It’s Still About Opportunities to See

Opportunities to See - Jeremy Larochelle, MBA

 

Gone are the days of malls, mom and pop stores, and various other brick and mortar outlets. They have been replaced by online merchants, specialty “long-tail sites like Etsy,” demand channels such as eBay, and social sales through Facebook, Pinterest, and Instagram among others.

 

When the distribution point of your product changes, it is imperative that your marketing strategies change with it. Why? New distribution points suggest you are dealing with consumers who have adopted new purchasing behaviors or, perhaps even more challenging. You need to re-train existing customers on these new digital protocols without losing their business. A great example lies in the fact that online buyers can’t physically touch the merchandise before they buy it. For some, who have grown up in the “online” world. This isn’t an issue. However, for department stores such as JCPenney’s and Macy’s with a funnel full of brick and mortar customers used to handling the merchandise. This is a problem that must be addressed.

 

The savvy marketers at Zappos quickly found the solution to this problem with their free returns and exchanges policies. Today, major retailers (including the aforementioned) have followed suit and now offer free returns. Some go so far as to streamline the process by providing return labels inside their packages and expedited reimbursement paths through the customer’s account section of their site. While John Q buyer still can’t touch the product before he makes his purchase, these policies reduce the perceived risk of their pre-purchase rituals and help close the gap between the brick and mortar and online worlds.

 

This is just the tip of the iceberg in regards to the changes the new “online” marketing landscape has forced on firms large and small. Customer reviews have become imperative for a company’s success as well as PCI compliant websites, PayPal payment channels, mobile-friendly landing pages, and social listening and engagement by the brand.

 

However, one core marketing element remains unchanged.

 

Opportunities to See still dominates the marketer’s playbook. Ultimately, the adperson’s primary goal still boils down to getting the brand name in front of as many relevant consumers as possible, so you can get them into the sales funnel where they will start the buying process.

 

I will argue that it is even more important now than ever.

 

In the past world of brick and mortar selling, competition was somewhat limited by physical location. E.g. you had to have a store or place for your customers to go to compete. Today,  many barriers to entry like this have been torn down like the Berlin Wall. It no longer matters where you are located or how much intellectual and financial capital you have. If you have the will and an internet connection. You can compete. Last year, popular online commerce platform Shopify announced the company supported over 375,000 merchants alone by the end of 2016.  That’s just one “out of the box” provider that caters to the “limited entrepreneur.” Add in other services such as Volusion, Magento, Bigcommerce, Wix, WordPress, and proprietary sites and it is very likely your business (no matter how niche it may be) is competing with a plethora of other brands across the web for the same customer’s attention. However, it get’s even more difficult. Since it takes the average online patron numerous views across multiple channels before they click “buy now.” Getting your message in front of those customers as many times as possible becomes a key ingredient to your success.

 

Yes, the distribution channel has changed and, yes, marketing strategies have changed with it. However, don’t let modern agencies scare you with new terms such as bounce rate, page views, click-through rate (CTR), cost per thousand (CPM). It all boils down to one basic fundamental that hasn’t changed in marketing strategy.

 

Opportunities to See.

 

 

 

MBA’s – The Mad Scientists Behind the Scenes

MBA's - the Mad Scientists of Business

 

I don’t think many get it.

 

I know I didn’t ten years ago.

 

Maybe it is because the “MBA” has lost its luster, and in some ways it has. However, for those who have successfully completed the program. We seem to understand just what an MBA entails and the knowledge it provides.

 

MBA students study leadership, operations, corporate social responsibility, project management,  international business, and marketing among other areas. All subjects you could pick up with a general Bachelor Degree. What sets the MBA, a graduate degree, apart from its predecessor is the depths to which MBA students dive into each subject. And, surprise, it’s not just reading, but a whole lotta’ math folks.

 

Much like traditional scientific studies, MBA’s collect and categorize information, create their thesis, and try to disprove said thesis through mathematical analysis that includes algebra, calculus, and plotting lines on a graph among other things. Through this information, the MBA trained mind can tell McDonald’s that if they lower the price of fries by 12¢ soft drink sales will rise by 4%. Teach Target leadership how to calculate the optimal order quantities to reduce overhead costs associated with held inventory. Or Amazon executives where to place the best distribution center in Europe based on mileage, load weight, product lead time, taxes and physical coordinates among other data points.

