Pethick's Next Feast

There was an interesting article about me by Amanda Gome in www.smartcompany.com.au this week.

http://www.smartcompany.com.au/Premium-Articles/EntrepreneurOnline/20080729-Pethicks-perscription.html?source=RSS

It was OK but I took slight exception to the inference that nudie (and ?What If!) had been failure.

Here was my response to Amanda:

Hi Amanda

By using the term “fallen entrepreneur” in a pejorative sense you potentially obscure both the facts and the lessons for other entrepreneurs.

It is true I was “kicked out” of nudie. I certainly wasn’t without fault in the proceedings but, at the heart of this was the fact that I had a very different vision and strategy for nudie than the board did. It provides a hard-won lesson for all entrepreneurs. When it comes to a contest between an entrepreneur’s vision and an investor’s money it is always the dumb money that wins!

I believed (and still do) that nudie is a powerful brand, and that as such we should have concentrated on brand development and marketing and outsourced manufacturing and distribution, via license, to another organisation that had a comparative advantage in those areas. nudie could then focus on what we did best and leave others to do what they did best. This seemed to me to be both a scalable model and an economically desirable one. The board believed nudie was a juice company and needed manufacturing and distribution to give truth to that.

I believe history will prove me correct (perhaps has done so already) and in part this is evidenced by the fact that the VC’s in nudie exited at a significant loss some two years after I had been “kicked out”.

But in any event nudie was a staggering success. It proved it was possible for a bootstrap start-up to tackle huge and profitable incumbent players in a mature industry, and create a brand (voted in 2005, two years after commencement, by readers of brandchannel.com as one of the top 10 “most influential brands” in the Asia Pacific region) and a business (turning over $18m a year after two years in business) that shook up that industry (have a look at the chilled juice cabinet in any supermarket now) in favour of consumers. It is a story which has and should continue to encourage and inspire budding Australian entrepreneurs and innovators.

The ?What If! experience is also one I am content with because, apart from the lessons I learned about the apathy big Australian businesses have towards innovation (and therefore their customers), it was a tangible demonstration of my increasing commercial maturity.

With ?What If! I stepped in as CEO to a 6 year old business which had been losing money for the previous 18 months. My initial objective was to turn that business around (as I had done successfully in the past, for example when I inherited a very dysfunctional, loss-making Encyclopaedia Britannica as CEO in the mid nineties). In the space of 6 months I determined that it would be possible to turn it around but that the size of the prize for doing so simply didn’t warrant the investment or the energy. ?What If! is a global organisation and they were better off investing in more lucrative and receptive markets. In the old days I would have seen it as a virtue to ‘soldier on’ and swing the business around. The more commercially mature me is more prepared to focus on the size of the prize.

I have three university degrees but have long held that formal education is not a patch on the benefits conferred by ‘lifelong learning’. Everything we do or experience in life gives us something – often it’s a lesson which we can build from. Particularly in the case of nudie, which I was extraordinarily attached to emotionally, the experience came with significant pain, but it still ‘gave’ me something personally and something to share with others.

I am applying all those lessons to Sultry Sally currently, and making those lessons available to other through my new business. I believe Sultry Sally will be a great success (both emotionally and commercially) and I am focussed on achieving that success by relying on the lessons of the past.

Two of the things I am very passionate about are the necessity of innovation in favour of consumers and the power of lifelong learning. One of the reasons the most valuable entrepreneurs in the US are those that ave at some time 'failed' is that they are presumed to have learned lessons from those failures. They'll take those lessons into their next venture. In Australia we have more significant cringe around the "f" word and therefore are often not as focussed on the benefits (and value) of learning from experience.

Short Termism Rules - Or How to Screw Your Customer

One of the reasons there is more innovation in small businesses and in private companies is because they often take a long-term view. Large (particularly public) companies are the opposite. They are forever focused on the short term.

Markets dictate it. They want to know (and reward) what is happening this quarter or this half, not what the plan is for 10 years hence. And in any event, even if market pressures weren't driving it, the people in big businesses would.

