Paul Wallbank, talking about media and comms

How marketing and business are interwined

Entrepreneur magazine discusses changing your definition of marketing. While Dan Kennedy has some good examples of businesses that have used tools such as membership and market positioning to grow, I’m not sure they can be treated as marketing.

Entrepreneur magazine discusses changing your definition of marketing. Dan Kennedy has some good examples of businesses that have used tools such as membership and market positioning to grow, but I’m not sure they can be treated as marketing.

All of the examples; Starbucks, Disney, Florida timeshares, barbers and gourmet pizza shops illustrate some great business models which is exactly what they are; ways of doing business that engage the customer and sell a better product.

The marketing aspect is simply telling the story of why the business is better, unique or why it does something so well.

One of the problems with marketing is it’s often about telling porkies, not about describing the product or why the business is unique. This type of marketing fails when the customer finds they’ve been sucked in.

In the past, big brands have been able to get around this by using mass media to shout it louder and stronger on the idea that if you repeat the lie often enough, people will believe it.

Marketing is part of your business DNA, you have to tell your story to get business. The key is to be telling a true story based on your product’s strengths.

The Sleazy Carnival

Seth Godin set up a friends computer and found “the digital world, even the high end brands, has become a sleazy carnival”

Seth Godin set up a friends computer and found “the digital world, even the high end brands, has become a sleazy carnival” as he clicked his way through dozens of pop ups, offers and confirmation windows.

The only real surprise is Seth can’t have set up a Windows computer for some time as crapware has been the bane of IT techs for years. At the 2007 Consumer Electronic Show Micheal Dell notoriously pointed out this crapware was worth $60 per computer.

Dell’s point was valid in one respect; if you are selling at unsustainable price points then you have to do everything you can to improve your profit margins.

At the beginning of 2010, Dell find itself locked in the low value, low margin end of the industry with a declining market share at a time when US consumers are banging shut their wallets. It’s fair to say Micheal has reaped what he sowed.

It’s unfair to just single Dell out – cost cutting, upselling and downright double dealing is endemic in the IT and electronics industry and the vendors only have themselves to blame as they trained customers to fixate on price and then struggled to claw back a decent profit.

The tech sector has betrayed its customers and only has itself to blame for the lack of trust and declining profits.

The new business tools

Probably the biggest highlight of a fast, hectic 2009 was November’s X Media Labs in Sydney which illustrated just how the world is changing as a result of new media channels, faster Internet and more powerful computers.

The organisers of X Media Labs, Brendan Harkin and Megan Elliot, describe it as “a meeting place uniquely designed to assist companies and people get their own creative ideas successfully to market, through concept development, business matching, and direct access to world-class networks of creative professionals.”

Brendan and Megan held the first event at the Sydney Opera House in 2003 but have since relocated to Shanghai. The Chinese connection was strong with the guest speakers including property developers and social media entrepreneurs.

Wang Xing, founder of Chinese social networking sites, Fanfou and Xaionai impressed everyone with the size and growth of the Chinese Internet market. It left no doubt where the eyeballs and where the wallets will be as we continue into the 21^st Century.

More challenges were presented by Zheng Xaioping, founder of property developer BAZO, who went through the growth of Chinese cities and the directions government and investors are taking within those cities.

A local success was Zareh Nalbandian of Sydney’s Animal Logic who showed some behind of the behind the scenes footage of Happy Feet and a US advertising campaign for fast broadband featuring a jet engine assisted shaved rabbit. It illustrated how exciting, quirky and innovative work is being done in Australia.

To show the US isn’t out for the count, Susan Bonds, president of 42 Entertainment, showed how bringing together many strands of the online digital media tools created a massive alternative reality game for the movie Dark Knight.

Probably the most exciting presenter was Professor JoAnn Kuchera-Morin from the University of California’s Santa Monica Nanotechnology Allosphere. Her talk, a version of which is on the TED website, showed the possibilities in the new economy as arts, science and technology come together.

Not everybody has the resources of the US National Science Endowment, a big movie studio, or the Chinese government to support their projects, but as Brasserie Bread showed a few months back you can create a buzz using some of these tools quickly.

That’s the challenge for all of us over the Christmas break – to figure out how we can harness the power and opportunities the second decade of the 21^st Century is going to present us.

Spam of the year

While cleaning out the IT Queries mailbox I came across a funny spam

While cleaning out the mailbox of IT Queries I found this among the spam messages;

HELP! I’m currently being held prisoner by the Russian mafia and being forced to post spam comments on blogs! If you don’t approve this they will kill me. They’re coming back now. Please send help!

Sometimes you can’t help but laugh.

The Technology gripe line: ABC Nightlife computers

Paul Wallbank joins Rod Quinn for ABC Nightlife computers from 10pm on Friday, December 18 to rant about what bugs us about technology.

