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.