Jul 9, 2015 | Branding, Customers, Demand chains, Marketing, Strategy
All those brand stories: gone.
Every now and again I see something so stupid, so irrational, and so destructive of a valuable brand, that I think that perhaps the loonies really do have the keys to the asylum.
One of them happened yesterday.
There was a radio news report that Akubra would cease to buy any of the raw material required for their hats, rabbit skins, from Australian suppliers.
From here on they would be using 100% imported skins.
One of the honchos from Akubra was interviewed, and he was blathering about looking after all stakeholders, that sacrificing 4-5 jobs in Kempsey where the hats are made was worth it to ensure the business remained viable, and that the 5,000 retailers around Australia needed to be assured of continuous supply, or they would be in trouble.
Blimey, stone the crows, 5,000 retailers rioting because there is uncertainty about the viability of a supplier of .00000001% of their sales.
Then it turned out that just 10% of current skin supplies were local anyway, as the khaleesi virus has cut a swathe through rabbit numbers, for which we are all thankful. Then a supplier was interviewed. He breeds rabbits for the table, the skins to Akubra are a very useful addition to his cash flow, important even, but not make or break, so now the skins will go to landfill.
How much better it would have been to set about supporting the Australian industry, modernising their equipment, working with their suppliers, so that this Australian icon could continue to grow, particularly as wild rabbit numbers seem to be increasing as the virus becomes less effective.
What a positive brand story they could have created and spread, reinforcing the existing position, telling the stories that are the foundation of their brand, but instead they chose to trash their brand, built up over 100 years plus.
Your brand is an amalgam of all the stories told about you, your products, the situations encountered, and the experiences users have with the products. The stories Akubra could tell are legion, but instead they choose to self-destruct their most valuable asset.
Next thing you know, a global brand like Coke will replace itself. Oh, poop, they already did.
Sigh.
Let the loonies go free.
Jul 8, 2015 | Branding, Customers, Marketing, Sales, Small business
Free works
It happened again last week.
A client asked why I advocated giving away a lot of information on their products and supporting technology, seemingly for free off their website. For them it is a challenging idea, one that runs against everything they have ever thought or done.
Their products are challenging, technical products, heavy in intellectual capital, so why give it away?.
To answer, I created the following list, and it is all about creating value before asking for the purchase order. Do it well, and customers do not have to be sold, they become buyers.
Provide assistance. Information assists potential customers to recognise that they have a problem, an opportunity, or that there may be a better way of approaching a situation.
Demonstrate. By demonstrating how their problems will be solved, enabling comparisons, and offering technical and financial case studies, the cost/benefits of a purchase can be more easily calculated. This makes the internal purchase approval processes easier for those charged with their carriage in a customers business.
Risk identification. Risks of adoption, and non-adoption can be articulated, demonstrated, and often costed and compared.
Learn. Information offers a prospect the opportunity to learn without the costs usually associated with learning, and they will not forget the opportunity.
Decision necessary information. Availability of strategically significant information from a supplier can accelerate the adoption and implementation of new products and processes, delivering a market benefit.
For my client, the list of benefits is as significant, and in this information driven modern commercial world virtually a competitive necessity.
Be expert. We will be seen as the experts in the market, and who would want to buy from an also ran?
Cycle time. It has the potential to shorten the sales cycle by removing some of the steps normally associated with such B2B sales of significant size
Conversion cost reduction. As a result of both of the previous items together, our cost of conversion from random and often unknown prospect to a transaction is likely to be reduced, and the numbers increased leveraging the costs of our sales effort.
Short listed. Information availability increases the chances that at least we get onto the short list of those who are considering making a purchase, but who may not be in our immediate sales radar.
Sales funnel information. Downloading of various material by prospects gives us not only information on who is in the market, but what they are looking for, and leads on their specific interests and concerns.
Build a brand. The biggest benefit of all is that of the building of the brand, the position of expertise in the market. In this day of ubiquitous information, being seen as the expert in any domain is a hugely valuable asset.
Being secretive, and believing that information held closely is power is now a failed strategy. It worked in the past, but no longer. Information is still power, but the way you leverage it has changed radically.
