All is not lost for small business

Here is some video footage of me on a recent Kochie's Business Builders TV episode from the 7 network, talking with Kochie about why the current economic crisis is not all doom and gloom for small business.

Christmas Silliness

That time of year is upon us again and, at the risk of sounding like a ungrateful bah-humbugger, it often tends to bring out the marketing worst in businesses. This is largely because it underscores the 'check-box' mentality which persists in many businesses, particularly in a business-to-business environment.

I love to use old cliches and adages so here is one- if a thing is worth doing it is worth doing well. Building on this a little bit, part of the doing things well is doing things thoughtfully, passionately and meaningfully. If you don't have those things you are paying lip service. The first group who will feel the lip service is always your customers. They are the last ones you want exposed to lip service because they actually want to believe you care.

I had two examples today.

Let's start with the hoary old Christmas Card. If you are going to send a Christmas Card to your customers don't do it just because you feel you have to; or because everyone else does; or because you've always done it; or because it comes up every year on your to-do list. None of these is a good reason. Do it because you genuinely (and personally) want to send a message to your customers. It could be to thank them for their custom in the previous year; it could be to let the know you would have liked to do more business with them; it could simply be to let them know you are thinking about them (possibly, more specifically at the moment, hoping they are weathering the financial storm).

Today I received two cards in the mail. They came in identical envelopes (so I had a suspicion they came from the same place); both were addressed in identical hand writing; both were posted to exactly the same address and arrived on the same day; they were distinguished from each other because one was addressed to Mr. T. Pethick, the other to Mr. Tim Pethick. When I opened them both were identical cards; both from a service provider and......... both from the same owner/executive in the service provider business. The messages, also written in the same (perhaps computer generated?) hand were slightly different.

So, what is it telling me? I certainly didn't take it (the error) personally - how could I, there was nothing personal about any of it. And that is the first problem. But what does it say about the business? They aren't efficient enough to spot a duplicate name and address on the data base or they are too sloppy to care? Perhaps they just overlook the details. As I said in my things continue as they begin post, leopards don't change their spots. If a business has a problem in one area it might be manifest in others.

A duplicate Christmas card from the same person pales into insignificant though compared with today's second Christmas Faux Paux.

A courier arrived at the office with a lavishly wrapped, relatively large Christmas present. The card inside it indicated it was from a supplier who we have only recently started doing some business with. We have spent around $75K with them so we are not huge but it is a big spend for a little business like ours. Apropos my previous comments about cards, the card set things up correctly - it thanked us for the business this year and cheerily added that they looked forward to doing business again with us in 2009. If only they had stopped with the card.

I opened the present and was, quite literally, gobsmacked. I have attached a photo below which unfortunately doesn't do it justice.

It is a vase. On the base it carries a bar code sticker which says "Mosaic Trendy Vase" "Made in China". It is sort of a very crudely made, vase like version, of a disco ball. The mirrored glass (if that is what it is) on the outside is chipped in places and very crudely cut.

I was left spluttering - 'what were they thinking?' - to my team. Putting aside the question of taste, if we look at this as a marketing device what is it saying and what is it doing? The vase probably cost about $5, perhaps less (if it cost more, there is again a question of business judgement), but certainly less than the courier cost to deliver it. It is not a useful (or appropriate) gift.

Frankly, my initial reaction was either that it was some kind of (yet to be fully revealed) clever joke, or that they were sending me a message along the lines of 'p*** off - we don't want to do business with you', or perhaps "we sent the good clients a bottle of Moet but you didn't make the grade'.

I'm sure none of these interpretations is true but I am still left thinking - 'what were they thinking?' or 'did anyone think at all'. What was their strategy in sending out such a gift? How did it work as a piece of marketing/communications - not well!!

I know I may be sounding harsh and ungrateful in this assessment. But the point is that everything we do in business has an impact - even the littlest things. Successful businesses are built by people who focus on detail; who are thoughtful; who know what their brand stands for and who consistently deliver against the brand promise.

Sometimes it is better to do nothing than anything when building a business and Christmas seems to throw up more examples than not.

Serendipity and Happenstance

This afternoon I popped up to the bank and as I was passing the village supermarket I noticed the wall beside their carpark exit had been rebuilt - differently!

Those who follow my blog may remember my post on Smart Persistence on the 30th November. In it I described how the wall was continually being knocked down by trucks only to be rebuilt in the same way then to be knocked down again.

It would be easy for me to convince myself and others that someone in the supermarket hierarchy was reading my blog, saw the innate commonsense of my posting and immediately ordered a re-design of the wall.

In other words my actions brought about positive change for which I am due credit.

In 5th Form at high school my economics teacher introduced us to one of the 'Logical Fallacies' - Post Hoc Ergo Propter Hoc - and it has stuck with me. It is Latin and means roughly 'after the fact therefore because of the fact'. In other words, it is easy (but often fallacious) to ascribe a cause and effect relationship to two things one of which follows the other.

One week I blog about the need for a wall re-design and the next week it happens. To link the two is a logical fallacy. I doubt anyone at the supermarket read and reacted to my blog. I imagine they resorted to some commonsense thinking of their own and had things well in hand with the re-design long before I started writing about the subject.

Frequently in business good things (and bad things) happen because of serendipity, happenstance of just dumb luck, not action or activity. In the same way that "Success Has Many Fathers" it is often the case that we inadvertently claim the credit for outcomes which were not completely, or at all, resultant from our actions.

To be able to learn and grow, and to repeat past successes, we need to be able to discern when we might be deluding ourselves with a post hoc ergo propter hoc situation. Of course we should also never be so self deprecating tha we hide our true light under a bushel!

