Trust me, I'm in advertising...

10 years ago when I started my own agency, an account director mate left the industry to become a real-estate agent. I remember thinking it was the only place he could go that had a lower standard of trust than we advertising types. 

Last week he told me it was a great move financially, he reckons 99% of people in advertising are really smart, whereas he’s happy competing with the 99% of real estate agents he’s found to be really ordinary. If we are that smart, why can’t we lift our own profile, beyond the bottom of the heap for trusted professions?

Trust in advertising? This is not an oxymoron.

Unfortunately, the perception of our industry is on a par with used car salesmen, yet our legal obligations, indeed our personal liability, dictate our practices are squeaky-clean. 

In Australia, like most things, our industry is regulated and kept on the honest path by a series of laws and regulatory bodies. You wouldn’t know it. 

The 2011 senate inquiry into outdoor advertising standards found only 0.01% of ads were found to be bad, i.e. sexist, likely to offend or straight out untruthful. Yet when prompted on ABC radio, the senator leading the inquiry said that if we don’t clean up our act under self regulation, he’ll "pull out the big stick and regulate" us. 

Would you trust a politician to decide whether marketers are trustworthy? 

In Europe, clergy are experiencing a decline in confidence levels and politicians are in last place. Our peers don’t rate much better than we do here, with over half of Europeans surveyed* saying they don’t like journalists, marketing specialists or advertising experts.
*Source: GfK Trust Index in spring 2010 

I can understand why journalists are suddenly on the nose – the phone hacking scandal at Rupert's tabloid News of the World has in the words of one shareholders action group "laid bare a striking lack of stewardship and failure of independence." The board had been unable to set a "strong tone-at-the-top" about unethical business practices. 

Australians generally are a trusting lot. When it comes to believing what our fellow citizens say, Australia on a trust index score of 92 ranks ahead of the U.S. (78.8) and U.K (61), just behind New Zealand (102) and way behind China on 120.9. 

Source: ASEP/JDS data bank 2011

So where do Australia’s “ad people” sit on the trust index today?

Who we really trust is no real surprise:
1. Paramedics
2. Firefighters
3. Pilots
4. Rescue volunteers
5. Nurses

At the bottom of the pile are
41. Taxi drivers
42. Real estate agents
43. Car salesmen
44. Politicians
45. Tele-marketers

Source: Readers Digest Austrlalia’s most trusted professions poll 2011

Before you think ad madmen aren’t so bad after all, the only reason they’re not last on this list is because they aren’t included in the survey. Tele-marketers are the closest category, so let’s just accept advertising and marketing guys are way down there. How did we end up down at the bottom with pollies, and what do we need to do to elevate our role to a similar level of respect as other service providers like engineers, doctors and architects?

Advertising first took off in America in 1800s when snake oil makers discovered the return on investment of promoting something of little value with amazing claims in the press. In Australia last year the most damage to our credibility was the public complaints about the posters advertising Advanced Medical Institute’s cure for under performance in bed. It was bad enough they were bad ads, the real breach of trust was the pitch was a fraud. Most of those with a desire to last longer in bed were overcharged for a treatment that generally didn’t deliver on the promise.

As a professional I feel we would be better off refusing to work for these types of people. It didn’t harm Bill Bernbach’s career when he told prospects he wouldn’t accept their business if their product didn’t live up to his standards.

(Glenn Mabbott would like to declare his interest as a sitting member of The Communications Council’s Policy Committee, which aims to raise industry standards through the Accreditation Scheme. UNOmarcomms was one of the first independent agencies in Australia to gain accreditation.)               

Are today’s retail ads bland, bland, bland?

Are today’s retail ads bland, bland, bland? This was the question posed by AdNews last week after Dick Smith launched a new brand style ad campaign. If you missed it, here is a cut down of my contribution to the debate.          

Dick Smith was an innovator

He built a new category with advertising and brochus that gave Australia’s cardigan wearing tinkerers access to an Alladin’s cave of electronics stuff to play with in their garages. What proved Dick really clever was his ability to sell his growing challenger brand to Woolworths and then go on to innovate time and again. With Australian Geographic and then his Australian Made products, Dick was a natural at creating marketing campaigns that resonated with the public mood of those times.

Contrast this with another retail innovator of Smith’s era, Gerry Harvey. Gerry also made his first million in his early twenties with ads for whitegoods and appliances that yelled, “Why pay more?

Is Gerry a clever Dick?

Gerry didn’t sell his business and continues to be the biggest retail advertiser in the country with ads that follow the same tired formula of thirty years ago. We all know the pitch: yell loud enough and people will rush in to grab a bargain. Except increasingly we’ve learnt to treat those ads as repetitious nagging. We’ve moved on to better retail experiences, which are likely to be online.

It’s time the majority of retailers looked at the current crop of retail innovators, like Net-a-Porter that has just released a new magazine iPad app that makes shopping an exciting, contemporary experience. Or this great campaign in Korea for Tesco’s challenger brand, Home Depot.

This article first appeared in AdNews, 21/10/11

A lateral way to increase retail shelf space: use a billboard

Watch this short video of how Tesco challenged the number 1 retailer in Korea by creating a virtual store.

What’s the next killer app?

The latest stats show Australians are the number 2 adopters of smartphones. And this year, Tablets and iPads are set to outsell mobiles, Australians will buy 1.2 million of them*. In the last couple of years the fastest increase in marketing online has been with using video, so we believe the next big thing for marketers will be video over smart mobile devices.

Ask us about the app factory that will let you make the most of video content. (Soon to be launched by UNO with our partners at Mass Media Solutions.)

*Telsyte mobile device update 2011.

73% of CEOs think marketers "Lack Business Credibility"

According to damning research by the Fournaise Marketing Group, marketers are not the business growth generators they should be.*

The gist of the findings of an Asia wide survey of CEOs is that management believe their own marketing departments are in a world of their own. They believe marketers speak in jargon and are not contributing any value to the business. From my experience you can’t blame most business owners for thinking this way, especially in Australia. Too few businesses have ever had a good marketer sitting round the table at board level, championing the power of marketing to generate wealth.

