When it comes to the 2011 Rugby World Cup, who knows more than the team behind it? Um, nobody. Which is why we marched straight up to Leon Grice, Director of the NZ 2011 Office, and asked his advice on what New Zealand businesses should be doing to make the most out of the opportunities that will be opening up in 2011. He gave us some good tips.

Grenville Main: We’re keen to learn about your advice, learnings, key points for the New Zealanders not directly involved in activities?

Leon Grice: Join the Business Club. Join it straight away. If you’re part of that and you’re offering up hosting opportunities, it’ll give you a qualified name.

[Editor’s note: This was said so definitively that we thought the interview was over. We asked Leon to expand.]

LG: The Business Club is a Rugby World Cup dating agency, essentially. The people coming to New Zealand are all high net worth individuals and they’re all looking for the great Kiwi experience. We’ll be asking them online what their age is, where they’re from, what their interests are, what they like to do on their time off, and – most importantly – what team they’re supporting. That data will tell us where they’ll be going. So for the Italians in our database, we’ll know that they’ll be going to Nelson to watch Italy play the United States and we’ll know that there’s ten of them, for example, in the seafood industry. From that we can make sure that the people in Nelson, particularly the seafood industry, know that they’re coming so they can take them out and catch a snapper, go and have a tour on one of the factory boats, go and have a game of golf, and enjoy some of the best on offer in Nelson. Perhaps they can go to the game together. And if they can have two or more interactions with these guys, then they can start to build some relationships and even turn it into a deal.

GM: And for non-export-oriented businesses, what’s in it for them and what should they do?

LG: I think that [New Zealand] business people are no different to ordinary New Zealanders, and it runs through all Kiwis that we like to host and we like to show off our country. We’d like non-export-oriented businesses to get involved and be part of the experience in hosting their peers – which we’ll give them access to during the Rugby World Cup. It’s as simple as that. You don’t need to be an export business to make the most of these global connections. Global connections can pay off and, who knows, you don’t need to be in exporting now, but in five years’ time if you’ve built those relationships [then you might be].

GM: So what you’re saying is, don’t shut the door because the opportunity is not immediately apparent – but the other side of the coin is saying you’re proud to be a New Zealander, you like to show the place off, so even if it seems as though it’s not there directly for you and your business, it’s there if you pitch in.

LG: I think if you look at the people going to Rugby World Cups, and if you look at the Kiwis in particular who are going to Rugby World Cups, they’re developing relationships with people that are long-lasting. And that’s the thing about rugby, it’s that brotherhood and that experience. So if you talk to House of Travel, for example, they’ll have, say, 700 people on their database that they’ve sent to Rugby World Cups, and if you talk to those people you’ll find that they were hosted in those countries and they have relationships in those countries that have lasted the test of time.

GM: It’s quite interesting, the number of people who are quite narrow around the fact that it’s a Rugby World Cup . I mean, sure, it’s a sporting event but it’s specifically rugby. So what if I’m a guy from a small-to-medium business who doesn’t care about rugby, what’s in it for me?

LG: That’s where the Business Club comes in. Let’s take the wine industry businesses, for example. During the Rugby World Cup there will be wine festivals in Central Otago, Marlborough, Nelson, Martinborough, Hawke’s Bay, Auckland. And the New Zealand wine industry is talking about putting on a showcase and wine dinners,  and there’s a whole range of VIP programmes. If you look at wine growers in the industry I believe they’re a model for operation. It doesn’t matter if you’re small or big or exporter or non-exporter, it’s actually an industry you can belong to and get benefit from because it’s the NZ life story, being a premium story, it elevates all the boats in that industry. So while they’ll compete in the international marketplace they also have an interest in not cutting each other’s throats and not rocking the boat, and so they’re not undermining the quality of the premium wine industry back home. So they’re very practised at working together. So their wine offering will be the best wine offering as a visitor experience, for both New Zealanders and for people offshore, in New Zealand’s history.

GM: So, that’s an example of the broader opportunity for anyone, in any sector, in any business.

LG: Yes. And the same thing applies for everyone. It’s an expo of the whole country. Even for smaller businesses – Bluff oysters will be put aside and put in growing cages and for the first time in New Zealand’s history, the only place you will be able to eat a Bluff oyster is in Bluff. It’s the same thing for the Wild Food festival. There’s usually only one Wild Food festival a year but they’re talking about having a Whitebait-focused Wild food festival on the West Coast. Now the West Coast doesn’t host any teams, it doesn’t have any games, but by putting on that festival and celebrating Whitebait they’re going to get Kiwis coming and they’re going to get overseas people coming, so people will go to Christchurch and the West Coast before going the their game in Queenstown. So from a business perspective, getting involved in that is huge.

GM: So you can start to see that it has massive implications potentially. Two key questions for us are, what is New Zealand going to learn from this and how will we quantify the benefit we’ve got out of it; and for you guys, what, besides from former World Cups, are some of the more recent and relevant learning examples?

LG: The Sydney Olympics.  If you look at the Sydney Olympics and you look at the return on investment, you wouldn’t have done it. But what did it do? It transformed Sydney from being one of the better cities in the world into one of the few great cities in the world – in the perceptions of the world

GM: In the perceptions of the world, and the perceptions of the Australian people.

LG: Exactly. And the Rugby World Cup is different, you play once a week. So for the other six and half days where you’re not drinking or watching rugby, you’re a visitor to the country.

If you look at the ROI for the Sydney Olympics, it’s qualitative. It’s that Sydney, without question, is now one of the great cities of the world. Its sophistication, its infrastructure, its performance, its culture, the people are friendly, they have a great lifestyle – all these things are cemented in London, in the U.S..

Our Ministers are very clear: they want New Zealanders to make sure that we use the Rugby World Cup, not just that we run on a great tournament, but that we present ourselves as a creative and innovative nation that offers a sophisticated experience for people.

GM: What are the risks in not quite hitting the mark?

LG: I think the regions themselves are getting really well prepared. It’s now time to recruit people into those programmes and start the movement. The programmes are there and they’re ready to go, our programmes, our Business Club, are there to support the regions. We’re ready for the volume problem. Our systems have been created for the volume problem. It’s right now. We’re ready to recruit.

GM: How many sectors are you showcasing?

