What leaders must do to enable organisational change.

What leaders must do to enable organisational change.

Feb 16, 2017 | Governance, Management

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.

Feb 15, 2017 | Branding, Customers, Marketing, Strategy

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.

Nonsense.

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.

 

To cut through the digital clutter:  Tell stories.

To cut through the digital clutter:  Tell stories.

Feb 13, 2017 | Branding, Marketing

Stories are personal, they resonate, you see the real people behind the business, not some nameless corporation, the people who do the work, and are accountable for  the decisions and outcomes.

Facts never change anything, but stories can.

Martin Luther King did not recite a list of the facts surrounding the deprivations and discrimination of the American negro in his 1963 speech, he told us of his dreams, and changed the world.

Facts are boring, stores are listened to, part of our DNA, we listen to stories and relate to them into old age.

 As a kid Dad read to us from what became known as ‘The weekend book’. A book he had been given as a kid, of the Greek legends. I saw that book again for the first time in probably 40 years last weekend. My sister had it carefully stored, as it is now falling apart from almost 100 years of love and use. She has kept the family tradition alive by reading the stories to my niece, who is as familiar and engaged with them as I was at her age. As I turned the pages, every page, story and picture was as familiar as if 55 years had not passed and I was 10 again, listening to my dad reading them.

Stories allow you to differentiate in an emotive and highly engaging way. Your story is yours, not your competitions, yours. They can be used to give potential customers a reason to go nowhere else, they give you a personality that cannot be erased with a cheaper price, or a hyperbolic sales pitch.

Tell stories

I am currently working with a medium sized printer, a 60 year old business founded by the current MD’s father in the mid 50’s. In a recent move of premises, sitting in the corner was the original little printing press that he had used to start the business,  about to be sent to the tip. Aloud, I wondered at the stories it could tell if it could talk. That press now holds pride of place in the foyer of the new premises.

We trust those we know, and we get to know people by hearing, understanding and relating to their stories. Facts simply do not  build trust, they bring enlightenment, and understanding, but not trust.

Tell your stories, you may be surprised at who is interested.

How do you price for services.

How do you price for services.

Feb 9, 2017 | Customers, Marketing

A common question from all those in consulting, and one I ask myself regularly, as it becomes really easy to under-price in order to get the job.

From time to time in the past I have done jobs for various bodies that I believe in, pro bono. I always thought it was my way of making a contribution, and that the effort was understood and appreciated.

Not so. In most people’s minds, things are worth what they pay, so a free consulting is worth exactly nothing, particularly if the recommendations are challenging and uncomfortable to implement. It is then very easy to just walk away as there is no skin in the game.

So, how do you go about setting your price?

Determine your hourly rate. Generally you can get a handle on the amounts that are the ‘going rate’ in the market, not just for your service, but for the range of services a business may need. For example, book-keeping is around $60/hour, a virtual CFO will be around $160/hour and a partner in a large accounting firm $400 plus. If you are selling accounting services, at least that gives you a context. More qualitative services like marketing have a similar range from the kid who can run your Facebook account for you, (not the copywriting, that should cost way more than a base rate) to the virtual  marketing manager with all  the skills of implementation at $160, to the widely experienced guru who will be $400 plus. Most shudder when that number is quoted, but why would a highly qualified accountant who looks in the rear vision mirror most of the time be worth more than a highly qualified marketing and strategic thinker who is looking forward, to the things that will sustain the success of your business?

Estimate the hours of a project. This always involves breaking a project down into its component parts, and making a judgement about the time each will take. The complication is always ensuring that the goal posts do not move. Agreeing the exact scope of the work up front is essential, and always hard, but scope creep adds enormously to the risks you face, and is present in almost every project I have ever done.

Provide the quote. Pretty obviously a multiplication of the rate by the hours, in most cases, perhaps plus a bit for scope creep and complications you did not anticipate. These are some of the considerations that play into the quote process:

  • A fixed price will always be appreciated by the client, as it removes risk, so long as there are also guarantees of performance in place. A fixed price also enables budgeting, which is usually very welcome.
  • Will the job lead to ongoing work? Often a key question in providing a quote, particularly for small firm like mine where a lot of time is spent prospecting. A flow of work that generates reliable revenue is enormously valuable as a means to keep the beast fed.
  • Who will be doing the work? Often the system is that the really important and highly compensated partner or rain maker sales person does the selling and negotiation, then hands the job over to the gophers, whose time gets charged at the high rate. Clients are not stupid, they understand this process, and have differing attitudes to it, usually depending on the confidence the gophers create in the first meeting. In my case, I do all the work, bits where some specialist advice is needed, I provide some referrals, and my clients make the choice. I do not clip the ticket for the referral, unless I am involved in the project management, and then the added cost is absolutely transparent.

Actively manage and communicate the project progress. Managing expectations is a key success necessity, and to do this communication is essential. Usually about the time you are tired of the communication is about the time that it is sinking in. Mutually agreed KPI’s are important, they act as milestones, but often the qualitative understanding of progress being made is as, or more important than, the pre agreed KPI’s.

