Decoding the new economy

The creative deadbeat

There’s some terrific excuses for not paying bills, some are worth collecting once the pain of extracting the money is over.

This post originally appeared on the Xero Accounting blog under the title “Sorry, we’re not paying you”.

“Your star readings were negative after you serviced my computer,” the astrologer said sweetly, “so I’m afraid I will not be paying you.” Then she hung up. It was a good start to the week.

In business, bad payers are an unfortunate fact of life, one of the redeeming features is most of us end up with a great collection of reasons deadbeat customers give to justify not paying their bills.

Along with the downright strange is the quasi-legal; “your tax file number is in the wrong format, so we can’t pay your invoice” is one of the better excuses I heard in the years of running my business.

“I gave your technician a cup of coffee while she was here, so you’ll have to give me a credit” was another great claim.

A teacher once threatened to report my business to her union on the basis we were exploiting low paid women workers. The funny thing was we’d cut her a big discount because I realised she’d struggle to pay the full rate.

Big boys’ excuses

Those excuses were from smaller customers, but the corporate sector can be no better, some of them treat their suppliers as banks who give them an interest free loan

One multinational suffering cash flow problems decided to pay all bills after 270 days, regardless of the agreed payment terms. They didn’t bother with excuses and their accounts team were blunt – if suppliers didn’t like it, they could sue and wait five years for their money.

That company had its come-uppance when every supplier in the country put the company on a cash up-front basis to avoid a nine month wait.

Another big corporation decided to tangle their contractors in knots by implementing an arcane system involving submitting an invoice by the 30^th of month one, backing it up with a statement of account by the 20^th of month two paying thirty days later. Make a mistake or miss a date and the whole cycle started again.

Probably the most irritating excuses can come from government departments, a common one being, “our budget has run out for that item, so we can’t pay your invoice until the next financial year. Would you be able to reissue it under a new purchase order for paperclips?”

Chasing the bad news

A truism with collecting debts is the longer we let them slide, the less likely it is they will be paid so we have to be on the ball in chasing those late payers.

In Xero’s accounting software you nominate the due date when creating the invoice and this will appear on the copy the customer receives.

As soon as the due date has passed without payment, follow up with a reminder or a phone call.

Whenever you have a slow payer, it’s best to talk to them. Showing you watch our money closely indicates to the customer that you are serious about your bills.

Identify problem customers

The good thing about late payments is it’s a pretty reliable guide to who is a bad customer – if they constantly pay bills late, then you don’t need them in your business life and it’s time to get rid of them.

More insidious is the good client gone bad – a previously good payer who suddenly starts making excuses could be in financial trouble. If so, it’s worthwhile making sure your business isn’t too exposed if that client suddenly goes under.

At one client the secretary insisted on paying most of our bill out of petty cash. Two weeks later the company, a Scotch whisky broking service, closed shop and left thousands of angry customers and suppliers out of pocket. It took the creditors ten years to get a fraction of their money back and the secretary did us a great favour.

Not every late payer is a bad guy though, even in the best of times good customers can hit a bad patch so making arrangements with a good customer who has hit a rough patch can be a good long term strategy.

Incidentally, the astrology lady eventually did pay her bill. Attached was a note explaining something about planets transiting Scorpio during a waxing moon. We never heard from her again.

At least with bad payers we get to have a laugh at their excuses later, what the best stories you’ve heard from deadbeat customers?

Leaving Facebook

Shutting down an account with the popular social media service isn’t easy but can be done.

In our social media segment for December 2011’s ABC Nightlife a listener asked about closing down their Facebook account.

Leaving Facebook isn’t easy, but it can be done and we’ve covered closing down a Facebook profile on the Netsmarts website.

The December Nightlife spot looked at a lot of social media issues and answered other listener’s questions about some of the challenges online. Some of those questions are listed on the page and the program

December’s spot was the last for 2011 and next scheduled Nightlife spot will be on February 9 however we will probably have some segments over the Christmas period and we’ll let newsletter subscribers know as we find out.

Comparing local review and search sites

How do the local search services compare?

