Jan 5, 2015 | Branding, Change, Customers, Governance, Innovation, Marketing
Small business is at a crossroads as we move into 2015.
Either they embrace the opportunities and tools presented by the disruption of the “old ways” by digital technology, or they slowly, and in some cases, quickly, become irrelevant, obsolete and broke as customers move elsewhere.
Your choice, as much of the technology can now be relatively easily outsourced, and at a very reasonable cost, certainly less than most would expect. The two major challenges in outsourcing, snake oil salesmen and not knowing what you want and need, are little different to any other category of purchased service.
So, to the trends that will influence your business in 2015 that you need to be at the very least aware of, and in most cases take some sort of pre-emptive action.
- Marketing technology will continue its rise and rise. The thousands of small marketing technology players who are currently emerging will be forcibly integrated, as the big guys buy “Martec” real estate. Adobe, Microsoft, et al will spend money, and the little guys will be swallowed as the gorillas fill the holes in their offerings, and new segments emerge. At the other end of the scale, there will remain plenty of options for smaller businesses to step into the automated marketing space. The current rash of innovations to make life easier for small businesses will continue and as those smaller single purpose tools gain traction, and more are launched to fill the niches that exist to service small businesses.
- Peer to peer marketing will continue to grow at “Moores law” type rates. Jerry Owyangs honeycomb diagram and data tells it all. Almost any service I can think of has the potential too be disrupted in some way by the peer to peer capabilities being delivered by technology.
- Content creation as a process. The next evolution in marketing, the move that I think “content” will start to make from being individual pieces of information produced in an ad hoc manner to being a process that is highly individualised, responsive to the specific context, and informed by the behaviour of the individual recipient scraped from the digital ecosystem. It means that content creation needs to be come an integrated process, more than a “campaign” . The term “content” will become redundant, it is just “marketing”, focussing on the individual customer.
- Marketing will evolve even more strongly as the path to the top corporate job. Functional expertise is becoming less important, what is important is the ability to connect the dots in flattened organisations that work on collaborative projects rather than to a functional tune. This trend is as true for small businesses as it is for major corporations. There will still be challenges as many marketers are really just mothers of clichés, but those relying on the cliché and appearances for credibility are becoming more obvious as the marketing expertise in the boardroom increases, and the availability of analytics quickly uncovers the charlatans. This will make the marketing landscape increasingly competitive on bases other than price.
- Recognition that marketing is the driving force of any successful enterprise will become accepted, even by the “beanies”. Seth Godin has been banging on for years about the end of the industrial/advertising model, the old school of interruption, but many enterprises have continued to deploy the old model, but I sense that the time has come. 2015 will be the year that sees marketing finally takes over.
- Video will become bigger part of marketing, particularly advantaging the small businesses that have the drive to deploy it and the capability to manage the outsourcing of the bits that they either cannot do, or cannot do economically. The old adage of a picture telling a thousand words is coming to life in twitter streams, instagram shares, and all social media platforms. The video trend will be supported by increasing use of graphics in all forms, but particularly data visualisations as a means to communicate meaning from the mountains of data that we can now generate. The density of data on the web is now such that new ways to cut though, communicate and engage need to be found, and I suspect those will all employ visuals in some form, perhaps interactive?
- Pay to go ad free is a trend that will evolve suddenly, to some degree it is an evolution of subscription marketing. Free to date platforms will charge to be ad free, whilst new platforms and models such as the Dollar Shave Club will probably evolve.
- The death of mass and the power of triibes will become more evident. The “cat pictures ” nature of content of social media platforms will reduce as marketers discover smart ways to package and deliver messages that resonate and motivate action. The agility of digitally capable small businesses will open up opportunities for them their bigger rivals will not see, or not be compatible with their existing business models.
- Local, provenance, and “real”. Marketing is about stories, so here is a trend made for marketers, and you do not have too be a multinational, just have a good story, rooted in truth and humanity. ‘Hyper-local” will become a significant force. Marketing aimed at small geographies, such as is possible by estate agents, and “local” produce, such as the increasing success of “Hawkesbury Harvest” in Sydney, and the “Sydney Harvest” value chain initiative.
- Paid social media will evolve more quickly than any of us anticipate, or would be forecast by a simple extrapolation. Twitter will go paid, travelling the route Facebook took to commercialize their vast reach. Some will hate it as it filters their feeds, others will welcome the reduction of the stream coming at them from which they try and drink. Anyway, twitter et al will set out to make money by caitalising on their reach.
- Social will grab more of the market in 2015 than it has had, even though the growth has been huge over the last few years. Small businesses will either embrace social and content marketing, in which case their agility and flexibility will put them in a competitively strong position, or if they fail to do so, they will fall further behind, and become casualties.
