Jul 6, 2022 | Marketing, Social Media
My inbox is filled every day by emails from random people assuring me that their secret social media strategy will see me as rich as Bezos.
Some have my name and email address; most are more like; ‘Hi there’ and many now start with the ‘Re: our conversation about social media strategy.’
Spamming by those who are trying to sell themselves as experts at selling on social media.
What Nonsense.
If they are happy to use that sort of rubbish to market their own services, what sort of crap would they dish up to you?
Social media is a tiny part of the tactical armoury of marketers, or should be. It is the very end of the process, not the beginning, or middle, it is the very end only.
Social media is simply a tactic, amongst an armoury of tactics to achieve a goal.
The metrics of social media are irrelevant when your objective is to sell widgets. The only measure of success is how many widgets you sell, not how many people view, like or share your content, although the last one can be useful.
In the absence of a reason to take that next step towards an objective, the post is a waste of resources.
‘Content is king’ is a horrible cliché, but it is true.
It is the ‘content’ of your posts that describes in some way the value you deliver, the problem you solve that matters, nothing else.
Almost all the junk I see has no strategy. It does not reflect any understanding of the drivers of behaviour required to achieve a goal.
When you want to find a social media ‘expert’ to work for you, start with someone who has way more than the knowledge necessary to plug a post into Facebook, Instagram, or Reddit. You need someone who understands what it takes to find a prospect, then take them through the process that creates a customer!
Header cartoon credit to social experts Scott Adams and Dilbert.
Jul 4, 2022 | Customers, Sales
We understand that the behaviour we reward is the one we get. It is the way we train our pets.
Many also tend to overweight commissions when we pay salespeople, rewarding a set of behaviours, some of which may not be what we want.
Years ago, we learnt that paying piece rates in a factory resulted in quality problems, and myriad ways of ‘gaming’ the system to the detriment of the overall numbers.
Why have we not applied the same lessons to sales commissions?
I will not argue that the best salespeople do not deserve to earn more than the average. The question is how much more, and how do we increase the overall productivity of the investment in sales so that there is more to share?
The answer lies in the results of the enterprise, and the way the enterprise then shares those outcomes across all stakeholders.
Collaborative teams work in factories, we have used them successfully to improve productivity and quality while reducing costs for 40 years. It makes sense to deploy similar tactics in your sales force.
Sharing customer, competitor and market information, and the best practice sales techniques amongst all salespeople, learning from each other, will lift the average without compromising the best.
Not all salespeople need to be on the same salary, but they should all have a common interest in making the enterprise successful by maximising the impact of the investment made in generating revenue.
Bonuses paid to salespeople tend to be tied to volumes, and/or profitability of the sales they make. However, all sales are not equal.
Let’s assume the strategy calls for expansion into an adjacent market. There is marketing expenditure directed towards generating awareness of the enterprise, and the value it delivers in that adjacent market, but there are established competitors whose best interest is to see you fail. In that case, you need your best salespeople on the case, but they may be reluctant if most of their income is tied to commissions on the same calculation base as the easier sales. In that case, there needs to be recognition of the greater difficulty, as well as the strategic imperative.
There is no one size fits all template that will be useful to you.
However, starting by tying remuneration of the individual to the outcomes of related work groups, strategic priorities, and enterprise outcomes is a start.
Header cartoon courtesy of Scott Adams and Dilbert.
Jun 30, 2022 | Change, Strategy
Promoting change is a major strategic and management challenge. Most will accept that change is a necessary ingredient in survival, but most will also hope it is the other bloke who changes, and they can continue in in their comfortable cocoon.
There are three ways to initiate and lead change, all based on behavioural psychology.
Incrementally.
When you ask people to make minor changes, and provide the background information so the changes seem reasonable, people will usually be prepared to make them. Minor change, on minor change, compounds to significant change is what seems like a short time when you look backwards.
You are not taking people too far out of their comfort zones by making these minor changes.
Anchored.
‘Anchoring’ is a core technique in negotiation that is fed by ‘fixing’ on the first number mentioned. In a negotiation over wages for instance, you often see what amounts to an ambit claim, a huge increase over what you are actually prepared to accept. The process then becomes one of compromising, meeting somewhere in the middle. The higher the starting point, the higher the ‘middle’.
Catalytic event.
When something happens that is an attention grabber, it can be used to demonstrate that the status quo is simply not viable, and change is a necessity of survival. This can be used at an individual and corporate level. Management jargon often uses the term ‘Pivot’.
Steve jobs did it on returning to Apple, by radically reducing the product range, and focussing resources on the ‘Mac’ and development of what became the iPod. Bill Gates executed the biggest ‘Pivot’ in corporate history in 1995 when he realised that the internet really was something big to come, and that Microsoft had almost missed the boat. Gates wrote a memo to all staff that instigated the pivot that in an instant, turned Microsoft 180 degrees.
On several occasions over the years as a contract manager and ‘change-agent,’ I have deliberately generated a catalytic event. On each occasion, corporate survival was at stake, and significant change was essential. Under normal circumstances, the scale of the changes necessary would have been untenable in the absence of the catalytic event.
The management challenge to successfully making change, whichever strategy is used to make those changes, is to ensure they will ‘stick’ after the initial pressure is removed. The tendency to revert to the previous status quo is always very strong.
