Small business is wary of social media
They are.. Just look around at what they are doing. I wish I had written this post.
Budget blathering whilst manufacturing dies. June 13 update!
Amidst all the blathering following the federal budget Tuesday night I have not seen one comment, political or otherwise that points out the crisis in manufacturing, particularly food industry related manufacturing.
Sure, lots of puff about how hard it is for exporters, but the terms of trade are better than any time in the last 140 years, so, by implication, how bad can it really be?
The food industry is now dominated by large firms, two retailers have a stranglehold, most of the products you buy are imported, and there is precious little manufacturing done here anymore. Australia is now a net importer of food, yes, a net importer, according to the AFGC State of the nation report 2010, try telling that story around the BBQ on Saturday, “they won’t believe you”
One of my clients, one of the few SME’s who have survived the onslaught of the last 20 years, yesterday missed out on a contract to supply one of the big two retailers on a housebrand contract, missed out does not describe it, his cost of production is just under the landed prices of competitive quotes. If you adjust for the exchange rate of two years ago, he may have won the business, but now!!!
The other side of the terms of trade is how cheaply stuff can be imported. OK for electronics, we do not manufacture them, but Food??. We are no longer self sufficient, and if this small bloke goes under, as most of the others have, 15 people in a modest sized country town lose their jobs, and he loses his house, super, and 30 years of effort. When the exchange rate goes back, after China and India slow down, as they will, and new mines in Africa and South America come on stream, it will be too late for him, and us.
But do you hear anything about this?, does anybody care? Judging by the blather, the answer is NO, or perhaps it is just too confronting a problem for the pollies to acknowledge until they get dragged screaming to it. Much easier to blather.
Update: June 11 2013.
Nothing has changed, Simplot anounced closures last week in Bathurst and Denvenport, Rosella went bust a few months ago, and a host of SME’s in the food industry are no more. In the wider economy, the mining investment boom has slowed right down, manufacturing is still in the crapper, and unlikely to find much succour in the $A being just below parity for the first time in several years. The headline example is Ford announcing last week the closure of local manufacturing, which galvanised the pollies to announce lots of “support” for the workforce, luckily heavily unionised, or they would get nothing, like the Fairfax journos shown the door a few months ago without a political peep.
Meanwhile, the Treasurer talks about the strong economy (well it is compared to Portugal) and almost full employment, but the statistical definition of “employed” is nonsence, meaning there is a huge weight of hidden underemployment around, and as a result nobody is spending. Nobody is taking up the NBN, even if they are the lucky few who are strategically located in a politically sensative spot, and may have the opportunity to do so, and the reluctance has nothing to do with asbestos. The speculation today has been all about the liklihood of Gillard still leading the labor party in September, let alone the country. The PM is in QLD, sprouting the “Gonski” Education reforms as the saviour, quoting numbers emerging from the modelling that has been done as the evidence of her committment, and we know how well that worked in several previous initiatives.
Can the labour party stop talking about itself?? We do not want to hear!
It really is Cloud Cuckoo land.
Technology driven or customer driven
The technical solutions emerging are fantastic, but how often do you see the technology get in the way of genuine interaction with a customer?.
Like any tool, the tech-tools of the 21st century are only as good as their users, and if their users are technology obsessed, as many seem to be, so what? How does that add value to the consumer?
The great opportunity is to use the tools to become customer obsessed, and genuinely deliver value and benefit to customers by intimately engaging with them and their needs.
It takes effort, and the right culture to support the effort, but “micro-marketing” to consumers, meeting their individual needs via the tech tools will become the driver of success in the future.
Social media is not free, so chase a return!
There may be no charge to post stuff onto social media platforms, but if you are running a business, and people are using the time and resources you have paid for, by definition, there is a cost, even if it is an opportunity cost.
Many businesses I have seen just react to social media use by employees by banning it, usually with a spectacular lack of success, others just ignore it, accepting the time spent as a hidden cost in their overheads, only a few have seen the hidden value.
Surely it would be better to set out to harness the resources that are going to be consumed anyway in such a way that they deliver some value.
Here is a list of ideas, feel free to add to them:
- Set up a social media intranet to:
- harvest new product and improvement ideas,
- customer service success stories,
- problem/solution discussion threads for company centric problems,
- a virtual “water cooler” discussion forum on just about anything on employees minds,
- Encourage consumer/customer contact with individuals in the business
- Offer product usage tips, recipes ideas, to consumers, allowing them to respond and build a community
- Report on company activities outside normal trading, and seek stakeholders feedback on how they went
- Ditto for activities of employees away from work
- Add personal stories about being an employee, supplier, customer or shareholder, personalise the place.
Add your own to the list, I suspect it could go on for pages.
Value of certainty
I’ve seen lots of customer service initiatives that promise “delivery by ……..” and no matter how quick that may be, there is still uncertainty about when it will be delivered, and customers will be anxious.
By contrast, “we will deliver at 3pm on the 25th” is very specific, and so long as you do deliver at the nominated time, every time, even if it is a few days longer than then quickest possible, customers just love the certainty.
What goes ’round comes ’round
Australian manufacturing has been decimated over the last few decades, and whilst there is no single reason for this impact, the determination of the major retailers to use the opening of global sourcing options to reduce their costs and compete on price has been a major contributor.
In my patch, the food industry, a whole layer of mid sized Australian owned food manufacturers have simply gone broke, or sold out to multinationals consolidating manufacturing internationally, as FMCG retailers increasingly sourced overseas. The very few that are left are fighting a rear guard action, and will probably lose.
Therefore, when I hear retailers bleating about the competition from international retailers selling into Australia using the same tools the retailers have used on former Australian suppliers, I think “good one” The latest bleating culminating in an advertising campaign, and lots of appearances by Gerry Harvey amongst others, does nothing but encourage me to believe that the short sighted retail sourcing policies which are just about landed price, with no acceptance of the long term benefits of having a vibrant and innovative manufacturing sector are coming back to bite them on the arse.
Retailers have been dishing it out for years, thumbing their noses at any form of regulation of retail, ignoring the potential and growth of e-tail, it is illuminating to see how they are reacting to some of their medicine coming back to them, although the sales loss is currently only very small, and the consumers they want slugged with GST for online purchases are also their customers, unlikely to thank them for the GST led cost increase.
Get over it, and figure out how to compete on other than shelf price, meanwhile, a few of us are enjoying the sight of retailers squirming.