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. 

The Economy. Does it Really Matter?

I caught Newsnight this week. I try to avoid doing this because it winds me up. However, this week it was actually quite interesting and, dare I say it, thought provoking. 


Jeremy (let's call him Jer) was attempting to stimulate debate on the alternatives to capitalism following David Cameron's statement in the week about moral capitalism. Capitalism that was socially irresponsible. A type of capitalism that must be stopped. 


Bastion of the far left and son of a marxist theorist Ed Miliband agrees with him. And not to be left out, Nick Clegg fancies helping us develop a "John Lewis" economy where everyone owns a wee bit of the company they work for. How egalitarian. 


Maybe I've missed something but it would seem to me that there is a subtle political revolution which is steering us more and more in the direction of communism? And I say communism, rather than socialism. A society which has common ownership of production at its very heart. (Not people). 


The flavour of the Newsnight discussion intrigued me. Jer brought on a well known Marxist to tell us why and how capitalism was doomed to failure. Then failed to interview him well. Keynsian economics theory was referred to in the programme as "revolutionary" some 80 odd years after it was first produced but Jer forgot to tell us what that actually meant. 


Revolutionary? Really? 


Either way it's clear that this concept of moral capitalism and economic predators with fat cat bonuses is here to stay. 


However, their rhetoric could be a smokescreen and distraction for what's really happening. 


So, here's how I see it. In our so called "free market" Keynsian society, the following things have happened in very recent years:


Individuals and households up and down the country have been encouraged, programmed and positively been forced down the route that owning your own property is a rite of passage. In truth, in Britain and the USA, you're not a real contributing citizen until you've straddled yourself with a 25 year debt amounting to tens of thousands of pounds through which you will actually pay more than double the actual cost of your property. 


This lending has been made free and easy by the capitalist (and, don't forget, evil) banks that ultimately control whether our economy stands or falls. They alone, we are led to believe, have the power. Not governments. And not the people.  


These banks soon found out that not everyone actually has the ability to pay these onerous, 25 year loans. So they did what any self-protecting capitalist venture would do and minimised their liabilities. Only, in their case, they found a way to do it which kept the debt "in play" as an asset. In so doing, creating a chain of transactions which, at best, could only be described as a game that combined the best of Russian Roulette and "The Weakest Link". 


As with any weak link in a chain, it will eventually break and, like a pile of dominoes, the effects are compound. In what felt like an extremely short period of time, our banks began to fall. And the people bailed them out one by one. State owned banks in a capitalist society. Who would have thought it possible?


Taking one bold step further towards a Marxist economy, as a country we are now in an interesting position where thousands of households "own" a mortgage debt, lent to them by banks which are now owned in a large part by the government which is in turn "owned" by the people of the country. The rest of us rent council properties. Which are owned by the government. Which owns the banks. Hmmmmmmm. 


In the background, electricity and gas companies battle with market pricing mechanisms and a consumer base that is continually telling them that they can't afford to pay those prices. Transport companies are lambasted for pushing up fares beyond which consumers can afford to pay. We've even had one politician suggest that the rich should pay the fares for the "ordinary" man. Robbing the rich to give to the poor. Robin Hood would be proud. 


This all sounds like the basis of a communist society to me and before we all go hurtling towards it at a break neck speed we should maybe stand back and ask ourselves: Is that what we really want?


Do we want a society where every gets exactly what they need. Not what they want, but what they need. 


As any political theorist will know - go too far to the right and you will end up on the left. Politics and, so it would seem, economics are not linear, but circular in their behaviour.


Which brings me nicely on to literary theory (often ignored in these troubled times, but a fairly useful reference tool for those that think it's just all so unfair). 


Thomas Hardy had it down nicely in his novels where Fortune's Wheel was the main factor in whether a man (or woman) succeeded or failed, economically speaking. However even Hardy had the nonce to understand that everyone begins their life at a different place on the wheel, going through both good times and bad times in order to live life to the full. It was, in essence, the meaning of life. That's why Tess never seems to get a proper break, it's why the Mayor of Casterbridge seems to be forever battling with bad luck through the ups and downs of his own career. 


Hardy wasn't the only one providing us with a commentary on economic success. Fielding did it too. And hundreds of years before him, so did Shakespeare. And years before him, Ovid. 


So, perhaps, just perhaps, what I'm trying to say is that our leaders need to be very careful if they think they have control over these situations. 


Economics are complex. However out of complexity, order will come. It's a cyclical thing. It's the way of the world. Complexity theorists know that. Writers of old know that. Heck, even the free market knows that. 


So in answer to my question about the economy, does it really matter? Yes, I think it does. 


But it matters to each and every one of us. Because we ARE the economy. Not the banks. Not the governments. The people. 


We are the market. We decide whether a business succeeds or fails. We decide whether a person's skills are valuable or not. We decide how we can better ourselves. We decide in which bank we should put our money. 


We decide. 


For the time being at least.