Crime and Punishment

I was always told that one of the advantages of studying an undergraduate arts degree at a Scottish university was the sheer breadth of education you can achieve. So I'm glad to say that, during my undergraduate years, I took some intellectual detours from the Shakespeare and Chaucer courses that normally comprise a degree in English Literature to expand my horizons and delve into the depths of several off topic subjects including (unsuccessfully) studying Spanish, (very successfully) completing two years of an accounts degree and (more interestingly) a brief spell studying criminal law. 

So, while not quite rivaling Perry Mason in my depth of knowledge, I do have a fairly good grasp of what constitutes criminal behaviour. 

Which brings me to the recent case of Lord McAlpine versus the Member Population of Twitter (or at least some of them). 

Debates have been raging all week, online, on air and offline. Some people seem to think this is a matter for the freedom of speech zealots. Lord McAlpine has been quite clear: he's been falsely accused of criminal activity, his reputation and character sullied, and he intends to pursue all the individuals who have participated in this gang defamation of his, otherwise exemplary, good character. 

What many Twitter users seem to be struggling to grasp is that they are (wittingly or unwittingly) guilty of committing a crime. 

Twitter, as a medium, is a broadcasting platform. You don't choose your followers, they choose you. The only control you have, as the owner of a Twitter account, is whether or not to broadcast and you have ultimate editorial responsibility for the content of that which you do choose to broadcast. 

This means that, in law, you have exactly the same responsibilities as the (recently much maligned) BBC when it comes to broadcasting and spreading rumour, conjecture and speculation. 

The fact that, on this sorry occasion, the BBC was actually the source and catalyst for the rumour, conjecture and speculation just goes to show how much trust the British public have in their national broadcaster. That they have already settled matters with Lord McAlpine, swiftly and without resistance, says much for their sense of responsibility and corporate citizenship and is to be commended. 

As for the thousands of other "perpetrators" who are (hopefully) now looking at their preferred broadcasting platform with a new sense of awe and responsibility, they can only hope that Lord McAlpine will be merciful in his pursuit of justice. 

But the lesson must be learned: freedom of speech comes with responsibilities and if you act irresponsibly, whether it's in print, online or in person, you must and will pay the price. That price may even be with your own freedom, if it's deemed to be a serious enough crime. 

This is not cyber-bullying. We're not in the playground now. This is serious stuff. And it's long overdue in being brought to the surface for discussion. It's regrettable that its victim is a frail 70 year old man, who has had to bear the brunt of such terrible accusations in order for it to be brought into the national consciousness. Imagine if it was your Grandfather. How would you feel then?

For all the law abiding citizens of Twitter who are wondering whether their preferred social media platform is now a fast track passport to an already crowded prison system, as in life, a wee bit of common sense goes a long way:  if you would not be prepared to put the content of your tweet in full page advert in a national newspaper, step away from the keyboard and go and make yourself a cup of tea instead. 

Remembering

Human beings are used to being humbled.

Corporations not so much so.

And so it was, just a few minutes before the eleventh hour of the eleventh day of the eleventh month, an installation team arrived at my door from the doomed British retailer Comet to install my new tumble dryer.

A tumble dryer which I ordered online literally 4 hours before I heard on Twitter that the retailer was due to go into administration.

A tumble dryer which I thought I might never get.

A tumble dryer which I thought I might never get installed, even on the off chance I did eventually get it delivered.

A tumble dryer which, in the scheme of things, is of little consequence when 6500 people are facing certain redundancy just 5 weeks before Christmas.

These two men, who fully expect to be out of a job forever at some unknown point next week, stood in my kitchen at 11am and faithfully observed a 2 minute silence in remembrance of the fallen.

I hope, at their eleventh hour, that someone will also remember them.

Get In, Get Rich, Get Out

Groupon's Share Price Performance Over Last 9 Months

The entrepreneurial mantras are crisp and clear.

Cash is King.

A bird in the hand is worth two in the bush.

Sometimes the name of the game in business is to get in, get rich and get out.

Some entrepreneurs need to realise that they are not always building a long term, sustainable business. That their brainchild is simply a product of its times. And it has a short shelf life. A bit like cheese.

But knowing when to get out is what separates the successful serial entrepreneurs from their counterpart failures.

That's why I will always have the greatest respect for Julie Meyer who sold the two year old First Tuesday global technology investment network for a cool $33million. It wasn't worth that just 12 months later but, as an entrepreneur, she did her job and made the best deal. No doubt.

That's why I worry for Groupon's founder Andrew Mason. He may have missed his moment. Google offered him $6billion for the global network of daily deal sites a couple of years ago. A good deal by any standards.

Perhaps Andrew believed his deal had been discounted? Either way, it was rejected and now his company is worth less than a third of that price.

How ironic, then, is it that Andrew delivered a lecture at Stanford University in 2010 where he gave students 6 tips on how to get super rich.

Among his top tips are:

"You’re building a tool, not a piece of art. Don’t get blinded by vision."

and  "Quit now. Sometimes you have to let an idea go."
Maybe time he listened to his own advice?

Before it's too late.

Pink Pens and PR

Marketing gaffes are, regrettably, ten a penny. 

For every marketer who's had a ground breaking, money making idea, there are many, many more who've taken their ideas to market and, quite simply, tanked. 

So it really shouldn't come as a surprise when a giant in the world of commerce also gets it wrong. The only difference is the sheer scale of their mistake. 

And so it has come to pass that BIC have come under fire for the launch of their range of pens "for girls". 

Pastel pink and prettily pointed, these deliciously girly biros have caused a storm on Amazon, with women across the world using their modern keyboard skills to brandish satirical commentary at the brand for their patronising attempt to create an arbitrary target market for pastel pens. 