With the Australian launch of local search and recommendation site Yelp, it’s worthwhile comparing the different sites to see how well they worked.

The sites work in different ways, some – like Sensis Yellow Pages and True Local – are online directories that search just the title and description of business.

Yelp, Foursquare and Word Of Mouth Online, are socially based and derive their searches on the content and number of community reviews. Their algorithms, the formulas to figure out what customers are looking for, are more complex than the basic online directories.

Most complex of all are the hybrid searches, notably Google Places and Facebook Places, that build local upon their search and social media data.

Each model has it’s own strengths and weaknesses which shows when we do a search. Due to time restrictions we only did two.

Looking for brunch in Neutral Bay, NSW

The first search was using what somebody might be expected to search for on a casual weekend or holiday morning. Neutral Bay and surrounding suburbs have plenty of cafes catering to the brunch crowd so it should be expected to return plenty of hits.

Yelp

The new contender only found one local result and the rest being on the other side of the Harbour Bridge, including one at Bondi Beach which may as well be in the Upper Amazon to the average Sydney North Shore dweller.

Interestingly, entering neighbouring suburbs changes the first two or three results to that suburb but the subsequent listings are the same remote locations as for the Neutral Bay query. This might indicate popularity with the current Yelp users or may be part of the package merchants get when they pay for a listing.

True Local

News Limited’s True Local disappointed one cafe in the district was identified and the number one result was in the city.

This poor results are probably due to the word “brunch” not appearing in the local cafes’ descriptions or titles, but this is a serious weakness for True Local, particularly in a district where they dominate the local news media.

Google Places

Surprisingly, Google Places returned an extremely poor result with no local businesses found.

Again, this is probably due to the failure of business owners to ensure keywords are entered in their business description and it illustrates how Google is allowing an opportunity to pass them by.

Facebook Places

Nothing. Nyet. Zip. No brunch for you.

Yahoo!7

Another poor result that has just scraped information off the web. It shows the weakness of the Yahoo! and Channel Seven joint venture which, like News Limited, is letting opportunities pass.

Bing/NineMSN

Probably the most disgraceful of the results, NineMSN returned two cafes for the whole of Sydney, a city of four million people.

The second result entailed, according to Bing’s directions, a 38km drive timed at an optimistic 23 minutes involving $9 in tolls and an illegal u-turn.

NineMSN’s performance shows just how irrelevant Microsoft has become in the online space and their Australian joint venture partner is more interested in selling big integrated campaigns to advertising agencies.

Given NineMSN and Bing are the default browser and search engine on nearly two million computers sold in Australia each year, not having a local business strategy is squandering a massive opportunity.

Citysearch/Sensis

Founded by Fairfax, Citysearch could have been a great success combining the assets and readership of Fairfax’s metropolitan and local newspapers coupled with their experienced sales teams selling advertising space and subscriptions. Good management could have done this.

Sadly Fairfax was being run by Professor Fred Hilmer and his army of power suited McKinsey consultants and Citysearch was eventually sold for a pittance to Sensis, who have allowed it to shrivel away as the zero result for our search shows.

Eatability

Eatability was a genuine surprise, returning no brunch establishments in the area. The only thought is that no cafe in the neighbourhood has the word “brunch” in their keywords. Still a very poor result.

Urbanspoon

The web version of Urbanspoon returned the most bizarre result, correctly finding one local cafe but misinterpreting the address as being in Bankstown on the other side of Sydney.

Urbanspoon’s iPhone app returned a far better range of results in surrounding suburbs although it only found one cafe actually in Neutral Bay which wasn’t the one incorrectly found on their web app, which didn’t appear at all.

Word of Mouth Online

Word Of Mouth Online delivered the best result of the web pages with two of the first three results being relevant. Of the other seven, they met the criteria of being within a 5km radius of the location which in Sydney can be a 12km drive.

The results would have been better with more local establishments but it appears the keyword “brunch” hasn’t been used by many of the WOMO reviewers.

Note: After the review I was contacted by the founder of WOMO, Fiona Adler, it appears some of the reviews have have been updated in the meantime. I’ve changed the results below, but the left the one above as it was correct at the time of the review.

