Decomposition.
The breaking up of markets, consumer groups, communications and value-propositions is a complex, often tortured process.
However, the rewards, upsides and insights gained can be substantial.
New perspectives and understandings can be gained, enabling enhanced efficiency, effectiveness and productivity in all things marketing.
HIGHER, AND HIRE
Fashion brand, Country Road, whose genesis was in Melbourne some three decades ago, has recognised, and is now responding to changes in consumption patterns.
It has entered a strategic alliance partnership with a finance-based hiring company to offer certain ranges for short-term hire to consumers who are seeking changing wardrobes and fashion-statements.
Few would have thought that the word “change” could so readily infiltrate the use, and outlays, for personal presentation “packaging”.
Statements like “my favourite… (garb)” will doubtless be cast aside by certain market segments and select consumer audiences.
It is an exciting prospect, and will reconfigure the measures of value, and space usage. In isolation, price tags will become marginal reference points.
Concepts of ownership will need to be recalibrated.
Personal budgets too, will need to be reviewed, refined and re-assessed.
PUT ON THE LEASH
Dog owners are often compelled by local government regulations to restrain their pets by having them on a leash, when going for a walk.
Many business lessees feel the same constraints are applied to their operations by the provisions, and costs of property leases. There has been a noticeable increase in the use of shared and casual occupancy throughout the commerce fraternity during the past decade.
It has developed a whole new sector in property management, with public listings of entities being planned and implemented. Initial responses from investors have been encouraging – but qualified.
The example of the We Work in the United States of America highlights that the concept may not work for all.
However, the property leasing and occupancy landscape is changing rapidly and retail networks need to be re-assessed.
BALANCE SHEET RE-WEIGHTINGS
The balance sheets of many contracting entities, particularly those seeking to service the volatile mining industry are weighed down with large inventories. Much of that capital is under-utilised, inert and subject to widely fluctuating need and demand.
That is an expensive burden to bear, particularly in periods of economic down-turns, which can extend for years.
Removing the costs (and value) of rolling-stock from the financial records can, and does, enhance key performance ratios and returns. These are typically reflected, positively, on share market prices.
Original equipment manufacturers are rapidly recognising the value and advantages of complementing the recognised and trust brand names, with financial instruments which impact on the balance sheet, and the bottom line. They have found the offers are particularly appealing to financially constrained start up, and green-fields operators.
Gearing up with motor vehicles, torque, can influence greatly acceleration and overall performance.
And it’s not all talk when new vehicle manufacturers are tapping into new sales opportunities in a largely contracting marketplace.
Overall, during 2019, new vehicle sales in Australia have fallen around 7%. Consumers, and to a certain extent, corporations, are retaining ownership of their vehicles for longer periods.
Reportedly, more than 70% of new vehicle dealerships are unprofitable in trading.
Cash-flows and margins are best from service, maintenance, insurance and finance revenues.
Not surprisingly, more and more vehicle manufactures are marketing extended, capped-price servicing of new vehicles (up to 7 years), which are purchased as a means to stimulate interest, visits, sales and relationships.
Ongoing personal contact and interactions with customers are significantly extending the duration and worth of customer-dealership relationships. Those reconfigurations are having impacts on corporate cultures, policies and practices, to the benefit of all.
ACCOUNTING FOR SOMETHING
The broader public accounting fraternity is under challenge. Increasing numbers of clients are expressing concerns about fee totals.
Overall, the services being provided and charged for are recognised to be costs.
Value, advantages and benefits are difficult for some clients to identify and monetise.
Discounting and negotiating lower fees are therefore often foremost on the agendas of accountant-client meetings. The outcomes are unpalatable for the professional accountancy principals.
A noticeable change is the introduction and integration of lower-cost and lower service-standard bookkeeping offerings. It satisfies the expectations, wants and needs of some.
Refining and repackaging value-propositions is an alternative.
Segmenting and differentiating professional services, including auditing is another.
Deleting provisions like business planning, human resource consulting and financial planning have also been identified by some to be attractive and advantageous for both clients and accountancy practices. Establishing, or retaining, arms-length relationships can, and do, have strategic upsides.
It simply involves the discipline of reviewing, assessing, determining and implementing reconfigured suites of services.
BREAK IT, BREAK IT UP
Established, often proven, business practices are not, and should not be beyond review.
Breaking up policies, reconfiguring value-packages and decomposing databases can often reveal new opportunities and possibilities.
Invaluable insights and overviews are gained as a consequence of posing the question, WHY?
Initial individual responses tend to be catalysts for further innovation and creativity. Energetic and enthusiastic buy-ins are inevitable, often self-generating consequences.
It just takes the drive to adopt a different view. So, don’t exclaim: Go figure
Instead, Go Reconfigure.
Barry Urquhart
Facilitator of Business Development Workshops
Marketing Focus
M: 041 983 5555
E: Urquhart@marketingfocus.net.au