Marketers need to talk the language of business outcomes

As in “how can marketing get a better return on investment”. Otherwise marketing will remain a misunderstood black art not worthy of the attention of three quarters of CEOs. The vast majority of businesses will thus miss out on the huge opportunities that insightful marketing can deliver when it is woven through the entire business process.

Meanwhile there are a handful of businesses doing better than the rest because they have value-adding marketers on the team. These marketers, obsessed with return on investment, are recognised as an integral part of the senior management team. They are helping their businesses punch above their weight in the following ways…

• Overcome competition based purely on price
• Prevent decline of sales
• Hold on to existing customers
• Build qualified sales leads
• Change the perceived quality of a product
• Revitalise tired brands
• Boost staff morale
• Speed the development of new markets
• Speed product trial and acceptance
• Help businesses raise capital more easily
• Build the value of a business for sale

ROI marketing works

For 100 years Coke has proven it, people from first world countries to third choose Alabama’s black sugar syrup even though it doesn’t taste as good as Pepsi’s. That’s the power of consistent marketing. Perrier taught us to pay more for mineral water than petrol. Branson has convinced Australians to fly Virgin despite having a deplorable record of taking off late, (and you still have to pay for your sandwiches). And thanks to marketing Apple has built a brand that is hugely profitable, marketing has enabled them to sell often inferior spec’d products at a premium to specialist manufacturers like Nokia and HP.

CEOs needn’t fear marketing speak. Business decision makers who embrace marketing with an open mind can still enjoy a sense of control by implementing a test and learn approach. Any marketer worth listening to understands the value of having the results of their work tracked. If it isn’t measured, it isn’t managed. A marketing program that IS managed WILL deliver better results than mindlessly sticking to what the company has always done, or jumping blindly into the latest thing.

ROI Marketing can make a big difference to any sized business, in any category

So what can ROI marketing do for you? My experience has shown me whatever the category, from Watties baked beans to Brita water, Splash Clinic cosmedical treatments to City Index CFDs, a test and learn marketing program can turn good businesses into category leaders.

Two thirds of Australians are using social media. Two thirds of those use it to decide what to buy.*

Social Media Marketing (SMM) is growing, the latest figures show Social Media is becoming a mainstream influence in the purchase decision process. UNO are members of the Australian Interactive Media Industry Association. Together with Sensis, AIMIA surveyed 803 Australian consumers and 1,944 Australian businesses to determine how social media channels are being used. 50% of corporations now have a social media presence, the majority on facebook. Just 14% of small businesses use social media.               

Proportion who have Social Media presence

Proportion who have Social Media presence

Social networking site usage by age and gender

Here are 10 ways you can make more of Social Media in your marketing communications mix:

1. Start now for free. If your business is consumer facing, get a facebook page, it’s free.
2. For B to B, skip facebook. Focus where business decision makers are active. Join LinkedIn. Follow relevant associations and groups, join industry forums and post comments on articles.
3. Share your knowledge. Your business is your passion; tell it how you see it where you can add value to a conversation. No need to sell, just build your credibility as an expert and you’ll be increasing the standing of your businesses.
4. Don’t post as anonymous. Out yourself. The CEO of a solar hot water manufacturing company follows chatrooms where plumbers share advice. His comments to tradies‘ questions demonstrate he’s in touch with his market. I suspect his competitors are unaware such forums even exist.
5. Put someone in charge of your Social Media. Empower a person within your business who is passionate and keen to have a dialogue with customers. If you don’t have anyone internally, outsource.
6. Tweet. Reinforce your position as an industry expert by tweeting and re-tweeting about relevant content that others have shared.
7. Blog. Blogs and reviews have a big influence on buying decisions, with 63% of social media users reading reviews before making a purchase decision.
8. Be regular. Respond quickly.
9. Integrate social media. Integrate content with your promotions and product campaigns. Measure. Track.
10. Video is the future. It’s the fastest growing area online because it’s easy to share. It’s not enough to post a television commercial on YouTube because no-one will look for it. Be creative, film an interview with an expert, or shoot a behind the scenes glimpse that showcases something you do well.

Social Media can deliver a measurable ROI. No wonder businesses are spending 5% of their marketing budgets managing and creating content for social media.               

Did you know it’s 20 times easier to sell to an existing customer than a new prospect?

The good news is that any business that has collected data on their customers is sitting on their own potential gold mine. Rather than spend money trying to appeal to new prospects by running press or even online ads, you will get a much better return on investment by adding some intelligence to the way you manage your data.

Give your CRM some Data Intelligence

Most data is in such a mess it offers little insight to business owners. To turn it into a powerful tool to enable you to communicate with your customers requires a clean, intelligently organised database.

The place to start to release the value from the mountain of data you already have is to give it to an expert to wash it.

You’d be surprised how many emails and addresses are wrong, repeated or out of date. You can’t begin to measure response rates until you know the data you have is clean. It’s better to measure the response from 10,000 real customers than to assume you’re sending offers out to say 30,000 on a dirty list.

Once you have a clean list, your data then needs to be structured and categorized with the aim of maximising its usefulness for marketing purposes. There are then some things you can do straight away to not only deliver quick profits today, but also set you on the path to delivering what customers will want in the future.

Fast profits can come from testing and tailoring offers to:

• up-sell, getting customers to buy more valuable products from you
• cross-sell, encouraging them to add something else to what they usually buy from you
• increase purchase frequency, by building loyalty and giving them more reasons not to be tempted by your competitors

So get the experts in quick smart to professionally clean your data so you can secure the future of your business. Let those who continue to spend big to tempt new prospects pay the price.

You built a website. You embraced e-commerce. So where is the massive lift in sales?