LG: With New Zealand Trade and Enterprise, it’s not an exclusive list. It’s anything from marine and film to I.T, seafood, food, wine, all those sectors. Each one of those has their own programme. I went through NZ Wine growers but there’s one that’s developing up now and that’s the seafood sector, which is not dissimilar, which is a series of regional activities, a nationwide programme and a set of objectives. So for NZ wine growers, they are wanting to maintain the premier status of the New Zealand industry in global wine, so for them broadening out the story beyond the fantastic Sauvignon Blanc to other varietals is part of the strategy for them for the Rugby World Cup. So the Rugby World Cup for them is a marketing device, a platform to lift their strategy. But it isn’t where the strategy stops. It’s an opportunity, while the world’s looking, to give a bit of impetus to their ongoing strategy.

GM: So we look at New Zealand success stories across business and there’s a group of business supporting each other. But generally across the board there’s too many cases you hear about of some people getting a lucky break or whatever it might be, but it’s a whole bunch of individual performers, not really whole sectors, who have really made it. Is this an opportunity to make other industries more cohesive?

LG: The Rugby World Cup is definitely a unifying idea. It‘s an important event, it has a deadline, there’s spring cleaning of infrastructure, and it gives people something to aim for. As soon as people have something to aim for it can be unifying. It’s an opportunity, and there’s nothing like a deadline to create a sense of urgency. This does create some interesting tensions, because there are some people who are commercially aligned to the properties of it all and some who aren’t. So there are some unique tensions. But hosting is not a commercial property – hosting is an activity, and it’s part of the unique Kiwi experience.

GM: And what is the unique Kiwi experience in the case of the Rugby World Cup?

LG: I think there are three points. One, rugby is a game of the people. The Rugby World Cup is a rare experience, New Zealand is known for rugby already, and there’s no other country in the world that will give a total rugby experience.

Two, we have the All Blacks, and the All Blacks are our most iconic brand, I believe, in terms of recognition and power. And because they’re such a well-known brand, we are actually a bucketlist destination for those rugby-playing communities who want to come to New Zealand. They want to come to New Zealand irrespective of the Rugby World Cup, but the combination of the All Blacks and the Cup is quite powerful.

Three, from a business perspective, 2011 is going to be the first year since 2007 where it’s going to be okay to party. 2010 is about getting your cashflow back. In 2011 it will be okay to celebrate. You’re feeling okay, your customers are feeling okay, and it’s okay to invite your customers to a wine festival or to buy tickets to go with them to a rugby match.

GM: And how well aligned is the concept of the unique Kiwi experience to most Kiwis? How does it stack up in the minds of the people who you think will be visiting through those towns?

LG: Part of being a New Zealander, I think, is that we love to show our country off. Irrespective of being in business, this is an opportunity to do something that we’re proud of doing.

In the past, what has attracted people to New Zealand is the landscapes, but they’ve left the country talking about is the people experiences. They didn’t expect the people experiences that they had.

So this is a very concentrated time to take that opportunity. We’ll be working to showcase the best New Zealand creativity, innovation and technology. There’ll be a large amount of people travelling around, a large international media contingent, and we’ll be using the large amount of time between games to encourage people to come and see the marine sector, the film sector.

New Zealand will perform. We’ll run a great event. Wellington will be great, we know how to party. Christchurch will be great. Auckland, the super city, is coming, they’ll step up and they’ll shine. But the question is how we use the event to send other messages, the message that we’re a sophisticated, creative, innovative nation.

That’s the challenge for all the businesses involved and it’s also our target.

I think the difference is the quality of what we give them. There’s 85,000+ people who are coming, they’re high net worth individuals, they’re business leaders and opinion leaders in their markets. It’s how we focus this and not only get to say ‘Gee, those Kiwis did well’, but really show them that New Zealand is a great place to do business, a great place to live, a great place to visit – in a really co-ordinated way. In the same way that Sydney went from being one of the good cities in the world to being one of the great ones, it’s how we present ourselves as a sophisticated, creative, innovative nation.

GM: Any final parting shots?

LG: It’s gonna be big. There’s never been a nationwide festival staged in New Zealand, and there’s never been a nationwide festival staged around a Rugby World Cup. Rugby is the game of the people in New Zealand and everyone wants to be part of it. It’s going to be huge.

GM: Thank you.

NZ Tourism is charged with driving tourist visitor numbers to New Zealand and an event like the RWC is a golden opportunity for New Zealand to shine. While the 85,000 visitors are already on their ‘way’, we asked Kevin for his perspective as the CEO of NZ Tourism on what local businesses need to be thinking about. While his mandate is not directly about business in New Zealand, his diverse business experience and his global NZ brand perspective affords a valuable viewpoint.

Economist predictions are that 85,000 people will be visiting NZ for the Rugby World Cup. The profile of the visitor will be 45+, wealthy, with male skew, high net worth individuals and there will be some VIPs visiting.

There is obviously a direct benefit to accommodation, beverage, food, travel and tourism businesses but the fact is that it will not directly affect a lot of NZ business. Something to remember though is that there will be more activity in the provinces as more games are played in secondary centres, this will certainly present many opportunities for business.

There will be a strong sense of pride and a real “buzz” in the country around the event – NZ will be alive and very interesting. The event will be the ‘best of New Zealand’ on display. If you are in a business in areas not mentioned above, you will need to think about selling ‘authentic’ New Zealand experiences.

You should be asking yourself how demand might be different during the cup and leverage this.

How will you leverage the “buzz” and what are the ways for you to add value as a business? You should definitely link into the various 2011 business forums and networking opportunities. Really though, the key message is no one is going to do it for you so you need to have a plan.

2011 is coming, and for many in New Zealand, rugby is a big part of it. As an opportunity for New Zealand it’s being pitched as bigger than Ben Hur.

But what does it really mean for the broad spectrum of New Zealand business? What does it mean for you and your customers? What’s the message for those that aren’t in the entertainment or tourism industries? How should people look at this - a pause for benchmarking perhaps; or is the reality, in fact, that there’s nothing to learn and not much that’s directly beneficial for those outside of the sport, tourism and hospitality industries?

We pitched these questions to Phil O’Reilly, head of Business New Zealand, and he gave us his insights. Here, we share them with you - because we’re good like that.