- The customer should always be the focal point of any organisation, but often they fail to get a mention. It is becoming more important than ever that you have a “360 degree” view of your customers, as the rapid evolution of social media and data generation and mining is enabling an ever more detailed understanding of the behaviour drivers of consumers. The density of highly targeted marketing, both organic and paid is increasing almost exponentially, so if you do not have this 360 degree view, your marketing will miss the mark.
- Treat with caution all the predictions you read, keep an absolutely open mind, as the only thing we know for sure about them is that they will be wrong, as with this ripper from Bloomberg who predicted the failure of the iphone. However, as with statistical models, quoting George E.P. Box who said “Essentially, all models are wrong, it is just that some are useful” perhaps some of the predictions you find around this time of the year will be useful, by adding perspective and an alternative view to your deliberations for 2015.
As a final thought, if you think your kid may be good at marketing, be sure they learn maths and statistics. “Maths & Stats” will increasingly be the basis of marketing, and the source of highly paid jobs and service business start-ups.
Have a great 2015.
Allen
Jan 1, 2015 | Leadership, Management, Marketing, Small business, Strategy
happy new year
It’s been the Christmas and new year period, and over the break some introspection occurred, along with the pud, family connections and some nice wine.
One of the insights that emerged was the application of Clayton Christianson’s “job to be done” idea to marketing, and specifically the manner in which I approach the task of developing, selling and delivering Intellectual Capital.
As I thought about what is was going to take to be successful in 2015, I needed to ask, and answer three pretty basic questions:
- What is it that I do every day?
- Why would people hire me?
- How can I help them do their job better?
When I worked my way through those, the answer was pretty simple.
The job of a marketer is to discover, develop, and tell interesting and engaging stories to people who care, who may receive value from the experience an wisdom contained in the stories, and who may take an action as a result that delivers them some benefit.
The job is not to make ads, or create blog posts or posters, it is to identify the ways that as marketers we can bridge the divide between what people are looking for, the challenges and opportunities they face, and how we can help them with the task of “finding.”
I trust 2015 will be a good year for us all, at least better than 2014.
Our families, friends, colleagues, and those who are in great need around this shrinking world need some simple wisdom, helping hand and quiet counsel, and it is up to us collectively to give that to them as we can, in the best way we can.
Happy new year.
Allen
Dec 22, 2014 | Customers, Governance, Management, Marketing, Small business, Strategy
“marketing” inventory
Taking inventory is one of the most boring things, but necessary things we all need to do. Understanding what you have in stock is fundamental to determining the operational priorities for the future.
Taking physical inventory is familiar to everyone, it is an essential part of staying in business, but how many take an inventory of their marketing assets?
We spend time and money creating things that we hope will deliver leads, or push them through the conversion stages, but how often do we stop and think about optimising the leverage those assets are generating?.
The Christmas break is a great time to get some of this essential stuff done, to examine from the recipients point of view, how well your marketing assets actually work. Following is a list of the typical marketing assets even a small business should have, and often will have without really considering the implications, consequences and costs.
Planning and tracking.
- Do you have a marketing plan that reflects the short to medium term activities needed to deliver on a longer term strategic plan?
- Is there an activity plan for marketing investments that outlines the timing, costs and expected returns from marketing activity in 2015?
- Have you put in place the measures that will enable you to calculate a Return on your marketing investments at each stage of the engagement funnel?
- Are there tracking measures in place that will enable you to improve your returns?
Customers.
- How well do you know your existing customers?
- Who are they?
- What problem are you solving for them?
- Would they be prepared to recommend you to others?
- What is your share of their wallet?
- Why do they use you instead of your competitor?
- Do you know who your priority target customers are?
- Are they defined to the point where you could personalise them?
- Are your communications “personalised” and directed to their specific needs and challenges?
- Do you understand their behaviour
- Do you understand why you lost customers, and have you made the choice not to spend resources to keep, or get them back?
- Are there some ex customers you are happy are ex? And why
Digital assets
- Are your websites and social media platforms linked and cross posting?
- Are your profiles optimised on each platform?
- Are tracking codes in place and optimised on each web page and platform?
- Do you work the key search terms for your segments naturally into the headlines and body copy of posts?
- Are the auto responder emails appropriate for the trigger response?
- Do you say “Thank You” enough?
- Are you capturing data at every opportunity?
- The “ABC of sales” or “Always be closing” school of sales has changed to “always be collecting”.
- Are you using analytics to test, test, and test again to improve your conversion rates?
- Do you track conversion rates at each stage of the sales funnel?
Relationships
- Are you seeking ways to build and leverage relationships with suppliers, and natural partners?
- What is the balance of your sales efforts between nurturing existing relationships to building new ones, and is that balance appropriate?
- How would you rate your relationships with your best customers?
Capability building
- How deep and appropriate is your management “bench” or in its absence, contractors to fill gaps?