What will it take for retailers to stay in business in this rapidly changing global economy? Futurist Ross Dawson commented in a recent blog that if you expect your business to look the same in 10 years as it does today, expect to be out of business.

Who’d have thought ten years ago that Woolworths would be the biggest owner of pubs and bottle shops today? Constant change is the only way to stay competitive, which explains why Woolworths just bought Cellarmasters for $340million. Kevin Luscombe recognises the future includes database marketing, Cellarmasters “will enable us to serve a whole new customer segment in terms of the direct marketing channel.”

eCRM drives online sales

Cellarmasters has the largest databases of drinkers of premium wines in Australia. For any competitor to stay in the premium wine business they’ll need to at the very least match the way they apply an eCRM program to their database.

Once a database has been professionally cleaned, you can start to mine your database and build a series of profiles of your customers. Using that intelligence will deliver a better ROI on your marketing. You’ll get a better result cross selling Pinot Gris to customers who are heavy purchases of Sauvignon Blanc. With profiles of your customers it becomes practical to promote a 20 case limited offer Coonawarra cleanskin, you simply email your regular purchasers of Cabernet. With data intelligence, while you offer a bonus with purchase of single malt to spirits drinkers, beer drinkers automatically receive a different offer.

Very few customers want to be constantly bombarded with promotions that are obviously being sent to the masses. They will reward targeted offers that demonstrate you understand them as an individual with stronger loyalty.

Your customers know what they like and will actually tell you what they want if you bother to track their behaviour, or quite simply ask them. Every marketing activity, from a mailer or catalogue to a visit to your store, each phone enquiry and every online order is an opportunity for you to measure what works and what can be improved.

ROI marketing will drive e-commerce

Every dollar you spend on marketing should and can be measurable. You don’t actually have to be a futurist to stay in business, with data intelligence you can keep track of where your customers’ needs are leading and continuously adjust and improve to keep up with them.               

You can be tomorrow’s business success story. Just add Bernard Salt

Bernard Salt earns a living as a demographer. That’s the art of taking research data and painting a picture of who we are and what we think and do. Before you tune out thinking he’s just another propeller head making money off the back of lies, damn lies and statistics, consider for a moment what you’d give as a business to know where the next big opportunity for making money is, before it happens.

How do entrepreneurs know where to invest today in what will be the sweet spot tomorrow? What did the savvy few who bought franchises in McDonalds in the eighties know? Or the food services that were ready to be part of café culture as we left tea drinking behind?

If you were a tea manufacturer in the 70s Australia’s demographics could have predicted that your volumes were about to decline. The move from a society of tea drinkers to the blossoming of café culture at the turn of this century was a consequence of something that happened in the 1950s. The wave of immigrants from Italy and Greece post war had kids, grew wealthy and infused our Anglo society with a Mediterranean café culture which saw Australians move onto the footpaths and embrace machiattos and cappuccino with biscotti in preference to sitting indoors with a cuppa Bushells and an iced Vovo.

At a Family Business Australia breakfast, Bernard explained the simple truth that the composition of Australia is what drives business growth. And decline. Seems obvious, yet even the high fliers at BHP and the big four banks pay Bernard to keep them abreast of what should be self evident. It’s easier to grow a business and be profitable in a category of growing demand than to compete for a share of a shrinking one. 

Change managment – there's money in tea

Follow the demographic trends that will shape what Australians will look like in the next decade and consequently what consumers will be asking for. Today there is a shift away from European immigration to Asian as these stats on fastest growth and loss by place of birth show.

Prediction: Start thinking about tea and noodles not coffee and pasta.

Super was yesterday’s money maker

In the last decade the biggest growth in financial services has been in superannuation. The SMSF category has doubled its share to be the largest segment at huge cost to growth of retail funds as boomers take more interest in their money in super. Industry funds have also grown share with a low fee proposition and the locked in stream of contributions via the super guarantee levy from a membership base that traditionally wasn’t saving much. But that’s today’s boom business, tomorrow it will change, again because of a shift in demographics. 

The makeup of working Australia is about to fall off a cliff, as the boomers retire and are replaced by… no-one:

The age at which boomers will retire, now on average 58, as well as the length they can expect to live has also profoundly changed in just a generation:

Prediction: Cashed up retirees who will live for 20+ years will want to travel, eat out, be entertained, live in a city apartment or by the sea and to pay for it all need a retirement pension plan that will last the distance. They’ll be looking at ETFs and annuities. 

Bernard Salt has a pretty good idea of what tomorrow looks like. It’s up to you to see how you can position your business today to be ready to reap the rewards of a growing market category before it’s the next big thing.

Does your business have a brand policeman?

When did you last check your brand imagery and how consistently you are projecting your business to customers and stakeholders? Have you done a complete audit of all your “touch points”? Who in your company has the authority to enforce standards?

Large corporations have entire departments looking after how the image they present visually. They have realised the value created by consistent repetition of the company brand marks alongside the product or service it delivers.

Most businesses fail to present themselves as professionally as big brands and end up with a brand “look” that has more in common with a camel than a racehorse. This occurs organically, by allowing too many people to make piecemeal decisions every time something is needed.

There are so many pieces that make up the complete picture of your brand, from a new business card to printing a brochure or sending an email offer. Each is an opportunity to build brand “credits”, or a risk for someone to go off on a tangent.

A complete audit of all your brand “touch points” would cover:

• Internal signage
• Building signage
• Banners
• Vehicle signage
• Advertising
• Email signatures
• Website
• eNewsletter templates
• Fax formats
• Letterhead
• Business cards
• Presentation folders
• Flyers
• Sales force and sales kits
• Product sheets, warranty forms
• Order forms
• Invoices
• Branding on your products
• Point of sale
• Price tickets and notices

Setting brand standards with a professionally developed Style Guide

Brand guidelines (also called a Style Guide) should cover all of the things in the list, and have specific rules for each element. For instance, how your logo is used would cover these specifications:

Colours
• Print: CMYK or Pantone reference 
• Digital: RGB 
• Mono, reverse, 
• Vector files for artwork production. 

