Aug 5, 2010 | Branding, Marketing, Small business, Strategy
Many businesses are sorely tempted to drastically reduce marketing expenditure during a downturn, it is often the most visible, and usually the least understood item in the P&L.
The evidence indicates that you should be keeping spending up.
Time and time again we see businesses that keep their marketing expenditure going during a downturn are in a much better position when the cycle moves up again. A dollar spent in a tough environment (assuming it is intelligently spent) is of far more long term value than the same dollar spent in the flush.
Now we appear to be in the recovery stage of the cycle, although anecdotally all bar mining appears to be pretty flat, opportunities will emerge to leverage the better circumstances, but discipline is needed to retain the focus that usually is heightened during a downturn. Below are three of rules of thumb:
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- Have a “Sku spring-clean”. Now things are improving, it is tempting to keep that small volume Sku, the “homeless” small brand, the small subsidiary acquired by accident, better to manage out of them to free working capital and enable management focus, and now times are a bit better, the cost of exit will be reduced.
- Don’t just push growth for growths sake, because it seems possible to get some, use the freed up resources to strengthen existing business before you chase growth for the sake of it.
- Don’t take the pressure off the cost cutting initiatives, the next downturn is somewhere just ahead, and your competitors will keep reducing their costs.
The cycles of economic activity appear to be getting much quicker, and competitive activity more aggressive and reactionary, so it is becoming even more important to have a firm view of the long term positioning. Define the brand development program, set long term performance measures, and stick to them as it will now take several economic cycles to get any meaningful result. Rather than being able to invest and make the return in the one cycle as has been the case in the past, it will now take several cycles to generate any long term depth .
Aug 3, 2010 | Branding, Communication, Customers, Marketing, Sales, Social Media
Social network marketing is a fundamentally different beast to “traditional “marketing. When talking to marketers, they usually see social media as being in effect free, the challenge is to get the message spread, often by being outrageous, generating awareness for little money compared to traditional media.
To my mind, it is much more complicated than that. “Word of Mouse” on social media has to be earned, and that is really challenging, requiring intimate knowledge of the marketplace, customers, their behaviour, and what is likely to positively engage them. Traditional marketing makes it easy to gain a general level of awareness, you just have to pay for it, but like most things that are easy, the return is very low.
Aug 2, 2010 | Communication, Customers
We have all heard the term, anyone who has ever read anything about negotiation will have it burned into their brains, but what does it really mean in this age of digital collaboration?.
The rules have changed, the old days when you saw an opportunity as a potential benefit, without much consideration of the outcome for the other party are over. As a retailer once said to me in the middle of a very difficult negotiation, when I asked where was the win win in his proposal “we will win today, and we will win again tomorrow”! Not a comment that could build any sort of sense that it was worth my being there.
Recently coaching a client going into a negotiation with a potential customer who had arrived via the website, and so had an idea of the value we could bring to him, we defined the optimum outcome of the first face-to-face meeting not as a sale, but as the creation of trust as a precursor to building a relationship that may involve the specific product on the table at that time, but not necessarily. There were plenty of other opportunities we could see, and assumed there were many we could not. Our objective was to present ourselves as a potential long term partner who could bring far more than just a good product range, customer service, and competitive pricing to the table.
Worked a treat, and will prove to be a real winner all round!
Aug 1, 2010 | Alliance management, Leadership, Management, Social Media, Strategy
Knowledge Management is all about collaboration, making the 3 + 3 equal > 6, but the challenge has always been how do you codify the knowledge for dissemination and re-use, implying the existence of both strategy, and a management mechanism for the knowledge.
By comparison, social networking is largely uncontrolled, and lacks a strategy beyond “to connect”, but it nevertheless has become a source of knowledge management.
Social networking brings to the table two factors not usually prominent in KM systems:
- Humanity, people connecting and interacting for the personal value, not monetary value, it reminds of the notion of “commons” where groups assemble because they can leverage off the social, intellectual and commercial base of the “common”
- Social networking offers the opportunity not just to form horizontal connections as happens in managed KM systems, but for the vertical, and oblique connections that offer the opportunity for insights and capabilities in an organic manner, rather like the organic metaphor for innovation.
It appears to me that an application for social networking techniques that will evolve quite rapidly will be as a new and powerful tool that will enable the rich and varied collaboration so crucial for the innovation process.
Jul 29, 2010 | Alliance management, Communication, Leadership
Contracts are the point of last resort, they define the exit, should it become necessary.
Believing a written contract that details how the dynamics of an evolving relationship will be managed is as dumb as believing the lady in the tent can tell the future with any accuracy.
Relationships are about leadership, collaboration, honesty, and a mutual respect, and a reversion to the clauses in a contract are a clear pointer to the failure of the relationship and the leadership.
A while ago, a business I have had intermittent contact with over a long period set about outsourcing their IT function. It is only a modest business, short of resources, and took the view that the IT people were the experts, and that they should know all there was to know about how to approach their problems, and that the resources freed up could be better used elsewhere. Problem was, they had not adequately defined their processes and expectations, and the vendor saw it as a small sale, perhaps not worth their best efforts.
There were some tough lessons in the exercise, and at their most basic broke down to the simple fact that nobody could know their business as well as they did, and a generic set of solutions sold to a modest business were never going to be successful.
The vendor failed in their duty to meet their needs, once the sales contract was signed, they “moved on” and the company failed badly in the implementation, and the whole exercise ended very badly.
The simple fact is that the “solution” could have, and should have worked, the company’s logic was sound, and the solution had all the fundamentals to deliver a great service, but the relationship failed. Rather than leveraging the skills and experience of both parties to arrive at a successful outcome, they took the easy way out and just fought over who would carry the can. Really dumb!
