Is being ‘sticky’ the key to success.

Is being ‘sticky’ the key to success.

Sep 18, 2017 | Branding, Marketing, Strategy

Those flogging business coaching to the owners of medium sized businesses seem to focus on one of the oldest sales techniques in the book, the ‘Before &  After’ pitch.

Describe the current situation, and make it as down and dirty as possible, then describe the new world, the joy of the state achieved by the application of their great coaching/technology/process, whatever it is they are selling.

No mention of the challenge in the middle, abracadabra, all is well, just $109/month, less than the cost of coffee and a roll every day and you are on your way to the ‘laptop lifestyle’.

Tangled up in the bullshit, never articulated, at least  to my hearing is a very valid notion, that of ‘Critical Mass’.

The critical mass in a nuclear reaction is the point at which the process becomes self- sustaining. It may take only a nanosecond, but there is that critical point, below which the process is not self-sustaining, and past which, it is.

At what point does a cloud, which is just an accumulation of moisture, suddenly change from being a cloud to dropping rain?

For small business owners, the point of critical mass, from where the business is self-sustaining, is usually that point from where they can take time out of the business, and enjoy the financial rewards of success.  The road to that point will be different in every case, and most in my experience never actually consider what the elements of critical mass may be in their particular business, and how they might influence them.

I think it might be about how ‘sticky’ you can become.

‘Sticky’ is not a term often seen in any form of business writing, it is more usual in kids books, but how is this for a definition:

‘Stickiness’ in business is the function of: Share of Wallet  X Propensity of customers to advocate for you.

The stickier you are, the more likely you will be to have your customers buy from you everything you can reasonably provide, and then go one step further and tell their friends, peers, and wider networks.

If you are  not sticky enough, you will be sub self-sustaining, but pass that sticky test, and the business will sustain itself, with some ongoing tweaking, which is different from the 80 hour weeks most small  business owners put in, to make a living, but often  not have a life.

 

Cartoon credit: Hugh McLeod and Gapingvoid.com.

 

 

 

Sell or nurture?

Sell or nurture?

Sep 13, 2017 | Marketing, Sales

Every piece of research I have ever seen puts the conversion rate of an initial sales contact little higher than 2%.

It does not seem to matter if it is the old style letter box stuffing or sophisticated email outreach, 2%.

Does that mean 98% are not interested?

Not necessarily, it can mean that they are just not ready to buy right now.

Therefore there is a percentage of that remaining 98% that may buy at some point with some nurturing.

This opens the question not just of how you go about the nurturing process but how you split your time, creative, and financial resources between the two, which is where the challenging strategic choices need to be made.

 

 

The one rule to ensure you attract attention.

The one rule to ensure you attract attention.

Aug 15, 2017 | Communication, Marketing, Sales

The real fight out there, the one that is for most businesses ‘make or break,’  is not for  likes, or new friends, or how many social media feeds you showed up in, it is for attention.

The problem with attention, is that it is transient, hard to get, and there is  no saving it up for later.

Use it or lose it.

To win that fight for attention, or at least have a shot at the title, there is one rule to remember and implement.

Nobody cares about you and what you care about.

There it is, in 9 words, could be better at 7 if you cut out ‘you and’ .

Perhaps your Mum cares,  and your partner, maybe your few really close mates, nobody else.

They are all too  busy caring about what they care about to be worried about you, someone they do not know, or occasionally may know superficially.

Why is it then that we spend so much time telling others what we care about on our landing pages, brochures, advertising platforms, marketing collateral, and websites?

Usually in my experience that mistake comes from one of two places, often both:

  • You do not know who you really need to talk to well enough to communicate with absolute clarity why they should give you some of their valuable attention.
  • You are covering your arse in case someone higher up in the place asks ‘what about….’

Both are short sighted, and revenue destroying tactics.

All forms of marketing activity and material have one purpose only: to contribute to the generation of revenue.

Nothing else. Nada. Zilch. Generate revenue or go home.

What contributes most to generating revenue?

Easy: someone has a problem, and  in the first glance, on your website, or brochure, or whatever it may be, if the answer to their problem, in 10 words or less is there, they may stop. Even 10 may be too wordy, some with the problem will have skimmed over it and moved on to someone who expresses their solution to their problem with greater clarity.

Outside your family, and close circles, nobody cares. Until they need you: then they care, and occasionally when you get your marketing ducks in a row, offer you the opportunity to gain their attention.

 

Cartoon credit: Hugh McLeod at gaping void

The real measure of marketing effectiveness, and how to deliver it.

The real measure of marketing effectiveness, and how to deliver it.

Aug 7, 2017 | Governance, Leadership, Marketing

Marketing is a functional silo on an organisation chart, as is Sales, Operations, Finance, HR, but unlike the others, marketing deals with unknowns, the future, whereas all the other functions deal with the past, or what is immediately in front of them.

Marketing is about the future, long term commercial sustainability, and its effectiveness is really hard to measure, other than in hindsight. There are lots of measures for things that have happened, which are the result of often many combinations of actions taken some time ago, so the measures are unable to change anything, just give insights to what worked and what did not.