Size guidelines - how small can it still reproduce?

Usage guidelines - clear space, location on the page, hierarchy with other symbols.

A Graphic Designer with credentials in this area can produce your Style Guide.

Enforcing your brand style

Your creative agency can act as your deputy and arm you with a password protected online archive of logos, images, artwork formats and templates.

Many businesses also find having a professionally developed Style Guide available, as a reference document for staff and suppliers, helps enforce brand rules making it easier to keep the company image under control.

Finally, someone qualified within your company needs the power to enforce the Brand guidelines. It is possible to mandate that all work using the company brand mark is approved by this person before it goes into production.

Success through consistency

Every business can benefit from designing formal brand “rules” so they can weave simple and consistent imagery through the company’s everyday operations. If you have a good product your customers will come to associate that product with your consistently delivered brand mark.               

Does your strategy need to include e-commerce? What would Gerry Harvey know?

There’s more to ecommerce than GST

Funny how Harvey Norman and other retailers are running to the regulator with the sob story that they are losing sales to overseas online providers who don’t pay GST. Time for a reality check, they are losing sales because they are slow in changing their business models to keep up with consumer behaviour. 6 months ago I flagged the stats showing how quickly online sales were growing and the failure of our retailers to keep up with the trend.

Consumers reward innovation

It’s how Gerry Harvey made his first millions when, in his twenties, he founded the first category killer electrical discount store, Norman Ross. You don’t have to be young to be innovative; you just have to give consumers what they want in new and exciting ways. Today consumers increasingly are researching and shopping online. In a few years what they want will be something most of us have yet conceived, and more than likely Apple’s Steve Jobs, aged 55, already has in development. 

Facebook keeps growing. So how can you make the most of it?

Facebook has broken through the 10 million barrier of active users in Australia*

While this will prompt many to jump in and increase advertising on Facebook from the current $12million a year, content is the cost-effective way any marketer can gain exposure to this increasingly significant audience. Best make sure it's the right kind of content.

Online content is King

When publishers and marketers say content is king, what exactly do they mean? Here’s an example close to my home. When I was 20 I played occasionally in a punk band called The Coathangers. Most nights we were lucky to get paid in free beer, the cover charge might be a couple of bucks. One night we had 6 bands for 69c. It was accepted that routine you played for little or no immediate return to build up an audience. Later you would then sell records to them, which was where the money was. Your loyal following paid for content.

Today you can’t expect to sell many CDs when everyone can download your content for free. My 21 year old son has a new band, The Psychonaughts. They hardly ever play live, they are busy recording, creating content that will more than likely be given away. In the not too recent past a band would build a website that fans would visit to purchase songs and buy merchandise. Not any more, people expect everything online to be free.

So what’s the value of giving away content online?

In the case of music, the content gets passed around and builds an audience, who then pay to see you perform live. Technology has turned the model upside down.

The ease with which people can share content across social media is a lesson for brands – we are now in an era where you have to produce content of value to your target audience, making it available for free. It then requires like-minded prospects to share it by whatever medium they choose: YouTube, mobile-to-mobile, email, or increasingly, Facebook.

According to Facebook regional vice-president A/NZ Paul Borrud, globally two-fifths of the more than 500 million Facebook users are accessing the site through their mobile. And Australians spend longer on the site than anyone else.

Unlike marketing via your brand site, or Google adwords, or banner ads or traditional mass media advertising and PR, the consumer isn’t being paid to publish your message. For content to be spread it isn’t enough to post brochure copy or press releases, content needs to be engaging stuff that your customer sees value in. And by aligning this free content with your brand story you can build a relationship with prospects stronger than an advertising approach could ever achieve.

So the art is producing content that is worthy of the attention of your audience, something they want to share.

* SMH.com.au 10/12/10

Get social media right or "you're stuffed"

Every time you use something that you aren't being charged for, remind yourself, it's because you are the product. SMH.com.au, LinkedIn, Facebook, Pinterest all let you read and/or post for free because they are making money out of YOU. Businesses of all kinds are constantly gathering data from you and about you and your contacts most of the time you do something digitally. Facebook can now access your phone’s microphone to eavesdrop on what you are listening/watching while you post an update.

The upside is you will be served ads or content or search results that have been vetted just for you. The downside if you're marketing your own business online is you have to recognise the average person will increasingly expect to receive only what they care about.

Social marketing 101: What's in it for your customer?

As Jane Caro told a room full of online marketers recently, people are "entirely able to screen you out no matter how much money you put behind (your message.)

“If the message is not relevant, if the message doesn’t mean anything to them, you’re stuffed.

“the power has moved from those people with large pockets to the population at large. But you can have no money at all and send a Tweet that resonates and takes off like wildfire and suddenly you’re famous.”

Research by McKinseys has shown businesses have found the primary benefit of embracing social media is the ability to open a dialogue with customers and actually listen to what customers want. Not talk at them like a brochure, but understand what they care about and respond, or learn and move on. Here's a reminder of the simple etiquette of doing a business on the Itnerweb.

3 rules of social media engagement: the 3 Rs

To participate in social media as a representative of an organistion or company it is important to remember 3 rules.

Be clear about who you are representing, take personal responsibility for ensuring that any references to your company are factually correct and accurate and do not breach confidentiality requirements, and show respect for the individuals and communities with which you interact.

Remember, you are personally responsible for the content of the posts online. If employing a ghost writer, it is your responsibility to sign off on final content. Ensure any information about your products and services that you provide is true and factually accurate.

Respect copyright, privacy, financial disclosure and other applicable laws when publishing on social media platforms.

If you break the law you may also be personally liable.

There is no best way to compete

Remember that scene with Steve Martin ordering coffee L.A. style – "a half double decaf decaffeinated half caf... with a twist of lemon." (The video is at the end for you to enjoy.) It seems every single decision we now make throughout the day comes with an endless number of choices.

