Archive for April 21, 2011

Posted: April 21, 2011
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Are you running a business or pursuing a hobby?

I realise that TV shows like Mary Queen of Shops, Country House Rescue and my favourite (if only because I could watch Alex Polizzi doing anything all day)  The Hotel Inspector, despite being formulaic and often contrived are the current entertainment of choice, but what I’m really waiting for is a series of “the ones that got away”.

I’m just itching to see the cases that sent the celeb consultants screaming out of the door, if only because I need the reassurance of knowing for sure it’s not just me who occasionally encounters a hopeless case that simply won’t be helped, or for which there is just no hope.

I’m currently going through that process of mental double-checking every option explored or unexplored that I guess every business consultant goes through before declaring a “patient” DOA.  My nemesis has proved to be a small advertising agency with a £1.5million turnover and accumulating losses that came to me at the beginning of the year.

I believe there is a solution to every business problem and the biggest obstacle to success, as in this case, is usually prejudice, laziness or obstinacy of top management, who despite consistent failure, insist on perpetuating the same model or set of practices.  Who was it who said “Insanity is repeating the same thing and expecting a different outcome”? What is really frustrating about this case is that the solution was pretty obvious.

The people at this agency are getting on in years and looking for an exit that they quickly discovered didn’t exist.  Their stated losses were modest enough, but when I took a closer look I discovered that the three partners, who were independently wealthy, weren’t paying themselves a salary, which made the real picture rather more of a nightmare.  Strangely, this isn’t the first time I have come across a business where owners were not paying themselves and been forced to point out that they were not a business (which makes money), but a hobby (which burns it)

Working as I often do with marketing services firms I always start with the perspective that whatever discipline they may lead with, a marketing services firm is a consultancy.  A position which carries with it two clear responsibilities.  The first is that you must know more about your subject than your clients do.  This may sound obvious, but I often find client/agency relationships that are a bit like the blind leading the blind.  Assuming you qualify on the first point you should be advising your client not taking instruction, otherwise there is no reason for your existence.

Explanations for the failure of this business were turning up under every stone I turned:

  • The principal of this business told me with pride that he had never in his life stepped foot in any other advertising agency and didn’t know what they did or how they worked.
  • In fact they had never conducted a competitive review and were oblivious to who their competitors were or what they were offering.
  • Neither had they undertaken a client review.
  • None of the employees had worked in other marketing services firms either, so their “training” had all been at the hands of their agency principal.  Consequently their perspective was as narrow as the business.
  • In an era where integrated marketing is accepted as essential this agency operated in a very narrow field indeed.  All they offered was local press advertising!  Account handlers positively resisted the idea of offering additional comms, probably because they didn’t know anything about them.
  • The business operated on the commission model where, as an NPA recognised agency (remember those?) they received a 15% commission payment from publishers, which they used to pay for the design and artwork they provided.  I don’t know of another agency that still operates this system, simply because it doesn’t work.  For one thing any agency, regardless of “recognition” gets 15% discount from publishers these days and for another, 15% of the space cost is rarely enough to cover the cost of design and production when the majority of the space you are dealing with is in local newspapers.
  • They “sold” advertising space rather than advised on media strategy and account handlers were paid on commission, just like a media sales rep.  They also did pretty much what their clients asked if it meant selling some space.
  • Senior management had no contact with clients and I was refused access to them because the account handlers wouldn’t allow it!!!  Work that one out!
  • Their in-house management system, including job-bag management and invoicing was all done BY HAND!  Yes, you read that right.  What’s more, they were adamant that this was better than a computerised system.  I haven’t seen that much paper since Wiggins Teape was a client of mine!

The list goes on, but you get the idea.  However, without giving too much away, after speaking to local businesses, business networks, competitors, local media and other marketing services providers, I identified an opportunity for my client to create a model that catered for small businesses and even outlined a plan for growing the business nationally.  This was obviously going to take the founders out of their comfort zone, but they weren’t planning on being around for long, so that was hardly the point.  My job was to make their business attractive to potential investors.

I wasn’t entirely surprised though, when the owners decided not to adopt my strategy.  It had become clear to me early on that they weren’t removing themselves from the situation.  Comments like “But we like the business as it is” and “What we really want is someone to come in with a few new clients” were commonplace, despite me pointing out that the business was losing significant sums mainly because there aren’t any clients left for whom the agency’s offer was relevent.