The average tenure of a CEO is something like 5 years these days. Other 'C Suite' managers often last even less. They want quick 'wins' to build their reputations.

The thing about 'winning' is that is almost always involves someone losing. The losers, when it comes to short term quick 'wins' for businesses, are often customers. We know it and that's why we customers frequently resent the brands we do business with.

The easiest way to gain a quick win is to focus on cost control. Building value through innovation takes time and investment and is never as easy.

Here are three current examples of how customers are losing while businesses reap short term gain. And in the process these businesses miss opportunities to cement solid (and valuable) lifetime customer relationships.

Ads on Pay TV
Pay TV in this country has been losing money for years so its shareholders have been 'investing' to support it. These losses have been, in part, because it has taken time to build a critical mass of subscribers. For the last couple of years it has turned around and Pay TV operators are now making money. The variety and quality of programs on Pay TV has never been better and people are switching to it in droves (at the expense of Free-to-Air TV). This is the context and I am not blind to it.

I have had Pay TV for years now and so have observed the recent changes. The one that really annoys me (and, based on the extent of conversations I have heard or participated in, I am not alone) is the seemingly exponential increase in advertising.

I haven't put a stop watch to it, but my perception is that now there is the same, or a greater, level of advertising on Pay TV as FTA. So my customer experience with Pay TV has fundamentally changed. My viewing is now interrupted at a rate which is egregious. And what has happened to my subscription cost - it has increased of course!

I wish I was strong enough to cancel the service in protest. But I'm not. My favourite programs are on Pay TV. So, I feel captive. And whenever we feel compelled to put up with a situation we can't change, resentment breeds.

I don't begrudge the long suffering shareholders in the Pay TV industry finally extracting some return from their patient investment. But why didn't they do it in a way which invited customer participation and therefore provided customer empowerment. For example, they simply could have explained the situation and the need.

Even more compellingly, they could have offered me a choice - perhaps, in the same way insurance companies provide lower premiums for customers who select higher excesses, they could have offered me a stepped level of subscription rates. Maybe at twice my current subscription rate I get channels completely ad free; at 50% more I get a maximum of 5 minutes of ads an hour; at the current rate I get 10 minutes of ads an hour and at 50% less than the current rate I get 30 minutes of ads an hour.

The point is, at the moment, I am an unwilling recipient of this change; it feels very much like I am being taken for a ride - I am paying a pretty significant subscription (certainly more than I was a few years ago) AND I am now being bombarded with ads at an unprecedented level which I know is making them more money. They are making (short-term) hay while the sun shines.

I resent them and if an option ever arose I would grab it as quickly as I could. I am not a happy customer or brand advocate.

A new credit card surcharge
I have had a wireless broadband modem with one of the telco carriers for 18 months or so. I use it as a back-up when my primary access goes down. I pay a fixed monthly charge of $34 and, at their insistence when I took out the contract, that charge comes off my credit card each month.

Last month I noticed the cost was $34.22. This month it became $36.26. I investigated and discovered that last month they started imposing, seemingly without consultation or communication, a credit charge surcharge. This month, still with no apparent consultation or communication, they added a $2 charge to have my bill delivered by mail.

I'm under contract for another 6 or 7 months. So I can't get out. They know I am trapped.

I have been paying by credit card and getting paper bills since I took out the contract. These were implied terms of the contract I took out. The cost of postage hasn't increased in the time since I took out the contract and there have always been merchant fees charged to them for credit card collections. In another business I too am a merchant who collects payments from customers using credit cards, and my cost of doing so hasn't increased in the last couple of years.

So, the costs of these elements has always been the same for my carrier telco. The change is that they have all of a sudden decided to pass the costs onto me - without my consent.

I can just imagine some bright accountant in the bowels of this telco coming up with the pitch to their boss. "Hey boss, we could reap an extra $X million a year simply by levying a credit card surcharge on everyones bill. It is so small no one will notice it and even if they do what can they do about it - after all they are locked into contracts".

