Apr 14, 2014 | Branding, Customers, Marketing, retail, Sales
Walking into chain retailers these days you are inevitably confronted by displays of product, usually at a discount.
Most people seem to think that it is the retailer doing the promotion as a means to attract added sales, which is true, but the reality is that the promotion is funded by the suppliers, and it is a competition for the retail space that is generally won by those suppliers with the deepest pockets, and best information.
Retailers are in two businesses, selling stuff to consumers, and renting retail space to suppliers. Chain retailers business model relies on a formula that accommodates volume, revenue, and total margin over the space allocated. This can get very complicated, as the number of variables is enormous.
For a supplier to a chain retailer, the challenge is to balance the complex and competing demands of enterprise profitability and investment in the future against the need to meet retailer margin demands necessary to retain access to the consumer via the distribution controlled by the retailer.
Of real significance is the difference between sales that would have been made irrespective of promotional activity the “base sales rate” and sales made in a period as a result of promotional activity, “incremental sales”.
The need to fund retailer margin via promotional allowances is universal, but the sales that occur as a result of the activity may not be there when there is no activity, and are therefore” rented” sales. The effectiveness of the activity has many measures, but to the supplier two measures only are of any real use.
- The real cost of the promotional activity including all discounts on deal volumes and associated co-operative advertising.
- The number of consumers who convert over time from being a rented consumer to one who becomes a part of the base sales volume.
If you are not making these calculations, and adjusting the mix of your expenditure programs accordingly, and are prepared to make some very tough choices on the basis of the information gathered, chances are you are going broke being successful, a very common complaint in the Australian FMCG market.
Apr 8, 2014 | Leadership, Marketing, Strategy
Often I find myself engaged in conversations with those running small businesses who believe they have discovered the next big thing, the idea that will change the world, or at least their business.
It can be as simple as a tweak to an existing product that enables it to be used in an adjacent market, to a patented idea that they believe will change the world, the 3 questions I always ask remain the same:
- To whom will it add value?
- How will it add value?
- By what means can you unlock that value and make a return as a result?
Whilst answering those questions can be time consuming, and sometimes confronting, and is often an evolutionary process, they constitute the core of strategy development,
So often I see a solution in search of a problem posing as strategy that it makes me shake my head in frustration, when a bit of discipline in the way tasks are identified and managed can go such a long way. These are 11 tasks you can set yourself to help the process of answering the “big three” along.
Apr 4, 2014 | Communication, Marketing, Social Media
A friend of mine has a very successful small business selling high value services to a small group of clients from diverse backgrounds. He does not want to be the next IPO, or employ hundreds, or even tens of people, just a couple to keep the business growing manageably, by delivering a superior and personal service to his clients, and a resulting comfortable living for him and his family.
Sensible aspirations.
However, the market he is in is very competitive, highly regulated, and subject to forces outside his control, so how does he grow in these circumstances?.
It is a classic case of needing a pipeline of prospects that convert to clients over time as a purchase looms, but having a limited key resource, his time, prospects need to be pre-qualified in some way, before they consume much of his time.
There is lots of advice around, free on the web and from all sorts of program managers and consultants that can cost a lot of money. By its nature, this generic advice can be conflicting, confusing, and presenting management challenges beyond the scope of capability for SME’s, so the opportunities are missed.
The standard advice generally includes a menu of :
Get a website
Get onto social media
Use mobile
Use SEO
Purchase ads on various Social media platforms
Employ analytics to A/B test various approaches.
Actively manage your landing page
There is a lot more, but those are the common bits in the mix, and as far as it goes, is reasonably on the money, but the generic advice pays no account of the specific circumstances of any business, and the commercial and private objectives of those who own it.
A pretty common failing of generic advice.
Over a coffee, I suggested a simple, and easily managed program which he is implementing, with early success:
- He got himself a website, but rather than paying a someone he does not know a motza to do it, he used one of the free site builders, Squarespace, and had a very creditable site up in about 8 hours. He could have used weebly which is my preference, and the one I use and supply to my clients, but the point is that it is relatively easy for anyone with some level of digital awareness and familiarity to do themselves at minimal cost.
- Continue the efforts to build lasting relationships with existing customers. The program he has used to date is fairly simple, but innovative in his market. To date this appears to have been successful, so he needs to build on it.
- Given his existing customers are all very happy with the service provided, he needs to be marketing to them as a source of referrals, rather than going out onto various digital platforms trying to conjure up leads. Any one referral from a current satisfied client of somebody who could use his services, is worth a thousand hits on a social media platform.” Market to current clients for leads” was my advice to him. The service he has given to existing clients implicitly enables him to ask them, and perhaps reward them in some way for leads they qualify as people he should be talking to.
