(Cross-posted from LinkedIn. Please connect there to get more like this.)
In recent times wannabe contrarians have embraced their love of failure – often pointing to entrepreneurs who have failed spectacularly, learned their lessons and then went on to great success. JK Rowling may have started it all with her TED talk in 2008, and even the psychologists agree.
It is not so much that failure is a ‘good’ thing.
The simple truth of the matter is that it often does not matter what we do as much as it matters that we do something. Maybe a better title to this piece would have been “The benefit of doing something”.
The sub text is that anything is better than nothing – even if it leads to failure.
There are a few arguments to support this contention:
1. Law of Unintended Consequences.
2. Complexity of Achieving Behaviour Change (statement of the bleeding obvious).
3. Predictable Irrationality of human decision-making.
Summarising all of the above leads to the inevitable conclusion that, for practical intents and purposes, it is near impossible design and deliver a human intervention that involves many people in order to achieve a predetermined outcome.
This is illustrated very clearly with the ‘Hawthorn Effect’:
The experiments took place at Western Electric's factory at Hawthorne, a suburb of Chicago, in the late 1920s and early 1930s. They were conducted for the most part under the supervision of Elton Mayo, an Australian-born sociologist who eventually became a professor of industrial research at Harvard.
The original purpose of the experiments was to study the effects of physical conditions on productivity. Two groups of workers in the Hawthorne factory were used as guinea pigs. One day the lighting in the work area for one group was improved dramatically while the other group's lighting remained unchanged. The researchers were surprised to find that the productivity of the more highly illuminated workers increased much more than that of the control group.
The employees' working conditions were changed in other ways too (their working hours, rest breaks and so on), and in all cases their productivity improved when a change was made. Indeed, their productivity even improved when the lights were dimmed again. By the time everything had been returned to the way it was before the changes had begun, productivity at the factory was at its highest level. Absenteeism had plummeted.
The experimenters concluded that it was not the changes in physical conditions that were affecting the workers' productivity. Rather, it was the fact that someone was actually concerned about their workplace, and the opportunities this gave them to discuss changes before they took place. (Extracted from The Economist – my emphasis)
For example, consider the following ‘failures’:
- You may want to run an awareness campaign in your company to increase safety awareness – but it results in a rise in complaints about unsafe working conditions.
- You have a serious talk with your team about discipline and putting in the hours, attending meetings and being on time. Instead of them being negative and feel reprimanded as you feared, they get to clear the air - resulting in positive climate change in the office.
- Giving people performance bonuses but instead of it being motivating, it raises the sense of entitlement.
- During an office relocation when everybody had to spend a fair amount of time on ‘housekeeping’ matters and services were disrupted, sales actually increased.
There simply is no accounting for human behaviour. When put under stress some people rise to the occasion and others wilt. When lavished with attention, some avoid the scrutiny and others feel more engaged.
The same logic can be extended to initiatives like:
- A re-branding exercise
- A corporate re-structure
- A merger
- Decentralising the procurement function
Most readers will be well aware of how corporate warriors will jump through hoops creating business cases, project maps, task forces and the like to develop and implement these solutions.
And then if you are lucky enough to survive the round of retrenchments, a few years on you will find that the re-structure must be undone, and that the acquisition must be sold and the procurement is better off being centralised again.
It may seem like the epitome of bureaucratic waste to do and then undo the same initiatives in a never-ending oscillation.
The simple answer is that there is no right answer to any one of those business/ operations/ management conundrums. Whether a certain function is centralised or decentralised does not matter. Whether the company is going through a ‘specialisation’ stage or a ‘diversification’ stage is just the strategy cycle.
What matters is this: the company is doing something; anything really, as the workers in the Hawthorne factories taught us. Any project will do. Any initiative will energise. Any strategy will do the job of making us feel we are working towards something.
Along the way the project will be more or less successful, but that matters nought, since there was no way to predict the outcome of a complex system anyway. All that matters that we are doing something, constantly engaging with our work and the people we work with.
A little bit of luck will determine whether there are more little wins or little losses adding up to success or failure in the long run.
But that we will not admit to each other. Just delude ourselves that we are in charge and prepare the business case accordingly.
Did you know …
- Coca-Cola began as a pharmaceutical product.
- Tiffany & Co., the fancy jewellery store company, started life as a stationery store.
- Raytheon, which made the first missile guidance system, was a refrigerator maker.
- Nokia, who used to be the top mobile phone maker, began as a paper mill.
- DuPont, now famous for Teflon non-stick cooking pans, Corian countertops and Kevlar started out as an explosives company.
- Avon, the cosmetics company, started out in door-to-door book sales.
There must be some lesson in that.
FOR THE SME: If things don’t work out as planned, there is always a plan B.
FOR THE ENTREPRENEUR: Launch quickly, iterate rapidly and pivot to a more viable business model.
FOR THE CONSULTANT: With good strategic planning, a company can be steered in the right direction.
FOR THE MANAGER: Even with the best resources at their disposal (including research) anyone can screw it up.
Maybe I am wired different, but when I look at these cases, I learn completely different lessons:
For each example listed here, there are tens of thousands of companies who stuck to their knitting and failed, and just as many examples of companies who stuck to their core and succeeded.