Foursquare

Like Yelp, Foursquare relies heavily on users’ contributions and this shows in the flaky, almost useless results for our search terms on a web based search.

Foursquare’s iPhone app was far more efficient, identifying a range of good venues in the area which were ranked according to friends’ recommendations.

Sensis/Yellow Pages

Again, “no brunch for you.” It’s almost scandalous that Yellow Pages has no entries at all for “brunch” for an inner Sydney suburb.

Redoing the search

Clearly the term “brunch” is problematic in all the services, so as a check here’s the relevant first page results for other search terms on each of the services;

Service	Café Neutral Bay	Breakfast Neutral Bay	Lunch Neutral Bay
Yelp	7/10	2/10	7/10
True Local	9/30	0/30	0/30
Google Place	10/10	0/10	10/10
Yahoo!7		not relevant
Bing/MSN	3/10	0/10	0/10
Citysearch	6/10	3/6	4/4
Eatability	40/50	8/8	23/31
Urban spoon	3/3	0/0	0/0
foursquare	3/20	1/20	1/20
WOMO	8/10	2/10	5/10
Sensis	7/10	0/10	0/10

As we found with the earlier search, Yelp was somewhat inconsistent and no doubt the social aspects will see it improve as more users come on board, the results are highly dependent on the terms used by reviewers and this will affect the search results.

True Local’s score was surprisingly bad, the search for “cafe” found 12 places but three are long closed. “Breakfast” listed B&B accomodation and “lunch” found outlets in the city and Eastern Suburbs.

Google Places also disappointed on “breakfast”, picking up some B&B establishments along with some city cafes. This is almost certainly due to keywords missing in descriptions.

Yahoo!7 doesn’t get a rating as all it does is scrape other sites and often refers you to other search services. They are just going through the motions.

Microsoft and NineMSN’s service again failed dismally; the “cafe” result was poor, “breakfast” looked for B&Bs and “lunch” amazingly didn’t find a thing in Neutral Bay.

Citysearch’s results for “cafe” found nine places, three of which are long closed which indicates the lack of maintenance their database receives. Encouragingly, Citysearch was one of the best performers for lunch and dinner, albeit only on four and six places found.

Eatability had by far the most impressive number of results, however a large proportion of the places have closed and are not flagged as such. This probably indicates a lack of maintenance by the owners.

WOMO was good and like Yelp their results are highly dependent on the words used by reviewers, so key words could be missed simply because reviewers didn’t use them.

Sensis performed well on “cafes” except that three of the ten listed were closed. The lack of results on “breakfast” and “lunch” is due to no places having those words in their name.

Conclusions

This comparison is not scientific, being based on a narrow search and small sample size, but there’s a few things we can take away from the experiment.

Search is still young

Right now, search is still a crude tool.

From the results, we can see that the keywords used by reviewers and businesses matter. If the public are looking for “brunch” and that isn’t on your cafe’s website and online listings, then you won’t appear.

Over time that will change as the web and search engines get smarter but right now search is still at a basic stage in its development.

You have to be there

Customers are using these tools to find what they need and if a business isn’t listed, then they can’t be found. Setting up a profile and getting some favourable reviews is important.

The business who are being pro-active are the ones who are succeeding.

There’s a lot of opportunity

It’s no surprise that older organisations like Fairfax, Sensis and Microsoft are failing to understand local search. What is suprising is how poorly the newer players like Google and Facebook are doing.

This opens up a lot of opportunity for services like Yelp and Foursquare in adding value to the data already available through services like Google, Facebook and Sensis.

Yelp’s tie up with Sensis makes a lot of sense from the US company’s point of view; they get to ride on Sensis’ sales team, maybe some licensing fees and – most importantly – they can access the richest, albeit not always accurate, database of Australian businesses.

For small, local business there’s a lot of opportunity as well. By getting online and registered on these services, it’s possible to become more visible and improve your competitive position.

The market’s young and there’s a lot of potential for disruptive players. It will be interesting to see how incumbents deal with the threat.

Tony Delroy’s Nightlife: Our digital reputation

How important is our online footprint?

