Oct 11, 2023 | Governance, Leadership, Marketing
These two words are often wrongly used as similes.
Complicated implies interdependence, you cannot pull it apart, and then put it back together in exactly the same form. Think of a knitted jumper.
Complex implies it can be simplified, much as you unfold a sheet of paper, then are able to refold it and end up in the same place.
Complex and complicated are at either end of a continuum, and rarely is something just complex, or just complicated.
Depending on where a situation or question sits in the continuum, you may be able to simplify somewhat, but not completely before you alter the form of the problem or task. It is rarely a binary choice.
Another way of describing this is the commonly used phrase ‘Think from first principles’.
Our brains have evolved a range of heuristics to deal with variables. However, depending on the people and the context of the variables, our brains can deal with only 3 to 5 at any one time before overload kicks in and confusion, procrastination, and poor choices result. By simplifying, we remove the need to consume cognitive capacity for those things we have classified as benign, to be allocated to the unexpected variables that present either danger or opportunity to us.
Simplicity enables optimisation, repeatability with little or no thought, as it is stable, and predictable. However, we are then tuned to miss the very things that can harm us, and sometimes offers opportunity.
Think about that first time you drove to a new destination. You are following a map or instructions, looking for street signs, and hazards of various types, you are concentrating on the drive. Now consider the same drive when you have been doing it every day for a while. The car seems to be on autopilot, and you are thinking of other things, only superficially aware of your surroundings. Your cognitive capacity is being used for purposes other than navigating you safely to your destination.
Therefore, the state we should be seeking is resilience. The fine line between optimised, but still vigilant to the unexpected variables and able to react to them in ways not locked into the way we did it before.
We need to be able to adjust quickly in a world of constant change, just to keep up.
Header credit: Hugh McLeod at gapingvoid.com
E&OE October 21. It has been pointed our to me that I got complex and complicated the wrong way around in the post above.
Dumb mistakes not picked up by editing do occasionally slip through. When you read the post, just reverse the meaning of the words Complex and Complicated. I considered rewriting the post, but am prepared to wear my mistakes, so left it as written. Also, I cannot help but wonder if Seth Godin saw the post, shook his head, and wrote a better one.
Oct 9, 2023 | Marketing, Social Media
Being able to market to a ‘persona’ the picture you build of your ideal customer, is a great leap forward enabled by digital. Our ability to define who buys our products, when, why, where, how, instead of what, and so on.
However, there is a flip side.
The flip is the customer, the real one.
They are not stereotypical ‘personas’ they are people, with homes and families, hopes, dreams, problems, prejudices, and challenges. They do not care about your marketing processes, how they fit into your profile, or where they are supposed to be in the ‘customer journey’.
They are people first, customers second.
Forget that simple fact amongst all the marketing tech tools, and you will lose them.
The fumbles in your process are not your customers problem. While they may like the convenience of you having some of their data, they are wary of having that privilege abused. They also like to be in control of their own lives, so be careful of denying them the ability to make their own choices as you pursue them, setting out to ‘catch and extract’ by a variety of means.
Choice is one of the few areas of our lives where the individual still has complete control. Compromise that, and it will not go well for you.
Sep 20, 2023 | Branding, Marketing
Many of my clients are SME’s whose businesses are localised in some way, usually to the boundaries of the city they are in. The budgets they have for marketing are limited, so they must make every dollar count.
A very common and deadly mistake they make is to not be aware of the distinction between ‘Sales activation’ and longer-term branding role of advertising.
They are very different, and impact your business differently.
I am old enough to remember the ‘Pink pages’ business directory. A phone book of all registered businesses in which you could advertise. Local shops, tradies, piano tuners, and hundreds of other types of businesses were listed. When you needed one, that is where you went to find them.
The pink pages is dead, replaced by Google.
You go to Google when you need to find something, today. Google does not sell anything beyond access. Other sites like Shopify and Amazon do sell stuff, but are focussed on the transaction, the immediate sale. You only go there when you are looking to buy, now.
Advertising is the opposite end of the stick.
Most of the times you see an ad, you are not in the market for that product or service. The objective of the ad is to be remembered, to leave a positive impression, so that when you are in the market, the product comes to mind as the saviour. In the jargon, you build up ‘brand salience’, the recall of the brand and the value it delivers when the need arises.
Local businesses cannot afford large scale media, so must be more creative. However, all the disciplines that large advertisers use to get their message across and embedded in the minds of their potential customers can be used. All come from the marketing 101 basics book, and often after a set-up cost, are then free.
Following are some of the advertising ‘media’ that have proved successful over the years in generating revenue for ‘Localised marketing’
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- Vehicle signage.
- Local sponsorships, such as the kids soccer team.
- Local collaborations. The shoe shop and dress shop jointly cross promoting.
- Testimonials from well-known locals, an even unknown ones who are identified as ‘local’
- Local social media.
- Branded collateral, from stickers, to fridge magnets, shopping bags, T-shirts and caps.
- Local signage,
- Participation in, and sponsorship of local events
- A ‘locally optimised’ website, and use of the ‘Google Business Profile‘. The GBP is essential, and free.
- And, the best of all, referrals from locals to other locals.
You do not need to be a large business to be a successful advertiser, but you do need to think about advertising with a different mindset to the usual ‘grab a sale today’ that dominates the thinking of most local businesses.
Header credit: Windows Factory. The branding of Windows Factory vans have paid for themselves many times over, just from people stopping them in the street.
Sep 18, 2023 | Customers, Marketing, Operations
When you want to improve something, find a metric that drives the performance you want.
Pretty obvious, as most of us subscribe to the cliché that you get what you measure, while remembering Einstein’s observation that not all that matters can be measured.