Short-term gain at my pain. And what disintegrates in the process? Any pretence of a relationship between the brand and its customers.

Recent rises in bank charges and interest rates
For the first time in Australia, the major banks are increasing interest rates even though there has been no Reserve Bank initiated increase in official rates. The banks argue that their cost of borrowing has increased and they have been absorbing those increases; they also argue they are not passing on the full cost of their borrowing in the rate increases. Then they ask us 'why should our shareholder's suffer at the expense of our customers?'.

This argument - 'we have a duty to our shareholders' - is one which is frequently used by organisations to rationalise any circumstance where customers are getting screwed.

What it misses is that customers are shareholders too. A corollary to this sort of notion was the basis upon which Henry Ford built the Ford Motor Company. He flew against conventional wisdom and paid his workers more, in a world where the emerging capitalist machine argued that workers should be paid as little as possible, because he knew that his car for the 'every day person' was going to be bought by his workers and people just like them. By paying them more he was creating the ability for them to become customers and therefore fuel his growth.

Back to the banks.

We have all watched as their annual profits have soared to record multi-billion dollar levels in recent years.

Thanks, in part, to the same market ructions which are causing the increase in bank's funding costs, consumers are doing it really tough. Inflation is running at a higher rate than it has done for more than a decade; consumer confidence is at a 17 year low; petrol and food prices are through the roof; mortgage defaults are at the highest rate for years and on it goes.

So, at a time when the bank's profits are at an all time high, and consumer confidence and disposable income is at an all time low, what happens - the banks start increasing mortgage rates out of step with official rate increases.

Is this more short-term profiteering at the expense of a 'captive' customer base? You bet! And it breeds the same kind of resentment already described.

What if a brave bank had come out and said - 'We recognise our customers are doing it tough; we are going to take a hit for a year or two and support them; we're going to hold rates and that means instead of delivering another x% increase in profits this year we are going to have a y% fall in profits'.

What customer (existing or new) wouldn't want to be part of that bank? They could recoup some of their cost of funding by cutting out all marketing spending for the year because their customers would become word-of-mouth advocates. In fact they would be beating off potential customers with a stick.

Of course no bank CEO would ever contemplate such an option because it would be short-term suicide.


There is real value in long-term customer relationships where customers are advocates for your brand. Many (most) large businesses sacrifice this for short-term gain. Unfortunately it often appears to work, because their customers are held captive. But it breeds resentment which must increase customer servicing and marketing costs. There is an opportunity here for small, privately held businesses to take a longer term view, do things differently and build value.

Little Things

When people talk to me about building brands or businesses they tend to focus on the big things like their strategy, their ad campaign, their brand identity and so on. All very important.

But it is the little things which sometimes make the biggest difference and businesses shouldn't ignore them. It's a bit like a chain - it is only as strong as the weakest link.

I was reminded of little things when we went to pick up our new cars. We had to swap over the old ones and, as invariably occurs in such circumstances, we still had some emptying out to do. We ended up with a small armful of rubbish.

In the expanse of the pristine car showroom there wasn't a bin to be seen anywhere. So we were sort of stranded with our rubbish wondering what to do with it. We ended up walking into a sales person's office and finding a bin behind their desk.

This is not the first time it has happened to me in a car dealership, and not just when switching over a car. When I take my car in for a service there is usually detritus such as a take-away coffee cup or a few old parking receipts which needs disposal, but even in a service area, car dealers aren't inclined to besmirch their premises with garbage bins.

Of course this isn't about bins or the lack of them. It is though a very small sign that the dealership is not really putting themselves in the shoes of their customers. They may be trying to think of their customer but they aren't 'being' their customers and so are missing the little things that are grounded in true customer insight.

Businesses that sweat the small stuff are showing they really empathise with their customers and, as a result, are often creating significant points of difference for their business.

Oh, and whilst on the little things - what does it tell me when the clock on the brand new car is set 4 years, 3 months and 7 hours earlier than the delivery time as I drive out of the showroom?
Forgive the rhetorical question - it tells me they are sloppy when it comes to attention to detail and that is likely to characterise all their customer interactions.