Tune in across Australia on your ABC Local Radio station or listen online through the Nightlife website.

You’re welcome to join the rant. Feel free to call in on 1300 800 222 and tell us what irritates you about the Internet, computers, mobile phones or anything else that goes beep.

Paul Wallbank joins Rod Quinn for ABC Nightlife computers from 10pm on Friday, December 18 to rant about technology; its bugs, errors and things that simply don’t work as they should.

Tune in across Australia on your ABC Local Radio station or listen online through the Nightlife website.

You’re welcome to join the rant. Feel free to call in on 1300 800 222 and tell us what irritates you about the Internet, computers, mobile phones or anything else that goes beep.

Riding the hype cycle

Despite the Google Phone only existing in a couple of photographs, the device is making headlines as the new “iPhone killer” and there’s no doubt early adopters are asking “should I wait for this new phone?”

It’s a tough life on the bleeding edge – the life of an early technology adopter features long days breathlessly waiting for the next hyped up product with short periods of extreme disappointment when the latest uber toy fails to live up to the marketing promise.

To explain how hype works in the tech sector, the consultants at Gartner invented the Hype Cycle. The cycle explains how a typical product is released in a wave of publicity that drives it to the “peak of inflated expectations”.

Eventually the bubble pops and the widget plunges into the “trough of disillusionment” where users either abandon it or suffer the taunts of their friends and workmates.

Over time, those persistent fans find what the widget does well and it begins to crawl up the “slope of enlightenment” as the believers convince others the product really is good for something.

When enough people accept the widget as the best tool for a certain job it settles on the “plateau of productivity” where it happily sits until a better mousetrap comes along.

In reality some widgets move faster than others and not all make it over the peaks and plateaus. A look at the 2009 cycle shows some products that have taken a decade to approach the peak of inflated expectations while others have simply been abandoned by their makers or the market before they’ve completed the journey.

For business owners, most focus on the tools that have reached the plateau of acceptance. This is partly because wasting time on a new device that doesn’t do what it’s supposed to squanders an entrepreneur’s scarcest asset.

The other main reason for avoiding hyped products is they carry risk and most business owners have enough risk in their lives to satisfy even the most adventurous tech warrior.

None of that means we shouldn’t be looking at new gadgets and ideas – the world is moving fast and those who don’t adopt new technologies and concepts will be left behind. But just be a bit careful of the hype and unrealistic expectations of what the latest new thing can do for you.

ABC 702 Sydney weekend computers

Join Paul Wallbank and Simon Marnie on the Sydney 702 ABC Weekend program to discuss today’s issues for home and office computer users.

abctower Join Paul Wallbank and Simon Marnie on the Sydney 702 ABC Weekend program this Sunday, December 13 to discuss today’s issues for home and office computer users.

This Sunday from 10am we’ll be looking at protecting your computers over summer; what to do before going on holidays and how to avoid storm damage.

Tune in on ABC 702 or listen online at www.abc.net.au/sydney. We love listeners comments, questions and opinions so call in with yours on 1-800-800-702 or SMS on 19922702.

Quality: The essential ingredient

So it’s worthwhile thinking about the raw materials in your business. Are you providing your customers with a quality product? Or is your only selling proposition cheap, cheap, cheap?

“We can’t pay for speakers, we have to cut costs!” said the conference organiser when asked if the day’s presenters were being paid for their time.

Most of the event’s sessions featured speakers who were at best going through the motions. Thankfully no-one on stage had a book, training course or a box set of DVDs to sell.

The sad thing was the event itself was a great idea and the organisers have a genuine belief and passion for what they are doing, but I’m not sure that came across to the day’s participants.

What this showed is how important quality raw materials are to a product or service and if you skimp on materials, you end up with an inferior product. in the case of conferences and conventions it’s the speakers who are the materials.

This is as just as true in any business and if you’re in a market where there are lots of inferior products, and there is no shortage of third rate conferences out there, then you just commoditise your product.

Every day we see this in the technology industries – cheap, me too products and services that have no differentiation from the competition except on price.

So it’s worthwhile thinking about the raw materials in your business. Are you providing your customers with a quality product? Or is your only selling proposition cheap, cheap, cheap?

The basics of service

Cathy’s saga shows how people skills are as important as competency when you’re running a service business. You need manners and respect to match your skills.

Of course, if you don’t have any skills to start with, you might want to consider doing something else.

Recently I wrote about the things you should look for when choosing an IT service provider. Shortly after writing that column I caught up with Cathy (names changed to protect the guilty) and found out what happened in her search for a tech.

The results weren’t pretty and the reasons why are a lesson for anyone in a service industry. Let’s start with the most fundamental.

