Archive for June 18, 2014

Vit Horky 2 edit

Posted: June 18, 2014
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An opportunity for contact centres to join mainstream marketing?

I met up for lunch with Vit Horky founder of Brand Embassy and The Future Care Initiative in Prague yesterday and he brought me up to date with new developments in the, currently red-hot world of what’s come to be known as “social care”.

One of the subjects I touched on a few months back was the need for organisations to re-engineer their marketing/customer service, social media infrastructure to accommodate the way that we connect these days. There’s no doubt about it, the trend towards social media platforms as customers’ channel of choice to connect with vendors is now well entrenched. Of course, managing social media can be very labour intensive and sometimes its difficult to spot the return, especially if you are using traditional metrics and KPIs, but the on-the-ball operators who have made changes apparently see only gains once the metrics start rolling in.

The big question remains though, “who manages social care?”. There are a number of models being pursued at the moment. The one involves splitting social media conversations between the marketing department and customer service. This seems to me to be a bit messy and rather less of a commitment than it should be. Vit was telling me about one of the big contact centre groups who are experimenting with a new business model where better trained operators filter off the social care conversations and handle them discretely. This is proving to be a bit of a “wow!” in that it is generating all kinds of benefits beyond the immediate customer engagement. For one they have found that better trained operators perform way-beyond those of the traditional cookie-cutter call-centre operators. They are faster, more efficient, get higher satisfaction scores and are better engaged themselves. In one case the employee lifecycle is ten times that of a traditional call centre, which kind of turns the old call-centre model on its head. Imagine a contact centre whose primary concerns didn’t include the desperate scramble to keep up with employee churn! What on earth will managers do with the time they no longer need to devote to recruiting and training operators!

This brings me back again to another of my recent themes. That of the need and opportunity for marketing services businesses to develop new models if they are to remain relevant. It’s my belief that businesses other than airlines, telcos and banks, who are highly reliant on customer interaction and already have their own in-house contact centres, aren’t going to be able to manage their customer support/social care in-house for much longer. It’s becoming far too specialised and complicated. This seems to me to be the perfect opportunity for contact centres, who have always operated at the periffery of the marketing services industry, to legitimise themselves. Now any contact centre could create a social care cell with more highly-trained operators managing conversations with customers through social channels. All they need is a platform to work on and Brand Embassy lead the field with their inexpensive and highly sorted offering. In fact, in keeping with the pace of change in this sector Brand Embassy are continually and significantly improving their interface so that all the smart (and for some people intimidating) stuff is hidden from view, which makes the transition from contact centre to the social care model far simpler.

Beyond modifying existing contact centres could this also be the opportunity for a completely new marketing services business model? Using the filtering capabilities of Brand Embassy a consultancy could put together an entirely new customer management offer. I’ve just created an integrated CRM/Loyalty programme resource for an international retailer that used in and out-bound telemarketing, social media, direct e-mail marketing and web to not only handle customer queries and service support, but provide a new channel that made direct sales and generated store traffic. With a platform like Brand Embassy this is so much simpler than the processes I had to engage, but it would have been great to have an agency who could take the whole thing and run with it.


Posted: June 17, 2014
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Retailer Primark explores the opportunities as landlords

They say that necessity is the mother of invention and the really great thing about a tough market is that it drives great ideas. As marketers its our job both to stimulate creative thinking and to contribute most of the innovation. I reported recently on how the agency sector is being inventive in it’s search for a new model more appropriate to our time and we are all familiar with the scramble for the silver bullet that’s going on in retailing. Now I see that the UK retailer Primark aren’t content to be just another retailer, they’ve decided to up the anti and buy an entire shopping centre.

Primark’s idea, it seems, is to create a flagship store and then rent out surrounding units to complimentary retailers.  It’s not a completely new concept of course. Primark aren’t the first store group to become landlords. Many others, including Tesco have operated models like this for some years and its not a million miles from the department store model. I even launched a similar initiative with the supermarket group Delhaize in Central Europe a while back. For those of you who aren’t familiar with the world’s fifth-biggest supermarket group, privately-owned Delhaize are food specialists rather than generalists. They don’t need the space of a hypermarket, but acquired a few big units in their march through the ex-Communist markets. Our idea was to create a mini-mall within the unit, but outside of the area of the supermarket and rent spaces to local retailers. This guaranteed them customer traffic and an alternative to the demise that small local traders meet when a big international retailer comes to town.

