From Unknown To - Understood

Economic boom times accommodate, tolerate and facilitate large measures of inefficiency and ineffectiveness.

Inherent in many past mass marketing strategies and initiatives were varying percentages of poorly targeted communications. Wastage factors were typically sizeable, but arguably affordable because of the sheer volume of business potential. Some customers simply fell in the cracks and felt that way, with little recognition of their plights, disappointments and unrecognised and unfulfilled needs, wants and aspirations. Little wonder that customer loyalty was mostly read about in marketing and sales publications, rather than being experienced and enjoyed in business relationships.

Since the onset of the Global Financial Crisis, many management teams have necessarily reviewed, refined and enhanced many aspects of business operations and processes. Understandably, budgets have been reined in. Communications have become better and tighter focused. Wastage and leakage factors and costs have been identified and are being progressively eliminated.

Among the more notable and costly inefficiencies of the past were generalised advertising, marketing, promotional, merchandising and selling initiatives. Customisation was applied occasionally, if not sparingly, because of a lack of substantive information on primary, secondary and tertiary target audiences.

ON-LINE, ON-SONG

Being on-line and connected has established a whole new world of expectations, demands and disappointments among consumers.

Pre-GFC, mass media campaigns were typically generalised and lacked strong measures of productivity, particularly in social media. The bold, general headlines were and remain, for many consumers, turn-off factors in cyberspace.

For businesses, effective emails, texts, Twitter, Facebook and YouTube exchanges need to be personable, intimate and respectful.

Purchase agendas are not determined or set by the corporate communicators. The potential or actual consuming communicatees are most responsive to positive information, intelligence and personal experiences or commendations.

The self-belief that one is unique, different and discerning is alive and well on-line and on the streets. Communication styles need to reflect those attributes and ideals.

MISS UNDERSTOOD

Many women are justified in being “miffed” about being ignored, not recognised or being misunderstood. Their roles, importance and influence in stimulating purchases and expediting the various stages of the buying cycle were and still are often over-looked, not studied, analysed, respected or addressed.

Lagging demand and poor sales volume can be explained, in part, because of the lack of sensitivity and responsiveness by marketers and management teams to the unique and divergent perceptions, preferences and dictates of female consumers. For example, some 72% of the decisions for families to contemplate and decide on the purchase of a new residence are initiated by the female head of the household.

There are a discrete number of “hot-buttons” which “turn on” the purchase drive of these key customers and consumers. Sadly, detailed analysis of the advertising, literature and promotional literature of new home builders, real estate agencies and property developers readily identifies glaring deficiencies, inadequacies and inappropriate texts. The target audiences appear to be unknown or misunderstood.

Motor vehicle dealers, networks and manufacturers exhibit the same insensitivities and suffer losses of potential sales as a consequence.

Retailers at large could profit appreciably by connecting with and being focused on the mind-sets, perception parameters, and purchase paradigms of female consumers. This includes hardware stores, some of which are conspicuously “macho-male” in advertising style, store presentations and sales staff employment practices.

THE NEXT STEP

The era of generalisation and broadcasting is waning, if it has not already elapsed.

Narrowcasting is an imperative, or put another way, mass customisation is in vogue.

Individualised, personalised and direct communication minimises wastage, shrinkage and leakage. Efficiency, effectiveness, productivity and velocity are optimised when investments are made into the researching, understanding and servicing of discrete sub-groupings and individualisation.

A mutual sense of understanding fosters confidence, peace-of-mind and assurance, which, individually and collectively, generate urgency, demand and optimal performance.

We should all know intimately and in detail our products, our markets and the economy. However, that is not enough. The needs exist for all entities to truly know, understand, value, to reach out, connect with and engage each and every targeted customer, consumer and client.

The journey typically starts with the unknown and unknowns, ultimately progressing to the understood... that is when you, your business, products, services and people will have arrived.

Sentiments Rule, OK

Economists are seldom right.

It is a recurring theme and reality. Put simply, economics is not an exact science.

There are too many variables for one to be definitive on any one issue or projection. Moreover, there is little scope for or recognition of the importance and nature of human perceptions and sentiments in economic equations.

For example, take the recent public statement by the Governor of the Reserve Bank of Australia, who has a doctorate in economics no less, when he pleaded with Australians to dispel their “gloom and doom” and to accept that nationally the “glass is half-full, not half-empty”.

Wrong! In reality there are two glasses. One is overflowing and the other is half-empty.

However, the physical reality of an overflowing cup is being tempered by the prevailing, pervading and apprehensive consumer sentiments. It is a classic case of the consuming public's perceptions becoming the economists' reality, if not nightmare. They just don't add up.

Long established, supposedly immutable economic principles need to be set aside. Consumers, like economists, need to be re-educated. The appropriate steps are recognised, sequential, basic and effective.

An overwhelming majority of consumers are now aware, alert, discerning and constantly exposed to multiple news sources and headlines which highlight the challenges being confronted by Greece, Spain, the Eurozone, the United States of America, as well as the Australian retail, tourism and construction sectors.

The “hard” news of the mass media, which centres on facts, statistics and other “concrete” aspects of news, holds little appeal to consumers at large. Those that do bear relevance and influence are largely negative in nature and character.

Whilst a significant percentage of people may be innumerate and financially incompetent they do tend to have an intuitive feel about things “that do not add-up”.

Therefore, consumer sentiments must necessarily be recognised, accepted and respected as a filter through which most, if not all communication is received and processed.

INEFFECTIVE ADVERTISING

Countless businesses around the world are reporting marginal responses to advertising campaigns, notwithstanding unprecedented discounts and offers.

Some have questioned the creativity of the advertising messages. Others have doubted the effectiveness of the various media channels. Both are justified, but for reasons related to the use of creativity and of the respective media, rather than to those two factors in isolation.

Few, it seems, have recognised the role and importance of consumers' sentiments.

There are 3 generally widespread realities in the marketplace. The first two explain, in part, the reasons why consumer demand and reactions are so sparse. They are:

•  Consumers are not listening

•  Consumers are not responding

Individually and collectively these two considerations define the challenge and the specifics of a brief which needs to address the need to “meet the market realities”.

Little wonder, those advertising campaigns which spruik, or better put, scream “save, save, save” or “sale, sale, sale” are ineffective.

A reorientation of focus from product, price and promotion to consumers, individuals and sentiments will generate interest, urgency and demand.

No consumer segment is immune to this spreading virus of disconnect. Most advertising is dismissed as just “noise”. A recent major study revealed that brand recall in the past 2 years has declined from 27% to 15%. Good marketing communication evokes emotional responses by projecting images or the promise of positive experience. Look no further than the communications of the brand Coca-Cola for a great example.

Case studies of consumer inertia and disinterest abound in electrical appliances, housing, real estate, financial planning and the same circumstances exist in numerous business-to-business scenarios.

A better and detailed understanding of prevailing consumer/corporate sentiments will be an effective first step in generating sales.

Repackaging the headline, the message, the offer and the very sentiment of the ‘advertising' is needed.

Significantly, for those entities which embrace these principles and address the challenges, enhanced performance standards are in the offing, regardless of overall volume of a sector or region. Redirection of existing demand is readily achievable.

FIRST THINGS FIRST

For most things in life there is a logical sequence. For marketers at present a new adage has evolved.

“Open the consumers' minds

Before you open their pockets”

This may and probably will involve the re-education, refocus, reassurance and reaffirmation. In short, the mind needs to be settled before the deal is settled.

Attention and priority needs to settle on the prospective, existing and past clients rather than the antiquated sales philosophy of the price, place and promotion.

It's All In The Mix

A magical two word business solution.

The suggestion may appear to be simplistic. However, the current malaise of the overall retail sector, as well as that being experienced by individual shopping centres, precincts and communities will to some considerable extent be addressed and redressed by a prime focus on a fundamental marketing imperative... that is, a good tenancy mix .

It should be an immutable rule for all lessors and property owners. A balanced, attractive tenancy mix which satisfies a full spectrum of consumer needs, wants and aspirations is an effective magnet which generates customer traffic. Thus, it is and must be Sine Qua Non.

Moreover, range, selection and choice hold the interest and attention of consumers who are inclined to visit more often, stay longer and increase purchase amounts. That is a sweet mix of optimising share of market and share of wallet. A compelling and profitable thought and reality. Never forget, an appropriate tenancy contributes to a great customer experience. That will result in high customer retentions.

The same principle can be extended beyond the bounds of the retail sector. Every business needs to ensure it offers a balanced, attractive product/service mix.

Qantas provides a striking case study on the consequences of a poor, limited product/services mix.

Two decades ago the airline enjoyed 42% market share of the inbound and outbound Australian International travel business. Today, that figure has shrunk to just 18%, with a continuing downward trend.

The causal factors are many and varied, not the least of which is the destination offerings. Throughout Europe Qantas has two destinations, London and Frankfurt, Germany. That pales into insignificance when companied to the 30 plus European cities serviced by Singapore, Cathay Pacific and Emirates airlines. Lesson learnt. Point made.

The same principles apply to pharmacists, veterinary surgeons, advertising consultants, engineers and real estate agents.

KEY PERFORMANCE

Therefore, achieving, sustaining and enhancing a balanced, attractive tenancy mix and product/service range is and should be a primary Key Performance Indicator (KPI). Some will contend that is a matter of “going back to the basics”. Astute business people, property owners, lessors and analysts will understandably question why there was ever a departure from the basics.

A GOLDEN RULE

Retail yields, internal rates of return and other financial measures should, ideally, be secondary criteria. Moreover, they should also be dependent on first achieving and sustaining a balanced, attractive tenancy mix.

Sacrificing a small percentage of yield in the current marketplace to ensure the maintenance of a sound tenancy mix is logical, establishes the foundations for stability and for sustainable growth and is a wise investment decision.

MAXIMISE OR OPTIMISE

The seeming conflicting between the goals of maximising rental receipts and yields against that of a balanced, attractive tenancy mix raises the perennial question, “is it best to maximise or to optimise?”

Evidence abounds in recent times of a widespread pursuit of maximising rentals (often measured in terms of dollars per square metre per annum). The criterium is applied to shopping centres and precincts with liberal abundance, reflected in the typical oversupply of jewellery stores, coffee lounges and phone retailers and casual leasing tenancies. Income is usually maximised in the short-term.