I post these thoughts to share with you dear reader ONE very important truism:
It is extremely dangerous to rely on one example of someone who ‘has done it’, one example of a company that did things ‘a certain way’ – or any ONE explanation of why something succeeded.
Go into your nearest Dymocks and look at the shelves full of books by authors on the topic of success. Everyone has a recipe.
One guy will tell you to ‘Be a Maverick’ (ex Pepsi), one guy will tell you to ‘Be Paranoid’ (ex Intel) and one guy will tell you to follow ‘these 7 habits’; not to mention a book a year by Richard Branson telling you to ‘standout from the crowd’.
I could go on, but you catch my drift.
The same goes for (and especially so) for business people who have made a success of something and then offer advice about that.
- They can tell you what they THINK has made it work for them – and they may be wrong.
- They can only tell you what they think has made it work for THEM – and it won’t work for anyone else.
The internet is rife with examples of entrepreneurs who made it big, who sold out and then write the books and goes on the speaking circuit. I challenge you to name the number of entrepreneurs who have made a similar success twice, and I am confident that in the world there will only be handful. How many CEOs have backed up their successful tenure at one company with an equally successful tenure at another? Just a handful in the world.
This may be the most pervasive success myth ever: if you want to be successful, learn from the successful.
- Other people’s success is not your success – copying their ‘approach’ at best a starting point.
- There is no ‘secret’ – the recipe for a successful business is well-known.
This seems counter-intuitive, right? It SHOULD work.
But it does not. So let’s turn to that trusty terrain of the sporting analogy.
The most successful coaches are (extremely) rarely the star players of yesteryear. I have looked at a range of sports, but for this example I will use the Australian sport called Rugby League. The only very successful coach that was also a bona fide star of their era is Mal Meninga of the Queensland State of Origin team. (I am sure you can argue about the star power and coaching success of say Ricky Stuart, but the fact that it is subject to argument already disqualifies him.) Meninga on the other hand has won 7 series in a row – at the highest level and in his playing career he was the National Captain and had the most caps of any player and made the Australian team of the century. (A US equivalent might Yogi Berra of Baseball fame.)
Of the 100s of coaches, there is one that qualifies clearly. Even then his coaching credentials can be questioned because it just so happens that his tenure coincided with having the best group of players of this generation playing for his team at the same time. But let’s not get petty.
Despite this dismal track record of star players to perform as coaches, clubs continue to offer them first dibs on plum coaching gigs.
By the same token, the coaches who have impressive track records may have played the game, may even have been good players, but often weren’t stars of their teams.
(Of course, being an average player, does not mean you will be a great coach either!)
To stretch the analogy even further.
When a coach is successful, other coaches adopt their strategies, which eventually nullifies that particular strategy because everyone uses the same strategy and they learn how to play against it week in and week out.
The really successful coach never copies another successful coach, they work on building a game plan that is unique and gives his team a competitive advantage.
From this analogy, I want to emphasise two things.
- What made you successful as player, does not make you successful as coach.
- What makes one coach successful is not worth copying, because in the long run a successful coach needs to carve his own strategy that suits your personal preferences and your resources.
Every successful outcome is the product of a unique set of circumstances, a range of complex processes and countless, dynamic human interactions.
To attempt to seek success by copying someone else a poor strategy, and it is even worse investment of time to read about it.
Success comes from doing your own shit. Maybe.
This presentation by Ross Dawson (Futurist) captures a number of trends. There is some good stuff in there, including case studies to be explored.
I am of the opinion that 'drone delivery' is much hyped, but completely nonviable, principally for safety & security reasons.
And here is a copy of a presentation I gave (a few years ago in 2011) just to compare and see how I stakced up...
LET ME KNOW YOUR THOUGHTS
... is not what you think
I have had an A-HA moment…
The reason why so many industries/ professions are in trouble is not because of changing technology. The industries/professions that are struggling to reinvent themselves are the ones that were structured to achieve profit and prominence AGAINST human nature.
All that has happened now is that technology has ENABLED consumers/users to wrestle back the power and force the change in that industry/profession to REVERT to the natural state.
In practice what happened is that industries built business models where the source of revenue was separated from the actual value sought by the consumer.
Let’s consider three examples:
1. Journalism/ Newspapers: everything free online
People want to know what they want to know. People don’t like to be bullshitted. People don’t want to be used and treated as eyeballs.
Newspapers have traditionally used journalism (relevant, true) to attract, but made their money by exposing the reader to other things where they (the industry) can make money.
The revenue source has no relationship with the consumer value.
People still want all those things like truth, information etc. And now they can get it mostly directly from each other. Technology allows them to curate and filter based on what they have always wanted.
The original opportunity for this sector remains in real journalism that is worth paying for. (The economics may be different, but that is the only sustainable response to the fundamental human need.)
2. Education: access to information and knowledge universal and free
Dropping out of college has become a badge of honour amongst entrepreneurs.
Academic institutions are considered out of date and most curricula are both irrelevant to the context of the current market, and irrelevant to the learner’s specific needs.
People can now find online all information they need to do anything and even better, someone who will help them and train them often for free or for a fraction of university costs. People will learn what they need to and may be motivated by an intrinsic desire or by force of circumstance and don’t typically see the value of being taught within an institution.
People want to learn what they are interested in learning when they want to do so, AND the test of relevance and competence is the real world, not a classroom quiz or exam.
