The cost of a fact free media

The cost of a fact free media

Jan 29, 2019 | Communication, Governance

EEEERRRRHHHHH

Excuse me, I just threw up on myself after being assaulted by another ad by a fat billionaire exhorting me to ‘Make Australia Great Again’ by voting for him and his dodgy party.

That nasty experience got me wondering about the nature of advertising in the digital world.

While we have people in Canberra who still think that regulating for diversity in media ownership is a thing on which they should  be spending time, Google, Facebook , and Alibaba (the latter almost exclusively in China) have sucked up 62% of the worlds digital ad spend of US 327 billion, last year.  Bringing up the rear is a rapidly improving Amazon, aggressively chasing a bigger share of this largess. These huge numbers leave what is left of the rest of the media, particularly the ‘old media’,  scrabbling to pay the rent.

The owners of the ‘Old’ media which interrupted me with the ad that started this thought are no doubt pleased to have the fat billionaire as a paying customer. Their priority is to  get the dollars in any way they can, to pay the rent, not make judgements on the veracity of the claims made by their advertisers. Facebook also faces this problem of fact neutrality, magnified geometrically by the reach and ‘stickiness’ of the platform, combined with its capacity to target and deliver messages to a very specific audience . 

However, our society has been built, at least to some extent, on the foundation of a free and diverse press that has the funds and bottle to be the ‘policemen’ of the standards and performance of those in power, political and corporate.

These media businesses have largely disappeared in the last decade, overwhelmed by the shift of advertising dollars, the foundations of their business, to digital outlets.

This has left the place without any police.

Look no further than the 2 recent Royal Commissions for any evidence you may need. If it was not for Kate McClymont, and a very few other investigative journalists with a passion for the truth, and the now defunct Sydney Morning Herald, these two rocks would not have been kicked over. The roaches hiding underneath would still be free to engage in their brand of hyper-hypocrisy, with most of us unaware of their corrosive and immoral activities.

Advertising funded investigative journalism via a neutral and responsible press is almost dead in this country. Without it we are deprived of the major driver of publicly minded behaviour.  We want, and need corporations to be publicly minded, to act in the best interests of  the community they serve. However nice those words may be, the officers of corporations are charged with the responsibility to deliver shareholder returns, and generally they do so without reference to the long term public good. The corollary is that personal agendas, and greed,  also get a very solid run.

We have conferences and forums where these corporate officers and politicians tell us what they are doing for us. However, the reality is they are mostly reading from a PR script, while attending a firefighting conference that only invites arsonists.

Advertising is increasingly becoming a tax on the poor, those who cannot afford to pay to be ad free. All this does is add weight to the confirmation bias we all have by removing any contrary voice that we may have seen and heard in the past.

That emasculation of media, the demise of a broad based, investigative and community minded press has consequences for the amount, type and quality of public debate, none of which I like.

Cartoon credit: Hugh McLeod at gapingvoid.com

Australia Day 2019

Australia Day 2019

Jan 25, 2019 | Leadership, Personal Rant

Comes around quickly doesn’t it!

Tomorrow!

2018 was a pretty ordinary year, with the revelations of the Financial Services Royal commission after the government was dragged screaming to the table, sandpaper making its (public) debut in test cricket, utter chaos and turmoil at all levels of Australian politics, house prices in Sydney taking a dump, and my previously resilient 92 year old mother being verbally bashed and left babbling by some scammer bastard on the phone demanding money.

2019 should be better, after all we are Australians.

Sometimes I do not know what that means any more.

As I look forward, I am filled with cynical anxiety at what is becoming of the Australia of my childhood, now long gone.

We can look forward to being molested by politicians and aspiring politicians over the next 3 months, desperately applying layers of lipstick to whatever pig turns up  that day in an effort to  buy our votes. The prevailing sentiment seems to be ‘to hell with them all’ as it relates to the major parties, but then you have the loonies, amongst a few gems turning up as independent options. I suspect a few will find themselves elected, then have to check where Canberra is located.  So much for the intelligent, long term and visionary policy planning we so desperately need in a whole range of areas affecting our daily lives, and those of our children and in my case, grandchildren.

On top of the politicians, we have the usual suspects bleating about the date. ‘Jan 26, Invasion Day’ seems to be the core issue. It is perfectly reasonable that a number of the descendants of the indigenous people  of the late 1700’s feel aggrieved, but let’s be serious, it was 220 years ago, and even if we pull it forward 150 years to capture the appalling, by our current standards, treatment of  indigenous people up until recently, it is still in the past.  The argument about Australia Day does not have to be a binary one. It is the day everything changed, for better or worse, let’s just get on with continuing to build resilient communities and a caring, successful, inclusive nation.