December’s Tony Delroy’s Nightlife looked at the risks of social media sites like Facebook, Twitter and LinkedIn. Along with being a great way to communicate with family, friends and colleagues using online services can have some unexpected effects.

Program podcast

A recording of the program is available from the ABC’s Tony Delroy’s Nightlife webpage. You can listen to it through the site or download it and listen to it as a podcast.

Topics covered

Tony and Paul covered a range of topics including the following questions;

Are we living in the social media age?
What is social media is?
Why people use social media?
How some folk have come unstuck using social websites?
Can doing the wrong thing hurt your reputation or career?
What the risks are during the christmas party season?
Are there too many social media services?
How businesses can really use them?
Where will these services go next?

Listeners’ questions

We had a great range of questions and comments from listeners and those we promised to get back to included how to shut down your Facebook account and the link to report abuse on the service.

Reporting Facebook abuse

If you’re being harassed on Facebook, you can report misuse at Facebook’s Help Centre. Their page includes instructions on dobbing in underage users, blocking irritating people and how to use their privacy settings.

Deleting a Facebook profile

Leaving Facebook is not easy, so on the Netsmarts website we have the detailed instructions on deleting your Facebook account.

Note with these instructions that you need to disable any applications you may have installed on Facebook before deleting the account. When you go to the Applications page you may be shocked at how many things are connecting to your page.

Do we have too many social media services?

Tony asked if we have too many social media platforms.

This is a topic we’ve covered previously on the website and while there’s no doubt many of the services around today won’t survive, some will become increasingly become important.

Next Nightlife tech program

Our next program will be on February 9 next year. We will probably have some spots over the summer break and we’ll let newsletter subscribers know about them as soon as we do.

The world of smaller margins

Many of us are going to have become used to a less profitable market.

“We never get expensive trips anymore,” lamented the IT journalist, “every year we used to get a trip to Las Vegas, London or Singapore.”

The decline of journalist freebies is one symptom of the world of declining margins. In the case of the IT industry, most vendors have seen their profits shaved and the days of flying the press around the world to product launches and parties is an unaffordable luxury.

A recent Time story, When Whenzhou Sneezes, illustrates the problem on a broader scale.

In Wenzhou, a provincial Chinese city, factory owners found their margins were being squeezed and they could make better money in property speculation, which of course rarely ends well.

For the IT industry, we saw the rise of “crapware”, where computer manufacturers started added trial programs that slowed their systems and detracted from the customer’s experience.

That’s madness but Micheal Dell, the founder of Dell Computer, pointed out adding this rubbish allows them to sell computers $50 cheaper.

Assuming margins will always be fat, and then fighting market trends when those profits start to erode, are two serious management mistakes that are being repeated across industries and by entire nations.

Right now the world is changing and there are few sectors that have been profitable for the last twenty years that won’t be affected in the post-consumer society.

It might be worthwhile considering where your margins are and how they are changing, then resisting the temptation to do silly things. Although cutting back on journo junkets might not be a bad idea.

Santa’s online business checklist

The run up to Christmas is a good time to make sure essential business information is online

Regardless of what sector your business is in, the web has become the way customers find us. Giving the key information shoppers are looking for is good start to getting their business.

An analysis by search engine giant Google of Australian consumers’ online Christmas shopping habits shows how the web is evolving as it becomes the main way customers discover businesses in the crowded marketplace.

Even if your business isn’t in retail, it’s worthwhile paying attention to the survey as a guide to what customers – both in the business to business (B2B) and business to consumer (B2C) spaces – expect online.

Do you list opening hours?

Number one failure of many sites is they don’t list opening hours or hide them. Warehouses, distributors and suppliers are particularly bad for this and if you’re in retail it is the unforgivable sin.

Your operating hours have to be clearly shown on the front page and come up early on a mobile site, people don’t want to navigate ten menus, subscribe to your newsletter or, worst of all, have to call you to find out if you’re open Sundays or in the evening.

List shut down and public holiday hours

If you’re in an industry that shuts down during the Christmas break, make it clear when you won’t be available.