Consumer Power (or lack of it)

It was actually quite difficult to buy our two new cars.

Like most consumers now do in advance of any major purchase decision, I had done extensive research on the web about the cars I wanted to buy. I knew their features and benefits; I knew how much they cost; I knew their pros and cons and had read numerous reviews.

Based on all of that I made a decision. Once having made that decision all that was necessary was to cut a deal.

I arrived at my chosen dealership seeking to cut such a deal.

It quickly became obvious that the dealership didn't want to sell me the cars in the way I was prepared to buy.

The first problem I encountered was a salesperson who was determined to walk me through all the details of the (first) car. I really didn't want to know. I had researched it all well before hand. Despite my attempts to avert him he remained determined that we couldn't get down to business until he had completed his sales routine around the car. Eventually I gave in and let him say his piece.

"Now", I implored, "can we talk turkey?" "But surely Sir would like to test drive the car first?", was his response. Actually, I didn't want to test drive the car I just wanted to see what the numbers looked like. The salesperson was scandalised. I could see the thought going through his mind - how could I possibly contemplate buying a car if I hadn't test driven it? At that point he seemed to make up his mind - I obviously wasn't serious - and I think that mindset set the agenda for the rest of our interactions.

It actually took me 3 visits to the dealership, and multiple phone calls, before I could come close to getting a deal done. Every time there seemed to be a new problem. For example, I wanted to buy two different makes of car. Both are retailed from the same dealership and this is why I chose the dealership, and persisted with them in the face of the difficulties I had getting the deal done. But clearly the business was not set up to accommodate someone who was trying to cross the brand divide. No one seemed to have an oversight function.

Eventually, in discussion we both (the dealership and I) got our differences on the table:

• They wanted people to be emotionally committed to a vehicle (for obvious reasons) prior to purchase;
• They wanted the prospective purchasers in the dealership, face-to-face with a salesperson to crunch a deal;
• They wanted to keep the sale of the two cars separate, in separate parts of the dealership;
• They wanted an opportunity to up sell and to cross-sell financial services and so on;
• They actually admitted, "We have a way of selling and we've found we are pretty comfortable sticking to it".
• I wanted a 'deal' based on the fact that I was prepared to buy two cars;
• I wanted their best set of numbers committed in writing;
• My preferred way of dealing was by email rather than wasting time going into the dealership;
• Mine was a rational purchase not an emotional one;
• I knew what I wanted and didn't want anything else or any extras.
• I felt harassed by their constant phone calls attempting to 'sell me' on something else.

We got there in the end but it could have been quicker, easier and happier for both of us. It wasn't a pleasurable experience.

They have fallen into the trap that so many businesses do these days. They want to force customers to deal with them on their terms, rather than being flexible enough to deal with customers in any way the customer chooses.

Consumers want choice. Not just in the products and services they buy but also in the way they buy them.

A tale of two finance companies

We decided recently to replace out two cars. We live in the inner city and do few kilometres. It seemed extravagant, both in terms of the dollars and the environmental impact, to have large cars, so we determined to switch to small, Low Emission Vehicles (LEV). More on that purchase in a later post.

Both new cars are being financed as were the old ones. The new cars are costing significantly less than the old ones. We invited both existing finance companies to quote for the new cars.

One of the finance companies (let's call them "A") is one I have been dealing with for more than 20 years. In all, I have financed more than 10 cars through them. We have a perfect history together - I have never had any problems with them nor they with me. Whilst it is a finance company associated with a particular make of car, they do provide finance for any type of vehicle.

The other finance company (we'll call them "B") is one which we tried for the first time 3 years ago when we bought a new car - it is affiliated with the car marque we were buying at the time. Ordinarily, they only finance the particular make of car they are associated with.

Both finance companies came back with quotes which were within $50 a month of each other.

The cheapest though was "B", who also came back and said that, in light of our payment history over the last 3 years, we had an automatic approval and wouldn't need to fill in any type of application or provide supporting documentation. This for two new cars which are in no way related to the car make "B" is associated with.

