Sep 15, 2023 | Branding, Strategy
Qantas is at the centre of a political, legal, and social bunfight.
On Tuesday 13th, (Sept 2023) Qantas lost an appeal in the High Court, being found guilty of sacking almost 1,700 Qantas workers illegally, replacing them with staff from labour hire businesses. This whack across the corporate chops comes behind outrage at Qantas selling tickets on flights they had already cancelled, lost baggage, failure to refund ticketholders, last minute cancellations of flights, and lousy service inflight and on the ground.
Alan Joyce is the prime target of the outrage, having just walked away a few months early with a pile of cash in salary and bonuses. Then there was another pile from the sale of shares at a time when he must have known the ACCC was investigating ticket sales, but the investing public did not. By most definitions, a clear case of insider trading.
Yet, in all this, should he shoulder all the blame?
Throughout his long tenure Joyce has aggressively cut costs by making radical and most ‘unQantas-like’ choices. Always he has had the support of the Qantas board. It is reasonable to assume the board endorsed all the strategies Joyce has implemented to cut costs, as well as waving through his compensation packages over the years. The chairman at least, must have also agreed to the $17 million share sale into a buyback scheme in the first week of June.
The Qantas board have clearly tied Joyce’s package to short term profitability with little regard for much else. It is therefore understandable albeit morally bankrupt, for him to optimise his personal wealth, arguably at the expense of the long-term commercial health of Qantas. As Peter Drucker observed ‘You get what you measure’.
The board is, or should be, the voice of shareholders. Qantas would be held in the portfolios of most superannuation fund managers in Australia. Therefore, we are all shareholders who will benefit from the profitability of Qantas. We have already benefited from the negotiations that squeezed $2.7 billion in various forms of support from the government over the covid period.
The morality of the governance of Qantas can be questioned, and the courts have found them guilty of illegally sacking workers, for which they (and us as shareholders) will pay a large price. There should be accountability and retribution for this sad state of affairs to be handed out. Some should go to Joyce, but a substantial majority of it should be directed to a board that has failed in its governance role as the guardians of the long term health of the business.
Note: I do not know Joyce, although did meet him once at a function, and did not like him at all. Probably because I was of no use to him, so he was abrupt (bloody rude) as he moved on to a juicier target across the room. Good riddance.
Header credit: cartoon by Lewis, from a Pinterest board by Janice Bell
Aug 30, 2023 | Branding, Marketing
Marketers have outsourced creative development to specialists from the beginning of media advertising in the late 1800’s. Correctly, there was a realisation that it was a specialist skill, not easily found, nurtured, and leveraged.
Amongst the daily advertising dross have been creative gems that have built great brands. At least they were great for a while before stupid management cut the creative advertising budgets in favour of short-term sales activation, a quantitative dead end.
Over the last 8 months another monster has emerged, and suddenly the conversations I hear about are all how to get A.I. to do your creative for you, and save a heap.
Well, here is the news: It cannot.
AI should be called EI. Enhanced Intelligence, not Artificial. All it does is build on what we already have, make connections, do drafts, take what has happened in the past and extrapolate.
Creativity has no role in AI, at least not yet.
Would AI have come up with the great 1964 Volkswagen “Snowplough‘ ad, the one voted the best ad of all time by the Cannes panel? Could AI have maintained that creative standard culminating in the 2012 Darth Vader series?
If there was anything that pushed the disastrous Volkswagen software rort off the front pages, it was this 50 years of brand equity built up by the brilliant, creative advertising.
A.G. Laffey when CEO of P&G recognised that the creativity had been stifled by the rules set in place by a right brained organisation. As a result, everything was stale and boring, as were P&G’s results. He removed the quantitative hurdles, and challenged their agencies to break the rules they had previously been bound by, and demanded that P&G marketing personnel became less risk averse. A new age of creative advertising supported by a tsunami of new products emerged. P&G doubled in size from the early 2000’s, $US44 to 85 billion revenue, increased margins, and earnings/share increased fourfold.
A few months ago in a SME workshop that had a decidedly older demographic, every person in the room knew the brand when prompted by: ‘you ought to be congratulated’. It is 35 years since Meadow Lea was advertised using that piece of creative genius.
Could AI have come up with that?
Header cartoon credit: Gapingvoid.com
Aug 25, 2023 | Branding, Communication, Marketing
Context. The word is ‘Context’
Marketing is a fundamental contributor to our commercial lives.
It is about defining and leveraging the value you create for another, for which they are prepared to pay, while not being about the transaction.
The beach and Heineken experiment as told by behavioural psychologist Richard Thaler describes beautifully the importance of context.
Two blokes on a beach, very hot, and desperate for a beer.
If they are told there is a shack a kilometre down the beach from which they can buy a Heineken, how much would they pay for the beer?
Same situation exactly, except the shack becomes a 5-star hotel.
The price they are prepared to pay for a Heineken from the 5-star hotel is roughly double the price they expect to pay for the same product from the shack.
This is a classic case of context and expectation; people expect to pay more for the identical product from the 5-star hotel than from the shack.
The utility they get from the beer is identical, only the context of the purchase is different.
How do you leverage the context in which your product is presented to potential customers to maximise your revenue generation?
Jul 7, 2023 | Branding, Marketing, Sales
A hundred years of practical experience and academic research proves that cutting marketing budgets during tough times is the worst thing you can do. Most do it, simply because it is easy, seems sensible to the uninitiated, and often prevents yelling from the corner office.
This provides great opportunity for those who hold their nerve.
