Sep 19, 2012 | Leadership, Marketing, Strategy
Strategy is about choice, which market, customer, technology, and so on.
Never has this black and white choice been so stark a challenge as in publishing, as the established operators struggle to find profitability in the electronic age.
Fairfax in Australia recently announced a record loss of 2.7 billion dollars, a continuance of their recent performance, on top of a series restructuring announcements and a precipitous drop in the share price over the last couple of years. They are not alone in the world of print media.
However, all is not lost. A few weeks ago I heard the editor of the “New Yorker” Henry Finder being interviewed on Sydney radio, a whimsical interview, but the astonishing difference is that the New Yorker is thriving in the new digital environment.
Instead of chasing the commodity, fluffy stories available anywhere, the magazine is going deeper into stories, rewarding readers with superior journalism and a range of views not available elsewhere.
They made a choice, not just to be different to everyone else, but to do it in a way that is consistent with the history and culture of the magazine.
My revered old mentor, Jim Hagler, scion of Harvard Square said to me almost 40 years ago “son, create a niche and then OWN it”. Jim had never heard of the internet, or the disruption it would bring publishing, but his wisdom still holds, and the New Yorker has listened. Wisdom has a context, but it remains wise.
Sep 17, 2012 | Management, Marketing, Sales
The web has disrupted the sales process, as well as just about everything else in our world.
Just think about differences between how the process works now, and how it used to work.
It now starts with a web search by a prospective buyer, after a team has identified the opportunity, scoped it, and developed specifications that need to be met, usually well before a salesman even knows that the prospect is in the market. The specs are then sent to a range of potential suppliers with a “request for quote” or some such phrase which really means give us your best price.
This all used to be the function of the sales person, to shake the trees, identify prospects, qualify and develop them through to a sale and ongoing supply relationship.
No longer.
Now it is the function of marketing to digitally “shake the trees” for prospects, then find ways to use the communication and marketing tools of the web to engage and qualify them, before turning them over to sales at the point at which they are about to become customers.
Many enterprises I see have not made the internal structural and cultural changes that acknowledge this disruption, and are failing to extract the maximum productivity out of their communicationand sales investments as a result.
Sep 14, 2012 | Branding, Innovation, Marketing, Strategy
The shape of Apple after Steve Jobs has been a source of much scribbling, and the launch on Friday of the newest version of its golden goose, the iPhone 5 has given us a peek.
The razzamatazz has been huge, Apple all over, but they delivered what the pundits view as a pretty limp offering. Nothing new, apart from a different case, and behind current offerings from Samsung and HTC on a number of parameters.
However, what Apple does deliver that nobody can get close to is profits. On $150 billion forecast revenues this year, Apple is delivering an astounding 28% EBIT, double a year ago, and considerably more on phones according to Creative Strategies Tim Bajarin. All this as their sales in a market growing at 42% are increasing at only 27%.
Apple has its own ecosystem, so to some extent is protected from commodity type comparisons that erode price, but how much of a premium can they sustain, and for how long? Googles Android operating system now has around four times the share of Apple, from “even-stevens” just a year ago, and Google spends 14% of revenue on R&D, to Apples 2%. In dollar terms, they are about the same, and Apple has less of a product portfolio to manage, but the tide of initiative is now with Google, and the momentum is really hard to break.
It seems to me that Apple is mortgaging their future, putting the dough in the bank, much as Microsoft did in its halcyon days, and not continuing the drive that got them where they are today. In a sharp reminder of priorities, Apple is spending big on protecting its current position by suing everyone standing in the tech space, which must be a huge distraction from the disruptive innovations created almost yesterday that put them where they are now.
Sep 13, 2012 | Communication, Customers, Marketing, Small business, Social Media
In a chook-house, there are both chickens and eggs, all mixed up, and hard to tell which chicken laid which eggs. It is a bit like the web, full of sites that could belong to any number of businesses.
As a part of a project a while ago looked at the sites of a range of operators competing in the market category in which this particular client operates. Most spruiked the features of their products and brands, what they did, rather than talking about the benefits that usage delivered, what problem the product solved, and why that solution was superior.
Why is it that the designers of sites seem to think that the most important thing to be said is what their product does, rather than designing the site to offer information that relates to the reasons why a customer may be seeking a product?
The old habits of printing a brochure and shoving it into every letterbox in reach die hard, and are being replicated on the web. A real pity, when the real opportunity is to target the offer to the individual who is attracted to look at the detail of your proposition because it engages them with something they want to know
Sep 10, 2012 | Change, Marketing, retail, Sales, Strategy
Would you rather do business with someone who knows a lot about you, and demonstrates they have your best interests at heart, or some stranger, enriching themselves?
Pretty obvious answer, so why do so few retailers seem to be able to respond?.
The ability to collect data is no longer much of a competitive advantage, everyone can now do it, the advantage has moved towards the analysis of the data, development of a customer proposition from the data, and most importantly, the capability to deliver on that proposition.
In Australia, both major FMCG retailers are busily copying international retailers, particularly Tesco in the UK. Tesco’s analytical and customer proposition development capabilities has driven the huge success of their category marketing initiatives. They have collaborated with researcher Dunhumby, leveraging the data emerging from their loyalty card to tailor their offers down to the level of to individual consumers, rewarding loyalty with compelling offers. The Aussie FMCG duopoly and other major retailers are still in the dark ages. The retail offer is still all about price, and a race to the bottom, but there has to be a limit, as costs are squeezed out of the supply chain at the expense of the weakest links, and on-line sales explode.
Tesco has, by contrast, moved beyond the numbers, and is concentrating on delivering to their customers, particularly their loyal ones, and the results over the last few years have been pretty good. They are managing by customer, not number, and other retailers have a lot to learn.
Listen up Gerry, stop whingeing as the business model that made you a billionaire becomes redundant, and make the changes that can keep the money rolling in by redirecting your efforts to your customers.
Sep 4, 2012 | Marketing, Sales, Small business
A modest sized marketing services agency I do occasional work for has an awards wall, where industry peer bestowed awards appear, a feature of most service agencies I have seen. However, theirs has two wrinkles
- Beneath each award is a further rating, done in collaboration with the relevant client that records the effectiveness of the ad/campaign, whatever it was, in the only awards arena that really matters, the marketplace.
- Campaigns that fail to win industry awards, which is most of them, are also subjected to their internal assessment of effectiveness, and they give it an internal award, and a spot on the wall.
As part of the effectiveness assessment underneath each award is a record of the assumptions, that drove the communication strategy, and their own internal award, the rating of which goes from “ratshit” to “not again” to “OK” to “dreamtime”. It also records what they collectively did right and wrong to deliver the result, and what they learnt that can be applied next time.
The wall provides a talking point, is a reminder each day of the reason they are in business, and how they are performing. Making performance transparent in this manner can be confronting, but time and time again, as I review best management practice, I see such transparency as a key success factor.
Oh, and another small wrinkle that sets them apart. They apply a pre-agreed sliding fee scale based on the agreed performance against objectives they set with their clients, so they always have skin in the game.
Clients love it!