Their commentary, fuelled by social media activity, has spread the word across the world leaving the company looking archaic and out of touch by not responding, nor having the social media avenues to enable them to do so. Imagine not having a Twitter account. Tsk. 

The pen may be mightier than the sword but social media is just so much better. 

Their radio silence on the subject has attracted criticism from public relations professionals who feel that BIC could have fought back with some biting wit which would have made light of the situation and enabled them to triumph against this adversity. 

That said, I wouldn't be advising the client to respond "tongue in cheek" when the premise of the criticism is that brand has simply behaved in a most blatantly sexist manner. But then, I'm a girl.

A female writer and strategist at Advertising Age suggests that the company shouldn't make "stupid products" - but I'd argue there's nothing inherently wrong with the pen, it's the marketing that's totally wrong. In every sense of the word. Perhaps the advice should really be "Don't use marketing to patronise your customers"?

Customers now have a voice. A powerful voice. It's called social media. Word of mouth has never been so important. Ever. And marketers need to bear that in mind with every campaign they run. It's no longer enough to test the product, we need to test the gut reaction too. Pink pens for girls? Sure, it's been done before. We've just never had to spell it out for them......

Produce pastel pens, by all means, just don't label them for girls. We're more than capable of picking the pink pen all by ourselves, we don't need sexist, patronising packaging to help. 

BIC either needs to say they are sorry quickly or launch an equivalent range of pens in fake camouflage or with dinosaurs all over them labelled "For Him" to level the playing field. 

But I bet they wouldn't ever consider doing anything that silly......

The Trick is to Keep Breathing

This month and year is special for me. It's August 2012. 

It's exactly 10 years since I had that eureka moment. 10 whole years since the onset of an entrepreneurial seizure. 10 years since I stormed into Business Gateway, promptly telling them that their best advice may be that it takes months of research before you can start a business, but that I had precisely two weeks so if they wouldn't mind pointing me to the shortcuts, I'd be most grateful. 

10 Years. 

It's quite something. 85% of small businesses fail in their first year. Less than 50% of the businesses that remain survive the next 10 years. 

So what's the secret to surviving in business? Is there even a secret?

I've spent a bit of time reflecting this month, as you can imagine and I've come to the conclusion that, when it comes to running a business, it's best summed up by the slightly tatty bit of paper I have blu-tacked to my desk. On it a Chinese proverb:

"To open a business is easy, to keep it open is an art."

It's true. 

Every day I get up and paint my world. Every day the landscape changes. 

Some days the paint is thicker than others. Sometimes it's more colourful. Other days, like any artist, I lack inspiration. And, on really great days, I create masterpieces. 

It's up. It's down. It's often round in circles, two steps back, one step forward. 

But the one thing I can honestly say about my job: It's never, ever dull.

I used to struggle with the pace of change. To waste energy panicking about future challenges (that I didn't yet have). Figuring I could avoid them or resolve them before they became a reality. 

Now I know that's there's very little point in wasting that energy. The challenges will come daily, whether I plan for them or not. 

For those just starting out on this journey, and for those just a little way down the road, I'd like to pass on this little piece of wisdom for success in business, borrowed partly from the iconic Scottish writer Janice Galloway, with practical assistance in the art by long time personal mentor  Rebecca Bonnington:

The trick is to keep breathing.

When every day brings its own (often unpredictable) challenges, sometimes you just need to stand back, take and deep breath. 

In and out. Running a business is an absorbing job, but if you're going to take on the world, battling with daily (sometimes apparently insurmountable) challenges, breathing slowly will help you focus. Will keep you calm, centred and effective. 

Rebecca once made me breathe in and out ten times, counting to 10 with each exhalation. On my first attempt I managed to get to 3 without getting distracted. 

Ten years later: It's a perfect 10. 

Poison Apple or Seed of Innovation?

Less than 24 hours have passed since the US courts issued a verdict in the epic Apple vs Samsung intellectual property battle. 

"Make your own phones" was the closing plea of Apple's legal team to the Samsung side. And the jury, it seems, agreed with them. 

Pundits around the world are already ganging up on the decision, citing how bad the ruling will be for marketplace competition, not least for Samsung who've been ordered to pay Apple around $1billion dollars in compensation. Let's not even mention that fact that Samsung now faces having its entire core product line banished from existence altogether, in America at least. 

This court case has opened up some serious questions about capitalism and how or what is deemed acceptable behaviour in the pursuit of profit. Copying, it would seem, is not. 

But isn't copying the natural way of the capitalist world? Aren't High Street fashions just watered down, plagiarised versions of their catwalk counterparts? Aren't own brand supermarket cornflakes just a less fancily packaged version of their branded competitors? And don't most cafes and restaurants serve pretty much the same food and drink, albeit served up in slightly different dishes and cups?

In fact, when it comes to "innovation" I'd estimate that the vast majority of organisations would be hard pushed to claim that 100% of their product or service line is entirely of their own exclusive thinking. In fact most of them would be struggling to claim that even 10% of their product or service line is unique. 

One of the core principles of developing an effective business strategy is looking at the competitive market place. Call it PEST, SWOT, whatever you like, but it's impossible to compete unless you seriously (and thoroughly) look at what the competition are doing. And, naturally, part of your strategic response will be to replicate, develop or simply copy and offer it to your customers too. 

Are we really prepared to believe that the executives and technicians at Apple are so special that they've never looked at what the competition are doing? Ever?

But that's exactly what this decision would have us believe. Apple are the absolute exception to this rule. And they are, indeed, exceptional. Their products are utterly innovative. There's no denying that. 

