2014 prediction scorecard.

Dec 31, 2014 | Uncategorized

It is new years eve 2015, and being an advocate of accountability, it is only right that I submit myself to scrutiny over the predictions made in January for 2014.

Below is a reproduction of the post from January 2014, with a few comments and the score I (generously) gave myself.

All in all, a pretty good record I think, although I struggle to find much quantitative data to support the generous scores.

• Simple is the new complicated.  All the conversations about social media, analytics, fragmentation of just about everything, we are bombarded with messages, options, and imperatives. Amid all this, marketing is at work, and the stuff that works is simple, cut through ideas. David Ogilvy had a bunch of “Olgivyisms”, one of which was , “big ideas are usually simple ideas”. This still holds true, it is just the big ideas have to cut through more fluff and interference than in Ogilvy’s day, and there is more confusing analytics and alternatives to be considered.
  • Score. This remains a prediction, but I guess simplicity will always be a primary objective of thinking marketers. I think it was that great proponent of simplicity Steve Jobs who said “simplicity is the ultimate sophistication”. 3/5
• Simplicity facilitated by new tools. Tools to leverage the capabilities of the web have been getting simpler by the month. It will reach the point where those with absolutely no computer skills at all can participate. WordPress has made building a web presence pretty easy, but now  the new generation of similar tools like  Weebly, take that a further step. The 40% of SME’s who have no web  presence beyond a facebook page set up by their children, has passed, they no longer have an excuse.
  • Score. I think this prediction still holds, but I remain astonished at how many small businesses do not get it.  The 40% of SME’s without websites remains about the right figure, sand  the take-up  the new tools does not seem to be as wide as I expected.2/5
• Reach and frequency is dead. This was the mantra of paid  advertising for most  of my long career, you paid for both in a matrix that focused on a demographic,   “women 25-40 with children” or “working women earning over  50k” and so on. Before behavior based analytics with any more  accuracy than a big U&A study, it was the best we could do, but it was pretty crap. Now with every man, his friends, and parents on facebook  LinkedIn, Pinterest, et al, reach and  frequency have a different sound. The enormous penetration of social media and the opportunity for behavioural analytics have changed the dynamics of advertising, and advertisers have raced to the new platforms, without recognising that the existence of the platform, free, and ubiquitous, has changed the rules entirely.
  • Score.  Not as dead as I thought, but declining. The wider use by Google and facebook particularly of advertising payments based on an outcome beyond just “availability” of an ad is a step that has highlighted to marketers the value of closely defining their targets then personalising communications. Most small businesses however still do not have much idea of how to best use Googles adwords and facebook ads.3/5
• Banner advertising on the web is also dead. Web banners simply do not work in the way a banner on the corner of your street did. They do not  grab attention, and convey a message, they are simply in the way.  Look  no further than the huge drop in rates from a decade ago when they were touted to be the next advertising El Dorado. I am not surprised, simple supply and demand economics would indicate that when supply is infinite, the price at which demand can be met is  close to zero. However, there is a caveat. The IPO of facebook in 2012, and Twitter in November 13, based on revenue projections that demand banner ads remain revenue generators is forcing some pretty smart people to consider how to make them sufficiently relevant to continue to attract revenue, and they may just crack the code.
  • Score. Did poorly here, marketers are still wasting huge sums on digital banner ads that promise reach, but deliver little of value. I am not sure if this is stupid marketers, or stupid boardrooms, either way, I score myself down. 1/5
• Values matter, more than ever. The temptation is to “pimp” your products and services at every opportunity. LinkedIn forums are full of new “discussions”, which are just pimping a product, very few get opened, they certainly rarely create an discussion, and are one step away from Spam. If you are gong to spend your resources,  money, time, talent, on marketing, make it count, tell people  “why”. Steve Jobs articulated this very well when launching the now famous “Think Different” ad to Apple employees.
  • Score. Got this wrong, pimping products seems to be more prevalent than it was in 2013, but I am prepared to believe that the worm will turn at some point. Perhaps 2015?
• Content is serious business. Content is not just a word, it is a consumer of considerable marketing resources, and the capability  of creative content creation to build a brand is evolving at a rapid rate. In the past, I  have wondered at the capacity of the web as a brand building device, giving it top marks as a medium of delivery, but I could not think of a brand that had been built by the net. Now it seems, that Red Bull will get a guernsey. Their web presence is exceptional, huge resources are put into creating the positioning as extreme sports in all sorts of amazing  ways. This best of 2013 post on Digiday has some great marketing, including Red Bull, and this terrific story of an old Nissan Maxima . The new year will see great strides in video brand building, the pace of creative change, and the socialization of the change, as demonstrated by the Maxima example, will continue to accelerate.  In 2014, the “Social” component, promising businesses interacting with their markets for free, will be overtaken by the “media” part of the social media equations, as to be noticed  bucks will have to be spent. There will  be the off the wall hits, but the average cost of being seen will go up substantially. Content creation without any content marketing and compelling reason why a consumer should even look at it let alone give it any consideration will rapidly become almost useless.  Your content is competing in a highly competitive and fragmented market for a share of consumers limited attention, and the old rules of marketing apply.
