Tag: marketing

Never going to let you go – the failing businesses clinging desperately to baby boomers

As younger people turn away from old business models, those comfortable with the status quo cling desperately to their established but shrinking markets

Probably the driving factor of the consumerist society’s development was the baby boomers’ growing up.

Through the last fifty years everything from Coca-Cola to baby products and hair loss treatments has been aimed at the cohort born between 1945 and 65.

For many businesses and marketers this group has been so profitable it’s been hard to let them go.

The US motor industry is a good example of this with Bloomberg reporting the over 55 age groups are dominating domestic car sales as younger folk turn away from car ownership.

A similar thing is happening in Australia as TV executives decide that competing with the internet for millennials is too difficult so sticking with the over 50s market is safer.

“We’d go out of business if we stayed with our traditional demographic of 16-39.” Channel Ten CEO Hamish McLennan told the Mumbrella360 conference in Sydney earlier this year.

The problem for both the US motor manufacturers and Australian TV stations is the trends are against them.

For TV stations trying to compete against the internet, the older age groups are following their kids across to the web at the same time that they are beginning to save for retirement.

That need to save is also working against the car dealers, while many boomers fawn over new cars a large number simply aren’t going to be able to afford these indulgences. It’s not a good prospect for the motor industry.

In the meantime, younger people are turning away from the motor car, Bloomberg quotes University of Michigan Transportation Research Institute s researcher Michael Sivak who penned a report on generational shifts in the US motor industry.

“I have a son who lives in San Francisco; when I get a new car and I tell him what I got, he couldn’t care less,” Sivak said. “To him, it’s a means of getting from A to B. He goes into great lengths about taking a BART or bus, even though it takes him an hour longer. He does have a car, but uses it very rarely.”

The movement away from the motor car indicates something much more profound about western society — if the baby boomer represented the age of consumerism, the entire Twentieth Century was defined by the automobile.

For politicians and town planners wedded to a 1950s view of economic development, it may be they are making terrible and expensive mistakes in pushing freeway and other road projects.

While aging baby boomers purr over their expensive cars, the forces of history may be passing them by. Those businesses pandering to those older groups might just want to consider whether they want to be left behind as the economy, and the kids, move on.

It’s comfortable to cling onto what has worked for the last fifty years, but sometimes the lowest risk lies in letting go.

Similar posts:

Understanding the social media whispers

The evolution of Roamz into Local Measure tells us a lot about how businesses can use social media and online local services.

What do you do when paying customers tell you they would rather your product be different to what you were offering? This is the predicament that faced Jonathan Barouch when he discovered the real market for his Roamz service was in social media business intelligence.

How Jonathan dealt with this was the classic business pivot, where the original idea of Roamz evolved into Local Measure.

Originally Roamz was set up to consolidate social services like Twitter, Foursquare and Facebook. If you wanted to find a restaurant, bar or hotel in your neighbourhood, Roamz would pick the most relevant reviews from the various services to show you what was in your neighbourhood.

The idea for Roamz came from when Jonathan was looking for places to take his new baby, jugging several different location services to find local cafes, shops or playground is hard work when you have a little one to deal with.

A notable feature of Roamz was the use of geotags to determine relevance. Even if the social media user doesn’t mention the business, Roamz would use the attached location information to determine what outlet was being discussed.

Enter Local Measure

While Roamz was doing well it wasn’t making money and, in Jonathan’s words, it was a “slower burn, longer term play”. On the other hand businesses were telling him and his sales team that they would pay immediately to use the service to monitor what people were saying about them on social media.

“People said, ‘hey this is cool, we want to pay for this.” Jonathan said of the decision to pivot Roamz into Local Measure.

“I want to say it was a really difficult decision but it wasn’t because we had people saying ‘we want to pay you if you continue with this product.’”

Local Measure is built on the Roamz platform but instead of helping consumers find local venues, the service now gives businesses a tool to monitor what people are saying about them on social media services.

The difference with the larger social media monitoring tools like Radian6 is Local Measure gives an intimate view of individual posts and users. The idea being a business can directly monitor what people are saying are saying about a store or a product.

For dispersed companies, particularly franchise chains and service businesses, it gives local managers and franchisees the ability to know what’s happening with their outlet rather than having to rely on a social media team at head office.

The most immediate benefit of Local Measure is in identifying loyal users and influencers. Managers can see who is tweeting, checking in or updating their status in their store.

Armed with that intelligence, the local store owner, franchisee or manager can engage with the shop’s most enthusiastic customers.

Customer service is one of the big undervalued areas of social media and Jonathan believes Local Measure can help businesses improve how they help customers.

“It makes invisible customers visibile to management,” says Jonathan.