As the senior marketing person in a very large business 30 years ago, I found myself often talking about advertising, segmentation, positioning, graphic design, and all the rest, around the board table, which either put others to sleep, or elicited opinions, usually uninformed, about the detail. However, when I talked revenue I had their attention.

Marketing is all about revenue, particularly future revenue. The other stuff is the paddling under the surface that enables the generation of the revenue, but the real measure of marketing effectiveness is revenue and margins over time.

In every business I have ever had anything to do with, marketing expenditure is treated as an item in the P&L. By definition, items in the P&L are expenses or past sales revenue. This is inconsistent with the notion of marketing being about building the foundations of future revenue.

The closest analogy is a piece of capital equipment, they are always purchased to fill one of two roles, sometimes both:

  • To increase the volumes too be sold, or,
  • Increase the productivity of the processes.

Those purchases are recorded in the cash flow statements, and the balance sheet, not the P&L. The greater irony is that capital items are depreciating assets, whereas marketing  investments, when done well are appreciating assets, unrecorded anywhere until the business is sold, then the accountants start talking about ‘Goodwill’ being the difference between the realisable value of the physical assets, and the liabilities on the books.

There is a structural paradox here. We treat a potentially appreciating asset differently to one that can only depreciate, just because it is hard to measure.

This challenge of measurement is the biggest one marketing people have to hurdle. The turnover of marketers in senior roles is the fastest amongst the functional heads in large corporations because we generally do not recognise the essential long term business building nature of marketing investments. We treat it as an expense to be cut at the slightest cloud on the profitability horizon, and the marketing people with it.

One of the challenges here is that to achieve these long term outcomes, marketing requires the co-operation and  collaboration of all the other functions, without the organisational authority to direct. The CMO has to be a leader across functions. He/she has to build the respect and co-operation of other functional leaders, often at odds with their short term function specific performance measures.

25 years ago, I and my marketing team, failed to convince the board of the then Dairy Farmers Co-Operative to invest the required capital in new equipment to launch a new brand of flavoured milk. It was to be packaged in plastic bottles, with a screw cap, to be sold at a very considerable premium to the products then only available in the gable top cartons, and we proposed to sell it to different consumers. Nobody had done this before, we were banking on tapping into a market completely under-serviced by existing packaging and branding. The Operations Manager at the time believed in the project, and put his neck on the line by committing  his R&M budget to refurbish some older gear in the absence of capital approval, and I ‘stole’ the required advertising funds from another brand.  We launched Dare Flavoured milk, and it delivered the fastest return on investment I have ever seen, and 25 years later, it is still going strong, delivering revenue and margins to the now overseas owners of the business.

If marketers started talking about revenue generation, rather than the more common ‘marketing-speak’ like positioning, segmentation, and all the insider jargon generated by digital, they will be taken much more seriously around the board table. Building support amongst other functions to acknowledge the long term impacts of intelligent marketing, is necessary for long term prosperity, and the only real measure of marketing effectiveness.

 

3 foundations that will enable Amazon to disrupt supermarkets.

3 foundations that will enable Amazon to disrupt supermarkets.

Aug 4, 2017 | Change, Marketing, retail

Shopping is a physical and sensory experience, humans evolved doing some sort of physical ‘shopping’ even if for most of our history, the similarity of that activity to a trip to the supermarket has been fleeting. Much as we might hate the queues at the checkout, difficult parking, reducing range as the retail gorillas replace our habitual brands with their own house-branded, and increasingly ‘Bandit branded’  (retailer owned ‘brands’ masquerading as proprietary) Sku’s, there is still an emotional and social element to the experience.

It applies even more in more specialist retailers, the more specialist, the greater the degree of sensory engagement necessary.

This is all breaking down, and quickly, as even high fashion, and highly personalised fashion like Shoes Of Prey, which can designed and bought on line.

So what can we expect from Amazon that would justify $US13.6 billion for Whole Foods?

 Virtual supermarket.

Virtual and Augmented Reality is coming at us like a train. Just as shoes of Prey allows you to design your own shoes, Warby Parker  has become a billion dollar company in 6 years by helping you to choose your glasses on line,   Amazon (surprise surprise) is playing with Prime Wardrobe , and Ikea is experimenting with a virtual furniture app.  it seems a short step to using Virtual reality from your couch to ‘walk’ through, select, place and order and schedule delivery from a grocery ‘store’.

Almost a year ago my second son bought a VR set for a few hundred dollars, and when I fiddled with it, thought I had seen the future of market research. Even so recently my imagination did not take me that next small step to an actual ordering and delivery management system, but why not?

Crowd sourced logistics.

The biggest stumbling block to digital grocery growth has been the logistics, both timing and cost. Fresh and frozen produce where timing and cold chain integrity is paramount, requires a different set of logistic standards to shelf stable commodity categories. Shoppers are very price sensitive across homogenised commodity categories of temperature agnostic products, and it does not matter much if they remain on the front step for a while, diametrically opposed on both counts to produce.