Jul 2, 2015 | Customers, Marketing, Social Media, Strategy
I find myself writing a proposal for the development and implementation of a digital marketing strategy for a bunch who know they need it, because I suspect their kids told them, but have no idea what it is.
Part of the challenge is to figure out how to balance the digital and social media education against the tough realities of marketing which have not changed despite all the new tools. The entrenched view that marketing is about putting out a monthly newsletter full of general bluster and crap and discounting as and when deemed necessary, usually from an inflated starting point pervades the thinking, and has contributed to ensuring the previous efforts in the digital space have failed.
Perhaps I am wasting my time?
Some of the essential early questions are proving to be challenging for them. Questions like:
1. Who is your audience? We need much more than generalised demographics, we need specific behavioural information informed by the demographics to the point of being able to give prospects individual personalities which we can address in communications.
2. Why and where do they spend their time online? The prospective audience all have digital lives, and if we are serious about becoming a part of those lives, we need to be serious about understanding how it works on an individual basis now, or we risk alienation.
3. What do you have to say? Unless what you have to say is of interest to them, sufficient to engage and over time lead them to a transaction, there is no future. Speaking to a prospect in their words, explaining why should they care about what you have to say is now essential.
4. How does what you have to say add value to their lives? It is one thing to be noticed, and hopefully gain some interest, but unless we can tell them specifically how the item being promised will add value to their lives, they will not engage. Long gone are the days of broadcasting generalised features and standing back with an order book. Now we have to specifically target benefits and articulate them unambiguously and with sensitivity to the aspirations, situation and needs of the prospect.
5. Why are you reaching out to them? The initial and quite reasonable and logical reaction to digital communication is that you are just trying to reach them to flog them something, and nobody likes to be a target. Describing the payoff to them in their terms is essential.
6. What results are you expecting? Knowing the end you are seeking is pretty important. This is not just the end point of the whole process, but the end points in all the building blocks in the engagement to transaction process. The practise of marketing has been revolutionised by the ability to collect and analyse data. For the first time we can now identify which half will be wasted and eliminate it.
Todays digital consumers are pretty savvy, cynical and can smell a con a mile away. However, they are also able to see the intention behind the tools and the benefits that can be delivered to them by the tools, and are comfortable with the trade-off if it is of benefit to them.
Jun 29, 2015 | Marketing, Sales, Small business
13 routes to success
Small businesses have few resources, so they need to get a lot of mileage out of what they do have.
How do they generate successful marketing campaigns that generate revenue and a long term position in a market without breaking the bank?.
Following are 13 ways that I have found to be successful in 20 years of advising small businesses. It is also fair to acknowledge that 20 years ago, the astonishing range of tools now available were barely in the minds of science fiction writers. There has been a revolution, and small businesses suddenly have the opportunity to look like and act like large ones, while retaining the advantages of being small.
1. Hone your elevator pitch.
You need to be able to engage a prospect in a very short time, sounds easy, but is very hard. The pitch is rarely about the product or service you have, although this is the subject of 9/10 pitches, the successful ones are about the outcomes your product can deliver to the prospect.
2. Collaborate.
Small businesses have great opportunities to collaborate with others with complementary products and services. The shoe shop with the dress shop, the florist with the liquor shop, the chiropractor with the gym, and so on.
3. Leverage social media.
I am often asked about the value of Social media, and can only respond by observing “that is where your customers are, so why would you not be there?”. However, managing social media can however become a burden if you try and do it all yourself. Listen to and believe many of the pundits with a silver bullet to sell, and you risk finding yourself lighter in the wallet, but no further forward, but trying to do it all yourself consumes considerable resources. The advent of digital marketing tools has not changed the basic foundations of marketing at all, just made them more accessible, and so outsourcing the bits you do not know how to do offers great opportunities for leverage.
4. Have a digital presence beyond a Facebook page.
If your marketing effort is all about Facebook, you have missed the boat. Facebook is a fantastic way of connecting, but it is only one, and it is not the best place o transact business, or cover the final step prior to a transaction, that is best done on a website. Social media delivers a set of great tools to drive people to a website, and start the process of engagement, moving them through a “funnel” towards a transaction, but it is only one of the tools needed. Refer above.