But not based on anything else, ever? Really?

Samsung's products also have their own ingenuity. Exceptional in their own way. Have they borrowed some of Apple's groundbreaking technology? Undoubtedly. One of the key documents in the case cited how Samsung had concluded that to compete in the smartphone marketplace, being more like the Apple iPhone would be a must. 

And here's where the legal argument diverges from the commercial. 

In the pursuit of profit, Apple is deservedly the winner. They invested the time, developed the technology, legally protected their ideas and deserve to profit (much more handsomely than they already do) from their innovations and their subsequent commercialisation. 

Strategically, they've played it by the book. Knowledge and technology was their asset, and they've protected it and defended it to the hilt. 

I think, therefore I am. Descartes couldn't have said it better himself. 

But when it comes to thinking, and in this case, pursuing or developing knowledge, Samsung have taken the seed of Apple's innovation and have advanced it further still, enhancing the experience, and winning the consumer confidence in their product line. Let's not forget that Samsung smartphones outsold Apple iPhones this year, 40million to 32million making them 25% more popular. 

Their starting point was Apple, their end point was (arguably) better. 

And surely that's what competition's about, after all? If not, why are we bothering with capitalism at all? And what are we really defending?

London 2012: Tragedy or Comedy?

The Olympics arrive on our shores in just a few days time. But we're so tied up in bad news, criticism and scaremongering, not to mention the weather,  it'll be a wonder that other competing countries aren't considering cashing in their tickets and spending this summer at home instead. 

To the casual reader, it's working up to be a Greek tragedy or, depending on how you look at it, a comedy of epic proportions. 

First we had the ticket debacle, then it was the sponsorship debacle, and we're now heavily embroiled in the security debacle (with a brief detour via the workers exploitation debacle). 

A comedy of errors to challenge even the best literary scholar. 

The biggest sporting event in the world and so far, as a country, we've managed to cock up the ticketing, balls up the staffing, and pretty much generate nothing but bad press every step of the way. 

In some respects it's almost impressive. 

The Olympics hasn't graced our small island for some 64 years. And, to be ruthlessly fair to the organisers, there's not much precedent for how to run the event in the UK. 

In the course of just 7 years they've had to build stadiums from scratch, re-organise public transport facilities, mount a sales and marketing operation that serves millions of customers across the globe, recruit and train tens of thousands of employees, as well as please stakeholders from every nation on this small planet. 

I'm not sure there are many companies (or governments, for that matter) that would be able to cope with the this level of upscaling and impact in similar timescales. 

G4S, a company which has 657,000 employees in over 125 countries and is the biggest of its kind in the world, has failed to deliver. But fair play to them, their original contract called for 2,000 staff. It wasn't until 7 months ago that the goal posts changed and their target quintupled. The fact they've managed to hire and train an additional 4,500 staff during that period is no small feat, irrespective of what you might currently think of them. 

Ticketmaster, part of the biggest live entertainment company in the world and accomplished at selling around 140 million tickets every year, has also struggled to win Olympic gold. Every stage of the ticketing process dogged in controversy and, seemingly, incompetency. 

So how come we're getting it so wrong? Why are all of these world class, market leading organisations failing to deliver? Who is the jester in the corner?

This isn't a case of paying peanuts and hiring monkeys. Has this been a classic case of death by committee? Too many cooks spoil the broth? The metaphors abound. 

The time for asking awkward questions will surely come. However, in the meantime, to paraphrase Lord Coe: 

If it were a walk in the park, everyone would be doing it. We have just 14 days to get this right. 

So true. 

Did Twitter Just Fatally Wound LinkedIn?

It has been a week for high profile separations. Katie Holmes filed for divorce just a few days before Tom Cruise's birthday. LinkedIn and Twitter have split up. In both cases, one partner has been seemingly caught off guard with the news. 


Celebrity break ups happen pretty much every day and, with the exception of the parties involved, rarely affect our every day lives. But when two of the world's biggest social networks are citing irreconcilable differences, then there are implications for millions of people around the globe. 


So what does this split mean for LinkedIn and Twitter users? 


Well, for me (and this is only my opinion, so don't shout at me) I think this move will firmly sound the death knell for LinkedIn. 


LinkedIn has been bumbling around in the dark for years, growling slowly, making few (much needed) infrastructure changes and really not developing its service beyond a glorified CV storage facility. Twitter's integration added a bit of life into the LinkedIn user interface and, what's more, generated interaction. A key component in a social network. 


Now that's gone, LinkedIn users are being forced to actually log in and use the platform if they want to update their network. And with user stats where the vast majority of users spend the least amount of time on the site, that's probably going to happen around once a week. If they are lucky. How long before we only log in to LinkedIn once a year? And then never?


I admit, I've been on LinkedIn for years. In fact four years ago I'd all but given up on LinkedIn. I rarely went onto the platform, more "maintained a presence" on it and I suspect I am not alone. 


Then along came Twitter and Facebook, social networking became an international buzzword and suddenly LinkedIn was alive again. People started to connect with me (connect, by the way, not actually interact. There's very little of that happening on LinkedIn) and my connections swelled. But mainly this allowed more and more people to direct message me in the vain hope of selling me something. Quite frankly, a bit of a turn off. 


Now I know that for some professions LinkedIn is a super charged networking tool. Lawyers, accountants and other professional services can find it an invaluable networking platform. Certain groups are extremely effective for building reputation and developing meaningful commercial relationships. But this just puts LinkedIn firmly into the niche category of social networks in my book. And now even more so.


Ultimately only time will tell what impact Twitter's move will have on LinkedIn. Maybe this is just the push that LinkedIn needs to redevelop a platform which is years old and in desperate need of a facelift. 


