Paul Wallbank – Brilliant Communications

Category: business advice

  • Omni Channel Buzzwords

    Omni Channel Buzzwords

    Retailer entrepreneur Gerry Harvey yesterday unveiled his strategy to arrest the declines in his home goods chain’s sales.

    One of the key points in his investor presentation was “continued investment in strengthening our Omni channel strategy”.

    When asked exactly what an “omni channel strategy” is, Gerry reportedly admitted that until last week he had no idea what it was.

    For an entrepreneur whose business model is suffering badly in the face of changed markets, Gerry seems to be remarkably flippant about how he and his team are going to react to the challenges.

    Gerry lack of understanding is bad news for his team, because appears there is no management commitment to the major changes Harvey Norman, and many other incumbent retailers, are going to have to make in order to recover the sales and margins they have long been used to.

    The “omni channel strategy” is an interesting beast, which was described by Myers CEO Bernie Brooks last April on ABC’s Inside Business.

    We’re building our own omni-channel approach, which will include everything from kiosks in store right the way through to being able to provide very good office online up to 250,000 items, free delivery.

    What’s interesting with the retailers’ talk of “omni-channel” is the talk of service. Both Myer and Harvey Norman claim customer service is the centre of their strategy but their emphasis in the past has been to reduce customer service.

    The reduced emphasis on service has been part of the decline of the both chains; Harvey Norman could get away while consumers were happy committing to “no-interest for 72 months” finance plans, while Myer steadily declined as their key difference with discount chains like K-Mart and Target was eroded.

    Hopefully both Gerry Harvey and Bernie Brooks will get their omni channel strategy strategies working, though it will be interesting whether both can get their management teams to re-discover the meaning of “customer service”.

    Without getting the service right, their “omni channel strategies” will just appear to be another management buzzword in a declining business.

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  • Competing in a high cost world

    Competing in a high cost world

    It’s often said that Australian businesses can’t compete and the nation can no longer can support manufacturing or high tech industries.

    With the high Australian dollar, many economists, business leaders and politicians have said industries have to adapt to being an expensive economy. Interestingly, few of these experts explain how businesses should, or can, adapt.

    At the recent Kickstart forum I had the opportunity to meet two Australian companies succeeding with high tech products and using the high dollar to their advantage.

    David Jackman of Pronto Software, a thirty year old business intelligence company, is proud of the fact the business he leads does most of its development in Australia. As business owned by it’s employees – Pronto had  an employee buy out in the late 1990s – he sees his role as building the business to last centuries like some European businesses.

    Linus Chang developed his Melbourne based business, Backup Assist, when he discovered the data backup tools built into Microsoft Windows weren’t very good. Taking the basic Microsoft products, he added the features that made these tools usuable at a fraction of the cost of bigger companies’ data backup software.

    Today Backup Assist is sold in 124 countries with the US as the biggest market.

    Both Backup Assist and Pronto find keeping the bulk of the software development in house in Australia makes sure they are producing high quality, effective products.

    Software development isn’t the only sector dealing with the high cost evironment, David Jackman says Pronto has many customers in the Australian manufacturing industry who have adapted to a high cost environment with niche and high value added products.

    Identifying these opportunities is where the challenge lies; what do our businesses do well that customers in international markets are prepared to pay for?

    We also have an advantage in being a relatively open economy with first world standards. This is another reason why investment in new infrastructure like the National Broadband Network is important.

    One thing is for sure, selling low priced commodity products with small margins is not where the future lies, even if the Aussie dollar collapses.

    We have success stories and businesses adapting to being a high cost economy, it’s a matter of understanding how our industries can add value while  do this.

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  • Pro Bono

    Pro Bono

    “Could you write a guest post for our corporate blog?”

    “Sure, I’d be delighted. How much are you paying?”

    “Sorry, we don’t pay. You’ll be getting a lot of exposure.”

    This organisation had a profit of over five billion dollars last year. Imagine how much the outfit would be making if the managers and executives contributed their time for free in the hope of getting some “exposure”?

    It’s nice to be recognised as an expert, but if you’re not going to make a living then it’s just an expensive, time consuming hobby.

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  • The over reach

    The over reach

    Sometimes we’re on a roll, all is going well, everything we touch is successful and those around us seem not to be able to win a thing.

    Then we over-reach.

    We get smart, we get cocky, we decide one more demand or humiliation will show the other guy just how good we are.

    And everything starts to wrong, because we took things too far. We over-reached

    The greatest asset all of us can have is a little humility and respect.

    Rather than wanting everything, maybe leaving a little bit on the table for the other guy may turn out to be a wise business move.

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  • The limits of SEO

    The limits of SEO

    On their busiest day of the year, the florist site Ready Flowers had a shocker. With dozens of customers upset their Valentines Day flowers didn’t arrive.

    Their reaction was to stop answering their calls, as one Ready Flowers angry customer on the Whirlpoool website said;

    Calling through to their 24/7 hotline was no good, all it told me (after 30 mins on hold) was a automated message saying it was valentine’s day (duh), that they were busy and that I should leave a message.

    So on their one key day of the year, they didn’t have enough staff to meet demand.

    Ready Flowers has been a success story expanding to 17 countries since being founded in 2005. The service is a modern version of the Interflora model where the company takes the order which they pass onto a local florist who creates the flower arrangement to Ready Flowers’ or Interflora’s specifications.

    The risk for Ready Flowers is that the local florist isn’t very good and that’s where customer support and tight supplier management comes into place.

    Which is clearly where they fell over on Valentines Day.

    In a 2009 interview with the Financial Review that’s quoted in the Sydney Morning Herald, Ready Flowers’ founder Thomas Hegarty claimed his success was due to good search-engine optimisation, online advertising, and landing pages for every delivery location.

    Missing is the term “customer service” – in that interview Thomas went onto say, “We saw that we could add value by applying more efficient technology without needing a large number of people to run the business”.

    This is the flaw in the web 2.0 business model. In the real world, businesses don’t run on remote control – mistakes are made, deadline missed and people do dumb things which the algorithm can’t handle.

    Over the last thirty years, customer service has been seen as an unnecessary cost centre. This was fine in a world where automated, low margin and fast moving goods were seen as the business model to emulate.

    If you can’t compete on price, it’s service that matters and this is where you’ll need more than a lost cost call centre and a well optimised website.

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