An example Jonathan gives is of a cinema where the concession’s frozen drink machine wasn’t set currently. While the staff were oblivious to the issue, customers were complaining on various social media channels. Once the theatre manager saw the feedback he was able to quickly fix the problem.

Employee behaviour online is also an important concern for modern managers, if employees are posting inappropriate material on social media then the risks to a business are substantial.

“From an operational point perspective we’ve picked up really weird and wonderful things that the business doesn’t know,” says Jonathon. “Staff putting things in the public domain that is really damaging to brands.”

“We’ve had two or three cases of behaviour that you shudder at. I’ve been presenting and it has popped up and the clients have said ‘delete that, we don’t want that up’ and I say ‘that’s the whole point – it’s out there.’”

That’s a lesson that Domino’s Pizza learned in the US when staff posted YouTube videos of each other putting toppings up their noses. Once unruly employees post these things, it’s hard work undoing the brand damage and for smaller businesses or franchise outlets the bad publicity could be fatal.

Local Measure is a good example of a business pivot, it’s also shows how concepts like Big Data, social media and geolocation come together to help businesses.

Being able to listen to customers also shows how marketing and customer service are merging in an age where the punters are no longer happy to be seen and not heard.

It’s the business who grab tools like Local Measure who are going to be the success stories of the next decade, the older businesses who ignore the changes in customer service, marketing and communications are going to be a memory.

Similar posts:

Trolls never sleep – Social media and the twenty four hour business

Qantas Airlines learns the hard way that social media doesn’t sleep, unlike its marketing department.

One of the truths of social media is it gives idiots an opportunity to expose themselves for what they are.

For businesses using social media idiots posting stupid or offensive content on the company’s site or Facebook page can do a lot of damage to their brand and reputation.

This is the problem Australian airline Qantas faced last week when some fool posted a pornographic image to one of the company’s promotions pages.

As the Sydney Morning Herald reports, the father of an eight year old reported an inappropriate post to the airline after his son found the image while visiting the Qantas Wallabies page. He was allegedly told by the company’s social media staff “there was nothing we can do about it.”

The father points out correctly that both the airline and Facebook are 24 hour operations so claiming a post that is put up at midnight – one assumes Eastern Australian time – is out of hours seems to be disingenuous.

Until recently, businesses had given social media responsibilities over to the intern or the youngest person in the office. While organisations like Qantas have moved on from that, they largely leave these tasks with the marketing department.

While marketing is a valid place for social media responsibility – it’s probably the most obvious area to establish a return on the functions – it leaves organisations vulnerable to out of hours customer service and public relations problems.

Social media doesn’t knock off at 5pm and spend the evening a bar like the marketing department, it’s on all the time and customers are using it to complain about problems while twits and trolls are gleefully posting things to embarrass businesses.

For those businesses who do operate on a 24 hour basis, and probably all big corporations, it’s no longer good enough for the social media team to just operate during office hours.

Smaller businesses have a different problem – most don’t have the resources to keep a 24 hour watch on their Facebook page but the effects of a social media disaster could be proportionally far greater – so they shouldn’t be overlooking regular checks on what people have posted to their business sites.

What’s happening in social media is part of a broader trend in the global economy that’s been going on for thirty years as the pace of business has accelerated. It’s something that all managers, entrepreneurs and company owners need to understand.

Similar posts:

Who will fill the online advertising opportunity?

The State Of The Internet report reveals the twenty billion dollar advertising opportunity that still hasn’t been taken.

It’s been a big week of reports with three major sets of findings being published; Cisco’s Visual Networking Index, IBM’s Retail Therapy and, the biggest one of all, Mary Meeker’s annual State Of The Internet.

With a PowerPoint overview weighing in a 117 slides, this year’s state of the internet is a meaty tome with some fascinating observations that compliment Cisco and IBM’s findings which hopefully I’ll have time to write about on the weekend.

On slide five of the State Of The Internet is what hasn’t changed Meeker describes the $20 billion internet opportunity being missed.

Basically online advertising is not keeping up with the audience, the time spent on media versus advertising spend is lagging.

mobile-market-opportunity-mary-meeker

What’s notable is that this is the third year that Meeker has flagged this disconnect, yet advertisers still aren’t moving onto the web in the way audiences are.

The print media industry though seems to be dodging a bullet with a disproportionate amount of advertising continuing to spent on traditional advertising – 23% for only a 6% share of consumers’ time which implies there’s still a lot of pain ahead for newspapers and magazines.

For the online media, it shows there’s a great opportunity for those who can get the model right.

What that one graph shows is that the disruption to the mass media publishing model is a long way from being over.

