Business Development

It's just as well they have a good brand ...

2007-10-16T14:47:00.000+01:00

I was talking to a couple of people last week about an e-commerce website. Rather, I was listening, they were complaining. One person had stopped using the site completely while the other customer had recently contacted the Help Desk in order to overcome a problem during the checkout process which prevented them from completing a purchase. In a few moments, the Help Desk had identified the cause, described it as "common" and straight away emailed a 2 page set of instructions for resetting the browser. Browser reset, the purchase went smoothly, but how many customers would have had the patience to work through a 2 page email to find the five lines that related to their set-up?

In manufacturing that kind of solution would be laughed at. If you know you have a problem in a process then you fix the process, you don't develop a work-around for the customers. If this site has a problem with cookies then it needs to redesign the way it uses them. Asking customers to follow a 2 page email and decipher which instructions relate to them can't be regarded as a good approach. And the site that is having these problems? Tesco. It's just as well that it has a good brand, because any normal e-commerce site wouldn't be able to sell much at all with this kind of defective functionality.

The power of reviews

2007-10-12T08:06:00.000+01:00

Recently I bought a new electrical appliance. It came top in a (2 year old) Which consumer survey and they were completely unequivocal - it outperformed the brand leader by a healthy margin against virtually every criterion that they tested it against.

Next stop eBay. I saw the item on sale, placed my bid and won. So far, so good. I had seen an impressive review, decided what I had wanted to buy and got it at a great price. But then, the little green demon curiosity took hold and I Googled to see if there were any reviews other than the Which survey. There were, and I began to read ...

Disaster. The first few were unfailingly negative and said that the Which survey didn't know what it was talking about because it hadn't used the product over a sufficiently long period. I looked further afield to see whether these opinions were a flash in the pan or reflected the consistent mood in the market. Eventually I found some more recent reviews and they were unstinting in their praise of the product so I feel vindicated at last that I have made a decent choice.

This information is a potential problem for manufacturers. They need to be aware of what people are saying about their product because there is a risk that negative reviews will impact adversely on their sales. Perhaps their site should link to some of the positive reviews so that they take advantage of independent praise to help offset the effects of any negative press which may exist.

Travel companies have taken this idea rather further - there are consistent claims that they have written some of the supposedly independent positive reviews of holiday destinations and hotels which appear on the web. I'm not advocating that - I'm a consumer, too.

Now I'm just waiting for the postal strike to end so that I can begin my own extended duration consumer testing. I'm just hoping that it's a positive experience.

Making a business more stable

2007-10-05T13:23:00.000+01:00

A small business that I know set up a new offer in my area about a year ago. From a standing start this offering has generated new revenues of about $400k in the last 12 months. That indicates that there is a genuine need for the service and the pricing must be relatively attractive, particularly since this growth has been achieved without anything other than poster advertising.

It wants to grow the revenues from this new offer further since its core business has been cyclical and the new service is significantly more predictable, limited by the capacity of its facilities and the availability of suitably qualified staff. The supply side is complex with both national and local suppliers, all competing for the same kinds of staff and not differing much in the pay and benefits on offer. It looks as though recruitment may well be the key process in helping the business to grow.

19 55 28N 23 28 50W

2007-10-04T13:22:00.000+01:00

That was the reported position of the lead boat in the round the world race Clipper Round the World 07-08 at midday today. The current leg is from La Rochelle to Salvador. The 10 boats are all identical and will arrive back in Liverpool next July as part of the city’s celebration of its 2008 City of Culture status. Clipper Round the World is a major adventure for most of the participants – the only professional sailor on each boat is the skipper – but it is also a business.

Clipper Round the World was thought up by Robin Knox-Johnston, the first person to sail solo round the world non-stop 1968-69.

Clipper Round the World races take place every 2 years and last about 9 months. The current design is a lightweight cutter built from a glass fibre composite sandwich construction with two layers of glass fibre around a balsa wood core. It displaces 30 tonnes and is just short of 21 metres.