- Have you defined the capabilities necessary to sustain growth and profitability, and set about building on the existing, and filling any holes?
Your time.
As the owner of a business, the most valuable asset you have is your time. Problem is usually there is not enough of it, and others do not value it so try to use it to their purposes.
- Do you have the business/life balance right? I know it is a cliché, but that is why it is true.
- Do you explicitly set out to work “on your business” rather than in it? Another cliché, but also true.
- Does the business run without your detailed day to day involvement?
- If not, when will that day come?
Financial management.
I often get puzzled looks when as a marketing consultant I bang on about things financial. However, it does not matter how good your marketing is if the product is crap, or delivered late, or sold at below cost. Financial management is the foundation of any enterprise, as much as marketing is the essential ingredient for success.
- Do you have a cash flow forecast?
- Do you know and actively your costs, fixed and variable?
- Have you calculated your break even?
- Have you a revenue forecast and operational planning in place?
The above is just a start, a “taster” for 2015 which I expect to be a difficult year, so those who are best prepared, will do well, the others… well, they sell flowers at the funeral home.
Thanks for reading, responding and sharing my musings through 2014. I am going to take a break from the keyboard for a short time. Have a safe and merry Christmas, and I will see you in 2015.
Allen
Dec 9, 2014 | Customers, Marketing, Small business
Know your customer. www.strategyaudit.com.au
One of the absolute foundations of successful commercial activity is to be able to define your primary “customer” in considerable detail. The more the better.
Years ago I watched as market researcher asked a group to define the brand we were researching as if it was a person walking through the door. The insights gained were enormous, and it is a practise I have used ever since.
However, like most good ideas, they evolve with use.
I now use a quadrant, with the customer in the middle.
- Demographics. This is as far as most go, defining customers by age, sex, financial and social measures, with or without children, homeowners or renters, and so on. Necessary, easy, but very limited analysis.
- External drivers. What are the things in the environment over which the customer does not have control, that impact on their behaviour. Answering this question requires choices to be made, as a 30 year old single woman working full time will behave entirely differently to her married twin sister who is at home looking after a couple of rug-rats, and you must choose which you want to appeal to. The range of variables to be considered is huge, as are the potential responses.
- Internal factors. The sorts of things that people can manage and respond to for themselves, their goals, aspirations, questions they face, and the choices they will be making in their lives. Understanding the psychology and personality of your customers helps you talk to them. No surprise there, because you can talk about they things that value and like to talk about.
- “Who” are they? The fourth quadrant is the behavioural picture you can draw by understanding the nuances and interactions of the first three. Jumping to this quadrant without intensively interrogating the first three will almost inevitably leave holes, but having said that, this quadrant does evolve as you iterate in marketing activity and understand better the behavioural changes that come from differing combinations of messages and service delivery.
I like to be at the point in this process where you can actually visualise the person, and associate them with someone you know well, someone whose behaviour you can anticipate. At that point, the communications you are writing, irrespective of the means of delivery, you can have that person you know well in your mind, and write for them.
The definition of your primary customers should be a constant on marketing agendas. It can easily become complicated by market structures and many other factors, so should be consistently under active consideration. Several of my clients are small businesses who sell to retailers of various types. By necessity, they need to consider both the retailer, who is in fact their customer and to whom the sell, and the consumers, to whom they market as separate.
Dec 8, 2014 | Customers, Marketing, Small business
1932 Rolls Royce Phantom 11
I bang on about “Value” a lot, in all sorts of contexts, and using all sorts of examples and metaphors.
Defining the components of value is challenging, as value to every individual is different in differing contexts.
Value can be described as the difference between the price of an item or service, and the utility the buyer derives from delivery of those goods or services. It is made up of a myriad of variables, speed and reliability of service, timeliness, design, warranties, intrinsic cost of the components, and many, many others unique to the individual and the circumstances they face.
The core challenge of an analysis of Value is that price is quantitative, but everything else is qualitative. Every persons calculation of value will vary according to the relevant factors and the weighting allocated in any set of circumstances.
So what?
Well, the conclusion must be that defining the behavioral characteristics of your target market as closely as you possibly can is essential to maximising the mix of factors to be delivered that the customer will count positively in their calculation of “value”.
Specifying the factors that they will include in a calculation of quality, and understanding the weighting they may allocate in differing circumstances will significantly assist you to craft messages that will engage them in some way.
Often the value derived from an item is in the way of a reward, the pleasure derived from use. A $15,000 KIA is just about as reliable a set of wheels for a journey from point A to Point B these days, but wouldn’t that journey be far more pleasurable in a Ferrari, or BMW, or 1932 Phantom 11 Roller?
There is value in the pleasure, and the imagery usage delivers, and often it is way more important than any quantitative utility derived from use, it is just hard to define.
