Do it right, or not at all

Barry Urquhart
Marketing Focus

Greetings from Melbourne.

I applaud and endorse creative, positive and well executed business development and local area marketing initiatives.

A recent personal experience highlighted the adverse image and business consequences of poorly structured and executed campaigns.

An unsolicited letter and “info-sheet” were received by mail from the State General Manager of a national, high profile, public listed legal practice.

The salutation of the letter immediately suggested inadequacy. It stated:

“Dear Barry Urquhart”

Very few people are addressed with their full or given and surnames. “Barry” or “Mr Urquhart” are the norm.

The correspondence encouraged and directed me to make contact with a specific individual, presumably a qualified lawyer, on a nominated telephone number at a suburban office.

Having recently completed a marketing brief for a legal practice, I was sufficiently interested in experiencing the approach to make a telephone call.

The telephone rang unanswered for an inordinately long time. It was finally answered by a receptionist who declared that she was located in the city office and knew nothing about the letter or the campaign.

She offered to, and then did, transfer me to the Personal Assistant of the lawyer who had been mentioned in the letter. Her name was Honey.

Regrettably, Honey was seemingly a busy little bee and the call went to message bank. Her recorded introduction referred to her being in the Will, Probate and Estate Department. Strange! I left a message at around 10:45am.

No return call was received that day.

At around 10:00am the next day the lawyer called. We exchanged pleasantries and with a measure of irreverence I enquired why a self declared, left-wing, Labor Party supporting legal practice, which is renowned for undertaking class-actions against businesses, would contact a business in metropolitan Australia to solicit business.

There was a pause on the end of the line.

It evolved that apart from being able to satisfy client needs on wills, probate and estates this individual was also very capable in corporate law… not very convincing.

The entire experience underscored the need for an integrated strategy for business development to be formulated, documented, implemented and, probably, supported by some rehearsal for all relevant points of contact.

In this case, the class action would be rated an “F”. Moreover, a lot of time, money and resources would have been expended, with a negative return on the firm’s marketing, image and business development balance sheets.

It is important, at all times, to remember and to respect the long-held marketing and merchandising adage:

“You only ever get one opportunity to make the first impression.”

Barry Urquhart
Email: Urquhart@marketingfocus.net.au

Service impact

In recent times, considerable space in the mass media has been allocated to expressions of concern about the leakage of sales, profits and jobs to off-shore, on-line businesses which are attracting custom from Australian consumers and businesses. Heightening the emotions are pointed statements about the lack of Goods & Services Tax applicable to on-line purchases (secured from overseas entities) values of less than $1,000 (Australian).

One report by an international accountancy practice concluded that up to 118,000 retail jobs would be lost in the Australian retail sector as a consequence of this inequity.

Take pause.

Be assured, 118,000 jobs and more will be lost if Australian businesses do nothing. Some 47% do not have a website and an overwhelming number do not enable on-line purchases.

They have therefore ceded that market segment to others. One cannot lose sales to competitors if one chooses to not compete.

Moreover, the latest statistics reveal that just over 3% of all sales in Australia are on-line and that just short of 75% of those sales are with Australia-based entities.

So, simple arithmetic suggests that 0.75% of local transactions are being lost to overseas online operators (I readily acknowledge this is a generalised figure and that some sectors are experiencing bigger percentages of lost sales to off-shore, on-line groups). That does not easily compute to a loss of 118,000 jobs.

Appreciably more sales are lost as a result of poor or absent customer service, with the prospect of more job losses. It is difficult to quantify the impact, however, a multiple of 10 appears to be modest, when compared to the relative impact of overseas on-line sales (and thus job) leakages.

During March a series of conference addresses were delivered and business development workshops were facilitated on the topic:

“Service That Satisfies SELLS”

In each instance there was considerable excitement evident among participants about the nature, relevance and benefits of the two silent “P’s” of customer service which our ongoing schedule of original research has identified, isolated and analysed.