The more expensive was "A" who also came back and said that, since it was 3 years since we took out the last contract, we would need to provide a full application including financial statements, accountants report and so on.

If there are some universal truths for consumers today (all of whom are time-poor) it is that we want hassle free 'buying' experiences and we want to be valued and recognised.

"A" failed on both counts. They should have recognised me as a valued, long standing (surely 20+ years should count for something??!!) customer and rewarded me with both a discount and an easy path through. Instead they allowed another company to sweep me off my feet simply by doing what "A" should have done as a matter of course.

And who wins the word-of-mouth advantage in this case - "B" of course. "B" is really known as Mercedes Benz Financial Services. Well done to you.

Interestingly the finance manager who I was dealing with at "A'' said in their defence, "It was nothing personal". Of course it was personal!

Businesses spend vast amounts of money to woo and win new customers. A satisfied, loyal and regular customer is one of the greatest assets any business can have. It astounds me when businesses fail to recognise that. When businesses fail in this way they leach value from their business and brand.

The lesson here is to work at recognising your most valuable customers; reward them for their custom (it is cheaper than acquiring a new customer) and build relationships with them.

Lacking Insight

I participated in a focus group this evening.

A retailer is replacing their in-house charge card with a new co-branded credit card in partnership with a leading global card provider.

The details of the card offering have apparently been decided and now we are down to the very pointy end - the design of the actual card.

In fact there have been numerous prior designs and focus groups and our group was looking at the refined designs as a result of that activity.

It quickly became apparent that the issue was finding a card design which encouraged people to use the card outside the retail store in question (since that is obviously how both partners stand to make the most money).

It seems to me that there are some significant issues with both the question and process.

We were asked to look at about 15 different card designs. Whilst there were subtle difference between each, when the were all laid out on a table, from a distance of about 60 cm away, they all looked much the same. I began to think there was an element of 'emperor's new clothes' about it. They kept wanting us to comment on the differences and how we felt about each. I was indifferent towards all of them - they were after all just credit cards - but their repeated insistence on comment on each eventually forced me (and I suspect others) to create opinions.

I couldn't help but think that I was witnessing gross corporate waste and inefficiency. A bunch of designer had created a bunch of card designs that were really pretty indistinguishable from each other; then a whole host of focus groups (we weren't the only one) were held (with paid moderators and clients looking on) with participants (for a fee) being forced to invent comments on each of the cards so it appeared we were doing something. This will inevitably lead to a raft of expensive analysis of results before an 'informed' decision about a card design will eventually be made.

They have lost the plot! An entrepreneur would ask his/her family and friends to pick between a couple of designs and then go with the one they liked in the first place. Thousands, perhaps hundreds of thousands, being saved in the process. I am not sure the snap decision of an entrepreneur would be any less effective.

But that still wouldn't create the right outcome.

I am not sure that the design of a credit card influences usage. But if it does, rather than testing dozens of different designs created by their designers, they should be allowing each individual to design their own card. This is after all 2008 and the age of consumer created content and Web 2.0. If they really believe that the look of a card will cause people to use it more they should be allowing the user to create their own look. This will ensure they pull it out of their wallet at every possible occasion. It isn't a new idea. In Australia, ANZ has been doing it for a while with http://www.designmycard.com.au/

Businesses and brands will always win when they give customers real choice rather than imposing an outcome on them.

nudie's troubles with the ACCC

Although I have not been actively involved with nudie for about 3 years, I am still somewhat synonymous with it, so it would be remiss of me not to comment on the recent troubles nudie has had with the ACCC.

