Train dogs, educate people.

Train dogs, educate people.

Apr 26, 2016 | Governance, Leadership

That phrase, ‘you train dogs,  but you educate people’ was used to me years ago by Harvard professor Jim Hagler, making the point that education involves nurturing the ability to think and question while training is simply  enforcing a repeatable routine.

Both have their place, but getting the two mixed up and expecting training to take the place of educating leads to failure.

There are thousands of information products out there, courses of many types that promise to deliver a learning outcome, which is usually passive income so you can sit on a beach and make money while sipping G&T’s

You  have seen them.

They offer training, and often use that term. They are the digital equivalent of buying a book, on a topic, and once you walk out of the bookstore (are there  any left?) the author, publisher and bookstore owner have no further obligation to you, the responsibility is all yours.

By contrast, getting an education takes time, and effort, and there is a responsibility of the institution to teach you, and ensure that you not just know the topic, but can think creatively and critically about both the topic and related material. You cannot walk into the university office and buy a degree (although recent revelations might just make that assertion obsolete)

Education is a two way street, shared by both parties, as distinct from information provision, which is a once only transaction.

Key difference is when you need help, is it there? Most on-line courses are just information, with no help beyond technical assistance to download the stuff, if you are lucky.

There is a big cost to education, not just money, but time and effort, the cost of training is often low.

I would rather spend $2000 on education, really learning a topic,  than $200 on a training course.

This rant was set off by another of those very well crafted pieces of sales copywriting that landed in my email last week promising to give me a passive income of ‘at least 5,000/month’ for life. All I had to do was part with $779 now, or an easy $150/month for 6 months, and it would be mine. Easy, great ROI if it actually worked.

Utter bullshit aimed at deluding the easily deluded.

Where will the retail gorillas make profits tomorrow?

Where will the retail gorillas make profits tomorrow?

Apr 20, 2016 | Customers, Marketing, Operations, retail, Strategy

Coles and Woolies are locked in a battle for share of the customers wallets and throats that becomes more complicated every day.

The competitive landscape has changed. The old model of them against each other and independent wholesaler supplied groups, has been spiced up by Aldi, Cosco, and the tide of competitive business models evolving both in store formats such as the convenience small stores around commuter points, farmers markets, and digitally enabled sales.

Those sales I call ‘Beyond Checkout’ cover everything from online ordering with home delivery to the evolution of old fashioned drive thorough pickup.

In my view the battle is a losing one for the gorillas without significant change to their operational culture. Their current business models are based on mass merchandising, not easily made compatible with the personalised service delivery and the  lower volume specialised products now being sought. You need go no further than the disappearance of Thomas Dux for evidence.

Having said that, I see 5 general areas for operational innovation of both the gorillas that would deliver ongoing profits, and sensitise them to the changes happening beyond the walls of their stores.

  1. In store technology deployment.

Deploying some level of the data driven category management control to store level would greatly enhance assortment optimisation, out of stock reduction, and margin maximisation. The assumption of course is that there is staff in the stores with the nous to leverage the information  they are being given.

There is also the juicy thought that stores will be able to connect to consumers in close proximity to stores via their mobile devices geo location capability and make them offers based on their purchase patterns. Then there is the option of instore kiosks harnessing the value of instore video and personalised advertising and promotion, again catalysed by your mobile device.

  1. Leveraging existing asset

Reduction of maintenance and running costs with innovations like rooftop solar power, preventative maintenance programs, improved store security, and stores as the logistic base for home delivery. Home delivery will become more and more important to time constrained consumers, so developing a compelling offer should be high on their agendas. To date the penetration has been poor because the logistics, particularly for fresh and frozen product is really challenging.

  1. Employee productivity improvements.

With better staff training, particularly in produce, customer sensitive opening and closing times, cash register  speeds (the Aldi insistence on prominent bar codes by observation speeds up throughput significantly), much can be achieved. Self-serve checkouts currently rolling out with store renovation programs have clearly been a success with consumers, and offer significant productivity improvements.

  1. Value chain optimisation

The use of collaborative technology  that goes back into supplier production planning and collaborative volume management from the production line to the checkout has been around for years. However, there remains huge opportunities to extract benefits from inventory management for all in the value chain. The barrier is cultural, as the gorillas want all the benefit to come their way, removing the incentive for suppliers to take risks and innovate, except when under the whip.  Collaboration through the value chain can deliver great benefits when done well.

  1. The customer experience,

What is retail about, if not customer experience?

It is here that retailers can differentiate themselves in all sorts of ways.  What they cannot do is demand from head office that customers like them, and prefer their stores over the others. Store choice is a personal thing for consumers, made up of many elements, but creating a store environment where the employees are pleased and proud to be of service is a great start.