 

As a society, we like to celebrate great entrepreneurs like Jobs, Page, and Bezos. All are of the genius caliber and have become brand names in their own right. They created something from nothing and rose from the ashes just like any great movie plot, which is probably why we gravitate to their stories.  However, at some point, these great leaders needed to onboard people who understood the science behind doing business to complete the left brain/right brain development of their global entities. Perhaps more importantly, by bringing on leaders to “run their business,” these great minds were able to focus on creating new products, entering new markets, or even exploring their own blue ocean opportunities. As a result, their astonishing leadership skills and the scientific training of their top-level managers birthed dominant public brands.

 

Before I attended college, I was an entrepreneur. I learned everything from accounting, marketing, customer service, and management while also developing and delivering our products and services “in the trenches.” It wasn’t until nearly ten years later that I picked up my MBA. Every day I wonder just how much larger my brand would have been had I known this science behind doing business and how it could have helped predict, prepare, and position us for astonishing growth beyond what we already achieved.

 

At that time, like many, I was uneducated in the value of an MBA. The mad scientists behind the scenes of business.

 

 

Si vis pacem, para bellum

Be Prepared for Business Wars Like A Samurai
Si vis pacem, para bellum, translated  “if you want peace, prepare for war” is an exceptional mantra to adopt in both your personal and business lives.  While it sounds like something that would come from Sun Tzu’s Art of War. It does not.  Rather, the phrase comes from book three of De Re Militari by Latin author Publius Flavius Vegetius Renatus. A first-of-its-kind war manual for Roman troops.

Business management is often looked at as a militaristic endeavor.  We have the war room, wear suits that dictate our prestige in the company, and even give marching orders. As such, we naturally gravitate to the military leadership and wisdom from war-tested individuals such as Tzu and Renatus.

It is important to note that when you read these manuals you will notice that much of the works are devoted to preserving life and, especially in Tzu’s work, avoiding a battle until absolutely necessary. As he points out, actual battle is costly – you lose both life and wealth in the process.  Tzu is consistent in his message of continually analyzing your opponent, the battlefield, and your position relative to both so that when the opportunity or need for war arises. You are better prepared to end the matter quickly and efficiently.

This is exactly the same in business. As a leader, you should always know what is going on in your battlefield.  Is a long-time supplier suddenly providing materials to a competitor?  Are there signs of your market shrinking… expanding… or disappearing altogether? Are your employees showing signs of complacency? Perhaps, your customers are discussing other options under their collective breath? These are all items a general should not only know but constantly analyze and calculate against the firm’s Key Performance Indicators (KPI’s).

These suggestions are not meant to create paranoid leaders. Rather, they are to remind said boardroom generals that peace in business is not achieved because you defeated a competitor. You will always have new competitors, fleeting customers, changing regulations, and world events that will impact your bottom line. Peace comes from accepting those fates and doing everything in your power to prepare for the wars that may come, so your army can win the battle quickly and efficiently.

 

 

 

The Simpsons-Curating Strategy Genius of FX

The Simpsons Curating Strategy

PUBLIC SERVICE ANNOUNCEMENT!

If you have cable, you can use the FXNow App and watch every single Simpsons episode right now.

 

What could be better?

 

There is a “random” button you can hit.

 

This is the future!

*****

No, I am serious about this. FX is doing something unique with TV. They are altering the viewing behavior. So, while other services invest billions in product procurement. FX is using a different strategy. They have licensed a well known and powerful brand with 618 episodes over 28 seasons.

 

That is a LOT of content.

 

There is a HUGE chance that, unless you are the most adamant Simpsons fan, you have missed a few episodes…maybe even a few seasons.  The result – hit that random button. If that wasn’t enough, they have numerous Playlists including every Treehouse of Horror, Classic Ralph Moments, Valentine and Christmas episodes among others.

 

Sure, this takes a lot of curating and back-end work to support. However, and I am not offering ANY proof. These costs must be less than developing just one new season of Game of Thrones.  And they are only doing eight of those.

 

Kudos FX Networks for using a curating strategy to sneak in a competitive edge in a very tough market. Kudos.

 

 

Underpromise….Overdeliver.