Initiatives like this are good PR and even better business. They really endear multiple retailers who move into town to the local population by countering common criticism that the multiples are the death knell of the independent store. They may be responsible for the closure of many independents, of course, but this has rather more to do with the incompetencies of some independents than it is the fault of the multiple and by placing the locals in the thick of shopper traffic they generate the big boys are at least giving the small shopkeeper a chance to show what they are made of. Those that have what it takes can experience their best ever business, but the few that just don’t make the grade and doubtless never would.

The city of Birmingham, the English location of the proposed Primark centre, is also a classic demonstration of how renovations, revised traffic flows and new developments can dramatically change the dynamic of a place and with it the fortunes of shopkeepers and other businesses. Coincidentally, I’ve been working with a major shopping mall in Dubai recently that had suffered as new, bigger malls opened and the epicentre of the city shifted – radically in the case of Dubai. The same is true to a lesser extent of Birmingham, the centre of which has has been in a constant state of flux for as long as I can remember, with the focus shifting dramatically with every new development. It will be interesting to see what Primark can make of their acquisition, which has been something of a victim of all of this. I will also be fascinated to see what tenants they attract to the mall which has been sliding down-market for as long as I can remember. Primark do entry-level retailing as well as anybody and they have a choice here to leverage either their fashion credentials and create a popular younger environment or focus on their low-price credentials and attract the Poundstretchers of this world. With two new fashionable mass-to-premium-market malls within a stone’s throw, this isn’t as easy to call as it might seem, but my guess is that a mall with lower-mass-market, but tasteful tenants would stand a better chance of success than a mix that would compete with the two other malls. Are there enough of these kinds of retailers? It might be a struggle, but time will tell.

This does however raise another thought that may be the driver behind Primark’s plan. As a tenant they have no control over who their neighbours are.  They can take space in a mall that promises to deliver the customer profile that suits them best, but if we are honest there’s always going to be a degree of compromise in sitting in a mall that’s controlled by someone else.  Even if the profile is right for you today, the landlord can choose at any time to change all of that and leave you in an alien environment. Then there’s the fact that the reputation of any brand is also coloured to some extent by the company it keeps. By owning their mall Primark get to choose their neighbours, which gives them the opportunity, if they are smart enough, to optimised the profile of the mall’s traffic to suit their own offer. It also means that they can be seen to associate only with retailers that enhance their reputation and if that wasn’t enough, they can also eliminate competitors. Now, this seems like a plan that other retailers might want to consider!

In the Middle East, of course, because pretty well all the retailers worthy of a visit are franchises and most franchisees own more than one franchise (Companies like Chalhoub and AlShaya seem to own most of them) you wonder if it wouldn’t be worth these companies investing in their own malls. This is especially true because many mall owners and managers are just chasing rents and aren’t sufficiently marketing savvy to manage their brand well enough to maintain a focussed customer profile. Of course, the franchisees have the money even if they don’t have the mall management expertise, so it will be interesting to see, with places like Dubai, Saudi Arabia and Bahrain now over-accommodated with malls who is first to raise the game by taking on a mall and optimising it. Things could get interesting!

New York Stock Exchange

Posted: June 9, 2014
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The role of marketing in an IPO

If you’ve ever taken a business to IPO you’ll know that its never as simple as it looks. An IPO is a long journey for many businesses, especially those that have emerged from informal cultures or developing markets. I’ve been working with a Saudi business for the past two-and-a-half years to help them get in the kind of shape you need to be to go to market. In fact they have been pursuing their mission for over three years and that’s usually the kind of time you’d expect to take.

Ernst and Young published a paper a while back, which outlined the process and in their polite way underlined to anybody thinking of heading down the IPO route, that if you think you are going to pull it off in a few months you are probably not sufficiently clued up to go to IPO anyway.

There are basically three parts to an IPO pitch, which is much the same as any business/marketing strategy. Firstly there’s a load of financial stuff to sort out before you can really get to grips with a project like this. You have to have all your numbers in a row, loans consolidated, financial processes in place and accounting compliant with legislation in the country where you are going to market.

Then you need to get people and processes in place for every function in the business. Its not enough just to have folks working away in departments doing things their own way, even if they are doing just fine. You have to document every process, which, in itself can be a major project. You’ll probably need a process engineer to help you describe the processes you use and design any that are missing in every department. They have to be formatted with flow-charts and filed in a manual. You also have to have your executive team in place, which often proves to be one of the biggest challenges. A recent EY survey highlighted that once the financial stuff is out of the way, people came top but one in the list of things that influence investors most. This means having director-level experts in the main areas of your business – marketing, logistics, production, operations and finance for example.