Respect
I find it hard to believe I actually have to write this, but I’ve seen it too often myself. Cathy’s first computer tech treated her with contempt and didn’t listen to her problem and needs.

You might think your clients are beneath you and maybe you are right. After all, that dumb customer doesn’t know how to use a mouse, fill in a BAS, fix a cistern or carry out root canal therapy.

But that dumb customer also pays your wage, so quit the attitude and show some manners and respect.

You should also respect your competitors, a point I forgot in last week’s column. Scoffing at the previous guy’s work is bad form and good clients will show you the door if they have any sense.

Competence
Don’t take on jobs you don’t understand. This is particularly common with computer techs who have a habit of saying: “yeah, I can fix anything” when a client calls.

In Cathy’s case she had a Windows 2003 Small Business Server which superficially looks like Windows XP but is a very different beast under the bonnet. The tech was experienced enough to know better.

Funnily, the tech I referred to Cathy declined the job because he felt her requirements were outside his skills. If the first guy Cathy called had shown the same humility and competence it would have saved everybody a lot of distress.

Appearance
In an industry known for cowboys, wearing boots that would look straight out of Rawhide is a big mistake. Clients are conservative creatures and many will turn away if you are too different to their expectations.

Dress how a customer expects you to dress- an accountant wears a suit, a computer tech has the blue shirt, dark pants combo and a bricklayer wears a pair of stubbies revealing more than you care for when the brickie bends over.

When you’re in an industry where people are afraid of being ripped off, showing up in a flash car confirms their fears. Leave the Porsche at home and show up in a cheap hatchback, the things are easier to park anyway. As you’ve probably guessed, Cathy’s tech drove up in a Mercedes.

Billing
Last week I advised avoiding the “no fix-no fee” crowd. However, that’s different from standing by your work.

If you’ve screwed up, as Cathy’s tech did, then bleating: “I sweated for you” is plain silly. If the customer is unhappy, waive or discount the bill.
Sure, sometimes you end up copping the pain when an unreasonable customer complains but billing issues are a reliable early warning a client is going to be a major pain. Refund their money and get them out of your lives.

The story does end well though. Finally Cathy found someone who was polite, competent and barely raised an eyebrow when they saw the mess made by the first tech.

Cathy’s saga shows how people skills are as important as competency when you’re running a service business. You need manners and respect to match your skills.

Of course, if you don’t have any skills to start with, you might want to consider doing something else.

Saving your technology relationship

Like it or not, your businesses is married to technology and often that marriage is not a happy one. Tech support is like a counsellor to your IT relationship; a good one will save you a lot of drama, stress and tears.

When a friend asked about changing IT support for her organisation last week I had to give the question some thought as switching service companies isn’t something you do rashly.

The first problem she presented was price. She was worried the quotes she’d received and the hourly rates were more than her own charge out rate.

On that front the advice is simple – get over it. Your doctor and plumber charge more than most peoples’ hourly rates and a good tech will save you a fortune in therapist and data recovery charges. So we’ll leave price to last and look at the other factors;

Confidence

Do their staff inspire confidence? The truth is support is as about trust mort than it is about competence. You have to trust the tech with your valuable data and systems.

The first step in establishing confidence is how they answer the phone. Are they polite, informed and prompt to return calls?

If they don’t care about you when you make a sales enquiry, you can be pretty sure they aren’t going to be helpful when you have a computer disaster.

So if you don’t like their phone manner, look elsewhere.

Presentation

They say looks don’t count for much. They are wrong when it comes to support.

Tidy, well dressed techs and a well presented web site indicate a business that takes itself seriously and is more likely to treat your needs as important.

Curiosity

Every business is unique in its own way and a good support company will ask lots of questions when arriving at a new site. Confidence inspiring questions include your business objectives, how you use technology and where it is currently frustrating you.

Questioning along those lines indicate people who want to know where technology fits in your business and how you can get the best return on your investment. Techs that ask those questions are worth a lot to you.

A good tech isn’t a “yes” man or woman. If your brother in law who knows something about computers has suggested something truly stupid then a trustworthy advisor will point you in the right direction rather than just agree with you. So take polite disagreement as a very good sign.

Training

It never ceases to amaze me how the tech support industry doesn’t train people. The vast majority of techs don’t get formal training and most support companies, particularly at the SME level, give their staff little preparation for new systems.

This means lower charges for you, but lousy service. Which is another reason why price should be the last of your concerns. Ask your prospective support provider what training they give their staff.

Outrageous claims

Be careful of silly claims. One of my favourites was a dodgy business a few years ago that claimed “all our technicians are qualified computer programmers” which is the same as an electrician advertising “all our staff are licensed forklift drivers”.

A similar thing applies to “no fix, no fee” claims. Avoid any company advertising they won’t charge you if they can’t figure out the problem as you’re paying a new operator to learn on your system.

