Nov 5, 2014 | Marketing, Small business, Social Media
Courtesy http://tomfishburne.com/ Thanks Tom, love your work!
For many small business people, Social media is a mix of mystery, distraction, and something that at some level they feel they should know about. However, they have seen too many stupid cat videos, observed the stream of consciousness that can be twitter, seen their children leave an indelible image on facebook they would rather not have seen, lack any native sense of what it is about, and lack the time to find out, so they avoid it.
It is pretty common, but misses the essential point. Social media is where your customers are, where they gather their product and supplier intelligence, and pass on their experiences. Choosing to exclude your business from these experiences is akin to going to play golf, but believing you can still be competitive if you leave your clubs at home.
There are a number of pretty simple ways to start. Social media is by its nature both incremental when you choose it to be, whilst at the same time if you allow it, overwhelming. There are just a few simple things to remember:
- Nobody can know it all, even the experts. Anybody who tells you different is either a liar, delusional, or just after your money. In the end, like all business decisions, there is risk and reward, your job in business is to be on the positive side of the ledger, and to do that you must make decisions and take action.
- Anybody can become engaged, in a small way, become comfortable, gain some understanding, and take another step, or indeed, backtrack and take another route.
- Social Media is a combination of two words, “Social” and “Media”. Individually they mean different things, together they take on another persona. If you remember the “social” part, and behave on SM as you would face to face, there is very little that can go wrong, unless, just like it is in person, you act stupidly, without regard to consequences.
- You need a “map”. Navigating Social Media is no different to finding your way through any unfamiliar territory. You need to know where you are, where you want to end up, and then if you have a map, you can make choices along the way depending on the circumstances in which you find yourself.
- Know who you want to talk to, and find the e-places they congregate. The better you can define your target “receiver” the better you can focus your communication on their needs and wishes. Demographics are just a start, on top you need behavioural and contextual information, how they react in different circumstances. If you can describe your intended audience as a person walking through the door, you will have done well, as to get to that point, you will have to have made choices about who is in, and who is out.
- Social Media platforms are not alike, almost not at all. Whilst there are similarities, and overlap, it is both relatively simple and sensible to choose 2 or at most three platforms on which to engage, depending on who you want to talk to, what you want to talks about, what you want to say, and importantly, what you want them to do with the information you give.
- Leveraging social media commercially rather than using it as a simple place to “e-meet” requires that you assemble and find ways to leverage the “list” those who by signing up in some way give their permission for you to market to them. This is a concept first articulated by Seth Godin 20 years ago, and is probably more relevant now than it was then.
- Develop curiosity. The best way to get to get to understand and feel comfortable with social media is to play around with it, make a few mistakes, gain some confidence, and most importantly, be curious, and experimental. After a while, it becomes easier, and the easier it becomes, the more you will use it and in turn get better at using it.
To get started, shop around until you find someone in whom you have confidence, can demonstrate they know what they are talking about, and read widely to inform yourself, then just get on with it.
Nov 4, 2014 | Change, Marketing, Small business
In the 35 years I have been practising marketing, absolutely everything has changed.
Well, almost everything.
What has not changed are the foundations.
The recognition that delivering value to a customer is the “raison d’être” of marketing, and that seeing everything you do from the customers perspective is absolutely essential if you are to understand what “Value” really means in any given context.
It is a fact of life now that marketing is controlled by software.
Marketing was pretty late to the software game, but in the last 5 or 6 years, it has exploded. Now we can not only automate a whole lot of tasks previously taking up valuable time, and gain vast leverage from the automation, but we can measure the performance of activities, bringing a whole new world of accountability and reach to the practice of marketing.
What we cannot automate, and really only measure after the fact is the influence of creativity on the process, the ability to see what others cannot, to interpret a given set of numbers and circumstances through new eyes, to connect the unconnected dots.
This explosion of automation and tools has created a new “middleman” in marketing, he/she is called “Software”.
Like all middlemen, “Software” needs to be proactively managed. There are many choices of middleman that can be made, often more than one may be appropriate, but those chosen need to be managed, and these tasks require a whole new set of capabilities many businesses do not have, and smaller ones often think they cannot afford.
They also need a new way of working, a collaborative, and cross functional culture that encourages hypothesis generation and experimentation. It must be “failure tolerant”, simply because failure is not really failure, it is an opportunity to learn about your market, competitors and customers.