Jun 27, 2022 | Governance, Leadership, Personal Rant
The ‘Insiders’ program on the ABC yesterday morning featured considerable debate about the coming wave of inflation, the increasing wages gap, the structural deficit now built into the national budget, and an interview with the new treasurer Jim Chalmers. I was struck again by the narrow focus of the conversation on the expenditure side of the equation, irrespective of the specific topic of the moment.
It seems to me that while we have an expenditure problem, about to become worse with the combination of inflation and the promises made to get elected, the real problem is with revenue.
While it is both sensible and well overdue to chop out the waste and costly lifestyle cushioning of liberal ‘mates,’ that will not solve the problem.
Long term we need a more productive economy, which does not mean less jobs, but it does mean that we need to edge up the international productivity ladder. This requires further investment in education, technical training, and investment in science and the means to commercialise the outcomes of that science.
Unfortunately, this takes investment at a time when investment is challenged by the scarcity of money. Anyone running a business understands this to their core. They also understand that to dig out of the hole, they need to generate added revenue to enable the investment, as cutting costs can only be useful at the fringes, and longer term is well documented as a failed strategy.
The government simply must examine revenue and put in place measures to increase it. Politically, and practically, increasing personal income tax is off the table. In addition, the temporary cut in fuel excise will end on 28 September, adding to costs throughout the economy and no doubt creating howls of protest.
The obvious way to generate revenue is to really bite the bullet politically and chase multinational companies that currently pay little or no income tax in this country. That would invite a huge PR response from these companies, comfortably headquartered in many of the tax havens around the world, exercising transfer pricing, related party loans, and the many other rorts that go on. They will claim that the competitiveness of investing in Australia has been destroyed, and deliver a litany of tales about the damage to the economy the withdrawal of that capital will deliver. Remember the effort the Minerals council made to force the Rudd government to abandon the mining ‘tax’? That would pale into insignificance compared to the shouting a real across the board tax collection effort would bring.
Bring it on I say. I am sick of seeing multinationals use the infrastructure, resources, and capability of Australians to benefit a group of obscure owners and shareholders hiding behind the curtains of tax minimisation and avoidance possible as a result of the simple reality that tax rules are national, while money is international, aided by political hubris.
Header Cartoon credit: Scott Adams and Dilbert.
Jun 24, 2022 | Customers, Leadership, Management, Marketing, Sales
In the past, for the orderly management and convenience of organisations, Sales and Marketing have been kept by management in separate functional silos.
In a time of flattened organisation structures and the ease of communication and data sharing, this no longer makes any sense at all.
The evolution of the silos to one functional area of responsibility will remove substantial opportunity for the transaction costs incurred by turf wars, miscommunication, and unaligned objectives, to be eliminated.
From a customer’s perspective, how you are organised internally is irrelevant, they are looking for the products and services that solve their problems or address their opportunities in the most cost-effective way.
The vast majority of interactions a customer will have with a supplier will be cross functional. Over the course of a transaction, they will interact with sales, technical service, after sales service, and logistics, probably sequentially.
The power in the sales relationship has moved from the seller, who had control of the information necessary for a customer to make a purchase decision, to the buyer. In past days, the sellers only delivered the information that benefitted them, but those days are almost gone. This process has been gathering speed since the mid-nineties, and now dominates every transaction beyond small scale consumer purchases like groceries, and even there, the need to be clear about the ingredients, their sources and provenance is pervasive.
Both sales and marketing silos have the same ultimate objective: to generate a sale, and preferably a relationship that leads to a continuing flow of orders. The combination of the silos into one, Revenue Generation, makes logical organisational sense in this new environment, as well as better reflecting the way customers interact.
Sources of revenue.
Isolating the sources of revenue is a crucial component in effectively managing the revenue generation function. Luckily, the sources can be summarised into three areas.
- Customers. Which customers buy what products, in what volumes, how often?,
- Markets. There are many ways you can dissect a market. Geographically, customer type, customer purchase model, product type, depth of competitive activity, lifecycle stage, and others.
- Product. Product type, mix, price points, lifecycle stage, margin, potential, and others.
Together these three axes form a three dimensional matrix from which your revenue is derived. The task of the RevGen personnel is to maximise the revenue today, and into the future, while minimising or at least optimising the cost of generating that revenue.
Type of Revenue.
Considering not only the source of the revenue, but also the type is a crucial part of the equation that will lead to long term profitability. Again, there are three broad categories into which all revenue can fall.
- Transactional. One off sales that require little else at the point of the transaction beyond a mechanism to execute the exchange of goods for money.
- Packaged. This category is by far the biggest, as it contains all sales that come with a ‘ticket’ of some sort. That ticket may be a guarantee of service, warranty period, assurance of quality via a brand, bundled pricing, promotional support, and many others.
- Subscription. With the emergence of the internet, subscription sales are growing rapidly at the expense of the packaged sales. This exchanges the upfront revenue of a sale for an ongoing revenue stream based on use, time, or both product and service. The emergence of the ‘cloud’ has spawned a host of new business models that use subscription as their base, but it is not new. Xerox used subscription for decades by leasing their equipment, then charging for usage on top. Similarly, Goodyear moved their sales of tyres to the airline industry from a sale to a usage model in the 80’s to sidestep the simple fact that their tyres were more expensive, but lasted longer. This encapsulated the price sensitive nature of airline purchases, with the savings over time because their tyres lasted for more landings than did the opposition.
Thought about these variations all have resulted in an exploding range of business models over the last 20 years, making the task of managing the generation of revenue way more complex, and therefore also opening opportunities for those who can think creatively about the task.
When you need some creative outside experience in this complex menagerie, give me a call.