We all wait with baited breath for the announcement of the Australian of the year. Last years AOTY Professor Michelle Simmons was inspired. How she got through the selection processes that strongly favours male sports stars who have not yet featured in the popular press for bad behaviour is beyond me. Perhaps a sign of maturity in the selection panel? Hopefully that level of maturity prevails again this year, and we honour someone who has made a real contribution, rather than just being well known.

Have a great day tomorrow, enjoy the barbie a few beers and your friends and family, but also give some consideration to what you want this country to look like, and how you can make a contribution.

Happy Australia Day!

Header cartoon is from the ‘First dog on the moon’ series in the Guardian. Rarely politically correct, always biting!

How to quantify your Customer Value Proposition

How to quantify your Customer Value Proposition

Jan 21, 2019 | Customers, Marketing, Sales

 

 

The value proposition to a customer is the means by which you converted them to being a customer.

Unless you can demonstrate value to them, in excess of any alternative, including doing nothing, you will not convert.

When you think about it, there are some pretty consistent variables that can  be massaged into some sort of quantification of a proposition. While it will never be perfect, it will be better than nothing when assessing the power of your marketing collateral, or perhaps assessing alternative wording.

Having a powerful value proposition is not enough, you must communicate it clearly and effectively to those who may be interested. You also must understand that ‘Value’ is a qualitative term, and will change with context and circumstances.

There are 7 variables I commonly see:

  • The strength of the purchase intent of the lead. This will vary enormously on a whole series of parameters, and will vary from time to time. For example, a need expressed to convert IT processes to the cloud from your own server might be a good idea, whose time has come, but when your server blows up, the need increases geometrically. The better you understand the drivers of the purchase intent the better able you will be to make a judgement,
  • How closely your proposition matches the need being expressed. When you are trying to sell a 4X4 and the lead is a single bloke who hates camping, you will have a challenge on your hands. Better to offer him the sports car.
  • Differentiation. When you are the only one in the market niche, selling to those who need your product becomes easier. When you are one of a number of undifferentiated alternatives, price becomes the major distinguishing factor, and that is never good. Conversion becomes a race to the bottom, and the greatest risk is that you win too often and go broke.
  • The clarity of the value proposition to the lead. This is where most fall down in the execution. Look at 100 websites, and see if you can locate the value proposition. While we are learning, the clarity of the proposition to a visitor to a website, which is now the first port of call in almost every purchase beyond the regular and mundane, will be terrible. The key to remember is that the lead, after reading the headline copy on the site, must be able to tell you why they should buy from you, and not someone else, assuming they are in the market you service.
  • The level of friction in the sales process. Increasingly as we go on line, friction in the process is becoming more and more important. Off line purchasers are increasingly expecting on line frictionless processes. In B2B sales, the friction is often institutional, the bureaucracy of procurement simply gets in the way. Effective Key Account Management is essential in these circumstances.
  • The incentives used to counter the friction. Most often financial incentives are the primary ones used, but tying them to another is common, for example ‘this special lasts only until Sunday’ or ‘Only 5 left’
  • Uncertainty caused by the purchase process. Human psychology seeks safety, and that resides in the known, and with the crowd. Asking a lead to do something different increases the risk to them, and the riskier they perceive the solution, the less likely they will be to convert.

So, to the equation.

Conversion potential = Purchase intent + need satisfaction + Differentiation + proposition clarity + (process friction – incentives) + uncertainty.

The way to put numbers on each of these parameters would be to weight each of the parameters in your particular circumstance, then score your lead on a 1-5 scale. The ‘w’ in the formula is the weight you give to each of the variables.

CP = wPI +wNS +wD + WPC + (wPF – wI) + U.

As an exercise, look at your own landing page and score it as a potential customer would when seeking a solution to an itch.

Image credit, again, to Gapingvoid.com

Modern Marketing’s dark underbelly.

Modern Marketing’s dark underbelly.

Jan 14, 2019 | Change, Marketing

 

On hearing the term ‘Modern Marketing,’ most would immediately imagine something digital.

That was my intention.

Marketing used to be about delivering meaningful information to potential and current customers in order that they become or remain customers, despite the flirtatious approaches of competitors.

The more appealing the information,  the greater the chance of some sort of engagement that might lead at some point to a consummation.

Bit like the University bar in 1970, when I was young(er).

Advertising used to be, and still is a crucial component, however, this is where it has changed.

Advertising in my day used to be the means by which the information was communicated.

In todays marketing, advertising is often the way people are identified, tracked, stalked, and targeted for  offers, sometimes genuine, sometimes outrageous, increasingly fraudulent, and usually unwanted.

This is the dark side of the digital advertising component  of modern marketing.

