Archive for the ‘marketing fundamentals’ Category

I was out the other day catching up with a good friend of mine when he made a statement that I thought was powerful. In our case it was referring to a company that we had spent some time together, but maybe it will ring true for you in an organization you may have or still may work at today.

In any successful organization it is key for all the functional areas to be working together. Marketing, sales, procurement/ finance, manufacturing (where applicable) and a few other that are around to support the ultimate goal of success depending what success is for that organization. Over the last several years working well together has become increasingly challenging as organizations are challenged to keep manufacturing facilities manufacturing or keeping employees employed to achieve success. The definition of success often depends on where you are sitting within the organization and when there isn’t alignment around goals and objectives, things can go sideways. When each area focuses on their own goal without understanding the overarching goal, the results tend to suffer. If the finance/procurement teams are focused on keeping the costs down and buying the cheapest raw materials or marketing material, it can inadvertently eliminate the story for the marketers to market or the sales guys to sell. When the marketing function thinks that what they do is more important to the brand than sales or finance you usually end up with a bunch of activities that build the longer term health (no guarantees) of the brand, but there are no funds left for sales.  The finance guys end up wondering why the numbers aren’t coming in. Finally, if the sales guys focus only on their goal, which usually requires distribution and throughput (including discounting), but don’t worry about the cost or the brand strategies you can usually keep the boat a float in the short term, but the long term health of the brand will suffer.

As of late it seems that many organizations have been defaulting to having the finance team lead in order to count the beans.  The only issue becomes that it is a short path to the bottom (unless short term success is the ultimate goal). No offence to the finance folks out there, but if the true objective is to keep the company afloat in the long run, step back and look at the big picture. It is great that you can deliver the bottom line numbers, but at what expense. Are the brands still delivering great experiences, are the sales guys able to get the product into the right stores and in the hands of key influencers to try? Do the marketers have investments in sort and long term brand building activities? Without investment in those as part of any strategy there will soon be no beans to count and everyone will be looking for a new place to do their work.  Don’t let self interest (be it money or praise) get the best of you. Work together to achieve the team success. That way everyone wins and the long term prognosis should be good for the brand, the team and the organization.

Cheers,

Pete

So, the Royal Bank has come out and apologised for outsourcing some business to an organization that was using foreign workers to facilitate some of its IT work. The effect of the move was that 45 Canadians would lose their roles at the bank….hmmm.

So who’s to blame? Gord Nixon or the bank? The tech company hired to do the work? The RBC employees for not doing a good enough job or not being productive enough? I am sure there would be people that would argue on any of these fronts, but I want to propose that there is someone else responsible for these continued stories of outsourcing, layoffs, downsizings, corporate restructuring or any other word that you want to use for a reduction in the workforce at any company.

YOU. (I include myself in the YOU, but YOU sounds more powerful than WE in this case.)

It’s a complex situation with many other variables (which I would like to expand on in future blogs), but specifically it is anyone who owns shares in a company (or a mutual fund) and continues to demand/expect high quarterly growth or share price increases and dividends without considering the consequences in the short and long term. You see, once sales start to drop (which is happening in just about every company in every sector) there are only a few ways for companies to maintain their profitability in order to keep YOU happy. First, as most companies have already done, you strip out all the fat in your logistics, production and any other cost centre that you may have. Once that is done you start to investigate other areas that create massive amounts of stress within organizations…How about cutting unique aspects of your product out or cutting back on the quality?… Not a good idea. How about cutting your marketing budget and hoping that it won’t affect sales?…I might suggest that it is more about the type of marketing that you are using that may be the issue, but in general if you cut your budget you are less likely to maintain awareness with the buying public…Also, not a good thing. Finally (and not always the last choice), how about cutting some staff or outsourcing to save money?…Well, obviously that doesn’t go over so well with those folks who are directly impacted, but even those that are left behind (I know there is a syndrome named after this) have all of the work that was in the hands of the fired employees dumped on them with no pay increase and no increase in the hours that they have available to get the job done. Outsourcing has a similar effect on the people removed, but the work is…supposedly…passed to others and in this case, the jobs left the country. Whatever choice the company makes, it usually cuts at the core of what and who the company once was, but those in the leadership roles who are most often motivated by short term incentives as well, really are not worried about the long term health of the organization.