In the intermediate to longer-term such complexes and locations become boring, narrow in scope of their offerings and appeal, and progressively lose customers. Therefore, maximised rental income can be and often is a false economy and goal, with profound, negative longer-term affects. The income of the lessor or property owner and the buoyancy of trading conditions inevitably declines and under-perform over time.

SAGE ADVICE

Ross Duffield is a well established, successful Western Australian businessman, retailer and shopping centre lessor.

He owns the 21 store Perth metropolitan area Carine Glades Shopping Centre, which is anchored by an independent IGA Supermarket. The centre consistently attracts more than 42,000 customers per week. A number of the lessees enjoy annual seven figure gross profits. Understandably, the retailers are happy. They are also respected and valued by Ross and his company.

The pillars of success which are applied by Ross include:

•  A good tenancy mix is imperative. It is why customers visit the centre.

 

•  Beyond a good tenancy mix, it is important to seek out and secure the very best targeted retailers one can get.

 

•  Establish a justifiable rental structure, which is fair and equitable to all concerned. Retailers must be allowed to profit from their expertise.

 

•  Be severe, set standards and never compromise. Fantastic, that is discipline.

 

•  Ignore inappropriate retailers and retailing businesses who are prepared to pay excessive rents. Stay focussed on a balanced tenancy mix.

 

•  At all times be open to and aware of changing consumer needs and opportunities. In short, stay relevant.

PERFORMANCE REWARDS

There is much to commend the proposition for a detailed review and refinement of the procedures which determine the remuneration of executives, in particular those in retail property sector.

Maximising rental receipts by having a tenancy mix which features 11 jewellery stores, 8 gift retail outlets and 7 coffee lounges could arguably be appropriate for incurring executive income penalties, not bonuses.

In the final analysis, there is only one arbiter of the degree to which a business is “customer-focussed”. That is the customer. Very few consumers, if any at all, will applaud extreme duplication of business types in a mall, streetscape or locality. Moreover, no research has ever revealed increased customer satisfaction based on high rental income. Measuring a balanced, attractive tenancy-mix is difficult, bordering on impossible. The criteria applied by consumers are subjective, emotive and variable. A reasoned person may contend that a fair and equitable quantifiable variable is consumer traffic counts.

Now that is a refreshing perspective and one that should be put in the mix.

Managing Expectations

Every prospective and existing customer and client arrives at the premises, on the telephone or on-line with expectations. These can be and are influenced, or indeed often determined in part or in whole, by past experiences, word-of-mouth references, advertising, website designs, literature, premises presentations, image, reputations and the attitudes of staff members.

Achieving and sustaining satisfaction are functions of the consistency and continuity of the service provided. This can involve numerous people, departments and sections which contribute to the experiences encountered and, hopefully, enjoyed by the customers and clients.

Among the consistently best service providing entities are those that embrace the “horizontal organisation” philosophy. In essence, the traditional pyramid organisation structure is turned on its side, and hierarchy or seniority have no consideration with individuals accepting and embracing responsibility and authority for ensuring customer satisfaction by managing their expectations. Everyone is a nominal manager.

No gaps are tolerated in service provision, authority, responsibility or communications. Reception, sales, service, production, logistics, credit and support people recognise, accept, embrace, endorse and celebrate their respective central and integral roles as team members charged with managing customer expectations.

Care is taken to ensure that all relevant people who contribute to managing the expectations are advised in timely and appropriate ways of their roles and of the commitments given to customers.

Those expectations can and do include personal presentation, the standards applied to cleanliness, accuracy, timelines and the attitudes of team members.

It is well to remember that the first person to interact with the expectant customer is seldom the last person in the organisation to do so. The expectations remain the same.

EXPECTATIONS CHALLENGE

The overriding challenge for team members in pursuit of consistently meeting clients and customers' expectations is to engage, commit and to develop sustainable mutually rewarding relationships. Each is largely founded on attitudes.

FACE THE FACTS

Fundamental to recognising, responding to and fulfilling expectations are the unimpeachable virtues of truth, facts, realism, information sharing and empowering clients and customers with attractive and viable choices.

“Get the deal or contract on any basis” is now a redundant philosophy. It's okay to say no, or to reset unreasonable and unachievable deadlines and benchmarks for delivery, price and service standards.

Above all else it is logical, acceptable and to be applauded for one to make a profit.

Being open, transparent and honest is greatly valued by customers. It meets their expectations. Most expect nothing less.

ANALYSE THE PLAYING FIELD

Many aspects and factors can and do contribute to the fulfilment and to the failure of meeting expectations.

Each service provider, team, section or department needs to recognise that they are, at one time or another, the axis or axle in a dynamic rotating wheel of service delivery.

The spokes of that wheel are:

•  Culture

•  Structure

•  Geography

•  Sequential flow

•  Authority levels

•  Accountability

•  Responsiveness

•  Product knowledge

Individually and collectively they need to be strong, consistent and complete. Otherwise the ride can be exceedingly bumpy, costly and involve considerable maintenance and remedial costs.

COMMUNICATION LOOP

Not unsurprising is the reality that inadequacies in and among the communication channels, vehicles and communicators cause the greatest and most recurring deficiencies in meeting expectations.

We need to enhance our communication skills, better use all available channels and be forever conscious of the need to avoid presumptions when dealing with customers. A lack of comprehension on the part of either party to a communication exchange creates filters, barriers, impediments and causes confusion, annoyance, frustration, misunderstanding and results in expectations not being understood or satisfied.

COSTLY CONSEQUENCES

The consequences of not fulfilling expectations can be quantified in terms of:

•  Productivity losses

•  Income sub-optimisation

•  Client satisfaction shortfalls

•  Relationship fractures

•  Lack of loyalty

•  Absences of referrals

•  Impaired company images

Each can be and often is a heavy burden, whose presence is reflected on the bottom line... You can bank on it.

Here is a sobering reality check. In dealings with external clients and customers one error, delay or fault typically has a cascading impact on between 5 and 7 people associated with or dependent upon that single direct client. Take pause. It is not difficult or very taxing to recognise and visualise that interdependent chain of relationships.

THE NEXT STEP TO FULFILLING EXPECTATIONS

Asking questions of customers, clients and internal associate service providers is empowering, satisfying and reaffirming.

It is the initial step to ensure that everyone knows and cares about what is expected of the company, the product, the service, the team and the individual.

Four simple direct questions provide clarity.

•  Do you know what I have committed us to?

•  Do you understand what is expected of you?

•  Do you comprehend the priorities and timelines?

•  Are there any reasons we can't fulfil the expectations?

From there it is simply a matter of confirming the outcomes, following through, following up and celebrating the attainment and fulfilment of the expectations.

Well done. Well managed. Expectations fulfilled.

On The Radar Screen - Turbulance Ahead

This is your captain speaking.

Welcome aboard this around-the-world flight, visiting some of the globe's economic and political hot-spots.

Fasten your seat belts. There is turbulence ahead.

We can and will ride it out, but it will be a bit bumpy. It may be necessary to reset our course several times to negotiate the conditions which lie ahead.

Be advised, we will be changing altitudes at various times in an endeavour to find the smoothest possible passage.

Our route on this trip has us tracking north and west. We do not anticipate any tailwinds. Therefore, the engines will need to work at full power and there will be no early arrivals.

Late in the flight do keep your eyes open, because we will probably see the sun setting on a number of countries, as we have known them.

European air-traffic control has issued a warning. There is a heavy flight of capital out of Greece to Germany, creating some congestion and its own slipstream. We will remain mindful of this. However, it should not cause us any major concern or delays. The impact will be relative(s) and should be limited to certain suburbs in metropolitan Melbourne.

Our instruments are showing a drag on the left wing and we expect that to increase over France. We are monitoring the situation closely. The atmosphere in Spain and Portugal may exacerbate conditions.

The global forecast is for a series of storm fronts to gather and stay over Europe for around a decade. There will be flooding in specific localities and businesses will bear substantial costs, many will incur damage (to revenue, sales and growth) and some will be washed out to sea. Analysis at this time has identified much structural damage and the re-building program will be long, complex and costly.

In most instances, there is no insurance cover to off-set the costs and premiums will be regraded. That appears to be a prudent policy, with little risk that it will not occur.

National business, political and economic lexicons will witness additions. Already, there is widespread and conspicuous evidence that the Greeks, French, Spanish, Portuguese and Irish are experiencing difficulty comprehending, articulating and applying simple words like austerity.

We have received word that the volcanic Mt Etna in Italy is active, which is in stark contrast to the national government. The former Prime Minister has been found to be a “Little Emperor” without clothes. He has given up his political party in favour of another bunga-bunga party. Advice is that we should avoid that airspace as a precaution to possible fallout.

A large depression has been identified over Ireland. Yes, that is correct and confirmed... to-be-sure, to-be-sure.

Here is an interesting aside. European business schools, political science facilities and universities are offering new and refresher courses on profits, costs, margin risk and capital management. At this time interest and enrolments are sparse. It seems many of the potential students are otherwise engaged in reclaiming and Occupying The Streets of cities throughout the continent.

The worst of the storms across the Atlantic Ocean over the North America continent have passed and dissipated. A lot of rebuilding is needed, not the least of which is confidence. This will be no tea party.

Regrettably, no one is showing or paying any interest. We will be avoiding that area because wind-shear and down-draughts will make it hard for us to take off and achieve any uplift for some time.

Reports have been received that China is experiencing an unseasonal cold chill, which is affecting the local atmosphere. Movement and air-traffic have slowed appreciably.

There are fears of a pending avalanche which will affect Beijing. We are assured that the Central Communist Party is drafting a most positive forecast...

Our scheduled stopover in India has been cancelled. We have received advice there has been another earthquake which has shaken the country. Five more cricketers have been found to be negotiating to cheat with the bowling of no-balls, wides and donkey-drops.

Hold on. Disregard that advice. It seems the situation is normal. Oh, my goodness!