Clipper Round the World has several revenue streams from the participants who pay to take part depending on how many legs they crew in, sponsors of the boats themselves and advertising sponsors throughout the event and on the website. Visitors to the website can use a race viewer which combines Google Maps with a KML file to report the track of each boat on the current leg. Positions on the map are reported every 6 hours. Crews on each boat write occasional blog entries as well as taking photos and videos of what is going on around them.

I’m hooked already and it has only just started. Mind you, I’ve got an interest in one of the boats, a friend is taking part in all the legs.

Just a spike

2007-10-03T12:20:00.000+01:00

For the past 6 weeks or so I have been working in an organisation with about 400 managers and staff. Although I have been there every day and I have met a number of people, I can’t normally claim to know what everyone there is thinking about at any one time.

Last Thursday and Friday there was no doubt in my mind what they were thinking about. They were thinking about business continuity. The local power supply became intermittent and a couple of power spikes disabled a number of their central servers. E-mail, printing, internet access and their main database system were all down for most of the 2 days. The interesting point of the story is that, in an attempt to ensure that their IT infrastructure was well managed, they had contracted out its strategy and management to Very Well Known in the IT Industry Ltd who is easily big and experienced enough to carry out effective risk assessments.

There a couple of reasons why an effective contingency plan might not be in place for this kind of risk:

the probability of occurrence was thought to be vanishingly small
the impact was expected be minutes rather than hours (this organisation has its own power generation for extended power cuts)

Whatever the reasons, I’m pretty sure that they have been visited at some length over the last few days and that there will be a serious attempt to make the network much more resilient to this kind of incident in the future. It also reminds everyone that even when you have contracted out the activity to a 3rd party, the quality of the service will depend on your being an informed client.

Another food outlet

2007-08-17T09:49:00.000+01:00

Many UK golf clubs have had a thin time over the last few years. Some of them have decided that they should do something positive to increase their attendance and bar sales, so they have made a real effort to develop their restaurant's offering at evenings and week-ends.

Last week-end I was a guest at a club who were running with this idea. The quality of the meal was excellent, the prices in the menu appeared to be from an earlier age, and the bar prices were low, too. The good news for the club is that the restaurant is full and bar income has increased substantially so there are real benefits to the club. That isn't to say that it would be a successful tactic for all golf clubs - it requires a well-equipped kitchen and a capable chef supported by sufficient support staff. For some clubs however, it can make substantial difference to trading income.

Getting the budget right

2007-08-16T10:34:00.000+01:00

I've talked before about the problems of cutting costs in complex organisations. One of the things that I didn't mention is that arbitrary cost cuts can cause a good deal of internal debate as well as loss of morale.

I was reminded of this earlier today when two middle managers were describing the approach being taken to next year's budget. They were highly critical but were uncertain that there would be an opportunity to ensure that the cuts were made in what they saw as 'less essential' areas.

Whether those managers were right about the nature of the process, the fact that they have become emotionally committed to an outcome which is different from the existing proposal creates a loss of efficiency within the organisation. Budgetting processes need to be capable of bringing these middle managers along so that they can feel part of the process and accept the outcomes.

What does a product recall cost?

2007-08-14T16:21:00.000+01:00

At the beginning of July, I noted that finding a low cost supplier in a far off country wasn't guaranteed to keep input costs low. Maintaining quality over long supply chains is difficult.

Mattel is a business that is learning the lesson the hard way. Here the problem is not simply the cost of the recalls themselves, but also the damage to Mattel's brand - reputational risk is often talked about, but the real costs are very difficult to estimate, particularly since it can take a long period for the full impact to emerge.

The customer contact problem

2007-08-08T10:29:00.001+01:00

While on holiday I met some people who don't use mobile text messages - they claimed not to know how to access them on their phones. That can be a problem for an organisation which may assume that because it has a customer's mobile phone number, it can use it to send text messages that will be read.