Most people will recognise that familiar refrain: I went to university to get a piece of paper. What they wanted was the ‘accreditation’ or certification of their ability, not lecture hours.
The revenue source has no relationship with the consumer value.
Universities are losing their monopoly gradually at present, but in 10 or so years they will start approaching a tipping point towards complete oblivion – unless they can pivot.
Some professions (law/medicine etc.) are artificially maintaining a closed shop with the assistance of governments, as are the governments themselves by mandating secondary education within their system. Not for long.
The original opportunity for this sector remains in objective assessment of knowledge and skills.
Marketing/ Retail: unlimited choice, instant determination of true value
This profession has thrived in the past because it controlled so many elements of the offer that it dictated all terms in the relationship with the consumer. This has led to a sales orientation. Even Theodore Levitt’s seminal insight in 1963 did not change that because the so-called marketing orientation was simply a re-phrasing of the activities that existed in order to sell more stuff.
Consumers don’t want to be sold to.
They don’t want you to sell them by ‘serving’ them. They don’t want you to sell them with a USP.
ANYTHING you do that will help you sell stuff has always been resented, but now technology has provided them with an alternative that is easy, cheap and powerful.
The remaining opportunity for this sector remains in finding ways to help the consumer to buy.
What consumers/users want is to buy stuff that,,.
Your challenge is to complete that sentence with YOUR product/service.
It is a completely different mindset to selling stuff. You must become a meaningful part of the customers’ lives without ending up like the annoying uncle at the family BBQ who wants to sell insurance to everyone.
The recipe for any industry being challenged by the transformative effects of online/ e-commerce and the connected world is pretty simple.
Find out what it is that consumers really want (and wanted all along) and attach value to that and charge for that value fairly.
Oh, wait. That isn't a recipe. It is just marketing.
Customer Acquisition, Retention & Engagement by turning your Organisational IP into Marketing IQ.
I was interested to know from retailers on the frontline where they were at with their eCommerce integration. My personal experience was that it was generally woeful, but I wanted to ask a broader group of people. Recently we conducted a survey in conjunction with eReady Partners and the findings were quite interesting.
We found that whilst e-Commerce is already having a measurable impact on 91% of Australian SMEs, only 54% have developed their own online business to the point where they can process an online transaction; with 46% of this group acknowledging that they still lagged behind their more e-Savvy competitors.
Already almost all (91% of respondents) reported that e-Commerce is already having an impact on their traditional business.
Of the respondents who were already generating online sales, almost half believe their online business lagged behind their competitors.
The vast majority (73% of those who are active) are spending less than $2,000 per month promoting their online business. (We believe that, despite the common misconception that it is ‘cheaper’ to run an online store, the reality is that there are many types of expenses that traditional retailers would not have considered before embarking on the journey.)
To summarise the findings:
Almost every retailer is affected, only half have started to do something about it an almost all of those are not doing enough.
(Participants will receive a copy of the findings via email if they opted in to do so. Others who are interested can get a copy from eReady Partners.)
The implications are profound:
1. You are behind: Traditional retail is allowing pure-play eCommerce retailers to stake their claim on these new gold fields, which they are doing at rapid pace. Of course, those pure-plays then integrate backwards and start opening in physical locations to create the omni-channel experience.
2. eCommerce is not a trend (as I said last week) here on Inside Retailing.
This raises the question about what to do and here is a simple action plan to get you started:
It is a constant learning process, because the technology is changing. Attend seminars, subscribe to blogs, subscribe to newsletters, engage consultants, ask your coach and buy books. However it is you learn, target these topics even if you feel uncomfortable about it now. (eReady Partners is scheduling quarterly updates that many will find useful.)
Start taking small steps – and here are the first 5 for you.
1. It is a constant learning process, because the technology is changing. Attend seminars, subscribe to blogs, subscribe to newsletters, engage consultants, ask your coach and buy books. However it is you learn, target these topics even if you feel uncomfortable about it now. (eReady Partners is scheduling quarterly updates that many will find useful.)
2. Start your Twitter account. You don’t have to say anything, just listen and learn.
3. Stake your claim on the social media sites and platforms to ensure you own your brand/ domain name as soon as possible. This includes at the very least: Facebook, Instagram, Pinterest, Vine, Tumblr, your blogging CMS and Youtube. (Here is Wikipedia’s list of top social media sites.) You can use NameChk, to see if your username/ brand name is available on most sites in a single glance. You may not use all these sites immediately, but at least you own your real estate.
4. Get your Google house in order, including claiming ‘authorship’ on Google for your blog, your Google Analytics account and so forth. (Having a free GMAIL account is very useful around the net and I use one to subscribe to newsletters instead of my business email. Google is SUPERB at keeping spam at bay, and it is much safer to use that email for (what could be) dodgy website subscriptions.
5. Make sure you have a simple, static website at the very least. Put your ‘SHOP’ button on it too even if you don’t have an online shop. Give customers a ‘coming soon, give me your email to be advised when we launch’, message and TRACK the number of clicks. (That is a basic way of testing interest in your offer.)
All of this should be done by Friday (except #1 which is ongoing). If not, I will come to haunt you…
GANADOR: Don’t out-sell your competitors, out-teach them & you r clients will love you for it.
