ARTICLE TEXT:
SIX
DEGREES OF SEPARATION
It
is a sobering realisation that we are each, potentially,
just six contact points away from personal conversations
or private audiences with the likes of Nelson Mandela, The
Pope and President Barack Obama.
Australian
Prime Minister Kevin Rudd may be another proposition, with
questionable value for the effort expended!!!
The
reason why most people and entities do not enjoy and achieve
being in the presence of such luminaries is a lack of planning,
sequencing, focus and intent. Most things are possible.
Success
in marketing, particularly in the current volatile marketplace,
requires similar discipline and the application of a like
disciplined framework. The six degrees of separation, from
ordinary to exceptional, in the current business arena are:
1
ST DEGREE - TARGET AUDIENCES
For
sheer efficiency, effectiveness and economy, diligent and
discrete targeting of primary, secondary and tertiary target
audiences is imperative.
The
term “mass media” is to a large extent now an oxymoron,
a contradiction within itself. Media channels are fracturing.
Broadcasting is to some considerable extent a thing of the
past. Today, the reality is narrow-casting. Reliance on
the use of a single medium is limiting.
Communicating
to and interacting with those who are outside the profile
of prospective, current and immediate past customers and
consumers can, and typically does involve the expenditure
and investment of considerable time, money, people and other
resources, often for little return.
Particular
care needs to be taken in the differentiation between customers
(who buy) and consumers (who utilise). The needs, preferences,
actions and roles in the buying process of both subsets
differ appreciably.
Women
remain the prime and key influential buying agents in up
to 70% of instances for consumerable, durable and, to a
lesser extent, capital goods and services.
There
is a rich vein of gold to be mined among existing customers,
who are largely unrecognised and not exploited. Develop
and exploit the relationships.
The
mantra, “share of wallet” in preference to pursuit of share
of market has great potential for more immediate and significant
returns.
Thus,
seek out, communicate personally with, service and satisfy
those whom you know best.
2
ND DEGREE - PRODUCT / SERVICE RANGE
Hundreds
of millions, possibly billions of dollars of under-performing
products and services reside within the inventories of retail,
wholesale, and manufacturing entities, big and small.
There
is little or no scope for sentiment, nostalgia and inertia
in business decision making in the prevailing marketplace.
Opportunity costs, an impost borne, are not entries on traditional
asset and liability statements.
Obsolesce
is a further burden which impinges on and limits performance.
Stockturn
ratios, sales conversion rates, internal rates of return
and stock ordering lead times are not of themselves guarantees
for better business performance levels and success. However,
they are benchmarks to enable effective monitoring and measurement
of absolute, relative and comparative progress to ultimate
goals.
Recognition
of the need for specific action is the first step to an
improvement and success.
Individually
and collectively they provide meaningful insights and sound
bases for responses to the ubiquitous question:
“How
are things going?”
Without
objective and accurate measures things may not be going
at all. They may be “sticking”……. to the shop and warehouse
floors.
An
integral part of the success of the complex and diverse
product range of the 3M Corporation, is that at all times
a minimum of 60% of the product/range has been introduced
into the marketplace within the past 5 years. That implies
a strong dose of dynamism. In short, clean out, shape up
and move forward.
3
RD DEGREE - SUPPLY CHAIN
The
disturbing and disappointing attrition rate of the new and
innovative products and services is a sad testament to poor
and inadequate supply chains and distribution networks which
operate globally and throughout Australia in particular.
Effective
chains and networks deliver products, services and above
all the key points of consumer appeal, convenience.
Inadequate
distribution facilities are the primary source of failure
in up to 70% of product launches.
Sophisticated,
discerning and “now” oriented consumers and clients demand
immediate access to those items they most need or want.
There is a noticeable lack of tolerance in the marketplace.
Offers of “rain checks” in which the products or services
are guaranteed to be available at the same price at another
nominated time are typically declined.
Short
lead times, on-line real-time interface between the computer
software of manufacturers, distributors and retailers, and
paperless invoicing and ordering through automated imprest
inventory systems are no longer ideals. They are increasing
mandatory, for entities to minimise costs and to return
to competitiveness.
It
is noticeable that market leaders like Woolworths in Australia,
Wal-Mart in the USA and Tesco in Britain have invested heavily
in upgrading their supply chains over the past decade. Significantly,
there is no slackening in the pace of such investments and
innovations.
Which
raises an interesting question. What industry are you in?
Today, there is only one answer. Supply chain management,
regardless of the related disciplines, products and services.
4
TH DEGREE - DIFFERENTIATION
The
recent public announcement by the Australian Federal Government
of the introduction of legislation to remove differential
labelling and branding in the packaging of cigarettes is
an important lesson for all.
Too
little attention is given to the art of effective branding.
It is not an overstatement to contend that over 80% of entities,
products and services available in the marketplace throughout
the world suffer from being labelled rather than branded.
