Jun 8, 2021 | Governance, Marketing
Part of the job of marketing is to make the complex simple and understandable, while retaining the essential core of the proposition.
As Einstein said, ‘Everything should be made as simple as possible, no simpler’.
This is the same logic used by ‘Occam’s Razor’, which summarised tells us that the best theory is the simplest one that still explains all the facts. Arthur Doyle’s character Sherlock Holmes was referring to both these when he said: “When you have eliminated the impossible, whatever remains, however improbable, must be the truth’
However, there is a point beyond which the process of simplification becomes corrupted by the selective choice of facts and variables, of leaving out those that might deliver a conclusion different to the one that is preordained, and preferred
People are not stupid, but sometimes they are lazy, do not have the technical knowledge to fully understand, or their cognitive capacity is consumed just by living, and a host of other mental barricades.
However, that is no excuse to oversimplify the complex when the complex is important, or to be sufficiently selective with the facts to be grossly misleading.
Successful long-term marketing depends on the truth, expediency may be attractive in the short term, but is poison over a longer period.
Our current PM, labelled ‘Scotty from marketing’ by that most reverential publication, the ‘Betoota Advocate’ has gone too far.
He has been conducting a masterclass in oversimplification on one hand, and obscurification on the other, for political purposes. It has been going on for some time now, and it is time to stop.
To be fair, ‘Scotty’ is not alone in the political sphere, (and I use the word political in its broadest sense), but he does set a very high bar.
We, the electorate, are not stupid. We may be disengaged, cynical, selfish, and mostly put our immediate family and community above the greater good, but treating us as stupid is a bridge too far.
It is easy to go too far in simplifying a message, which then is read as patronising, self-interested, and with little relationship with the facts. This erodes credibility, and therefore the ability to get anything done by any means other than leveraging institutional power.
Header cartoon courtesy Tom Gauld in New Scientist magazine.
Jun 7, 2021 | Branding, Marketing
Brand is underplayed as a source of economic power in B2B. We seem to default to the tactical marketing tools used in B2C too easily.
Over the years I have concluded that there are only two core elements in B2B brand strength:
Trust.
Service.
They are mutually reinforcing, or indeed, depreciating, and are both multi-faceted, with variations that are as varied as the businesses that deal with each other.
The dictionary definition of Trust is something like:” A statement that is taken as truth in the absence of anything more than the word of the party giving it”.
So, trust is based on doing what we say we will do.
The definition of service would be something like: “An act of selflessly helping someone else”.
Again, as varied as the contexts in which it is used.
Clearly however, service drives trust, and trust is the fodder of service, and both go both ways.
You still must do all the stuff to get customers inside the tent, once there, they have at least once, accepted that you will do as you say. Do that, and the reasons they might move on for the next time are way more limited than if you fail on some dimension of the service that they believe is important.
Therein lies the dilemma. Every business sees ‘service and trust’ in their own context, within their own definitions of ‘Value’.
It is your task, as the seller to unravel that often unclear ball of expectations.
When you think you would benefit if your customers trusted you more, give me a call, an audit of your trust profile with customers may be enlightening.
Header cartoon credit: Scott Adams’ alter ego Dilbert does it again.
Jun 2, 2021 | Governance, Leadership, Strategy
Successful businesses in my experience have several things in common, and in general do most of them well.
Focus.
They are sufficiently disciplined to be able to assemble and deploy resources against a limited number of objectives and opportunities. This requires that there is a robust strategy in place, as they have made a series of choices about what they will do, and what they will not, which are all clearly understood throughout the business. Being all things to all people is never an achievable outcome, so they leave it alone.
Niche.
In one way or another, all successful businesses I have seen operate in a niche, where they have sufficient scale to be relevant to their selected customer base. This is the same for a small local business as it is for a multinational, each in their own way have defined a niche and set about owning it. Of great value is the niche that others do not recognise, where competition does not exist, or is marginal.
Leverage.
Leverage is doing more with less, so it follows that the greater the leverage of assets, the greater the success. Of course, when taken in purely financial terms, leverage can lead to disaster, as leverage also increases risk, but when looked at from the lens of human capabilities it works. It also works when you consider outsourcing as leverage, keeping your most valuable assets doing jobs that deliver greater returns. In successful companies, the jobs that just must be done to keep the machine grinding, are broken down to repeatable processes and done at the least cost, so the assets released can be deployed to deliver optimised results.
Differentiation.
In the absence of some sort of differentiation that increases the value of an offering to a group of customers, all you have is price. When price is all you have, you will, eventually, lose.
External sensitivity.