It was widely reported, but for those who didn't see it, here is just one of the articles:

Sydney Morning Herald - June 21, 2008 "nudie's labels bare-faced cheek" http://www.smh.com.au/articles/2008/06/20/1213770924125.html

Basically, nudie's Rosie branded cranberry juices were actually 80% apple juice (and made from re-constituted apple juice to boot!). The ACCC believed nudie misrepresented them (through their labelling and marketing) to be cranberry juice.

nudie's defence hinged around two primary points. Firstly, that they were effectively using the apple juice as a natural sweetener instead of adding sugar. Secondly, that they always had the apple juice content clearly identified on the ingredients listing so they weren't hiding anything. (By the way, apple juice is significantly cheaper than cranberry juice).

I can see some marginal merit in both these points but it isn't enough to sway my opinion on the subject (nor was it enough to overcome the ACCC's view that a misrepresentation took place).

I feel disappointed about it as I am sure many other nudie consumers would. It is worth noting here that the ACCC action was sparked by a consumer complaint - a member of the consuming public felt cheated enough to raise a complaint.

There are many, many reasons I was able to build the nudie brand from nothing to one of the top 10 most influential brands in the Asia Pacific region (as voted by the readers of http://www.brandchannel.com/) in the space of just 2 years. In the life of this blog I hope to be able to reveal and explore many of those reasons. But one central one was that nudie, whilst always witty, was also always completely authentic, transparent and real. It earned rapid trust with consumers by having integrity.

nudie's actions with the Rosie cranberry juices breached the trust because the actions were not authentic or transparent and they lacked integrity (even if it was not a deliberate action on their part). In so doing they have damaged the brand and the relationship the brand has with consumers and therefore devalued it. This sparks my disappointment.

Last year I spotted some research (from both STW Communications and Grey's Eye on Australia Study) which resonated with me about what consumers thought were the attributes of a great brand. Here is a summary:

• 71% say a great brand had to be trustworthy
• 65% say it should never let them down - it should be dependable
• 63% say it should be honest
• 61% say it should be credible
• 60% say it should be the the best quality [product or service]
• Also important - it needs to be fun, innovative and recommended by people I know.

Anyone assessing nudie's actions with Rosie against this list would immediately see those actions are NOT what we expect from a great brand.

From nudie we had a right to expect better. They have let us down. How could they!!??

Whilst this question is somewhat rhetorical it does deserve some investigation to see whether there are any lessons to be learned.

I am surmising here rather than working from a basis of certain knowledge:

• A lot of pretty pedestrian juices are reconstituted. i.e. made from concentrate. Concentrate is a generally aseptic sludge derived from cooking up a juice and evaporating off the water content in the cooking process. To reconstitute concentrate you generally add back water to take it back to a 'brix' level which approximates the original unconcentrated juice. nudie frowns on concentrates and quite rightly uses real (single strength) fruit and juices in it's eponymous products. But with Rosie they have used some concentrates. It may be that they used apple juice instead of water to reconstitute those concentrates and this would account for the high volume of apple juice in the products. In that case they may have perceived themselves taking the moral high ground and may have been outraged by the ACCC's views to the contrary.
• All this deception took place with Rosie branded products, so nudie may have felt that the high standards applicable to the nudie brand could be relaxed when it came to Rosie.

There are flaws with both these arguments.

I guess I am a much more informed consumer in this area than almost any other would be. I raced out and bought Rosie cranberry juice when it was first launched. I certainly examined the labelling and packaging, but until I was informed of the ACCC action I believed it to be cranberry juice or largely cranberry juice. I really had no idea that it was in fact cranberry-flavoured apple juice. If it deceived me, it is certain it would deceive less informed consumers. There is no moral high ground for nudie to take. Common sense should have revealed the problem.

On the second point, nudie seems to have fallen into a classic trap for those who really don't understand brands. Brands are far more than just logos and brand names (identities) - great brands have personality; they have values which are played out in the brand promise. 'Brand Slapping' is where you take a brand identity and 'slap' it onto any old product or service, hoping to get some of the commercial value from the brand rub-off on the product. But if the product which has been 'slapped' doesn't live up to the brand promise, you inevitably leach value from the brand. nudie has tried to have its cake and eat it as well. They launched the new Rosie brand and product and then plastered the label with the nudie brand to provide endorsement value. This meant Rosie should have lived up to the high ideals of the nudie brand and it clearly didn't. Apart from being largely apple juice it had concentrates in it an nudie eschews concentrates.