We have been able to connect with the Australian-owned and sited Jindalee Over The Horizon Radar System and can report we are tracking what appears to be a significant number of well-heeled Australian consumer refugees, who appear to be trekking overseas for relief from high prices, appallingly bad customer service and an incompetent Federal Government.

Ladies, gentleman and children, we anticipate a relatively soft-landing after a somewhat “bumpy” ride.

And so, please sit back, enjoy the spartan service (with due deference to the Greeks) and have faith. There is only one way, and that is up. And at the moment the First Officer is in full flight using the sextant trying to conclude which way that is.

Love Me Tender

There is a certain sameness about tenders. Compliance to the provisions of the tendering process promotes commodisation of tendered documents and the tendering entities. The sole point of difference is the quoted price.

Little wonder the concepts of value, originality, innovation, relationships and negotiated, mutually rewarding agreements are discounted and, often, dismissed.

Politicians may well promote, endorse and revel in “level playing fields”. Commercially, it is an ill-advised limiting strategic option in which there is only one winner... occasionally and rotationally. In the longer term no one wins and costs rise because of unallocated expenses which must be amortised on all projects and stock items.

In the prevailing straitened economic circumstances and with a price sensitive marketplace, an increasing number of business owners and managers are adopting the attitude that they and their entities cannot afford not to pursue every opportunity. Inadvertently, they do so at their own cost and detriment.

Saying “No” and turning one's back on an invitation to submit a tender takes mental strength, a strong and singular focus, complemented by the resilience of a sound corporate philosophy. It is a refreshing, appealing alternative to being one of a long list of compliant, non-differentiated tenderers.

Being the same soon develops into a market image of being... “same ol', same ol'”.

Similar templates and market consequences can be applied to those “bricks and mortar” businesses which choose to compete on price on-line with their global cyber space competitors and substitutes. Street-smart and tech-savvy consumers and clients are well connected, informed, discerning and price sensitive. They are also becoming increasingly numerate. Two-structure pricing policies (in-store and on-line) quickly disconnect the value of brands, services, businesses, physical presence and loyalty.

In the book “The Jindalee Factor” , which provided insights on Australian entrepreneurs, Professor Roger Smith and I were able to highlight the belief of several sustainably successful leaders of commerce that it is prudent not to pursue all available deals.

The profit incentive is not desirable. It is an imperative. Profits pay for premises, stock, staff and service, without which an entity “wilters on the vine” and the client is left unsatisfied and unfulfilled. “Unprofitable profitability” could only ever be considered and accounting term which measures cashflow. One cannot profitably invest cash flows in the long term.

A general slowdown in economic activity accords opportunity to review, refine and develop operations, strategies and to pursue those prospects which represent genuine, on-going value.

BRUTAL REALITY

There is no tenderness in the tendering process. It is a statistical and historical reality that only a percentage of tendered submissions and entities will be successful and profitable.

One need look no further than the appallingly poor recent track record of major engineering and construction corporations which won business with successful tenders and have recorded consistent, significant and increasing losses.

Losing such tenders has proven to those tenderers who were not granted the contracts to be winners.

NON COMPLIANCE

Whether the objective is to win custom on-line or in a tender, non-compliance is an appealing attribute because it provides scope for difference, enhancement and betterment

AT WORST

At the very least, entities that are requesting tenders should be made to pay for such. Decisions to participate in tendering processes should, and often can be complemented with a creative drive to find a better, faster and cheaper way than that stipulated in the tender document.

Remember, rules are for guidance, not obedience.

One should never apologise for being original, innovative, creative and profitable. Each is an attribute and building block for growth, sustainable competitive advantage and the delivery of value through quality products, services and experiences, and relationships.

Ill-Will Blows On Goodwill

Another GFC casualty.

Goodwill and its innate, tangible, attractive and now in many instances, past value for business owners, investors and prospective purchasers has been dealt a foul blow by the consequences of the Global Financial Crisis (GFC).

Like, and because of, rampant reductions in prices, goodwill has been extensively discounted. Its fate runs parallel to that of customer and client loyalty... heavily qualified or being a quant recall from the past.

The concept of goodwill is founded on the belief, expectation and established record of sales, margins and profits that future income, dividends and competitive advantage are “bankable”. Repeat and referral sales have traditionally been the cornerstones for payment of goodwill, along with the anticipation of stability, growth and sustainability.

Some models and templates which determine the actual worth of the goodwill, which is inherent in individual businesses and sectors, provide for multiples of past and current annual gross or net profits. Many of those calculation structures are being refined or, indeed, discarded. The future vision, it seems, is clouded by volatility, change, shifting consumer sentiments and significant structural changes in commerce.

It is just another consequence of the “now” society in which we all operate. The concept of loyalty has necessarily been revised, like that of personal relationships. It is a circumstance that futurist Alvin Toffler wrote about in the 1970 book, Future Shock . Transience is the very essence of modern society.

Life partners are inclined to vow monogamy-with a qualification. That is, adherence to “serial monogamy”, in which I will be “faithful” to you when I am with you, but I won't be for long.

For businesses, that makes the currency, appeal and viability of “loss leaders” somewhat redundant. In short, each encounter should be a profitable experience. Delayed financial returns from hoped-for long-term relationships may simply and unreasonably inflate profit projections and goodwill valuations.

The short-term horizons applied for the calculations of goodwill related to medical, legal and accountancy practices are understandable. Information Technology (IT) consultants often express frustration about the lack of value that is typically applied to their practices. Perhaps it's just another VIRUS!

GOODWILL ATTRIBUTES

Entities which enjoy substantial, consistent and increasing goodwill worth tend to exhibit a common set of attributes. They typically centre on:

•  Committed allocations of resources for product/service development, innovation and creation.

•  Stable pricing policies, based on offering value, rather than on discounting advantage and the conduct of regular sales.

•  Dedicated allocations of upgrading premises, systems and distribution networks. Currency in those attributes generates bankable currency flows.

•  Considered, disciplined and scheduled professional training of all staff members and appropriate stakeholders.

•  On-going investments in upgrading communications networks, because effective, efficient and timely two-way communication is the lifeline for all entities.

•  Adherence to the process of structured planning with respect for the need to implement, monitor, quantify and refine time-oriented goals and benchmarks.

•  A culture which promotes, supports, recognises, celebrates and rewards change, having fun and a pervading belief in a positive team spirit.

Sadly, there is a noticeably short list of recognisable international iconic businesses that project all of those attributes and the related profitable benefits of goodwill. Apple, Facebook and BMW are examples.

Within Australia, Liquor Barons, Liquor Legends and The Coffee Club come to mind. Encouragingly, there is an increasing pool of businesses which are striving to justify their goal to be numbered among the local entities which warrant payment for, and the benefits of goodwill.

For those in the retail sector, I refer to the acronym so often used by Jeff Rogut, the Executive Officer of the Australasian Association of Convenience Stores, being:

R.E.T.A.I.L – Retail Excellence Takes Attitude, Innovation, Leadership.

Focus on those three pillars and avoid the distractions of siren calls for discounting, outsourcing to overseas call centres and constant reductions in staff members, inventory and systems.

Sentiments Are Not Sentimental

Fickle consumers.

How can retailers possibly cope?

Actually, it is the sentiments of consumers rather than the consumers themselves that are fickle, and thus hard to analyse and forecast.

Much consumer sentiment is the product of newspaper, television, radio and magazines headlines, stories and innate editorial biases. Accordingly, they can and do, in many instances, change daily.

This is a reality strikingly evident in the discourse between, opinions and expressed buying intentions of participants in focus groups.

One is left to conclude that consumer sentiments, to a large extent, are an “effect” rather than a “causal” factor, which must be considered in the planning of the marketing, advertising, promotions, product lines, inventory and financial forecasting of many retail businesses.

Over-riding consumer sentiment can be materially and significantly affected by the public statements of politicians, bankers and other spheres of influence.

Declarations by high profile retail industry spokespersons about price deflation, sales leakages to internet on-line retail websites and entities, rampant price discounting and a general sense of lack of consumer loyalty can influence prevailing sentiments. More disturbing, it can awaken, educate and influence consumers to consider and try competitors, substitutes and alternatives as means to satisfy their needs, wants and desires.

Compounding the issue is the lack of uniformity in such expressions, driven largely by short-term, often conflicting, self-interest.

Some industry leaders even get very sentimental about the whole issue, to their and businesses' detriments.

ECONOMIC SHORT-COMINGS

Expectations of economists typically exceed the disciplines and the practitioners' capacities, training and abilities. To expect economists to accurately forecast within .1% interest rates 12 – 24 months hence, is unreasonable and, above all else, their attempts to do so, unbelievable. So too are such forecasts.

Many economists determine their projections on established or unique modelling. Retail association spokespersons use or refer to similar templates and concepts.

Many business leaders share a general consensus that economic forecasts are inevitably wrong. The major point of disagreement is just how wrong the economists are in their forecasts.

Interestingly, a common deficiency of economic modelling is the absence of consideration of and tolerance for the role and influence of consumer sentiment.

It is estimated that the sentiment of consumers is a variable that can influence demand, and thus sales, profits and dividends, by up to 25% of standard economic forecast modelling.

Hence, it seems that consumer sentiment is something that business people, retailers in particular, cannot do with or without.

FILTERED SENTIMENT

Consumer sentiment is a cruel, fickle master. It is also a rewarding but not compliant servant.

Sentiment is a filter through which consumer perceptions are developed, established and, over the short-term, sustained.

It can and does impede and block out communication. Moreover, it is often a pre-emptive factor which determines whether purchase, investment or consumption will be contemplated. That is a powerful variable which will directly and, most importantly, indirectly impact on spending patterns. Care must be taken about the capacity for mass consumer sentiments to change and to do so rapidly.

One need not look beyond the fortunes of retail brands in the “beach culture” sector of retailing to register a salutary lesson.

BE DISCIPLINED

Consumer sentiments, and their importance to all businesses underscore the importance of a principle enunciated in my co-authored book on Australian entrepreneurs which was titled, The Jindalee Factor. That was

“Plan long. Manage short”

Don't attempt to plan in anticipation of sentiments or manage oneself around them. Consider, respect and allow for them, with appreciable tolerance for variability.

