Aug 24, 2015 | Category, Marketing, retail, Small business
Australia’s Grocery retailers continue the march towards private label range dominance, basing their strategic decision making on two foundations, it would seem to me.
- By controlling a large section of their sales via PL, they manage to both increase their margins at the same time they reduce their transaction costs. Good trick if you can get away with it, and in the short term they certainly can, but in the long term?? Who knows.
- What works in Europe, and particularly the UK will work here. Over 40 years in this industry, this has certainly held true, what works there generally becomes translated here at some point, in some form.
However, when considering the future of PL as a part of the landscape in Australia there are a few other considerations not present in the UK, and elsewhere in Europe.
- We have large distances, and a smaller population, making the economies of scale in manufacturing and distribution that much more elusive, and less attractive. In western Europe you have 350 million, or thereabouts living is far less space than Australia occupies, with a multiplicity of manufacturing options. Just the UK has 65 million in about the space as Victoria.
- Over the last decade, the number of middle sized Australian owned FMCG manufactures has been decimated by a combination of the high $A, the GFC, and the power of the two major retailers, so there is little left. Now the $A is lower, and the opportunities emerging, they are not coming back. Imported private label products now have to carry the added cost burden as well as the substantial costs and risks of the extended supply chain.
- Where is the innovation going to come from? Medium sized suppliers have been the source of much of the innovation that has driven category growth over the last 25 years. While it is relatively easy these days to pick new stuff off the shelves in Europe and set out to copy it, the retailers still need to have the products manufactured, and often massaged to suit local tastes, not so easy any more.
- Retailers in taking their ideas from European retailers, seem hell-bent on segmenting the PL share. No longer the cheap and cheerful substitute, European PL now offers under a range of house brand labels that cover the market from ‘top’ to ‘bottom’ as well as emerging segments like organic and halal are being pushed, further eroding the power of the proprietary brand. As a marketer I ask “for whose benefit?” certainly not the consumer.
- The Private label business model that demands minimum transaction costs on both sides does not sit comfortably with the proprietary model, with its complex trading terms. In most cases, suppliers of PL also supply proprietary products, adding to the complexity of the paperwork and relationships.
- Produce is a bit of an anomaly, as there are almost no proprietary brands. Producers and their representatives have comprehensively failed over 30 years to do any sort of branding job, so consumers do not miss what they never had. However, increasingly consumers seem to be reluctant to buy anything much beyond robust commodity products from supermarkets, believing after 25 years of cricket balls masquerading as peaches, that the specialists do a much better job.
- This last point is really anecdotal. There appears to me to be a backlash coming from consumers. A typical comment made to me last week was ‘if I do not want any choice, I will go to Aldi, but when Woolies denies me a choice, I wonder why I pay the premium over Aldi’. The two majors had better be careful, they do not ‘own’ consumers, who will make their choices independent of a retailers profit considerations.
Private label is now irrevocably a part of our lives, but I doubt if there is too much more room in dry goods for share growth without compromising retailer margins, but I guess they will be very wise with hindsight. Meanwhile, the pressure on the few medium sized manufacturers left intensifies.
Aug 10, 2015 | Customers, Marketing, Sales, Small business
cold calling
Almost everybody I know hates cold phone calling, there is something in the psychology that prevents us putting ourselves in a position where absolute strangers can reject us 99% of the time.
“Cold email calling” is the less confronting and can be a hugely effective option, but unless you follow some simple rules, will still be 99% ineffective. It is just that the email will go to the trash, and you will not have to put up with someone rejecting you verbally.
If you follow these rules, and optimise your emails, their effectiveness will explode.
1. Research the prospect list.
It is easier today than ever before to create and segment your prospect list into finely drawn groups, each having a persona that is likely to respond to specific messaging. Sending an email to a professional chef outlining your Aunt Mabel’s favourite cup cake recipe is unlikely to be read.
Ensure you have a strong value proposition for each persona that you draw, one that feeds into their motivations, problems and fears.
2. Have a compelling subject line.
Your subject line is like a headline in a newspaper, or the cover of a magazine in the newsagent. In a very few words it needs to capture attention and lead you to the next action.