Tracking your time is a key activity, you need to know how you are going compared to your expectations, and while this is not for the clients sake, it is vital for yours and the long term profitability of your business. There are many tools around to track time, pick one that suits you, even if it is a simple note in a diary.

Know who your ideal client is. Maybe not the name, but the characteristics they display, the market they are in, the problems they face to which you have a unique set of solutions and relevant experience. Having this piece of thinking done will enable polite removal of tyre kickers and those who are not really ideally suited to benefit from the experience and knowledge you have.

‘Embrace’ your pricing. This may be the hardest part of the equation for most. Charge what you are really worth, name the number with confidence. Usually for services that is hard, and is based on the outcomes, not the cost. An expensive consultant that gets results is far better value than a cheap one that does not. At some point, the question of what success means to your potential clients business comes into play, as does the ability to pay.

It is inevitable  that you will not get every job, and that you will need to keep a straight face as potential clients over-act a response your prices. You will also have to believe in yourself to the point where you can look people in the eye as you deliver the price and they over-react, and you need to be a good negotiator. Most people respond positively to a high price delivered with clarity and certainty about the outcomes that will be delivered. The first person, who has to be convinced that you are worth the price, is you. The second one is easier.

Guarantee an outcome. This takes a level of confidence that is pretty rare to be able to build as there are simply so many variables at play. However, if you are sure that by employing your services you can guarantee an outcome, you can charge almost anything you like up to that outcome, and most will see it as money well spent. Few will walk away from swapping 10 cents for  20. There is a lot of services marketing that involves an implied outcome, justifying a high price, but the explicit guarantee of success is not something I see much.

Leave it to them. This is a risky strategy, but one I use a bit on short term projects such as a workshop, where the investment of time is understood, there is a clear problem to be addressed that is right in your ‘hitting zone’, but they do not really know you. Giving them a ‘list price’ with the undertaking that you will leave it to them to assess the value of the time to them, and tell you the invoice amount. It removes risk from them, and underscores your own confidence in your ability to deliver value.

Your best marketing tool. We all know that satisfied, even delighted clients are the best advertising you can have. Referral business is the best business, and the easiest to get, as happy clients refer you to their networks as someone who really delivers value. When that value is delivered at a high price, so much the better.

As a final thought. Increasingly in a complicated world, we value simplicity in all things, and the response to your prices will be enhanced by simplicity.

Cartoon credit: Scott Adams and his alter ego Dilbert.

How do you calculate a Cost Per Lead?

How do you calculate a Cost Per Lead?

Feb 7, 2017 | Sales

The smoke and mirrors crowd of “Digital marketing made easy” will tell you that Cost Per Lead (CPL)  is a key measure. This is half right, but the half that gets missed most of the time is the half that really counts.

First, how do you define a lead?

Is it a webform download, attendee at a webinar or seminar, business cards collected at a tradeshow or network breakfast, someone who calls up ,looking for information, or just a random conversation about the product you sell with someone at the tennis club in a weekend.

It can be all of these, and none.

All so called leads are not created equally, and until there is some sort of qualification that there is a problem to be solved or some circumstances that can be leveraged, it is not a lead, it is just a name you happen to have.

The task is to qualify the name in some way that indicates its potential to result in a transaction, and therefore attract the resources necessary to convert.

Most businesses have some sort of prioritisation process in place, even an ad hoc one, that recognises the difference in value between a business card from that exhibition, a referral from a trusted contact, to a request from existing customer for advice on a problem they face.

It is not however an easy process, nor is it one that is aided by the simple metrics found in most CRM and marketing automation packages.

The most expensive resource an organisation has is often its salesforce.

It is not the absolute cost of them that counts, but the business that their face to face time delivers.

Lets assume that your total cost of employment of a sales rep is 100k.

They work 42 weeks, 8 hours per day, so the nominal cost per hour is $260.

Let’s further assume that they have a lot of internal meetings, order follow up, report writing and  emails that takes 2 hours per day (a conservative estimate in my experience) travel time of another 2 hours/day to get to 3 meetings with customers taking 30 minutes each.

All that means that the face to face selling time, the key to revenue generation in most B2B businesses is  just  1.5 hours a day, so the real cost of the sales representatives time, doing the real work of selling is $1,387/hour.

Puts a different light on the common task of sales reps of following up the business cards collected at that sales conference, or cold calling door to door in the local industrial park, doesn’t it?

The only real way to measure the CPL is to have a process in place that is sufficiently complete, and agile enough to recognise differences in the nature of the so called leads. This really requires the knowledge of people to be applied. Leaving it to the algorithms in the CRM is no way to go, although at the rate of development of machine learning, that will be possible in the very near future.

Scary thought that for sales and marketing people.

However, currently a robust process looks something like:

  • A strategy for creating and leveraging demand
  • Articulation of the value proposition of the business
  • Identification of  the ideal customer on the basis to whom the value proposition will be of most value
  • Detailed customer  journey analysis
  • Automated systems to do the ‘grunt’ work
  • Face to face sales time & conversion rates
  • KPI’s and dashboards to collect and monitor key sales pipeline data
  • Continuous improvement of all the above.

When all that is done, measure the CPL in a way that is meaningful to your business.