THE YEAR AHEAD

If one is not able to accurately and consistently forecast mass media headlines 7, 14 or 30 days ahead, then no attempt should be made to project consumer sentiments or to believe that concise sales and profit totals can be documented and “banked” in advance, based on those premises.

Likewise, economists' statistics about the future should be studied carefully and then, in most instances, be summarily dismissed. Economics is the discipline of the allocation of scarce resources, not of declaring within .1%, the official interest rates and the All Ordinaries Index, twelve months hence.

Accept the fact that the headwinds which has been spoken and written about so freely since the onset of the Global Financial Crisis (GFC) in August 2008 will persist during 2012. They will be fluky, inconsistent in direction and in intensity and they will be compounded by the changing tides of consumer sentiments.

In short, astutely set course for the finish-line, but be flexible, malleable and responsive. Recognise the nature, role, importance of and influence of consumer sentiments. Don't attempt to control such emotions. Rather, reach out, connect, and interact with consumers and at all times endeavour to guide (but not unjustifiably talk-up) their sentiments.

If one possesses a high tolerance of risk and has a “business auto-pilot”, then at least push the reset button!

Value Pricing

Value is an intriguing, complex, subjective, and often misunderstood concept which is the product or consequence of a convergence of quality, design, price, predictability, and, often, originality and individualism. Sadly, to many, value has been reduced to a single dimensional scale. That is, price, and with it the whole precept has been debased.

Above all else, value is determined, accepted and appreciated by individuals, consumers at large and the marketplace. It is they, individually and collectively, who assign the relative ratings and weightings of a disparate set of attributes and characteristics to determine the “true measure of value”.

Advertising texts that scream “Great Value”, typically because of cheap and discounted products, miss the point. The primary thing discounted in such instances is the inherent value of a brand name.

IT'S LORE, NOT LAW

It is bemusing to many that lawyers and the legal fraternity are dismayed that they and their skill-sets are not valued.

The self-determined and self-measured sense of worth, common among those students of the letters of law are greatly influenced by a profession-wide culture. First-year undergraduates are exposed to a belief system, highlighted and reinforced by lecturers and tutors, that is quantified in six-minute modules. Career path aspirations, income expectations and assessments of one's worth to “the firm” are all extensions of the six-minute fee charging mind-set.

Conversely, consumers and clients have profound interest in “concrete” outcomes in their dealings with lawyers and the law. They want accurate assessments of legal decisions (from and within courts and tribunals), set predetermined costs and defined projections of time schedules.

Rationalisations, equivocations and references about the vagaries of legal processes simply serve to compound the annoyances, frustrations and sense of a lack of value felt and expressed by so many corporate and individual clients.

Considerable competitive advantage and growth potential lie unfulfilled in the legal landscape for practices (and legal practitioners) that are prepared to take the risk (as so often undertaken by other professionals, including management consultants, engineers, accountants and bankers) to be “concrete” in their costing estimates and evaluations of probable outcomes. If only they would...DARE TO BE DIFFERENT.

WORTH PAYING FOR

True value is worth paying for. Consumers revel in a sense of satisfaction in knowing or concluding that he or she has a balanced sense of value.

During the course of 2011 I was approached by a Melbourne-based professional event management group which was to conduct and promote a public conference.

The projections and related statistics were impressive... A total audience exceeding 300 senior corporate executives from targeted and defined business sectors, each of whom would pay in excess of $4,500 to register and attend an intense three-day program of diverse speakers. Specific dates and venues were nominated.

  “Would you be interested in having the opportunity to address that audience

  profile?” I was asked.

Expressing the affirmative response seemed unnecessary and meaningless. I ventured forth with the statement:

“Yes, subject to the brief, the set objectives and conditions of my appointment. In short, what will be the fee and expenses?”

I'm still not sure, but I think the response was awe-inspiring, or alternatively, breathtakingly audacious:

  “ YOU will be expected to pay $4,500 to address the group for 45 minutes.

  All travel, accommodation and meal expenses will be your responsibility.

  However, we will offer a discounted registration fee so that you can hear

  the other speakers.”

I offered some well-intentioned gratuitous advice, with the rider that being gratuitous and not involving any fee the advice did not represent value. My contention was that if I was not worth paying, then she should find others who were, to pay them and to appreciate the value.

Value reigns supreme. Subsequent advice received at our offices was reassuring. The proposed public event did not proceed and the event company promoter lost a considerable sum of money. The marketplace had expressed its own value judgement.

TAKE OUT VALUE

“Long after the price is forgotten, the value will be appreciated.”

It is a long established, tried and true axiom of business.

Successful and professional marketers repeatedly espouse the need to de-emphasise the features of a product and service in favour of emphasising the advantages and benefits which are determined, appreciated and valued by customers and clients.

There is little point in knowing one's product if there is a lack of knowledge and understanding of the perceptions, attitudes, expectations, needs and value determinants of customers and clients.

PRESCRIPTION FOR SUCCESS

Increasingly, retail pharmacists are assigning priorities to offering, promoting and capitalising on services which complement and enhance the income generated by the dispensing of traditional medicinals. Significantly, greater than 50% of adult consumers currently seek out and take complementary medicines.

It is they who determine if each and both sets represent value. Professional vanity can be and is an expensive attitude of some medical professionals. However, there should be no reticence about the concept of fee for service.

Trained and experienced market researchers, do have much to offer in addressing this issue. Now is a good time for all pricing structures to be reviewed and refined. New pricing models should be tested before implementation.

It is important for one to remain objective and dispassionate in studying consumer preferences, buying criteria and buying habits. The data which is retrieved and collated must be analysed without any value-judgements by the researchers. That is a measure of the worth and value of the research to the client.

The logical progression of the process extends to the interactions between companies, their representatives and consumers.

Business people need not agree with their customers, but they do need to understand... that's value and valuable.

On Side With On-Line

On-line communications and statistics should be, and are, the friends of those in business. However, one needs to look behind the statistics for understanding, value and worth.

For many, the staple diet of statistics in the mass media about the growing presence and influence of on-line channels of communication and supply is both intimidating and overwhelming. Equally, those data can be misleading or incomplete, not revealing the full story.

Take for example the fact that up to 67% of people now go on-line when intending to buy or are buying a wide range of products and services. Seldom reported is the fact that the fastest growing sector of on-line contact for purchases is mobile – that is, via mobile phone and tablets. (Perhaps we need to heed the advice of former Australian Prime Minister Kevin Rudd to take a Bex tablet and have a lie down).

The latter factors represent opportunity for bricks and mortar retailers. They establish and reinforce the reality that many consumers are going on-line when actually out in the marketplace, in retail precincts, shopping centres and in stores. Understandably, they are cross-referencing the comparative values and prices available in-store and on-line.

Effective, courteous and professional customer service, complemented by the appeal of convenience and immediacy – an imperative for “now” consumers – are compelling reasons for consumers to conclude the sales in store immediately. Such advantages need to be promoted and exploited. Indeed, astute service providers involve themselves in the practice of consumers going on-line by providing comments, background information and making informed value statements. It is imperative, and is impressive to many intending buyers.

At present some 37% of the 24 million mobile phones that operate in Australia are smart phones. It is estimated that this figure will increase to over 50% by June, 2012. Hello!

The very best of businesses are also utilising on-line channels to personalise messages to discrete target audiences and individuals. It is now the most effective and efficient means to reach out, connect with and engage consumers.

2010 was a benchmark year in marketing and commerce. For the first time ever in Australia, investments in below-the-line advertising (emails, text, telephone, direct mail etc) exceeded those of above-the-line advertising, which include the mass media of television, radio, print and outdoor signage. Again, the market leaders of the latter group are embracing and utilising on-line to complement and enhance their value packaging. Television New Zealand is at the forefront of the movement.

A NEW SHOP FRONT

It seems ironic that many shopping leases which are signed and, albeit often reluctantly, accepted by business owners, stipulate that at the expiration of each three or five year term lessees are legally obliged to outlay from $30,000 to $1 million for store, layout and fitting upgrades.

This stands in stark contrast to the standards and outdated presentations of many websites and online presentations (our own included). The internet has become the new shopfront. First impressions are influential in image building, revenue generating and relationship development. Tokenism is not sufficient.

For the 47% of Australia's 2.3 million operating businesses which do not have a website, a simple message: Get one, and fast.

However, be selective in your choice of consultants. I for one find it hard to accept the periodic faxes received at our premises with the offer headline:

“Websites For Dummies”

Classification as a dummy does little for one's self-image and ego. Furthermore, dummies are inclined to accept anything that is offered. Neither is a sound foundation for positive, mutually rewarding and sustainable relationships.

DON'T OVERDO IT!

Many on-line communicators lose appeal, relevance and business by testing the tolerance of their targeted prospective, existing and past clients.

Daily transmissions are seldom responded to daily. That surely is making a definitive statement. Weekly transmissions too can be testing. Therefore, to be effective in marketing, one will need to ignore the advice of health professionals. That is, be irregular. Communicate when you need to and when you have a compelling offer, often with a time limitation. Such missives will have impact, will resonate with recipients and will generate additional revenue.

BE GRAPHIC

Extensive attitudinal research has consistently concluded that graphics in email transmissions are often deemed to be irritating distractions or some simply overwhelm the message. Often it is the graphic that is recalled rather than the essence of the message/offer, the product the service or the company itself.

Moreover, graphics consume a lot of computer capacity and time.

Therefore, good graphics are like good fashion - understated. They can and should make a definitive statement.

COMPETITIVE ADVANTAGE

Astute, contemporary marketers possess, exhibit and share comprehensive and compelling detailed product knowledge. The most prolific visitors to websites and recipients of texts, emails and direct mail from the major and significant operators in a sector, are the astute business people (competitors) themselves.

They subscribe to the philosophy:

          “KNOW THY ENEMY”

Effective, current intelligence is the essential prerequisite for sound cash-flow generating strategies.

YOU STILL NEED TO SELL

The highest ratios of sales conversion remain with the personal contact between the customer and a service provider. Statistics don't lie, always. Where possible, appropriate and economically viable, encourage consumers to talk to an individual service provider. A convergence between the emotional and the human quotients does wonders for the bottom line.

