Jul 2, 2014 | Customers, Management, Marketing, Small business
Marketing technology is rapidly taking over from the hit and miss, ad hoc research, customer and prospect management, and performance measurement practices that have dominated to date. This is a particularly critical evolution for small businesses who are generally already behind as the game started.
As time passes, this marketing capability gap, and hence ability to compete with their larger, better resourced competitors is becoming increasingly compromised.
Simple things like having a website, are still beyond many small businesses. Often they give the task of “knocking up” a website to their 15 year old kids or the summer intern, think the job done, and wonder why business does not walk in the door.
According to the ABS, 60% of Australian enterprises of less than 5 employees do not even have a website. The penetration in Agriculture is particularly low, yet Ag is being touted as one of the saviors of the economy post mining boom!
There is clearly a disconnect between economic forecasters sitting in ivory towers, looking at survey data and the reality out in the boonies. Many small businesses in Ag do not have a website, or any digital connectivity for all the same reasons their city brothers do not, but also have the added challenge that access to the web is crap, they can often make a cup of tea while the home page of a searched site launches.
Digital competence is learned, the more you play with it, the more curious you are, the better you get at it. This is counter intuitive to the average 55 year old farmer, who manages risk in a long term, and very organised manner.
Small businesses have wonderful opportunities to compete delivered by technology, the gap created by the economies of scale available to their larger competitors are now increasingly obsolete due to technology, but a new form of gap has emerged, the digital capability gap, that is proving difficult for many to jump.
SME’s often just need some encouragement, a dose of curiosity, and access, then the gap can be rapidly filled.
Jun 30, 2014 | Branding, Customers, Marketing, Small business
www.strategyaudit.com.au
One of the most common questions I get is how you get away from competing on price.
A couple of things are common in the situation that leads to the question:
- Someone else has control of the value chain. This is often the case with an FMCG product. In Australia two chains have 75% market share, the supplier, even to the MNC behemoths can only watch as they set the retail price, shelf position and category definition.
- The questioner has not spent the time and brainpower to consider what really matters to the customer. They have therefore failed, or chosen not to to make the hard choices that are central to building a brand.
Back to the Australian FMCG situation, as it relates to produce. Coles and Woolworths do not stock any proprietary brands at all in produce, just store branded product. The producer therefore has no control at all about what happens in store, but they do have a choice: to build a brand in alternative channels.
In some produce categories, hard vegetables, for example, the chains have close to the FMCG share of 75%. Carrots and onions seem to be pretty commoditised, but other categories like sensitive summer fruit, mangoes, stone fruit, and berries like strawberries and blueberries, have a far larger share in the alternative channels simply because the state of the product really matters to consumers. The 17 year old casual in Coles after school does not care much about the sensitive nature of the strawberries, but the greengrocer often does, the product matters, so they make decisions based on what matters.
Not every consumer will care enough about their strawberries, but perhaps enough will to make the development of a brand worth the effort, time, risk and cost.
When you accept that it is only price that matters to consumers, you have made a key strategic choice. That choice is that you will not care enough to find out what else may really matter to consumers sufficiently that they will make their purchase choice on a basis other than price.
Things that matter are usually beyond the physical dimensions and capabilities of a product, they are the stories that make the difference.
Why is one toaster worth more than another, they both toast bread, but perhaps one is just a tool, the other a piece of kitchen art based on the stories of the designer.
In simple terms, Focus on what really matters
Jun 24, 2014 | Change, Communication, Management, Marketing, Small business, Social Media
I asked that question a week or so ago of a group of SME’s, most of whom did not have any digital presence.
None said their businesses would survive without a phone. Why is it then that they think they can survive without a website and social media presence? These tools are as integral to success as the phone, but like the phone, need to be used well, as they are just a tool.
Last week (July 19, 2014) the ABS released a report “Summary of IT use and innovation in Australian Business”
web presence by size
Web presence by industry
Businesses with 4 or less employees 35% penetration, 19 or less employees, 60% penetration, overall about 50% of enterprises have no web presence.
Lowest web penetration is, obviously in industries with many SME’s, agriculture, transport, and distribution.
It is a report that highlights the paucity of digital capability amongst SME’s, which are the backbone of the Australian economy, and back up previous reports by Sensis and others pointing out the shortfall.
The building of digital capability by SME’s is not just necessary to compete, it is vital for survival.
Social media use
The pattern is repeated in social media, but is more pronounced, most SME’s do not even use the simplest forms to market their business.
I remain “gobbsmacked” that so many still seem not to have got the message,
That is where your customers are!!!
But what opportunities there are for improvement and leverage, it just takes a bit of energy and time.
Jun 18, 2014 | Collaboration, Customers, retail, Small business
Strategyaudit.com.au
Chain stores dominate our grocery shopping environment, they have developed all the advantages of scale, and use them to the advantage of their shareholders, by delivering returns, and to customers by delivering low prices.
The model works, in Australia 75% of the grocery shopping dollar goes to one of two retailers, and small retailers have been decimated.
However, small retailers are making a comeback, the ones left are good, good enough to deliver value to their customers in different ways to the chains, and they are making a good bob.
They compete with a variety of strategies, all of which have elements of the following 10 rules.
- Make the store look warm, friendly, inviting, and, importantly, current. The last Valentines day, a client put in huge volumes of roses on which he put some very cheap prices compared to the highway robbery employed elsewhere, but he also had a promotion of Chocolates and a voucher for collaborative promotion with the grog shop two doors down, on sale. He did sell a lot of roses, a pile of chocolate, and got a slice from the bubbles the grog shop sold.