Even with all these problems nudie could still have averted the extent of the problem by living up to their brand values in how they handled the issue. Roughly, (since I am working from memory), the timeline of the issue went something like this:

• Rosie was launched in about October 2007;
• The ACCC commenced their investigation as a result of a consumer complaint in November 2007;
• nudie changed the Rosie labels, to have pictures of Apples all over them, in January 2008;
• The ACCC announced the Federal Court action in February 2008;
• There was a Today Tonight 'expose' of the issue in February 2008 - nudie declined to comment;
• The Federal Court orders by consent were delivered in June 2008;
• The media frenzy such as the article above started after that - nudie continued to decline to comment.

An open, transparent, real brand with authenticity and integrity, a brand like nudie should be, should have leapt straight into the public forum on the issue when they first became aware of the consumer complaint (November 2007). Even if they genuinely didn't believe they were in the wrong they should have thrown themselves on their sword and cried 'mea culpa'. Since they lent the nudie brand to endorse Rosie they should have communicated directly with their nudie customers (not just the Rosie customers, who eventually saw a label change). They should have admitted the error, apologised, explained and changed and shouted the whole lot from the tree-tops (including acceptance that there was an error). They should have invited the opportunity to talk to consumers about it through the media. Such actions would have completely diffused the situation, lived up to the brand values, earned the respect of consumers and gained acceptance of the apology.

Avoidance or denial of the issue compounds it, even if the avoidance or denial is not deliberately constructed.

Great brands and great people have nothing to fear from the truth if they go through life with integrity.

I think it is entirely possible that none of this situation results from nudie deliberately or maliciously setting out to mislead or deceive consumers. They may have 'fallen into a hole' with the best of intentions (this is often called an accident), and then simply not known how to dig themselves out. A quick review of the ACCC wesbite would suggest they are in the company of many august branded players including in the FMCG space, so they certainly aren't Robinson Crusoe.

Nor do I think it is terminal for them. But they will have to work much, much harder future to regain the trust lost.

Great brands are not built through great advertising. They are built through powerful actions.

Incidentally, nudie may have to take some of the Rosie learning's and apply them to the traditional nudie products. For example, I noticed (and I came across it purely as a result of the Rosie issue), that nudie's 'cranberry, raspberry & more crushie' (otherwise known as the "fire fighter nudie") has just 2.5% cranberry. I originally devised and created the recipe for this product and when it was launched, and for a number of years afterwards, it had 15% cranberry content. It's apple content has increased from 40% at launch to 55% currently. It still comprises 17% raspberry.

As far as I know there has been no announcement from nudie that they changed the recipe somewhere along the line. In fact the nudie website still (as at 30 Jun 08) has the original recipe listed.

Once again, I can't speak to nudie's motive. It may well be that there is a perfectly sound reason for changing the recipe. For example, cranberries are very tart; cranking down the cranberry content and cranking up the apple content would make the product sweeter and smoother and possibly, as a result, more appealing to a broader taste. Another, possibly reasonable, explanation might be that there is a worldwide crop shortage of cranberry (I have no idea whether that is the case) and they simply couldn't get enough of them.

So, I am not suggesting there is anything sinister in the fact that the recipe has changed. But for whatever reason it did change there should have been direct, open communication with nudie consumers about when and why. That sort of communication is once again what we expect from the nudie brand.

Innocent, the fabulous smoothie company in the UK, last year changed the recipe of one of their launch products - mangoes & passionfruit - after about 5 years. When I was last in the UK I bought the new recipe product and couldn't honestly discern a difference from the previous one. I can't recall now why or how they changed it, but I can recall they heralded the change on their website and in their newsletter. They spoke to innocent customers and 'asked their permission' to change the recipe before they did so. And once they had received that permission, and changed the product, they told everyone they had done so.

What a great example! It is one of the reasons why the innocent brand is an inspirational example to all, and the company goes from strength to strength in Europe.

