Oct 19, 2011 | Customers, Marketing
Peter Drucker often condensed seemingly complicated concepts into pithy quotes of the blindingly obvious.
One I came across the other day is “There is only one profit centre that counts – customers”
It seems this statement of the obvious is often lost in the razzle dazzle of bullshit and self serving, non value adding nonsense that inhabits many organisations.
Next time you are faced with a pile of the aforementioned internal stuff, ask yourself a few simple questions:
“what would a valued customer think about all this?
“Would my customer see this as an activity that they are prepared to pay for?
“How does this impact on my customers experience with the product and organisation?
Pretty simple questions, but answering them and acting accordingly will radically increase the productivity of your marketing expenditure.
Oct 18, 2011 | Change, Customers, Management
One of my clients is in a pretty difficult spot.
Having lost a major contract, simply on price from an offshore based competitive supplier to his supermarket customer, he finds himself in the position where his overheads will eat him alive quickly without very painful commercial surgery.
Over a period of time we have been discussing the Quality of his sales Vs the Quantity of sales, but assembling and allocating the resources to execute a change in the customer base has proven easy to say, very hard to do.
It is fine to obsess about the sales revenue line, but rather than just consider the quantity of sales, the quality is just as, if not more important. Had the volume he did with the supermarket been spread around 3 customers who were less likely to go offshore looking for a better price, even accepting the higher transaction costs, he would today be far better off.
Many businesses, particularly service businesses like insurance and Telcos factor in customer churn, and spend lots of marketing dollars to replace the customers they will lose through poor service, pricing, competitive deals and so on. Directing a small percentage of those dollars to better engaging with and servicing existing customers to reduce churn would be far better.
It is the quality of sales that should be measured, not just the quantity.
Oct 14, 2011 | Customers, Management, Personal Rant, Small business
It seems that new ACCC chief Rod Sims is getting serious about the reality of the power of the two major supermarket retailers.
At the same time, Andrew Reitzer MD of Metcash is giving the ACCC a headache over his presumptive execution of the purchase of Franklins from Pick n’ Pay before the Federal court had ruled, simply on the basis that the business was bleeding cash, and the transaction had to be done, even at the risk of the consequences of an adverse finding.
An interview by Alan Kohler of Reitzer and the accompanying commentary give a great insight into the thinking behind the only real alternative to the power of Coles and Woolworths.
The overwhelming power of Coles and Woolworths has nevertheless not stopped the evolution of niche retailers like Harris Farm, competitive regional supermarkets like Drakes and Ritchies, and market entry of Aldi and Costco. The downward pressure on purchase price has however wrecked havoc on the Australian food manufacturing sector, with very few left, and those that are in pretty shallow water, with the only really large domestically owned manufacturer left, Goodman Fielder performing poorly.
I can only hope that in the new environment of more aggressive review of the retailers, that the plight of the domestic manufacturing sector is adequately considered.
Oct 4, 2011 | Communication, Customers, Marketing, Sales
Dave Winer, one of the earliest bloggers, prolific web publisher, and a key developer of the RSS technology so many of us use daily, has made many pithy statements worth remembering, but I was reminded of one over the weekend as the silly GASP customer complaint “thingie” went viral.
Dave opined “if you don’t want me to slag off at your product, don’t have a shit product”. A retailer sells goods, but the service is a part of the offering to customers, so irrespective of weather or not a purchase is made, it is in the retailers interests to have them leave with a smile on their face.
The dresses at Gasp may be worn by so called stars, but the failure by the self proclaimed sales superstar to recognise that individuals can now extract a substantial revenge for poor service via social media should ensure his superstardom is exercised elsewhere, perhaps serving petrol at the local Woolies where he cannot do much damage to his employers brand.
Oct 2, 2011 | Customers, Marketing, Personal Rant
Earlier today, Sunday, about 4.45, just before the League grand final kicked off, I got a phone call on my mobile from Optus. Well, sort of phone call, it was an automated call, some recording telling me they had something important to talk to me about, and it would only take a few minutes. Once we got that far, the call was ended.
There are plenty of ways for Optus to connect with me, to market to me, after all, I have all my services with them, despite being “stiffed” recently by them, changing is all a bit hard, and the others are not any better anyway, so I just swallow hard. Like most of us.
These clowns spend millions on “marketing”, TV, radio, magazines, social media, spin doctors, franchising sales outlets, call centres, the whole 9 yards, but they clearly do not have any idea about marketing, they just know how to spend money on media.
Using an automated service to ring a customer and ask for his attention on a Sunday afternoon, any Sunday afternoon, but this one? to talk about “something important,” presumably to their revenue, beggars belief.
You could not make this stuff up!! How stupid can they be??
Sep 23, 2011 | Communication, Customers, Innovation, Small business, Social Media
Ask a SME manager in packaged goods, “would you like a phone call from Woolworths ordering stock of your new product for every store in the country?” and you will most likely get a tear with the nodded head.
Enter the “Orabrush” story, they got the call from Walmart without any of the usual begging.
There are many hurdles for SME’s in the packaged goods industry to jump before distribution in the major retailers can be obtained, and then the problems really start, because SME’s lack the resources to move the product off shelf before the trial period runs out.
Social media has helped over the past couple of years, you now have the opportunity to reach highly targeted groups of consumers, and deliver them a message, but generally it has not helped much to get the product on shelf in the first place.
Orabrush really broke the mass market model with a product I still find odd, but great creativity and lateral thinking combined with social media has turned the product into a hit, and can now be found in Walmart stores around the world
Have a look at the Youtube ads in the link, gems.
