Feb 6, 2013 | Customers, Marketing, Sales
Modern life gives us an array of opportunities to go somewhere, physically or digitally, and have presented to us a huge range of choice in any category of interest we may have.
There is a paradox here.
Concentration of anything, attracts those who may be interested in purchasing to the location, whilst creating the hurdle for those hoping to make a sale of differentiating their offer from everyone else in the concentration.
This morning I was waiting for a meeting in a café in a local shopping strip that is little more than a concentration of cafes, bistros, and dining of all sorts. I was struck by the breadth of choice, and the resulting challenge of differentiation for the operators.
The café I was in is one of about 7 or 8 within 150 meters, all selling good coffee, a range of simple, tasty menu items, but all pretty much the same to a casual visitor. I wonder what would happen if one of them started roasting their own coffee, creating that intoxicating smell, and the opportunity to tell a story about the beans, why the tastes varied, where they came from, and how the skills of the barista influenced the outcome. They may also make a bit of extra margin.
The provision of a cup of coffee is pretty commoditised, buying roasted beans from one of the roaster/distributors is a transaction where the individual café has little leverage in the price negotiation, but there appears to be plenty of margin in the roasting business. Seems pretty obvious to me.
Feb 5, 2013 | Governance, Management, Marketing
This is definitely not referring to the pallet of old brochures gathering dust in the warehouse, although most businesses still seem to accumulate them.
I am referring to the sales leads, data bases, prospects, active conversations, existing customers and relationships, that together constitute the marketing inventory. When you think about these things as “Inventory”, an asset, you instinctively consider the means by which you generate a return, as that is what you do with assets.
The similarity of marketing inventory to physical inventory is that you can use the same sorts of measures for marketing inventory that you use for physical inventory, pretty much broken into the sorts of categories that Lean inventory management would require:
- “Flow” and Balance through the system of leads, prospects, active prospect, execute the sale, they are essentially “how many” questions.
- Conversion rates from one part of the system to another. Conversion trends are valuable pointers to both tactical success and emerging problems.
- Velocity through the system. As in physical inventory, the quicker the better, whilst maintaining flow and balance.
Considering the sales and marketing effort in this way encourages a sensible demarcation between the functions, and generally removes the argy-bargy that often happens. Importantly, it focuses attention on the cost and return analyses that enables resources to be used where they generate the best return. Having your expensive sales force out doing cold calls with a 1% hit rate now makes no sense, as the process has been completely disrupted by technology.
Feb 4, 2013 | Marketing, Strategy
LAB, Lemming Avoidance Behaviour, or simply, avoid being like everyone else.
Whilst we are in the age of the “wisdom of the crowd” there is a profound difference between that wisdom and simple herd behavior.
We are not lemmings, but so often we exhibit their behavior, following the crowd, just because being a part of the herd is more comfortable than being an outlier, unless of course, we find the proverbial cliff. Standing out from the crowd, turning left when the rest turn right, making ourselves a target, is unnatural, because it is dangerous, and deep in our brains there are the evolutionary barriers to being different. They served a real purpose when there were sabre-toothed tigers outside the cave, but as the tigers are gone, the dangers are elsewhere.
Today, the danger is in conformity, blandness, commodity, to day, you need to stand for something that others value, something remarkable, something that makes a difference to others. The absence of difference, implies lemming behavior, and I believe to be successful, LAB is mandatory.
Try it, get the adrenaline pumping, feel the buzz, and have a chance to succeed.
Jan 30, 2013 | Change, Marketing, Small business
I wonder how anybody could be in the slightest bit surprised that Coles and Woollies are raking in the profits from petrol retailing, as has been reported recently.
We have allowed a virtual duopoly to emerge and duopolies behave in pretty predictable ways, for the benefit of shareholders, that is the way the system works. Oh, you will not be able to nail collusion, or any of the other nasty anti competitive behaviours on them, probability is they will not be happening, as they are not necessary with a duopoly, simple self interest will drive profitable behaviour. The opportunities to cross merchandise, cross promote, and leverage operational logistics costs that exist just enhance the attraction of it all.
The scale of the major enterprises makes competition from local businesses a huge challenge. Pundits like me can wax on about the opportunities the small agile enterprises have, how the net has given them the flexibility and transparency to take on the big guys, but when it truly is David Vs Goliath in a local market, the little guy will rarely win. He will be swamped by the “man” who can simply ignore as a short term irritation the slower traffic, lower basket value, squeezed margins, and any resident reaction that occurs, that would mean death to the smaller operation.
I feel for the small guys who have made a huge effort to compete, but being in a commodity market means that scale counts, and in the petrol market, Coles and Woolies now own it, as they do groceries and hardware, with office supplies evolving down the same path. I bet they cannot wait to get their hands on the still regulated pharmacies and newsagents, where the regulation has enabled a cosy club for small businesses to exist.
Jan 29, 2013 | Marketing, Small business, Social Media
Groups, networks, friends, and even loose 2nd and 3rd party connections via social media all have similar characteristics when viewed from a distance. Groups of people interconnected in some way.
However, the real value of a group is its density, how close they are, and how mutual are all the links, how much they share, and of crucial importance, how much they contribute rather than just being conduits.
A small group is able to self regulate easily, there is little tolerance of free-riders, there is a high degree of “density” among the members. However, a large group is poor at identifying and excluding free-riders. The number and strength of connections between individuals in the larger group are much less, and weaker, there are those in the group who have no connection with each other beyond membership of the group: the density of the group is much lower.
A high density enables stuff to get done, the group can co-ordinate the actions of its members. But there is a paradox here, a large group can also co-ordinate, and in a short time, but only in the negative, it can be somewhere to stop something, to protest, a very simple, single purpose, but it cannot map a course of action and follow it. A dense group can map a course, follow it, and if dense enough, accommodate changes in direction.
Consider how easy it is for a group of three friends to agree to go to the pictures next week.
They agree a time and film to see that suits them all.
Now consider the added complications of adding an extra three friends to the party, all that extra schedule matching, as well as the varying tastes in film. How much more difficult this would all be if the added three are just acquaintances of one of the original three, unknown to the others.
Density, not numbers is the key to social success, in media, as well as in life.
Jan 24, 2013 | Branding, Marketing
“Graph Search” may offer the potential of a financial bonus to the beleagured facebook shareholders sucked in by the IPO hype, I suspect it is, but what were they thinking when they dreamt up the name?
A brand is supposed to convey a promise, be a memorable badge for the product, and in the case of a sub brand, add to the whole. Writing this post, and the one a few days ago, I had to return to the facebook page several times to remember what the silly thing is called.
Graphs?
Greater?
Giraffe?
“Grape search” (cab sav anyone)
I know that to insiders, a “graph” is a metaphor for the map of a persons networks, a diagram that represent all the friends, comments, reviews, updates, and connections, but not everybody is an insider.
Perhaps they shoul have snuck down the road and thrown some money at the branding boys at Apple, they seem to know what they are doing.
