It should come as no surprise that the way we get news today is quite different than in the last decade. Daily Newspaper circulation, which stood at 62 million in 1990, fell to 43 million in 2010, a decline of 30% (source: The State of the News Media 2011). There are many reasons behind this decline. One is a drop in advertising revenue, which has resulted in staff reductions, less content and reduced deliveries.
Google just announced plans to offer wireless service. What might this mean for AT&T, Verizon, Sprint and T-Mobile? How would you respond if one of your suppliers announced they are going “upstream” and will now offer the exact same product or service you offer?
I was amused when I read about this announcement, including the quotes provided by Google, and the reporter’s assessment, so I thought this might be a good topic to explore in greater depth.
I find it interesting when I speak with new acquaintances and they ask me what I do. I’ll typically respond with “I’m a marketer” or “I’m part of a marketing team.” Nine times out of ten, the response I’ll get back is “Oh, you do advertising.” I used to be surprised with this response, given that advertising is really just a small part of the marketing discipline. Now, I have come to expect it.
Of course, advertising is a part of the marketing mix. It comes in many forms, as shown in this recent media share chart.
Each of these categories represent are part of the advertising spend, with each component offering unique advantages and opportunities, depending upon what you are selling and where your audience resides.
Few would argue the importance of customer satisfaction. Every business owner strives for happy customers. In practice, however, what does it mean to achieve customer satisfaction? What makes a happy customer? Are they more profitable? More loyal?
Fortunately, considerable research has been performed on this subject, which will be quite helpful to address these questions. The first challenge is to understand what is actually going on versus what business owners think is going on. According to Lee Resources, 80% of companies say they deliver “superior” customer service, but only 8% of people think these same companies actually deliver this type of service. That is quite a perception gap. A big part of the reason why such a gap exists is that most unhappy customers don’t tell you – only about 4% – according to “Understanding Customers” by Ruby Newell-Legner.
As a business owner (or an aspiring one), an important consideration is the quest for future growth. From a strategic perspective, there are really only two choices: grow organically or by acquisition. By “organic,” I simply mean to grow by closing more deals, through efforts such as expanding your sales force or introducing a new product line.
When writing a business plan, it is important to consider each of these growth strategies – whether you are starting a new business, or expanding an existing one.
This decision is actually quite important, with big repercussions as to what your company will ultimately become. Given the significance of this choice, it is smart to carefully consider both options.
If you are starting a business, then the biggest challenge is what I’ll call “finding your way.” Starting from scratch means you don’t have any processes in place. Everything is a variable, so picking it all right the first time is highly unlikely. Instead, you will pick an initial path to pursue. Then, you will spend a lot of time adjusting and evaluating that decision. This process will then continue until you start getting traction and find the right path for growth.
Having a long “runway” with sufficient funds to make a few changes is critical for long term success. Early mistakes can be costly – a big one could sink the company. So, it is necessary to plan for some setbacks. Other suggestions are to surround yourself with as many experts as you can, and to have a well thought through business plan.
Grow by Merger or Acquisition
This option, in many ways is the exact opposite of organic growth. First, existing processes, employees and a business plan are already in place. If you are seriously considering the purchase of an existing business, you must see something desirable – enough to buy it! So, your challenge is how to integrate the new business into your existing company – from a people and process perspective, as well as from an IT systems and go-to-market strategy.
Alternatively, if you are considering starting a business through acquisition, then the one integration challenge is that of acclimating yourself to being the new owner or manager. Process “integration” is not really an issue … it is more your evaluation of the existing processes. What makes sense and what doesn’t?
In many ways, I see the success of a business acquisition to be akin to getting a new dog as a pet. Here are three ways I see these two activities to be in close alignment:
- There are many different types of dogs, and there are many different types of companies – you need to research the strengths and weaknesses of each if you want a good fit with your existing lifestyle, and/or the culture of your business. For example, if you live in an apartment in NYC and don’t have many “jobs” for a dog to do, then getting an Australian Sheep dog might not be a good fit. Similarly, if your company has rigid processes and procedures, then purchasing a startup out of the Silicon Valley with a young management team might not be a good fit either. It is really important to match the culture and temperament of an acquisition to your existing company or family to achieve a good fit.
- If you don’t spend time with your new acquisition, then the relationship will sour – this holds especially true with a puppy. Young dogs have a lot of energy, so they will either play games with you, or chew up your clothing, furniture and anything else they can find if you are not around. In the same way, employees at a newly acquired company will be looking to see their new role. If you don’t quickly give them guidance and a compelling reason to be part of the newly combined entity, they might lose interest and leave. The amount of time you need to invest in this task is going to be more than you thought. And, this requirement doesn’t go away after the first 60 days. If you are not ready to invest the time, re-think this acquisition decision.
