Does ‘Know, Like, & Trust’ still hold?

Does ‘Know, Like, & Trust’ still hold?

The only way businesses survive is to generate revenue in excess of their costs, consistently.

Common sense.

One of the oldest adages in revenue generation is that people do business with those they know like and trust.

It was correct, and to an extent it still is, but with a huge, game-changing wrinkle.

Most of us by now have done some sort of transaction electronically.

You have most likely moved to that transaction without ever meeting the person on the other side, so you certainly do not know them, and have no idea if you would like them, but you trust them to complete their side of the transaction.

One out of three now seems to be good enough?

Not really when you think about it.

In most cases there has been some interaction that you as the purchaser have undertaken that the seller knows nothing about.

You have looked at their website for technical specifications, prices, service promises, you may have downloaded some of the free stuff from their site, often to a junk email address so you do not get bothered with the following auto-marketing.  Depending on the product you may also have checked out the various product forums, and review sites, and you have compared all this to the competitive offerings.

The summary of all this is that when you get to the point of initiating a transaction, you have come to value and trust those you do not know, sufficiently to decide to do business with them.

Value and trust. Key words.

Trust is mutual and earned by performance over time, value is delivered.

The challenge now in revenue generation is therefore to reach out to those who do not know you, but who may have some problem you can solve, some irritation you can remove, and demonstrate your value to the point where they trust you sufficiently to do business with you.

A complete turnaround from the days where you did business with people you got to know like and trust while walking the golf course.

How to send a great brand down the crapper.

How to send a great brand down the crapper.

When you change your business  model, make sure you take your customers with you. Just assuming loyalty and the power of incumbency can be terminal. The evidence to this is long: Kodak, Blockbuster, and more recently, Blackberry, amongst a very long list.

A few customers will hang around, even to the death, but most will walk just as soon as a viable alternative emerges, and in the meantime probably think you have overindulged in happy-juice, and think way less of you for it.

Not many would see this as a good outcome in the challenge to build and leverage a brand.

LinkedIn has been a great success, making its founders billionaires, early investors multi millionaires, and enabling business connection and networking in ways unimaginable just half my working life ago.

The freemium model they used worked well, it gave significant levels of usage for free, which hooked in a huge, professional user base.

You did get a lot for no financial cost, but in exchange, you did give them a lot of information.

Your personal details, work history, interests, location, affiliations and networks, and a lot more, all of which should have been an advertising bonanza, and if I asked for it when interviewing face to face in Australia, I would be breaking the law.

This information is  the quid pro quo for the use of the platform, and unless you are really stupid, you know that it will be used to sell access to that information to anyone with the money, who wants to reach you.

Nobody would seriously argue that this was not the case.

Facebook has made a huge success of advertising to finely defined audiences based on the personal information given in return for access to the platform. That LinkedIn failed to do the same, with the significant added value that could be accessed via the subscription versions, is their marketing failure, not evidence that  there was not an opportunity waiting to be grabbed.

Anyway, at some point, some of the users of the free version needed to go a bit deeper, to be able to search in a more targeted manner, so they happily upgraded to one of the premium packages. While the subscription revenue may have been under what it could have been, LinkedIn seemed never to really set out to market the benefits aggressively to their user base, all they did was offer a months free access to the premium version.

As LinkedIn seeks to generate revenue by annoying its users, Facebook jumps into the markets to date dominated by LinkedIn and offers similar services to its huge user base. Serious competition? Not too the differentiated Linkedin, but perhaps now it is.

I was a constant advocate of LinkedIn, and strongly encouraged and coached all those I worked with started to use it, some migrating to the subscription services. That advocacy is now gone, and I am sure that I am not the only one.

How long before the first cat photo turns up? Perhaps it already has, further blurring the differentiation LinkedIn used to have to Facebook and other social platforms.

I get that Microsoft needed to create a return on their $26 billion investment, but ignoring your market is a pretty stupid way to go about it.

Perhaps the new bloke who has admittedly made some pretty smart moves since he took over from Steve Ballmer, should have rung Jeff Bezos at Amazon who may have reminded him that Amazon keeps an empty chair at every meeting as a constant reminder that they are there to serve customers, not the  other way around. Do that successfully, and you will make money, fail to do it, and the bell will eventually ring.

The upside for the few really effective marketers out there is that a really effective automated toolbox has been removed from the wannebe’s, so creative, differentiated, focused and truly customer-centric  marketers will have more oxygen.


What does ‘Priority’ mean to you?

What does ‘Priority’ mean to you?

Most of us would say in answer to that question “the one most important thing”.

The thing that we just have to do first, in preference to all others.

Priority is singular.

However, in most cases I see the word used as a plural, ‘Priorities’. It seems this is a new word, spawned perhaps by our instinct to cover our bets and our management arses.

We all get what ‘Priority’ means, but how do we separate the ‘Priority’ from the ‘Priorities’.