However for now, my status updates once again fall silent and may stay that way for some considerable time.

Carr Crash - Jimmy's Driving is Formula One

If you were in the UK this week, you couldn't fail to miss the furore surrounding revelations that comedian Jimmy Carr had squirreled away all his earnings into some cleverly packaged tax avoidance scheme and, despite earning £3.5million last year, paid less than 1% in income tax. 


Thrust into the limelight, Carr was harangued by the press, public and politicians for his immoral, yet perfectly legal, act of keeping what he's earned for, well, himself. But did Carr handle the situation well?


We think so. 


Carr's first engagement with the story was to say he pays "what I have to, and not a penny more" - and let's face it, who can't identify with that statement? Who really wants to pay more tax than they have to? So with the general sentiment of the public on side, his next move was to sincerely apologise. 


It was a good move on Carr's part. Swift, simple and sincere. 


Compare Carr's apology to David Nalbandian's unsportsmanlike flippant attempt to the crowds at Queen's last weekend, and they are poles apart. 


While Nalbandian seemed to implicate it was the ATP's rules which could be blamed for an angry kick that injured linesman Andrew McDougall, called a premature halt to the match and handed the tournament trophy to Marin Cilic just minutes into the second set, Carr takes full responsibility for his actions and promises to conduct his affairs more responsibly in the future. 


Nalbandian could learn a lot from Carr's humility. 


As a bonus, David Cameron waded in, branding Carr's actions (and therefore, in the process, the complicated tax laws of his own country) morally wrong. Tell us something we don't know, Mr Cameron. 


But Carr's triumph in this story, quite frankly, came on Thursday night when he addressed his audience at Stockton Plaza. 


Prepared for the heckling, and brave enough to stand up and take it on the chin, as well as fully aware that the UK's press were watching for their next installment in his so-called downfall, he faced the music. All alone. On stage. With nowhere to hide.  


Engaging with direct banter and heckling on the subject, Carr did what he did best and used satire and humour to win the day. 


Who can't resist a man who, in his darkest hour, is willing to laugh (heartily) at himself?

Working 9 to 5? What a Way to Run a Business.

The British High Street in in trouble. Mary Portas says so. The Government says so. Heck, even the shoppers say so. 


It's the economy, you see. We're all down on our luck, pulling in our reins, cutting back our spending. 


Or are we?


Having worked in retail, it has always struck me as the least flexible industry and the one least willing to change. 


Ever since Margaret Thatcher declared Britain a Nation of Shopkeepers, we've stuck doggedly to, and with misplaced national pride, a business formula which, all of a sudden, fails to take into account the market needs. 


Take online retailing as a comparison. Despite recession, it continues to grow. 


Peter Gold, Head of EMEA Retail, for commercial property specialists CBRE, commented recently that there has been “A change in our shopping behaviour has seen a boom in consumers shopping online."


It's a similar story with out of town shopping destinations. According to Trevor Wood Associates recent expansion in this sector has led to the vacancy rate for retail parks dropping to 6.8 per cent from 2010’s 7.9 per cent.


These are more than green shoots in a flailing economy. 


But both of these industry sectors have something very similar in common and, specifically, in contrast to the traditional High Street. Their opening hours. 


The internet, by its very nature, is open 24/7. You can shop when you want and, thanks to mobile phone technology, wherever you want. 


Out of town retailers frequently stay open longer than their High Street counterparts, closing their doors at 9pm or 10pm and even, in the case of some supermarkets, staying open all night. 


The High Street, by comparison, dogmatically refuses to bend, opening its doors at 9am, shutting them again at 5pm. Their excuse? Well hardly anyone comes in between 5pm and 6pm. At 9am, however, it's a common sight to see shoppers queuing out the door........


Like many so called consumers, I work full time. Which means that it is simply not possible to shop during "normal" High Street opening times. Put in simple terms, potential access to High Street shops every week is only 30% for me - hardly optimum. 


For out of town stores, thanks to longer opening hours, that rises to 50%. 


And for internet, it's 75% (I'm not sleeping in this scenario, just to prove a point). 


Little surprise, then, that I spend more online than I ever do in person. Need a book? Amazon. Need some clothes? Next Online. Need some food? Just-Eat.co.uk. Need some groceries? Tesco.com. Need to travel? Expedia.co.uk. 


Retail is not alone in perpetuating this limiting 9 to 5 culture. Other businesses do it too. Hairdressers. Beauty Salons. Doctors Surgeries. Cafes. The list goes on. 


Which makes me wonder: are they really opening for business?


Strikes me they'd be better having the morning off and working later. Portas has a long list of recommendations on how to revitalise the High Street. 28 of them to be precise, covering things like market days and better business rates. None of the 28 recommendations suggest more flexible opening times. 


Isn't it time, as a Nation of Shopkeepers, that we actually opened for business?

Know your Market: Lessons from Eurovision

Sweden is Euphoric with their Winning Entry

I missed Eurovision last night. The biggest television show in Europe. The longest running television show in history. The greatest example of how a normally competitive country can be totally out of touch with its marketplace. 

When the BBC announced earlier this year that the UK's entry would be sung by Engelbert Humperdinck I was genuinely upset. As a long time Eurovision fan, I have been watching the show since the age of 5. The winning act that year was Bucks Fizz with Making your Mind Up. And it certainly made my mind up. Eurovision was a programme all about singing, dancing, and music. What's not to like?

But, at its heart, it's a contest. 

And like any contest, there are judges. In this case, those judges are the great European public. A fact that seems to have escaped the powers that be in the British Eurovision Entry Management Team for the past 10 years or so. 