So, this is one for the “ones that got away” file.  A fruitless exercise, but maybe not a waste of my time because its always good to have an insight into markets and in this case I have awoken to an opportunity that some other small agency might make work.  It also reinforces my belief that businesses fail, largely because they deserve to and that a great many small businesses should start by deciding whether they are running a business or pursuing a hobby.

Posted: April 13, 2011
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It pays to engage your employees

Only a real idiot would fail to nurture and care for his employees.  After all, your employees ARE your business.  Their personal traits are your assets, their values are your values and their passions the seeds of your future products.  They have the ideas that, in an environment where a business is only as good as its NEXT big idea, are the difference between success and failure.  Its also down to them that these ideas get turned into products and services and delivered to market and the level of efficiency with which they do that is also in their gift.  That’s why my Brand Discovery programme focusses on engaging the organisations’ workforce.  They, not the directors are after all, going to bring the brand to life.

Internal marketing will deliver by far the fastest performance improvement for pretty well any business.  For one thing its massively neglected.  Many businesses don’t even have a budget for it and we are all familliar with the law of diminishing return, so its easy to see why a little attention given to such a neglected subject will quickly deliver disproportionate results.  When I am faced with a business that’s strapped for cash, but needs to turn around, my first call will be to the internal marketing toolbox.  Its rare for my marketing strategies not to include HR initiatives.  I usually have HR people on my project teams and I’ve frequently delivered results without increasing marketing investment by switching marketing funds from external communications to internal initiatives.

My fascination with this subject explained my glee when I came across Dr David Kelly’s account of “Designing Curious Employees“.  Just about every paragraph on this piece contains a priceless insight that most businesses I encounter could do well to contemplate.

Although he may not express it in these terms, David Kelly recognises that getting your employees behind your brand is the key to success.  Brands fail because they don’t live up to expectations and that’s down to employees, but for employees to do their stuff requires that they are comitted to playing their part in delivering your brand promise and in my experience few employees even know what that is, let alone have a sense of ownership.  Most businesses issue instructions to their employees rather than explain and involve them in decision and as Dr Kelley says, that’s the worst thing you can do. Why should they feel anything for a concept or even a business that they haven’t been allowed to participate in the development of?

Keeping them in the loop is but a facet of internal marketing.  If you want your employees to truly own your strategy (and belive me you do) they have to have played a part in its formulation.  There are all kinds of tools that you can engage to ensure this is happening, but most of all you need to engage your ears.  Once they know you are listening, in my experience emplyees will respond with all manner of ideas and suggestions that could set your business on the road to success.  I once created an entire business unit from an idea that came from a junior secretary and businesses that harness their people power are doing the same every day.  So, take heed of what David Kelly says.  Internal marketing is a powerful tool that in the right hands can transform a business.

Posted: April 7, 2011
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Don’t talk to me about “viral”


If another clueless idiot comes to me with a half-baked idea that’s “going to go viral!” I swear I’ll explode.  I realise that marketing people love buzz-words, but its like everyone suddenly “discovered” viral and is trying to nail the label to anything that moves.  Get real!

I’ve had this debate before and as far as I am concerned its done and dusted, but here are a few thoughts to consider before you start thinking about adding a viral element to your strategy.

Firstly a miniscule proportion of campaigns that are intended as viral ever break even – fact!  To avoid being a dismal failure a viral campaign has to at least cover its cost – very few indeed actually do.  The reason for this is simple.  Nobody is going to pass your material on to their friends unless it’s at least, well-produced.  Production costs are high and with the sales-to-view ratio being what it is, you’ll have to count on hitting more than your mates and your mate’s, mates to break even.  To qualify as a success a viral campaign has to create more than a blip on your sales graph.  That means it has to reach many more than a few thousand people, their mates and the rest of their families too and that’s definitely not going to happen unless your viral piece qualifies as a “big idea”.

Now I’m sadly very aware that very few people indeed really appreciate what a “big idea” really is.  It’s not for instance a video of your CEO, even if he does have Richard Branson’s charisma and profile, standing in front of your latest product telling you how good it is – just forget it, its at best naff and at worst … well, I can’t even go there!