  • Score. At last, a 5, and the evolution will continue.
• “Environmental” research. This is not tree-hugging,  it is my term for standing back and forming a view of the context in which your customers and markets live, what is changing that will alter their lives, and how can you leverage those changes by innovating in the manner  in which you serve them. Now more than ever, this is a skill required, as there is simply so much data and information around, it is easier than  ever to drown in the detail without understanding the context. For example, in my view, 3-D printing is an emerging disruption, not just  to manufacturing but across industries that are in any way engaged with selling “things” rather than  services. Forming some views on how this may impact on you, and your value  chains, and taking steps to build the capabilities that will become necessary to survive and prosper is as important as breathing.
  • Score. The jury is out, but the judge (me) still sees this sort of research as absolutely fundamental to success. 3/5
•  Data accumulation and “personal  leveraging”  Word of mouth has always been the best marketing tool available, now the continuing development of social media  platforms and marketing automation, the  opportunity to be  “personal” is increasing with every day that passes. In  conjunction with this is the building of lists, contacts with whom you have the opportunity to build a relationship.
  1. Score. Absolutely. 5/5
• Every person is a potential media channel. Just consider the capability to connect to facebook, LinkedIn, and the rest, and send  information, ideas, links, referrals, to everyone in their networks. Media channels used to be a few radio, TV, newspaper and magazine channels, they were all one way, the “stuff” got pushed out and the opportunity to respond was limited to letters to the editor. No longer!
  • Score. Still the case, although many, perhaps most small businesses are still not taking advantage of the opportunities.
• Personal Kaizen.  Kaizen is Japanese word for “continuous improvement” extensively used in lean literature.  Lean is more than just an operational strategy, it is one for every facet of  your life and business. Every time you do something, strive to do it better, by being smarter, than the time before. Being serious about personal kaizen makes you curious, interested, and interesting, qualities that attract opportunity.
  • Score. I have seen the tern “Kaizen” pop up a bit in the last 12 months in the marketing literature, but  that does not mean much is happening. I leave it to you to mark yourself. My mark of me, a bit harsh, but private.
• Craftsmanship. In a world of increasing homogeneity delivered by specification driven design and manufacturing, where differences are often just cosmetic and qualitative, genuine craftsmanship, bespoke design, and catering to the individuality of people is increasingly important. The extent to which craftsmanship and “manufacturing” beyond the C20 concepts of mass manufacturing for operational  efficiency can become integrated is just starting to evolve.  There are many examples, one I am personally familiar with is Ian berry who is Ironsides leather. Ian crafts leather, belts, harness, bags, using just the old tools of the trade, experience, true skill, and passion. It is true craftsmanship, and buying a belt from him is receiving a gift of that experience and craftsmanship. Ian is also a great advertisement for  the point above about simplicity. He produced his website using a Weebly template, a   few photos, and a bit of time, no cost. No HTML, no complex menus, no computer skills beyond a one finger  familiarity with a keyboard.
  • Score. Still the case, perhaps more so. 5/5
• Marketing and technology will continue to collide. The days of marketing being unaccountable are over,  there is no excuse for not  calculating the ROI of your marketing investments these days. Scott Brinkers blog on the intersection oftechnology and marketing is a terrific resource, his thinking on this is in front of the pack, and allied with Avinash Kaushik’s wonderful Occam’s Razor blog, there is enough brain food to keep most of us fed on the topic.
  • Score. Also still the case, if anything, the rate of growth of marketing technology is accelerating. The first Marketing technology conference held in Boston in march 2014 was a resounding success, and I hear from Scott Brinker that the second planned for march 2015 will be even bigger. Enough said. 5/5
• Collaborative marketplaces will continue to rise and rise. The web 2.0 enabled one way markets to thrive,  Amazon, Ebay, electronic banking, and many others. More recently,  collaborative marketplaces have emerged, where both sides of the transaction put something in, rather than just buying a product. Airbnb, Uber, and many others, will continue to explode, mainstream companies in areas threatened will need to consider how they respond. Car hire companies need to have a service, to disrupt themselves, hotel chains need an equivalent to Airbnb, and so on, the disruption is profound, and just beginning.  The best thinking around in this is being done by Jeremiah Owyang, whosebody of work on the topic is extraordinary.
  • Score. Still the case, and accelerating. Jerry Owyang’s  latest database of recently funded startups on the topic is extraordinary, and expanding. 5/5
• Mobile  first.  Use of mobile devices to access websites and social media platforms continues to increase, reaching numbers in late 2013 upward of 65%, and reaching the eighties for some specific sites, numbers that astonish even the bullish predictions of a year ago. In developing countries, where the economies  are booming, and fixed line infrastructure is limited, mobile and wireless have simply jumped ahead, and the infrastructure of the developed world will simply not be installed. It is these countries that are driving mobile innovation.
  • Score. Still the case. 5/5