Grenville Main: As you see it, what’s the real opportunity for NZ business and what you can do as a business to take advantage of it?

Phil O’Reilly: There are two aspects to what’s going to happen to New Zealand business for the rugby world cup.

Firstly, tens of thousands of people are going to come to New Zealand. Secondly, millions more people are going to watch it on television. They’re not going to be in New Zealand, but they’ll see New Zealand.

For the people who are going to come to NZ. We can stratify these groups into a couple of themes. Firstly, there’s a general theme that there will be very few people indeed who will be coming here primarily for business. They will be coming mainly to watch rugby, drink beer and have a good time.

However, we know that lots of people want to come to New Zealand, it’s just that it’s so far away. A lot of business people in particular that I speak to every year, thousands of people in fact, think of it as one of those things that they really want to do ‘one day’. It’s a big effort to get here. So we know that many of the people who come here will be here for their first and only time. They will only come once – and they’ll come because of this big event that’s going on.

The second interesting thing about the cohort of people that will be turning up is that in other countries, except in NZ and South Africa but particularly in places like Japan, rugby is an elitist sport, a corporate sport. So the people who turn up will be more than the average tourist – they will be business people, and people of some worth. That is a huge opportunity for New Zealand.

GM: What are Business NZ going to be doing here?

PO: Business NZ along with the 2011 Office have stratified that group into three areas we are working on.

Firstly, there will be a very small group of rock stars – the Richard Bransons and the like. Then there’ll be a whole bunch of corporate people who will have, for example, Board meetings during the cup. What we’re doing is lining up major companies/corporates to host and meet these people. We’re encouraging major companies to think about opportunities to invite clients, parent companies, Boards and other decision makers to come to NZ and be hosted here. We’ve got lots of boardrooms, lots of facilities, and lots to show them. That’s obvious for the larger companies, but there is nothing to stop medium-sized companies from doing this as well. If you’ve got a major client that you deal with or a major supplier, or a series of customers you deal with, why wouldn’t you invite, for example, the senior management to come and have their offsite [meeting] here, or invite their Board to come to New Zealand and be hosted by you? The point is, there’s a lot of opportunities for people to come do business in New Zealand while coming to watch the Cup. Any company with relative heft should be thinking about that and getting onto it now.

The second and biggest opportunity is from a cohort of these business people from South Africa. How much business do we do with South Africa currently? Not much, as it turns out. But there are a huge number of South African business people who will come to NZ to support their team and those people have a great deal of respect for, and love for, New Zealand. We have a great commonality with South Africa – partly through a shared love for rugby and cricket – but not an established business relationship. We need to enable New Zealand and South African businesses – along with businesses in Japan & America and the rest of the world – who are in New Zealand anyway to enjoy their stay here with us. They’re here to enjoy rugby and have a good time. This is a massive opportunity. We need to host these people – not in seminars and Boardrooms, but with city tours, meals, farm trips, factory tours. It’s an opportunity to shake a hand, hand over a business card and make a friend. And New Zealanders do that better than anyone else in the world. We’re the best at that. Nobody does that better than us.

Now there’s a third opportunity here, and that’s that people in the tourism sector and the hospitality sector will be selling stuff to those people. They will be selling accommodation, food, experiences. The opportunity there is to figure out whether or not we are world-class. We need to ask ourselves if we are world class because we will have a huge bunch of people coming through here who haven’t been here before, they’ll be staying at hotels and eating at restaurants, and it’s a good opportunity to listen hard to them and benchmark ourselves.

GM: And what about the ‘fourth’ group of people, those watching everything from afar?

PO: The people watching the World Cup on TV will be seeing a tourism ‘tinged’ view of New Zealand, but there will still be opportunities for them to see New Zealand as a nation. They’ll see the stadium, the streetscapes, the buildings. There’ll also be plenty of the ‘real’ New Zealand – cities, towns, real people – coming through. I think, once again, that there will be plenty of opportunities, certainly for New Zealand exporters but also for other businesses, to take those ideas and the visibility that this creates in the world markets. It will a tourism-focused thing, and rightly so, but it will also be a slice of New Zealand life that they won’t see in the ‘100% Pure’ ads. It will be ‘100% Pure Plus’, if you like. I’d hope that New Zealanders will take as much of an interest in what the rest of the world is saying about us as much as they will about the rugby. They’ll be watching BBC World and CNN and taking in interest in New Zealand as part of the world media during that time, so that they can understand what the image of New Zealand is that comes out during the event. If that’s a good image, and I’m fairly confident that it will be, what does that say to you about the possibility to now do business for New Zealand offshore?

GM: There are quite a lot of New Zealand businesses that work solely in New Zealand, for New Zealanders…

PO: Even for domestic businesses – it will be key to take note of what it teaches us about an outsider’s view of New Zealand, and what that means for your business, or elements of your business.

GM: So, there’s quite a lot of learning that will come out post-event?

PO: Yes. Even if we monitor outside coverage of the Rugby World Cup, there’ll be an opportunity to learn about what outsiders think of us because they’ll be here for a relatively long period of time and we’re on show. Again, there’s an opportunity for us…just look at what impact this had on Australia after the Olympics, and the World Cup.

GM: Won’t distance still be a barrier if we’re only as good as everyone else?

PO: I’d be careful about saying that to sell on the international scene, we need to be much better than everybody else – for a number of businesses that’s true, but for others it’s irrelevant. For a small bunch of New Zealand businesses, if they’re world-class, they’ll still sell into market because they can sell off the net or whatever, freight costs are small, they’re not time-sensitive.  So for them, it’s not an issue. I wouldn’t say that new Zealand’s brand really matters that much for everybody – it matters for some a lot more than others. And there are aspects of the New Zealand brand that matter a lot more than being ‘clean and green’ on the whole – aspects like trust, no corruption, honesty, English-speaking, first world.

I’ve been overseas quite a bit, (I go overseas a large percentage of every year), and I’ve never heard a single person say ‘I like new Zealand because it’s clean and green’. Never. What they talk about is the beauty and the unattainability – it’s a beautiful jewel, a Shangri-La. I think we let ourselves down by saying people like us because we’re clean and green – it’s a very absolute term and any sophisticated thinker in the world will know that. The 100% Pure brand is not how the world sees us.