In the short term there is upset and anger within the people that have been personally impacted by the downsizing/outsourcing etc. This creates personal stress, family stress, stress within their circle and it all leads to additional issues in society.  The assumption would be that there will be a period of time until these people are able to find a new place to work (if at all) and as a result will change their spending habits, buying less of everything, potentially increasing their debt and adding to the overall risk that they face. This extends to be a risk to our country’s finances should inflation and/or interest rates go up having another negative impact on the segment of the population caught in this growing group.

In the long term, if this type of action happens in more and more companies (open your eyes, it’s happening all around us) and more and more people face the same impact as the individuals above, then it means a lot less people buying a lot less of everything which completes the ugly cycle that we are in right now. Less people with jobs buying less of everything, those with jobs buying fewer products because they think they are next and the companies selling less of everything as a result…and what happens next?  These companies then fire more people to maintain their shrinking profit margins and the cycle begins all over again. It just keeps getting worse unless we start to do something about it.

So what is the solution? Well I am certainly no Einstein, Marx or Keynes and I am certainly not against people working hard and being rewarded for it, but it seems to me we all need to accept less. We need to understand that by accepting less individually (that includes the greedy individuals at the top of organizations making gazillions – when is enough, enough?) we all win as a society.  We need to see that a greater separation between the haves and the have nots is only going to increase the stress and pressure amongst us. That continuing to worry about the Jones’ and buying into continued consumerism will only require more access to money and we will continue to pressure organizations to keep filling our pockets (and theirs) with profits driven by the exact things that drove Gord Nixon and the leadership at RBC to make the decision that they did to outsource the IT roles…even though their first quarter profit for 2013 was 2.7BILLION dollars. Yep, first quarter.

So here is what you and we can do. The next time you show up to your Shareholder’s meeting or have an opportunity to discuss or impact any organization’s direction in whatever role you play, think twice about downsizing or outsourcing as a means to maintain double digit quarterly returns. For those of you who may not be in tight with such business decisions, speak up when you see other situations like the one at RBC. The more light that is placed on these issues in all businesses and industries the more likely it will be that organizations may reset their priorities to include the population that they ultimately serve and who buy their products.  In the world we are in today, the growth numbers of the past couple decades are not sustainable (of course there will be some exceptions) and if we don’t reset our expectations (profit and lifestyle), more Canadians than ever will be out of work, the government will have less people to tax and pay for what will be a growing need for services and we will ALL be worse off.

BUT, let me say this…There might actually be a beautiful golden pot at the end of this not so beautiful rainbow. If we can all (and it must be everyone simultaneously or it will fail) shift our expectations, accept that the past is the past and that the future will be different in how we value our life and lifestyles, if we can accept that he with more toys does not win and that work life balance really is a goal that is worthy of a achievement, we may actually create an even better society that is full of people who think about one another, share their wealth and take the time to smell the roses.

Fingers crossed.

Cheers,

Pete

What exactly is Customer Experience?

I have had a few people lately ask me what exactly the Customer Experience is. To me it is all the aspects of an interacting with a consumer (product or service) other than the direct interaction itself. In the good old days we all spoke about customer service as being the be all and end all of making consumers or customers happy. Over the last decade as competition rose in every type of business and raised the bars relevant in each category, the experience became the new benchmark.  Here are a few examples…

Hospitality Industry – Today you see more restaurants, bars and hotels worrying about every aspect of your experience from the minute you walk in the front door, to all aspects during your stay and not just having a pint, a great meal or a clean room.