Below is just one video from a series by the good folks of IDEO. Go here and watch all the videos. The site is called Made int eh Future.
It will be the best 20 minutes you have spent online this month.
PS: The site design is ULTRA cool too...
HT Neil Perkins
This is the stuff failure is made of.
Myth #1: An online business is cheap to run.
In our survey (findings to be published here next week) we found three quarters of retailers who are already trading online are spending less than $2,000 per month promoting their online business. When you want to stake a claim online, your marketing spend is also the rent you pay.
An online business is not cheap. It has low barriers to entry and low(-ish) CAPEX to get started; but that does not make it cheap.
The bigger you want the business to grow the more you have to spend. The amount of money you spend is proportional to the amount of money you make. There are a few exceptions for very early adopters or innovators, but let’s face it that won’t be your business.
If you only want to dip your toe in the water, you can’t surf the wave.
Myth #2: All you need is a website and off you go.
Launching a website is like selling cold drinks from your caravan in the Outback. Everybody may want one – if they could find you.
The estimate is that there are close to a million eCommerce sites in the US alone. If you consider that this would include sites like Amazon and eBay and so forth which suck up a huge proportion of online spend, then you get the idea that the online world is a really big mall and your shop is going to be down a side entry near the toilets. (Amazon is estimated to account for over 20% of eCommerce sales.)
Setting up the website is the easiest part. If you are struggling through this process right now, you may find it disheartening to think that it will only get tougher. But it very much is like raising kids.
You may think giving birth is the hard part, but it only gets harder.
Myth #3: My key to success is to replicate my offline business into an online version
I have called omni-channel a pipe dream, for the very reason that most retailers want to simply replicate their business online.
You may have a successful boutique in Terrigal, St Kilda or Cottesloe where you sell a great range of designer labels at a good price with great service. You may THINK you are successful because of that, but that is not the full story.
The truth is you are successful because you are the only boutique selling that range at that price in that suburb.
The problem is when you go online, all three of you (and a thousand others) will be selling the same stuff at the same prices, and your location does not matter any more.
MOST independents survive/prosper because their location is their only Point of Difference – which is the one thing the internet makes redundant.
Myth #4: An online business is easy money – you make money while you sleep.
It’s a business (unless you treat it as a hobby) and any business takes hard work. If there was easy money to be made, there would be a million people ahead of you in the queue.
You DO make money while you sleep, but the business also NEVER sleeps. While you are sleeping you may be making money, but you are also receiving complaints, running out of stock, having traffic issues etc.
You must create a business model that is capable of dealing with a 24/7 cycle, and it really isn’t easy. (Re-read this post on the Digital Jungle and study the graphic to get a sense of the complexity.)
Myth #5: I won’t be affected by online retail.
This one is not so much a myth is wishful thinking,
Morgan Stanley estimates that eCommerce sales will double to more than one TRILLION dollars by 2016. And it won’t stop growing either.
You can choose to be part of it, as long as you are realistic and smart about how you go about tackling the opportunity.
Next week we will share the findings AND give you simple action plan that you can follow to get started.
Ganador: Helping you help your clients.
11 Things retailers need to get over
I discovered this great video where a guy gives advice to kids about life. I posted it as a Friday Funny – because it is funny, but there are also some uncomfortable truths in the advice doled out. (“Your parents do have a favourite child. If you don’t know if it is you, then it is not you.”)
In the same vein, some home truths for retailers facing up to this new age.
Ready to be confronted?
- You don’t have great customer service. 99.9% of companies deliver poor service and you are one of them. You are not the exception to the rule and you probably never will be. (You may be if you spend more on customer service than you do on marketing AND you pay at least 10% over the market in wages. If you think I am harsh, consider this: 90% of North American firms view customer experience as important or critical and 80% of firms would like to use customer experience as a form of differentiation. [Forrester’s: The State of Customer Experience 2010.] If these are their PLANS then they are NOT there today, right?
- You don’t own your brand – your customers do. (The idea of brand management is therefore an anachronism). At best you are a custodian, and custodians act very differently to owners.
- If you don’t manage your data you don’t manage a business, you are playing shop.
- You can’t have your cake and eat it. (You want to pay minimum wage, and you want great staff. You want the government to butt out of your business with less red tape, and you want government protection when the overseas competition arrive…)
- Online is not going away. EVER. Embrace it or …
- The landlord won’t reduce your rent because you are struggling, they will reduce your rent if there is a business case for them (not you.) They don’t run your business and they don’t have equity in your business.
- No amount of marketing, PR, differentiation, service et al will ever beat quality or competence. There is no substitute for products that work as intended and services that deliver what is promised. (You really can’t fool all the people all the time – especially now.)
- The fact that you don’t like customers, shows. Customers know what you really think and feel and you kid yourself if you think otherwise.
- Sales incentives don’t incentivise your staff IF every other aspect of the job sucks – including the way you treat them and the conditions they work under.
- Unless you are doing something different every year, then ten years’ experience is really only one year’s experience ten time over.
- Stop selling and help your customer buy. Yes, even if it means ‘losing’ the sale today and pointing them to a competitor or alternative.
Customer Acquisition, Retention & Engagement by turning your Organisational IP into Marketing IQ.
If you ask me if I would rather have lunch with Queen of England or Dick Smith, I would pick Dic. Hugh Jackman or Gary Vaynerchuck? Gary by a long shot.