What they do see is adventure and possibility. New Zealand is incorrupt; and it’s the second-easiest place to do business in the World according to the World Bank – that is massively, massively important.

GM: OK, but there’s a whole bunch of people who are domestically focused, who aren’t exporters. What’s in it for them?

PO: It’s fair to say that there’s less in it for them – they’ll get the knock-on impact from the billions of dollars that will flow through New Zealand through the big businesses. But, considering the amount that we’ll learn about ourselves through this process, I would be telling them to ask themselves, measure themselves, examine themselves in terms of thinking about what it means to be a business in New Zealand.

Here’s a good example. Will our stadiums be empty if the All Blacks get knocked out in the quarter final? I hope not, I really hope not. I was in Australia for the last Rugby World Cup and it was a really inspirational time to be in Australia, because even in the games where you had two nobody teams playing against each other, there was such incredible crowd support. People were going mad for players from a country they’d never heard of – they had placards, support groups, face paint –and the games were incredibly successful. We need to do that in New Zealand.

GM: So what’s on show is our hospitality – our attitude, our spirit and our sense of ‘can-do’?

PO: Exactly. And the Australian Rugby World Cup and the Sydney Olympics are great examples of this – everyone contributed to that success, everyone can remember it and everyone can feel proud of it.

GM: And because Australia is quite close to us, the learning’s from this are quite tangible, and the results are quite potent?

PO: Yes. In our case, we need to think about what it means to be a New Zealander, and a New Zealand company, and yet support the world. What does that take? How do we overcome our egoism, if you will, our inward focus that has developed as a consequence of so often being the smallest man in the room? I think that will be an incredible lesson for New Zealand if we can overcome all of that – to cheer and scream for everyone in the room. To feel good that someone won, but feel better about the fact that we hosted the world. When Australia won the world cup there was a difference between celebrating Australia winning, and celebrating the spirit of Australians, the big-heartedness of Australians. Not just for export businesses but for every business – every person, in fact. It was about saying to the world, “Welcome – we’re on show and we want to support every team and make everybody feel good.” That had a clear spin-off into business, both export and domestic business, because everyone understood that success and understood what it meant to get that success. It applies to the panel beaters just as much as it applies to intellectual businesses. It was about feeling proud about the fact that they hosted the world so successfully.

GM: What’s the likely mindset if I’m a consumer in the equation, and I’m being told that we’re world class, so I’m now expecting world class?

PO: I think we need to be a bit careful about the use of this ‘world class’ thing. It’s impossible for every single business in New Zealand to be world class. Lots and lots of businesses in New Zealand are New Zealand class – just like a lot of businesses in Australia are Australian class and U.S businesses are U.S. class – and we’ve all experienced those businesses, businesses that aren’t quite as good as the others but they just get on with it and that’s ok.

GM: We have a saying, that ‘world class’ is nothing but the gold standard for sameness…

PO: Exactly, and it’s important that we don’t buy into that, that for 2011 to be successful we just need to be ourselves, and show the world who we really are.

GM: Nonetheless, will we as consumers all become a bit more demanding? Do you think this will change the standards and expectations for New Zealand business?

PO: I have a slightly different thought: we will find out something new and different about ourselves in this process (whether the All Blacks win or not).

If the All Blacks win, and we’re happy because the All Blacks won, that tells us a very different thing to whether we’re happy because we ran a successful tournament because everyone had a good time here. Those are two very different thoughts. We need to unbundle those thoughts as a country, just as the Australians did, to say whether or not we did a good job in hosting the world and in showing New Zealand to the world. Not just showing the clean and green either, but showing what New Zealand really is – buildings and people and technology. When we show the complexity of what we have to offer, that’s the big opportunity – it’s not a 30 second TV ad. I think we will take learnings out of that. Is New Zealand very creative? Yes, in fact Maori people are known to be some of the most entrepreneurial people on earth, and we don’t commercialise on that for a number of quite sensible reasons, but we need to unpick those sorts of things.

We have our own legends about ourselves that we tend to trade off on. The whole ’100% Pure’ thing, for example, but we’ve begun to realise that these aren’t as absolute as we would like to think. However, we need to feel comfortable about that because we are special and we are complex. Our brand is not quite what we’ve thought or quite what the slogans tell us, but there are things to celebrate and things to feel comfortable about without getting too stressed out about whether we are this or that. I think this process will be a good opportunity for us to see that, to have a national realisation about some of that complexity. I also think that we will pick up new things, new truths about ourselves. What we’re going to hear is a lot of insights from a lot of people because of where we are on the world stage.

GM: And how likely is it that we would get stage fright, do you think? Are we in danger of overdoing it?

PO: What I hope we don’t get is stage fright – and by that I mean I hope we don’t get nervous and under-do ourselves – but I also hope that we don’t get gauche and over-do it by trying to be something we’re not. So if we get that right, we’ll be able to get some learnings for the future.

I think as a nation it would be pretty hard for us to over-do the hospitality. I’d be very surprised if we turned out like Las Vegas with the sellotaped smiles and the fake tans and the signs saying ‘have a great day’. That’s just not in our psyche. The stage fright I mean is that we might lack the confidence to be ourselves, that we might try to be somebody else, that we do what everyone else is doing and we don’t strive for our own version of world class.

GM: Thankyou.

Phil O’Reilly is Chief Executive of Business NZ, New Zealand’s largest business advocacy group, representing thousands of businesses of all sizes.

As the Chief Executive of the Auckland Regional Chamber of Commerce & Industry, a Director of both the Auckland Chamber and NZ Chambers of Commerce & Industry, and Secretary-General of NZ’s National Committee of the International Chamber of Commerce, Michael Barnett has a keen interest in how New Zealand business is going to benefit from RWC 2001. He shares some of his insights with us.

Q.What insights do you have from your understanding of RWC 2011 and the benefit to NZ business?

RWC 2011 is the biggest sporting event in the world in 2011. It is huge and so are the benefits to NZ businesses. An economic impact report tells us that the additional direct spend during the tournament will be approximately $500 million throughout NZ with an estimated $267 million of that going to Auckland which will be the hub of the tournament.

While much of that revenue will be generated through visitor-facing businesses in sectors such as hospitality, accommodation and transport, the opportunities are much wider than that. All of the businesses in those sectors will need increased supplies of goods and services so there are opportunities all along the supply chain for a wide range of businesses.