Customer contact is strongly in the permission marketing area and if a customer hasn't given you permission to use a particular contact channel then you may well be wasting your time. The message may not be seen or worse, be filtered through a veil of annoyance that the company has used a channel that the customer finds irritating. It's no surprise that so many people sign up with the mail, fax and telephone preference services. They do it because they don't like the approaches, or they don't like the channels.

Don't ignore SPAM

2007-08-08T10:10:00.000+01:00

I have just come back from a few days holiday and was welcomed on my return by 1783 messages in my SPAM inbox totalling 12.2 Mb. It would be easy to delete it all without reviewing it, but I thought I would take a few minutes to see if there was anything valuable there.

Of the total, only one message shouldn't have been listed as SPAM (a false positive) so that means that the filters are working pretty accurately, but I still get quite a lot of false negatives in my normal inbox (messages which are cleared as good but which are still SPAM).

The point of the post is that SPAM is a problem because it can bury normal mail.

One of the organisations I have been working with recently has a website which allows its customers to complete transactions online. Once the transaction is completed on the webpage, the transaction is sent to the organisation's main email address and is processed as soon as the office opens. That has proved to be popular with some of its customers and the number of transactions processed in this way has been growing rapidly. However, on examining their SPAM inbox they found that a number of the transactions emailed to them from their own website had been categorised as SPAM (a false positive problem). What makes it more difficult is that their problem is subtle - there doesn't seem to be a clear distinction between the transactions which correctly find their way to the inbox and those which have been declared as SPAM.

So, don't ignore your SPAM inbox - there may well be something in there which is valuable to you.

Extending a supply chain doesn't just mean finding a low cost supplier

2007-07-10T09:39:00.000+01:00

Many European organisations have been shifting their focus from local manufacture to import and distribution from an increasingly long supply chain, all in the name of reducing the cost to serve.

I found this article today which describes the quality problems with some products sourced in China. The article refers to US importers and distributors, but the same issues face European importers and distributors.

Now, I'm not making the case that European good, Chinese bad. That wouldn't be accurate, but I have little doubt that the importers and distributors mentioned in this link thought that they were dealing with good products which met the appropriate safety standards. Apparently that assumption isn't enough to guarantee that delivered quality meets local requirements.

It also means that additional activities may need to be built into these long supply chains to make sure that quality standards are maintained. That will have the impact of increasing the cost to serve although it is unlikely to make these sources uncompetitive until their wage rates increase substantially.

What is the customer experience?

2007-06-09T20:21:00.000+01:00

The other day I called 118 118. For those of you outside the UK, that is one of a number of directory enquiries companies who provide details of business and private telephone numbers. I knew the name of the company I wanted to call and their address, but it didn't help. I didn't find out their number until I got back to my computer and looked them up on their website.

I don't imagine that many potential customers would try to find them through directory enquiries, and it wouldn't matter if they did, based on my experience. My point is that they haven't put themselves in their customers' shoes and tried it for themselves. If anyone in the business had a similar experience then I'm sure that they would have done something to get their number properly registered with the directory enquiries companies.

Not that they are exactly hurting on the telephone front. Last week I asked them what their incoming call volume was and they told me that it was running at about 150 calls per day - not bad for a micro business!

Writing a manual is tough

2007-06-02T07:52:00.000+01:00

I like espresso. I've had my current machine about 3 years and it's been excellent, but in the last couple of months it started to play up - the flow rate through the brew head didn't seem as fast and eventually it slowed to a trickle. The noise made by the pump motor sounded different, too.

I read the manual carefully and followed the instructions to clear any airlocks which the manual suggested might be the cause of the problem. It didn't seem to really help so I tried everything else I could think of to clear those pesky airlocks. No real improvement, so I decided to look at the problem more carefully.