So it came as no surprise when a global a marketing guru presented research to the World Business Forum in Sydney that proves, in industry after industry, there is no single best way to compete.

How to differentiate your brand today

The worst mistake in strategy is to compete with rivals on the same dimensions, Professor Michael Porter says. The man who’s made strategy his life work says many businesses still get confused around the definition of the concept of differentiation, and that even trying to be ‘the best’ means a business is starting in the wrong place strategically.

Porter points out "we all know it’s impossible to meet every need of every customer uniquely well. That’s impossible. There’s no one way to deliver value.

“Strategy starts with a notion that the fundamental question is not how to be the best, it’s actually how to deliver something unique. To the customers you’re choosing to serve. Not because what you’re doing is ‘the best’ but because what you’re doing is delivering distinctive value.

Strategy is about being unique. That’s ultimately what all successful companies are able to achieve for some period of time."

The formula for growing challenger brands

If today we are spoiled for choice, it follows the prospective customers for our business are too. So instead of seeking some magic wand global answer, a better strategy is to identify one thing people you're trying to serve actually care about. Something that you're good at delivering. Finding your mojo is the fundamental starting point in our formula for growing challenger brands.

What happens when the CMO spends more on IT than the CIO

The head of marketing will soon be spending more on IT than the head of IT, so a recent study by Gartner found. Last week at the annual adfest in Cannes, Ogilvy's top creative warned of how too much faith was being put into data and not enough into ideas. This was resulting in well planned and placed ads that don't actually achieve much.

Where is the real value to be found in marketing?

The more things change the more they stay the same. The problem in the past was IT managers spent a fortune, first on hardware and then software to sytemise the running of the business. Whether or not the customers' experience was improved was not the concern of the CIO. You only had to dial 3 for support to know that. The main focus of the CIO was all about having bragging rights his IT budget was bigger than the competitors'.

Now we are seeing marketing managers playing the same game, "my Big Data budget is bigger than yours." Businesses are paying more and more to collect big brother levels of information on people. You've experienced the result like everyone else – being hit with ads on Facebook when all you want to do is see a picture of a friend's fishing trip. This may be how Zuckerberg will try to make an earn for shareholders, it isn't the road to marketing Nirvana. Just like the IT managers of the past, what the customer wants once again isn't the focus.

The constant here is managers within the business concentrating on the business of the business, rather than looking for ways to make a customer's life better. You probably recognise the trap, I fell for it. For several years I paid too much time and money on experienced professional staff and IT consultants to implement and manage programs to systemise my business. None of it added to the power of connecting and motivating, inspiring or creating. It was money spent on smooth bureaucracy for neatness sake and failed to grow my customers' businesses, nor consequently my own.

Rational Vs emotional marketing approach

"Investment" in IT has always been a rational spreadsheet sell to the chief decision maker. How often have you witnessed a marketing department asking for a "brand building" budget lose out to the CIO who could promise a guaranteed ROI from some new IT? Problem is marketers seem to be giving up the fight at the board level for using emotion to connect with customers, instead choosing the easy route of asking for funding for data. Spend X get Y. Yet economic modelling consistently shows the customer is innately irrational, human beings are pre-programmed that way. This is at the heart of getting the best marketing ROI.

Your customers are more emotional when making purchase decisions than rational

The influential role of emotion in consumer behavior is well documented, here is a summary by Antonio Damasio, professor of neuroscience at the University of Southern California –

• MRI neuro-imagery shows that when evaluating brands, consumers primarily use emotions (personal feelings and experiences) rather than information (brand attributes, features, and facts).
• Advertising research reveals that emotional response to an ad has far greater influence on a consumer’s reported intent to buy a product than does the ad’s content – by a factor of 3-to-1 for television commercials and 2-to-1 for print ads.
• Research conducted by the Advertising Research Foundation concluded that the emotion of “likeability” is the measure most predictive of whether an advertisement will increase a brand’s sales.
• Studies show that positive emotions toward a brand have far greater influence on consumer loyalty than trust and other judgments which are based on a brand’s attributes.

So it follows a business that concentrates on chasing efficiency by spending big on data risks failing to connect on the more powerful emotional level.

Challenger brands care most about what the customer thinks matters most

Challenger brands that actually care about what customers want are winning by using the Cloud to remove superfluous steps from the delivery of products and services, often without big IT budgets. One example I know intimately is an Australian first, UNOsmsf, Cloud based Self Managed Super.

The rational customer benefit: More choice, more control, lower fees. We'll be using an emotional truth to appeal to prospective clients: your fund can do better than your mates with more money who are paying through the nose for an average product the big banks want to sell them using big data.

Check out the superannuation challenger brand taking on the banks from the Cloud.

Top 5 biz management blunders

Have you read any of Robert Gottliebsen's recent articles on the impending 12 billion dollar plane crash coming our way? Australia's purchase of three squadrons of Joint Strike Fighters – 58 at over $100million each is a fine example of the 5 management blunders many businesses tend to make.

5 blunders for management to avoid (& tips on marketing)

Gottliebsen quoted Liberal senator Jensen, a scientist, explaining what a blunder the decision to purchase the JSF is proving to be. Here I paraphrase Robert, with my own warnings on the blunders to avoid when making decisions about marketing::

Rule 1 of management blunders

Ignore expert advice and go with your gut. A decade ago Australia's manager at the top, John Howard, ignored the advice of aviation experts and bought into the development of the JSF. In my experience, being told the CEO doesn't believe in marketing or paying for external advice is more common than finding a boss willing to admit where their expertise ends.

Rule 2 of management blunders

When you make a big decision, those who continue to oppose you need to be pushed aside -- everyone must get with the program. Creativity is stifled by group think, yet it's creative thinking that helps businesses compete on their own terms, rather than taking the category head on.