Added to that are a multitude of events around the tournament – Fan Zones, festival events, business events etc. All of these events will need technical equipment, fencing, staging, seating – hundreds of different goods and services.

All of the above benefits are direct benefits that will occur in the lead up to and during the tournament. Businesses have the opportunity to use the tournament to generate a commercial return and then invest that return in the future growth of their businesses – so if businesses get it right, we are talking about far more than just a six week boom.

You also need to take into account potential long-term business benefits from business events, networks and other initiatives designed to link NZ businesses with potential investors who are here for RWC 2011. There is a significant national and regional programme being put in place to try and link our business people to investors and markets during the tournament.

Q.What do you see as the opportunities for NZ business (at the individual level) for leveraging the cup?

The opportunities for businesses are many. Examples include targeting visitors during tournament, supply chain opportunities (both with visitor-facing businesses and key players such as the tournament organisers and venues), media opportunities with Auckland and NZ in the spotlight, sponsorships, participating in business clubs, investment attraction programmes and showcase opportunities.

If individual businesses want to leverage these opportunities the best advice I can give them is to stay in touch with what is happening. To keep in touch with business opportunities (including RWC 2011 related tenders), check out www.auckland2011.com/business.  That will link businesses to the Business Opportunities programmes which includes access to tender opportunities, regular updates, business opportunities workshops and all the information needed to leverage the tournament.

Like a rugby tsunami rolling towards us, the World Cup is coming and with it will arrive somewhere in the region of 85,000 visitors, not to mention the millions of viewers watching TV coverage around the world. An economic impact report tells us that the additional direct spend during the tournament will be approximately $500 million throughout NZ, with an estimated $267 million of that going to Auckland as the hub of the tournament.

As an opportunity for New Zealand it’s being pitched as bigger than Ben Hur. But what does it really mean for the broad spectrum of New Zealand business? What does it mean for you and your customers? What’s the message for those that aren’t in the entertainment or tourism industries? How should people look at this – a pause for benchmarking perhaps? Or, is the reality, in fact, that there’s nothing to learn and not much that’s directly beneficial to those outside of the sport, tourism and hospitality industries?

On a mission to answer these burning questions, I spoke to a few geezers who should know. Kind enough to share their thoughts were Kevin Bowler of Tourism NZ, Phil O’Reilly of Business New Zealand, Leon Grice of the NZ 2011 Office and Michael Barnett from Auckland Chamber Of Commerce.

If we were to tickle the nub of the issue it’s surely this. What’s the real opportunity for NZ business? “The fact is,” Kevin Bowler says, “There is obviously a direct benefit to accommodation, beverage, food, travel and tourism businesses but it will not directly affect a lot of NZ business.” Phil O’Reilly agrees, “There will be very few people indeed who will be coming here primarily to do business. They will be coming mainly to watch rugby, drink beer and have a good time. However, in other countries like Japan, rugby is an elitist sport, a corporate sport. So the people who turn up will be more than the average tourist – they will be business people, and people of some worth. That is a huge opportunity for New Zealand. What these visitors see is adventure and possibility. New Zealand is incorrupt; and it’s the second easiest place to do business in the world according to the World Bank – that is massively, massively important. It’s an opportunity for us to shake a hand, hand over a business card and make a friend. And New Zealanders do that better than anyone else in the world. We’re the best at that. Nobody does that better than us”

Michael Barnet says the best advice he can give is to stay in touch with what is happening. “Keep in touch with business opportunities (including RWC 2011 related tenders). Check out www.auckland2011.com/business. That will link businesses to the Business Opportunities programme which includes access to tender opportunities, regular updates, business opportunities workshops and all the information needed to leverage the tournament.”

Leon Grice also had some advice. “Join the Business Club. Join it straight away. If you’re part of that and you’re offering up hosting opportunities, it’ll give you a qualified name. The Business Club is a Rugby World Cup dating agency, essentially. The people coming to New Zealand are all high net worth individuals and they’re all looking for the great kiwi experience. We’ll be asking them online what their age is, where they’re from, what their interests are, what they like to do on their time off, and – most importantly – what team they’re supporting. That data will tell us where they’ll be going. So for the Italians in our database we’ll know that they’ll be going to Nelson to watch Italy play the United States and we’ll know that there’s ten of them, for example, in the seafood industry. From that we can make sure that the people in Nelson, particularly the seafood industry, know that they’re coming so they can take them out and catch a snapper, go and have a tour on one of the factory boats, go and have a game of golf, and enjoy some of the best on offer in Nelson. Perhaps they can go to the game together. And if they can have two or more interactions with these guys then they can start to build some relationships and even turn it into a deal. From a business perspective, 2011 is going to be the first year since 2007 where it’s going to be okay to party. 2010 is about getting your cashflow back; in 2011 it will be okay to celebrate. You’re feeling okay, your customers are feeling okay, and it’s okay to invite your customers to a wine festival or to buy tickets to go with them to a rugby match.”

This is all very well but what about New Zealand businesses not involved in export – what can they do?

Kevin Bowler: “There will be more activity in the provinces as more games are played in secondary centres. The event will be the ‘best of New Zealand’ on display and you will need to think about selling ‘authentic’ New Zealand experiences, ways to add value as a business and ways in which you can leverage the buzz in the country. What will your channel to the visitors be? Ultimately though, the thing to remember is that no one is going to do it for you.”

Leon Grice: “You don’t need to be an export business to make the most of these global connections. Global connections can pay off – and who knows, you might not be in exporting now, but in five years’ time if you’ve built those relationships you might be. If you look at wine growers I believe they’re a model for operation. It doesn’t matter if you’re small or big or exporter or non-exporter, it’s actually an industry you can belong to and get benefit from because it’s the NZ life story, [and] being a premium story, it elevates all the boats in that industry. So while they’ll compete in the international marketplace they also have an interest in not cutting each others’ throats and not rocking the boat, and so they’re not undermining the quality of the premium wine industry back home. They’re very practised at working together. The Rugby World Cup will be an expo of the whole country. Even for smaller businesses – Bluff oysters will be put aside and put in growing cages and for the first time in New Zealand’s history, the only place you will be able to eat a Bluff oyster is in Bluff. It’s the same thing for the Wild Food festival – there’s usually only one Wild Food festival a year but they’re talking about having a Whitebait-focused Wild food festival on the West Coast. Now the West Coast doesn’t host any teams, it doesn’t have any games, but by putting on that festival and celebrating Whitebait they’re going to get Kiwis coming and they’re going to get overseas people coming, so people will go to Christchurch and the West Coast before going to the their game in Queenstown. So from a business perspective, getting involved in that is huge.”