- Collaborative retailing is a really effective way of building sales and relationship s with customers. The example above worked really well, as have others that group retailers of differing women’s apparel, dresses, shoes, hairdressing services, et al together.
- Experiment, with everything under your control. Store layout, range, price, stock weight and position, proximity of complementary products, promotional activity, it is a long list limited only by imagination and energy. However, experimenting is not the only game, you need to track results, now easy via the electronic tills, and if nothing else, Excel pivot tables. Understand what works, and improve it for next time, eliminating the things that prove not to work. It is a simple formula, challenging to implement consistently, but in principal, simple. Learn as you go, and as the you experiment more, you will also find your depth of tacit knowledge also increases. A small business can put in place an experiment, have the outcomes and a resulting tactical outlook while their bigger competitors are still trying to get a meeting together to decide if it may be a good idea.
- Use technology widely, not just in the tracking of sales, but in the management of your operations, and most importantly, the engagement of your consumers. Make your website the co-ordination centre of your marketing efforts. Mobile, email, social media platforms, blog posts, all potentially have a place, but mostly you cannot do them all, so make informed choices. However, you need to recognise that digital is not free, there are both operating and opportunity costs attached, and for most SME’s, a capability gap. Outsource all you can, which is getting easier by the day, and importantly, track the results of everything you are doing on line
- Make sure you have a website that does you justice. A mate sent this to me this link to Victor Churchill, a butcher in Sydney’s eastern suburbs, and now I just want to go there.
- Personalise, personalise, personalise. The chain retailers have “mass market” business model, they cannot easily personalise their offer to the customer base. They may have a technology edge because they have the resources, but how often does the casual filling the shelves greet a customer by name? Enquire after their kids, and ask how the fruit basket you supplied last week for the centre-piece of your dinner party work out?.
- Specialise in what you do best, deliver “depth” to consumers where the mass retailers can only deliver “breadth” to a mass market.
- Be the expert in your category. If you are a produce retailer, know where the best strawberries come from, and when they will be available , similarly, a fashion retailer needs to be current with the trendsetters, to know what is coming, what will accessorise easily, and how the fashion can be tailored to the market they are serving. Most people want to deal with, and seek the affirmation of experts, be the expert, and they will keep on coming back.
- Apply the disciplines of Category Management to your inventory and space management. In its simplest form, Category Management is a mindset that seeks to allocate finite and valuable shelf space on the basis of maximising the customer experience, while delivering optimised profitability and long term commercial sustainability. This can get as complicated as you like, but for an SME, building an excel database leveraging the capability of pivot tables, tools virtually every business has sitting on their PC already, is sufficient to get started.
- Watch the cash. This one always gets a run. Retailers greatest cost, and biggest risk is usually inventory, and inventory is a raging consumer of cash. On the other hand, the oldest adage in retailing is “stock sells stock”, so there is a tightrope to be walked. Perhaps the most valuable, and in SME’s underused, performance measure in retailing is stock turn. Use it aggressively to fine tune your range, and inventory.
None of these “rules” are of great value separately, but together, they offer a potent competitive tool set for small retailers.
Jun 6, 2014 | Communication, Small business
Marketing is about telling stories, engaging people with them, which builds awareness, affinity, preference, and with luck, persistence, and good management, can lead to a transaction, or two.
Metaphors, when well used can make a complicated point in a memorable and understandable way.
Couple of weeks ago in a talk to a small group of SME owners about the rugged terrain of modern marketing, I used an old metaphor, a throwaway, in the midst of the conversation. I was surprised firstly that nobody had heard it before, and secondly at the sudden clarity it delivered to a complex message.
“When you go to the hardware to buy a 10mm drill” I said, “you do not really want a 10mm drill, what you want is a 10mm hole”.
An oldie but a goodie.
This morning on the copyblogger site I saw another one I really like. It goes something like: “To make a restaurant successful, you don’t really need the best location, best service, lowest prices, fascinating menus, and all the rest, you just need a starving crowd”.
Obviously, all the good features you will see touted around as people flog bum-spots in restaurants in a crowded market all helps. They are part of the means to the end, the way you deliver the service, but to be outrageously successful, what you really need is a starving crowd.
A good metaphor, like a good picture, clarifies, simplifies, amplifies, and makes memorable, the outcome of a complex conversation.
May 28, 2014 | Alliance management, Collaboration, Leadership, Small business
Mojowire.net.au
Tonight is the first Origin game of 2014, and so I expect to hear lots of people using sporting analogies over the next few weeks, particularly football.
Sporting analogies abound in business, “A team of champions does not make a champion team”
How many time have you heard that?
As management layers are removed, and the management culture evolves rapidly towards recognising the value of teams in a commercial context, we often use the sporting team as the foundation of the commercial team .
Familiarity, known skills, interpersonal relationships, all that stuff gets considered as a team is put together. Sometimes of course, in the real world teams are put together with whoever is to hand, has some spare time, is at the water cooler too often.
We confuse this simplified sporting stuff, useful in its own context, with the key components of a commercial team faced with commercial challenges.
In that case, you need a range of technical and domain skills, a questioning mentality, and a willingness to try things, and usually some diversity, some new or unusual blood being injected to create a sense of discomfort that always precedes game changing ideas and insights.
Unlike sporting events, which last for a hour, more or less, commercial challenges are way longer term, when the micro interaction is important more as a learning event than a game breaker.