- Write a list of the 20 most asked questions ,and then answer them, in detail, from several perspectives, in blog posts over a period of a couple of months. Do a series that engages, perhaps “Most often asked question by those buying……” Followed by the “Second most asked question…… And so on, with links back to previous questions. This is a technique made prominent by Marcus Sheridan and it works. As an aside, I am a little annoyed with Marcus, as he has very successfully put a strategy that has worked for me in the past out into the public domain, and made a business of it, although answering client questions seems a pretty obvious strategy to me.
- Ensure there is a data capture capability enabled. This can be a simple as a “cut & paste” of information from a contact form to highly sophisticated and automated CRM systems. At a simple level, there are free and low cost tools like Mailchimp and Aweber that can work well as email marketing platforms.
- Measure and refine his efforts using the free analytics, and tools from Google. The range of tools Google offers to assist is amazing, but so long as you recognise that they are serving their best interests by maximising your effectiveness, and they track and use everything you do, you can become very effective relatively easily. This can become data intensive, but at a simple level there is vital and actionable information available. If you track nothing else, track the level and type of “conversions” of visitors, and returning visitors to your various platforms, and build on them. A conversion is simply a step taken along a path you have laid out that can lead to a transaction.
- Recognise that digital effectiveness is these days, is just a cost of doing business. The challenge is to mould the myriad of possibilities and opportunities available to your own objectives, circumstances, capabilities, and capacity to manage change, avoiding the snake-oil on the way through. Sounds a bit like any other management task to me.
Apr 3, 2014 | Branding, Communication, Management
Talking with a couple of mates over a beer recently, one of whom has a successful boutique recruitment agency, we found ourselves reflecting on the changes in word usage that had occurred over the last 20 years, and how we had contributed to the changes, most of which we did not feel were improvements.
A few examples.
“Gay”. A friend of mine at school was named Gaye, lovely girl, great fun, bet she has changed her name.
“Like”. It actually used to mean something, rather than acting as a tool of verbal punctuation.
“Green” used to be a really nice colour, not a political label.
The kicker for me was “passion”.
I have been guilty, there are several posts over the years talking about how important passion is, so I have made a contribution to turning this word into a management cliché
Do we have to be passionate about everything? Cooking. Suddenly we have to be passionate about cooking, when sometimes cooking is just to refuel, and jobs. A quick look at any jobs site will tell you that to be considered you must be passionate about your job, the mission of the enterprise, collaborating with others, and so on, Sometimes, a job is just a job, it pays the bills, keeps the kids occupied , and with luck delivers some intellectual and emotional support.
“Passion” has become a cliche, and has an unfortunate simile, Pretentious.
If you really want someone to be passionate, to make the emotional investment you are seeking, you had better give them a very good reason, because passion is a very private emotion, not given easily.
Apr 1, 2014 | Branding, Communication, Customers, Marketing
What do I do now?
The great paradox in selling is that to sell successfully, we often raise the expectations of those to whom we are selling, but to have satisfied customers, we need to under promise and over-deliver.
Complicating that dilemma of the potential mis-match of promise and delivery is that people hear what they want to hear, filtering out stuff that is inconsistent, unexpected, off their personal radar, or is just uncomfortable, while interpreting and exaggerating the stuff they want to hear. This particularly applies to sales outside the expertise of a customer.
Flicking through the TV channels last night, a bit slower than usual, I saw (another) ad for some sort of home training device that promises to deliver me the body of an Adonis in 10 minutes a day with little effort. A classic case of over promising if ever I saw one, but I guess someone is sucked in every minute, or they would not be aired.
Wonder if the poorer suckers ever get their money back? Guess not, but they do get to keep the flab.
The only antidote is to build a brand that customers trust. To do that you need to deliver on the value proposition consistently, over a considerable period, and act with honestly, humility and transparency. Big call for the “fat-be-gone” industry.
Mar 28, 2014 | Communication, Marketing, Social Media
Hunt around in Google, and there are thousands of posts out there giving you lists of things to do to have a successful blog. A few Are pretty good, but most a just lists of the blindingly obvious, hoping that the headline “Top 20 tips for success” and their ilk attract attention.
My contribution to the pile is a really simple list of three:
- Know who you are talking to well enough to, well, talk to them. It is after all just a conversation.
- Be original, relevant, interesting, and engaging, by reading widely, building on the ideas, looking for angles and unexpected applications, and offering connections to your readers.
- Do not forget rules 1 and 2.
Pretty simple, but like most seemingly simple things, there is much to distract from the simplicity that needs to be distilled out, hard choices need to be made, and focus found.
Never easy, but rewarding.
Walking into chain retailers these days you are inevitably confronted by displays of product, usually at a discount.