Ask yourself, “would I open this email”
Have a compelling “sub head”
Your first sentence is like the sub headline on that same magazine cover. If you watch what works in your local newsagent, it is often piquing curiosity that works best. Writers of these covers are the cream of direct response writers, so model your emails on the pattern that works for them.
3. It is not about you.
If your email opens with “my name is Fred Nurk from ABC Corp, and we provide the worlds best Blah Blah product” you have probably already lost them. Instead, you need to spell out exactly how you can help them do their job better.
Be conversational. Write like a peer, someone who understand the challenges and opportunities of your target, and who relates to them. Being “needy” is the best way to lose a reader, even if you think your cause is the best in the world. Avoid weak terms like “I hope..” and “I just ….”
4. Establish credibility.
Without credibility, you chances of converting are minimal. Providing social proof, data, of some sort is essential. A testimonial from an existing customer can be very effective, but these days, they have to be video, and the individual has to be clearly identified, and identifiable, otherwise you will be suspected of writing it yourself or getting one of your mates to do a video.
5. Create a process.
A cold email rarely creates a sale, at best it can create a warm reception to the follow up. This is the entry to your sales funnel.
There are three parts to a successful email process that recognise the “moments of truth” that occur. First you need the finely drawn persona noted above, second, you need to map the buying journey to be able to identify the points at which you can create interest, and third, you should have a schedule. It is easier to map out a series of posts around a topic, then write them, than it is to sit facing a blank screen trying to think of something to write today. Believe me, I have tried both.
None of this is easy, and it takes time and expertise, but does work. There is never any substitute for experienced, professional writing. It is not the case that everyone who can write a letter and ensure the spelling and grammar is OK can write a good sales letter, it is an art, so you are probably better off getting an artist.
Aug 5, 2015 | Branding, Customers, Marketing, Small business
It seems to me that in the tsunami of digital marketing going on, FMCG is being left behind.
For brands largely dependent on consumer sales via supermarkets, you would think that they would be at the forefront of finding ways to engage with consumers as a means to loosen the choke hold the retailers have on every day purchases through their scale of operations.
When in store, consumers are driven by the environment to “commoditise” their shopping, constantly bombarded by price activity that has over time eroded the impact that a brand can have, giving retailers greater control of the shoppers purse. Price has become such a central driver in FMCG that I suspect many have forgotten how to really build a brand and market value to consumers, rather than just price and availability.
On the other hand, marketers kid themselves with the notion flogged by the snake oil bunch that people want a “relationship” with your brand, and spending mega bucks on building such a relationship will delver returns. Truth is that most supermarket shoppers, confined by a finite budget give their brand “relationships” little thought when in store. They tend to have a pool of acceptable products in a category, and buy from that pool based on an almost instantaneous response to their previous experiences. Marketers really only get the chance in to get a considered response when a product is being considered for the first time, or there is some other powerful outside stimulus. It is here that an ability to deliver highly targeted messages to consumers via digital means can have a real impact.
So how do we cut through the haze?.
The old rules of marketing still apply, just digitally.
Years ago I worked for a dairy company, we had a great long life custard product, and the simple co-location of a floor stack of custard next to the bananas when they were in season and a value price, with a bit of POS material, saw the sales of both soar. I have done this time and time again, with different product combinations, and the results have been consistent, problem is finding you way through the planograms and rules imposed by central head offices bent on selling floor space to suppliers and maintaining a discipline at store level, often at the expense of innovating to sell products to consumers.
How could digital work to enable this proven technique?
Apples iBeacon technology is one of several systems that use location sensitive smart phones to deliver brand messages. Unilever appears to be successfully trialling it with a Magnum promotion in the UK in collaboration with Tesco, who have a bit of history of innovation in the digital space. Retailers also have the building blocks of truly innovative co-location and collaborative activity housed in their loyalty card data. Combine that with geo-location and opportunities really open up.
Young consumers, heavy users of digital are not their mothers, they are distinctly different, and see brands and digital through different eyes. Relying on them to accept a commoditised selection on supermarket shelves is probably going to end in pain, as they select the products and brands they want to interact with digitally, and have a whole range of considerations their mothers would never consider.
I know this digital stuff is going to work when marketers manage to crack the code, and have the grunt to either collaborate constructively with retailers, or go around them. I have written about the cottage cheese club previously, an analogue version of what is possible, now simple and highly extendable with digital tools.