Wasted Opportunity - Market Research 1

I was picking up coffee this morning in the main street of our village and decided to get some cash from the ATM.

My local bank has recently installed a shiny new ATM to replace the slightly tired looking old one which had served faithfully for many years.

I stuck my card in and a few seconds later the new machine coldly dispensed a few $50 notes.

Now I hate $50 notes. They're just awkward. Shops never seem to have enough change for them; taxis wont accept them for short trips. I'd rather have a wad of $20's and $10's - far more useful day-to-day. Clearly, or perhaps just presumably, I am in the minority.

The old ATM had a really useful feature where, before dispensing the cash, it would ask me how I wanted it, and give me the option of a number of combinations of denominations. That would seem to me to be useful for both the 'big noters' who wanted piles of $50's and $100's AND those of us who wanted something smaller. Freedom to choose is the greatest gift a consumer can be given; and it should be a fundamental right.

Now here is the rub. Not once but three times over the past 18 months my bank has emailed me asking me to participate in market research about ATMs. I always try to participate in market research - I think it is great to provide feedback when asked. So I answered three different but similar online questionnaires about ATMs. In each there was a whole series of questions about how I felt about the fact that, unlike other bank's ATMs, their ATMs allowed you to choose the denomination you wanted dispensed. It was the only thing in the market research I wanted to focus on. As far as I am concerned an ATM is an ATM; at least my bank had a point of difference with theirs that really delivered a customer benefit.

Anyway, despite the fact that I was puzzled about why they had to do the same market research 3 times, I was pretty confident in each of them I had got my message across loud and clear - I love the ability to be able to choose how my currency is dispensed!

You can imagine how I felt this morning when I rocked up and found they had taken away my choice. Anger and frustration were the two primary responses - why keep asking me what I want if I am going to be ignored???!!! This is exactly how brands alienate their customers.

It is also one of the primary frustrations created by market research. We are asked but rarely listened to.

Of course, I am prepared to accept that I may have been amongst a minority. The vast majority, when asked, may have said "No, take our choice away! We don't want the hassle of the extra step in the process. Just gives us whatever currency you want to give us".

But if that were the case the bank still missed an opportunity. They could have had their cake and eaten it as well. They managed to track me down 3 times to ask me the questions in the first place. They surely could have tracked me down a 4th time and let me know things weren't going to go my way.

If I had received an email from them saying something like, 'look, we know you felt passionately about our ATMs primary point of difference, but the vast majority of people didn't give a toss about it; we are sorry, but this time around majority rules and we are going to change the software on our ATMs', a few things would have happened:

• I would have felt like they were listening
• I would feel valued
• They would have put a human face on their otherwise corporate bank
• I might have had time to ponder and prepare for the change
• I would feel like I wasn't being patronised by them

And as a result I would continue to be a brand supporter rather than a brand agitator.

It is the little things that make a lot of difference when you are trying to win the hearts and minds of consumers.

Apathy

It is often said that we end up with the politicians we deserve. It seems to me that we end up with the businesses we deserve as well.

I am always appalled at the extent to which businesses and brands seem fine with the fact that they more frequently disappoint their customers (or potential customers) than delight them, but maybe we are partially to blame.

Why do we, as customers, put up with the mistreatment we receive at the hands of businesses who are really there to serve us?

We are an apathetic bunch - particularly here in Australia. We deserve better but never demand it. We put up with crap, and certainly whinge about it to our mates, but we never really seem to punish those that dish it out by withdrawing our custom.

When was the last time someone really enjoyed spending an hour on hold to a Telstra call centre trying to sort out a problem which should never have arisen in the first place? Yet how many people will be in the queue to get one of the first iPhones flying out of Telstra's door?

The positive flip side of this is that businesses who don't disappoint; who truly do focus on their customers and give them something valuable and different; who stand out from the crowd and who delight their customers (as nudie did when it first started - alas no more), create customer evangelists who will spread the message and help build the business.

Hail the power of word-of-mouth.