Gary is the quintessential entrepreneur: part innovator, part shyster. I love his work...
He may crash and burn one day, but the beauty is that he will never NOT come back for more.
Today marks the 7th Anniversary of this blog. I guess it gives me permission to talk about us - for a change. And I thought I would share our strategy/ business model and the evolution we experienced. That is our gift to you - maybe you can get something from it. (Because it isn't really about us.)
We started out with a plan to replicate the business model we operated with when we had our own business - Quiver Enterprises. From the name you can deduce that we wanted to have many arrows in our quiver, and hence we offered a range of services to a very specific target market.
Initially this included: training, consulting, mystery shopping, publishing and marketing. We strengthened our training capabilities with the establishment of an RTO (Ganador Business Academy) and gradually dropped the marketing & publishing. (We produced text books that were adopted by several TAFEs and RTOs in case you were wondering how publishing fitted in with our other work.)
Our grand plan was to achieve two things over time:
1. We wanted to increase our online offer and be 'in play' with all things ecommerce. (I was co-founder of a startup (something like realestate.com.au) for the commercial property sector in 1997 - before most people even had email.
2. We wanted to reduce our reliance on project work and establish recurring revenue streams.
Over time things changed a bit as we became more familiar with the opportunities :
- we 'pivoted' our business away from sourcing SMEs as clients towards the big end of town
- we closed the RTO because of the onerous compliance regime required for no commercial benefit
- we broadened our market focus as we increasingly focussed on the whole of supply chain (from manufacturer/ importer all the way through to the retailer interacting with the consumer)
- we narrowed our offer to focus on the systems/skills/strategies that helped our clients acquire, retain and engage their own customers. Specifically we focus on 'customer education' as the cornerstone philosophy that underpins our activities.
In early 2013 the last few pieces of the puzzle fell into place as we finalised our last key alliance that allowed us to offer the BEST IN CLASS SOLUTIONS to support our innovative strategies.
Many casual readers might think that Ganador is (still) a retail consultancy or even a retail training company. Although we may engage in those activities, we are not that ‘type’ of business.
Our customers are often not retailers, but organisations that may have retailers as customers. That is our clients are also those Businesses who have other Businesses as customers. Organisations in need of B2B (management) solutions in the (retail) supply chain turn to us for strategies, skills and tools just as much as Retailers do.
The problem we solve is that of Customer Acquisition, Retention and Engagement (CARE) – and those customers can be retailers, consumers, members, franchisees and the like.
The reason our particular ‘solution’ can reach B2B and B2C ‘customers’ is because we are focused on one particular approach that hones in on one particular human attribute.
We are therefore a specialist agency and there are many tactical solutions that we do NOT deliver. We don’t create advertising or PR for instance - which achieves similar objectives.
The best strategy (and the one we specialise in) is the delivery of customer education – because it is a very attractive and relevant offer to most customers. (Business customers and consumers are all people and all have similar innate needs – and the need to be informed, the need to grow and develop and achieve success is universal and fundamental.)
We have arrived at this strategy because our philosophy is that people inherently want to learn and enjoy learning. Of course we are not talking about class rooms and text books. The current focus on CONTENT MARKETING is but one facet of customer education. Content can also be about entertainment for instance, but even entertainment (e.g. a good movie or a short YouTube clip) can also be educational.
Customers who are educated about your product and service are more loyal to your product because they have made an emotional investment in your brand.
This is one of the reasons why people become fans of products like Apple or keep buying a BMW every time they get a car. There is comfort, convenience, less risk and also productivity benefits from sticking to the same product and brand.
We help those businesses use their IP (Intellectual Property) as an effective Marketing Strategy. We call this Customer Education: from IP to IQ.
All organisations and brands have a tremendous amount of intellectual property contained within. Organisations do not realise this.
Consider the following simple facts:
- If you are a manufacturer of watches, you know a LOT about watches – much more than 99% of the employees of retail jewellers.
- You also know much more about your brand and why consumers may wish to engage with it.
- Retailers and their employees must know a little bit about many different watch brands, and in addition also about various types of jewellery and even gift lines, as well as of course the intricacies of retailing and its specific requirements.
- The watch manufacturer knows very little about the environment in which their watches are sold
- They know very little about how to best sell the watch and how consumers may compare and make decisions in store except through some (very limited) second-hand research
There is an obvious knowledge/experience gap.
BOTH PARTIES benefit from becoming more knowledgeable about each other and that is the service we provide.
What we do may sometimes look like training or consulting. Sometimes it may look like a user manual and sometimes it can be a sales script.
Whatever we do, it always has the same objective: to educate a customer/client/member about a product/brand/offer. Because when the very simple homespun truism is that, if your product is any good, that “to know me is to love me” comes to fruition. And what better outcome than clients that love you?
We conduct a series RetailRemedy Seminars on behalf of a client for selected customers.
The program is very much in the mould of ‘Burke’s Backyard Blitz’ – but instead of us rolling in our team of experts, we actually make it an interactive workshop tapping into the expertise of the attendees and get them to provide the solutions. We do a before and after workshop and at the ‘reveal’ workshop, the business owner shares the learnings and also the financial impact of those changes implemented.