In most management situations, we do not do that separation job adequately. We end up trying to do too much, compromising the outcomes of everything in front of us.

Pick one priority, and when done, move on.

In 1997 when Steve Jobs (don’t you get sick of examples from Apple and Jobs?) returned from involuntary exile back to Apple, the company he started was on the verge of insolvency, having just lost over a billion dollars. A year later, Apple turned a $309 million profit.

How did he do it?

He focused Apple on the priority: selling the core range of two products, the PowerMac 3 and PowerBook 3.

Most of the huge range of products were discontinued, revenue did drop, but overheads dropped even further, so they made money, and were able to reinvest in the follow up innovations that changed the world.

Italian mathematician Vilfredo Pareto coined what has become known as the 80:20 rule by observing a wide range of totally unrelated situations where 80% of something was generated by 20% of the generators. The truth of this principal was observed by pioneer management consultant Joseph Juran who popularised it as the Pareto Principal.

In 22 years of consulting and contracting, mainly to medium sized manufacturing businesses, I have only ever seen evidence that the Pareto principal holds. In some cases, it is more like 90:10, so the challenge is the same one faced by Steve Jobs.

Which 80% of what you are currently doing do you no longer do?

Never an easy question, there are always reasons for everything that is being done, but survival is often about establishing the priority, and doing just that one thing better than anyone else.




What leaders must do to enable organisational change.

What leaders must do to enable organisational change.

Through processes of organisational change, there is a lot to do, a lot that can go wrong, and something always does.

The only way to handle it is to just keep going, making the necessary adjustments as you proceed. However, there are some ways I have seen that smooth the waters on the way through.

Communicate, communicate and then communicate some more. When you are sick to death of the message, it is probably just getting through, just starting to resonate, so long as your actions are consistent with the message.

Be transparent. You need the trust of the employees during a period of rapid and often unpleasant change, and you cannot hide anything. If you try, when it gets out, you will lose the trust so necessary to enable the changes. When people believe their views have been taken into account, even when they do not agree with the outcome, they are more likely to be prepared to accept it than when a decision they do not like is just foisted on them. Be prepared to share everything, particularly data, even if it is ambiguous or not necessarily as you would like, the fact that you are prepared to share will go far. Besides, you rarely win an argument by telling people what you think, you have to show them the data, and why the conclusions are based on the data.

Stories have an important place. True leaders are at heart storytellers. We all come to understand complex questions from narratives and metaphors, and the stories provide the platform from which we learn. However, there are also some traps here. You have to know when to shut up, when to let the audience absorb and process the stories you are telling them, and every word counts. Never be seen as anything other than 100% up front, and always ensure that your actions are consistent with the narrative.

Remove the trappings of position. Every person is equal, and has an equal right to have an opinion, and express it. Good leaders quietly ensure that the quiet ones get an equal chance to express their views. When a great leader expresses their views, it is as an equal in the conversation, not as the boss. It is also the leader’s responsibility to ensure that others in the organisation structure also follow this no trappings rule. It follows that in these circumstances, you may know the answer to a question being discussed, but it is often useful to keep it to yourself, and continue listening. When they come to the same conclusion, they will be more committed to it than if you had proclaimed it, and if the conversation comes to a different conclusion, as the boss at another time, you still has the power of the position, but due process has been observed.

Strategies and tactics work together. They are not mutually exclusive, and you do need both. People are all different, they think, act, and work differently, which is why teams are better at developing and implementing both strategies and their supporting tactics. Small teams are better than large ones, and the make-up of the teams is crucial to their success, so do not leave it to chance. Make sure you have diversity of styles and skills on the teams, ensure the team is collectively responsible for the outcomes, and the way things get done.

Respect Vilfredo Pareto and his rule. Always focus on the 20% that will deliver the 80%. When you have done those big things progressively, you can do the others, but letting the not so important but urgent crap that will not in the end make much difference consume time is not smart.

Decide and do. When there are difficult decisions to be made, make them, and implement quickly. The uncertainty of thinking something unpleasant may be about to happen is far worse than the sure knowledge that something unpleasant just happened. When it is organisational structural change, this is absolutely the case. When it involves redundancy, you have to be prepared to deal with the ‘survivor syndrome’ that can be challenging but is helped by the speed, fairness and transparency you have already exhibited.

Hire slowly, fire fast. Often we get this the wrong way around, and hire because we have an urgent need, then find ourselves with the wrong person, and a problem. Not only should you take your time, but you should when possible involve others in the hiring decision. This is not an abrogation of responsibility, but a recognition that the person being hired has to work harmoniously in a group. Taking the time to find the really best people, not just the most technically qualified, but the one that exhibits the passion and curiosity that are the foundation requirements in this challenging world will pay big dividends. Along the same lines, when an existing employee exhibits behaviour you do not want, irrespective of how superficially important they may be, get rid of them. The team when working well gets more done than any individual, and a toxic individual has the ability to destroy the performance of those around them.