We like to blame it on the politics. Heck, this year we're even blaming it on the placing in the show. But the fact of the matter is that our entries are so out of touch with the target audience, that we're never going to win. 

Eurovision is a musical mass marketing contest as much as anything. And, just as in business, making sure your product meets the needs of the market is of critical importance. 

That was why, as a former short term resident of Italy, when I heard Sweden's song performed at the semi-final on Thursday night, I immediately said to my husband "I bet that's a massive club hit right across Europe, that's bang on target market. There's your winner." - turns out I was right.  Should have put a bet on. 

So what business lessons can we take from the UK's miserable performance? Quite a few I think. 

Firstly, know your market. The UK's arrogant, supercilious approach to Eurovision is what has left it out in the cold. The UK is failing to engage, and failing to understand who the voters are. Eurovision is Europe's X Factor. That means its voters are likely to be (largely) in the younger age brackets. Selling them an aged, albeit international superstar, as a cutting edge performer and they are bound to smell a rat. Treat them like musically inferior imbeciles and they'll punish you with votes or lack thereof. Which brings me nicely on to point number two. 

Respect your market. The UK's sneering, jeering and childish assumption that it is musically superior to the other entries and, indeed, to the 300 million Europeans listening to them, is why it keeps languishing at the bottom of the results table time after time. If you want to be supremely successful in business sometimes the mass market is more effective than the niche market. Niche only works if you can charge more. 

And finally, serve your market. Give them what they want. Europe likes dance. They like rock and metal. They like traditional ballads. Highly synthesised pop tunes may have worked for Bucks Fizz in the 1980s but the world has moved on. Give them something they can dance to. Something they can sing to. Give them something uplifting - half of Europe is practically bankrupt, it's no surprise that the winning song is entitled Euphoria. 

So the next time you're tempted to blame the politics, the economy, your positioning in the market, take a long good look at your business and ask yourself: Do I really know my market?

Titanic Expansion means Groupon's Sinking is a Mathematical Certainty

It would seem that those in the know have suddenly woken up to the fact that the digital industry’s cash cow, Groupon, may have turned out to be more of a dog. Duncan Parry’s column for The Drum explored the possibility of what it might mean if the digital wunderkind Groupon goes down. Just like the Titanic did 100 years ago.

For quite some time, Groupon has been troubling me. The old adage that “if it looks too good to be true, it is” should have rung alarm bells all over the place when Groupon soared into our consciousness. We’re slap bang in the middle of a recession, and traditional media is losing ground so anything that connects businesses to customers for the greater good of all is a great thing, right?

Wrong. The fact that Groupon is perceived to be in trouble comes as no surprise, and to paraphraser Titanic’s architect Thomas Andrews, I believe their failure is a mathematical certainty.

Economically speaking, Groupon produces nothing. Its “product” is provided exclusively by third party businesses that sign up to a marketing scheme that pledges to connect them directly to an enormous audience at no direct cost.

But when you start to look at the indirect costs of using Groupon it takes on a very different shape.

Let’s begin with a minimum discount of 60%. So your product, which normally retails at £100, is now to be sold at the vastly discounted price of £40. Then let’s take off VAT at 20% which will leave us with just £33.33 to play with. Now here comes the ball breaker. Let’s take 50% of that value away as Groupon’s success fee, leaving the product/service provider with just £16.67.

The indirect cost of marketing on Groupon: 83.33% of turnover. That’s before you’ve created or delivered the product or service in question.

Forget Charles Ponzi, Groupon’s business model makes his scheme look positively philanthropic.

No business can sustain marketing costs in excess of 80% for any period of time. Those that try are inevitably going to go bust, those that don’t will find themselves working for “nothing” in a vain attempt to service those customers that have bagged a bargain and who will undoubtedly move on to another service provider at the earliest opportunity.

Which is where Groupon’s negative PR comes into play: Cupcake Calamities are warning signs or a business in distress and if Groupon’s suppliers are beginning to feel the pinch, it’s only a matter of time before it travels right up the supply chain and inevitably into the hands of the consumer.

In fact, it’s now such an issue, that the OFT has stepped in to tell the internet giant to pull up its socks, or else. It’s the Titanic equivalent of the HSE stepping in to suggest that the insertion of those rivets could be better…..

In order to grow, Groupon needs a never ending supply of third party product and service providers. And in a recession these are becoming increasingly thin on the ground. In short, Groupon’s market shrinks every day.

Shrinking markets are not good news for any business or its investors. The fact that the clever people on Wall Street, who supposedly analyse businesses for a living, have not cottoned on to this before now is a mystery to me. How did they think Groupon was going to continue to grow? Geographic expansion was inevitably only going to get them so far.

Groupon, like the Titanic, has been subject to a great deal of arrogant media noise but if we learned anything at all from the dot.com bubble and crash, it was that the hype counts for nothing and that the fundamental rules of business have not changed. The clock is ticking.

THIS BLOG FIRST APPEARED ON THE DRUM ON 16 APRIL 2012

Why your Bin is a Useful Marketing Tool

This week I was inspired my bin. But before you think I have completely lost my mind, let me tell you why. 

Marketing is a complex activity. There are literally thousands of different media to choose from, and millions of ways you can communicate with your customers. The vast majority of these cost the participating businesses money. 

I am forever being asked "Will X work for me?" or "What about Y?".

But some of these media are (literally) dying on their feet. 

Take the Yellow Pages/Phone Book advertising market for example. I'd fashion a rough guess that this industry has more than halved in size in the last 4 years. Why? Well, because of the internet, of course. And the market's changing behaviour. 

This week I, like many other individuals and businesses, received the Phone Book. 