Rule 3 of management blunders

All staff involved in the decision are ‘looked after’. E.g. In the case of the JSF, Senator Jensen has studied carefully what happened and says "there are too many who get jobs with contractors where they have provided advice favouring that contractor's product.” Advertising is renowned for managers procuring from friends who are designers, family members who know photoshop and printers who give them tickets to the rugby.

Rule 4 of management blunders

Delay as long as possible in telling the people at the top that the decision is wrong. In corporations, big, sudden write-downs are often caused because management down the line keeps putting a good spin on the data to keep their jobs, until finally they have to confess. Or in my experience, they are found out long after they've moved on. One CEO didn't realise that for two years none of my proposals to fix their problems had ever been passed up to him by his marketing manager. It was only after firing the manager he discovered an email trail where my strategies and estimates had been constantly forwarded to her close friend, who was then being commissioned for services beyond their capability at far higher prices.

Rule number five

Obscure the costs with all sorts of creative accounting. In marketing and advertising, this is really easy when so many managers claim to know the cost of everything, when they actually don't understand the value of anything.

The common theme here is the tendency of management to throw staff at problems, at great long term cost, when trusting experts would be better for business.

Get onboard the online retail bandwagon: $14.9bn & racing

The idea that online retail is about discounts isn't in line with the facts. While margins might be tighter, e-commerce is no longer just about bargains and end-of-line clearances. The latest NAB Online Retail Sales Index shows just how broad Australian retailing has become. Daily Deals sites are stuck at 3% share. The biggest online sales growth stories now are in liquor and groceries.

Department stores and appliance retailers the big winners, or losers online?

The mainstreaming of e-commerce can be seen in the leadership of department store products with a whopping one third of online spending. Once slow to adopt, Myer now offers 119,000 individual products online.

Domestic operators still have the lion’s share of online sales at around 75%. Gerry Harvey’s call for a GST on foreign online sales is just noise when you consider he mostly sells homewares and appliances, the second largest online category. I don’t see Australia Post delivering washing machines bought from Best Buy New York via their online store as a threat to Gerry. The threat is internal, his stores are failing to add value to the sales process and Harvey Norman still doesn't appear to have a strategy to compete with local online challengers.

Challenger brands have an advantage online

If anything, e-commerce puts the power back into the hands of customers who want to deal direct with manufacturers. Australian challenger brands, when they make a product that locals actually want, can cut out the blood sucking Coles/Woollies duopoly and the Gerry Harvey’s.

When brands reinvest into marketing a portion of the retailer margins that going online cuts from the delivery chain, they can grow share long term. This way e-commerce becomes a WIN, WIN equation for brand and customer.

An example of this approach is the transformation of a traditional Australian designer manufacturer of compression and sportswear – Quick Response. UNO has helped them transform from a wholesaler at the mercy of retailers to a direct-to-consumer e-business. This challenger brand is now competing with SKINS, (the retail market leader with a high priced foreign made product), by offering superior Australian made garments direct online, at a better price. Check out the QRS compression online store.

The future for online retail marketing

While retail sales generally have been mostly flat, ABS figures show Australian’s spent 27% more online in the year to March than the year before.

The NAB online spend index doesn’t include online shopping paid for by Paypal, transfers or EFTPOS, so the 6.5% of all retail spending measured in the latest report to March 2014 is an underestimate of the reality. Marketers need to view online retail as a growing opportunity for current business growth, not just a nice to have in the future.

Source: National Australia Bank Online Retail Sales Index.

Truth in advertising?

Which professions are most trusted in 2014? Research shows the Australian public rate nurses 91% for ethics and honesty, once again at the top, whereas most professions don't rank well in the trust stakes at all.

No prizes for guessing who rates last at 3%, it's the same profession that has been at the bottom every year since Roy Morgan began their annual "Image of Professions" survey in 1986.

2014 rankings of professions for ethics and honesty 

1. Nurses
2. Pharmacists
3. Doctors
4. High Court Judges
5. Dentists
6. School teachers
7. Engineers
8. Police
9. Supreme Court Judges
10. University lecturers
11. Accountants
12. Bank managers
13. Lawyers
14. Ministers of religion
15. Public servants
16. Public opinion pollsters
17. Financial planners
18. Directors of public companies
19. TV reporters
20. Newspaper journalists
21. Business executives
22. Insurance brokers
23. Stock brokers
24. Talk-back radio hosts
25. State MPs
26. Federal MPs
27. Union leaders
28. Real estate agents
29. Advertising people
30. Car salesmen

Source: Roy Morgan annual 'Image of Professions' survey for 2014

Design Thinking makes more money than traditional business management

Since the GFC businesses and investors have struggled to find consistent ways to achieve double digit returns. You can continue to blame the shake out that the credit crunch brought down on our heads, or perhaps the current tough environment is the new normal. The new normal is a world where businesses and governments and media proprietors no longer have control. Everything has been digitised, and thanks to Google and global Internet access from mobile phones at low prices the slevers are now controlled by the public, your customers.

The last decade has seen what Deloitte term the era of Digital Disruption. In a paper last year they identified which Australian industries are facing a short fuse, big bang trashing of their business models. Traditional business models that could control supply and demand and charge a premium have dissappeared or in the case of Delloittes hit list of financial services and are about to.

The businesses that prosper will be those that can embrace the new digital normal. It is the business managers that apply design thinking to their entire way of operating that will survive. The good news for SMEs is they have eless to lose than corporations and also have the management structure to embrace change. The best thing about all this si design thinking makes more money for a business than traditional management approaches. Here are some figures on just how much more profitable design centric businesses have been since the GFC. 

Design Thinking has doubled the returns of companies across a range of industries

The Design Management Institute in the US worked together with Motiv Strategies to create a share market index for tracking the returns of businesses that have Design Thinking at the centre of the organisation. Called the Design Value Index, it shows the 15 rigorously-selected companies that understand the value of design beat the S&P Index by a whopping 228% over the last 10 years.

Who are these profit powerhouse businesses and what do they have in common?