Timing of delivery has been particularly problematic in multiple income homes, and building delivery certainty creates considerable cost.

Both have been solved by the sort of technology Uber uses. Pretty simple to have a crowd sourced delivery service where the vehicles just have a refrigerated unit in the boot hooked into a power source in the car, combined with the delivery scheduling Uber has amply demonstrated works.

 Payment security.

Payment security while it should be a problem, as the level of fraud increases rapidly in Australia, from 16.2cents/$1,000 in 2013 to 24.5 cents/$1,000 in 2015, (according to the Australian Payments Clearing association), it seems not to be for most of us. However, It will be very soon. Blockchain technology will remove much of the risk, and in the early stages of development, seems to be ‘fraud-proof’. Amazon has been experimenting extensively with Blockchain , collaborating with many large financial and digital innovators to better facilitate and secure web based financial transactions.

It seems to me that these are the three building blocks Amazon needs to make a huge dent in the traditional supermarket business, struggling to identify the sustainable sources of growth and profitability. Whole Foods is only the stalking horse, as there is a lot of expertise in procuring quality fresh produce in predictable volumes, and Whole Foods is already an expert in this. Amazon will add the Whole Foods expertise onto what they are doing already, and bingo, another disruption coming your way.

 

 

How to choose your marketing and sales automation software

How to choose your marketing and sales automation software

Jul 31, 2017 | Change, Governance, Marketing, Sales

One of the common questions I field is which tools are the best to automate sales and marketing processes.

The right answer is that there is  no right answer.

There are just so many tools out there that may do a really good job for you, some need to be stitched together with others, but there are a few that offer all singing, all dancing solutions.

The latter are usually not appropriate for the needs or IT resources of small and medium enterprises, who typically lack the knowledge  and resources to do a complicated implementation.

While it may seem wasteful, my advice to SME’s is to take small steps, be wary, find ways to work around the shortcomings, and stitch things together, then when big enough take a bigger step and integrate in a larger package.

It does not always work, but experimenting as you go along is usually a very good idea.

However, here are some generic steps that can be taken that should be done at the beginning of the process, no matter what, and how, you are going to implement.

  • Define outcomes. Define the outcomes you want from the software in the context of your strategy. Automation tool implementation without reference to the strategic principals and goals will be a painful experience.
  • Integration. Consider how the software will integrate into the rest of your business. Most implementations I see these days are automating sales and marketing in one way or another, which usually need to be integrated into the existing financial and operational software that has typically already been deployed. You need to clearly understand where the holes between the applications hide, and have considered the manner in which they are to be filled. Excel seems to be the ‘filler’ of choice in most circumstances I come across.
  • Build wide buy in. It is essential that you get the buy in for the functional users, by seeking their input to the tool choice, project planning, training, and implementation. This offers the opportunity to ensure that their current and anticipated requirements are met as far as possible, and that their concerns are able to be aired, if not completely addressed.
  • Fit. Ask yourself how well the new software and existing processes fit together, and how familiar the new processes will feel. Most software is not fully utilised, and this is often a result of legacy systems being useful and familiar. You need to determine how to address these issues of what I call ‘legacy elasticity’.This may seem very similar to the challenges of integration, but they are different, as there is always resistance to change, and  the better the fit to the existing, the easier the evolution will be. Integration implies that both parts of the equation can be altered to achieve a different outcome, whereas fit matches existing parts together.
  • Map your processes. My normal practise is to have someone outside the business map all the current processes, then run that map over the process map that will be implemented in the software. My objective is twofold: remove the inconsistencies and silly bits from the current, and find a process that matches what is left as closely as possible, then implement the software without change. Changing the code in the software package seems easy, but always ends up in tears as unintended consequences rear their ugly heads.
  • Do we go to the cloud? The argument about ‘cloud or not to cloud’ has been had. Go to the cloud. The compromises can be managed, the cost will continue to beat the costs of on premises, but the real value is in the automatic patching and upgrades that occur.
  • Due diligence. As you are doing your due diligence, make sure you ask deep questions, and hold control over the agenda. Software sales people are very good indeed, and will sway the most recalcitrant and reluctant buyer with a vision of the new life you will have purely as a result of their software. Just assume it is all bullshit, that there are a number of options that will meet your requirements, and be clear about what you need, not just in terms of the functionality, but the training costs, ongoing maintenance, upgrades, any internal hardware expenses, and features that may not be included in the base package.

Making a software vendor decision is challenging, but the truly challenging bit, the implementation and leveraging of the software is yet to come. Make sure that the whole project is planned in great detail, and that the vendor is locked into the outcomes.

Do all that, and you might get away with it, and when you do so the productivity gains will be huge.

Image credit: Scott Brinker of Chief Martech. The landscape details 5,381 digital martech automation tools as of the end of April 2017. There will be more by now. I recommend you dig around in the Chief Martech blog for ideas, information and insight.