Oct 31, 2014 | Customers, Marketing, Social Media
What is the difference between a cookbook of recipes and tips/secrets by a top chef, and the stuff you turn out at home using the book?
Usually a fair bit, surprising really when you have all the information necessary to create and present the dish to hand.
The difference is not the Intellectual Property reflected in the cookbook, the stuff that gets written down, it is the Intellectual Capital of the chef, what is between his ears that cannot be adequately reflected in just words and pictures, but just “happens”.
Same in business.
I have an occasional client that sells technical flavor and texture enhancing products to an industry niche. They are a successful and long lived business, increasingly struggling in a world that they seem not to understand despite the brainpower in the labs.
They have a fancy website that tells you nothing, not even the basis of the recipes to continue the metaphor. In their mind, the “recipes” of technical ingredients are their intellectual property, not to be given out to their customers and competitors under any circumstances.
However, their customers all have a pretty good idea of the “recipes”, they are trained in “recipe” generation, they just lack the nuanced understanding of the real detail, the stuff that is between the ears of a few of my occasional clients employees. Their competitors are unlikely to learn anything they do not already know, they have their own “chefs”, and their own Intellectual Capital that they set out to leverage with customers. The real competitive arena is not the recipes themselves, but the value they add to their customers operational processes, and the outcomes in their consumers mouths when they get to taste the finished products.
Net result of this Neanderthal view of the digital world is that nobody comes to them via their website, or other digital means. They wonder why and conclude that this digital marketing is just a stunt brought on by shysters who do not know anything about the technology they are so proud of, which they believe is so good that it must just sell itself.
Bullshit.
Their products are now almost commoditised, at least to the recipe level.
To sell nowadays, you must demonstrate that not only do you know the recipe, but that when the dish comes together, it really is something special.
Oct 29, 2014 | Marketing, Small business, Strategy
Any business that has done business with the supermarkets knows that they are not there to do you any favours. They have shareholders to keep happy, customers to sell to at the lowest prices possible consistent with their margin objectives , competitors to beat, and shelf space for sale to their suppliers.
In order to survive and prosper selling via supermarket distribution takes a business model that is tailored to the demands that the retailers make.
Following are 10 strategies that have worked in the past, the more of them you cover off the better, and the first few are mandatory.
- Understand the supermarket business model. The supermarket business model is based on three factors: high volumes, lowest possible supply chain and transaction costs, and low prices. With some minor category exceptions for some retailers, they do not vary from this model, in Australia or overseas. Given the scale of their operations, they get to set the rules, and there is little room for negotiation, even for major suppliers.
- Be savvy with data. Mass market retailing is a data intensive game. The retailers have mountains of data at their disposal, and plenty of suppliers willing and able to interpret it for them, with the obvious disadvantage to those who do not interpret. Scan data, combined with the loyalty card data increasingly being used is a goldmine of demographic, behavioural, and promotional information. Being in a position to present data with your interpretation, and having the credibility to interpret the retailers and your competitors data is a price of success.
- Aggressively execute on Category Management. Category management disciplines are the foundation of the retailers ranging, promotional and in store product placement strategies. It is data intensive, and an integral part of he business model, and as such sufficiently important to be treated as a separate “to do” for those to whom success with supermarkets is essential. Allowing your products to be “category managed” by your competitors is simply not sufficiently competitive , or aggressive. You need to execute on category management in partnership with the retailers, even if you are not in the “category captain” role.
- Build a brand that has relevance and connection to consumers. The alternative to having a brand that has at least a small but demonstrable group of consumers your brand has no effective substitute, and who will perhaps change their choice of retailer for, is essential. To be a price taker with no leverage at all, is to be an irrelevant supplier who is absolutely dispensable.
- Recognise you have two customers. The supermarkets may be your direct customers, but the consumer is also your customer, indirectly. As a part of brand building, you need to open communication channels with consumers, so that they are predisposed to buy your products. This may seem like brand building, and it is, but it is more short term direct, and actionable than building a brand which is a long term investment. Direct promotional and communication activity can now be a part of your tactical marketing plans in a far more directed manner than has ever been possible before.
- Remove transaction costs. Transaction costs have two basic causes, the first is not getting “it right first time” requiring rework to correct, and the second is the penalty of small scale. It costs the same to raise and process an invoice of $1,000 as it does for an invoice of $100,000. To the extent that technology can be applied to process the invoices, the costs will not be material, but if people are involved, the costs of the $1,000 invoice is 100 times as much as the $100,000 invoice. This relationship is reflected throughout the supply and distribution chain, and even minor improvements can deliver substantial savings. The source of Woolworths superior performance over the last decade compared to Coles has been the impact of their reductions in transaction costs that have dropped straight to the profit line. Wal-Mart became the biggest retailer in the world by focussing on the reduction of transaction costs of all types, and passing the savings on to consumers as lower prices.