Both at home and at work this free tool, filled with hundreds of adverts, met the same fate. The ended up in the bin. Unopened. 

They are of absolutely no use to me whatsoever. The only thing I felt remotely guilty about was that it couldn't be recycled. I use the internet if I need a phone number for a business or I'm looking for something in particular. I have done so now for years. 

And in previous years, the Phone Book and the Yellow pages have had pride of place in their own drawer in the kitchen. But now I'd rather put the drawer to better use. I have no need to retain the clutter. 

Other "marketing" materials to fall victim to the same treatment include numerous unsolicited direct mailers, magazine inserts, and let's not forget the "virtual" bin, email marketing campaigns and discount coupon offers. 

So, the next time you are looking to put some of your hard earned income into marketing your business take a look in your bin first. You never know, it might just save you a LOT of money. 

People Want What they Think they Can Get

As someone who has run countless number of readers competitions in the local press over the years, I continue to be astonished by the response that certain competitions get in comparison to others. 

Win a family holiday to Disneyland worth £1500 will ritualistically attract less entries than Win a Family Ticket to a Local Attraction worth £36. 

I've put this down to the "people only want what they think they can get" phenomenon. Perhaps they believe their chances of winning are higher for the lower value prize. In fact, they are not. Quite the opposite. 

Or perhaps the disappointment of not winning is much less. Imagine not winning a family holiday to Disneyland. Devastating. However if you don't win a family pass to a local visitor attraction, no biggie - you can probably afford to go anyway. 

Which makes me wonder if traditional advertising works more or less the same way. Do people only lust after products they know they can (just about) afford? 

What do you think?

Are you Under-Marketing your Business?

As a marketer, I frequently have the same conversation over and over again with different businesses. And it all pertains to spend. How much should I be spending? Isn't that too much? We've never spent that much before, will it make a difference? 


Now. It's a recession. So the normal rules don't always apply. It's taking a LOT more effort to encourage customers to part with their cash so, arguably, your marketing budget will need to increase (not decrease) in times like this to cope with that additional influence required. There's absolutely no point "hunkering down" to wait it out - your business will not survive (intact). 


So I thought I'd lay everything out for you with the benefit of a formal marketing education and over 15 years of experience across well over a hundred different businesses, and then you can decide, yourself, if you are under-marketing your business (NB. In my experience, most businesses are.....). 


At Strathclyde University we were always taught to measure marketing spend roughly as follows:

• New Business/Product Launch: 10-12% of Turnover
• Established Business Wanting to Grow: 8-10% of Turnover
• Established Business Not Wanting to Grow: 6-8% of Turnover
• Established Business Wanting to Contract: Less than 6% of Turnover

These figures are flexible to a degree of 1 or 2 percent, depending on the industry and age of the business, but as a rule of thumb it helps me judge whether a business is over or under funding it's marketing activities. You'll notice the final option suggests negative growth - or, in other words, decreasing turnover and/or decreased balance sheet value. Very few companies are in business to achieve that. 


More recently, the firm Go-to-Market Strategies published an article suggesting that around 39% of companies spend a "less than adequate" amount on marketing with 30% of companies spending 3-5% of revenue on marketing and 45% spending over 6% (most of those between 6-10%). 


These figures are wholly consistent with what I was taught more than a decade ago in the halls of Strathclyde's Business School. 

But yet, despite that, I keep coming across businesses who are spending a lot less than 2% per annum and who seem puzzled by the fact their business is not growing. 

If you are placing yourself in that category, let me put it simply for you. At that level of marketing investment, it won't. At best you are maintaining the status quo. At worst, you're diminishing your return on investment. 

Modern business owners seem to have forgotten that age old adage "You gotta Spend Money to Make Money" - it's still true. You want to grow your business? Then you have to invest more in your marketing activities. 

So here's a ready reckoner for you all out there, here's what you should be looking to invest in your marketing spend if you want your business to grow: 

Turnover >£100,000: Marketing Spend: £6k - £10k

Turnover >£250,000: Marketing Spend: £15k - £25k

Turnover >£500,000: Marketing Spend: £30k - £50k

Turnover >£1million:  Marketing Spend: £60k - £100k

Turnover >£2million:  Marketing Spend: £120k - £200k

I suspect some of those figures might shock some of you. How much? I can hear you calling?? She's having a laugh. 

But this really is no laughing matter. And I'm deadly serious. 85% of businesses in the UK do not survive their first year. Of those that remain, 30% fail during the following two years. Last year, 24 Scottish business failed every week, wiping 1278 firms off our nation's streets in just one year. 

These statistics are not funny. And reasons for failure, while I'm sure are anecdotally diverse, are fundamentally because a firm has failed to attract enough customers to make it solvent, profitable and successful. 

Obviously, every business is different. Profit margins are different. Service and product based businesses are completely different and their marketing plans and expenditure will take account of this, however the percentages will only differ by 1 or 2 percent at most. 

So, before you march forward into another week of hard work, long hours and an infinite number of business challenges, ask yourself this: Am I under marketing my business, and what difference would it really make if I were to invest properly in my marketing? What difference would more customers make? What difference would increased cash flow make? How would more customers affect my bottom line? How would a higher turnover and profitability affect my balance sheet and the long term growth of my asset? 

The sooner you start asking these questions, the sooner you might just start having a very good year indeed. 

Recession? What recession?

Breaking "News" - If it's Broke, Fix it

I don't know where you get your "news" from anymore, but for me it's rarely from a "News" paper. 


Twitter and Facebook are my primary sources of news, followed slightly slowly thereafter by online news sites. Last and, certainly, least it's my morning "News" paper. 