The third thing that you need to focus on is strategy. It’s top of that list of investor influences and its probably a large part of your submission document. This is where we marketers make our biggest contribution to the IPO process. These days business and marketing strategies are synonymous. Investors need to know what you will do with the cash they are injecting and that you are ready with the innovations and initiatives that in three or five years time will result in their slice of the action being worth more than when they bought it.

An IPO often proves to be the push businesses need to focus. If you aren’t intimate with your market, have clear objectives and have a clearly defined strategy you’ll struggle to attract investors, especially in an IPO where the equity on offer to investors won’t give them much influence. This is marketing #101 of course. Quantifying your hard and soft resources – identifying the opportunities – defining how you are going to exploit them. And strategy, of course, starts with your brand. You need to prove to investors that you know exactly who you are and what opportunities that gives you. My Brand Discovery programme has proven just the device I have needed in these cases because it doesn’t just help businesses define eleven coordinates of their brand, but introduces a clear process that applies to pretty well everything they do thereafter including the all-important innovation.

An IPO is something that you simply can’t cut corners with. I’ve seen a number of businesses who think the answer is to squeeze their business dry in an attempt to impress prospective investors for the usual three years prior to an IPO. They hold back on investment, go for short-term gains by cutting prices or quality and if their preparations go smoothly and they keep to their timeline (which is often not the case) they just about manage to drag a dead horse across the finishing line. What happens then, of course, is that the business crashes and investors are left with a stark choice – invest further to fix the accumulated problems or accept the loss. Its all a bit like buying a used car in fact! If you take this short-term approach and fail to keep to your deadline your business will die before you get across the line, you won’t get your IPO and you’ll have to find investors some other way to pay for the remedial work your three years of squeezing have necessitated. Alternatively, of course, you could just shut up shop!

Actually the used car analogy goes further in that. If you buy from an established dealer there are some inherent or at least inferred guarantees. In the case of an IPO of course the “dealer” is the bank that manages things for you and because their reputation is on the line, they’ll conduct due diligence that will make a drug-squad strip search feel like the start of a beautiful relationship. So, if you survive this scrutiny you’ll probably be OK when you make your submission to the authorities.

The point to bear in mind with this is that your IPO submission is nothing more than the kind of good marketing strategy document that every business should have anyway, so if you don’t have one the first question you have to ask yourself is “Am I really ready for an IPO anyway?” However it might be a good idea to put your strategy together as though you were going to IPO anyway. As I said, its only what any good business should have.


Posted: June 3, 2014
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The “purpose” of your brand

One of the eleven P’s (the coordinates that define a brand) in my Brand Discovery models is “Purpose”. You will imagine, each of the elements that go to make up a Brand Discovery brand model involves some discussion and some a degree of soul-searching. That’s what we do in our workshops, but purpose is among those that often takes the most time to resolve. Appropriately so in fact, because a business without a purpose is a ship without a compass – you might hit land sometime … but then again, you may just remain at sea!

Most clients start with the assumption that their purpose is clear-cut and it isn’t until I test their resolve that they recognise the importance and complexity of this apparently simple subject. For example retailers will often say they are there to “provide the lowest price for their customers”, but their commitment to this starts to wobble a little when I point out that this might be in conflict with social responsibilities such as sustainability or avoidance of worker exploitation. Likewise there’s often a conflict between what’s best for customers and what’s best for shareholders. There’s no escaping this issue, you have to make a decision and stick to it.

Its also quite common for the executives in my Brand Discovery workshops to confuse “purpose” with “promise” and/or a strap-line, so let’s define what a purpose should be. I define purpose as “your role in life’s great plan”. This isn’t necessarily the same as what you are good at or what you offer your customers, hence the distinction between purpose and promise. Purpose is the contemporary replacement for what we used to call “vision” (which is rather more wishful thinking from most companies than the here and now) and as such should be supported by a list of actions that lead to the realisation of the purpose (or the achievement of the vision) My Brand Discovery brand models refer to these as the pathway (yet another “P”) but in the traditional context these would be your mission.

For example, the purpose of the UK’s national trust might be “to preserve history and beauty for future generations” but this isn’t the promise they make to the market, which might be something like “We enable you to experience history first hand”. Strangely, they don’t appear to have a strap-line and I’m not going to presume to offer one here.

When I was researching this post I came across a really good article by Mark Di Somma on Branding Strategy Insider. Mark has been around nearly as long as me and I’m sure from the ideas he promotes he’s experienced much of the same kinds of things, so its hardly surprising that he and I are pretty much on the same page.

Of all the Brand Discovery coordinates purpose is one of the most substantial. Many of the others will change, probably quite frequently, but purpose is pretty constant and as such provides an anchor for your business, so its worth taking time to define it.