Sending out a terse email message at 10am on the day of the close down and putting a sticky taped note on the front door that your accounts, receiving or sales department will be shut for two weeks doesn’t help your business or your customers.

Where are your contact details?

Probably the most bizarre aspect of hospitality industry websites is how many bars and restaurants hide their location.

This is fine if you’re one of these Melbourne laneway hipster haunts where only the ‘in-crowd’ are welcome, but most businesses actually want customers to find them.

Have your address and a map on your site showing exactly where you are. If you are in hospitality or retails have a mobile version that shows this first so lost shoppers and taxi drivers can find you.

Are local listings up to date?

A lot of mobile phone applications get their data from services like Google Places and True Local so get your listing up to date with these services, making sure you have accurate Christmas trading hours and that their maps accurately show your location.

The good news for hard pressed retailers is the overseas online threat fades in December as foreign websites can’t guarantee delivery after the first week of the month and local web outlets drop out around the 16^th.

If you want to grab those last minute shoppers – which includes most men – then you’re going to have to make sure they can find you when they pick up their smartphone or log into their computer.

As Telstra have found, people are no longer turning to the phone directory and calling you for information, they expect contact details and opening hours to be clearly on your web site.

The web is where our businesses have to be, so make sure you can be found there.

Spotting a security charlatan

The tell tale signs of technology and web falsehoods

Google’s Open Source Programs Manager, Chris DiBona recently pointed out how IT security industry charlatans keep making false claims to push the sales of their software products and consulting services.

“If you read an analyst report about ‘viruses’ infecting ios, android or rim,” says Chris, “you now know that analyst firm is not honest and is staffed with charlatans. There is probably an exception, but extraordinary claims need extraordinary evidence.”

Sadly, the computer press tends to accept these extraordinary claims at face value and allows the charlatans to repeat their snake oil pitches without subjecting them to critical analysis.

Fortunately for those who care about the security of their home and business IT systems, there are ways to spot the charlatans and their dodgy wares.

The Big Target theory

When you read a claim that the Windows malware epidemic of the early 2000s was due to Microsoft being a big target as opposed to the tiny market shares of Apple and Linux, you can be sure they are the words of someone who is at best clueless selling a dubious product.

This theory is nonsense, as I’ve explained previously, and anyone who genuinely believes this has no experience in dealing with the poorly secured operating systems that were Window98, Me and the early versions of XP.

If you are confronted by somebody making this claim ask them why, now smartphones are outselling desktop computers, where is the widespread malware promised for mobile systems? It doesn’t exist for exactly the reasons Chris gives in his Google+ post.

Real Soon Now

The other key indicator is the “real soon now” claims – that a virus is about to burst onto the scene that will rub the smile off the face of smug Mac and Linux users.

Invariably the hysterical headlines are backed up with claims, almost always taken from a vendor’s press release, that a security company’s researchers have identified a threat that is about exploit wilfully clueless users.

Daring Fireball’s John Gruber has done an excellent job of dismantling this rubbish in his classic post “Wolf”.

His post was provoked by the ‘news’ that a wave of Apple malware was on its way. That was six months ago and we’re waiting. John tracked similar stories back to 2004, none of which came to fruition.

The modern snake oil men have an advantage in that tech journalists are desperate for page views and in many media organisations they no longer have the resources to critically analyse PR claims.

Sadly there are real security issues that home and business users need to be aware of. Of course, much of the solution for this doesn’t sell dubious antivirus or expensive consulting services.

In some respects, the proliferation of these stories is a reflection of the decline of the mainstream media business model.

As more ‘news’ stories become lightly rewritten PR spin, the less readers take those outlets seriously and once trusted journals of record become little better than online gossip rags.

Important issues, like information security, deserve more than repeating the lies of those who profit from fear, uncertainty and doubt.

Author: Paul Wallbank

The creative deadbeat

Big boys’ excuses

Chasing the bad news

Identify problem customers

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The world of smaller margins

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Santa’s online business checklist

Do you list opening hours?

List shut down and public holiday hours

Where are your contact details?

Are local listings up to date?

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Spotting a security charlatan

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