Design is an integrated function across the entire enterprise; they invest in design and it shapes the way employees interact and report, management structure is flat or receptive to ideas; experienced design executives are given power to direct design activities; and there is a senior leadership-level commitment to design. Some of the companies on the list won’t surprise you – Apple, Coca-Cola, Walt Disney and Nike. Others might – Ford, Herman-Miller, IBM, Intuit, Newell-Rubbermaid, Procter & Gamble, Starbucks, Starwood, Steelcase, Target and Whirlpool.

Designers are lateral thinkers, utilise their creative leaps

The way designers think is much more open to ideas, random thoughts from diverse sources and then building on these. By starting with the question what does a customer want and what makes them happy the designer is liberating from current accepted practices within a business. They challenge all aspects, collaborating across all the people in a business from sales to complaints, production to procurement. Compare this to control and command structures, like the public service where you aren’t allowed to ask a superior a question let alone challenge what they believe is the way it’s always been done.

Change, rather than wait to be redundant. As Deloitte warns, redundancy is coming sooner rather than later.

Design Thinking makes more money than traditional business management

Since the GFC businesses and investors have struggled to find consistent ways to achieve double digit returns. You can continue to blame the shakeout that the credit crunch brought down on our heads, or accept that the current tough environment is the new normal. We now have to operate in a world where businesses and governments and media proprietors no longer have control. Everything has been digitised.

Thanks to Google the information levers are now controlled by the public. In other words, your customers now call the shots.

The last decade has seen what Deloitte term the era of Digital Disruption. In a paper last year they identified which Australian industries are facing a short fuse, big bang trashing of business models. Traditional business management techniques that could control supply and demand and charge a premium have disappeared. You can see from Deloitte's hit list, even industries not used to rapid change like financial services and arts and recreation are about to face significant disruption.

Deloitte's Digital Disruption map

The formula for small & medium business survival in this time of disruption

The businesses that prosper next year and beyond will be those that can embrace the new digital normal. It will be the business managers who apply design thinking to their entire way of operating that will survive. The good news for SMEs is they have less to lose than corporations and more flexibility in the management structure to embrace change.

SMEs are perfectly placed to become tomorrow's challenger brands. The best thing about all this is design thinking makes more money for a business than traditional management approaches. Here is a chart that shows just how much more profitable design-centric businesses have been since the GFC. 

Design Thinking has doubled the returns of companies across a range of industries

The Design Management Institute in the US worked together with Motiv Strategies to create a share market index for tracking the returns of businesses that have Design Thinking at the centre of the organisation. Called the Design Value Index, it shows the 15 rigorously-selected companies that understand the value of design beat the S&P Index by a whopping 228% over the last 10 years.

Who are these profit powerhouse businesses and what do they have in common?

Design is an integrated function across the entire enterprise; they invest in design and it shapes the way employees interact and report, management structure is flat or receptive to ideas; experienced design executives are given power to direct design activities; and there is a senior leadership-level commitment to design. Some of the companies on the list won’t surprise you – Apple, Coca-Cola, Walt Disney and Nike. Others might – Ford, Herman-Miller, IBM, Intuit, Newell-Rubbermaid, Procter & Gamble, Starbucks, Starwood, Steelcase, Target and Whirlpool.

Designers are lateral thinkers, utilise their creative leaps

The way designers think is much more open to ideas, random thoughts from diverse sources and then building on these. By starting with the question what does a customer want and what makes them happy the designer is liberating from current accepted practices within a business. They challenge all aspects, collaborating across all the people in a business from sales to complaints, production to procurement. Compare this to control and command structures, like the public service where you aren’t allowed to ask a superior a question let alone challenge what they believe is the way it’s always been done.

Change, rather than wait to be redundant. As Deloitte warns, a big bang of disruption is coming sooner rather than later for most businesses.

How do you lead your business in the Digital Age?

The answer is in the mail. Australia Post is over 204 years old, but that hasn’t stopped it making the most of the digitised world. At a presentation to business leaders at the AGSM Leading The Digital Enterprise event yesterday, I found Tracey Gosling, a director of Australia Post, the biggest surprise. While the usual suspects, like the Head of Policy at Facebook and an author on Innovation helped open the eyes of the bank managers and bureaucrats in the room to the way generation X and Y want to be treated at work, it was the true stories of change at Australia Post I found most useful.

What's the future for AusPost in a digitised world?

Tracey shared real examples of the often simple ways ordinary people in their business have made changes that have worked. They show us what can actually be achieved when the starting point is very grim. Which gives real hope for small and medium sized businesses that aren't as tied down by the inertia of a monopoly like AusPost.

Tracey painted a picture of a vast post office workforce laboring under the emotional burden of the fear of change. Imagine you were a postie, one of my schoolmates from 30 years ago still is. Imagine over the last decade the postie doing the daily rounds would feel the bag of mail on their back was lighter than the week before. And next week it will be lighter still as people stop posting letters. They'd be worrying when will the day come there is no mail to deliver and they're out of a job?

To survive Australia Post has to manage a bigger change to the way customers exchange information than past revolutions like telegraph to telephone, horse borne deliveries to airmail, phone to fax. The Internet has changed everything more significantly than any of those innovations. Manage the change they have.

To quote the Australia Post annual report: “For the 13th consecutive year, we met or exceeded all of the performance standards that relate to our community service obligations. We delivered 95.5 per cent of domestic letters on time or early (against our 94 per cent target) and we increased the number of postal outlets to 4,429 nationwide. Total revenue grew to $5.9 billion and our after-tax profit increased by 10.9 per cent to $311.9 million. This means net profit has grown 21 per cent per annum since we enacted our Future Ready transformation program."

What has AusPost changed to keep up? Nearly everything, they had to. Last year they lost $189 million on mail delivery. AusPost now makes more from servicing e-commerce businesses and other activities that didn’t exist just a decade ago. There are secure 24/7 Parcel Lockers within minutes drive of most homes for out of hours parcel deliveries, digital self serve kiosks in post shops and soon digital I.D. recognition software that will mean documents like banking applications and contracts won’t need signatures by hand.