I have yet to hear anyone complaining that they do not receive sufficient numbers of unsolicited digital offers.  

No wonder we do  not trust anyone or anything anymore.

While it is counter intuitive, limiting your ‘digital reach’ to those who have actively demonstrated they welcome your approach, will become a valuable tactic. By ‘actively demonstrated’, I do  not mean just filled in one landing page email address to access a lead bait, I mean meaningful interaction.

Back to the Uni bar.

There was one rather unprepossessing bloke we all made some fun of, as he would sometimes turn up with a bunch of flowers. His ‘transaction’ rate was impressive indeed, and few of us ever figured out how that was the case until much later.

Perhaps being truly generous with our knowledge rather than demanding an email address in return for some valueless rubbish is the new digital bunch of flowers.

 

The 11 point program for scaling your business.

The 11 point program for scaling your business.

Jan 8, 2019 | Change, Leadership, Strategy

 

Successful scaling of a business is not luck, nor is it just good management, it is way more than both.

It is having the leadership capacity that enable all those in the business to consistently and willingly take action that collectively, over time, compounds into growth greater than that available from just doing what you are doing now a bit better every day.

It takes leadership, because this stuff is hard.

Good managers manage, leaders define what it is that needs to be managed, when, and how.

Over 40 years of working with this challenge, it seems to me there are some common traits amongst those businesses that successfully scale, all originating with the leadership.

None of the following can be taken in isolation. as they all contribute to each other. There is a synergy you need to find that is necessary for scaling, as distinct to improvement.

To scale, you need to change what is done, and how it gets done, rather than just improve the way in which things get done. There is a quantum leap in this seemingly minor semantic difference.

 

Have a genuinely stretch goal

Scaling a business requires change, which is uncomfortable, so there must be a very good, well communicated reason for the discomfort to be imposed, with a specific outcome. Often this is now called a ‘BEHAG’ a term coined by Jim Collins in his book ‘Built to Last”. In it absence, nothing will change. The most obvious example is President Kennedy’s 1962 commitment to land a man on the moon by the end of 1969. You have to find, communicate and commit to your metaphorical ‘man on the moon’ goal.

Underneath the BEHAG there must be a strategic plan, broken down progressively into its tactical components in order to deliver the goal.

 

Alignment.

A much used and abused word, but absolutely necessary.  Every person, and every persons activity has to contribute meaningfully to the strategies in place to deliver the objectives, irrespective of the time frame of those objectives.  Without some sort of overriding objective towards which every person and activity can be looking, the outcomes will be suboptimal.

The metaphor I always use to describe alignment is that of a rowing eight, training towards a major championship, for example the Olympics. Every training session, every activity of each of the eight who will be in the shell, as well as their support staff, needs to be looking towards that goal of winning that medal. Everything that is done needs to be judged by the simple criteria of ‘will this add to winning that medal’?

 

Strategic Ambidexterity.

Let me explain this idea of strategic ambidexterity.  Every small action taken has to be a part of a larger action that builds into the scaled outcome. Any individual is easily distracted in their daily lives by the urgent but not important things that arise. Allowing those distractions to consume time takes away from the objective of scaling. Therefore, the focus of every person has to be on the one thing today, tomorrow, this week, month, quarter, and so on that has to be achieved in order to achieve the scaled target.

If you were to set out to run a marathon under 4 hours, you would  not just start trying to run the 42km from day one, you would fail. You would break your training down into pieces, each one building on the last towards the objective. You would have a range of daily sessions, building into weekly and monthly targets that would eventually result in the successful completion of the marathon. It takes time, dedication, and a dual focus in getting every small step completed sequentially, while recognising that each one builds progressively towards the objective.

Engaging your supply chain partners and customers in the process adds to the power of the process. It is like having specialised trainers and suppliers of equipment contributing to your overall program. As success builds, you will find that they want to come on board, as everyone wants to be part of a winning team, which further builds momentum.

 

Operational rhythm.

Every activity and set of activities can be managed to have some sort of operating rhythm. In most cases it is unrecognised and unmanaged, so is not optimised. The most obvious example is the annual budget setting process most businesses go through. This normally happens in some sort of regular order and manner, to some sort of timetable. It is also in most cases I have observed, an addition to the routine set of activities, and is therefore an imposition rather than being a key part of the business management and development process. Similarly, the process to turn an order into product will follow some sort of routine that follows roughly the same set of steps every time. However, in every case, without an explicit and transparent process that has performance measures and associated management in place, the process will inevitably ‘wander’ being subject to change for many reasons. Process stability, noted below is essential for a predictable and consistent operational rhythm.

 

Accountability.