RING THE BELL

The essential message brings to mind a recent past Australian Federal Government funded advertising campaign about national security. Steve Leibman, the veteran television personality implored people to:

“Be aware, not alarmed”

That is sage advice, particularly about on-line.

It's Raining Training

A great train of thinking.

To train or not to train. That is not a question. It is a dividing line, between those who will strive and thrive, and those who will wilt and fade away.

There is growing evidence that investing in training is one effective avenue to develop business and to counter depressing levels of sales and revenue leakage.

There have been many lessons learnt since the onset of the GFC (Global Financial Crisis) in August 2008. Among those are:

•  Price discounting is ineffective in achieving sustainable sales increases.

•  Sales events have themselves been discounted in value and integrity.

•  Bargain pricing has inflicted irreparable damage to many brand names.

•  Reduced inventory and staff numbers have made conspicuous impacts on customer service standards.

•  Customer loyalty cannot and will not be “bought” by loyalty card points.

•  On-going multi-channel communications between businesses and customers are imperatives, not options. (Hello! on-line and social media.)

•  The rate of change and innovations is increasing.

•  “New” and “local” have become the black in marketing.

•  The cornerstone for establishing, maintaining and developing relationships with existing, prospective and (yes) past customers is PERSONAL.

It is these points and more that constitute the parameters and framework within which truly effective training must be formulated, documented, implemented and supported.

CALL TO ACTION

The findings of a recent comprehensive study of some 2000 chief executives of companies and departments throughout North America, Europe and Australia by an international finance group were stark and compelling.

Some 62% of respondents nominated internal and external customer service as the primary need for training and enhancement. A total of 43% contended “corporate culture” was an area of concern and in need of improvement.

Both those factors rated higher in the priority listing than the wish and need to improve “productivity”.

On balance, upgraded customer service standards and an enhanced corporate culture will and do inevitably lead to greater cohesion, pride, self motivation and productivity.

Clearly, it is important to look closely at and respect the importance and value of the “bottom line” in preference to a single focus on the top line.

Most sobering were the conclusions of those chief executives who participated in the study. Some 71% stated it was difficult if not impossible to quantify any increases in customer satisfaction, sales, profits and productivity as a direct result of recent training activities. Some 18% believed there had been “marginal” or short-term improvements in performance standards.

Just 9% of respondents concluded that training in customer service and corporate culture effected and sustained significant enhancements. (Note: 2% did not respond). The lesson here is that the “right” training, to the “right” people by the “right” trainer, for the “right” reasons and the “right” desired outcomes is essential.

LESSONS LEARNT

Business leaders who have decided upon and are committed to undertaking training to address the prevailing market-forces and to achieve a sustainable competitive advantage are to be applauded.

However, the findings of the study among their 2000 corporate peers are worthy of reflection.

Training in and of itself is not the answer. The keys to effective people and skills development are numerous, complex and integrated.

At a recent public event in Australia an executive from a public listed training company proudly declared his accredited and registered training group was most effective in securing government funding for the training of client company staff-members.

Subsequent detailed and specific probing about the skills of the trainers and their comprehension of the diverse aspects of service excellence and positive corporate culture revealed a disturbing and significant inadequacy in skills and knowledge.

This was another case of waste in terms of money, time and resources – soothed somewhat by the realisation that it would be government funded. As if Australia needs more government waste!

Another case study is equally enlightening. An international hotel group sought training in customer service for its high turnover, typically casual and part-time hospitality service providers.

It transpired that the female executive who initiated the approach was not qualified or experienced in Human Resources Management or training. She appeared to have little or no authority and would need to refer all matters requiring decisions to an unnamed senior executive.

The two hotel brands had no formal job specifications (which detail the human attributes necessary to fulfil differing employment duties and functions), no formalised induction procedures, little structured or scheduled and customised training programs for individuals, groups or departments, and no infrastructure to support, reinforce and complement any training undertaken.

The professional trainer who had extensive skills and experience in consulting to businesses and conducting interactive workshops on corporate culture and quality customer service was then advised he would not be paid a set professional fee. Remuneration would be a percentage of the increase in sales revenue from those hotel departments whose staff-members would be involved in the integrated and structured training schedule.

The negotiations ceased immediately.

In the first instance, the value of the professional consultant was not recognised or quantified. Secondly, how could a trainer have faith in the ability of a hotel group which was so evidently deficient? This was not training in customer service or corporate culture. Rather, it was un-abased drive to improve the sales closure skills of staff-members.

Moreover, the activities were ill-focused.

The most immediate training needs lie within the ranks of senior executives.

ESSENTIAL STEPS 

Corporate executives and professional external and internal training experts who seek, expect and, indeed, demand successful outcomes in their training activities, especially relating to customer service excellence, need to progressively address the following issues:

   CORPORATE CULTURE

Ensure that the overriding corporate culture (both formal and informal) is understood by all people, is documented, verbalised, respected and adhered to. In essence, the corporate culture is an expression of the personality of an entity. A fun learning experience is to have team-members express the culture, of which they are part, in terms of humanoid characteristics.

 

It is and can be a revealing exercise.

 

RECRUITMENT PROCESSES

Each company should review and refine carefully JOB DESCRIPTIONS (detailing the duties to be undertaken, the authorities to be exercised and the responsibilities which are assigned to each position).

Job descriptions should be cross-referenced to each JOB SPECIFICATION (the human attributes necessary for the performance of each position to be fulfilled).

Care must be taken in the differing phases of recruitment to recognise that fewer than 24% of adult Australians have an appropriate psychological profile to be an effective, efficient and engaging service provider.

NOTE: Promotion of the above listed factors is an excellent means to generate interest in employment by the best available recruitment prospects, who are typically keen to be involved with the best prospective employer.

INDUCTION PROCEDURE

A comprehensive, disciplined induction procedure develops an appreciation of the values and nature of an entity.

 

The first step to achieving higher planes of customer service standards is for team-members to think and state: “I understand”.

 

Full understanding of the interdependence of positions, departments and duties contributes to optimal outcomes of customer satisfaction and productivity.

 

TRAINING NEEDS ANALYSIS

It is imperative that each training experience be customised, that the training objectives be defined and shared, as well as the commitment of each participant be secured from the outset.

 

“Singing from the same hymn book” has a certain harmony about it.

 

Understanding WHY the specific training is being undertaken is an imperative prerequisite if the WHAT and the HOW are to be embraced and subsequently implemented.

 

INTERACTIVE SESSIONS

Rightly or wrongly, to greater and lesser extents, each individual believes that he or she has much to contribute to the training exercise.

 

Everyone should be given the scope and opportunity to provide input, analysis and to give connection to the jointly determined outputs.

 

DEFINED OUTCOMES

The initial euphoria, motivations and aspirations which flow from training programs are usually extinguished within 72 hours, three weeks or six weeks, unless benchmarks are set, monitoring processes are installed, on-going feedback is provided and regular refinements are encouraged.

 

External trainers, catalysts and change facilitators need to be complemented with internal project leaders, or “Concept Champions”, if you will.

 

The best results are achieved and maintained when someone is assigned the authority and delegated the responsibility to ensure focus, cohesion and commitment are retained.

 

THE EASY PART

Now for the relatively easy part...that of conducting the training. The sentiment correctly reflects the importance of planning, research, preparation and selection.

 

One final checklist

 

•  Right training

•  Right people

•  Right trainer

•  Right reasons

•  Right outcomes

Pull The Digit Out!

Digitisation is revolutionising the world. Its impact on technology and communications in particular is resounding, if you'll pardon the pun.

Quality standards and accessibility have been appreciably upgraded.

The ability of businesses to interact with the clients and customers, even in remote locations, is astounding.

In short, the capacity for entities to perform, to deliver and to improve has been elevated to a higher plane because of digitisation.

Clarity and purity are two redeeming characteristics which enhance the appeal to clients and consumers. Personal service can be, and is being offered, projected and delivered over great distances.

Now, somehow the phrase “virtual reality” appears antequated. One is left to conclude that the images, the ambience and the experience seems so real. Or is this simply the new reality?

GET ENGAGED

At the forefront of the charge are the banks. Their clients can now be engaged by product and service specialists delivered now, on-line and digital. The overwhelming public response!, “Unreal”!

Personal engagement with wealth management, mortgage, insurance, funding and capital specialists is recalibrating the nature and measures of value.

Digitisation can, and in some instances is, providing attractive competitive advantage. Cost constraints are being recognised and adhered to, while still achieving prompt and effective access to and delivery of personal service, founded on expertise and experience.

ENABLING TECHNOLOGY

Technology alone cannot and will not satisfy most clients and customers. In isolation it is devoid of the personalisation that can only be achieved with human and personal interaction.

Digital technology enhances the accessibility, productivity and personalisation of individuals. Thus, technology complements rather than replaces people. The net result is that appropriately trained and experienced people, via digital technology, can enable customers and clients to achieve their goals, objectives and desires.

Like all engagements should be, this is a match made in heaven, or cyber space!

Already there is wide spread evidence that relationships, trust, integrity and loyalty are being founded on interactions made possible and better by digitised communications.

Therefore the concepts of accessibility, quality, value and immediacy are being remodelled. All businesses will need to be repackage their offers to address this reality.

CONVENIENCE REVISITED

The promise and delivery of consistant convenience has long been the highest ranked buying criterium by clients and consumers for a broad cross-section of products and services.

Tyranny of distance, time constraints and the impersonal nature of technology have individually and collectively mitigated against the appeal of many “value packages”. The specific dimensions and quantum scores which qualified the appeal of such were difficult to visualise and verbalise. Not any more.

The clarity, immediacy and personalisation of digital communication channels embellish the ambience, elevates the experience and expedites the process.

Convenience which for so long was two dimensional now has attributes that distinguishes entities, people, products and services.

Moreover, it seems logical that convenience now needs to be extended or complemented with the word and concept of enabling.

“Enabling convenience” has a certain “ring” about it. Imagine. Informed, empowered customers who have the capacity and the control to drive the pursuit of their own specific goals and desired outcomes.

A CAPITAL IDEA

Miniaturisation is a concept which is inextricable associated with digitisation. Products and networks simply get smaller.

But, not necessarily budgets. Digital technology is not an add-on to analogue processes, services and products. It requires the investment and outlay of capital.

