well, a few do. Several hundred subscribers get an email every time I post, and a good proportion get opened, although the rate varies with the headline. (you can always tell an interesting headline) and more are open via twitter, LinkedIn, and other social media. Thanks to you all, and more reposting, and retweeting would be appreciated.

 So, What has changed over the life of StrategyAudit?.

 Marketing has changed,  absolutely. The world is now digital, and the practice of marketing. has been radically transformed, and by observation, many of Australia’s enterprises have missed the boat, so far.

Mobile has not just arrived, but now dominates many net usage categories, particularly social media.  Overall mobile now delivers 25% of web traffic, and growing at warp speed. 

Marketing ROI. You can now calculate the ROI of most marketing investments based on data, where previously it simply was not a reliable calculation.  For the first time, the old adage of “50% of my marketing budget is wasted, just wish I knew which 50%” has become nonsense. It can now be calculated with considerable accuracy using free web analytics. Given that data is free, there is no excuse not to use it.

Crowdsourcing. Creative input, money, advice, as well as crowdsourcing routine clerical jobs. No longer is Intellectual Property king, Intellectual Capital has taken over, as it is what you have between your ears that can influence tomorrow that really counts. It is now much less about what you did yesterday, and are protecting in the hope that it can be a win again tomorrow, than what you can do now that counts.

Visual has arrived, from the growth of YouTube, to Vimeo, slideshare, visual podcasts, instagram, Vine, the list goes on. Content is now visual, a picture replacing a thousand words writ large.

Fragmentation has overcome social media as it has matured, just as the manner in which we get news fragmented a decade ago when suddenly the newspapers, radio and evening TV news became almost redundant. There are choices you now make about which social media for which purpose, the way you use it, the content, et.al. Social is now part of our commercial world, not the habitat for our teenage children, and smart organizations are starting to understand the nuances, and use it well, rather than just chasing “Friends”.

Marketing automation is upon us. Everything from consumer CRM, to social media posts and content bait is combining to disrupt the sales and marketing processes that evolved over last century. It is particularly potent in B2B  sales  and marketing, removing the demarcation that is the base of so many organisation structures and cultures.

Transparency has evolved from operational and logistical environments into marketing. There is now huge volumes of great info on the net aimed at helping people to think about and measure the impact of their marketing. It is the age of helping, in the hope of gaining a customer for life, rather than just creating a transaction. Jay Baer has just written a second book,  “Youtility” on the topic, and last week put up a long post that includes slideshare presentation on “how to” publish, doing exactly what he advocates in the book.

 “Big Data” has arrived, although most have no idea what it is, and so are missing the opportunities that evolve from the mass of data now available to those with the capabilities and tools. Apart from the academic interest driven by the challenges of analysing zettabytes of information, enterprises across many categories are looking at ways to leverage the potential. It has also spawned a new job description,” Data Scientist” those who do this mining. Wonder how our universities are coping with teaching something only 3 years old, that is rapidly becoming a defining discipline of the 21st century?

Mortar to virtual retailing has arrived, along with the “Showrooming” whereby people use bricks retailers to touch, feel, test and size products they then buy on line a bit, sometimes a lot, cheaper. However, the research still evolving tends to suggest that the “showrooms” that get visited are first “webroomed”, increasingly from mobile, social media connected devices, and the total of sales is increasing, stimulated by the available information and marketing, while bricks retailers are missing substantial  opportunities by concentrating on price as a competitive tactic. In effect, to be successful retailers need to be “Omni-channel” retailers. However, as noted below, we still go to the local store for much of what we buy.

Local. This is an emerging trend that leverages technology to disrupt at a local level by providing services specifically tailored to the individual. Airbnb, just a couple of years old is busily disrupting the hotel business, and from nowhere Uber, disrupting taxi and limo services is now a billion dollar baby. (Just how the absurdly regulated taxi industry in Sydney reacts will be an interesting exercise in the status quo Vs common sense). Nowhere is this trend more visible than in the growth of local growers markets in urban areas. Web strategist Jeremiah Owyang is calling it the Collaborative economy, and it is just getting started, but what a huge baby, at a current estimate of $26 billion.

 Empowered consumers. Consumers now have enormous amounts of information at their fingertips, and this has removed from sellers much of the power they used to have in the selling process, weather it is paperclips or power stations that are being bought. This means that an ordinary value proposition is simply not good enough any longer!

 Bullshitting the boss. Marketing was always a balance between art and science, but the pendulum has swung decisively in favor of the boss. The “black art” component has been removed, senior management have been around this stuff long enough, and are smart enough, to now be able to discriminate between the real marketers and those who just know the jargon. Baffling the boss with marketing bullshit no longer works, Full stop!

 And, what has not changed.

 The net has not turned all of us into wise, super informed consumers, and few of us are hyper connected, yet, and most of us are just a bit confused at the array of choice. However, if the pace of change continues, and I expect it will only accelerate, another decade will see us living in something akin to a sci-fi movie as Gen Y takes over. 