Long way to go there.

What the senior management can do is provide the infrastructure that enables that level of personalisation and service to be delivered in stores, and the leadership to create and encourage the customer centric culture that front line employees then deliver.

And a final thought: Is that the light at the end, or a headlight?

E-tailing is a huge threat to the gorillas, and while it involves capital to develop and deploy the technology, it is essentially an individual engagement and transaction. Online gets all the publicity, but still only accounts for around 6% (depending on whose numbers, and which categories you look at) of sales. The gorillas should see E-tailing as their next opportunity area, to be embraced rather than feared.

Remember what happened to the Blockbuster video business? They had the game by the throat, Netflix was just an irritation in the corner, so they ignored them.

Bamm! Blockbuster is gone.

While it is still pretty hard to stream a family roast dinner, the lesson of Blockbuster should not go unheeded by Coles and Woolies.

 

7 steps before the close to double conversion rates.

7 steps before the close to double conversion rates.

Apr 18, 2016 | Sales

Sales people for 100 years have been coached on how to do a close, often after a mini close or two.

These techniques all have their place, and in the past have worked enough for them to become the default, after all it is a numbers game.

However, when you last looked at your close rate, what was it?

Most would be in single figures.

100 leads, converts to 50 warms leads, converts to 10 hot leads, converts to 5 transactions.

What if there was a way to double, even triple that rate, make the 5% 10% or even 15%

There is.

Every sale is a journey, has a starting point and an end point, what happens in the middle determines your conversion rate.

  • Identify the prospect
  • Qualify the prospect as a lead
  • Understand their buying processes
  • Provide social proof
  • Make sure you are talking to the decision maker
  • Gain the support of those who influence the decision maker
  • Ensure your offer is irresistible

Making  the offer irresistible means that you do not talk about the offer from your perspective, you talk about what the offer means to them, the outcomes of accepting your offer.

Conversely, the result of passing it up

If I was selling you a lead generation process for your product selling for $499, and I promised to triple the conversion rate from its current 5% to 15%, would you take it?

The maths becomes very easy, $499 is either a great offer or a pile of rubbish, you can make the choice.

However, if I just concentrated on closing you on a lead gen process for $499 using all the old fashioned techniques, I would almost certainly fail, as it is all about me, and my stuff for $499, not about you, and the return you will get for a modest outlay of just $499. (Be quick offer closes at midnight. Could not help myself, as time linked offers do make them more compelling irrespective of anything else)

In other words, focus on the outcome, not the process, at each stage of the process.

Sell the hole, not the drill.

 

Are Woolworths new “Essentials” really essential?

Are Woolworths new “Essentials” really essential?

Apr 12, 2016 | retail, Sales

Woolworths have announced a change of their ‘Homebrand’ range of housebrands to ‘Woolworths Essentials’ a more ‘upmarket’ housebrand.

If that is all that is happening, will this just be putting lipstick on a pig?

The strategic and competitive challenges facing Woolies run way deeper than the packaging on a housebrand offering.

However, if it is a signal that the changes are cultural, and the changes are to impact the way the organisation operates, it may be the start of a competitive revival. To be fair however, Woolworths’ financial performance over the decade up to only two years ago was outstanding and shareholders had been a very happy bunch on the supermarket side of things. However, the suppliers have recently decided they have had enough, and customers are becoming more open to alternatives.

Suppliers and customers are surely pretty important groups to a retailer.

Housebrands started as strategic move in Australia by Franklins in packaged goods almost 40 years ago, as outlined in this ABC podcast. They had been around in variety and general merchandise for some time before that, Marks and Spencer in the UK pioneering the idea way back in the 1920’s.

Franklins raison d’etre was customer value. They achieved this by a combination of low prices, aggressive promotions, and the widest possible range of products. The addition of a low priced housebrand range in heavily shopped commodity categories made absolute sense, so they started with ‘No Frills’ margarine in the late 70’s.

At first, many Australian consumers hid the No Frills products in the bottom of their trolleys, hoping none of their friends saw, as it was perhaps a social indicator that could see them accused of being cheapskates or down to their last bob.

The brands you buy were, and still are, an important part of your own self-image.

Pretty quickly however, shoppers discovered that some housebrand Sku’s s offered great value, so they locked in on them, and the presence of a housebrand in a trolley came to indicate a canny, value-conscious shopper. Conversely they also rapidly discovered the Sku’s that offered only price as an incentive to buy a rubbish product, and discarded them. Consumers are very quick learners, and make choices in discriminating ways.

