PERCEPTIVE, PRESCIENT DR PETER

Barry Urquhart
Marketing Focus

“The Peter Principle” lives.

In 1969 Dr Laurence Peter released a management book, with co-author Raymond Hill, which was an irreverent study of what became known as hierachiology.

The underlying contention of “The Peter Principle” was that everyone in a bureaucracy is promoted to their level of incompetence.

An extension of the principle, verified by ubiquitous anecdotal observations, is that everything that works will be used in progressively more challenging applications until it fails.

In Canberra, home of the Australian Federal Government, resides the “Peter” Labor Government. The Prime Minister, “Peter” Gillard’s incompetencies focus on the telling of porkie pies about no carbon tax, gambling legislation and the tendering process for the Australian (Television) Network.

“Peter” Swan, arguably Australia’s first financially illiterate Treasurer incomprehensibly abuses and criticises our competently managed big four trading banks. In his initial three years of controlling the Treasury benches he converted a $12 billion surplus into a $60 billion deficit.

Only Senator “Peter” Conroy could commit to spending some $40 billion of taxpayers’ funds for a National Broadband Network without the rigours of a detailed cost: benefit analysis and critical review of available or emerging alternative technologies. His rigid adherence to “The Peter Principle” of incompetence was highlighted in the conduct of the two tenders for the overseas telecaster Australian (Television) Network, in which non-preferred tenders (to the government) won both processes (by the unanimous votes of panel members). Senator Conroy withdrew the tender and granted the licensing rights to the ABC (Australian Broadcasting Corporation) in perpetuity.

Our national safety and security is the ambit of Defence Minister “Peter” Smith, labelled-or crucified-by his own words as a “serious error of judgement”.

There is no need for parentheses or nuances when addressing the issue of Speaker of the Australian House of Representatives, Peter Slipper.

It’s a sobering consideration to realise that during 2013 the Australian electorate will have the right to vote on the retention or the removal of the incumbent “Peter” Labor Federal Government. One can only hope that they will do so competently.

MAKE IT EASY

Nathan Schipper is a principal of Tangibility, an outstandingly successful Perth-based promotional marketing company which since inception has enjoyed exponential annual growth in revenue, profits and clients.

Consistent, exceptional, personal and understated customer service is a pillar of the achievements of the business, complementing the outstanding creativity of Nathan, Jarad and the Tangibility team members.

Nathan believes in the virtue of making it easy for clients to do business with them.

Imagine the frustration he experienced over the Easter long weekend when he presented his four-wheel-drive vehicle to a total of three automatic car washes, only to be told the vehicle was “too big”. Given the high percentage of SUVS (sports utility vehicles) which are now sold in Australia and populate the roadways, this is one market sector that is denying itself considerable patronage and profits.

Responding to the unwelcome advice of one automatic car wash employee to “try” the manual car centre which was located about 1 kilometre down the road, Nathan finally undertook the labouring task of cleaning his own vehicle, in “good” clothing.

And the bottom line? When it came to pay, Nathan was advised the business didn’t accept payment by credit cards nor did it have available an automatic teller machine.

When will business operators learn that an essential characteristic of quality customer service is to make it easy for the customer or client to do business with the firm?

Remember always the words of Peter Kailis, founder of the Red Rooster fast food network:
“Business is simple, and should be made easy”

COST OF DOING BUSINESS

The current testing, at times challenging, marketplace conditions are placing enormous pressures on management teams and entities.

Endeavours are made to rein in costs, both variable and fixed. No stone is being left unturned. It is one way to insulate profit margins from on-going squeeze factors.

The enterprise and entrepreneurism of individuals, groups and sectors should be recognised and applauded. More importantly, they should be rewarded. To achieve just returns from efforts expended, capital and resources invested and risks taken, many existing businesses are being reviewed, refined and, indeed, remoulded.

Rents are one aspect of overheads which have come under close, often emotional scrutiny. Tests are being attributed to the “fairness and equity” of a cost burden, negotiated on a minimum sum, plus a percentage of gross or net turnover. That percentage figure morphs quickly into a fixed cost, which impinges on the profit reward of lessees and thus, on the market value of the business. The costs of doing business are being brought to book and nothing it seems is immune to negotiations. A first step in that process is the initiation of contact to set a time for a meeting and discussions on a fundamental platform for business.

KARMA

In the current marketplace there is unquestionable currency in the phrases:
“What goes around comes around”.
“You take out more than you put in”.

In business-to-business dealings ascendancy is being given to and value accorded to initiatives which contribute to performance enhancement and business betterment.

Increasingly, deals centred on discounts, volume rebates and extended credit terms are being spurned, with preference being given to improved individual, mutual and collective competitiveness, revenue, client satisfaction and stability.

During the past six weeks we have contributed customised keynote presentations and facilitated business development workshops for radio stations in Tasmania and New South Wales, a legal practice in Sydney, accountancy firms in Brisbane and Adelaide and a real estate group in Canberra.

In each instance, audiences and participant members have been at capacity and record levels of business have been achieved by the host entities (within two weeks of the invitation only events).

Significantly, the focus has been on providing strategic insights on the prevailing market forces and the sentiments of corporate leaders and consumers. A recurring point of interest has been the optimal deployment of multimedia and cross-media communications, with an orientation to integrating on-line, SMS text messaging and social media use into a comprehensive strategy. It has been noticeable that skills and operational issues like merchandising, selling skills and inventory controls have been relegated to second and third rankings.

If we can contribute to your endeavours, do make contact.

Barry Urquhart
Mobile: 041 983 5555
Office: (08) 9257 1777
Email: urquhart@marketingfocus.net.au

SHARE THE WISDOM

We invite you to forward this e-zine transmission onto those in your network who will benefit most. If these individuals wish to receive future issues they should contact Kate Power, to be added to our own distribution list.

Kate Power: kate@marketingfocus.net.au

MANAGEMENT GETS A SERVE

Memo to Management:

The findings of our latest annual survey on Australian customer service standards have identified management policies and corporate culture to be primary causal factors in the widespread decline of customer satisfaction during the last twelve months. Management decisions on expenditure in technology, staffing levels, inventory, product and brand ranges, staff training, warranty policies and communication deficiencies were nominated by 1,000 consumers throughout Australia during March.

Significantly, front-line customer service providers were not identified as major sources of annoyance, frustration and disappointment.

Also of importance is the clear segmentation of the buying/transaction cycle segments which are apparent from the unstructured responses of consumers. Clearly much of the negativity about service provision occurs before and after interactions with frontline staff members.

Detailed below are the key findings:

IN THE RATINGS OF SATISFACTION:
Repurchase/pre-transaction
(In descending order of nominations and rankings)

Automated telephone systems
(Long) queues
Absence of/access to service providers

Purchase experience
(Lack of) product/service knowledge of service providers
(No or little) stock availability
Preferred brands, models, size (un) availability
Post-purchase/post-transaction
(Poor) warranty policies, responses
(Lack of) follow-up – communication
(Inadequate) accountability of buying/service entity

There is a clear message to management teams about the need to carefully review, and to possibly refine, enhance and develop current company philosophies, cultures, policies and practices.

An implied answer lies in the title of our latest customised keynote presentation:
“Service That Satisfies
SELLS”

ARTICLE TEXT:
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.