As communication vehicles change, our use of them changes too. I followed the London Riots coverage last year on Twitter. It was at least a couple of hours ahead of the BBC in their "on the ground" coverage and the "eye witness" reports were breathtakingly real. I recall one gentleman updating regularly on the incident that was unfolding just several feet away from his home and the fear and urgency in his 140 character tweets was palpable. 


I didn't need to read about it in the newspaper the next day. I felt like I'd already been there and experienced them first hand. 


Facebook is great for picking up feature stories that you might not have seen in print - and a good story, by its very nature, is viral - that ancient human art of story telling is not dead. It just exists now in the form of a "Share" button or a Retweet. 


So where does the future of the traditional "news" paper sit in all of this? 


Advertisers are shifting away from print in droves, taking with them the not insignificant funding they'd once happily provided. Just a few weeks ago, Proctor & Gamble, that bastion of print and broadcast advertising, announced they are cutting 1600 jobs, many of them in marketing, because "facebook and google can be more efficient than traditional media". That's got to hurt. 


And hurt it does. Newspapers are shedding journalists at a faster rate than ever before. 


So what do you do when your readership is dwindling, your ad sales are struggling and everyone's using other mediums to obtain news?


You panic. 


That certainly seems to be the answer that many publishing houses have come up with. Let's try something, anything, to keep going. Doesn't matter what it is. 


Which might explain the rash of "me too" daily deal sites launched by established newspapers in recent months. 


Inspired by the money making runaway success that is Groupon, publishers are connecting up the obvious dots of Advertiser + Audience = Money. 


The Scotsman's having a fling with DealMonster.co.uk, publishing giant DC Thomson's flogging us Beezer Deals, while in other countries the same thing is happening: The Washington Post is promoting Find n Save and there are many more titles across the planet that are doing the very same thing.


Lord help the marketing industry if this is all we're left with as a primary means of reaching consumers. Second only to giving your product away free, it's the most expensive form of advertising I have ever encountered. 


Yet, regardless of all this fervent "activity" to generate cash, these publishing houses are missing one key point. Readership figures continue to dwindle. And the reason why? They are no longer selling us news. It's old news. 


In fact the situation is so troubling that a site ominously entitled "Newspaper Death Watch" reports that according to academics there will only be four newspapers left in the USA in just five years, wiping out the other 1400 which currently serve that country with their news content. The UK is no different. 


Newspapers need to focus on what they bring to the public that no other medium can and does. Advertisers are only interested in one thing at the end of the day: reach. So whether that's in print or online, we want to get our products in front of people. That's why newsprint advertising was so successful for years - they put us on the breakfast table of millions of people every day. 


No daily deal site is going to achieve that in the long term. There's a limit to how many daily deal sites we will sign up to as consumers, and to how many deals we want to consume in an average day. I suspect I am not alone in spending the first five minutes of the day deleting several deal offers from my inbox. 


So come on Newsprint - we need you to innovate. We don't want to lose you. We still like the experience and the in-depth leisurely read of a newspaper, and with all that attention your product gets, your advertising is bound to be effective, just rethink the content of your core product and stop faffing about with unsustainable diversions. 


Or you might just wake up one day and be too late. 

Can't is the New Won't

It's London Fashion Week this week. This means that next week we'll be told that green is the new black. Or grey. Or some other colour of the rainbow. 


Trends change, and so it is true in business. Increasingly, I'm finding that businesses are using "can't" as the new "won't". 


As someone who finds the word "can't" hard to compute at the best of times, and prefers to use the English language with a little more precision than the general populace, I have to say I don't like this new trend very much at all. 


My husband was told last week that one of his suppliers "can't" send out product samples. Can't? Or won't? Surely they have samples of the products they manufacture? They've just chosen not to respond to any sample requests. 


I've had experience of a hotel restaurant that "can't" serve up a bacon roll. However they "can" serve up the bacon and roll separately, they are just not allowed to put them together. Bonkers. 


This week I came across a hotel that "can't" sell me a room at the same rate as it appears on the internet. How come? Why not? 


In recent months I've also come across a company that "can't" put through the order for processing until the money has been received - but whose credit control processes rely on waiting weeks for other companies to respond to a laborious, and somewhat old fashioned, trade reference process causing unnecessary delays and irritation to both us and our client. Can't? Really? Won't is more like. 


In so many of these situations the companies "can" but instead of being up front about their strange and unhelpful internal policy decisions, they are hiding, cowering, behind the word "can't". 


"Can't" is less assertive than "won't" - it may fill the recipient of the message with a sense of despair and irritation, but it's unlikely to incur the wrath that a more assertive "won't" would. "Can't" implies that the decision is someone else's responsibility altogether. 


However if businesses are not able to explain, justify and stand firmly behind their own policies by owning them, then why do they even bother employing people to answer the phone or manage their customer services? 


So fight back. The next time you're told you "can't", tell them that they can and they are just choosing not to and ask why. 


My husband did just that. After kicking up a fuss, he was put through to the owner of the company who quickly backed down and agreed to send out the samples. 


I did just that. After challenging the "can't" - surely you mean "won't"? -  I was happily offered the internet rate saving me a cool £35 per night. Good little customer service person. 


Can't? We just won't stand for it. 

If Your Business is Not Using Social Media, You May as Well Shut up Shop

Core to marketing is communication. And social media is now the dominant communication vehicle in the world. But despite that indisputable fact there are still businesses (and business people) who refuse to get involved, whether through stubborn ignorance or sheer dogmatic arrogance. 


Businesses who think it's a flash in the pan. Businesses who are afraid their customers might just (publicly) talk back to them. Businesses who are stuck in the past. Businesses who might genuinely have no place in the future. 