Let me know what you think,

Another amongst the tsunami of 2015 prediction posts will be along in a few days, but as has been my focus in the past, I seek to articulate the strategic drivers and trends I think will shape our commercial environment, rather than make specific predictions about particular events. Makes holding me to account that much harder.

Hope you had a good Christmas break, now almost over, and that 2015 is a stellar year for you.

Thanks for reading, commenting, and sharing over 2014.

Allen

6 Category Management ideas for small business at Christmas

Dec 10, 2014 | Uncategorized

Courtesy www.milehightreefarm.com

The third in the series outlining the 10 ways small businesses can beat the supermarket gorillas at their own game, by aggressively executing on category management.

Read the first here, the second here.

What better time is there for small businesses  trying to make a mark with consumers and those key gatekeepers, retailers, than Christmas?

The 5 rules that normally apply to category marketig still do, but in the heat of the season, the quick and the smart can find a  bit of extra leverage.

Any time of change is a time of opportunity, and Christmas ranging is one of the biggest changes retailers go through in the manner in which they allocate their shelf space, as they seek to maximise their seasonal sales. Doesn’t matter what market retailers are in, from  fashion to  food, car accessories to handbags, pre Christmas sales are critical to the annual numbers.

Meeting customer needs, and maximising the value of the retail shelf -space  is what category management is all about.

Just think about the space supermarkets allocate to hams from the beginning of December. Where does that space come from? How do they allocate it across differing brands, sizes and types of ham? and if you are a ham producer, how can you get a slice, and if you sell some of the products that give up shelf space, to hams, how do you make up for the lack of shelf exposure?

6 simple strategies to employ to maximise sales:

1. Know the relay schedule, and if possible be involved in the planning discussions. Most chain retailers, particularly supermarkets will  have a lead supplier who has the inside running because they have all the data, and better access to the decision makers, but that doesn’t mean you cannot participate.
2. Understand the volumes and margins of all products in the category, and manage your recommendations to the retail buyer with his objectives in mind, maximising the absolute margins that come from the shelf space, rather than just concentrating on your margins. Retail buyers are not there to look after your margins, only theirs.
3. Understand the sales that come from differing  shelf positions, and the impact of differing placements for differing Sku’s. Eye level is always best, but is high better than low? What about the type of shelf grouping, by size, brand, flavour, which combination is the best for you, and the retailer? Retailers will generally have a layout in place, but are often willing to experiment, from which you can  both learn.
4. Recognise the importance of the retailers profit model, particularly for bricks and mortar: Volume X Item gross margin = gross profit.  Going one step further, dividing by the shelf space allocation gives a return on the space, and being really fancy, you can weight the value of the shelf space for a number I call RRRE. (Return on Retail Real Estate).
5. To some degree, the discipline of the planogram that covers the other 11 months of the year will be put aside in favour of the short term outcome, knowing once the Xmas frenzy is over, they can revert to the plan, it is a great opportunity for those who can grasp it. Encourage field staff to be creative, a stack of bananas or Christmas pudding near the custard, French mustard next to the hams, dried fruit into he flour category with some cake recipes, A scarf from next door with your handbags, the potential for cross selling at Christmas is limited only by imagination.
6. Christmas is a terrific time of the year, family, friends, social opportunities on steroids. At the same time, as the pressure comes off a bit because all the key decisions have been made, it is a great time to work on the relationships, plant the seeds that will deliver next year, and build your category management profile with your customers. After all, your competition is probably at the bar thinking the game is over. Whoops.