Brands are built by having a ‘share of voice‘ greater than their market share over time. Brand building is a long-term exercise, which becomes cheaper in a recession, as others cut their expenditure, demand for advertising space drops, so does the price as a result, and your customer is more likely to see your ads in a less cluttered environment.
This is a strategic investment.
You should reduce the existing tactical, promotional deals if you can, as they are costs to the bottom line, not investments in your brand. You might get a short-term volume bump, but the added volume rarely replaces the margin lost from the discount.
Do the maths before you agree to the discount.
How much extra volume do you need from the promotion to recover the margin surrendered? Consider also the customers perception of the ‘right price’ for your product. Have you just lowered it?
You can cut yourself to oblivion, easily, while being clapped from the sidelines. Usually those clapping control access to consumers, as do supermarkets, or are those customers who would have been happy to pay more.
Do not miss the opportunity to build your brand while your competitors are hunkered down giving discounts in an effort to maintain volume, while destroying long term commercial sustainability.
Header credit Tom Fishburne at marketoonist, who very effectively pokes fun at marketing hubris.
Jun 28, 2023 | Branding, Communication, Marketing
No business I have ever seen has enough in their marketing budgets to do all they would like to do. Therefore, they often start cutting bits off ‘willy nilly’ to reach a budget that can be managed.
There is a better way: Basic marketing 101, which most SME’s ignore to their detriment.
What problem do you solve.
The more specific the problem you solve better than anyone else, and the more specific you can be about those who are likely to have that problem, the more able you will be to focus your limited resources productively.
It appears easy at first glance to articulate the problem, often it is way harder than it seems. The key is to articulate it the way a customer would, rather than the way you speak about it internally. That way you have a chance to avoid the drill or the hole confusion.
Your brand.
Those who have the problem and may be inclined to pay someone to solve it for them, need to be aware of your brand, and the offer you make that will solve the problem for them. You must figure out the best way to reach these people in such a way that you may be able to at least add your brand to the list of options they have for consideration. Preferably of course, your brand is the only one they consider.
Trust.
There must be a reason for someone to pick your solution in preference to others that may be available. If that reason is price, then in most cases you have already lost by winning that race to the bottom.
Trust is hard won, and easily lost, but plays a crucial role in any sales process.
For most SME’s doing more than one thing at a time is challenging, so they tend to throw money at all three without adequate consideration of the best options they have to leverage their small budgets. There are many service providers out there who have all sorts of creative and verbally attractive ways to spend your money, but very few will go to the trouble of walking through this minefield with you.
It is easy to be overwhelmed, most are.
However, thinking about the process in these three buckets offers the opportunity to weed out a lot of the ‘noise’, although it is not easy.
The line that trips many up, even those who spend the time to deeply consider these three buckets, is the breakup of the budget between the two very different types of expenditure inherent in the whole process.
First. The resources you spend to build the brand, such that when someone is aware of the problem and is in a mind to consider solving it, your name comes to mind.
Second. ‘Activation’. The tactical means you use to swing the choice your way at the point of the transaction.
The first is long term, and very hard to measure except with hindsight, by which time the horse has bolted. The second is more immediate and subject to at least a modicum of quantitative measures.
The starting point should always be your objective.
Is it to generate leads, is it to build brand awareness, is it to build trust, and where do all these, and other points in the customers decision processes overlap?
Playing cards by yourself is usually a way to win, but it does not translate into a real game. For that you need a real appreciation of the barriers to winning, and often partners.
Call me when you need a partner who inderstands the game.
May 8, 2023 | Branding, Marketing
It seemed impossible to ignore that piece of luxurious marketing content being rammed down our throats over the weekend, after a build-up over previous weeks. After Christianity, the British monarchy is the most successful, long term marketing program on the planet, and what a show they produced on Saturday!.
Like most, I watched bits of the coronation at a mates place, conveniently happening on a Saturday evening. Along with a large and sometimes noisy bunch of friends, piles of delicious nibblies and a mountain of spicey BBQ’d sausages, the debate over the relevance of the occasion raged. There may have also been a few lubricants. My friend and his wife were born in England but came here to escape to the good weather and to dodge the crushing burden of just being English. It was however a big relief when Charlie stepped under the big hat, indicating the excruciatingly boring but for some compulsive watching was nearing an end.
To some it may be interesting to recall that if it were not for deed polls (or the royal equivalent) Charlie Windsor would have been named Charles Saxe-Coburg-Gotha. That mouthful was the family name of his mother Elizabeth, changed to Windsor by her great grandfather King George V in 1917. That change was probably prompted by the fact that London at the time was being bombed by King Georges first cousin Kaiser Wilhelm of Germany, using the first heavy bomber capable of such a mission, the ‘Gotha’.
It seems a bit slow to change your family name from a German one to a British one after almost four years of war. Perhaps it was that Georgie did not want to upset his cousin any more than he already was.
I wonder what the Murdoch press would have made of that at the time. Ruperts father of course had been sending false reports back to George and his cronies from Gallipoli just two years earlier. Fake news reporting must run in the Murdoch family.
Families are often difficult, especially when the tree has grown in an environment insulated from any sort of genetic diversity, which perhaps explains a lot. It is however somewhat pleasing to see that apart from the inheritance of wealth and position at the tip of the artificial British social hierarchy, they are pretty normal. Broken marriages, sibling rivalry, affairs, seedy personal practises, the odd visit to barristers, grifters, and social media advisors, and the never-ending demands from people they do not know to donate money.
All good fun, and we finished the night watching ‘The Windsors’ on Netflix. If you haven’t caught up with it, hurry before it goes away. Satire to some is a documentary to others.
Vive le Republique!