The RetailRemedy workshop has direct financial benefits for our guinea pig newsagent, but all attendees learn and go back to their store and implement lessons learned. The client gains, their customer gains - everyone wins.
We may get called in by a landlord to assist with a 'critical tenant'. They are of course trying to do the right thing and the retailer is usually trying to do the right thing.
When I start the diagnostics process, the answer is usually quite obvious - and very often the centre manager has identified the issue and the retail tenant admits it readily. Ignorance is NOT the problem.
The most value we add is not only in identifying the problem and recommending a solution, but in repairing fractured relationships and educating both parties about the issues, challenges and realities the other party faces.
Working together towards the desired outcome is my aim. The strategy relies largely on educating both parties.
it may look like consulting on the surface, but at its heart it is 'customer education.'
I hope that explains what we do a bit better. The challenge we face is that both words (customer + education) are loaded words and each person reads and understands both of those elements differently.
(PS: I will be interested to see how this language suddenly start popping up in our competitor's websites and literature. It doesn't matter to us - we don't have many direct competitors, and besides, the knowledge and experience we have can't be too easy to replicate.)
You heard here first: Customer Education is the new Marketing.
We started doing this about 5 years ago and for the last two tears it has effectively been our platform, so we KNOW it works.
Your takeaway is this:
STOP SELLING AND START EDUCATING YOUR CUSTOMER
I will be talking more about this in future blogs, so if you are not subscriber or knows someone who is interested, send them this way.
Helping us gain more subscribers could be your little gift to us on our 7th birthday - please share....
Of course we do the face to face thing. But as you know, technology is part of every business if they want to have a future-proof business model.
In our case it is SMARTCLOUD.
We constantly craft the message and the brand and the image, and how to best visually represent it.
The PRODUCT itself can be visually explained as per this image.
What I need your assistance with is our new business cards.
I am thinking of using some GAPINGVOID art for the back of the business cards.
I am tossing up between the following two:
(Hah – see what I did there… a bit of innovation testing. C’mon talk to me…)
PS: Let me know what you think about SmartCloud too...
...think before you sign up for ‘Buy Local’
Buy local or shop local campaigns abound. The NSW state government even has a special page on their site to tell you how to do it. (If that is not a sign that that you should be concerned, then I don’t know what is.)
By the same reasoning, a ‘buy local’ campaign cannot save a decrepit retail precinct by a misguided appeal to the community to ‘shop local’.
Every struggling town and every decrepit retail strip has such a campaign, or has tried one or wants one. These campaigns are often instigated by a number of stakeholders who rarely recognise their flawed motives which make for poor execution.
How does one reconcile ‘begging’ customers to ‘do the right thing’ with sound marketing? Is there even an example where begging has been a successful way of growing a business? (It may help you survive, but hardly prosper.)
The mind boggles at the condition of the local high street generally and the trader’s stores specifically. The lack of investment in infrastructure and (more often than not) crappy service and over-priced merchandise is obvious to all but the campaigners.
Often a local council sees fit to waste taxpayers’ money in a misguided attempt to save the economy and to protect their rate base. If the Reserve Bank (or even a Government) can’t save an economy, why do the local councillors think they have special powers? It probably happens because it makes them FEEL better and gives them something to TALK about come election time; but neither talk nor feelings will change anything.
Whatever the motivation and however deep the pockets, it is almost always a bad idea to launch such a ‘buy local’ campaign - at least the way these programs normally get launched.
Consider this campaign in Gladstone. All the ingredients are there: Awareness. Advertising. Customer Service. Etc. In addition, they may even throw in the shopping bags and a funky street map. (I am looking YOU St Kilda Village.) What do you think are the chances of making it being a success?
I am guessing slim to none, because the most important ingredient is missing: What are the local traders doing to make it worth THE CUSTOMER’S while?
Of course raising awareness of the offer is important. I even promote an APP that will do that for you. (And good onya for trying Gladstone.)
But that alone is not sufficient. In fact, the more successful the campaign to attract people to a poor offer, the quicker the demise.
People don’t buy elsewhere because it is more expensive to buy locally. Whilst no one wants to be ripped off, you don’t have to be the cheapest. Only ONE product in every single category will classify as the cheapest. Few of the things in the world that you or I buy will be classified the cheapest.
I don’t buy because it is local, I buy local because you have what I want.
Making things worthwhile for me – the local shopper – is about making me feel special. I am the customer; it IS all about me, so make it about me.
- Love me… (Yip, serve me as if you actually love me; because whilst there will always some commercial prostitution, most customers want the real thing.) Love is the killer app, as Tim writes in his book.
- Make yourself interesting and different – which makes me feel special for interacting with you…
- Make your shop a nice place to spend some time – which makes feel special…
- Make me feel part of the community – because that is special…
- I think you get the idea… It is not (only) about service and it is not about ‘guilting’ me into buying from you. Don’t beg for my patronage. No-one likes needy people.
‘Buy Local’ campaigns can be done and should be done, but the fundamentals have to be there first. And these fundamentals are really just a collective commitment and concerted effort to practise great retail. Now, about that APP….
Ganador helps organisations systematise success.
A scorpion and a frog meet on the bank of a stream and the scorpion asks the frog to carry him across on its back. The frog asks, "How do I know you won't sting me?" The scorpion
says, "Because if I do, I will die too."
