Welcome to our new year.
This issue of the periodic ezine is seemingly early, primarily for one reason … momentum.
It is and has become increasingly apparent to many business leaders that momentum is imperative in this “crisis ridden global environment”.
If you do need a case study on the importance and role of momentum, simply read the media reports on the national career opening innings of Australian batsman Dave Warner in the first of two Twenty-20 cricket matches against South Africa. His score of 89 off 43 balls achieved the momentum for the Australian side to record a total of 182 and to win by 52 runs.
There is or should be no space or tolerance for a slackening of individual and collective efforts. Maintaining and achieving critical mass is an imperative.
Since Monday, 2 January, we have been busy working with new and established clients in the conduct of half day marketing audits, strategic reviews and creative business development workshops. Branding, its role and importance, has been a central focus for many of those briefs.
The energy of participants has been palpable and infectious.
Most encouraging has been the realisation that we at Marketing Focus, as external consultants, cannot make hard decisions easy decisions. However, we can contribute to making easier the hard decisions. Many of these need to be taken now and importantly, in the right sequence.
Already, evidence is emerging that the consequences of the Australian Federal Government spending and finance support initiatives, together with the sales campaigns conducted by businesses, retailers in particular, have generated sales in the short term. Significant longer term negative consequences are starting to emerge.
Throughout Australia, the distribution of some $10.4 billion by the Federal Government to welfare recipients, lower income families and individuals and carers did contribute to stronger than expected peak Christmas and post-Christmas periods. Significantly, non recipients of the federal monies also responded to the offers of 50%, 60% and in some instances up to 70% discounts on standard prices.
Sadly, many of those purchases had been planned for during the course of 2009. Thus, few “new” sales were generated. Rather, the sales simply rescheduled intended purchases. That has implications for the March, April and May trading period.
Disturbingly, the large price discounts have established what consumers now perceive and accept as new, value based price structures and sets of expectations. It will be difficult for retailers to increase prices or reintroduce standard recommended retail prices without considerable leakage of demand.
In many business sectors, the pricing actions of some operators have elevated price from a ranking of four to being the number one factor in the determination of stores visited, products or services considered and ultimately purchased.
Compounding the scenario of Christmas and post-Christmas sales were the teeming crowds which were attracted to premises. The ambiences were hardly enticing.
Exacerbating the poor shopping experiences was the reality, in many instances, of being served by a part time or casual employee who possessed limited product knowledge and exhibited poor interpersonal relationship skills (read: customer service).
Customers left and were left with negative perceptions about countless numbers of businesses whose premises they had just visited for the first time.
Management teams confront the challenge of re-establishing preferred and advantageous market positions, images and pricing structures. In essence, that relates to branding. It won’t be easy and doubtless many will falter. On balance, there is no option. Anyone can lower prices, eliminate profit margins and literally give away products and services. There is little sense and future in doing so.
Clearly, 2009 will be the year in which true customer service will win and retain business. And commitment to attain that end and those ideals need to start now.
TOWARDS THE MEASURE OF VALUE
It is stated by the authoritative mainstream of the science fraternity that at least twice in the history of the planet earth, the magnetic north and south poles have reversed. On those occasions the world was figuratively and literally turned upside down.
New datum points for navigation had to be established, measured and monitored.
Scientists contend it could happen again. Well, perhaps it did during 2008, in a figurative sense at least, for business.
For the latter half of the year everything seemed to be out of balance, not least of which were and are the balance sheets of many companies. Close analysis reveals that significant percentages of asset values are attributed to “goodwill”, “brand value” and other similar, vague, emotional and spurious criteria. Does anyone really need creative accountancy at present?
In the current marketplace goodwill, loyalty, referrals and relationships are hard earnt, often on a daily basis.