Commodization
reduces, if not eliminates, the inherent value and thus
satisfaction which is and can be attributed the uniqueness
to a recognised and preferred brand.
A
perusal of the real estate section of a weekend newspaper
confirms the expenditure of considerable monies in a cavalcade
of colourful signage and graphics. Real estate advertisements
broadcast on radio stations present a similar cacophony
of sound, with little effective branding.
Health
specialists forecast that as a consequence of the removal
of branding on cigarette packages in Australia (and as a
result of 25% increase in taxes on the product range) 100,000
Australians will cease smoking within 12 months. Significantly,
it is projected that in the same period of time more than
70,000 adolescent Australians will not take up smoking.
Brand switching among existing smokers will be reduced.
More
than ever before the cigarette companies will need to develop
strategies and tactics which differentiate their market
offerings centred on actual product presentation and below-the-line
(non mass media) communication.
Little
wonder there has been renewed and increased interest in
our exclusive customised keynote presentation,
“It
Is Better to Be Different
Than
It Is To Be Better”
5
TH DEGREE - PRESENTATION
For
the past two years cash flows have been adversely affected,
budgets have been reduced, financial institution lending
policies have been tightened and outlays have been understandably
constrained.
Business
owners and managers have been confronted with the challenge
to do more with less.
The
scope of options which are viable, attractive and effective
has narrowed.
Two
lessons which recur across a broad spectrum of sectors and
entities are:
•
PREMISES AND COMMUNICATION PRESENTATION
UPGRADES WORK
No
one aspect of the 20 elements of the marketing mix achieves
greater traction than enhancing, remodelling and modernising
one's presentation in the marketplace. That reality reflects
the importance being assigned by many retailers, precincts
and communities to establishing an appealing, safe ambience.
Obsolescence, or a sense of such, impedes endeavours.
Subtleness
can be a virtue. Relevance is the objective.
Having
a “good” place to visit and to work in, inspires confidence,
imagination and demand.
•
MULTIMEDIA MESSAGES ARE IMPERATIVE
It
is one thing to upgrade premises. However, without informing,
educating and encouraging prospective and past clients to
visit, to enjoy and to become involved, the potential for
increases in consumer/client traffic, revenue and profits
remains latent.
6
TH DEGREE – SALES AND SERVICE
Sadly,
too many business leaders and practitioners separate sales
and service into two distinct practices and disciplines.
A
preferred philosophy integrates the two into a compelling,
unified presence of conspicuous benefits and advantages.
During
the boom years prior to the Global Financial Crisis (whose
impact was universally evident from August, 2008) considerable
difficulty was encountered by businesses in the recruitment
and retention of qualified, experienced and engaging staff-members.
High employee mobility was a common and exasperating experience.
Loyalty was isolated, stability a thing of dreams.
Management
attitudes hardened. Investments in training were understandably
considered to offer little and only short term benefits.
Many training budgets were curtailed and in some instances
eliminated.
As
a consequence, customer satisfaction plunged. Significantly,
the primary causes seldom related to the actual products
or services, quality, availability and maintenance. Rather
it was the poor attitudes, inadequate product knowledge
and poor presentation of staff members.
Cuts
in training and the lowering of standards in recruitment
proved to be false economies.
Leaders
in the broader retail sector have been quick to embrace
the prioritising of a “positive ambience” and a “great shopping
experience” as the imperatives necessary to optimise revenue
potential and profits.
Enthusiasm,
pride, urgency and a sense of theatre are contagious emotions.
Moreover, individually and collectively they are effective
counter weights to a prevailing feeling of dullness, indifference
and apathy which impede the realisation of attractive sales
potential. Let me be emphatic. Good and great customer service
costs. Poor and awful service costs more.
Greater
emphasis needs to be assigned to upgrade the service experience
for a sales advantage to be achieved and sustained. Price
sensitivity will then be rightly assigned its ranking of
the fourth, fifth or sixth most important purchase criteria
by customers and clients.
THE
NEXT STEP
Progression
through the six degrees of separation is simple, but not
easy. Hard decisions cannot be made to be easy decisions.
However, addressing progressively each of the six degrees
detailed above does make it easier to make the hard decisions.
There are not short cuts. In the current marketplace one
wins and retains business by degrees…. six, in fact.
THE
AUTHOR
Barry
Urquhart, Managing Director of Marketing Focus, Perth is
an internationally renowned conference keynote speaker,
business analyst and author.
He
is an in demand facilitator of interactive workshops.
Barry
has accepted an invitation to be a Visiting Fellow by the
Leeds Metropolitan University, Britain. He will address
undergraduates, post graduates and local Leeds
business leaders during a speaking tour in November.
Email:
urquhart@marketingfocus.net.au
Web:
www.marketingfocus.net.au
Tel:
(08) 9257 1777
Mob:
041 983 5555