Experimenting with housebrands

Since those early days, retailers have experimented widely with housebrands, coming up with sometimes elaborate words to support the introduction of fancy labels on the same stuff, or to simply copy the new products of a proprietary supplier before the category is established in consumers minds.

Fluff when substance is needed.

The strategy has changed radically from the Franklins’ original model of using housebrands to deliver value to customers, to one of capturing proprietary margins without the expensive, and long term work of brand building that requires an understanding of consumers lives outside a supermarket. Instead their control of what goes on their shelves has been used to squeeze the margins of the remaining proprietary suppliers while filling the now vacant space with their own “Faux-brands”.

Niche housebrand

Both Woolworths and Coles have leveraged their mass merchandising and supply chain expertise into liquor retailing.

Go into Dan Murphy’s and look at their range, particularly of beers, fancy niche names, many of them are just sold in Dan’s, with no marketing credibility beyond the shelf space and quirky name.

They are a Housebrand.

Both also have ‘cleanskin’ wines also housebrands, but unashamedly so.

 Market niches

Private Label quality has improved over time, some of them are pretty good, as good as proprietary brands, although usually a bit different in composition, packaging, or in some way at least moderately meaningful to consumers.

The problem is that the retailers are in the business of flogging stuff. Product to consumers and shelf space to suppliers. It is a high volume, multiple  transaction, low margin business. By contrast, suppliers are in the business of building brands for the long term based on consumer preferences, behaviour and emerging lifestyle trends. They are the ones seeing market niches emerge, and building new products to suit, but why take the risk when you know that the retailers will copy you in a short space of time, squeeze your shelf space, and screw you on margin and terms.

Where will the genuine, category creating innovation come from? Not from the retailers if the past is any guide.

Not all the blame for the innovation stagnation that is evolving goes to the retailers. Proprietary marketers are also in the gun. It is suppliers, albeit under considerable retailer pressure, who have allowed the categories to become commodities by transferring the innovation and marketing funding to price promotion, thereby destroying the value of their brands over time.

Years ago as a young product manager, I worked for what has become Meadow Lea Foods. Meadow Lea margarine had been built into one of the strongest brands in supermarkets, with a dominating market share well over 20%, in a crowded field. I have not seen ‘Mum’ being congratulated for probably 20 years, presumably the available marketing and advertising funds were swung from what had worked to build the category, into the retailers pockets.

What is Meadow Lea’s market share now? I bet it is in single figures with the rest of the commoditised products in the category, although I have not seen any figures for a long time. Building a brand is a journey that is never complete, and if you stop giving consumers a reason to buy yours, they will follow your advice and stop.

How to find your keywords, for Free!

How to find your keywords, for Free!

Apr 11, 2016 | Customers, Marketing, Strategy

Pretty much everyone engaged in the ‘content wars’ have some level of focus on keywords.

It makes logical sense to include them in your headlines, and body copy where appropriate, and while ‘keyword stuffing’ now brings the wrath of Google down on you, being sensible still carries weight.

There are a number of paid keyword tools that do a great job, but a pretty good job can be done for free just by applying some thought and a bit of common sense.

Some of the ideas I have used in preparation of this blog are:

Google auto complete. Start typing a query into Google and it gives auto options. These are nothing more than Google scanning the similar terms put into search and returning their most common responses. Ie, a keyword or phrase.

Wikipedia. Thousands of experts collect and curate information on many topics. Any page that deals  with your niche will have links and words that can be used as keywords, curated by experts.

Google related searches. Every first page of the search results give you a number of related searches at the bottom of the page. Often some good ideas are hidden in there.

Amazon. This may not be an obvious choice, but if you have a look inside a book in your niche, you will see the chapter headings. Somebody who presumably has a bit of knowledge in your niche has taken the trouble to write a book, and set out the important stuff in the chapter headings, might be an idea there?

Quora.com. Quora is a Q&A platform, for the uninitiated, so there are discussions on many topics, probably yours, so there are a range of words and phrases used that could give some ideas.

Forums. Type your topic + Forum into the search box and up will come the forums related to your search term. Again, these are discussions on the topic for which you are looking for keywords, so there are likely to be some good ideas floating around.

Google keyword planner. This is a great tool, suffering from success. It gives only specific variations on a word or phrase you type in, there are  no similes or suggestions in there, no variations beyond the specific word or phrase you typed, no imagination or inference is applied. The obvious advantage is that you also get some data which can be very useful. On the flip side, everyone uses it, so finding a word that is different, but still relevant will not happen in this tool.

The paid tools are very good, but for a medium or small business, an expense that they often choose to avoid, as they can be expensive. No amount of keyword magic however can replace a creative and relevant strategy and Value Proposition executed with precision.