If a bureaucracy can go digital, so can your business

These changes to a huge and diverse business are making sure it can remain competitive as digitisation changes the world. As with most things in business, change management is being enabled at Auspost from the top. CEO Ahmed Fahour is a case study in the new style of management required for the digital age – leadership by openness, not power. This infographic sums it up nicely.

View this image on Pinterest.

Here are some examples of how Ahmed Fahour has let go of control:

1. Let staff fail

Individuals in offices can change their methods behind the counter to see if it works better than current processes without asking prior permission from senior management. If it doesn’t work, no great loss. If it does make an improvement, it’s shared across the organisation.

2. Social media is for everyone

While most government departments still don’t allow social media or even Google to be used in the office, Fahour has let employees at every level of share an opinion on Facebook. Just a few years before only 2 people were officially given the role to manage social media, yet even then there were 15,000 conversations happening on social media each year amongst staff.

Businesses need to recognise they can’t control what staff want, or constantly roadblock how they want to do it. Indeed today, in the words of former Cisco Senior Director Martin Stewart-Weeks, "a network routes around an obstacle." It's the same with staff, they will go around you, or leave.

3. What does the customer want that they’re not getting?

To improve the way they can fulfill for e-commerce customers, staff who had never shopped online were encouraged to do so in work hours. This led to an understanding at many levels of post  employee of what online businesses do well and not so well, and discover what shoppers want from the whole order to delivery process. One consequent innovation is the 24/7 Parcel Locker, which means you don’t have to be at home to receive a valuable e-purchase.

4. What can you do that’s new?

Things are changing fast, so what you’ve always sold in the past is less likely to be as attractive to new customers tomorrow. Again, take inspiration from the top postie:

“We capitalised on the boom in online shopping with the Parcel & Express Services segment earning profit of $354.8 million, on the back of 9.3 per cent growth in domestic parcel volumes. And, despite difficult retailing conditions, Retail Services profit again grew to $200.6 million, mainly through adding new financial and identity services.”

“Initiatives are all focused on capturing our immediate customer growth opportunities in the digital economy – especially in e-commerce, digital communications and trusted services.”

We are constantly exploring the new possibilities with our clients, it's how we help to keep them growing as successful challenger brands.

What if consumers were as determined as the businesses they dealt with?

Making meaningful comparisons as a consumer is challenging, especially with superannuation. Christopher Zinn says we need to understand how to make informed choices when incumbent businesses operate in a "confuscopoly". 

It is a big ‘what if’ because too many businesses profit from the lack of determination of their customers for better products, services and even prices.The public’s desire for improvement is dulled by a widespread disengagement, resignation and inertia that anything they do may actually be much better for them.

And the consumer malaise seems worse in those markets which really count most because of the sums involved: superannuation, health and other insurances, energy such as electricity and telecommunications.

The symptoms are a lack of switching to better offers, which tends to benefit the incumbent above the challenger brand, and even paying over the odds by sticking with the wrong plan and perhaps the wrong provider.

The figures are sobering. The Australian Communications and Media Authority says poor plan choice around telecoms has cost consumers a probably under-estimated $1.5 billion a year.

Superannuation is confusing for customers

The ATO holds more than $18 billion in lost superannuation accounts. And despite more than 11 million Australians are covered by private health insurance less than 40,000 of them switch each year.

The fault is not solely the consumers. The ‘confusopoly’ of the mobile phone market in particular makes meaningful comparisons more than challenging.

Our cognitive biases, which make us particularly vulnerable to decisions around money and cause us to favour the present as opposed to the future, do not serve us well when it comes to assessing strategies around retirement savings.

And the complex and changing rules around health cover and premium rebates tend to drive policy-holders to sit pretty instead of seeking better value.

Of course some consumers are determined and realise a little time and effort in acquiring knowledge of these markets can save significant pain and expense.

But there’s a limit to even their patience and how much effort is worth it for how little a reward. There’s also the issue of expertise and the imbalance of information: as consumers we are amateurs buying from professionals.

We may only purchase a new car every few years, but the sales staff sell them every day, and however canny you are they will always know more about the vehicle, its true value and how to upsell you on various unnecessary warranties.

One way to correct this asymmetry, as it’s sometimes called, is to gather like-minded consumers together and use their numbers as leverage in negotiating better terms.

It’s already happening in specific markets such as energy and insurance as One Big Switch, with whom I used to be director of campaigns, has demonstrated here and overseas.

Another way is selectively reforming markets by regulation. In Australia conflicts of interest with financial planners led to the Future of Financial Advice (FoFA) legislation.

The government is seeking to severely dilute these much needed consumer protections, claiming they are somehow excess ‘red-tape’. In fact they represent a much-needed shark-proof cage for consumers to more safely navigate financial waters.

In the US and UK regulation is helping liberate consumers’ usage data from the back offices of utilities and banks so citizens can employ trusted third parties to crunch the numbers and help them make better decisions.

The determined consumer can take back control

Being determined as a consumer is not just a state of mind, although that helps. In the future it will require the technologies which can bring us together quickly and cheaply to use some people power in markets.

It will also require more consumers to get hold of their own data and then find emerging intermediaries to help them make real sense of the complexity and choice fatigue which bedevils too many markets.

Determined consumers do not need to be told to shop around or read the fine print. They already know that, but they do need help in turning their determination into better decisions.

Christopher Zinn is an independent consumer advocate currently running a campaign to highlight the financial advice protections (www.saveourfofa.com.au). His other initiative is www.determinedconsumer.com.au which is aimed at motivating consumer action. UNO worked with Chris on consumer empowering programmes at CHOICE. He also co-founded One Big Switch as well as being a repoorter/producer at the ABC, Channel Nine and several newspapers.