5. Foster creativity
The management structures of large businesses are designed to ensure the repeatability of process, so that they are not dependent on the knowledge and commitment of individuals. Therein lies their weakness, as another way of looking at a process is that it delivers multiple opportunities to say “no”. Find ways to foster the creativity of those in your networks, or out of them currently who have expertise and knowledge that can be applied to your sphere of operations.
Network relentlessly. Get out of the building, create networks and friendships that know about your businesses, what it does, its “Why” and it will enable over time organic growth.
6. Open envelopes.
A colleague of mine once said disparagingly about a mutual acquaintance that he would “go to the opening of an envelope”. On talking to this bloke on another occasion, he laughed and indicated that it was right, so long as he could wield the letter opener, meaning, he had an opportunity to put a point of view, and be the focus of some attention, even if only for a moment. I always thought it a good idea to take every opportunity to speak, as it builds credibility, and as a result, builds a business organically. It follows that you also need to be a competent public speaker, so if you are not, get some training, or opening envelopes at the local “toastmasters” group would be a good idea.
7. Seek referrals.
The most powerful marketing is word of mouth. When someone we trust tells us that a particular product or service is good, we tend to believe it, and will try it out when the need arises. Referrals are now hackneyed, as many web sites have them from people we have never heard of, and often we think the site owner probably wrote his own, but that does not diminish the power of the personal referral. Seek the personal referrals out, ask for them, post them, and build “social proof” in other ways.
8. Be the expert.
Whatever is your niche, make sure that you present yourself, and indeed are, an expert. The world is full of experts, but for a small business, if you are the expert in your local area, and those around who may need you understand you are the expert, who will get the business as it evolves?
9. Build relationships.
People buy from people, not businesses. I know that sounds odd with all the stuff being sold on line, but look at the sites that are successful, beyond the mega sites like Amazon and Alibaba, they all have a human face, and a personality. You might be sending your money via a credit card to a business you are not familiar with, but 9 times in 10, you would have looked at the profile of the “face” of the business, looked at the products they sell and endorse, sought some sort of social proof. You get to feel that in some way you know them, then you might buy. An old mentor of mine used to say, “Success comes to those who build many bridges, and never burn one”
10. Localise.
Most small businesses are local by their nature, be sure that your customers know where you are, that they can get their hands around your throat if necessary, but more importantly have a cup of coffee with you wen all is going well. Local, and the human touch that brings is enormously valuable. Even large businesses are localising. I rang the customer service lines of one of the banks recently, with a complaint, something they had done which had (presumably) unintended consequences on me, and I was nit happy. The first call was answered by a call centre, clearly not in Australia, the first hand-off was to the supervisor, again clearly nowhere near Australia, by which time I was getting really annoyed, but the third was to someone in a local call centre, who handled the problem quickly, easily, and in a language we both had as our first.
11. Offer incentives.
Most times these words are uttered, the first thing that springs to mind are discounts. These may play a role, but are far from the only ones. Time limits, quantity limits, guarantees, freemium, there are all sorts of incentives that do not require you to make a sale at a discount, many of them when used creatively will actually increase your conversion rates by adding some urgency to the selling process.
12. Everyone is in sales.
In every business, particularly small businesses, everyone in the business needs to recognise that they are in sales, that their job relies on selling, irrespective of the title they may have on their business card. This particularly applies to some of the marketing people out there who seem to think their job ends before accountability begins.
13. Promise the world, then deliver + Mars.
Under promising then over delivering used to be an effective strategy, but it has lost its gloss. Promising the world is easier than ever, and there are more people than ever making those promises in your space. Today you need to be known as the one who promises the world, like all the others, but then delivers with more than was promised. In effect it is an over delivery on the expected over delivery.
If you can do all of these, even a majority, the world is your oyster.