The frog is satisfied, and they set out, but in midstream, the scorpion stings the frog. The frog feels the onset of paralysis and starts to sink, knowing they both will drown, but has just enough time to gasp "Why?"
Replies the scorpion: "It’s my nature..."
Aesop’s fable about the Scorpion and the Frog is particularly instructive:
I often just sit down and think. I think about things. It is in my nature. (Some of you may be able to find the time to do the same.) Some things I tried in my business worked better than I thought and others didn’t work out at all.
But the one thing I can rest assured about is that my failures have rarely been because I have been blind to my own nature. I may have been stupid, inexperienced or under-capitalised or over-confident; but being introspective and self-aware, I have avoided the failures of hubris caused by being blind to your faults.
There are extremely practical and all to real examples of this.
To quote myself from an article written for National Newsagent magazine to encourage newsagents to change their business model:
One of the biggest challenges you must overcome is the fact that many of us see ourselves as NEWSAGENTS. It is part of our identity and it is part of our public persona and even our ‘place’ in the town hierarchy and it has a certain status.
You may not see yourself as a convenience store owner or a gift shop owner and refuse to acknowledge the reality.
That is a pity because <strong>we are all entrepreneurs</strong> and what we should be doing is responding to the market opportunity instead of floating along on the seas of change.
Failure is OK. Most reasons for failure are acceptable, but a few aren't. First among those is being blind to yourself.
#thinkdifferent - -
In the previous post we explored how successful people manage to better balance the tension between two diametrically opposite requirements or outcomes in order to navigate a more successful course.
Learning this skill is possible, and this little bit of brain gymnastics as your first exercise:
Most countries are facing a crisis of drug abuse. Using drugs is a dangerous and addictive activity that almost invariably causes health and social issues. On balance by most reasonable criteria drug abuse is a bad thing for the individual and their community.
What is the first and obvious response to this scenario?
PAUSE – and think about that.
The typical response is to remove the cause of the problem = drugs.
What is the opposite (maybe even counter-intuitive) response to this scenario?
PAUSE – and think about that.
The opposite response is to make access to drugs easier
Which one is right?
And if your answer is neither/both, you will begin to appreciate the ability that successful people have. You will begin to understand that becoming successful is about resolving and balancing the tension between two opposite course of action.
It is estimated that decriminalisation of drugs would save the US economy alone in excess of $40Bn
Despite having the most stringent rules w.r.t. drug trafficking, the countries of the golden triangle (including Indonesia where Schapelle Corby was convicted for drug trafficking) this is what the Asian Sentinel says:
The government, however, is beginning to learn that massive drug seizures and the threat of capital punishment for trafficking are no more effective in Indonesia than anywhere else in the world. A study in 10 major cities found four million Indonesians had used illegal drugs, and the country's drug trade was valued at nearly US$4 billion a year, with drugs readily available in schools, karaoke lounges, bars, cafes, discotheques, nightclubs and even in remote villages. More than 15,000 deaths every year are attributed to drug abuse.
So if there is evidence that a punitive does not work anyway AND there is evidence that we will save money going with decriminalisation, does it mean that is a better option?
The answer that you will come up with is hopefully that ‘it depends’. You have to compare legalisation with the impact of increased availability and the extent to which increased availability may impact on the community.
As usual you have the hawkish approach to punish it out of existence and the softer approach to decriminalise.
The Indonesian found that Schapelle attempted to smuggle drugs into the country.
The benefit to the Indonesian society was that 4kg of marijuana was NOT smoked. (Statistically it did not deter other smugglers, so that cannot be accrued in the benefits column).
The cost to the Indonesian society was a decade of internment of one prisoner, numerous court cases, reputational damage and (seemingly) serious mental health issues for Schapelle that may well last a lifetime.
The right answer is somewhere in between.
It always does – including those big decisions that you battle with in your company.
Companies fall victim to poor leadership – for example - when they adopt this binary approach to strategy. Corporations seem to perpetually oscillate between centralisation and decentralisation; or between diversification and focussing on the core business.
When a Chief Executive gets booted out, the replacement simply follows the diametrically opposite strategy. He or she lasts a few years, only to be succeeded by someone who reverts to the previous approach – usually with a new label, but the same old strategy nevertheless.
But allow me to give you a practical example.
Marketing departments often follow a strategy of spending money on branding campaigns OR on sales activities. What is more important? What is their job? Is about brand (long-term) or is it about sales (short-term)?
By now you will know the answer: it is about BOTH. You have to deliver sales campaigns that build and strengthen the brand. It is about AND not OR. That is the fundamental tension to resolve for marketers and it is not hard once you practice thinking inclusively as opposed exclusively.
The luxury goods market has to deal with the pervasive issue of fakes and knock-offs. Here is an example of a guy that turned that problem into an opportunity. I won't give it all away - watch the video.
And afterwards, tell me you don't want one of what he makes...:)
The questions we have ask ourselves is of course how it applies to us and which problem(s) we can turn into opportunities.
Here is a list of 100 ideas that will shape your future.
(But that is the fun part of life, isn't it?)
And the PLUS 5 refers to IBM's list of the following 5 mega trends which makes for interesting thinking...