- Collaborate for scale. Small suppliers to supermarkets have to find ways to apply leverage to their opportunities. Collaborating to reduce various forms of transaction and supply chain costs , as well as pooling data and data capabilities are logical if challenging tasks. Many produce suppliers have found ways to collaborate, but their produce is unbranded, and commoditised by retailers, so it is harder for branded FMCG but nevertheless possible.
- Constantly innovate. It is almost a cliché, but nevertheless true, that to stay still is to be left behind. Innovation is a part of the necessary armoury of success. Not just innovation in the product supplied by the means of its production and supply require constant innovation.
- Build agile value chains. Commercial agility is the ability to alter processes in the face of changed circumstances without resorting to non value adding discussion and debate, and without losing sight of the objective. Agility is not flexibility, which implies that things “bend” then go back to normal. By contrast, agile value chains have the characteristic of being able to evolve rapidly, and improve in the process.
- Do not play. The last and most obvious strategy is to ignore the supermarkets, and play in channels they do not control where the value in the product is able to be recognised in some way that is impossible in the high volume low margin supermarket game. Depending on how you measure, and what category we are talking about, supermarkets control between 50 and 80% of FMCG sales, which leaves some 30 billion of Australian FMCG sales left over, not an insignificant sum.
That is an awful lot to do, and the best time to start was a while ago. However, the second best time is now, so go to it. If you need a bit of assistance, just get in touch, and I will bring along my 35 years of experience with this stuff and put it at your disposal.
Oct 20, 2014 | Customers, Marketing, Small business, Social Media, Strategy
Most Aussies will probably recognise the diagram above, the London Underground.
The first time anyone arrives in London, an underground map is a vital piece of paper, even in these days of mobile phone enabled GPS tools.
The underground system in London is pretty complex until you figure out how it works, and when you take into account the interchanges with London buses and British rail, it is not something you approach without a clear understanding of the details of your intended journey. To get anywhere, you need to know just two things:
Where you are
Where you need to go.
After that, with the map, you can figure out the best way to get there ,what the route options may be, what it will cost, and how long it should take to get to the destination.
Why is it that people understand this instinctively for a sojourn on the underground, but fail to do it for their business?
Social Media is the shiny new toy around at the moment, everyone knows it is there, some dabble in it without a map, and get lost, have their pockets picked, and decide that from now on they will catch a taxi, if they really have to get somewhere. Other wise they will just stay in their hotel.
“Social Media” used as a noun, has some similarity to the underground, in that it is complex, but navigable with a map, where it differs is that it changes, evolves, even mutates, every single day, in some meaningful way. However, if you understand the structure, where and how it all fits together, navigation can become relatively easy, relatively risk free, and open up the opportunities of a wonderful tool.
Need a map?
Oct 17, 2014 | Branding, Marketing, Strategy
Majors Bay Rd Concord, Sydney.
No business can do everything, so the easy way to start is to do the thing you can do well, as long as it is at least partly the thing that also makes you different.
In a suburb not far from me in Sydney, there is a street that over the last 5 years or so has evolved into an eclectic mix of cafes and restaurants, occasionally separated by some other hang-over shop from a previous age. There must be 25 or 30 of them down both sides of the street, each vying for a share of the dollars the punters bring in from all over Sydney.
One of the cafes, on a corner, not only has plenty of outside room on the footpath, friendly service, and a good range of only mildly over priced cafe meals, and treats, they also roast their own coffee beans. This just reinforces that they have the best and freshest coffee experience in the area, supported by a blend of service, location and that aroma as they roast.
Intoxicating.
It also confirms them as “knowing their coffee” an important cache in an environment where coffee-wankery is reaching disturbing proportions, and cafe’s are springing up like mushrooms after rain.
It cannot be too hard to set up a roasting operation, it delivers a great marketing advantage to the cafe, offers an added income stream from bagged coffee sales, and, oh, did I mention the aroma?
Differentiating yourself is a must in this homogenising world, and doing it in a way that reinforces the marketing story in the way this cafe has done merits competitive success, which by my observation every time I go there is substantial.