For heavens sake, get on with it!
Aug 3, 2015 | Customers, Marketing, Small business
goodwill and trust first
Networking has always been a great way to build a business, and nothing will ever change that. Most small business owners go to networking meetings, register on linkedin and all the rest for a simple reason: they want to find more business.
Why is it than that when you go to these places, physically or digitally that it takes so much effort, and traction often seem really hard to build for most?
Simple.
Most people approach it the wrong way, they go along, hand out business cards, have a chat, and move on to the next prospect.
We all do tend to it.
But, remember, most people are there to gain more clients, not become somebody else’s client, so many times we are approaching it the wrong way around.
You have to put water into the bucket before there is any in here to take out again.
Pretty simple formula, be prepared to put in before you even think about taking out.
Takes a while, takes effort, and that is why most fail at it as they want to have immediate results, for no effort beyond going along and participating.
Jul 31, 2015 | Customers, Marketing, Small business
I am constantly surprised at the lack of understanding that many small businesses have of the greatest boon to small business in 100 years, digital marketing.
Last week I had the opportunity to do a short presentation to a network group, and took it by outlining the foundations of digital marketing.
For some in the group, it was yawn time, but for many, it was useful explanation.
Foundation 1. To explain some of the basic terms used in relation to websites, I used the metaphor of a house.
- The house is the website
- The land the house is on is the hosting
- The address is the domain
When you have the house, it needs to be connected to the world, the electricity, gas, and water or it is useless to anyone.
Then you need people to come, to make it a home, but to come they need a reason, in this case the content you can offer them.
Foundation 2. Continuing the house analogy, the notion of the three types of digital media as owned, earned and rented, was discussed.
- Owned media is your website. You own it, you determine what goes up, and who is able to access what. Just like your own home.
- Rented media are the various social platforms and forums that we inhabit. We do not own them, so are subject too the rules and behaviour of others, we have no control
- Earned media is the most valuable, and is when somebody shares in some way content you have posted. It matters little if that post was on your site, a social platform, or somebody else’s site, the fact that it was shared gives it credibility and value. I do not count “likes” in this context, as they are too easy, too automated to be a reasonable indicator of value.
Foundation 3. Traffic sources to your website. In summary there are four:
- Social traffic from social media platforms
- Search traffic, which is why having SEO optimises is important
- Content traffic, coming from content you post, and is shared around
- Advertising driven traffic.
Clearly there are overlaps and cause and effect at play, but the principal remains. The first three are often classed together as “organic” traffic, while advertising is obviously purchased traffic and as such is less valuable, but usually much quicker to generate.
Foundation 4. Digital marketing is a two edged sword. It enables you to target exactly an extremely specifically defined audience, and address them with very specific offers and information. This is the great strength of digital marketing. The flip side is that you must be able to say No, to a lot of seemingly potential customers, because unless your communication is very specific, it will not get read and acted on. This is very difficult for most. In the event you have several ideal customers, you will need to keep the marketing activity entirely separate.
Foundation 5. The fifth foundation is the foundation of all marketing, but now way more transparent and obvious; “fish where the fish are”
Foundation 6. Again, not exclusive to digital marketing, but now way more able to be automated and in control of the seller is the sales funnel. Every sales training process I have seen in 35 years in one way or another uses the funnel analogy, and it is equally valid with digital marketing. Difference now is that progress through the funnel can be tracked exactly, and managed pro-actively by the seller using data.
As a final note, there are thousands of tools to make your digital life easier, and more productive. Each person will evolve a way of working that best suits their skills and circumstances. There are many free tools that the beginner can use to cut their teeth, which can then be upgraded or substituted for more productive paid ones. The free tools I use are
Google analytics, Canva.com, Picmonkey.com, Mailchimp.com, Surveymonkey.com, Paint.net, Google keyword planner, Flikr.com and One-note.
The short deck I used I posted on Slideshare
Jul 29, 2015 | Customers, Marketing, Sales, Small business
Small businesses selling B2B always struggle to generate sales leads. Survey after survey confirms it as one of the biggest challenges they have.