- New dogs and new companies need clear lines of demarcation to know what behaviors are acceptable – for those of you who are parents, you know this analogy applies with young children too. We all need clear direction on what is expected and how we are to perform to achieve success recognition. Without this communication, pets, employees and children will come to their own decisions, likely pushing boundaries to new levels in search of a definitive line.
A careful evaluation of “build vs. buy” will help avoid surprises before you have made an investment in either a new company, or a new member of your family. Once the decision has been made, it is usually quite difficult to undo … and will cost you a lot of time, effort and resources. Plan ahead to avoid the pain and achieve the gain, and go into these transactions with eyes wide open.
The band U2 and Apple partnered this month to do a remarkable promotion and awareness activity. Every iTunes user received a copy of U2’s latest album, Songs of Innocence. When I heard about this offer, I couldn’t believe it. I saw a television advertisement showing the band playing a song from the album. Then, at the end of the ad, it was explained that the album would be available for free to iTunes subscribers.
I am a big U2 fan, so was thrilled at this act of generosity. And, as a marketer, I couldn’t help but think about what the terms of the agreement might have been. Clearly, both Apple and U2 stood to gain from this promotion – Apple from getting new subscribers, and U2 from having Apple pay millions to promote their album.
A New Promotional Trend for Music?
Of course, this is not the first time music has been given away for free. Many artists offer promotional songs or live recordings as a way to generate interest and awareness.
But, U2 is hardly in need of any new promotional campaigns. They have sold more than 150 million records worldwide, won 22 Grammy Awards, and have been designated by Rolling Stone magazine as perhaps the “Biggest Band in the World”. No, this is not a band seeking awareness. Something more is going on.
An Act of Generosity
An interesting story has unfolded as part of this giveaway. It turns out Harriet Madeline Jobson issued a complaint to Bono (the lead singer of the band) stating, “Can you please never release an album on iTunes that automatically downloads to people’s playlists ever again? It’s really rude.” The comment came to light in a Facebook Q&A the band released on their fan page.
To Bono’s credit, he apologized, stating: “Oops, I’m sorry about that. I had this beautiful idea and we got carried away with ourselves. Artists are prone to that kind of thing: [a] drop of megalomania, touch of generosity, dash of self-promotion and deep fear that these songs that we poured our life into over the last few years mightn’t be heard. There’s a lot of noise out there. I guess we got a little noisy ourselves to get through it.”
There was no need for an apology. It was a gift. If you don’t like a gift, don’t use it. Contrary to Harriet’s claim, you had to download the songs to make them active on your iTunes library. If she didn’t want the songs, she simply could have chosen to not download or listen. What is remarkable is the level of conversations that are now going online right now.
As you might expect, folks are taking both sides. What is interesting, though, from a marketing and pricing perspective, the adage on pleasing people holds true: “You can’t please all the people, all the time.” Even at a price of free, not everyone is a “taker.” This is an important point to consider when pricing your product. And, to those economists out there, the laws of a downward sloping demand curve can only be projected so far … there comes a point when that curve flattens out. 🙂
A Final Word on Publicity
The famous PR quote is that there is no such thing as “bad” publicity. Here is another example where that saying is still true. The amount of coverage of U2s short Q&A video on their Facebook page is nothing short of phenomenal – it has gone viral. In two days the video was seen by 1.4M fans. Most marketers would be very happy that type of coverage. And, let’s not forget the comments – the 5-minute video has been shared 12k times, a hashtag of #U2NoFilter was created that is now trending, and there are nearly 4k comments on the page already.
Demonstrating his wisdom, Bono responded brilliantly, reinforcing his “cool” status and spokesperson expertise. As marketers, we can all learn how U2 played out this interesting experiment. They were bold and brave enough to try something new, realizing that some would take offense or not understand their actions. Time will tell if other bands will follow … I’ll keep my fingers crossed, as I really like a musical gift!
Here are two other pricing articles you might find interesting:
The Wall Street Journal recently published an interesting article on Artificial Intelligence (AI), written by Christopher Mims (see article). The article describes two new businesses that are making great strides in how AI can be used to help make our lives easier.
What struck me as most interesting, however, was the incredibly narrow focus these businesses have with regards to what they hope to accomplish, and the value proposition they offer. As Mims points out, this is actually a very smart approach – one that is in complete alignment with my own perspective. If you seek to launch a new business (and write a new business plan as part of the process), then you too can benefit from this strategy.
In the WSJ article, one of the new businesses described is X.ai, which seeks to help simplify the task of making calendar appointments with others. We have all experienced this challenge. It can be annoying and time-consuming. The investment community agreed. The company was recently funded with $2.1 million to develop their virtual assistant called Amy (see announcement). Considering all the tasks an administrative assistant could do, it is notable that the company will just address the task of making appointments.
