Oct 15, 2014 | Change, Management, Strategy
There is no such thing as “equalibrium”, just constant change.
I have a mate who is an academic economist, a really smart guy used to arguing a point of view, and with a box of stats on call to support any contention he makes, alternatively to pull down anything that runs contrary to his argument.
He is very convincing.
An ongoing debate has been around the nature of management, and particularly marketing in the face of the changes that have been wrought by the digital revolution. His view, if I can summarise, is that the forces that have emerged will find a new point of equilibrium, and it is our task as managers to identify that point, minimise costs on the path towards it, then be in a position to leverage for the maximum outcome when it is reached.
Economics 101.
My contention is that the assumption that an equilibrium will be found is flawed, and that the better analogy is the ecosystem, constantly evolving and changing in response to the adjustment of the forces that interact on the inhabitants, and the better strategy is to assume that everything will change, some things over night, some with a bit more lead time, and the forces that are interacting to drive the changes are not necessarily evident from wherever it is you sit.
My evidence, in contrast to his is all anecdotal and perspective, challenging for an econometrician.
Often I refer him to the antitrust suit brought by the US government against the “monopoly” that Microsoft had, an action that was finally binned by President Clinton. The equilibrium argument suggested that the Microsoft empire would endure and continue to crush competitors, and that the brakes had to be imposed externally, when the reality is that Linux came along, followed by the rise and rise of Apple, emergence of Android, and within a very few years Microsoft was relegated to the role of an also-ran, albeit one with a mountain of cash.
Enterprises of any type and size that fail to accommodate the ecosystem metaphor, preferring to rely on an emerging equilibrium that they can leverage is in for a long wait, and ultimately a visit to the insolvency practitioner, unless of course they are a public body in which case the just continue to cry poor, and suck at the teat of the taxpayer.
My conclusion therefore is that there is no new equilibrium on the horizon, continuous and pervasive change is with us and the only thing that will change is the speed of the changes themselves, and our ability to respond.
Planning to disrupt your apparent equilibrium, the existing business model that has served well is a confronting undertaking, but a necessary one for commercial survival. A depth of experience an understanding of the traps can save much heartache, so I would be happy to apply my experience to help navigate a path.
Oct 13, 2014 | Branding, Marketing, Sales, Small business, Social Media
When looked at from the “helicopter perspective ” there seems to be three points of threshold competitive activity that you simply have to get right, or all else is irrelevant. Having a few meaningful measures at those three points is essential to understanding the effectiveness of a marketing investment, and testing ways to improve.
- Share of attention of your target market
- Share of engagement from your target market
- Share of wallet from your target market.
Traffic to a site is a useful measure, but really is not all that important, it is what happens then that is important. Just counting traffic is like counting people walking past a pet shop, they may even see the dog in the window, but that does not mean they are in any way likely to buy one. Your conversion rate to sale of this casual traffic would be miniscule. The challenge is to get the attention of those who for some reason are in thinking about how nice it would be to have a dog. When those people walk past, and see your doggies, you have a chance of getting their attention, which is why there are always some cute pups in the window, to grab the attention.
Having seen your doggies, those who walk into the shop for a closer look have given you a share of their engagement, you have the opportunity to talk to them, find out what sort of dog they may like, a pet for the kids, companion for an older relative, or something to keep the bikies away. Whatever it is, you need to know in order to be able to make an offer that meets their needs. They may also be looking elsewhere, so the share of engagement is important, are they serious buyers, or just filling in 5 minutes to look at some cute pups?
To get a share of their wallet, you need to be able to make an offer that persuades them to buy from you. There are many alternatives to a pet shop, breeders can deliver a very specific dog that will fill a purpose, with all the vetinary stuff done, or you can go to the kid down the road whose dog is just about to have a litter after a night of indiscriminate passion with some unknown stray, and comes with all the risks of the unknown. Alternatively, you could just go to the pound and find something that takes your fancy and needs a home. Share of wallet can also include the share of the ongoing costs of having the dog, food, accessories medicines, vet services, even in time a replacement. Measuring each of these situations delivers knowledge you can use not just for this sale, but on an ongoing basis.
Back to our e-marketing challenges from the doggie shop. Following are some simple metrics that you could consider.
Share of attention.
- Social shares, from any social platform
- Bounce rate and visit time. These two go together, how long the landing page hold attention, and what did the visitor do then, leave, or go to another page, followed by another…
- Pages per visit. Clearly if just one page was visited, there is less attention given than if the visitor had gone to 3 or 4.
Share of engagement
- Click through rates for your call to action tags.
- Comments made, on the blog, and/or in conjunction with the social shares. It is easy for someone to click the twitter share button on a website, but it takes a greater level of engagement to click the button, then take the time to add an endorsing comment, and this social proof can be marketing gold.
- Downloads of information from your site
- Questions that come back seeking information and clarification
Share of wallet.