And there’s another point.  The views that you achieve aren’t worth a jot if your viewers aren’t likely purchasers of your product and unfortunately, the kind of people who pass-on stuff on the internet aren’t big consumers of  things like ozone air-purifiers or stair lifts.  No, I’m afraid viral isn’t for everyone.

There’s also the question of seeding.  I’ve found that quite a lot of people with “great viral ideas” forget that they need to start the ball rolling themselves.  You don’t just upload these things and they miraculously get found by people..  Sure a few might bump into your masterpiece and some of them might actually pass it on, but, even with the world’s best SEO, if  you are going to hit worthwhile numbers you’ll have to mail it out yourself to people you know are interested and likely to forward it.  That could mean buying a mailing list – another cost – and maybe even introducing an incentive.

Finally, a viral initiative isn’t going to achieve much in isolation.  To make any sense, it has to be an integral part of a broader campaign that channels responses, gathers data and leverages the analysis.  Again, if you aren’t doing all of this you are wasting at least a part of your investment.

Don’t get me wrong, this isn’t a case against viral marketing.  As with everything else when it works it works great, but the risks are arguably higher with viral than they are with many other communications routes and unless you are VERY good at it you will be wasting your investment.

If I haven’t put you off and you are determined to go the viral route I suggest you asses ideas against a comparison with Cadbury’s Gorilla, Garry Busey’s cameos for GotVMail, the Apple Mac v. PC movies, Tom Dickson’s “Will It Blend?” Vids or the absolutely brilliant Shiro “Cheers System” campaign.  Of course, viral doesn’t always mean videos, but the combination of sound and vision does give you a bigger chance of creating impact.  However, if your ideas don’t match those I have mentioned for bigness, forget it, save your money and think twice before you run around saying, “I’ve got this great idea, it’s going to go viral” because the probability is, it won’t!

Posted: April 7, 2011
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Go shopping in the East End!

Not surprisingly, shopping centre development in Europe plummeted by 30%, to a 27-year low in 2010.  This much has been confirmed by new research from property consultants Cushman and Wakefield, but things are looking up … or are they…?

In cities throughout Europe the skeletons of would-be retail paradises have stood testament to the economic downturn for the past year with no visible sign of completion work, but there are stirrings once again and the same report predicts 6.9million new square feet of Gross Leasable Area by the end of 2011.

You may be asking quite where all this is likely to be.  I for one have been speculating that the optimism of some Central European cities has both been responsible for a disproportionate amount of the recent growth in GLA and left the developers concerned with the high risk of un-let retail space.  In cities like Prague the profusion of new malls that retailers’ traditional policy has compelled them to take occupation in, has left some retailers competing with their own stores only metres away from each other, but retailers are being forced to face reality and my guess is we’ll see them rationalising their estate at a cost to centre owners and managers.  I know of one new centre that has all but closed down after a couple of years of trading, simply because of this.

2011′s new square-footage looks like being further East in places like Turkey and Russia which are expected to account for as much of 40% of total European growth.  In the West, we are far more reserved.  Even though our variety of retailers in each sector is significantly higher than counties in CEE there’s a limit to how many coffee shops you can cram into one centre, a reality that is underlined by the modest 2.5million of new square-footage we’ll account for this year.

Europe is clearly dividing into two retail zones.  The easy short-term money looks like being in the East while retailers in Western markets have to get in shape for the battle to secure revenue.  Either way, there’s a challenge for retail marketers.

Posted: April 5, 2011
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Genuine brands and really great musicians – you can always tell the real thing

I would never have considered myself an Alison Krauss fan, but this track took my fancy.

Its by no means a stand out song, its put together in a pretty standard sort of way, but the musicianship is great and I really like the contrasts in the arrangement of mandolin and steel guitar.  Its a demonstration of how attention to detail can make something special.

At the other end of the tempo scale is this version of Imelda May’s Inside Out.  I love her stuff and my daughter put the rawer, album version of this on a loop in the car last week so I know it well.  I love the way that Imelda produces lots of different versions of the same number – a real artist with a band made up of great musicians including her awesome guitarist husband Darrel Higham.

These are both examples of how the genuine will stand out in a manufactured world.  Just like brands.  You simply can’t build a strong brand on pretence the values have to go all the way through – just like the lettering in a stick of rock or songs by real musicians.