Therefore, the uptake of this potential game-changing channel will not be for all entities, only for those who have a vision for the future and a commitment to sustained growth and competitive advantage.

Many people have fond memories of vinyl records, audio tapes, analogue tapes and video cassettes. Likewise, those businesses which are not planning for and implementing changes to the digital future will soon be fond memories.

No Rules, rule

Traditions, established mores and long-held beliefs and practices should not be forgotten. However, in many instances, they should be discarded.

Technology, innovations and creativity represent the future. Significantly, the future has arrived.

The past should be recalled, reviewed, refined and yes, in some instances, revered. Then it should be put to bed, retired or archived.

GROUND-BREAKING, GROUND-SETTING

The current charge, charter and challenge for all management teams are to establish, foster and provide support for a host of small, open, flexible and motivated teams to explore, discover, improve and introduce new products, services and processes.

Necessarily, the most appropriate team-members will be the individuals who do not seek or are bound by rules, structures and strictures.

By nature, they will need to be leaders (if not by title, certainly by character) who are prepared to set, implement and maintain new flexible rules. A healthy tolerance of risk and possible failure will be imperative. So too with a willingness to learn, as well as a predisposition to sharing, to celebrating and acknowledging the contributions of others. That is, a hive of activity in which everyone is contributing, being committed and understanding their roles to create...wealth, sales, satisfaction and development.

NO BOUNDARIES

Cabals, in-groups and concepts like being in the tent rather than outside the tent have no place in the dynamic nature of the optimal fast-evolving entities. Job descriptions will be malleable and “territorialism” will rightly be deemed to be a thing of the past.

RESPOND, NOW

Hierarchal structures and centralised decision making cannot respond or make decisions fast enough to match the current rate of change in the needs and expectations of consumers and clients. As a consequence many businesses lag, become exposed, vulnerable and typically falter.

The nature and speed of change within the marketplace is typified by the transformation of “word-of-mouth” to “word-of-mouse”. The latter is an instant, comprehensive process which is difficult to measure, monitor, influence or control, let alone respond to.

Responses that are required to negotiate layers of an organisation, filters, blockages and egos are left in a shadow. That can be a dark lonely place to find oneself.

STRUCTURES

The good news is that now that the future has arrived bureaucracies will only be the subject of interest to business archaeologists. These quaint fossils and those who inhabit them will doubtless fight for their retention and will revel in the rules and inertia. Such entities and people will be the subject of rightful distain and will confront the removal of funding.

We will all be witness to “Take Two” of the concept of horizontal organizations, in which everyone is a manager, responsible for performance, client and customer satisfaction, continuous learning and constant evolution.

Image. “I am responsible for this and I will see it through to your satisfaction” will be the only utterance that external and internal customers will ever experience. Phrases like “It's not my department” and “I don't have the authority” will be disposed of, along with those incompetents and individuals who are reluctant to take on personal responsibility.

NO PLACE TO HIDE

The new dynamic organisation will by nature be lean and definitely not mean. There will be no fat. Nor will there be space for the uncommitted to hide. Transparency and real-time accountability will provide the feedback necessary to motivate and to provide clarion-clear assessments of performance and sub-optimal performance levels.

“A designer knows he has achieved perfection

not when there is nothing left to add, but when

there is nothing left to take away”

-Antoine De Saint-Exupery

WAKE UP

No, one is not dreaming, experiencing an out-of-body phenomena or withdrawing from an encounter with some hallucinates. This is a wake-up call. It's a brand new day, possibly the birth of a new generation of businesses.

Support infrastructures will be psychological rather than physical or documented in countless procedure manuals, job descriptions and policy statements.

TRUE UNION

Business owners, managers and teammembers will be in a true union of endeavours, visions, beliefs, goals and action.

Refreshingly, there will be no explicit or implicit threats for the team-members to slow down and to work-to-rules. There will be no rules.

Fear of Rejection

Fear of rejection.

Three words. Highly emotional, insightful and reflecting a pervading reality in global, national and local marketplaces.

This is a causal factor of sub-optimal performance, which outranks rampant competitor discounting, on-line intrusions and leakage, the omnipotence of substitute products and services and a decided lack of customer and client loyalty.

In business-to-business scenarios too many company representatives are currently identified to be and dismissed as “time wasters”. The individuals are typically affable, courteous, ready to discuss the weekend sporting results and their latest achievements on the golf course. They are inevitably up for a good cup of tea or coffee. Sadly, few or none contribute to sales, profitability or productivity of existing and prospective clients.

When finally, like Elvis Presley, they leave the premises it is apparent to all who are left that there was no request for a sale or a contribution submitted to develop business, for mutual benefit.

Well, yes. That is all true. However, the representative who vacated the scene did so with his or her ego intact, not being “damaged” by rejection or failure! Hardly a measure of success.

Little wonder that management is so often advised by that same representative that it is increasingly harder to secure appointments with “difficult” clients who simply don't make themselves available.

PURPOSEFUL CALLS

Professional representatives are distinguishing themselves by formulating and presenting specific, client benefits during their contacts.

Inter-firm comparisons and analyses of individual performance levels for particular products, services and categories are usually welcomed, beneficial and income-generating.

Few, if any clients or their staff members will be totally familiar with an entire product range of a supplier or distributor. Therefore, appropriate education during visits can and will stimulate enthusiasm, sales and purchases.

EARN NOT ASK

In life and in business, it is better to give than it is to receive. It is a sound philosophy for all representatives. The more they give to clients in terms of ideas, insights, suggestions, care, attention and time the more orders they will receive.

At the conclusion of each visit to a client and customer it should be mandatory for each representative to undertake a critical and objective evaluation of just what they offered in the contact.

CRITICAL ANALYSIS

Manufacturers, distributors and agents have at their disposal invaluable information and data which can be insightful and beneficial to each client. Sharing such in a respectful manner fosters confidence, loyalty, preference and motivation. Today, information and sharing these is all powerful.

CONSULTATIVE SELLING

Consultative selling is a much prompted philosophy which is, regrettably, poorly implemented.

Consulting is a widely practised art-form. It influences, provides differing perspectives and can be instrumental in enhancing performance standards.

Professional consultants do not sell products or services. Their expertise and experiences are sought, used and happily paid for because their input is valued and valuable.

Hence, the input offered can be and is processed internally, to effect incremental output. As a consequence, products and services are bought, not sold.

Accordingly, appropriate and astutely deployed “consultative selling” opens opportunities rather than closes sales.

An integral component of the philosophy is the need to invest sufficient time in the relationship for there to be ongoing value accorded to the clients and customers. Time is the differentiating element between marketing and selling.

True and good consultants value their own time and that of their clients. Appointments are made, specific time allocated and desired outcomes outlined at the outset of meetings.

That is a refreshing and welcomed philosophy, so different from statements like:

“My name is Kevin, I'm from Queensland, represent the government and I'm here to help.”

 

Sadly, all too often they help themselves to time, revenue and resources. That is not consultative.

FULL MARKS

The mark of a good consultant and representative is the ability to ask succinct questions and to listen. In fact, the ratio of words spoken by a consultant/representative to those heard should be around 1:5.

Interestingly, the more one listens, the more one learns and therefore, the greater one is able to share and to benefit others. It is a valuable adjunct to specific product knowledge.

Active listening is a skill set that enhances the worth of a representative in the field. Recognition of one's capacity for active listening facilitates the securing of a more, productive appointment.

I'm sold on the idea. I hope you will be too!

Here's Looking At You, Kid

“Here's looking at you, kid”

Opportunity is staring you in the face. Are you looking? More importantly, are you comprehending and identifying the boundless scope for development right now? Look no further than your main competitor. It is he, she or they who provide insights on how best to formulate and implement new initiatives into uncontested and attractive areas.

It is not too harsh to declare that many competitive entities are burdened by inertia, price discounting, cost cutting moves – including inventory and staff reductions, offers of give-a-ways and the repetition of boring, predictable campaigns. The widespread distressed state of business is often caused or exacerbated by the actions of business owners and executives. Sadly, staff-members are quick to identify and copy inappropriate behavioural and strategy traits.

Since 1988, Australia's Woolworths supermarket network has progressively developed from being in supermarkets, to retailing, to supply chain management and now they are leading the charge to relationship marketing.

The current philosophy will enable the group of companies to capitalise on the customer relationships which have been established and to cross-promote and sell-in to the other non-competitive service and product providers.

Coles is currently winning the supermarket battle. Sadly, it still lags in its evolutionary development and will continue to be profit constrained.

Many book retailers can and should reject the proposition that book shops will soon be replaced by on-line book sellers.

For those astute book retailers who have looked the competitive forces in the face, it is evident that the real threat is from those bookshops which have an appealing, informative and functional on-line presence with an easy-to-navigate website.

The attributes of “local” presence and “personal” customer service are strong and sustainable competitive advantages.

KNOW THY COMPETITOR

Now is the time to embrace the philosophy of being a contrarian. That is, doing what the others aren't. It involves risks, which cannot be eliminated but can be managed. It will require confidence in one's own ability and capacity and the need to invest in those qualities.

In short, it's time to “dare to be different”.

Conformity within a product range or industry sector leads to non-differentiated commoditisation and overall mediocrity. It can be safe and non-threatening, but hardly inspiring or profitable.

Entrepreneurs, game changing business leaders and elite sportspeople live on the edge. It is exhilarating, adrenalin pumping and, yes, often exhausting. The rewards are immense and the demands for optimal performance-exacting. In each instance, consistently high performers study closely and know intimately the practices, policies, styles and preparation regimes of those whom they want and need to beat if they are to fulfil their own dreams, ideals and goals.

They then diligently formulate, document and implement their own, differentiated strategies.

DISPEL THE 1% BELIEF

Sporting coaches of old and business coaches or mentors have long espoused their beliefs in the “one percents”. That is, the little things that “champions”, cum winners, do constantly to gain and maintain an advantage.

The contemporary global community in which we all live and operate from seldom recognises and rewards 1% variance. For example, mining company chairpersons and chief executives tend to be well versed and qualified in finance and geology. With the current price levels for iron ore, uranium and energy (in its various forms) those skill sets have contributed marginally to the record profits being enjoyed by the many operating mines and the operators of those raw commodities holdings.