Michael Barnett: “While much of the revenue will be generated through visitor facing businesses in sectors such as hospitality, accommodation and transport, the opportunities are much wider than that. All of the businesses in those sectors will need increased supplies of food and services so there are opportunities all along the supply chain for a wide range of businesses. Add to that a multitude of events around the tournament – Fan Zones, festival events, business events etc. All of these events will need technical equipment, fencing, staging, seating – hundreds of different goods and services.

OK, so what is New Zealand going to learn from this and how will we quantify the benefit we’ve got out of it?

Kevin Bowler: “Businesses need to have a digital social strategy around getting the visitors they interact with back after the World Cup. That’s very important.”

Phil O’Reilly: “The opportunity post-event is to figure out whether or not we are world-class. We need to ask ourselves if we are because we will have a huge bunch of people coming through who haven’t been here before. They’ll be staying at hotels and eating at restaurants and it’s a good opportunity to listen hard to them and benchmark ourselves. I think for domestic businesses it will be key to take note of what the World Cup teaches us about an outsider’s view of New Zealand, and what that means for your business. Even if we monitor outside coverage of the Rugby World Cup, there’ll be an opportunity to learn about what outsiders think of us, because they’ll be here for a relatively long period of time and we’re on show. Again, there’s an opportunity for us…just look at what impact this had on Australia after the Olympics, and the World Cup. Businesses need to measure themselves, examine themselves in terms of thinking about what it means to be a business in New Zealand.”

Leon Gryce: “If you look at the Sydney Olympics and you look at the return on investment, you wouldn’t have done it. But what did it do? It transformed Sydney from being one of the better cities in the world into one of the few great cities in the world – in the perceptions of the world. If you look at the ROI for the Sydney Olympics, it’s qualitative. It’s that Sydney, without question, is now one of the great cities of the world. Its sophistication, its infrastructure, its performance, its culture, the people are friendly, they have a great lifestyle – all these things are cemented in London, in the U.S..”

What are the risks in not quite hitting the mark?

Phil O’Reilly: “Here’s a good example. Will our stadiums be empty if the All Blacks get knocked out in the quarter final? I hope not, I really hope not. I was in Australia for the last Rugby World Cup and it was a really inspirational time to be in Australia, because even in the games where you had two nobody teams playing against each other, there was such incredible crowd support. People were going mad for players from a country they’d never heard of – they had placards, support groups, face paint –and the games were incredibly successful. We need to do that in New Zealand.

If the All Blacks win, and we’re happy because the All Blacks won, that tells us a very different thing to whether we’re happy because we ran a successful tournament because everyone had a good time here. Those are two very different thoughts. We need to unbundle those thoughts as a country, just as the Australians did, to say whether or not we did a good job in hosting the world and in showing New Zealand to the world. Not just showing the clean and green either, but showing what New Zealand really is – buildings and people and technology. When we show the complexity of what we have to offer, that’s the big opportunity – it’s not a 30 second TV ad.”

Leon Gryce: “I think the regions themselves are getting really well prepared. It’s now time to recruit people into those programmes and start the movement. The programmes are there and they’re ready to go, our programmes, our Business Club, are there to support the regions. We’re ready for the volume problem. Our systems have been created for the volume problem. It’s right now. We’re ready to recruit. I think the difference is the quality of what we give them. There’s 85,000+ people who are coming, they’re high net worth individuals, they’re business leaders and opinion leaders in their markets. It’s how we focus this and not only get them to say “Gee, those Kiwis did well”, but really show them that New Zealand is a great place to do business, a great place to live, a great place to visit – in a really co-ordinated way. In the same way that Sydney went from being one of the good cities in the world to being one of the great ones, it’s how we present ourselves as a sophisticated, creative, innovative nation.”

So, are you ready? Here are five key points you need to be thinking about in order to maximise the opportunities and prevent your business from dropping the ball.

1. Do you know what your business really stands for and are you truly delivering it?
2. Do you really know your audience and competitors and what differentiates you?
3. Are the channels you use the right ones and if so, are they fully optimised?
4. Do you have a strategy specifically for this opportunity?
5. How will you measure your investment and learn from the experience after the event?

If you need assistance with any of the above, we can help. Call us now!

Stuck on our own agenda

There’s no debate about the business benefit of having highly-engaged customers, or how providing integrated experiences help that happen. So why aren’t more Kiwi businesses onto this?

A key reason is that most organisations are separated internally by channel, along with siloed KPIs, P&L, and subsequently…planning. I’ve heard views from all sides about how this separation is the main, even the sole barrier to integrated channel planning where customer interactions are designed into and between channels. But I’m not convinced.

Is the internal structure of our companies the real problem? Maybe the idea of arranging channels and touchpoints around customers is just too hard to get our heads around? I think this is probably so, here’s why.

We don’t really understand our customers – so how can we get smarter about serving them?

We’ve all got a few inches of research paperwork outlining supposed consumer preferences, intentions and satisfaction – but that’s not helping. We don’t really get it, we can’t distil it, and it’s usually hard to ‘action’. Of course in the rest of our lives we get to know people in person. The more we get to know them the stronger the relationship. Until businesses slow down and take time to really ‘get’ their customers, designing business interactions to suit them is going to be tricky… regardless of the channel.

We’re rewarded for the short game – not the tough stuff

As employees our value is constantly being evaluated. Did we deliver? What was the result? There’s a focus on now, not tomorrow.

A few key people are tasked with the strategic stuff, but even they’re under pressure to show quick results. And as much as moving to multi-channel marketing (and service delivery) is about taking small steps, it’s equally about deciding where you need to end up. And that’s too often in the too hard basket.

A motorcycle instructor once told me that on a bike you end up in the place you’re looking at. When you enter a corner you can’t look at the corner, you look through it and out the other side.