Claiming to support big corporations is often the mark of a new, naïve business. Usually that indicates the owner once worked as a contractor for a company that setup that BigCorp’s desktops. Treat those claims with disdain unless it is a big support outfit with accordingly high charges.

24/7 service and two hour callouts are fair enough if you are prepared to pay for them. Be careful though when dealing with smaller support outfits as they can struggle to meet these promises.

Charging structure

Unethical support companies love the large billing unit. So avoid companies that charge in 30 or 60 minute blocks as these encourage techs to pad out basic jobs. A fair unit is ten or fifteen minute periods

The best plan for a business is a regular support contract which includes a basic level of services per month. These often include a base number of technician’s hours, either onsite or remotely. Review the hours regularly as you can overpay for time you don’t need.

Price

Finally we get to where most clients fall down. Good support companies that train, support and reward good staff have high overheads and the corner cutters will always be substantially cheaper.

You should be prepared for rates in excess of $150 an hour, with discounts for bulk purchase and fixed fee support contracts, the longer you are prepared to enter into a contract for the better the discount.

By all means shop around but don’t fixate on price, the company that charges $180 an hour to provide a qualified, experienced tech is far better value than outfit charging $60 an hour to provide a part time student working for beer money.

Don’t be surprised or offended if the really good support companies tell you they can’t help. Many choose businesses they can help and decline those who they don’t believe are a right fit for their skills. If that happens, ask them if they know of someone who is a better fit for you.

The relationship between technology and business is often complex, but its not one most businesses can neglect. Make sure you’re investing the right people and expertise in your systems.

Twenty three great ideas

A few weeks ago more than 40 of Australia’s most exciting innovators showed off their products at Tech23. Twenty-three of those business were selected to give a four minute pitch to industry leaders in front of several hundred spectators at a Sydney auditorium.

All the inventions were great – the highlights included Heard Systems; a bovine pregnancy detector, We Are Hunted; a music charting system that tracks a work’s popularity across the Internet and Posse; a ticket seller that harnesses a band’s fan base to fill venues.

The intriguing thing about two of these companies is they rely on communities. The fact both these businesses come from the music industry isn’t surprising. This is a sector where social and peer power has been long understood through sales charts and fan clubs.

With all of us having grown up with Top 40s and music videos we have an intuitive understanding of how these communities work.

An advantage all three businesses had were passionate, informed presenters who believed in their product and who could explain the benefits in 240 seconds. Those 23 presentations showed was just how important a good pitch is to communicating how a great idea is going to change the world and make investors happy.

Another thing that stood out was how a well done Powerpoint enhances a speaker while a poorly done one distracts and irritates the audience. Interestingly only one of the three pitches mentioned had a memorable overhead shows how a passionate speaker who believes in their product trumps even the most elaborate presentation.

In some ways it’s another variation of the rule of threes in that you have a three second pitch, a 30 second pitch and the three minute extended version. Indeed the ReadWriteWeb site has an extended rule of threes, describing how an “insanely great” service is being spoken about after three days, three months and three years.

While you can’t control what people will say about your business three years after hearing about it, you should be able to get across what your business does in three seconds.

Funny enough, that’s pretty close to how long it takes to read a 140 character SMS or Twitter message. Can you describe your business in one tweet?

Why innovation rises during a recession

Steve Lohr in the New York Times looks at how innovation rises in downturns. Are the various stimulus packages a roadblock to innovation?

Steve Lohr in the New York Times reports R&D budgets increased for 900 of the United States’ 1,000 largest corporate spenders on research and development.

What stands out is how patent applications rise during economic downturns with an increase of 25% in the 1929-32 period. Steve goes on to point out;

The Depression years yielded fundamental advances in technologies of the future like television, nylon, neoprene, photocopying and electric razors, according to the Thomson Reuters analysis.

A similar trend is true around later, far shorter recessions, when basic work on personal computing and later Internet-related technologies were done.

In this respect, economic downturns are necessary as they clear out the old, inefficient industries and allow new ideas and businesses to take hold.

While governments had to do something to avoid a massive depression when the capital and trade market froze in late 2008, is the propping up of debt laden industries like banks, housing companies and auto manufacturers going to act as roadblock to new ideas and businesses?

Just a thought.

The Depression years yielded fundamental advances in technologies of the future like television, nylon, neoprene, photocopying and electric razors, according to the Thomson Reuters analysis.

A similar trend is true around later, far shorter recessions, when basic work on personal computing and later Internet-related technologies were doneThe Depression years yielded fundamental advances in technologies of the future like television, nylon, neoprene, photocopying and electric razors, according to the Thomson Reuters analysis.

A similar trend is true around later, far shorter recessions, when basic work on personal computing and later Internet-related technologies were done.