Eventually I had an epiphany. Although the flow rate through the brew head was very slow, there was water escaping from the pressure release valve back into the reservoir. With that new information, I was able to solve the problem in about 10 minutes and the machine now works perfectly again. Better, I did it without using any tools or anything that wasn't in the kitchen already. My point is that the problem and the solution weren't covered in the manual.

A proper manual needs to be comprehensive to be useful and that means not just instructions on how to switch the machine on, but helpful in identifying common problems and providing guidance for what can be done. On that basis, most instruction booklets for appliances fail as manuals. Trainer tip for budding manual authors: the phrase no user maintenance possible, is probably not one that you should use unless it is really true.

So how can you write a comprehensive manual? The most obvious approach is to provide the equipment to some would-be users and find out what happens when they try to operate it without any instructions at all. That will provide a very quick insight into how a group of people think and what kind of instructions would help them to get an acceptable outcome.

If you have access to a pool of machines with long working lives then you can also assess what kinds of problems those machines have experienced and provide advice on how people can analyse their problem and carry out simple maintenance.

I'm just off to have an espresso with a full, rich, crema.

The two tail problem

2007-05-09T06:47:00.000+01:00

A and B are rarely separated by a clear unambiguous line. Statisticians refer to this as the two tail experiment. The attempt to separate A and B into 2 categories automatically will actually result in 4 groups:

correctly categorised as A (positives)
incorrectly categorised as A (false positives)
correctly categorised as B (negatives)
incorrectly categorised as B (false negatives)

In most real situations there isn't enough cash to reduce the size of the false positives and false negatives to zero so the designer has to decide where he will accept a higher level of false results. Over the weekend I have had an opportunity to review how one of my email providers had set the limits on their junk mail filters.

Like most people I get junk mail. Like most people I moan a bit about it but generally ignore it. Over the week-end one of my email providers had a significant problem and in only 4 days 87 megabytes of junk mail was sent into my junk mail box - almost 3000 messages - most of which was delivered last Friday and Saturday. That's a pretty unusual blip and since then it seems to be running at a more normal 1 megabyte per day.

Clearly, this email provider had attempted to reduce the level of false positives (emails incorrectly categorised as junk) at the expense of a higher level of false negatives (emails put into my normal inbox which were actually junk. I reviewed the junk mail box to check if there was anything in there that was worth keeping and found 4 false positives - but I was able to sort the junk in a different way than my email provider and was able to immediately throw out stuff from mailer daemons; postmasters; mail delivery systems; mail delivery sub systems and so on which meant that in the end I needed to review only a handful of messages to find the 4 messages which have now been correctly classified in their filter system.

No system is perfect and we need to keep checking that the results that we are offered by these type of systems are actually correct.

Cutting costs

2007-04-30T17:10:00.000+01:00

A good pal of mine says that "Any fool can cut costs, it's reducing the cost base without reducing organisational capability that's the tricky part." That's been brought home to me during the last few weeks as I've been doing an operational review for a fairly large sized organisation which has been through a series of cost reduction exercises over the last 5 years.

What I have been doing is to establish the organisation's current capability in a number of dimensions and the answers have been occasionally bleak. Some of these cost reduction exercises have limited the organisation's ability to create value which has created a rather damaging spiral of decline.

The moral: think hard and make sure that it's just costs that you are cutting.

It's just like Pinnochio's nose

2007-04-28T09:51:00.000+01:00

At the end of January, I reported that Feedburner's stats showed that over time 51 different types of feed readers, aggregators and bots had accessed the blog.

Today that figure is 61, including three cutely named and highly memorable visitors: ocgnpaCs4eCrcdamsfuu4c4n ggp, tctnbtkw9yoj9 x ps oxcpvajmNrtx and eapjsi dm f vtv ei0x all of which appear in the feed reader and aggregator area.

Here I am, where are you?

2007-04-28T08:51:00.000+01:00

I got an email from someone the other day which said, more or less, "Here I am, where are you?", it then went on to describe some work that the writer wanted me to do.