Business is no different. We all need to deliver ‘now’ – but we need to look where we want to get to. We can’t afford to crash into one of the corners we encounter along the way.

We’re comfortable with this – not that

In my view, perhaps the biggest barrier to multi-channel progress in New Zealand is that it requires a new way thinking. To deliver integrated we have to think integrated. We need to step out of our comfort zone and learn about ‘other’ channels and ideas. We need to use our heads first. We need to re-think how we do things, to realise that just because we can do things our way there just might be a better way.

Ultimately, the reasons don’t matter

Integrated (multi-channel) experiences are coming whether or not your business is ready for them. Your peers and competitors are already discovering the leverage they can give their businesses, allowing customers to command their own interactions.

Your business may not have the ideal structures today to help you explore this new frontier – but don’t hide behind that. It’s too easy to focus on your internal priorities instead of those of your customers. Especially when you’re making big calls like your channels strategy (you do have a channels strategy right?).

The reality is that there’s never been a better time for you and your businesses to get into the business of meeting customer needs properly.

What are you waiting for?

It’s not surprising most New Zealand retailers are traditionally cautious and have ‘gorse pockets’, i.e. a reluctance to spend cash. The world financial meltdown hasn’t helped either. But now it’s February 2010, some green shoots are still present, and it is a prime time to value innovate and get a jump on the competition.

According to Retail Forward*, the evolution of creating value in retail is efficiency, then intelligence, and then intimacy. Value innovation around customer intimacy is “managing consumer relationships by ‘customerizing’ the interface and interaction with individual consumers”. In simple terms that means putting the power in the hands of your customers to shop how and when they like. Do that and they will reward you handsomely.

If New Zealand retail businesses opened their eyes and ears to their customers they’d see a major strategic innovation opportunity to deliver greater customer value right in front of them. This opportunity has been created by covergence and is called (by the IBM Institute for Business Value) Integrated Multi Channel Retailing (IMCR), i.e. integrating on and offline channels as if they are from one business.

In their book (Strategic Innovation) messers Govindarajan and Trimble identified a ‘strategic innovation’ as a quantaum change with medium to high revenue potential that’s initiated by the business. This is exactly what becoming an IMCR-based business is all about.

The business case for making this a strategic initiative is very strong. A study by Forrester Research recently found that customers who shop across two different channels spend two to three times more than the single-channel consumer. A Shop.org study, based on over 48 000 interviews of shoppers across channels found store shoppers who also buy online from the same retailer spend an average of US $600 more annually in-store than typical store shoppers of that retailer.

IMCR it is not running two channels (online and offline) with two divisions internally, having a store locator online (which Yellow is better at anyway), putting your ads on the web, putting www message in ads or putting www messages in store.

The ways retailers run an integrated multi-channel business is wide and varied, and depends to a large degree on whether they are coming at it from an online or offline stance. But the similarity is that they all cater to customers who are accustomed to mixing and matching whatever they feel like, for instance:

• Accepting returns anywhere from anywhere
• Accessing offline inventory stocks via online kiosks
•  Buying in one channel and getting the product via another
• Using customer communities to manage inventory
• Staff assisted sales at online kiosk
• Using customer reviews at shelf level
• E-coupons redeemable offline
• Signing up in-store for email messages
• Downloading product information offline onto your smart-phone (online)
• Visual merchandising offline online clubs or registries
• Txt alerts for curbside pick-up of online orders
• Running gatherings offline for online communities

Assuming retailers have a desire for more customer value and higher returns, how do they go about it?  In Target speak – “crawl, walk, run” or in IBM-speak “protect-evolve-transform”. Whichever language you speak the message is the same – insight applied, progressive, cautious, planned innovation, consistent operational delivery, an uninterrupted customer experience, co-ordination across touch-points and a totally engaged organisation.

If you are in retail in New Zealand and your strategic plan is full of operational efficiency initiatives that are really just grasping at straws, you might want to be open to thinking about your customers and exploring the case for becoming an integrated multi channel retailer – before your competitor does.

*Thanks to Retail Forward, IBM Institute for Business Value, Trendwatching.com, Target, and McMillan Doolittle for various extracts for this article.

And so the new year begins. Back at work, planning the year ahead. What’s the first thing most people do after returning to work? Plan their next holiday of course! That’s exactly what I did a few weeks back, and it got me to thinking about how retailers are (or aren’t) bridging the gap to online channels, specifically in the travel industry.
 
Not that long ago you went along to meet your retail travel agent face to face because that was the only way you could do it. If you got on and they didn’t leave you stranded in transit for 18 hours waiting to make a connection, you went back to them next year with your holiday plans. That was how ‘loyalty’ worked back in the 80s.

How things have changed. We all know how easy it is to purchase flights online, particularly for domestic travel, but there are also lots of options internationally too. While the self-service nature of it is very convenient, it’s all very transactional – fly a-to-b, holiday package here, grab a seat there.

We’ve been planning a trip to Vietnam and Cambodia. I’m definitely not a ‘tour person’ so I did considerable research over the Christmas holidays. As well as the traditional guide book resource there is now a wealth of travel information online – blogs and you tube videos, and tripadvisor.com which provides a plethora of recommendations and star ratings, all from real travellers.

But who do you trust? All this information is posted by strangers and there is no accountability for the reviewers. Some even sound like they’ve been blatantly penned by the hotel owners themselves. And should you believe one Kiwi’s review ahead of the majority view of a bunch of Americans?

Those concerns aside, and having done our research, we knew where we wanted to go. But the route we’d settled on required a bit more organisation than simply purchasing return airfares. And it was at this point, when we we’re ready to start plotting the different legs of our journey, that things got a bit more tricky. I didn’t just want a transactional experience, I wanted advice on how to string it all together, ideally from someone I could trust. It would be reassuring to find a travel agent who’s travelled in the countries we were going to visit. But how could I find that consultant? And ideally I didn’t want to have to visit a store. Could I achieve this online?

I started my quest by sending detailed queries via the websites of several of the large retail travel agencies, expecting that the specific destinations mentioned would flag I needed a pretty specific response. I also emailed one agent at a local agency.

The response from one agent revealed just how little she knew about Vietnam when she suggested flights that back-tracked several times – I seriously doubt she even consulted a map! Another responded with some helpful a-to-b prices with flight availability, but I could buy cheaper flights online myself. I received an out of office message from another agent for more than a week, without any alternative contact information provided. I’m still waiting for a reply to that one.