 B2B – In the past it may have been good enough to have the biggest brand or the cheapest product, but now it is about returning your phone calls, showing up on time, customizing your support or being there during challenging times. Building relationships.

 B2C (retail) – Beautiful displays, friendly people in store, try before you buy, better return policies, financing, washroom and baby changing facilities and big clean and clear aisles. All these make your experience more enjoyable.

 As I write the list of items above I am certain that I have missed some of the items that the average consumer would now expect from different business types (everyone’s list is different). It is the above aspects (and the ones I have missed) of any business that have now become the differentiation between one business and another. These are the aspects that help a business show you respect and care in exchnage for your consumer dollars. More so than ever before businesses are working hard to get better at them, because they understand the other option is to eventually go out of business as thier competition continue to improve its own experience.

 Just my two cents. How about you?

 Cheers,
Pete

Bell Canada…are you kidding me?

 Over the course of the last year as I have written my blogs (this is number 114) I have had a few situations that have driven me to ask the question that is a sure sign you are not satisfied with the results or value of a customer experience…”are you kidding me?” This past week I had a situation with Bell that I had to tell you about.

 My family has a cottage that I lived at this summer for roughly six weeks and as a result had added a long distance package onto the Bell phone service. This phone has been at the cottage for just over 20 years and the bill for the basic phone service has been paid every month, on time, for that entire time. At no time in the last 20 years have there been any additional services on the line other than the ability to receive and make calls. From the middle of September, when I left the cottage, until last week the phone up there has not been used to make or receive a call, let alone receive or make a long distance call. As well, due to a recent move at the same time, I had not received a Bell phone bill over that period of time and was only updated as to the outstanding bill last week. Once I was advised about the outstanding amount I immediately called Bell Canada and offered to pay the bill. When I was told that the bill was over $300 for 4 months I questioned how it could be so much? When they explained that the long distance package had remained on the phone for the last 4 months and thus the bill was what was stated, I asked for some consideration. I suggested they check the phone line to confirm that the line has not been used at all, let alone for a long distance call over the last 4 months. To this I was told it is not the job of Bell to monitor people’s phone lines and remove services when they are not used. I suggested that I understood that, but was looking for some understanding in this situation after 20 years of seeing only a basic plan on the phone…of course someone was not there. Again, I was told that the Bell policy was to charge people unless a communication was made to remove the service.  By this point I was chatting with Brian who was the supervisor of the person who had answered the original call…so here is what I mentioned to Brian.

 “So Brian, I get that you have a policy at Bell, but I am hoping you are listening to what is happening here and what you are saying. When this phone was put in at the cottage Bell was the only option for a phone and now there are other options that are actually cheaper. In addition, our family has gladly paid the bill (which is now $41.00 a month roughly) every month for 20 years…no exception. Finally, I recently moved my mother’s home phone to Rogers (along with her cable) because of a conversation just like this, after which Bell spent (my estimate) upwards of $200 in manpower and hard costs to get my mother’s phone business back. Here we go again. I am not asking for you to discount the entire cost of our phone service and I happily paid for the long distance service when I was using it. The total cost of the discount/rebate that I am asking for would be roughly $100, which is a lot less than what you are going to spend to get our business back once again. So with that all said you still are telling me that you have a policy that you have to stick to, correct.”

 The answer from Brian was “that’s correct”.

 How sad. A great opportunity for Bell to hold onto a customer for the short and long term versus just thinking about the short term profit on our little piece of business. Consider what the value is of our $41/month for the next 20 years. I don’t blame Brian for what happened as I also believe that his managers have not empowered him to make the “right” decision versus the decision that makes sense for everyone. The best decisions in life and in business are the ones where everyone wins and it is obvious from this interaction that Bell does not agree.

 I hope by sharing this experience that you too challenge business to make the “right” decision on your business. You deserve it.

 Sorry Bell, moving our cottage service as well. You lose.

 Cheers,
Pete