Our behavior has not changed all that much, just because the tools have changed. We just have a bigger choice of tools, many of which most of us cannot, or choose not, to use. What we like  and dislike, the people we choose to share a meal with, and how we spend out time have not changed all that much, human behavior is too hard wired for rapid evolution. The exception to this sweeping generality is social media, which has been adopted in the manner of a starving man being presented with a feast.

The web has not replaced our old buying ways completely, despite the hype. Most of our shopping (95% depending on whose numbers you use) is still with bricks and mortar retail, and much of the so called lost 5%, the B&M’s would  not have made anyway, as the demand is a creation of the information and choice available via the new tools.

The web is not a cure for the disease of crap advertising and communication we suffered last century. If anything, it has multiplied the opportunity for us to be bored, turned off, and just plain aggravated. Were it not for our innate ability to ignore that which does not interest us, we would all be bonkers by now.

I’m glad you stuck with me this far, thanks, I hope I have scratched your brain. And so, on to the next thousand.

Anti-social media

Jul 31, 2013 | Communication, Social Media

 

anti social media

“We just clicked”
It’s an old expression to describe the situation where you meet someone, and find a lot to talk about, mutual interests, and an immediate comfort in each others company for some reason.
In the digital world, it means something entirely different, implying a “friending” of someone on a social site, or a “click-through” on an e-vertisement or link on a site.
The key difference is the presence or otherwise of a real person, not an avatar, not a site, or a blog, a real person, whose hand you can shake, eyes you can smile into.
The value of a real relationship, one with a person, should never be confused with the number of “friends” on a social media site.
Humans are social animals, and while we might call this thing taking over our lives “Social media” it perhaps could be better called “Anti-Social media”

Marketing is measurement, is marketing.

Jul 25, 2013 | Marketing

 meaurement

Most of the best marketers I have worked with had a common strand of DNA. They were professionally trained, and came to marketing via their science, engineering, or maths training, for a variety of reasons.

Took me a long time to figure it out, but the light dawned (this is now 25 years ago) when interviewing two seemingly very good people for a key role, and having trouble with the final selection despite several meetings with both. Each seemed to have the right experience, were a good cultural fit, had the drive and collaborative mind set I was looking for, and on a personal level, I liked and admired both of them.

What clinched it for the one I selected was a natural “hypothesis/test/analyse/rehypothesise/retest” approach, that seemed to offer the potential of a combination of his comfort with data and his marketing experience to provide useful insights. By comparison,  the other seemed to move quickly to a conclusion based on what appeared to be valid experience and  instinct.

It is pretty easy with hindsight. My lucky (for me) hire moved towards a conclusion based on data, and where there was no data,  he created some by experiment, rather than leap ahead to a comfortable conclusion. This is now a standard marketing  operating procedure, as we have so much data at our door, but then, it was unusual.

Feeling a bit bad about passing over what I thought was a very good candidate, I recommended her to a colleague at another large company. She proved over time to be reasonably effective, but too inclined to favor the cliché over data, which limited the breadth of insight she was able to bring, as every decision was based on what had been, rather than what may be.

Today, with our analytic capabilities and the mountains of available data, marketing is all about the maths, and we should be accountable for results.

Marketing Mediocrity (sic, crap)

Jul 24, 2013 | Change, Governance, Management, Marketing

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In this time of marketing abundance, huge opportunity to connect with consumers, understand their behavior and its drivers, both physical and psychological, not just the demographics of big groups who fall within arbitrarily nominated boundaries, why is the general standard of marketing so crap????

It seems to me that the defining skills of great marketing, the insights, creativity,  compelling articulation of a proposition, empathy with a problem and its solution, and indeed asking question not asked before, have all been drowned in a deluge of marketing mediocrity coming from the abundance.

The Australian Marketing Institute recently published a paper wondering why the marketing profession is underrepresented in Australia’s boardrooms, and came up with a bunch or pretty treasonable reasons. However, to my mind, they missed the seminal one: most marketers, and hence their output are crap.

Many of the youngsters I see coming through who have a marketing degree chose marketing because it was the lowest UAI entry requirement. Whilst this may not be a good indicator in every individual case, on average, is it any wonder the level of real marketing skill is disturbingly low.

It seems also that anyone over 40, who has accumulated some life and management experience, and has the experience to have developed some instincts and insight, is seen as too old, too set in their ways, and unable to accommodate the fragmentation caused by digitisation, not “hip” enough.

What a waste this is!

People who run large businesses are smart, smart enough to see through the clichés and jargon of superficial so-called marketers, and the nonsense they hear erodes their confidence in the contribution real professionals can bring to bear.

I was just listening to a commentary on the productivity challenges facing Australian manufacturing on the radio, and the focus was on the old battleground of wages and benefits. If that is to be the central  arena of the productivity improvement debate, we cannot expect any improvement at all, indeed, we will continue to slip down the greasy international productivity pole.

