Paul Wallbank – Brilliant Communications

Category: marketing

  • Lipstick myths

    Lipstick myths

    Is the lipstick theory really true? I’ve been hearing a lot about it lately and I’m not so sure.

    The “lipstick theory” is people will spend money on small, modest priced luxuries in a downturn to make up for not being able to afford big luxuries.

    It’s been used to justify everything from increased fast food sales to Belgain chocolates to expensive beer to, well, lipstick.

    I recently heard it used by a software developer as the rationale for investing in a software as a service product.

    But is it true?

    The Economist isn’t so sure and shows there’s little correlation between past recessions and lipstick sales.

    My suspicion is if it was true in the twenties and thirties, it was more because better manufacturing and distribution techniques meant a better, cheaper product could get to the market.

    Even if the lipstick theory is true, it’s dangerous to assume your product is the same.

    For a start, some lipsticks will do better than others, partly because of marketing and partly because their price points are smarter.

    Should your “lipstick” product be successful, it might not make much money for you anyway. In the last recession we saw McDonalds and other fast food chains introduce $1 and $2 meals, we’re seeing a similar trend at the moment with sub $500 computers.

    These “recesssion busters” may keep your market share up, but they aren’t going to be particularly profitable. Indeed, for the computer manufacturers, the sub $500 laptops may well be cannibalising what’s left of their profitable product lines.

    The reality is a lot of the products that are claiming the “lipstick theory” will save them are really doomed. The vast majority of shops selling expensive chocolate, lingerie, beer and other pricey but non essential products are simply marking time until the effects of the popped bubble reach them.

    It’s best to base your business plans on sound evidence rather than blind hope in an idea that may or may not be true and may or may not apply to your products.

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  • Ignoring your customers

    The new Facebook design has picked up lots of critics with nearly 800,000 users giving it the thumbs down.

    However Dare Obasanjo claims Facebook founder Mark Zuckerburg doesn’t care. Apparently Mark’s view is “the most disruptive companies don’t listen to their customers“.

    That’s true – Steve jobs ignored the howls of protest when Apple dropped support for floppy disks and the Apple Desktop Bus which left millions of Mac users stranded with obsolete equipment.

    Even more famously, Henry Ford told customers they could have any colour Model T they liked as long as it was black.

    Both were right and the customers followed them, although not without some grumbling.

    So you can succeed by knowing your customers needs better than they know them, but it’s a risky ask as Microsoft found with Windows Vista, Ford with the Edsel and Coca-Cola with New Coke.

    Time will tell if Mark Zuckerburg’s right. It’s a high risk strategy though.

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  • Managing your reputation

    Keeping track of what your customers and others are saying is important for your business. Luckily there’s a free tool to let you keep track of your reputation on the Internet.

    This article first appeared in Smartcompany on 17 February, 2009

    Last week at a major telco’s product launch a respected tech journalist piped up that while their new gadget was nice, their network was rubbish and so the gadget wouldn’t work very well.

    The telco’s reaction to this deserved comment was instructive on how large corporations deal with criticism.

    Rather than take the comments on the chin, the telco’s spokespeople canned the journalist and waved around a report stating their network was the greatest thing since sliced bread, or at least since somebody thought of connecting two cans with a piece of string.

    Personally I’d be tempted to point out to the esteemed and highly paid writers of the report that two cans of string are probably a touch more reliable than their client’s network in notoriously remote locations like North Sydney and Martin Place.

    While telco managers usually get away with head in the sand behaviour, business owners in the real world can’t. Their reputation with customers matters.

    In the current business climate, you can’t afford to be dismissing your customer’s concerns. When a customers complains, action needs to be taken and lessons learned from that complaint.

    How business leaders deal with complaints is a real test of how good they are. Handled well, a complaining customer can be turned into a raving fan of your business and a complaint should be an opportunity to review how well you do your job.

    You don’t need to be hosting press conferences with stroppy journalists to find out what people think of you. One Internet tool for managing your reputation is Google Alerts.

    With this, you can set up an email summary of each time your target word or phrase has popped up on Google and have it delivered to your inbox.

    I have all my business names listed with Google’s alert service so I can see when others have mentioned them on Internet forums, blogs or websites. It’s also very handy on keeping an eye out for anyone breaching your trademarks.

    Incidentally, the journo was right, and that particular telco’s network problems have been widely discussed on the net and in the media. It beggars belief the managers and PR couldn’t have expected this sort of criticism if they’d been running these tools.

    The web’s a pretty effective way of getting good and bad news out about a business. If you watch it closely, you can anticipate problems before they bite your bottom line.

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  • Why your business should have its own domain

    Why your business should have its own domain

    In our society where half the population seems to be on the road at any given time, having signage on your company vehicles is one of the most effective ways of publicising your business. 

    Because I spend too much time sitting in traffic jams I get the opportunity to study a lot of this advertising. All too often I see terrific, well done designs let down by poor email or website addresses. 

    No matter how much you spend on snappy slogans and flashy logos, an email address along the lines of fredtheplumber@biginternetprovider.com.au will spoil the effect. Addresses like these make it hard for passers-by to remember, and they smack of someone who can’t afford the less than $200 to set up a business internet domain. 

    One of the great things about the internet is it allows smaller businesses to punch above their weight. With your own domain name, even the tiniest microbusiness is on the same basis as their multinational competitors, and they can do this for less than the cost of a cappuccino a week. 

    Another big plus is your own business domain unties you from your internet provider. In Fred’s case, if he decides to change internet providers, he can’t have his address follow him. With his own domain, he can change internet providers every week without affecting his email and website addresses. 

    Setting up your own business domain is a two-step process; first you register your domain with a registrar and then arrange for a hosting service to look after it for you. To simplify things most registrars, hosting companies, internet providers and web site developers can do it all for you. 

    Whether you do it yourself or get someone to do it for you, it’s important to make sure someone at your business is designated as the administrative contact. This means you have ultimate control over the domain and you are the first to be told when fees are payable or domains are expiring.

    There’s no reason in my mind why even the smallest business doesn’t have its own domain. Compared to the costs of a Yellow Pages listing, local newspaper ad or even car signage, a domain and the associated hosting costs are almost nothing.

    Your business name is an important asset. If your organisation doesn’t have its own domain, regardless of its size, then you aren’t getting the most from that asset.

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  • Every business is different

    different

    One of the things I’ve always believed is every business is unique.

    Your character, your staff, your processes, your customers, your premises and every little thing your business does makes it totally different to every other business in the world.

    That’s the beauty of business and it’s why any advice you recieve should be tempered by the knowledge that no-one knows your operation better than you.

    This isn’t to say you shouldn’t listen to advice. You should because a fresh pair of eyes or ears can alert you to something you’ve missed.

    This isn’t to say you shouldn’t experiment with new ways. Those businesses who don’t will probably not survive the next five years.

    But what’s works for the guy up the road won’t necessarily work for you. His blog might be successful while yours may fail; she might be able to ditch the Yellow Pages while you cannot; they might be able to use social media while your contacts ignore it.

    So understand your own businesses, its staff and the customers.

    And most of all understand your own strengths and weaknesses.

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