Be prepared to be wrong. This is again a function of the due process, but the leader does not ever know all the answers, and if you think you do, you have just made the biggest mistake possible. Giving others the authority to be wrong, and learn from the mistakes is as important as learning yourself

Yes. This is a powerful word, spread it, have a culture of yes, getting things done, making decisions and being transparently accountable for them, without fear is a powerful culture to be developing. Recognise that many decisions are based on judgement as well as data, and judgement only comes with experience, which must be earned.

Never forget the customer. They are after all, why this us all happening. Jeff Bezos famously ensures that there is a spare chair in every meeting at Amazon, as a constant reminder that they are there to serve the needs of that invisible customer.

Encouraging and nurturing change is amongst the hardest things a leader has to do, and perhaps the easiest to put off, until the day it can be put off no longer. Then is it often too late, and is always harder than it would have been yesterday.

Case study: The pros and cons of PR in a B2B market.

Case study: The pros and cons of PR in a B2B market.

PR can be a remarkably effective tool in the marketing arsenal, but most of it is just wasted, simply because it is not delivering any message of value to anyone who cares.

What can you expect when you have a combination of PR agencies who get paid by the word, various supposedly credentialed dills with a barrow to push who like to see their names in print, and politicians who will respond to the smallest of pressure groups who make a big noise?

The latest target of the word churners is sugar, specifically sugar in soft drinks,  but more broadly, sugar in everything.

Tax it and the problem will go away.


While it is true that in economics 101 I learned that when you increase the price of anything, you sell less of it, this is a logical outcome based on an assumption of rational behaviour.

If I have learnt anything about consumer behaviour in the 45 years I have been in the marketing game, it is that it is rarely just rational, and unlikely to be altered by well meaning press releases, full of adjectives and promises of better days, written by those with a dog in the fight.

I was recently asked by a former client who supplies high value but very low usage ingredients that have the  potential to replace some of the functionality of sugar in food products for an opinion on a couple of different PR approaches they were considering in response to the discussion about a sugar tax.

Following is the reasoning I offered on PR as a marketing tool in this situation, sanitised for more general consumption.

  • There is a political problem, we are all too fat, therefore there is pressure on governments to regulate. Some of this regulation is warranted, such as the disclosure of the calorific value of products, in this case soft drinks, some is just nonsense.
  • We all (should by now) know that soft drinks are full of sugar, and drinking them to excess makes you fat, as well as having other health impacts. Therefore ensuring that label regulations are clear and understandable to laymen is a good thing, resisted by the beverage companies, as they do not want to scare the horses.
  • We cannot expect (in my view) governments to regulate for our behaviour, to be the gate keepers on our fridges. However, the tendency seems to be to seek to regulate to protect people from themselves. This is the guts of the move to have a tax on sugar, but underneath, there is a revenue measure for government that they will not talk about, but remains.

For a business to successfully leverage the public discussion for their commercial purposes requires some sort of strategy, and what I often see is a strategic vacuum, into which a PR release is sent. Some thoughts on the value of PR in these circumstances to a business that has some sort of vested interest in product formulation in the beverage market :

  • The target market for information is the marketing and technical people in beverage manufacturers, and they require different messages entirely. If it was me, I would have a plan with a few simple elements, and execute on the plan.
  • Create a list of the beverage manufacturers in each market, along with the relevant information about their ownership, location of factories, brands, strategies, etc, all you can reasonably glean from the combination of public documents and what your sales force knows. This is part of what marketing departments in businesses  with these sorts of interests should be doing.
  • As part of the above, ensure there was a list of the personnel in each business, their role in an organisation chart, and more importantly their role in the marketing, procurement, and product formulation decision making.
  • Develop ‘content’ with credibility to support all sides of the debate, and make all the data available, not just the bits that may support your commercial objectives. Research by the likes of Tate and Lyal, and CSR will be viewed with suspicion, irrespective of the science of it, because they have a vested interest, unless they discuss all the data and both sides of the debate.
  • Use the lists developed above to target selectively the people you need to speak to with the commercially agnostic data (content) you have developed. Do this digitally to create MQL’s (marketing qualified Leads) which are then passed to Sales and Technical services to follow up in person to make your formulation and commercial arguments.
  • Pick a small number of real target companies and devote resources specifically to the task of selling to them.  I would pick the challenger brands in each market, the ones you can sell to without the regional head office being involved, those who do not  have the big marketing budgets and brands, so they have less to risk. Once you convert a small number, and they have success in the market, the rest will follow.

This is pretty basic marketing 101.

Recognise that your target market is specific, and sales intensive, not marketing intensive. You are not selling toothpaste to a consumer with a low transaction value and regular small transactions, where marketing is vital. You are selling high value ingredient to customers where there is a high degree of specification, complication, and a long term relationship at stake. The challenge is different. Wasting time and effort, as well as money on consumer PR is useless in this context except as a strategy for keeping the wallies who do not understand the basics of the sales and marketing of their businesses quiet.