Jun 22, 2015 | Branding, Customers, Marketing, retail, Small business
retail crash test dummies abound
Watching the rather sloppy way Grant O’Brien was moved on by Woolworths last week, I got to thinking about all the converging things happening that will impact the FMCG landscape over the next few years. A superficial look would suggest that things are pretty set, and change that happens will be incremental, but a closer look would suggest there is a lot of paddling going on under the surface.
These are the things I see:
Coles resurgent.
In the 40 years I have been around, I have seen the pendulum swing a couple of times, and it looks like Westfarmers have pulled off another mighty swing with Coles. Across pretty much any parameter you choose to look at, they are catching or have caught Woolworths, and remain on the improve.
Woolworths momentum.
In this high fixed cost retailing game, momentum is a huge contributor, not just to the financial outcomes, but to the day to day operations and shop floor “feel”. The momentum seems to be all against Woolies now, after enjoying the benefits for a long period. Their failure to drain cash from Coles by putting pressure on Bunnings with Masters has not just crunched their financial results, but it seems to have knocked the wind out of their confidence at the sales face across all their formats except perhaps Dan Murphy’s, which seems to be bucking the trend. Woolworths do not have a player in the office supplies game, which must be hurting them, further draining competitive resources.
Discounters are winning.
Aldi is doing really well, opening stores and taking share hand over fist. I have not seen the figures that would substantiate the notion that woolies are losing more to Aldi than Coles, but it would not surprise me at all. On top of Aldi’s blitzkrieg, it seems that their German competitor Lidl is coming. Lidl is a potent long term competitor with substantial experience across many markets.
Costco is seemingly carving out a niche, although not as aggressively as was first forecast, but the crowds in the Costco store at Auburn in Sydney would suggest they are not going away any time soon.
The $A.
After a period well above US $ par, the Aussie is back to more like its long term position. However, the carnage wrought by those few years on the mid sized supplier base cannot be turned around. Retailers by going offshore when they could and leaving their local supplier base to contract will have a continuing impact, as now the dollar is sensible again, there are few suppliers left with the wherewithal to be reliable national suppliers. It is also clear that those who have survived are a pretty resilient bunch, and are disinclined to replace their eggs back in a basket they cannot control.
Housebrands.
Coupled with the carnage of the high $A, the retailers strategic decision to rationalise proprietary SKU’s and replace them with tiers of housebrands to capture the proprietary margin has further led to the rout of the mid sized suppliers. Those left who might be inclined to chance their arm are generally not large enough, and lack the sophistication to manage a business relationship with a major retailer, but some will probably go broke trying.
Margins.
Many FMCG suppliers lose money on most sales to supermarkets. The negotiating power of the retailers, resulting trading terms and promotional guarantees that enable retailers to never pay beyond the discounted price, while restraining top line price increases to compensate has led to the situation where only a madman or the financially illiterate would stake their house on success in FMCG.
Innovation avoidance.
Markets evolve with innovation, but the barriers against success are so large that risk avoidance is the priority. Suppliers trumpet a new pack colour scheme as an “innovation”, and retailers get serious by asking the few second tier suppliers left to copy the proprietary market leader for yet another housebrand “innovation” . Retailers think they are good at innovation, but the experience from around the world as well as locally is to the contrary.
Promotion as marketing.
Continual price promotion only erodes the value of a brand, but brand building is a long term proposition, while staying on shelf is an immediate priority. Guess which wins, and we are rapidly approaching a brandless future beyond the few global mega brands that have the grunt to stay on shelf while spending with consumers to brand-build. Marketing budgets have been consumed by promotion spend. We have a generation of marketing people who have never experienced or even seen real marketing in FMCG.
Wholesale death.
Metcash as pretty much the last man standing is being squeezed by overheads and competing access to consumers outside the major chain supermarkets. Their recent financial results demonstrate the challenge of being the middleman in an environment where it is increasingly easy, and there is increasing motivation to go around the middleman. They seem to be trying with IGA, and with some success, but the local positioning of IGA mitigates against the mass merchandise wholesale business model they operate. Nevertheless, I do see IIGA as a potential bright spot for smaller suppliers who are unwilling or unable to service Woolies and Coles.
Opportunity?