Look around, an increasing number of networks and entities are enjoying competitive advantage, enhanced customer satisfaction and increased revenue because of two understated, emotional aspects of customer service excellence.

Barry Urquhart
Email: urquhart@marketingfocus.net.au

Poles are about to switch

Scientists have long predicted that the Poles of Earth are about to switch, as they have also done so several times in the history of the planet.

I believe we witnessed a public declaration about the phenomenon in China recently. It was the People’s Republic of China’s Congress.

Let me first explain, it had nothing to do with the magnetic North and South Poles. Rather, it related to the economic east-west poles.

The Chinese government stated that the growth in its Gross Domestic Product (GDP) for the ensuing year would decline to just 7.5%. Most importantly, there will be a noticeable and significant shift of focus from export earnings to domestic consumption.

Further construction of high-rise offices and family accommodation will be curtailed, avoiding a compounding of tens of thousands of vacant offices and residences which abound in numerous cities and communities.

Food security and raising the living standards of those estimated 900 million Chinese peasants who currently exist on less than $2.00 (Aust) a day will be a primary focus.

The consequences for Australian mining corporations, exporters and commodity prices will be profound. So too will be the impact on Australian government tax receipts. Budget surpluses can and will readily convert to budget deficits.

To complete the switch process, Australians, New Zealanders, the British and Americans can expect to see a rebirth of activity and business in office, factory and residential construction (and the related investment allocations) during the ensuing three to five-year period.

However, it will not be without pain. As volume increases, cash-flows will be squeezed, capital structures will be subject to extreme pressure and business failures will occur.

One can only hope that the tourism and hospitality sectors will be the beneficiaries of the resurgence of construction, in the form of quality hotels and infrastructure.

On balance, those national economies will become less reliant on what is currently a fickle consumer marketplace.

Share the messages

We do encourage you to transmit this e-zine to those who you believe will benefit and profit.

For those who wish to receive the transmission direct, please provide the contact details to: kate@marketingfocus.net.au

“Trading hours are ours to choose”

Inevitable.

Some things in life and business are inevitable. That is not to suggest that all things are desired by and acceptable to all. The proposed extension of retail trading hours in Western Australia has been inevitable for some time.

Campaigns against the proposed legislation have achieved all that could have been hoped for. That is, to delay its introduction.

A new reality in the retail sector is about to dawn.

Let me first dispel one widely promoted myth, which is, that sales and revenue will not increase. A long history of extending trading hours in Australia and around the world has established that longer trading hours do induce increases of some 2 – 4% in macro turnover.

However, some businesses will benefit above average and others will lose. That has always been the nature of business.

Another myth which needs to be set aside is that all major, national and global entities will trade 24 hours a day, seven days a week, or for the maximum time available. The euphoria of being able to trade is quickly replaced by the economic reality that it must be viable to do so.

The trading hours legislation and regulations will stipulate the maximum hours of trade that are possible. They are not mandated hours of trade. Individual business owners will have the right to choose to open or close their doors at certain times.

Consumers too will be given choice, which in itself is a compellingly attractive proposition.

Astute business owners will closely review and, where appropriate, refine their current business models. Fixed and variable costs will doubtless be under scrutiny. Penalty pay rates for staff members and personal lifestyle imperatives will determine that opportunity costs will need to be objectively evaluated and seemingly hard decisions will be made.

Societal values and mores from the past will have little currency. Things won’t be like “the good old days”. Sometime in the future, you can be assured, the present and immediate future will be considered to be “the good old days”.

There is little or no doubt that existing businesses and management teams will be able to and, indeed, will compete effectively. What is not resolved at this time is HOW?

A lesson to learn is from the philosophy of IBM:

“There is a better way. Find it”.

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.

The Author

Barry Urquhart, Managing Director of Marketing Focus is a business strategist, an analyst and an International conference, keynote speaker. His latest presentation is:

“Insights on ‘The Big Picture’
-Future-Proof Your Business”