The email was from the Managing Director of a high street brand that I had done some work for a couple of years ago. I had facilitated a 2 day workshop for a cross-functional management team and although I had excellent feedback from them, nothing seemed to happen as a result. I followed up several times over the next 3 months but it went very quiet.

The moral of the story has to be, don't bore people to death with follow-ups but have patience. If they really liked what you did then you won't be forgotten.

Salary sacrifice

2007-04-28T08:11:00.000+01:00

I'm working with a team at the moment which provides a range of services associated with salary sacrifice programmes. Salary sacrifice involves deductions made from an employee's monthly pay which are hypothecated for a specific purpose and are free from income tax and national insurance. It's an interesting idea as a business:

it provides a win-win for everyone (employees [who can make savings against specific, government approved purchases] and employers [who make a net overall saving on their payroll costs even after the management fees charged by the service company]
after selling in the initial programme, the service company can use its relationship with the employer to offer additional programmes so there are great opportunities to deepen the relationships within the existing customer base
it's fast growing - the number of approved programmes is increasing all the time and as more and more employees find out about the savings they can make, they are pressing their employers to set up their own programmes which drives demand for the service companies' expertise
almost best of all - the group of employees who stand to benefit most from this are higher rate tax payers - the group that the employer least wants to lose, so employers tend to respond relatively quickly once the idea takes hold

Lorem Ipsum

2007-04-28T07:39:00.000+01:00

If you have ever been involved in the design of any collateral then you have almost certainly seen the dummy text which is used to provide an impression of how the text would appear in the design layout without allowing the reader to become overly distracted by the content.

I had assumed that this material was garbage pseudo Latin, but it seems that I was wrong. It has a distinguished provenance. According to Richard McClintock, a Latin professor in Virginia, it comes from sections 1.10.32 and 1.10.33 of "de Finibus Bonorum et Malorum" (The Extremes of Good and Evil) by Cicero, written in 45 BC. It seems that I have been exposed to historic literature far more frequently than I had thought. If you would like to learn more, then Lorem Ipsum has a more detailed description of the source text with translations by Rackham. It also has a true Lorem Ipsum generator which it claims is unique since it does not rely on the repetition of text blocks and contains no padding text from other languages.

Copywriting the Halbert way

2007-04-11T16:07:00.000+01:00

Having noted the death of Gary Halbert in a previous post, I thought that it might be worthwhile to reflect on why his style of copywriting worked. Halbert himself didn't think it was much to do with the quality of his writing. He said that it was the quality of the ideas that was important and he used to spend at least 90% of his time on thinking about what he was supposed to be selling and less than 10% on the writing itself. On that basis, Halbert should probably be revered as a marketeer or a super salesman rather than a copywriter.

The thing that he looked for was a hungry audience. He didn't mean people who were literally hungry of course, he meant a group of buyers who were desperate for the product or service he was promoting. If he could identify that audience then he knew that he could sell. His gift was very often to identify an aspect of a product which had been overlooked by other people which could confer real benefits to that hungry audience. He was, in his own words "an ideas man" who could generate value for a business both on the top line and the gross margin. Read some of his newsletters to get a flavour of how he helped to redefine business models for some of his clients.

He appeared to be a robust character who enjoyed telling the unvarnished truth, but that was probably a persona for public rather than private consumption. He was obviously a complex man who straddled the old and the new and tied them together by understanding that, at root, the buyer was untouched by the technology. His ability to tie in an advertisement to that buyer was what made him famous. His influence is significant and I have no doubt that many of his ideas will be stolen and used again and again.

A sale is a very fragile thing

2007-04-11T08:06:00.000+01:00

The headline is a quote from Gary Halbert who died on Easter Sunday. Halbert was internationally respected as a copywriter and managed the later years of his life as a mentor and trainer of people trying to develop their own skills.

