Feb 12, 2024 | Branding, Communication, Customers
Last week I provided a template for a Customer Value Proposition. The template works well, but ‘Customer Value Proposition’ is a piece of marketing jargon which just means making a promise to your customers.
This presupposes that you actually know who your ideal customers are, and what sort of promise would be attractive to them.
In the January February 2024 Harvard Business Review there is an article called ‘The right way to build your brand‘ written by Roger Martin and two Co-authors. The article sets out research that proves the hypothesis that making a specific promise to customers is more attractive than a generic claim of some level of excellence. The specific promise is about the benefit a customer will receive with use of the product. A generic claim to greatness is just about the product.
It does not surprise that the first is more powerful than the second.
‘Your promise is your strategy’ is a sub headline towards the end of the article. When you think about it, the observation must be right. Strategy is a process of influencing factors over which you have no control in such a way that the subsequent behaviour of the customers benefits your enterprise rather than an alternative. Making a promise of performance in delivering an outcome desired by a customer is about the strongest driver of short-term behaviour I can think of.
Delivering on the promise, will build trust.
Right at the end the authors ask four crucial but simple questions that can be used to determine if a proposed advertising campaign is worth investing in:
- Is the campaign based on a clear unambiguous customer promise?
- Were customer insights used to identify a promise the customers value?
- Is the promise framed in a way that is truly memorable?
- Were product marketing, sales, operations, and customer service involved to ensure the promise will be consistently fulfilled?
To me, this sounds like a comprehensive framework by which to decide if a proposed communication campaign is a worthwhile investment.
Feb 9, 2024 | Branding, Marketing
Almost everyone has trouble with this most basic of marketing jobs, articulating your ‘Value Proposition’. It is a simple statement of the benefit a customer gets from using your product, rather than an alternative.
Internally it also plays a role, in aligning staff and other stakeholders to a common purpose.
For …………….. (your ideal customer)
Who……………..(define the specific need, pain point)
Name……………(of the service or product)
Provides…..…. (The key benefit)
For example, the simplified Value Proposition for StrategyAudit might be:
For small to medium manufacturing business leaders,
Who do not have the resources to hire deeply experienced management,
Allen Roberts from StrategyAudit,
Provides that deep experience across all functional areas of your business on an ad hoc, part time, project, or on-call basis that is guaranteed to lift your profitability.
This simple template works well for just about any product or service.
It forces you to articulate why your ideal customer should deal with you rather than an alternative, and the value they will derive from that choice.
Generating the best possible value proposition is an iterative process. Rarely do I see the ‘perfect’ one emerge quickly. Often there are several that look OK, which can be tested and improved.
Feb 7, 2024 | Analytics, Marketing
Every customer segmentation exercise I have ever seen is based on geography, demographics, some combination of behavioural characteristics, or all of the foregoing.
‘Young women, 25-35, single, who live in the Eastern suburbs, earn more than 80k, and eat out a lot’ sort of analysis.
Misses the point.
There are five types of customers in every business I have ever seen
Unhappy. These will often tell you and anyone else they can grab, of their unhappiness. Usually these are users, rather than the ones who make the purchase choice. This means they can be a fantastic source of improvement ideas, but can also consume lot of your time with things that cannot be changed.
Satisfied. When a customer is satisfied, they go away happy and you rarely hear from them. The more time you spend understanding the drivers of their satisfaction, and doubling down on them, the better.
Loyal. This group of people usually quite small will not go anywhere else and will generally pay premium to you in the knowledge that you will not fail them. In effect, it is in effect a risk mitigation strategy for them.
Apostles. Apostle customers these are generally small subsection of your loyal customers and occasionally just a satisfied customer when conditions are right who are prepared to aggressively push your case to others in their various networks. These people are your best salesman and also your cheapest, although there is a cost get him to getting them to the point where they will proselytise on your behalf
Cheapskates. The fifth type, the one you can probably do without, is the one who dips in and out of your product, chasing the cheapest price irrespective of other considerations. It also seems to me from experience, that they are also the ones who complain a lot.
Think about it.
I am prepared to bet there will be nuggets of value hiding in plain sight you can use.
Header credit: My thanks to the exiled Scott Adams, and sidekick, Dilbert.
Feb 5, 2024 | Change, Leadership, Strategy
‘Going digital’ sounds easy.
Sadly, it is not.
Almost every company I visit or work with needs, to one degree or another to be aggressively moving down the path towards ‘digitisation’.
Just what does ‘digitisation’ mean?
For most of my clients it means automating some or all of the existing processes driven by bits of unconnected software and spreadsheets, liberally connected by people handing things over.
It is a mess, and there is not one, or even a suite of digital measures that will address the whole challenge, despite what the software vendors sprout.
The world is digitising at an accelerating rate, so keeping up is not only a competitive imperative, it is a strategic necessity. Never more than now as ChatGPT burst onto the scene, compressing everything, and making the ‘digitisation’ drive one of life and death.
On of my former clients is a printing business, an SME with deep capabilities in all things ‘printing’ that enabled the company to be very successful, in the past. Their capabilities are terrific, cutting edge, if we were still in 1999.
If I use them as a metaphor for most I work with, there is a consistent pattern.
- They did not see Digitisation as an investment in the future, rather it is seen as an expense.
- There was no consideration of the application of digital to their product offerings, beyond the digital printing machines, and services beyond those that made them successful 20 years ago.
- Their business model, beyond what is demanded by the two biggest customers, who between them deliver 34% of revenue, has not changed.
- They have not considered digitisation of operational processes, beyond a 25-year-old ERP system. The system has not been adequately updated, and they only use a portion of the existing capability.