Last week I used Facebook to arrange a meeting with a client, Twitter to discuss a joint pitch opportunity and Google+ to issue a press announcement. One of our Winter Camp businesses had their first hot sales enquiry for the training of a lot of people via Twitter before our 4 week course in how to maximise its use for marketing purposes had finished. If arranging new business meetings, generating leads and discussing business growth opportunities are not enough of a reason to be involved in these social networks, I don't know what is. 


The thing is, I've never believed Facebook or Twitter are destination sites (like MySpace and Bebo were). I always saw them as highly sophisticated communication tools. 


I didn't start using Facebook and Twitter because they were "social", I started using them because they enabled me to communicate with a lot of people, simultaneously and therefore save me an inordinate amount of time. Just like our mobile phones contain our address books and enable us to connect at the touch of a button, so do Facebook and Twitter. 


I spend time on Facebook and Twitter because they enable me to interact, communicate and contact people when it is convenient for all of us. And that's the underlying key to their success. 


Unlike the phone or a text which is an interruptive force in our lives, people log in to Facebook and Twitter when it suits them and respond in their own time. That's why people like it so much. They are in control of both the incoming communications, and the outgoing.  


So if your business currently has only a telephone number, fax number and email address, you are cutting yourself off to literally millions of customers who tweet, facebook and G+ their way in the world. 


Why would any business person in their right mind, cut themselves off from the marketplace? 


You may as well save yourselves the time and stress of business failure and shut up shop now. Or take half an hour out, hop on those sites and try them out. 


It's free, and costs nothing but your time and an open mind. 

Suits You, Sir.

Today's blogging was delayed due to a very important shopping trip. Today we went on the "man shop". 


For those of you who live with a man, you'll know what that is. For those of you who don't, let me briefly explain. Men shop differently to women. They have a tendency to only come out once of twice a year, bulk buy, and spend a lot in a single transaction. 


It's an important ritual in a man's year. Stocking up on socks, pants, trousers, jumpers and shoes. Their primary mission is to clothe themselves fully in one single trip, without the pain of having to repeat the process before a reasonable amount of time has elapsed. 


For a retailer, this should make him the ideal client. He's interested in purchasing the whole kit and caboodle. And, crucially, he has money to spend. So making sure he spends it in your store is critical. 


Now we are increasingly led to believe that British Retail is in the doldrums. People are spending less and less, well established retail chains struggle, and jobs are in jeopardy as the British public cast aside shopping as a national past time and embrace, well, other stuff. 


So here's a wake up call for you, British Retail, based on my recent "man shop" experience. 


In less than 80 minutes we achieved the following:

• The purchase of 6 pairs of pants, 7 pairs of socks, 4 pairs of trousers, 2 jumpers, 1 pair of boots and 1 pair of shoes. 
• Spending a minimum of 15 minutes in 3 separate major national retailers
• Trying on clothes in all 3 retailers
• Waiting for around about 10-12 minutes to hand over money
• Having to ask for a bag to put the large shoe box in so we could carry it out of the store (seriously)
• Spending 40% less than we had intended

And we achieved all of that without once actually being offered an ounce of service or purchasing advice from any of the 6 separate sales "assistants" we encountered on our retail journey. 

Now, in a previous life I have a retail claim to fame: I was once the national sales champion for women's clothing retailer Richards. And this lofty title was bestowed upon me for one simple reason: I was able to shift more clothing per square foot of store than any other sales assistant in the country. Cool, huh?

Perhaps I should share my ancient wisdom with British Retail now, in the hope that they might be able to redeem themselves from the doldrums and lift themselves firmly back into the 21st century?

If you are trying hard to wrestle money from the purse of the average consumer, it really only ever comes down to one thing, and one thing only: SERVICE. Simple service. 

And much of that service, in a clothing environment, is delivered in the changing room. Not on the shop floor where your retail assistants are wasting time tidying up. Not in the stockroom where they are shirking from the primary task of serving the customer. And not behind the till where they are standing, looking vacant and bored. In the changing room. 

The changing room is where you can take a £20 sale and turn it into £120. The changing room is where you can offer that added value service: Need a different size, sir? Can I suggest that the green would look fantastic on you, sir, would you like to try it in that colour? Have you tried these on, sir? They look very smart, sir, we have them in 4 other colours, would you like me to bring them in for you to see?

Once a customer is in the changing room, they become a client. They are yours and yours alone to serve, advise, understand and help. 

There's a small dress shop in Perth where I live, called Loretta's which has got this level of service down pat. The shop is stuffed full of stock. So much so, it's impossible to find anything. In fact most of the stock isn't even on the shop floor. But Loretta knows this. Which is why she ritualistically shoves you in a changing room and brings the shop to you. Average spend in Loretta's, I'd hazard a guess, is in the region of £3-400 per transaction. 

When I worked for family owned, national retailer Hobbs, we were all trained in advising the customer on their ultimate "capsule wardrobe" - irrespective of whether they only popped in to buy just a belt or an entirely new look. "That belt would go really well with these trousers, madam. And may I suggest we team it up with this top - it's the perfect colour for you." Average sale? Much higher than the cost of the average belt. 

When I worked for Richards, we were specifically trained in the art of getting the customer into the changing room and off the shop floor as fast as possible. Why? You've guessed it. This action alone increased the customer's average spend. 

So come on, British Retail, this is your clarion call. Get your staff off the cleaning and into the changing room.  Get them onto the shop floor serving the customer. Get them acknowledging the customer when they walk into the store. Get them talking to the customer. Get them offering advice. Assisting. Consulting. 

Then, you just never know, your doldrums may just be a thing of the past. And my 40% underspend might just have made it into your tills. Your loss. Our gain.