Interesting to most and disturbing to some, the Chinese who represent the largest market for Australian ores and energy, are seeking more and more investments in Australia resource entities. The buying criteria are not solely gross profit sums and Price: Equity ratios. The Chinese government and investors are seeking continuity of supply and security of supply.

Therefore, astute mining industry leaders and aspiring leaders will, should and indeed, must look their competitors and peers in the face and then determine largely unrecognised avenues for advantage and exploitation.

For example, how would Lindsay Fox of Linfox Logistics and Paul Little from Toll Holdings - two of Australia's and the world's leading authorities on supply chain management - operate and develop Australian mining companies?

Neither would, I am sure, be constrained by any suggestion of a series of “one percenters”. In looking competitors in the face, one should also determine what business are they or should they be in. The appropriate answer may not be obvious.

Perhaps, we all need to dispel the seemingly underlying beliefs in and adherence to the “traditional”, the “established” and the proven ways of doing business and being in business, if one wishes to stay in business.

A good start to identifying which is the best avenue for enhancement is to look in the mirror and to recite the words: -

“Here's looking at you, kid.”

Who's Listening?

Good question.

What do Sir Michael Parkinson and Sir David Frost have to offer those in business, marketing and sales? In a word, lots.

Both are consummate interviewers whose selective use and economy of words ensures and facilitates expansive responses. The more words offered in responses to good questions the better the prospects of insights and identification of key factors which influence perceptions, preferences, buying patterns, purchase decisions and satisfaction.

Sadly, it has become increasingly conspicuous in recent times that the ability of business owners, marketers, sales people and service providers to ‘communicate' at large and to elicit meaningful responses in particular have declined dramatically.

Some will contend that the trend is a consequence of ever increasing use of the electronic and social media in which brevity is often seen as a virtue. SMS texts by their very nature are limited to a maximum 144 characters. That is clearly insufficient for many to project the very nature of their character.

Many contracts, deals, sales and opportunities are lost because of misunderstandings or simply a failure to understand. It is an expensive lesson to learn. One should seldom economise on or avoid communication with stakeholders at large-current, prospective and past clients in particular.

TWO WAY COMMUNICATION

The spoken word is an optimal communication medium because the receivers are able to identify, analyse and respond to key nuances, which are often not conspicuous in emails and text messages. These nuances add meaning to the phrase: “to express oneself”.

Moreover, agreements and common understandings are usually concluded faster and more efficiently with the spoken word.

Productivity is constantly enhanced when emails, text messages and letters elicit responses on the telephone and in person.

We do live and operate in a world of multichannels. Each is and should be both recognised and used as complementary conveyers of communication.

“NO” OR “YES” ARE SELDOM ANSWERS AT ALL

Monosyllabic answers should be contained to distracted adolescents in the back seat of a motor vehicle and to males who are transfixed on the telecasts of sporting events!

The timeless art of interviewing, negotiating, marketing, selling and customer service excellence is to engage in compelling and responsive discourse which avoids “yes” and “no” as sole and definitive answers.... until the time arrives to conclude the deal.

Raconteur Michael Parkinson readily and expansively nominates as his worst professional interview experience an encounter with Academy Award winning actress Jodie Foster. Try as he might, he was unable to have the interviewee expand beyond simple one word answers.

Notwithstanding his experience and expertise in the craft of structuring questions which avoid “yes” or “no” answers he met his match with a person whose skills centre on communications.

It was a poor experience for the interviewer, the interviewee and, above all, the viewing audience. It should also serve as a lesson for all.

COMMUNICATION SKILLS

In essence, excellence in communications has three essential phases, being...

•  Listen

•  Speak

•  Listen

The sequence and balance of the clearly verbal communication process detailed above is about right. We need to listen and take in more than we expel.

I am sure that Parkinson and Frost would demur to a preference of a 5:1 ratio. That is, to listen, receive and analyse five times more than the amount one expresses. It is a skill, reinforced by discipline, practice and preparation.

FIRST LESSON

Remember, yes and no are not possible answers to questions which focus on the key issues of: -

•  Who?

•  What?

•  Where?

•  When?

•  How?

•  Why?

The final issue of why should be utilised astutely and repetitively. It provides answers and expressions which are typically invaluable and insightful.

The Plan Is To Plan

Two words. That's all it takes in business for the inert to become action.

It's a short shift from a noun to a verb.

Most organisations have a plan (a noun). Few of those are fully understood, embraced and implemented. The real learning, progress, fun and achievements are derived from the investment in and the commitment to plan (a verb).

Former Untied States of America President and World War II military strategist, General Dwight D. Eisenhower once said:

  “Plans are nothing. Planning is everything.”

PLANNING DEFICIENCY

One notable deficiency of an overwhelming majority of business plans is the lack of a goal to regularly plan. Accordingly, most planning documents are frozen in a given point in time, most often in the past. Few are regularly updated and refined. The dynamics of economies and marketplace quickly ensure that such become obsolete and irrelevant.

It seems mad not to commit to and schedule regular planning sessions.

Dr Roger Smith, Professorial Fellow at the University of Western Australia in his publication “Management Allsorts”, quoted the theorist Nietzsche, who declared:

  “Madness is the exception in individuals but the rule in groups.”

A cause of much frustration and the measure of madness within organisations is the oft stated comment by participants at the conclusion of planning sessions..... “Good, that's over. Let's get back to work.”

Wrong! Effective planning is the essence of productive work and development. The activity provides, or should provide a framework to question, review, refine, update and replace established philosophies, practices and ultimately, outputs.

THE CHALLENGE

Good planning is challenging and often confronting. It should be a fun experience and is fundamental to integrating efforts, securing commitments from team members, fostering pride and informing those in the entire network.

Accordingly, planning and its consequences should not be limited to a select few. The content of the planning process must not become privileged or an instrument utilised in the exercise of power.

Consistently, the best performing entities are those that have open channels of communication which share information and invite feedback, input and analyses from the full spectrum of departments, locations and people.

Highly structured organisations, with structures which impede information flow and exchange inevitably suffer. In such cases information is not allowed to be progressed to intelligence. Military leaders like Eisenhower, Monash and Montgomery knew the value of intelligence, and utilised it adroitly.

BONDING RETREATS

The conduct of bonding retreats for management teams has been a regular event for numerous companies and entities.

High rope exercises and team building activities are typically fun, a break from the routine of work and can be insightful learning experiences. Their frequency has fallen since the onset of the Global Financial Crisis in 2008. Another casualty of budget belt tightening.

Widespread anecdotal evidence shows that the most effective means for company team members to bond, to become motivated and to give commitment to the ideals and objectives of the entity is participation in periodic, goal orientated planning sessions.

CONFIDENTIALITY ASSURED

Counter-intuitively, respect for the confidentiality of the issues addressed and the goals, objectives and targets set in planning sessions is increased by broadening the numbers involved in the planning process.

It is a consequence of “shared ownership” of the resultant document and commitment to the attainment of the established milestones and performance measures.

MEASURE OF SUCCESS

Effective planning processes and planning documents detail quantifiable, monitorable goals, assign authority, responsibility and accountability to individuals and groups, specify time horizons and facilitate and encourage ongoing revision, refinement and development.

STARTING POINT

How ironic. Most planning documents are long on outcomes and goals.

Too few focus on and determine the starting points.

As a result, the WHY question in the planning process can be left unresolved.

Consideration will typically be given to WHAT needs to be done and most time, effort and resources are dedicated to HOW the goals will be achieved.

The emphasis and outcomes need to be inverted for a truly actionable plan.... that is a good starting point on which to conclude.

"Respect The Birthmark"

“It was (is) the best of times, it was (is) the worst of times”

As suggested by the creatively adapted quote above, the current marketplace has many of the elements and characteristics of a Charles Dickens novel. Only in this instance it is not a “Tale of Two Cities”, but rather a tale of two paradigms.

In the period since the onset of the Global Financial Crisis (GFC) there is an accumulative amount of evidence that confirms many entities, regions, cities, products and services have suffered from the consequences of the poor “Brand Management”. That rather than price discounting, lack of consumer confidence, higher interest charges and globalism is the cause of individual suboptimal performance.

The images and market presence of numerous former market leaders are fractured, seemingly, because of neglect, ignorance or naivety... I know not which, in most specific circumstances.

Conversely, in the same marketplace other entities, products and services are enjoying the fruits of “the best of times”.

The case studies are very conspicuous, the lessons telling and all too often the brand names are well known, formerly respected and the inherent integrity valued.

Take Coles and its related brands are as case in point. For the calendar year 2010 and the early months of 2011 Coles supermarkets enjoyed better performance achievements in measures of growth and productivity enhancement than its major competitor, Woolworths.

An initiative to discount the price of housebrand milk to just $1.00 per litre was bold and supported by a well funded, aggressive advertising campaign. The strategy was soon extended to other dairy products. Contemplation was given to including bread and chickens in the marketing thrust.

Significantly, the responses from the Australian and individual regional dairy industries were immediate, voluble and personal. Regional communities and individual dairy farming families were identified and labelled in the mass media as “collateral damage”. The term, concept and images did not sit well with the broader consuming public, particularly when young teenagers were interviewed and made references to two, three and four generation family histories in dairy farming. Somethings just cannot and should not be discounted.

Coles quickly became the focus, the message if you will, rather than the messenger of good news for the consuming public.

Let me be emphatic. A time series of national attitudinal research has revealed that from day one of the milk discounting strategies a majority of Australians stated that the image of Coles was not improved or upgraded by the campaign.

Moreover, a similar percentage of research respondents confirmed that they did not foresee themselves being more loyal to Coles or to being more frequent customers of the branded outlets.

The most telling findings centred on consumers recognising that they had and would continue to buy the discounted $1.00 per litre housebrand milk “opportunistically”. That is, yes, consumers would buy, save and enjoy the personal financial benefits of the cheaper dairy products. However, the brand Coles may well be that which was discounted most.

It is a reasonable and understandable set of emotions, responses and perceptions, reflecting the nature of relationship marketing. Coles could have, or indeed, should have asked the question:

  “If you take advantage of me today, will you respect me in the morning?”