Getting increasingly frustrated, I started searching online to find any agents who might write blogs of their travels. I got excited to find one agency that does this, but when I got in touch they said they’d only be interested if I booked a tour, as they ‘don’t really cater for individuals’.

Maybe that’s the problem, that I’m an individual. But I know there are lots of people like me out there – independent travellers and internet/email users who want some advice. If we get the advice, surely the transaction comes as a matter of course?

So let’s run a check on my experience so far. Have any of the agents I’ve had contact with been where I’m trying to go? No. Have I had any useful advice on how to put my travel itinerary together? No. Have I been able to keep the process an online experience (that suits me) rather than visit the store? Well yes, in so much as I haven’t visited a store (yet). But then I haven’t actually got what I want and have encountered real shortcomings with regard to the service provided.

Without any point of difference when it comes to service, price becomes the only differentiator, which means margins must continue to get eroded in order for travel agencies to win business. Surely this model isn’t sustainable.

So is the travel industry purely a transactional business or is it in the service sector? Given my recent experience I think they need both qualities to survive.

Let’s imagine a travel agency that actively promotes agents specialised in specific destinations. They provide valuable advice based on their own knowledge and experience. I’d go there for sure. Then next year, provided I’d had a good experience, and even if I was going to a different destination, I’d go back to the same agency. When I did I’d expect the same level of personal service from another specialist agent for the new destination.

If that happened I’d be showing loyalty to a brand because I’d been delivered the experience I’d been promised – an experience I’m actively (but unsuccessfully) seeking out at the moment. And if the experience could be streamlined through a mix of online tools and personal contact I’d be even happier, because it would be making things even easier for me. And let’s not forget, it’s all about me because I’m the customer paying for the tickets and expertise.

But why isn’t anyone out there providing my ideal travel agent service? Perhaps I don’t understand enough about the sector. Maybe it’s not a sustainable business model. On the other hand, do the traditional big retail travel brands still have a secure market?

I went to a movie the other day called ‘Up in the air’ (the title is a happy coincidence!). When accused of being racist George Clooney said “I’m like my mother, I stereotype – it’s just quicker”. Through my recent experience I’ve made some pretty strong assumptions and formed a stereotype of the travel sector.

Or, maybe I’ve pinpointed a significant gap in the market. I’ll let you decide. Bon Voyage.

Idealog magazine has always aspired to be an integrated online and offline media product—and we’ve kind of succeeded. You can experience Idealog via print, video, events, Twitter, email and the web – and it’s fairly coherent across all the platforms. There are as many people who know us by our email newsletter and Twitter as know us as a magazine, which is good news for a brand with a small marketing budget.

We’ve been less successful in converting all of that activity into sales. Despite being well known and well liked we have until now failed to ask people to pay for what they receive. It’s a fairly classic online dilemma! How do you covert the free stuff into paying customers? For media the problem is especially acute because the information we produce is not just a pointer to a product that then gets sold – it is the product.

One of my jobs this year is to find a way to monetise the large and committed online audience we have built. I suspect the answer will not lie in charging people for content but charging for online services like directories and customised content for companies.

The travel industry used to work on a standard commission paid in much the same way as the media advertising marketing model works. The internet has enabled people to do DIY holidays (often with the misconception that the internet provides wholesale pricing). In fact, nearly every travel purchase must be made on an instant purchase basis, and if you have  ticked the terms and conditions box then the purchase is likely non-refundable and non-amendable, i.e. use it or lose it.

The traditional distribution system has been honed down as the industry has concentrated on taking out the middleman. As Carol acknowledges, if your travel requirement does not sit on a shelf waiting for you to click it, then where do you go for help online?

Where did the middlemen go?

The other big amendment to the industry has been the personnel shift out of retail. Initially the internet allowed a retail agent to no longer have to deal with domestic and trans-Tasman bookings, which had for years been done almost as a favour to customers and airlines. However once this expanded into long-haul, travel agencies began shutting down – from 750 in 1999 to around 450 today. The internet meant that instead of shopping around locally, you could bombard agencies all over the country with the same request. The result is that the tyre kickers sent many experienced agents into corporate travel, where they now work as order takers.

Agencies started to, and still do, churn through inexperienced workers at an ever increasing rate. It’s the nature of the industry that there is always someone wanting to get into travel. However now everyone works on a commission only basis, and like most things building up a client base takes time, hence the constant dropout.

Many agents who have a client list of regular travellers now make better money working part time from home as travel brokers. Many of these brokers will only deal with a new customer if they are ‘introduced’ by way of referral.

This example of unintended consequences has resulted in a massive decline in experienced agents. I’m the first to admit as a bricks and mortar guy that I don’t yet see social media as something I want to pour resources into. Change is difficult for us in the +45 tick box, and we are sceptical.

In my opinion, the type of specialised travel advice requested by Carol will be difficult to find from a traditional online source that is trustworthy. Carol has correctly identified the somewhat broken model of travel advisory websites, which are constantly being manipulated by suppliers and people with grievances. Is social media any less corruptible?

When making a significant purchase I can understand researching online, but the only tactile thing about a travel purchase is the knowledge and enthusiasm of the person advising you. Sometimes this is achievable within the constraints of email conversations, but it’s still best face to face. Then again, sometimes our customers will visit us once, just to eyeball us, and then we never see them again for years.

This brings me to the main issue in play with any online model – just how is the online business to generate revenue?

Good advice, leading to a transaction as a matter of course, in my experience is the exception not the rule. In a recent example we produced a honeymoon itinerary for a driving tour of Italy in October, when many of the boutique hotels are closed or closing. So detailed was the routing and information, the actual wedding day was booked on the basis of it. Then the groom went and booked the whole thing himself (using our information) via the web at the same rates we would have. Would the bride and groom have paid in advance for this expertise and information? But then again, maybe the web is a ‘hunter collector’ substitute.

If Carol wants to be introduced to a Vietnam expert with no web presence, besides her amazing photographs from Antarctica at www.cbdtravel.com , she can try phoning Geri 09 3664645.

PS – I must point out that we are currently engaged in developing a social media plan for Mondo that will help golden oldies utilise these channels.