Being able to ‘feel’ the changes as they happen in their competitive environment and react before others marks not simply good businesses, but ones that have the DNA to be sustainable, as they incorporate in their DNA the ability to change early, and often. This does not imply a moveable feast of strategy, rather an agility in the implementation, which requires a considerable dose of leadership.
To my mind, businesses that are able to keep themselves in front of the ‘market Takt time’ are well placed to prosper.
Robust and shared culture.
‘Culture’ has become the rallying cry of all sorts of pundits, and self-proclaimed experts, but is clearly a major differentiating factor in good businesses. The cliches of all rowing in time and in the same direction apply, but the best definition is still Michael Porters definition: ‘Culture is the way we do it around here’ holds. In addition, when setting out to measure culture, as we are increasingly trying to do, I have yet to see any measure of culture that make a lot of sense beyond the simplest, ‘bad news travels quickly, & untainted, to the top’. When I see that, I know there is a robust culture in place.
Collaboration.
Part of superior performance is understanding where your capabilities are best deployed, and from time to time, a collaboration makes sense as a means to leverage both yours and another’s capabilities into an outcome neither could hope to achieve on their own. Collaboration is a really challenging thing to pull off, as it requires that both the businesses and all the personnel understand that their own best interests are best served by serving the best interests of the partners.
They have a detailed understanding of their strategically important customers.
This may not always be their biggest, although that helps, but those that will deliver sustainable profits into the future. Every large and important customer started as a small one, the trick is to pick those that will, long term, make a difference to your business, which can only be done when you can make a difference to theirs. This implies some sort of key account strategy is in place.
Robust financial management.
It should not need to be said, but sadly, genuinely robust financial management is not all that common. Anyone can deliver the statutory accounts required, but it takes creativity and understanding of the complexity of customers and markets to produce useable management reports that reflect the current, and more importantly forecasts of the state of the business.
Of all the reports, cash is the most important. All the sophisticated marketing, procedures, and cultural initiatives become redundant in the absence of cash.
Header cartoon credit: Hugh McLeod at www.gagingvoid.com nails it.
May 31, 2021 | Analytics, Marketing, Social Media
‘Social Media Marketing’ has become a substitute in many people’s minds for ‘Marketing’.
It is sensible to have such a strategy, just as it is sensible to have an email marketing strategy, and a telephone marketing strategy, in the appropriate circumstances. However, to treat it as anything more than another tool in the marketer’s toolbox is to completely misunderstand the whole process of marketing.
Following is a reproduction of a note I sent after a long conversation with a potential client who runs a large function venue in a regional area. It all happened pre-covid, but it seems the sentiments were still valid, based on a similar conversation last week.
Thanks for taking the time to talk to me yesterday, you clearly have some challenging issues to be dealt with.
I suspect that the social media “brain-dump” over the phone I delivered yesterday may have been a little unclear, so I thought I would follow up with a few points that have consistently come through over the course of the work I have done in this space.
- To achieve anything at a cost that delivers leverage on your investment, you need a plan.
- A core part of that plan is establishing objectives for your activity, and in social media marketing the real objective should be to generate “leads”. Not sales, leads. Social media will not be effective directly selling a product such as yours. It can, however, be a very potent tool to identify and feed leads into a sales process that can be at least partially automated.
- There will be investment required in the process, particularly the development of the ‘content’ and messages you send, irrespective of the level of automation.
- The starting point to developing the messages as it should always be, is the definition of the value of the product you are selling to the receiver of the communication. This is the point where your mix will be challenging, as the wedding reception product you have will be different to the corporate function product, although held in the same room, just re-arranged, and with differing support services. Similarly, the person to whom you are marketing the wedding product will be different to the one likely to be the buyer of the corporate function. Defining all this is critically important, much more now in the time of social media because of its ability to deliver a specifically targeted series of messages to a well-defined individual potential buyer.
- You can develop metrics that will give you indications of the effectiveness and impact of your activity. However, the problem of attribution is a significant one. Which piece of content, or ‘marketing collateral’ was the driver of the move towards the objective of a sale? Any digital agency that tells you they have that absolutely nailed is dreaming. However, you do now have the opportunity to test all parts of the process in a multitude of ways and optimise over time.
- The nurturing requires a “toolbox” of content, aimed at the individuals inhabiting specific target markets that you are setting out to reach. Some of this content can be challenging to create, but once done, can be used, and re-used, improved, and used again for little cost, providing your investment with considerable leverage. In your case, you do not have to do everything at once, pick a market (like weddings) and create a few pieces of content, such as the “Guide to the big day” I suggested yesterday, together with a few supporting pieces such as photos of decoration options, flower seasonality guides, and checklists of the really little things that make a difference on the day. These will both alleviate the planning headaches of the wedding planner, and make your life easier by neutralising those last minute panics.