Assisting with the process of defining the behavior drivers of customers, a Customer Value Audit, is a core part of the StrategyAudit process, going as close as possible to quantifying the components of value for each individual.
PS. Spooky. Bernadette Jiwa, a really accomplished marketing thinker, even though she is a “sand-groper” today posted on Value, as I did. A thought provoking example, and I cannot but wonder at the co-incidence.
Great minds Bernie??
Dec 4, 2014 | Category, Marketing, Operations, retail, Small business
Data management & analysis
The second of 10 ways to beat the supermarket gorillas at their own game, after understanding the way the supermarket business model works, is to be savvy with data.
Supermarket retailing is heavily data intensive. These days, any retailing beyond the archetypical lemonade stand by the side of the road is data intensive, but particularly supermarkets. Commonly a supermarket range is up to 30,000 Sku’s across a number of different formats and geographic and demographic locations, and several thousand suppliers, all with their own focus and story to tell.
The supermarkets physical space needs to be allocated across the Sku’s chosen to be on range in the way that best delivers a return on their investment in the particular store and strategically across the chain.
SME suppliers to chain supermarkets usually are playing from a position of weakness, as they lack the scale to have the data and category management resources that supermarkets demand. However, their strength is that they can be far more agile and market sensitive that their bigger rivals, often SME’s can develop and launch a product before a multinational can get the first development workshop together.
Whilst supermarkets have a wealth of data at their fingertips, both their own, and that supplied by their large suppliers, they recognise that not every piece of data is worth the digits it is written with. Data is only of any value if it leads to some sort of actionable insight, and it is here that SME’s have an advantage despite the disadvantage of small size. Making the connections between differing seemingly disconnected data points is where the gold is hidden.
There are several points at which data can be collected, from which insights can be gained. Internal, observed and purchased.
- Sales and margin history. No SME should be without a robust and detailed sales and margin analysis of their own sales history, and thus ability to forecast with some certainty. Every SME has a sales history in their accounting package, most do not use it. Most use the “Office” package, which included Excel, but many do not use the power of the tools in excel. Pivot tables are the most underutilised and useful tool I have ever seen for SME’s. If you are one of the majority who do not use them, wake up, spend 30 minutes on YouTube figuring out the basics, and start generating insights. Also in excel is the V-Lookup tool, which can be enormously valuable to SME’s to keep accurate track of a whole range of variables in their business.
- Sales intelligence. SME’s are usually in a position to have unfiltered market intelligence in the hands of decision makers easily and quickly. Usually the people best positioned to see change as it is evolving are those in direct contact with customers and consumers, often the lower paid front line staff. Being engaged with these staff, or indeed as is the case for many, being that staff as a part of the role of the SME business owner puts you in a position to see shifts as they occur, if you are watching. Finding a way to turn these random conversations and insights into data points that can be connected and acted on can build into a significant competitive advantage. There is no substitute for the insights gained by simply watching and understanding the drivers of consumer behaviour, then crafting an offer that adds value.
- Agile operations. Scale brings its own momentum, despite the huge improvements over the last 20 years by the adoption of Lean practises. Large suppliers to supermarkets, with large factories, fixed planning cycles and extended supply chains are often caught short by the unexpected and unplanned. Agile suppliers can often fill the gaps created, but do so they need to be able to make very quick decision on costs, time frames, and operational priorities and limitations. To make these decisions, they need absolute understanding of their cash and financial position, costs and decision drivers like break even points, the impact of discounts, and negotiation trade-offs they can make. To be truly agile, you need accurate and detailed financial and operational data that is easily useable to make well informed decisions, then track the outcomes of those decisions.
- Be experimental. Having good data enables experimentation on a scale that offers great insights, but minimises risk. The supermarkets are increasingly amenable to enabling SME’s to experiment with all sorts of offerings as they learn as well from the activity. However, you cannot just walk in and expect to be taken seriously without a history of sensible innovation and a relationship with the individual decision makers in the retailer. Having robust, realistic and well understood strategic and operational planning in place is a must if you wish to be experimental and stay in business.
- Purchase syndicated data. Scan data can be purchased in many forms, and to varying degrees of analysis and detail. There is a significant cost to this information, firstly the purchase costs, but more importantly, the data analysis capabilities. Increasingly scan data is being matched to the behavioural data emerging from store loyalty cards to add another dimension to decision making, and this trend will only accelerate. SME’e can dip in and out of this data, taking a slice here and there to provide insights without the significant investment of being fully engaged. Treated sensibly, it can be used a bit like market research, taking a small and well defined sample and using it as representative of the whole picture.
None of this is easy, which is OK, because if it was, everyone would be doing it. However, many SME’s simply think it is all too hard, and stay away, effectively walking away from 75% of the volume in the market. For many, this is a sensible decision, but for some, those SME’s with a genuine opportunity to become larger businesses, building solid capabilities in collecting and leveraging data is essential.