An improvement in our marketing and strategic productivity, although hard to measure in the quarterly reports required by our institutional masters , would make a huge difference.

 

Top 11 tasks for Small businesses.

Jul 18, 2013 | Management, Marketing, Small business

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As I talk to small businesses, there is a very common set of things they should all be doing, remarkably common.

So here they are:

  1. Doing what they currently do 10% better. Even if what they are doing is sub-optimal, doing it cheaper, faster, better, must be of benefit, and is usually very low hanging fruit indeed.
  2. Get your digital house in order. Websites, blogs, social media, all consume resources, but worse, most SME’s treat them as one-off activities, items to be ticked off a list and left till next year, or left to the pimply faced intern to do in their spare time. Wrong. You need a strategy, allocated resources, and the capability to do all this stuff, it is after all the window to the world, and is not an optional expense, it is an investment in commercial longevity.
  3. Sort out who your current high performance customers are, and build relationship s with them. They will not necessarily be the biggest, they may be the least cost, highest gross margin %, have most potential, be the ones who are prepared to engage with you on more than a transactional level, whatever it is, engage, as it is far easier to extract another dollar of revenue from an existing customer that find and extract from a new one.
  4. Understand the market segments you work in, and which deliver you the best returns, and work the segment harder. This may be similar to the best customer list, but it may not. It is really all about understanding the characteristics of the type of customer to whom you can add the best value with your product and service offerings.
  5. Actively seek and work for referrals. The cheapest form of marketing is to have an existing customer refer someone to you, so be creative about seeking referrals, and reward the referrers. Oh, and ask for them, most do not ask, but if your customers are happy with you, 9 times in 10, they are happy to give you referrals, they just do not think of it on their own, and you have to make it worth their time.
  6. Create and leverage alliances. If you are running a shoe shop, it makes sense to be working with the dress shop around the corner to cross-refer, co-promote, and collaborate to build a customer base loyal to you  both. Halves the marketing costs, and leverages the dollars you do spend.
  7. Create and leverage data bases. Capture every transaction, and do something with it, follow up, see if the buyer is happy with the purchase, send a “thank you for your business”  card,  ensure the product met expectations, provide an offer for the upcoming birthday, etc, etc, etc. It is now so cheap to build and leverage databases that it is insane for small businesses not to be doing it.
  8. Keep your eyes open for opportunities. Most small business operators are so engrossed in the day to day bun-fight that they do not take the time, or make the effort to look around, see what their competitors are doing, look at the  trends in your market, and those adjacent to you, look at the evolving technologies that may impact, or be of use, see who is going well, and who is going broke, and understand why, etc, etc. Opportunities usually come from unexpected places, and you have to be ready for them when they do.
  9. Measure, measure, measure. Understand your costs, not just of your products, and the stuff clearly articulated by an invoice, but the often subtle or hidden ones, customer acquisition costs, wasted time in the office, using untrained staff, breakdowns in the factory, etc, etc. Some measures will be more enlightening that others, and you need to be cognizant of the costs of collecting and analyzing the data to give you the measures, but rather than not measuring, do it for a while and determine if there is a value to the continued measurement and leverage the data gives you, then continue, or leave it if the return is not worth the effort, or the opportunity cost is too high.
  10. Work on why you do stuff, rather than just what you do, and how you do it. I considered making this number one on the list, but it is a bit esoteric, so it is here, with a link to Simon Sinek’s presentation that in my view should be compulsory viewing for small business people. Watch it, think about it, and act on it.
  11. Do something different, now.  Pick from the list, and do something about it. I could go on about planning, assembling resources and capabilities, and all the other consultant stuff, but for small businesses people, the primary task is to act, watch how it works, and be prepared to change direction quickly if necessary, and move ahead again.

Oh, and a last one, so important that it is on its own, WATCH THE CASH!

Fire yourself.

Jul 17, 2013 | Governance, Management, Marketing, Small business

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Small business owners work harder, and often take home less than their employed peers. I see this all the time, again and again, in all sorts of contexts.
Ever wondered why?
In my experience, most go into business because they have great skill, contacts, and experience in the domain of their choice, which makes them great engineers, plumbers, food scientists, but does not necessarily suit them to be CEO.
The flip side is, do you need specific domain knowledge to be the CEO of an enterprise in that domain?, the answer clearly is no.
Most get confused about the purpose of their activity. Competent chefs try to run restaurants, simply because as a chef they can pay themselves only chef rates and remain solvent, but being a restaurant owner, perhaps a string of them, is where the money is.
Get your priorities right.
Want to be a rich chef, but love to be “cheffing” ? Probably can’t do both.
So many exchange the cooking for shuffling paper, suppliers, lease contracts, worrying about staffing, and doing the marketing, then wonder why the restaurant fails.
Fire yourself as the CEO, and hire a professional manager, while you do the cooking. After all, you would not even consider hiring an apprentice to replace you in the kitchen as you try to run the business, would you?

You can still own the business, and eap the benefits, you just do not have to run it day to day.