- Once you have some of this, you can utilise social media to target the buyer. For example, Facebook and Pinterest will probably work for the bride to be, but LinkedIn may be better for the corporate buyer. In corporate it is rarely the one signing the cheque that does the investigation into venue options. Having such targeted message recipients means you can get some useful measurements of the outcomes of your social media spend, that can be supported by some of the other media options you are already using. I am however, a great believer, based on the results of the years, of being able to create a “conversation” with potential customers via social media, but this is just an automated and ubiquitous version of the opportunities we have always had to communicate, as evidenced by this story which goes back many years that I related in a post back in 2013.
As a last word, it is really difficult to find people who genuinely understand all this stuff and can implement as well. There are many around who will promise the world, and deliver something entirely different, when they deliver anything beyond an invoice. However, if you are curious, and prepared to explore the options, much can be done very effectively, and the outcomes are measurable and cost accountable.
If it costs you $50, or even a couple of hundred dollars to find, nurture and convert a prospect for a wedding reception into a sale, is that a worthwhile investment? I suspect so.
Let me know if I can help you develop and implement a plan that will deliver a return on the investment you have made in a terrific venue. Just do not be seduced by the hyperbolic nonsense sprouted by many self-styled ‘Social media experts’
Header cartoon credit: Hugh McLeod at www.gapingvoid.com
May 26, 2021 | Governance, Management
I was astonished when I recently went back to all the stuff I had written to copy and paste a simple explanation of cash flow into something I was doing. I had written a post some years ago, but not in the detail required in this instance.
Astonishing because I rabbit on about cash flow all the time.
Cash flow is the measure by which SME’s live and die.
I encourage as strongly as possible, repeatedly, that those I work with do a weekly rolling 13-week cash flow forecast.
It saves a lot of grief, and once set up is simple to do.
The real benefit of cash flow understanding for an SME is that it is cash, it cannot be ‘managed’ by various accounting practices, you either have it or you do not. Understanding the detail of where it comes from, and where it goes, and when, is the single most important metric for any business. This is particularly the case for an SME without a depth of reserves to accommodate when things go pear shaped.
So here goes.
Cash comes in from only a few sources. Most comes from being paid by customers in an ongoing business, but it can also come in from borrowings, sales of assets, capital injections by the owners, and incidentals like dividends.
Cash goes out in a similarly limited manner. Payment of purchases from suppliers, for anything from leases, capital items, manufacturing inputs, wages and salaries, to paper clip purchases, and repayment of borrowings, dividends, and tax payments.
In the presentation of statutory accounts, the required cash flow statement is broken into three parts.
Cash flow from Operating activities. This records the cash generated, and where it is used in the course of the normal operating activities of the business.
Cash flow from Investment activities. This records cash going into and out of investments that are outside the normal operating business. For example, a business deciding to invest in an adjacent business to firm up control of the supply chain, would record the investment in this part of the cash flow statement, as they would any subsequent dividends that were received.
Cash flow from Financing activities. This category records cash coming in from sources such as bank loans, and capital raising, as well as cash going out in repayments and dividends.
For most SME’s, the first is the major item, with only occasional intrusions from the other two, so I tend to just lump them together.
The format is the same for each. The source of the funds, and the use of the funds.
It is often useful to break the captions up a bit for a greater level of detail.
For example, you might break cash received from customers by geography, type of customer, or product group, all of which can give you a more detailed view of which parts of your business are working as expected, and which are not.
Coming out of pro-actively managing your cash flow are a number of other key improvement strategies, amongst which are:
- Reducing your cash-to-cash cycle time, which reduces working capital
- Managing inventory down without compromising supply,
- Actual cost of goods sold analysis rather than relying on some arbitrary standard,
- Positive relationship management with funders, especially valuable when you are looking for more capital
- Cash can act as a leading indicator of trouble with an individual customer or supplier, or indeed of a market segment in which you compete,
- Goodwill coming from being able to pay your bills on time, every time,
- Cash is the basis of several important investment analytical tools; a robust history makes the numbers even more credible
- Most importantly for most owners of SME’s, pro-active cash flow management delivers peace of mind.
Managing your cash is management 101. Unfortunately for many, it has become surrounded by accounting jargon, and mixed up with the more complex practises employed in the P&L and Balance sheet. Alan Mullaly when in the throes of saving Ford from extinction, demanded a daily cash balance assembled from operations around the world. If it can be done daily in an operation as complex as the global Ford organisation, it should be really simple for you to do it weekly.
Cartoon credit: Scott Adams and Dilbert again make the point better than I can.