There are plenty of tools out there that supposedly make it easy, and certainly they do make it easier than it has been in the past to generate many contacts, but it is still hard to generate a warm lead, and then to convert to a sale.
None of the tools are any good unless you have a crystal clear picture in your minds of the value you can deliver, being “wishy washy” and peppering the conversations with adjectives (particularly “awesome” my latest hate word) no longer works.
Following is a list of options that have worked over the years for my clients. Most are pretty obvious, when they are pointed out.
1. Referrals. Being referred is the best sales lead you could ever have. Someone who is familiar with your work saying “Bill is great at …. you should talk to him” to a colleague would be wonderful. Yet, so few of us explicitly ask for referrals. When you have done good work, ask who else your client knows who could benefit from your expertise, not expecting to be referred to their competitors.
2. Testimonials. Perhaps second to referrals are testimonials, people with whom you have worked who are prepared to say in the record how great you are. Video is the only way to go with testimonials. Nobody believes any more that the written ones on your website from “Monica X from Parramatta” are real, they believe you have written them. It takes Monica to front a camera, identify herself and say how great you are for it to be effective, then is very effective.
3. Personal networking. A lot of small business people join network groups, in the expectation that this will lead to referrals and work. It can, but almost always takes time and effort. Others in the group need to understand what you do, and how that is relevant to their problems, then they have to be convinced that you offer the best value solution to them. Being in such a group can be rewarding for small businesses in more ways that just generating leads, as it get them out of the office, and forces them to speak publicly about the value they can deliver, which almost always acts to sharpen the elevator pitch. These skills come in very useful when actually in elevators.
4. Digital networking. LinkedIn is the obvious tool here, too often misused by those who just see you there and immediately start selling. LinkedIn like any social platform requires that you demonstrate your bona fides first, and the best way to do that is to identify the groups, preferably closed ones, where your prospect hang out, and start to engage in the debates and conversations that occur. You can then follow up privately with some, and have a more focussed conversation about their needs and after a rapport is established, your solutions.
5. Seminars, webinars & e-books. In most cases, our clients buy from us because we have something, or know something that they cannot get elsewhere. Demonstrating your mastery of a topic by running seminars on them, producing webinars, and writing e-books demonstrates your mastery. The secondary benefit of this type of content is that it can be used, reused, repurposed, and reused again, and again.
6. Platform cross-posting. Many people blog on their own site, hoping people will stumble over the posts, but there are many other platforms now that can provide a shopfront for your products and services. LinkedIn recently introduced a blogging platform which works very well, you can open up a YouTube channel and post instructive videos, or put great information up on slideshare. Then there is guest blogging, a great way to leverage the lists of others, by adding value to their audience, a win win both ways.
7. Lead magnets. These are things that visitors can gain access to by exchanging their email address. It is a great way to reuse the content you produced in a webinar or e-book. Here the challenge is that you need to attract the eyeballs to the lead magnet before it has a chance of being magnetic.
8. Direct mail. Yes, snail mail does work in this day of digital everything. Now we get so few things in the mail that is not either bills or junk, that a handwritten envelope with a stamp, will always get opened and read. This requires that a modicum of research into your prospects is done, as a wrong spelling or title means immediate filing in the round-file. Best done in small batches, that way you can also test the response to the sales letter you send.
9. Warm cold calling. Bit of an oxymoron there, but a deliberate one. If you do not know the name and position of the person you are preparing to call, do to waste your time. However, if you do know their name, there is a reason they might be interested in hearing from you, and you can articulate that reason in 20 seconds or less, then that implies you have done sufficient research to make a cold call a warm one.
10. Advertising. The last and perhaps most obvious tactic to generate leads. All social platforms survive by taking advertising, they are the newspapers of the 21st century in that regard. You give them your profile and preferences, inadvertently or otherwise, and they sell that to advertisers to whom your profile fits their target. Having said that, the tools available on the platforms are terrific. Both Facebook and Google in particular set about making it increasingly easy to spend ad money with them with features like Facebooks lookalike audiences explained here by Jon Loomer, easy and AdWords strategies outlined by Wordstream.
Most businesses use a mixture of the above, too often randomly rather than as a deliberate strategy. The old marketing communication “rule of 3” still applies: Know what you want to say, know and articulate why it is relevant to the receiver, listen to the response.