Here are 5 reasons why this is a good strategy:
- Once the development work has been completed and it is time to start generating awareness or “buzz” for the company, the message of simplifying the task of calendar appointment setting is crisp, easy to understand, and will resonate very well with nearly everyone that hears it. Another term for this strategy is KISS, or Keep It Simple, Stupid.
- The focus on just one task means that the “use cases” or examples of problems that can be solved will be equally focused. Employees will quickly become experts at the challenges tied to setting appointments when they can’t see each other’s calendars. Training time, effort and cost will be minimized, as will time spent on the phone doing customer support.
- Sales cycles should be accelerated, or at least simplified. This will likely also lead to streamlined support and future sales leads, helping the company to grow at this critical point of its life.
- Market awareness programs will be better understood to yield better results. Given the overload of information that potential customers hear every day, the chance to quickly address a common challenge will resonate well, resulting in greater retention and brand recognition.
- Future expansion decisions will be simplified, and cost less. For example, if the company sought to ease appointment setting, time card completion and file storage, then you will have new complexity when deciding the best direction for future growth. Where do you invest next? Time card tracking, appointment setting or file storage? Having initially invested in all three services, you will likely continue that strategy, and it will cost you more resources and investment. Alternatively, going with a very narrow focus to a specific audience offers a more cost-effective approach to expansion. Getting just appointment setting right, for example, could then be applied to several different types of user profiles, ranging from corporate business workers to small business owners to “soccer” moms. This type of expansion will be much easier and cost effective to execute, so will have a greater chance for success.
So why don’t more business startups pursue such a narrow focus and strategy, including how they write their business plan? Experience has taught me that when working for a small startup it is very difficult to say “no” to a new sales opportunity. The sales and/ or management team is afraid to see a possible sales opportunity walk out the door. When you are at a startup, things are tight, so every possible sales angle takes on greater attention. But those with the strength and discipline to do just one thing, and do it well, will be rewarded with less risk and, hopefully, a better chance of survival.
Numerous articles have been written on the importance of what we marketers refer to as “content” in order to drive market awareness, lead generation and other sales support activities. Simply stated, you need something to say to gain the attention of your prospects and customers. Google, Bing and the other search engines reinforce this concept – you simply can’t achieve good search engine placements without quality, relevant content that is frequently updated on a regular basis.
As has been mentioned in this blog and other publications, a blog is a great place to showcase your content. Blogs offer a great “home” for you to build a collection of articles and stories that share a common theme, which in aggregate support your brand and help future customers to find your business. Any business plan writer you meet with should have a strong understanding of this topic too – if not, it might be time to find another writer!
Is Good Content Enough?
Here is where you have to ask yourself “what’s next?” Now that you have invested the time and resources to write a collection of articles, how do you now build relationships with your readers, current customers and potential clients? The reward for getting engaged in these conversations is substantial and includes:
- Enhanced likelihood these people will read and follow future announcements
- Improved response rates to future offers
- Increased chance of that person will ultimately become a customer
Learning by Example
One area where marketers can learn how to drive increased conversations is from the world of e-commerce. Some of the online retailers are quite good at creating a series of interactions that create a group of engaged prospects that likely will become future customers. For example, we all know that if we order a product from a website, we will get an email soon thereafter confirming our order. This is a good thing – we like to have a record of what we just bought. Further, if we receive an email the next day indicating our product has shipped, this is also a nice message to receive – my order is on its way. Then, sometimes you even get an email indicating that the order has shipped, with complete tracking information. Follow up emails might even include customer satisfaction surveys, another great opportunity to suggest or induce conversation.
The conversation, however, doesn’t stop once the order has been shipped and received. Instead, it is highly likely we will get a follow-up email from these retailers in a few weeks or months from now, suggesting a similar product for us to order. For some of us, this is an annoyance, and we will opt out. But, for others, this is seen as a nice thing, as a way to make future orders easier to manage and accommodate.
Here is where public relations and social media professionals might take note. What can we learn from the retail establishment as a way to increase our conversation “quotient”? One challenge is we don’t have the same access to the contact information that e-tailers do, such as an email address. And, with privacy laws and concerns, it is unlikely this will change. One approach is to add a call to action or value proposition that can then facilitate better access to this data. A newsletter sign up, for example, might be an angle that promises notification of new stories of interest, or of when a new blog post goes live.
If you can accomplish the right mix of content and conversation, then you are worthy of “royal” lineage. You will then have addressed both the king and queen of marketing awareness, through a marketing-based approach to public relations and brand awareness!