The supermarkets are dumbing us down

By and large in Australia we have little choice other than to buy our groceries from Coles or Woolworths. The concentration is pretty significant - each has close to 800 supermarkets so there are around 1,600 in total across the country.

There often times I discover something new in my local supermarket and get quite attached to regularly buying it only to find that some months down the track it just disappears from the shelves.

I suspect it is because it just hasn't produced the sales volume required by the supermarket. Both chains generally set USW (units per store per week) hurdle rates for new line products. This is the rate of sale expected from the new product on a weekly basis.

In the case of something like a nudie the USW might for example be 11. This means 11 units per store per week of each flavour ranged. That doesn't sound like a great deal until you multiply it by the number of stores. If you had a product in both chains and all stores nationally that would mean 17,600 units sold a week.

Selling 11 bottles of nudie a week in an up-market location like Sydney's Double Bay is a shoe-in, but it becomes more difficult in a lower socio-economic store location like Mount Druitt. The more stores you are ranged in the harder it becomes to achieve the same average sales level across the chain.

In the UK they have solved this problem in supermarkets like Tesco by stocking different things in different stores based on the shopper base for that store. It is less likely in this case hat the law of averages works against you.

Back here in OZ, I suspect there are some great products which are cut because they haven't managed a respectable average USW across the wide variety of stores they are listed in.

This must inevitably mean that our supermarkets will stock more and more 'mass market' lines and less and less niche lines.

The system works to dumb down our choices and that can't be good for anyone.

Consistency

Fortunately for marketers and entrepreneurs very few consumers suffer from neophobia. They are always prepared to give something new a go if it is relevant and useful or desirable to them.

But once they are hooked and the novelty wears off they want consistency. They want to relax into an easy state where they know what to expect.

In the early days of nudie the flavours of the product changed almost weekly (it is far more homogeneous now and I can't help but wonder why). The reason for this was that the fruit we used changed - different varieties; different seasons; different growers; different climatic conditions, all impacted - as anything which is natural and real will do. Initially this change was off putting for some consumers, but they quickly learned it was because a nudie was made from real fruit and there is no such thing as a consistently flavoursome strawberry for example.

Before long consumers expected subtle variations in flavour and wanted that consistently delivered because it was a reassuring hallmark of the integrity of the product.

We are creatures of habit. I will go to the same place every morning to get my coffee made by someone who 'knows how I like it' and who uses the same beans. If it all changed and it wasn't to my liking a few mornings in a row I would have a reason to think about exploring for another coffee shop.

Once you have determined the hallmarks of your offering - the product, the service, the quality and the brand - work at delivering it with consistency. If you do you will provide your most loyal customers with more reason to stay and spread the word.

Smart Persistence

One of the hallmarks of successful entrepreneurs is persistence. The ability to keep driving on; often in the face of all the reasons not to presented by the naysayers.

There are frequent setbacks in building a business. Many of them are small and occur day-to-day. Less frequently there will be a major setback - like the nudie fire. But big or small it is the attitude of persistence which allows an entrepreneur to keep pushing forward.

I think a worthy metaphor is the Bozo the Clown punching bag I had as a kid. He has a rounded bottom and is sand filled. So no matter how hard you bop him in the nose he keeps springing back up.

It is important to understand though that there is no virtue in dumb persistence.

We have a major supermarket in our village on the peninsula. At the exit to the car park there is wall which is relatively frequently partially demolished by departing trucks who can't successfully negotiate the narrow confines as they leave the loading dock.

With monotonous regularity, in its efforts to uphold the aesthetic, the supermarket calls in workmen to repair the wall. They patiently rebuild it brick-by-brick, then render it and paint it. Beaut - just like a bought one again! The quickest I have personally seen it re-demolished is about 48 hours.

As I picked up my coffee this morning I found yet another team of workers commencing the latest re-build of the wall which has been damaged now for about 3 months.

One can't help but think there are better uses for the work men's time and the supermarket's money. This is dumb persistence.

Smart persistence would have the wall re-designed - perhaps lowered or re-shaped - or eliminated altogether, or built of a different material which might withstand the occasional knock.

Successful entrepreneurs harness their capability for smart persistence to drive their organisations forward.

Simple Things

In their search for bold marketing moves businesses often overlook the simple things.

Regularly on my way to pick up a coffee or go to the bank I pass our local village bookshop. It has a high street presence and it's windows are often nicely and thematically arranged with some of their latest books.

This is a great start but invariably the window display is changed only sporadically.

The greatest way to draw someone into a store is to give them a reason and often the reason is something new. What if my bookstore had a poster in the window changed each week which simply listed "New into store this week" items. This would allow me to quickly check whether any of the new items are of interest and make a determination to visit the store.

Now what if this was extended by the bookshop and the next time I visited they asked me for my email address so they could email a weekly list of 'what's new in store'. What if they added am author 'watch list' to this so I could be alerted when any of my favourite authors had a new release. And then what if they shared lists and content with, say, the local video store so I could also receive a 'what's new in store' list from them on a weekly basis. How about they started adding some local gossip or a blog from the shop owner.

All of a sudden they would have their own online community of local interest; they would know their local customers in a more intimate way which would further bind their customers to them; they would be providing a valuable service and driving more foot traffic into store. And best of all they could pull their regular weekly ad from the local newspaper which is nothing more than a useless banner anyway. The money saved can be used to further build the local online community of interest.

It is best to start with simple, creative (and often low-cost), customer-centric solutions before you start blowing money on traditional advertising campaigns.