This is the secret recipe for creating regional centres that should dominate their trade area:
- Add a town square
- Create a community hub
- Consolidate mainstream fashion
- Introduce international fast fashion (at any price)
- Strengthen youth fashion
- Create an authentic fresh food market
- Add a supermarket
- Extend the cinemas
- Expand fast food (multi-cultural)
- Create casual dining destination (near the cinemas)
- Improve parking
- Improve signage
- Enhance the ambience
- And get me JB HiFi on the line now…
This post is not about shopping centres or landlords nor is it about lack of innovation. I use shopping malls merely to make a point, and because most retailers can relate to this scenario.
When shopping centres fall victim to the ‘sameness’ syndrome it is because they follow what everyone else is doing. When retailers start ‘doing what everyone else is doing’ they also become the same as everyone else. You are what you do: nothing can be more logical than that.
When ‘THE THING EVERYBODY DOES’ becomes the default strategy, bland SIMILARITY is the result.
For a long time geographic differentiation was the saviour of mediocre retail. That is, you were the only XYZ shop in that centre or the only corner shop in that particular suburb and if anyone wanted what you had, they had to get it from you.
The mobile phone changed that because the consumer has every conceivable option in their pocket. Geography is now rarely a competitive advantage.
Since you have lost that advantage, you must redefine and execute a new point of DIFFERENCE – not because the strategy text books demand so, but because THAT is the reason why customers visit you.
‘The things everybody does’ as strategy will result in mediocrity at best and failure at worst. You must find your own way.
The good news is that there are dozens of ways in which you can differentiate yourself meaningfully and successfully.
(This 2min video powerfully illustrates the power of conformity and group think which is a different but related topic.)
Go make 2014 a winning year…
GANADOR (Google the meaning :-))
Win-win results in business-to-business relationships between retailers and all suppliers/partners.
Is that tumbleweed rolling through the mall?
The challenges facing retail are well documented. The direct impact on retail shopping centres is expected, even anticipated, but exactly how that change will manifest itself is not clear. Some landlords and property managers seem to operate under the old paradigm that ‘formats evolve’ and there is always a new concept to replace one that is past its use-by date. (After juice bars we get gelato, right?)
But this time it is different.
In New Rules of Retail, Lewis & Dart estimate a reduction of 50% in retail outlets and terms it an ‘economic tsunami.’ Consultants have cried wolf about paradigm shifts in the past that these calls now go unheeded. But we are not witnessing a natural evolution, but we are dealing with a fundamental re-shaping of the retail landscape. The consequences of this shift are a reduction in the total store network with fewer bigger stores for some and a straight-forward reduction of store size for others.
The store formats which thrive on the physical experience will naturally come to dominate physical shopping centres, but the questions are:
- Is this enough?
- If not, what then?
The clear front runner at the moment is obviously FOOD. It is a growth category and we are seeing a great deal of innovation. But how many centres and how much space remains unanswered, but my retail instincts suggest that it will be less (of both) than we might like. This brings us to question #2.
If food won’t cover all the gaps in all the centres, what will? I believe that if we understand WHY food is a growth category, we may be able to unlock to the key to innovating in the other categories.
Food is a necessity, but that does not account for the more exotic and high-end sub-trends in the category. The popularity of shows like Masterchef and My Kitchen Rules provide an insight into a new manifestation of consumer behaviour. Note that this is not a ‘shift’ in behaviour; it is actually simply that the environment and the available technology now allow a fundamental consumption preference to be manifested.
It is an understanding of these underlying consumer behaviours that will facilitate retailers and landlords to innovate at pace:
- Consumers can (and want to) experience things on a multi-sensory level. (Experiential.)
- Consumers want to be involved in the (co-)creation of their products and experiences. (Co-creation.)
- Consumers want personal (customised) outcomes. (Personalisation.)
- Consumers appreciate the value of things that are unique, artisanal and special. (Authenticity.)
Food readily taps into all of these underlying consumption preferences and our challenge is to transfer these principles to other categories. (Note that the traditional consumption preferences of value, convenience etc. continue to apply.)
Services (some), Entertainment, and of course (those elusive) New Concepts are logical options for other formats that also rely largely on a physical experience, and could follow the same trajectory as food.
All of this potential growth will rely on relatively rapid (faster than ever) innovation. The questions the retail property sector must answer honestly are:
- Will it be sufficient (as before) to wait for the market to evolve, or must you play a more proactive role? If so, what role will the landlord/manager play in this innovation process?
- Do we have the depth of retail talent and skill in your organisation to drive innovation?
- Are your processes and traditions (lease terms for example) and organisational culture conducive to experimentation – and inevitable failure?
Honest answers to these challenging questions are bound to trigger useful changes that are bound to impact returns in the not too distant future.
Of the six to eight key trends we are facing right now,
arguably this is one will arguably have a more profound impact than some
The Trendwatching Report calls it ‘guilt-free consumption’ and it is well worth a look. They define it as follows:
epic quest for more aware, more ethical, more sustainable consumerism.
The most compelling statistic is quoted as follows:
Indeed, a recent global study identified 2.5 billion of these 'aspirational consumers' (representing one third of the global consumer class). These consumers are defined by their love of shopping ( 78% ), desire for responsible consumption ( 92% ) and their trust in brands to act in the best interest of society ( 58% ).(BBMG, GlobeScan and SustainAbility, October 2013)