The general answer is now self evident.

Sadly, sometimes, perhaps all too often, lessons are not learnt and are repeated.

More recently, the Coles owned, “1 st Choice” and Woolworths' “Dan Murphy” retail liquor outlets have been aggressively marketing, advertising and selling leading brand packaged beer at, reportedly, below cost.

Foster's, one of Australia's two major brewers made the decision to withdraw supply of certain of its beer brands to the two chains, albeit for a short period, as a means of respecting and protecting the integrity of the brands.

It was a bold, courageous decision, because the two major supermarket chains and their retail operations control close to 50% of national retail liquor sales.

The media has been quick to take up the running on this emotional story.

Profiles of family owned, smaller liquor store owners have been prominently featured, along with community based service clubs which are reliant for their survival on ongoing local social patronage.

Harsh judgements have been passed on the two major retailers and endorsements given to the actions of Fosters.

The widespread coverage has put the two retailers on their back feet. How could this happen so close to the milk discounting disaster?

Concepts like “Emotional Intelligence” are laudable. However, the effectiveness of such is dependent on its execution. The word execution is used advisedly. Some people simply kill the underlying principles and values.

All business owners, managers and executives need to recognise and respect the importance of effective, consistent brand management. It has short, intermediate and long term benefits and implications for companies, products, services, sectors, regions and communities.

A tainted brand can be and often is a substantial millstone to bear. It puts to question the integrity of the brand and the degree of trust which can be placed in those who represent it.

Most important, it is intangible attributes, qualities and values of a brand which must be adhered to.

Imagine the competitive disadvantages being endured by the packing brand names of Visy and Amcor following the legal actions taken by the Australian Competition and Consumer Commission (ACCC) on the cartel activities by and between these two dominant forces. The fine paid by Visy was substantial. However, the civil actions by a large number of clients against both entities is a festering sore, which will need extensive and intensive remedial action for some period of time.

It is doubtful whether the companies of certain individual corporate executives will ever recover their integrity standings.

David Jones is still bearing the costs of the alleged sexual harassment allegations against its former Chief Executive. The brand was noticeably damaged among the company's primary target audiences of females.

On a different tangent, public statements by business owners and senior executives can and do impact on the currency of a brand. The recent concerted efforts of Gerry Harvey of the electrical retail chain Harvey Norman and Bernie Brookes, Managing Director of Myer, among others, about the supposed inequity of Australian consumers buying on-line and not having to pay the 10% Goods and Services Tax did not endear them or their respective brands to most consumers.

There was little sympathy and support emanating from “little Aussie battlers” to billionaires and to executives with multimillion dollar annual salary packages.

Indeed, one by-product of the highly visible media campaign by major retail groups was the fostering of greater confidence in buying on-line and the education of previous non-users of internet purchases.

The ability and benefits of saving money and not paying GST on purchases were minor and secondary considerations to most Australians.

What was damaged were the brands of a diverse range of entities which participated in the campaign.

There are and were many lessons to be learnt.

“Brand Management” extends well beyond the labelling, graphics and physical presentations of entities, products and services. Consistency and continuity of values, philosophies, beliefs and understandings are unimpeachable attributes.

For those who do and do not recognise and respect those imperative, the consequences can be the difference between the best of times and the worst of times.

A Matter Of Trust

Confidence. It is the aphrodisiac of business.

It is the reason so many economists' forecasts are so wrong, so often. Bland statistics, economic modelling, historical records and trend lines do not recognise, respect or factor in the inherently important role and impact of confidence in the buying, investment and developmental decision making of the overall marketplace.

Economists need to study and better understand the emotional drives of key stakeholders rather than simply the mechanisms of the marketplace. To do so, may well be a Nobel pursuit.

Confidence is the focus, outcome and essential that is deficient in a huge majority of current advertising and business dealings. Emphases on product, price and finance no longer stimulate and sustain significant increments in demand, revenue, margins, profit, and above all, consumer and client confidence!

What happened to identifying needs, fulfilling them, projecting a compelling ambience and featuring a great, positive buying and transaction experience? Are we so devoid of creativity, energy, enthusiasm and pride? Is the art of selling a lost skill set, replaced by the single dimension declaration, “we wont to be beaten on price”.

ANIMAL INSTINCT

Animals, domestic pets in particular, can detect confidence, or a lack of it. That, seemingly, is a sixth sense which is possessed and exercised by contemporary consumers and clients.

Interestingly, the typical instinctive response to hesitancy by prospective buyers of offering a lower price actually stimulates a loss or lowering of confidence.

Many consumers are seeking advice and recommendations about alternatives rather than cheaper prices. That is the underlying rationale of asking questions, many of which sales and service people do not hear, comprehend or respond to.

INFORMED CONSUMERS

The internet has been the instrument and inspiration for many changes in lifestyles, expectations, education, communication, commerce and confidence.

Ready access to information has empowered consumers and clients at large. They are discerning, demanding and sadly, in many instances, possess better product knowledge than sales and service providers.

Confidence in a company brand, product, service and person can and will plummet in such circumstances.

VOLATILE EMOTIONS

Confidence can be and is influenced substantially by the media and the 24 hour news cycle. Headlines regularly are the catalysts for demand surges for retail petrol on the “news” that prices are going up imminently. Likewise, bookings for airline tickets can and do dry up with media reports about safety issues.

Media releases about the pending launch of a new model motor vehicle impacts on sales enquiries, regardless of consequence of the impact on confidence, for people wanting to make the best possible decisions, avoid making a wrong decision and pursuit of a sense of “peace-of-mind”.

“Peace-of-mind” is a term which is interchangeable with the word confidence. All people in business, financial planners, developers and home builders in particular, need to truly embrace the role of being a “confidence builder”.

BROAD HORIZONS

High levels of confidence provide for and facilitate longer term horizons in the typical buying cycle. They are also an effective insulation against the volatility of market forces, which typify a lack of confidence.

One key and fundamental consequence is stability in cash flows. That then enables better planning for and the deployment of resources, including staff, inventory and communications. Individually and collectively, these contribute to greater efficiency, effectiveness and profitability.

MULTI LAYERED CONFIDENCE

Consumer and client perceptions, images and motivations are not single dimensions. Each is complex and often integrated with numerous variables.

A good example is that of Telstra, the Australian telecommunications company. The Board of Directors has been forthright in maintaining and projecting adherence to an annual dividend payment total to shareholders of 28 cents. That is reassuring to those shareholders whose primary investment criterium is dividend receipts.

However, for those seeking capital growth or a positive mix of stable dividends and capital growth have a pronounced reluctance to invest in Telstra. From a list price of $7.40 per share at the time of the third tranche of Telstra shares the current value languishes at around $2.75.

Hence, confidence is a complicated master or a slave which is difficult to master. Nonetheless, it is an important ingredient in the mix of success factors in any or all businesses, products and services.

"Sales" and Discount Fatigue

It had to happen.

The actions of businesses, retailers in particular, have pushed consumers and clients to a tipping point. Sales and discount fatigue is in evidence everywhere. That is a new phenomenon.

Consumers now state that the appeal and allure of more and bigger discounts are marginal. Those savings will be readily accepted. However, only 31% of adult consumers in a recent Australia-wide survey stated that they would buy more if offered a further 40% off the already discounted prices.

ENOUGH

Enough is enough! Too many businesses have shown their hand and the stack is lacking an ace card. Price is not the overriding issue in determining and influencing the volume of marketplace demand. Utterances by leading high profile retailers about price deflation is compounding the complexity of a brittle, volatile marketplace. Declining price structures are enough to induce consumers to delay purchases... and to be financially rewarded for doing so.

Significantly, consumers openly declare that they do not feel happier, more satisfied or have greater brand or business loyalty because of recent purchases which were concluded at greatly discounted prices, often up to 40% off normal. Rather, there is a sense of unease, which is difficult for them to explain or to express.

In short, current practices are not establishing or sustaining a “win-win” sense of well-being.

Packaged offers of “two for one”, “buy one, get the second at a discount” and similar are not achieving incremental sales, enhanced customer satisfaction or greater loyalty.

Some will defend the practices with the contention that revenue levels are being defended and sustained. There is no credible evidence or basis on which to found those beliefs.

Short term, reactionary initiatives do and can have profound implications and ramifications for brands in the intermediate and longer term.

A REALITY CHECK

Business people have been slow to recognise and effectively respond to the new consumer mind set.

Bold banner headlines of “30, 40 and 50% off” hold little credence with most consumer groups. Conversely, full or normal retail prices are considered “irrelevant” “premium” or “unrealistic”.

One structural change which has been effected by the consequences of the Global Financial Crisis (GFC) is that references to “discount” and “40% off” are misleading. The reality is that the current discounted and sales prices are now the “new price”. Astute leaders will quickly accept, grasp and utilise that new paradigm.

RECOMMITMENT TO SERVICE

Since the onset of the Global Financial Crisis, competitors of all sizes and hues have felt compelled to match the rampant discounts on offer, often by major duopolistic national and transnational entities.

It has proved to be a fruitless exercise, lest one enjoys and accepts unprofitable profitability. Emphasis has been places on cashflow, rather than sustainable margins, brand integrity and valie. The greater resources and deeper pockets of the few leviathan have ensured that advertising, marketing, promotions and price advantages lay with the few and the big.

One of te viable, attractive and compelling competitive advantages available to the multitude of small and medium sized enterprises resides with exceptional customer service.

The challenge is how best to entice customers and clients to deal with an individual business to enjoy the benefits and advantages of personal service. Fundamental to addressing that reality is the recognition, acceptance and deployment of the new nature and characteristics of service excellence.

Most important, the service promise begins with a striking and responsive presence on-line. Far too many businesses around the world have no, inadequate, static or a boring presence on-line. In the contemporary world, that speaks volumes to discerning, demanding, time-poor and communicative prospective, existing and past clients.

Service expectations and experiences begin and develop from the first point of contact.

This underscores the fact that an overwhelming majority of customer service initiatives and training are ineffective and irrelevant. The issue is not the process, but rather the expectations and the outcomes that determines customer satisfaction.

Little wonder that customers and clients repeatedly declare:

“You don't understand”