When you think that perhaps some external wisdom might be useful, lets have a chat.

The sure way to make a significant profit.

Oct 2, 2014 | Uncategorized

How many monopolies have you seen that do not make a good profit?

Very few I bet.

On the other hand, how many very sensible, responsible, customer focussed businesses in competitive markets have you seen go to the wall?

Which would you rather be?

Our consumer regulator works to achieve as competitive a market as possible, so it must be good, or at least seen as good, but good for whom?

If you take a broad view of what constitutes a monopoly, a situation where there is domination of a niche, you do not necessarily have to be a massive multinational, or legislated infrastructure supplier to be a monopoly. As a kid, there were several milk bars in the suburb I lived in, one of which had a monopoly on milkshakes sold to schoolkids, and as a result all the other stuff the kids in the area bought. They had a monopoly in a niche, and even as a kid, I knew it was good business.

GoPro went from a idea to a billion dollar company by seeing a niche in the camera market, and going for it. There are two in my household, 2 of my three sons, mad as they are, use GoPro’s to document their lives, and there is even now several years later, no alternative.

Perhaps the most common conversation  I have with my client base is about the need for and means of differentiation. What makes you different? Why should people buy from you?

The ultimate differentiation is to have something that nobody else has, that some people want, and it does not have to be a superior milkshake, or innovative piece of camera technology, it can just as easily be a re-engineered supply chain.

The Dollar Shave Club delivers a product you can get in the local supermarket, difference is the way it is delivered. They have created a monopoly in mail order razors, who would have  thought? Certainly not Gillette.

When you figure out what you can do for a customer that nobody else can do, and that customer is not satisfied with an alternative,  you have what is in effect a monopoly.

Seems to me that the objective of differentiation, and a sure way to make a significant profit is to find a way to create a monopoly.

SEO through Google’s eyes.

Sep 18, 2014 | Uncategorized

First let it be clear that I am neither a “power-user” of the increasing suite of tools supplied by Google, or an SEO expert. What I do is approach strategy from the perspective of the potential consumer of that strategy, wether that be B2B, B2C, or in  this case, U2G, User to Google.

SEO has been a hot topic for a decade, some really smart people have made loads of money providing advice and bottles of snake oil SEO solutions, often selling it to people who should know better.

When you think about it, SEO is all about getting your content ranked highly, preferably above the fold on page 1. To do that, the SEO proponents go to considerable lengths to “game” the Google algorithms. Google, like all businesses needs to ensure that the people who pay for its services (advertising) get value, so it is in their interests to remove the opportunity to “game” their system. Therefore it seems logical that they spend lots of resources developing algorithms that eliminate any advantage the “gamers” may be able to find.

Who has more money and expertise, the Gamers or Google?

Who really has the greater motivation to remove the opportunity for gaming, Google or the Gamers?

Googles business model is not to make your website popular, they do not care in the least about your site. Nor will they willingly allow you to make your site “popular” by leveraging their algorithms for free.

Googles  objective is to find the popular websites and index and rank them to better serve those searching, and to present the searchers eyeballs to those advertising to reach them.

Trying to “out-Google” Google by staying in front of their algorithm development is a losers game. Much better to ignore them, and set about making your site popular because it deserves to be popular, and let Google find and rank you.

Having said all that, there are a few simple things that you would be negligent not to do on your site:

1.  Focus each page of your site on a key word or phrase
2. Ensure each page has a meta description to make indexing easier
3. Keep media files to a minimum size to speed up loading,
4. And the most important one, and by far the hardest to do: Create great and relevant content that your target audience is motivated to read, bookmark, comment on, and share.

It is easy to be put off by the techno babble that goes on, a lot of it trying to squeeze out the last few percent of so called performance, when in most cases, particularly for SME’s the cost of the last 5 or even 10% efficiency is not justified by the cost of securing it. A little bit of common sense and focus on the customer and the value you are delivering goes a very long way.

SEO as it is usually practiced measures how often your content gets presented to be seen, not by who sees it, and not what they do with it.

Top 11 tasks for Small businesses.

May 8, 2014 | Uncategorized