Ensuring clarity of accountability  for an activity, item, and process is essential to performance that can be measured and improved. Without accountability, a problem will always be someone else’s problem. Accountability, responsibility and authority often become entangled in ways that leave the improvement and scaling of any set of activities challenging.

Accountability means that someone is specifically held accountable for the activity or set of activities. That person is accountable to track the progress of the activity, process, function, whatever it may be, and give it a ‘voice’. If you cannot nominate one person who is specifically accountable, it will fall through the cracks. Responsibility falls on anyone who has the ability and opportunity to respond to proactively support an activity or process. Anyone who ‘touches’ a process has some responsibility. Authority belongs to the person with the final veto power.

For example, in a previous life as GM of a large organisation, I had authority over the expenditure of marketing budgets, product managers had accountability for  the specific activities that took place in their brand portfolios, and we all had responsibility to ensure that the customers who bought our products were serviced in a manner that had them coming back for more. 

The question ‘how can I be held responsible without the authority’ is often asked. The answer is that ‘it depends’. Everyone has the responsibility to manage their own activities on a daily basis, and be held accountable for the outcomes, but as you move up a corporate ladder, it becomes increasingly challenging to maintain the link. The more senior you are the more you will be held accountable for things over which you have less and less direct control. That direct control is held at lower levels in the organisation.

The key to making this all work is to thoughtfully and consistently delegate. This requires that you pinpoint the job to be done, have a system of interlinking KPI’s, and that there is explicit and transparent performance feedback and management of both the process and those held accountable for the components of the process.  

 

Stakeholder engagement.

All stakeholders, and most critically, employees need to be ‘engaged’ in the objective of scaling a business. To go back to the metaphor of the rowing eight, if one oarsman is not concentrating, and is therefore slightly out of rhythm, the performance of the eight will be critically compromised. That out of rhythm may be created by the training regime of the individual, the maintenance of the oar, and many other specific sources that together add up to the sub optimum performance of the eight when engaged in the race.

 

Clear, unambiguous and valuable personal purpose.

Again to refer to the rowing eight. Every member of  the crew and support staff know the purpose is to compete in the Olympics, and to do everything possible to win. To every person, the goal of winning is a personal one, as well as one that motivates and directs the team, and to every person, the goal provides a deeply personal objective upon which they can focus all their efforts and emotion.

It is no different setting out to scale a business. If the employees see the objective of scaling as being one that will enrich the proprietors  and shareholders without  anything in it for them, why bother. The purpose has to be one with a ‘higher calling’ that delivers something very personal for everyone.

 

Performance transparency.

No improvement project, let alone one that requires scaling can be successful without a roadmap provided by performance measures to show progress, identify weak spots, and offer alternative perspectives.  The greater the level of transparency the better able will the whole team be able to buy into the program.

Performance transparency  has a number of faces. It covers individual, team, and corporate performance measures, from the perspective of both the internal KPI’s and the external ones that will impact on the manner in which the enterprise competes. These external KPI’s are those factors that impact performance, but over which the enterprise has no control other than being aware and able to accommodate and when possible leverage them.

 

Process Scalability.

It is a fact that as enterprises become bigger, the degree of complexity increases as the number of people, teams, functions that require co-ordination and alignment grows. With size comes complexity. The essence of a scalable management infrastructure is simplicity and conquering complexity is a challenge of leadership as well as the management of the processes themselves.

The tool that works best in my experience is to document all processes. This enables the process to be applied consistently irrespective of the person working it, and is the basis for  improvement, without a starting point that is stable, no process can be improved.

 

Marketing.

Everyone is in marketing. From the CEO to the lowest level support staff, everyone has a responsibility to be an apostle for the business. Word of mouth, personal recommendation, whether it be by clients referring you to prospects, or your employees telling their friends what a great place it is to work, remains the most effective form of marketing. All that comes after is in one way or another a scaled version of that first person marketing.

Scaling marketing is not a matter of posting some cat photos on Facebook. It is a disciplined process of communicating your value proposition progressively to those most likely to be future customers, and retaining those you already have. It is very easy to blow huge resources under the banner of ‘marketing,’ but like all things worth doing, it is not as easy as it sometimes seems, requiring clarity of the value proposition, an ideal customer persona to be served, and a product and service mix that is both differentiated and valuable to customers.

As marketing is exercised externally,  the potential for misdirection and complication is significant, so focussing attention on the productivity of marketing expenditures is a key to being able to successfully scale.

 

Cash.

Growth, let alone scaled growth, are voracious consumers of cash. Proactively managing your cash resources is essential. From time to time borrowing may be necessary, but when it becomes necessary to keep the day to day activities going, you have over-reached, and quick remedial action s necessary.

 

Without wishing to belabour the point made in the intro, the absolutely essential ingredient is leadership, without which scaling will not be possible.