Amongst the doom and gloom, I see several bright points of opportunity.
- While the traditional marketing strategies no longer work, it remain a fact that it is consumers who actually put their hands in their pockets to buy something. Retailers are just a choke point in the system exercising control, and the emergence of digital marketing offers small businesses the opportunity to engage and motivate their consumers to ignore the predations of retailers and express their purchase preferences with their money.
- The shortage of retailer suppliers may lead to a loosening of the noose around those remaining, and open opportunities for them to focus on a niche to deliver a product offer that the retailers do want, but that is hard to copy effectively. Combined with digital marketing, there are opportunities to engage with consumers in ways not dominated by price promotion and generic substitution.
- Local suppliers with a following in a region do have an opportunity to build a business. Coles have been playing with this for a while, and it does work, although the model of local supply does not sit very comfortably alongside the national supplier mentality that exists. For retailers to really get behind this opportunity to nurture “local” they will have to wear an increase in transaction costs, as well as make exceptions to their trading patterns. The big blokes may not, but there are real opportunities in the independents and non chain retail segments.
- Niche retailing will boom, and suppliers have the opportunity to participate. Harris Farm in Sydney continues to rise and rise, and even Thomas Dux, owned by Woolworths but operated largely separately are harbingers of the future. Consumers are increasingly engaged in their retail food shopping, they want their concerns and individual tastes to be met, and that cannot happen in a mass retail outlet focussing on discounting and housebrands.
I am sure there are thoughts I have missed, and would welcome feedback on them as well as comment on those above.
Jun 12, 2015 | Change, Customers, Marketing, Strategy
apologies to Scott Brinker, www.chiefmartec.com
Faced with so much choice of technology and platform options to reach and engage consumers, many marketers are paralysed. On the other hand, many are tempted to be all things to all people, simply because the tools are there to reach them, and they hope that they strike a hot prospect somewhere.
“It’s a numbers game” dominates many conversations, and it seems limiting your options is silly.
However, the customer has extraordinarily well developed bullshit meters to filter out the digital noise, so unless you are very specific with the offer, it will not pass the filter, it will not be seen.
It seems to me there is way too little being done to consider the people we are trying to reach. It is ironic that the tools have given us access to their lives, but often we choose to ignore the individual and chase the usually poorly defined “triibe”. A great description coined by Seth Godin, now misused by many.
We need to stop obsessing about the tools and ask ourselves three basic questions:
What is it we are trying to do?,
Why should anyone care?
How do we use these tools now available to make a difference?.
It seems to me there are four strategies
- Establish your “Why“. Simon Sinek in his seminal TED talk compellingly makes the argument that this is the core of marketing, to quote, “people do not get what you do, they get why you do it”.
- Build relationships. This sounds a bit yukkie, but when done with a genuine desire to help, and add value to others, it delivers to both parties. The twin brothers of C21 marketing, “Social media marketing” and “content marketing” have between them led us astray. Everyone is working feverishly at the tools trying to be different, the face in the crowd that stands out, but mostly failing, there are just too many faces, and too few asking the follow up question of “what am I going to do with them when I have their attention”. For the faces, they are attracted from time to time and let down somehow, and have become even more reluctant to give anything easily.
- Bridge the gap between what you say, and the customer experience. Too many marketers are there for the money, not for the joy of delivering on the “why”, and do not really care about the challenge of getting their customers to say “that was amazing?” Marketing is emerging as the difference between success and failure in this commoditised and transparent world, so you better get some of the rare good stuff.
- Choose your tools based on the behavior of the individual consumer. There are so many tools, and combinations of tools available, that making the choices becomes a task of considerable proportion. Choosing the right combination can be the difference, so make sure you choose on the basis of the best way to match your messages to the behavior of the consumer, not by what is available. No good having a hammer when you need a screwdriver. When you are building a deck at the back of the house, the choice is obvious, but when building a bridge to the consumer, the discriminating factor is their behavior in any given set of circumstances, and this is really hard to predict, you really need to understand them in great detail. There is too much technology, it has become the end, rather than the means.
When you are stuck, give me a call.