- They have not modified their organisational and operational culture to meet the changed expectations of their customers, and the market.
No digitisation effort can succeed without the support of an operating culture that encourages ongoing change. Organisational processes can be modified by decree, but they will not stick. It takes everyone in the boat to be pulling in the same direction, in unison to make progress. This takes leadership, and a willingness to be both vulnerable internally, and a strong ability to absorb the stuff from outside. The leadership group must ‘get out of the building’. Not to smell the roses, but to see the lie of the land, and understand where the opportunities and challenges are hiding.
Coming to this point, where there is a recognition that change is no longer a choice, is where you are given one point out of a possible 10. Now you need to do something about it all to have a shot at the following 9 points. A daunting prospect for most.
The process has 5 easy in principle steps:
- Map the existing operational processes so you know what to change, and where the gaps/opportunities are hiding..
- Map and change the mindset of the people, so you understand the extent of the challenge.
- Take small and incremental steps along a path that all understand leads to a digital future, which means that a lot of collaborative planning has been done.
- Ensure that there are the necessary opportunities for all stakeholders, but particularly employees to grow and change with you. Those that choose not to, also choose to work elsewhere. There are no free rides.
- Ensure the resources of time and money are allocated uncompromisingly to the long-term outcomes. It is just too easy to put aside something that is important but not urgent, for something that may seem to be urgent, but is not important to the transformational effort.
As noted, since the public release of ChatGPT in November 2022, the time before the liquidator comes around for those who choose not to change has compressed radically.
Most, if not all SME’s beyond the digital start-ups now cropping up like mushrooms after rain, will need outside expertise.
Consider that help to be an investment in survival, not a cost.
Header cartoon credit: Tom Fishburne at Marketoonist.com
Dec 20, 2023 | Analytics, Marketing
This is an indulgence, but who cares, it is that time of the year.
I do not spend too much time worrying about numbers, this blog is my personal ‘journal’ of the stuff I am thinking about. If others get some benefit from that great, if not, nobody cares.
However, contrary to the above, there are some lessons for me in the numbers, and learning from the past, and improving is what it is all about.
The obvious skew in numbers that arises from posts early in the year having more time to gather readers than those posted later, has been ignored. Most posts see the vast majority of views in the first week or so, so timing should not be a huge influencer. However, there are a few exceptions to that rule.
Number 8 on the list is a post on the business model of supermarkets written in 2014. This has been in the top 10, usually the top 3 every year since. Number 7 is a thought starter on the budgeting process, that annually added job everyone except accountants hate, which was posted in January 2020. Every other post on the list is from 2023.
There are a few common characteristics of the top posts.
- Most promise a silver bullet of some sort in the headline. This may attract readers, but sadly, does not make the meat of the post any better. I can only hope that having been attracted, some might take some value out of the post.
- They are generally shorter than the average. This may reflect the focus and promise of the headline, or alternatively, I just did a better editing job.
- This characteristic is both a surprise and a worry to me. Apart from the two posts from previous years, and number 10 on the list, all have as a header a ‘Dilbert’ cartoon. Perhaps the presence of Dilbert is a strong motivator to readership? There was no intent here, and that correlation (or is it causation?) came as a complete surprise to me.
- Almost half the readers come from the subscription list, which is not big, about 35% from LinkedIn, and the balance from search engines, mostly from Google, but a surprising number from random engines. Readers come 70% from Australia, next biggest is the US, followed by (presumably) taxi drivers in Mumbai looking to emigrate, and a few from places I have to consult an Atlas (remember those) to find.
- Linkedin attracts a varying number on the platform, from a few to in some cases many thousands. The ‘views’ which misleadingly just counts the number of feeds a post has been shown in, bearing no relationship to being read, varies between a few, and many thousands. I only take account of the number of comments and reposts as an indicator of value, with a lesser value on ‘likes’. Linkedin discourages links leading off the platform by sticking offenders in ‘Linkedin gaol’, meaning they squeeze the algorithm so fewer people on the platform have the chance to see it. Suffice to say, I expect my gaol sentence to be ‘life’.
- As I run my eye down the full list, there is an increasing number of posts from previous years, some delivering very regular cadence of readership, years after publication. This is gratifying, and indicates that unlike a newspaper, a useful blog post is not just tomorrow’s fish wrapper. One that does continue to amuse is ‘Public Sector Flatulence’ published in 2013. It can go months without any readers, then suddenly, and suspiciously coincidental to some politicians brain-fart, it generates a bunch of views, and the odd comment.
For those interested, the list from top to number 10 is:
The simple choice marketers must make.
Plans never reflect what happens, so why bother?
The single key to great success.
Enduring culture change demands action.
The easiest and most effective way to build carbon emission compliance.
How to maximise the return from your investment in sales personnel.
5 Key factors to consider when planning your budgeting process.
3 essential pieces of the supermarket business model.
Equity or loans: The entrepreneurs funding dilemma.
The two key building blocks of strategy.
Thanks to all my readers, have a safe and merry Christmas, or whatever it is you celebrate (a valued friend is a Hindu, and Hindu’s traditionally marry on the last Sunday of the month. Guess what he and his wife of 30 years are celebrating)
Note: Given the number of links in the post, Linkedin will send me to their gaol for life, ensuring as few as possible casual lookers get to see the posts. So, please encourage those who might be interested to subscribe on the StrategyAudit site. That way they can continue to have the chance of seeing the outcomes of my addled musings.
Header courtesy of Dilbert, and Scott Adams, again. It just seemed right.