Ultimately, what the customer thinks is crucial to success. Therefore, measuring the performance in meeting the customers’ expectations is always a good place to start measuring your performance.
Amongst my favoured measures is DIFOT.
Delivered In Full On Time.
That means not only the full order delivered on the day it is originally promised, with no errors of any sort, from quality of the product to the delivery time and accuracy of the ‘paperwork’.
DIFOT is a challenging measure, as it requires the collaboration and coordination of all the functional and operational tasks required to deliver in full on time.
As you fail to reach 100% DIFOT, as most do most of the time, at least at first, the failures are used as a source of improvement initiatives.
There is very little more important to the receipt of that next order than your performance on the previous ones. Never forget that, and measure DIFOT.
Hand in hand with DIFOT, you should also measure inventory cover.
The sibling.
You can improve DIFOT by simply increasing inventory when selling a physical product. Demand is inherently difficult to forecast, as it is the future, and entirely out of your hands. The challenge is to prevent your warehouses multiplying, and clogging the operational systems. The ideal situation is ‘make to order’, the ultimate shortening of the order to delivery cycle time.
The most common and very useful measure of inventory is ‘Days cover’. How many days of normal, average, forecast sales, whichever you prefer in your circumstances, do you have on hand to meet demand? This measure is extremely useful on a ‘by product’ basis, but when applied as an average across multiple lines with differing demand levels, can become a dangerous ‘comforter’.
Counter intuitively, the products that cause the most problems are the smaller volume ones, and new products. In both cases, demand is harder to forecast. The swings from out of stock to excess inventory can be erratic, particularly when a production line is geared to the larger volume runs of an established product as a driver of operational efficiency.
To achieve a 100% DIFOT while controlling physical inventory over an extended period is the most difficult operational challenge I have come across. As a result, it is amongst the most valuable to keep ‘front and centre’. The twin measures of DIFOT and ‘Days Cover’ are a vital element in addressing that ultimate challenge of customer service.
Sep 13, 2023 | Innovation, Marketing, Strategy
Creativity comes from somewhere; the challenge is always to understand and manage the process and the people. This applies equally to every type of creativity, from painting, writing poetry, formulating the mathematical representations of our physical world, to designing a bridge or a house, or imagining something entirely new.
Creativity is never just a Eureka moment under the shower with no pre-work as the catalyst. It requires the frameworks provided by the pre-work to enable the catalyst to emerge.
For the pre-work to be able to provide a solid framework within which the catalyst can emerge requires years of study, experience, and lessons learned from the ideas discarded or failed, on top of the few that might succeed.
Specialise.
This leads to focus, and deep knowledge, and an ability to apply well above commodity pricing. When a service or creative product is in short supply, the price goes up. Creative people seek problems to solve, and ideas to explore, which is great, but counterproductive to finding the price that will optimise your time. Be committed to the niche, and the specialisation this niche requires will open the opportunities for other ideas and new problems to be solved.
Specialisation really only happens with the benefit of experience, which happens over time. Define clearly what are you going to do, and who do you do it for, and being very clear to both yourself and those in the market what you will not do. For SME’s this is always a very difficult series of choices to make.
By specialising, you also end up emasculating competition, as they cannot do what you can. For those who want what you provide, there is no option.
Address questions of money early.
We tend not to talk about money, it makes us uncomfortable, and creativity is very personal, not about money. However, making a living providing a creative product is why you are in business. You must be able to talk about it to make it, and talking about it delivers credibility.
Do not be scared of silence.
Nature abhors a vacuum, so the best way after delivering a ‘price-bomb’ is to embrace silence.
When selling, if you fill the void, you tend to say something that reduces the impact of the bomb.
It is uncomfortable, but you get used to it.
State the number and shut up. You will gain a lot of information from the silence. Often it saves yourself from yourself, while offering an ‘out’ for those potential customers looking for a commodity product and price to remove themselves early, before you invest much of your valuable time.
How to measure value in the conversation.
There is no easy way to measure value in a conversation, but there is no substitute to a conversation that seeks to find ways for people to exchange value, in whatever form that value takes. The answer is to discover sources of irritation, complexity, or desire the client would like to address, and propose ways to achieve that outcome. Therefore, identifying quantitatively the impacts of the problem, and the results of your solution will increase the value of your offer. The larger the problem being faced, the greater the value of the creative process.
Say ‘No’ a lot.
As Warren Buffet notes: the difference between successful people and really successful people is that really successful people say no to almost everything.
We all want more what we do not, or cannot have. Saying No increases the desirability of your offer.
Anchoring against desired guaranteed value.
If I could guarantee you an extra million dollars in profit, would you be prepared to pay half as compensation? This is a closed question, but it is an anchoring question at the high end of the range. You can work backwards from that, in terms of risk and the nature of the guarantee. This strategy is used all the time, often without us noticing. Energy retailers seem to be always guaranteeing savings on your power bills when you buy from them, knowing that few will do the measurement, and it is a hypothetical measurement in any event. This tactic can be used in many ways. For example, usually you cannot guarantee value when selling to a bureaucrat, as they cannot pay for value, they pay for certainty against a budget. Therefore, you can offer guarantees of delivery date, or performance, any factor that is quantitative.
Value is entirely subjective. At the heart of value is the trade, where you are both happy. Your costs have nothing to do with the value. People do not want your time, or your deliverables, they want the solutions to their situation that you can deliver.
To conduct a value conversation, you need to have the right questions, not the answers. Ask the questions, and the answers will evolve.
Header credit: Me. As you can see, graphic art is not part of my creative armoury.
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