I recently wrote a blog post on the importance of building a blog as part of your public relations program (see article here). As I explained, in today’s digital world, a blog is a critical part of your online profile – as a source of new insights, thought leadership and brand positioning necessary to keep your opinions and perspectives top-of-mind.
Once you have come to the conclusion to invest the time and resources to have a blog, the next step is that of promotion. If you build it, no one will find it unless you provide digital “bread crumbs” to lead the way. Search Engine Optimization (SEO) will play an important role, but isn’t enough. Here is where social media comes in. In fact, from a Public Relations professional’s perspective, this might just be the most important use for social media, and the single most important factor in justifying your entire investment in social media marketing.
What Should I Tweet About?
With Twitter being one of the most predominant social media platforms, it is nearly mandatory that you, your company or even your product line has a Twitter account. It is easy to set up the account … what next?
One strategy is to share interesting news that the audience you seek to build might be interested in reading. This is generally a good idea. Providing value to an audience will, over time, generate more followers, which helps in getting a higher profile. But, wouldn’t it be better to instead drive your audience towards an article that you wrote and hosted instead? Or, better yet, what about directing traffic to a promotional partner that is perhaps hosting a future event you are sponsoring? It doesn’t take much to see that driving traffic to a page you control is better than one you don’t.
Here is where the blog strategy can pay a handsome dividend. Once a new post has been written, such as this one, the next step is to promote it through your social media channels. Further, this points to a tangible benefit that can be achieved by building an audience … each time you have a new blog post, you will theoretically attract more potential readers with a larger audience.
Some authors have mastered this technique very well. Seth Godin, author of my favorite book the Purple Cow, has attracted an audience in the millions that religiously follow his words and wisdom every day. And, as he announces to books that he has written, he has an instant “base” of avid fans that will become new buyers.
What Social Media Venues should I Pursue?
Having made the decision to invest in a blog and promote it with social media, the next question to ask is what social media properties should you focus on?
Great question, and one that will be answered in my next post.
I recently had the opportunity to go to France on a business trip. Despite the increasingly “flat” world we live in, each country definitely has its particular nuances on how business is done and what social customs are acceptable. Fortunately, I was able to spend a bit of time in restaurants where I enjoyed the wonderful French cuisine.
One thing that caught my attention was when it came time to pay my bill. I was aware that when using a credit card, the tip had to be referenced early so as to be included with the authorization approval. What struck me as odd was that a tip amount could no longer be included with my credit card charge.
Shortsighted Policy Shift
This policy change surprised me, so I asked further what the thought was behind it. My server told me that it was causing too much taxes to be charged to the restaurant – apparently VAT or other taxes are applied to not only the food bought, but the services tipped. So, the solution was to simply stop including tips with credit card bills.
My next question was to my server – what did he think of this change? You might guess his response, “It is terrible.” I can only imagine. Personally, I carry little cash with me, relying heavily on plastic to cover my expenses, especially during a business trip. I didn’t have any Euros on me, so had to explain I would be back later to reconcile my shortcoming (which, by the way, I neglected to despite good intentions).
Industry Change, or Window of Opportunity?
My next thought was whether this change was government-mandated, or just the establishment’s decision. After doing a bit of research, it appears this was an isolated incidence (please let me know if I missed something). Given my server’s response, if the policy was country-wide, I suspect we would have all heard about it by now!
Given that this appeared to be an isolated change, what do you suppose will be the outcome? To start, I have a lower opinion of the restaurant – why do I want to support an organization that is clearly not thinking about their employees?
Further, I am inclined to believe the hired help will seek employment where tips can be added to the receipt. This might even create a cycle (and a reputation) that this business owner may, or may not truly understand. Those that can’t find “full payment” employment opportunities might ultimately become the staff at this establishment – effectively lower the bar on the quality of staffing. These folks might have to accept a lower payment in exchange for a lack of experience, poor work history, bad reputation, or some other challenge that precluded their working elsewhere.
As a competitor, this opportunity could be viewed as a window of opportunity to initially hire away the best employees, and in the future, to convince new recruits to not even consider their competitor for employment.
Alternatively, if this were a broader industry shift, such as a new government mandate, then the window of opportunity might be with a different perspective. For example, a new business plan that might now gain traction could be to provide mobile payment via a new app capable of digitally paying a bill while bypassing the restaurant’s own internal billing format. From a marketing communications perspective, the waiters could then become your own distributed sales force, offering this service to those without cash on hand.
Those with a keen sense of what was driving the change and what the perspective is of those impacted by the change will stand to benefit – if they can move quick enough to provide a new solution before everyone else.
So, next time you observe a shift in a routine, it might be worthwhile to pay particular attention to what is driving that change – a new business plan opportunity might be just around the corner!