To strike an economic balance one could give serious consideration to investing in the 838 page tome “The Snowball”, which is the authorised biography of the world’s richest man, savvy investor and humanist Warren Buffet, “The Oracle of Omaha”. The author, Alice Schroeder will not be pleased with my advice to put priority on reading the 24 page chapter 1. The homily of Buffet’s address in 1999 to a “closed shop” meeting of some of the world’s leading captains of industry is insightful and timely.
His essential message of worth, value, performance ratios and balance were largely ignored by the IT entrepreneurs and their investors. Price:Equity ratios were deemed to be old news business. Business compasses had gone awry.
April 2000 and the dot.com collapse brought much old currency to the new economy. The currency was measured in ratios, value and worth, not necessarily in dollars and cents.
Buffet’s perspectives on the airline and automotive industries are well known to those who have studied and admired this enigma of a man,. From some 2000 automotive manufacturers in the early 1900’s the US industry has rationalised somewhat to just 3 majors and cutting !!! Watch this trend of consolidation and rationalisation.
One persistent characteristic of capitalism is excess. During the past decade we have had it in spades.
In certain sectors asset and property values still appear to be excessive. Until such falsehoods or dreams are removed from the marketplace, there can be little or not balance.
The worth of the book “The Snowball” is around $55.00 (Australian). Retail booksellers have determined the worth by the price which has been applied. It’s value is countless times more for those who are prepared to invest time, money, resources and thought into reading, comprehending, analysing and then applying the principles, concepts, philosophies and life lessons which are relevant to their own belief system.
Oh! One further suggestion. Do go to the balance sheet and determine what is the true worth and value of your own assets. Are they in balance? If not, the balance sheet is probably worthless … just ask your banker for a valuation !!!
Don’t feel comfortable!
There is little room or relevance for anyone in business today to undertake or not undertake actions that will or do make one feel comfortable.
Creeping inertia has dire consequences. Too often at present suggestions, recommendations and input for creative action are dismissed with expressions about management “being comfortable”
Energy, urgency and action do attract attention, interest and enquiries. Internally and externally, people do want to be part of “what is happening”. The sentiment is infectious. “Nothing happening” suggests, well, nothing.
Stretching oneself in the prevailing marketplace may seem incongruous with the avoidance of risk and a general sense of conservatism. Unquestionably, it can be and often is uncomfortable to stretch oneself when all around, others are “pulling their heads in” and retreating to the trenches.
Doing nothing is not a viable or, in actuality, an attractive option.
It is not too much of a stretch to conclude that those who determine not to be comfortable will be the generators of interest, demand, sales and profits.
The message is simple: Make it happen… it could be very comforting.
3 PHASE SHOCK
Addressing the current rigours and dictates of the marketplace should, ideally, involve three discrete phases. If the cohesion, efficiency and prospective capacity of an entity are to be retained and realised, the temptation of taking short-cuts should be avoided.
Take for example the widespread evidence of management teams cutting costs, suspending travel budgets, holding off purchases as the primary means which result in reduced inventories, retrenched and dismissed staff members and the trimming of advertising and marketing expenditure.
Each is understandable with the volatility and fickleness of the current marketplace. However, the seeming short-term benefits can be and are being overwhelmed by the intermediate to longer term consequences.
Cost cutting is the second of three logical and sequential phases. Cutting costs can fracture corporate cultures, puncture staff confidence and morale, lower service standards, impinge upon supply chains, relationships and client loyalty, as well as adversely affect consumer images, perceptions and expectations.
Ideally, the first phase must necessarily be to revisit, reassess, possibly refine and then recommit to the essential elements of a positive corporate culture. In recent times it has been our experience in fulfilling briefs to facilitate and expedite business development initiatives for big and small, public and private businesses that variances have evolved between the written and the actual (often undocumented) corporate cultures.
Involving staff members in the process inevitably fosters better confidence, more belief in management and generates new, original and creative strategies and tactics to increase sales margins, repeat purchases and client recommendations. Importantly, cost cutting thrusts are typically modified, avoiding cases of “corporate anorexia”.