SOW is one of the most powerful measures on the success of revenue generation efforts, and almost always requires qualitative input. How you define the wallet shapes the numbers that will be generated. Our pet shop owner may choose to define his wallet simply as the share of sales of pets he generates, in his area, or he may include the accessories and food after the initial sale, and if he has a vetinary surgery service as part of the enterprise, he may or may not include that, depending on what is important to his understanding of the returns coming from the investments made.
- revenue per customer, or “basket” size
- Purchase “basket” contents,
- Customer return visits that deliver a transaction
E-marketing is the shiny new thing, different and potentially seductive, but in the end it is only the set of tools that is new, the principals of marketing still apply, the toolbox is just bigger and more complex. When you need help sorting the complexity, the experience of the StrategyAudit team is at your disposal.
Oct 7, 2014 | Communication, Marketing, Small business
Over the weekend, my sister, a writer, called me a “blogging machine”, recognising the challenge of producing 3 or 4 worthwhile posts a week. Caught me a bit by surprise, because I just blog, write about what seems important to me, and that I think will be of interest to those that pay me the huge compliment of following and commenting.
However, her comment got me thinking, and I recall the mindset when I wrote the first post, back in March 2009, as reflected in the 1,000th post in August 2013. While I wondered how this would evolve, I tackled in that first stumbling post a thread that has been consistent throughout, the nature of the major challenges facing SME’s, as they set out to compete in an increasingly complicated world.
My sisters comment also follows a casual conversation at a recent SME networking meeting, where I had previously advised the bloke to whom I was speaking to add a blog to his website as a part of a strategy to establish his credibility amongst those who had found their way to the site. He was doubting the value of the advice, lamenting that there had been no result from the major effort he had made to blog.
More from curiosity that anything else, I checked his site and realised why there has been no impact, no business flowing .
3 posts only.
Pretty good posts, well thought out and presented well, but three? What did he really expect?
Reflecting on my experience with this arm of social marketing, here are the things my networking friend has to address, and the simple guidelines you should all at least acknowledge:
- Be prepared for the long haul, there is unlikely to be any impact quickly. I am reminded of a conversation I had years ago as I paid my way through university by slaving on building sites. An old brickie, someone who these days would probably be a professor of philosophy, described the difference between builders for whom he subcontracted as: “some can just see plan, and with luck follow it, the good ones understand the plan, can clearly imagine the completed building, and act with the completed building in mind”.
- Have a “tone” that is consistent, and reflects the person you are. Being yourself makes it much easier to be consistent at least.
- Have a clear purpose for the blog. This pretty much follows for any commercial activity, but is really important here. If you cannot meet the discipline of twitter, 140 characters, in articulating your purpose, you need to do more on distilling your thoughts. It is way harder than it appears, and I always refer people back to Simon Sinek’s wonderful TED talk for inspiration.
- Knowledge is attractive. The more you know about a topic, the better you will be able to write about it, and be relevant, entertaining, and add some value to readers. Fail here by being unoriginal, unclear, unattractive or unfocused, and the bounce rate on your site will be high, a factor Googles algorithms now take into account and punish.
- Follow your passion. Passion is to my mind the real competitive discriminator in this world of commodities, but is widely misused to the point of becoming a cliche. However, life without passion is pretty boring, and the last thing you want your blog to be is boring.
Call me if I can help get the ducks in line.
Oct 6, 2014 | Communication, Governance, Marketing, Social Media, Strategy
Seeking a simple metaphor to explain how SEO fits into a digital strategy to a “digitally challenged” client running a successful small business, I struck upon the map of the London Underground.
If you look at the map, there are stations on single lines, stations with several lines running through, and stations with multiple intersections, some to other networks outside the underground, busses and British rail.
At any time, there are people in various stages of a journey. Some are waiting on a platform, some travelling towards the underground entry and exit points, and some on a train going to some predetermined end point of their journey.
Imagine now that every person had a descriptive tag attached, which was stored waiting for a request about that person, that could be read, and communicated to anyone asking.
SEO calls this process of asking for a location and description as “Crawling” and “Indexing”.
Each piece of information, if it has been appropriately tagged, or described by the person putting it onto a site, is “indexed” by the search engines, and when someone types a search request into a box, the engine crawls through the indexed material and returns a link to the location and description of the item to the searcher.
Back too the metaphor.
Each person with the tag on the underground, can be found, and returns the requested information to the enquirer. Location, what they are wearing, who they are, what they look like, with links to others who may be with them, and where they are going.
There are just two dimensions to having an effective SEO strategy.
- Get the technical stuff right, and this can be really complicated, and to the novice, even many professionals, is challenging. Find someone you trust to get it done for you.
- Have a strategy and action plan, without which you will be lost irrespective of the quality of the SEO.
Back to the underground metaphor. You never (perhaps rarely, a late night can make a difference) climb onto an underground train without knowing where you are going, and what the best route is under the circumstances that prevail.
Why should it be any different for an SEO strategy?
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.
