Feb 5, 2013 | Governance, Management, Marketing
This is definitely not referring to the pallet of old brochures gathering dust in the warehouse, although most businesses still seem to accumulate them.
I am referring to the sales leads, data bases, prospects, active conversations, existing customers and relationships, that together constitute the marketing inventory. When you think about these things as “Inventory”, an asset, you instinctively consider the means by which you generate a return, as that is what you do with assets.
The similarity of marketing inventory to physical inventory is that you can use the same sorts of measures for marketing inventory that you use for physical inventory, pretty much broken into the sorts of categories that Lean inventory management would require:
- “Flow” and Balance through the system of leads, prospects, active prospect, execute the sale, they are essentially “how many” questions.
- Conversion rates from one part of the system to another. Conversion trends are valuable pointers to both tactical success and emerging problems.
- Velocity through the system. As in physical inventory, the quicker the better, whilst maintaining flow and balance.
Considering the sales and marketing effort in this way encourages a sensible demarcation between the functions, and generally removes the argy-bargy that often happens. Importantly, it focuses attention on the cost and return analyses that enables resources to be used where they generate the best return. Having your expensive sales force out doing cold calls with a 1% hit rate now makes no sense, as the process has been completely disrupted by technology.
Jan 26, 2013 | Governance
Today is Australia Day, January 26, 2013.
As I watch what is going on around me, I see a lot of frenetic stuff, the hype at the cricket, crowds of people carrying “Australia” bags, hats and eskies, Pollies offering platitudes for a sound-bite, and many group BBQ’s at the local park.
All good stuff, but should there be more?
The Australia now is a vastly changed place to just a generation ago, and my grandfather, a digger who spent a vacation in France in 1917 simply would not recognise it, although he bled for it. We are a polyglot nation, remarkably able to absorb and celebrate difference, now removed from our European roots and finding a way in Asia, wealthy in many ways, but twitchy and suspicious of those we do not know, and authority, and nervous about the future.
We are like a kid who realises he is now alone in the world, and has to stand up for himself, but is not too sure how to do it.
So what will we look like in another generation, by 2050?
I suspect the things that seem to occupy our minds now will mostly be seen as trivial excursions by then, and we will be paying a high price for ignoring the things that are important but not urgent, at least in the minds of those supposed to think about these things for longer than an election cycle. The education of our kids, and their kids, real education, to think, question, and be prepared to defend a conclusion, our research capability, both public and private, and the capacity to commercialise that knowledge, the selling off of our national estate, and the determination to dig up everything, flog it at commodity prices, and import the manufactured product as our own manufacturing capability withers on the vine.
As Australian day 2013 closes with another display of fireworks and platitudes, we Austalians should stop and think, project ourselves forward 50 years, and ask, “what do we want the place to look like?’. Then, for a change, lets demand that those visions become part of the public debate, not sidelined by today’s celebrity nonsense.
Jan 25, 2013 | Governance, Management
If I hear the sporting team metaphor once more this week, I think I will spew, although I have often used it myself over the years.
I’ve been contributing to a sales conference this week, listening to some intelligent, well thought out stuff from some surprising corners of the business, some crap from a few who should know better, and endless sporting analogies.
Lets examine the sport team metaphor realistically, looking for the shortcomings that are rarely mentioned:
• Sporting teams have a set number of players, and your ability to maintain a “bench” is limited. In contact sports, there is usually a few all-rounders who can be used as substitutes, but in most, what you start with is all you have. What would happen in a business if you could not adjust capabilities and numbers on the fly to respond to unforeseen circumstances?
• Sporting teams conduct the contest within a well known and understood set of rules by which each side complies. Try telling your competition to play be a set of rules agreed beforehand.
• A sporting contest takes place at a set time, in a set place, and has a set duration, and if you do not turn up, you lose. Fundamental to the commercial contest is the “faking” of the opposition to get them to expend resources doing something that can deliver them no benefit, and if you can do that and not even have to turn up, so much the better.
• Sporting teams know who their opponent will be next week, and the week after, have a pretty good idea of their capabilities, so therefore can train specifically to address the challenges as they arise in a predictable manner. Not so in commercial life, and just because you beat a competitor last week, does not mean they will not come back at you in an unexpected way tomorrow, not even waiting for Saturday! Sneaks.
The list goes on, but the point is that metaphors are great, they illustrate a point, but they do not provide a template, just a lesson.
Jan 21, 2013 | Change, Governance, Lean, Operations
The maths are simple, do more with less, and you have more left over at the end.
Productivity is not just something you aim for in the factory, the opportunities to do more with less are everywhere, in every activity undertaken.
The catch in all this is, when you identify the opportunities, free up the capacity by doing more with less, and figure out how to make the necessary changes “stick”, you have a choice to make:
- You remove the now redundant resources, and pocket the difference, or,
- You sell the added capacity that is already “paid for”, so you get the added revenue at an enhanced margin.
Sounds seductively easy, but in fact it is a tough road, littered with challenges, and nasty potholes for the unprepared.
Dec 18, 2012 | Change, Governance, Management, Social Media, Strategy
Like most newspaper groups, Fairfax has failed to evolve to accommodate the depredations of the digital revolution. Their business model is broken, and the way forward is unclear.
The one spot of light in a gloomy future was the NZ auction site “Trade Me” which Fairfax bought for $700 million in 2006, then floated 34% onto the ASX, and a further 15% last year, raising $422 million, leaving them with a 51%, share which they are now selling for $616 million. The proceeds of the sale, are being used to pay down the debt accumulated to keep a redundant business model alive, offering an opportunity for it to change before being terminal.
Trade me was delivering profitability, superior return on funds, and an important toe in the digital water, but is being sacrificed to keep the legacy business afloat while it tries to adjust. In addition, Trade Me, along with Fairfax’s other less prominent digital assets offer the opportunity to experiment, test, to learn how to survive and compete in the digital environment.
The lesson in all this is that if you do not cannibalise yourself, somebody else will accommodate, and the pain of chewing your fingers will pale into insignificance against the pain of being chomped around the waist by a white pointer. The irony however is that the only digitally sustainable asset in the house has to be sold to buy some time, but leaves the business without any significant cash generator in the digital space. At least Fairfax shares rose yesterday, so directors are probably happy this morning.
Dec 7, 2012 | Governance, Sales
We are all pretty familiar with the typical sales funnel, wide at the beginning, narrowing progressively as you get closer to the “business end”. It is a simple, descriptive metaphor for other than an impulse or regular consumer purchase, but like most models, rarely reflects reality.
Prospects come into, and leave the sales process at all points, and then often come back, for all sorts of reasons that have nothing to do with the efforts of a sales/marketing program.
Given that is the reality, it follows then that the relationships that evolve are far more valuable than the position of any prospect in the sales funnel, as it is the relationships that evolve that enable lead nurturing and recycling through the irregular, stuttering, and often unpredictable sales cycle.
A much better metaphor in many cases may be a game of snakes and ladders, but that is nowhere near as neat and tidy in a board paper.