All to often businesses have not addressed the seven aspects of an integrated, cohesive corporate culture.
Once that phase has been successfully concluded, cost cutting can and, perhaps, should be considered, albeit, through a different paradigm. That will enable management and the team members to then address the third phase… but that is for another time.
If we can be of assistance in fulfilling the role of an external facilitator and catalyst for change, please do not hesitate to make contact.
I do hope you enjoy the following article text. Do forward it on to those whom you believe will most benefit.
ARTICLE TEXT:“MY WORD IS MY BOND”
My word is my bond.
Great sentiments. Or, are they a nostalgic recall from the past. How sad that recent experiences within the context of the global finance turmoil have prompted fears and reservations about verbal commitments which have been given.
No one or one sector seems to be immune to this contagim. There is evidence of it in business to business, business to consumer, personal, social and professional relationships. Disbelief, rejection and dismissal are perhaps overly strong expressions to be applied universally. Rather, the feeling among many centres on terms like qualified, conditional and tentative.
As a consequence, budgets are being recast and tolerances for variances included in forecasts.
Beyond risk, debt and entrepreneurism, the lubricants of business are trust, truth and transparency. A personal or corporate profile centred on fulfilled commitment is advantageous and optimal.
Sadly, contemporary business practitioners have become attune to identifying the symptoms where bonds given are wavering or have lapsed.
Telephone, email, fax and SMS messages which do not elicit prompt and reasonable returns are indicative of this insidious epidemic.
Calls that are “fielded by subordinates” or “intercepted by personal assistants” are not appreciated or appropriate.
A LITTLE UNDERSTANDING
Most, if not all, people in business are sensitive to just how rapidly circumstances change in the current global marketplace. Their own realities foster a sense of understanding.
Fundamental advantage can be achieved and maintained with a concerted effort to keep all stakeholders, external and internal, fully informed. Personal standings are enhanced.
DOCTRINE OF NO SURPRISES
The philosophies of the former President of the International Telephone and Telecommunications Group (ITT), operators of Sheraton Hotels, Avis Rent-a-Car and a number of Telcos in the 1960’s and 1970’s have heightened relevance today.
Harold Geneen, subscribed to the belief and importance of ”the Doctrine of No Surprises” .
Open, two-way channels of communications promote confidence, stability and valued substantial lead-times (during which remedial actions are possible.)
The message is: “Tell it to me and tell it to me straight”.
TRUTH OR FACTS
Truth is an interesting concept. It generally resides in widely held and accepted beliefs.
Facts are easier to address and to share. Moreover, it is from facts that truths emerge.
Stakeholders appreciate and value the sharing of facts. It genuinely empowers them.
Some facts are unwelcome, unwanted and hard to handle. However, there are no “true facts”, or “soft facts”, just like there are not “half truths”.
Sharing facts, often in confidential and discreet settings enable the formulation, development and acceptance of new truths.
The lesson is: People can and do respond, if and when you respect their integrity by the sharing of facts. In most cases, everything is then negotiable.
In these complex times, there is understanding. The 2009 global economy and marketplace is a whole new world. Indeed, it has no precedence.
The new context does often, understandably and appropriately, impact on the content.
A bond is an integrating and mutually beneficial force. A clear comprehension that one wants to do business enables negotiations to begin and to be concluded on the specific shape and contour of the context and content.
So, start early, communicate and maintain the flow, to enable others to appreciate the true value of the phrase:
“My word is my bond”
Barry Urquhart is Managing Director of Marketing Focus, Perth, a full service market research and strategic planning practice.
Barry is an internationally recognised conference keynote speaker, facilitator of business development workshops and author. He has worked with big and small entities throughout Australia, New Zealand, Britain and North America.
Barry Urquhart is author of the two largest selling books in Australasia on quality customer service, being:-
· “Serves you Right!”
· “Service Please!”
Tel: (08) 9257 1777