Forecasting For Business Can be Tough

 

Forecasting a prospective market can be quite tough. Especially if you are a small business that lacks the resources to acquire and use costly third-party database results and analytical software. In some niche markets, data can be even harder to uncover even with these resources at your disposal.  For instance, I focus on the drum industry and even though there are a “crap ton of drummer’s out there” –words from an SEO consultant I worked with. It is tough to get empirical evidence on their behaviors. Luckily, I had developed my own forecasting model in grad school and was able to use that when working on my business plan for Spirit and Groove™.

My model follows a four-step process that creates a funnel from a 100% total market through a potential audience to the final stage of prospective buyers. The last step is a calculation I call the “gut metric” that allows me to adjust the data based on a “gut” feeling. Some would argue the use of this step, but I disagree for two reasons.

Number one, data is both qualitative and quantitative. Analytical software rarely includes the qualitative metrics. Algorithms are great, but there is a reason even Google and Facebook continue to seek out ways to model the “human” perspective. Number two, having run my own company, worked for firms of all sizes, and studied the business plans of countless publicly traded brands during my MBA studies, I have a refined understanding of what is actually possible when you have that empirical evidence in your hands and I am able to sift out marketing “pipe-dreams” from that data.

Perhaps the most important, my model aligns with the concept of “underpromise…overdeliver” – a theory I learned with one of the world’s top brands.

While working as a retail specialist and store mentor with Apple, I witnessed firsthand just how powerful this corporate mantra can be. Apple doesn’t simply include it in their employee manual and call it good. No, they drill it into the corporate-wide psyche. As a retail specialist, it is a concept you learn in your initial training before you are introduced to any of their coveted i-products. At Apple, you are taught to always tell the customer their iPhone would be fixed in 30 minutes, even if you are sure it will only take 10. This way, you are able to increase the consumer’s buy-in when you do deliver ahead of schedule, and that is just the tip of their underpromise…overdeliver iceberg.

If you follow the tech giant in the news, especially when earning’s statements come out. You will notice that (somehow) Job’s brainchild regularly outperforms their own corporate estimates. There is no doubt in my mind that part of this phenom lies in a brand-wide “underpromise/overdeliver” mentality.

Business owners and managers often “over-assume” their results will beat expectations. Managers see the glass as half full because their bonuses and growth-potential are directly related to those results. Owners usually adopt the same ideal, but for different reasons. They are emotionally attached to the brand, see things others may not have in their field of vision, and have much more on the line, which forces them to hope for better-than-expected results.

Neither of these are good ways to engage in business. Yes, overhyping serves a purpose in specific sections of the marketing mix. However, overhyping your forecasts with owners can be detrimental. Imagine what an investor would think if you told them you would hit 1,000,000 units sold in the first quarter of 2018, but you only hit half. Now imagine, that happens every quarter. Soon you will lose their confidence…then their support.  Now instead, flip the coin. You forecast that you plan to sell 500,000 units in the first quarter of 2018 and you end up selling just over 10% of those figures. To you, it may look like slight gains (maybe even losses, because through your rose colored glasses you were hoping for one-million). However, to that investor you now over-performed. If you continued this method for future quarters and witnessed similar results. Your investor’s confidence would grow exponentially and with that, your opportunity for explosive future growth would be solidified via their willingness to spend more on your ideas.

Remember, the underpromise/overdeliver concept is rooted in marketing and not finance. It is not designed to “cook the books” or to “sell a lemon.” Rather, it is a mantra that your entire team should adopt, so that it will become part of your overall corporate culture and brand. When properly instituted it impacts both sides of the ball. Your customers will constantly be “surprised” by your service while your investors will continue to experience a responsible and growing company worthy of continued investment.

 

 

The Dangers of Over-negotiation and Increasing Perceived Risk

Striking a Balance When Negotiating

 

When negotiating, be careful not to go too far. This week, I was negotiating a small sale with someone…. let’s say. Not that experienced in deals. We had both made our demands and concessions and it was clear a balance had been struck. When it came time to close, he made another demand that would have brought us back to square one. I researched my market, my position, and kindly told him of other persons selling a similar item. However, if he still wanted my product. He could get it for market price.

My ultimate position was not enacted due to emotion. Rather, this customer’s final action increased my perceived risk of the deal. The concessions he initially earned, were judged on my risk analysis that he could pony up the funds, close, and wouldn’t return a vintage item that could be harmed with further shipments. Remember, risk is part of the deal. We learn it with car insurance, health care, and mortgages. It should be a part of any decision.