Like many people, I became aware of him through the Gary Halbert letter which contains several hundred newsletters, begun by him during the 1980s and selling at that stage for about $185 per year. A lifetime subscription to the newsletter sold for about $2800. The point is that people paid over that money willingly because they admired the content, but also the style. Halbert's sales letters are masterpieces of carefully drawn, highly effective prose. If you want to look at a master writer developing a variety of themes then this is a great place to start.

The thing that makes Halbert stand apart as a copywriter in recent years was in his understanding of reach and channels - he knew that for the copy to do its job, it had to find its audience, and he was very inventive at getting his copy in front of plenty of eyeballs. A talented writer and one well worth celebrating.

Link building

2007-03-30T09:10:00.000+01:00

Everyone wants to build their site traffic. There are a variety of ways of building traffic, but organic search results offers lower cost traffic than pay per click advertisements. Pay per click advertising offers other benefits, but that is a post for another day.

People understand that links are important in building their organic search traffic, but they tend not do much to actively manage their links. The very best type of links are one-way inbound links, but the quality of the site providing the link is important too.

Actively managing links takes time and it relies on a series of activities. Many sites don't tend to do these things but they are vital unless you believe that link building should be left to chance or that the investment is a diversion which gets in the way of the day to day business.

These activities include:

research, which sites do you want to target?
classifying possible links, can you use any facts to help you decide which of these target sites deserves special attention?
developing an outline link request letter for webmasters which should be personalised to their site and describing why a link will benefit both them and you
testing the letter on some sites which are less important to you
developing an escalation process, in case they don't respond to your initial offer

I'll be developing these ideas over the next six weeks or so.

Kempton Park on Saturday

2007-03-30T08:59:00.000+01:00

One of my clients has a horse running in the 2:55 at Kempton on Saturday. I won't mention the name of the horse because I wouldn't want any of you to complain about the quality of my racing tips. The reason for the post is that this hobby has become a business sponsorship. The silks which the jockey wears are in the company colours and the website address is clearly shown. I would never recommend a business to indulge in this kind of sponsorship, but as it is an investment that is going to be made anyway, why not try to take a business benefit, too?

The race is a 2000 Guineas qualifier, and it is the horse's first real attempt at running a mile. It has done very well at 7 furlongs in the past but this may be a trip too far. The race is live on Channel 4.

PPA and click fraud

2007-03-29T07:17:00.000+01:00

Advertisers will like Pay per action adverts because they will pay out only when an action is completed. In the current experiment, advertisers can define what the action is (for example, a newsletter sign-up or a sale). It should eliminate the incidence of click fraud too, because the action has to complete before the advertiser has to pay Google. That's where things may start to become more complex.

If the desired action is a sale then at what point does the advertiser pay Google? At the point that their card acceptance service registers the payment from the customer? When the product or service is delivered? What happens if the advertiser pays Google for a completed sale and the customer subsequently asks for a full refund? If these issues can't be handled automatically, then Google may fall out of love with PPA very quickly.

PPC or PPA?

2007-03-27T14:08:00.000+01:00

Pay per click has been with us for a while and it has proved to be highly popular with web marketers. It offers immediacy, targeting and test data. What it hasn't done up to now is offer every advertiser low cost. Some advertisers find that Pay per click advertising is highly expensive since they find themselves paying for clicks which don't convert into sales or relationships which can be exploited subsequently.

Google is experimenting with Pay per action advertisements. During the experiment, these will be available only on Google's content network, but because they focus on advertiser-defined actions they may ultimately prove to be even more popular than Pay per click ads.

While the experiment is in beta, there are some additional limitations for advertisers wishing to take part:

U.S advertisers only
You must have conversion tracking (or be able to implement conversion tracking code) on your website

Advertisers will have to think through just what an action (a sign up for a newsletter, a sale of a book or another product, for example) might be worth to them and that will no doubt mean that bid prices for sales actions could rise sharply which will do Google's share price no harm at all.

I can't wait to see this experiment roll out beyond the content network and then into Europe. This looks as though it will be a very exciting innovation.