Similar posts:

And your message is? How Silicon Valley wrote its own history

Is the myth of the altruistic Silicon Valley entrepreneur an example of businesses rewriting history?

Sitting in on the Storytelling and Business panel of the Sydney Writers’ Festival it occurred to me how well Silicon Valley and the tech startup community have crafted an image for their times.

Author of What’s Mine Is Yours, Rachel Botsman focused on the need of businesses to articulate the organisation’s sense of purpose. While this begs the question of what’s the message if the business’ purpose is to enrich their senior management, it is an a good point.

What is a business’ purpose and how do you articulate it? More so, what is the purpose of your industry?

One group of businesses that has done very well in articulating their message is the Silicon Valley tech community who’ve portrayed themselves – regardless of the reality – as being driven by the altruistic aim of changing the world.

Steve Jobs was one of the leaders of this and, while we shouldn’t overlook his talents, he was a ruthless, driven businessman.

On the panel advertising industry elder Neil Lawrence raised Jobs’ ability to articulate Apple’s mission, telling the story of when the Apple CEO was challenged on the ‘Thing Different’ slogan not being good English, he replied “it’s Californian.”

Apple’s success in branding itself as a visionary, creative company – and Google’s image of ‘Don’t Do Evil’ – show how it’s possible to create an image for an organisation, an industry or even an entire industry.

In reality, Silicon Valley and the tech industry are as full of snake oil salesmen, mercanaries and paper clip counting corporate bureaucrats as any other sector, but legends have been built, and continue to be built, on the myth of  selfless entrepreneurs sacrifice all to make the world a better place.

Contrasting Silicon Valley’s success with the Australian experience was interesting, Botsman was scathing about the ability of Aussie managers in telling the story about their businesses finding most of them have lost her by the second slide of their Powerpoint presentation.

We shouldn’t get too hung up though about the nobility of telling a business’ story, Shehan Karunatilaka, former copy writer and author made the major point about business communications “story telling in business is about shifting product.”

He went on to describe the tragic career path of the advertising copy writer who comes into the ad industry believing they are a world changing artist and ends up being burned out.

“you are not an artist – you are a mouthpiece for businesses” said Shehan.

The truth is most of us in business are not artists, some parts of our work may involve creative skills – like copy writing, design or financial engineering – in reality most of us are there to make a decent living, if not a fortune.

Silicon Valley’s mythmaking shows how you can cover the mundane truth with a noble, a constant narrative which has  allowed ruthless businessmen like Steve Jobs and Mark Zuckerberg to portray themselves as selfless visionaries rather than the modern equivalents of  John Rockerfeller, Cornelius Vanderbilt and other 19th Century robber barons.

This is possibly the greatest message of all in business communications – history is written by the victors.

When you’re winning in your industry, you get to write the story.

Similar posts:

Door to door blues

How short term management thinking caught energy suppliers and telecommunications providers short.

The news that energy companies have decided to drop direct door to door selling in the face of prosecution is the latest example of poor thought out performance metrics and managers unsuccessfully trying to shift risks out of their business.

Electricity and gas distributors Energy Australia and AGL embarked on a door-to-door sales campaign to gain more customers. Like most modern corporations, they don’t do this stuff themselves and engaged outsourcing companies who in turn took on commission salespeople to do the ground level selling selling.

It didn’t work well and in face of complaints, both companies had to back away from their campaigns after suffering legal and reputational damage.

The sad thing this has happened before, at the time of telecoms deregulation in the 1990s telcos did the same thing to grow their market share. Door to door sales teams fanned out across the suburbs to sign households up to telephone plans.

In one example, a company hired dozens of backpackers, bussed them to outlying suburbs and sent them out on the streets to sign up as many households as possible.

Initially the campaigns were a success with providers reporting increased signups, greater market share, fat executive bonuses and happy commission earning salespeople.

Then the complaints began.

Customers discovered they’d been lied to, or in some cases falsely signed up, as hungry salespeople did everything they could to get a commission.

At first the telcos thought they could throw the problem over the fence so they blamed the contractors. Eventually the damage became so great the telcos had to back down on their door to door selling as problems multiplied and consumer protection agencies expressed their irritation.

At the heart of the problems with this type of door to door selling is the mismatch of incentives – for managers, contractors and the teams going door to door in the suburbs.

Door to Door Blues

At the coalface are the salesteams trudging around suburbs. In the 1990s telco boom they were largely made up of backpackers whose interests were to sign up as many customers as possible in order to fund the next stage of their travels.

Often, the telco or its contractor would only discover a sign up was the family dog or toddler long after the traveller was sunning themselves at Koh Phi Phi.

Using Indian students as the energy contractors were doing largely fixed some of the worst excesses of the 1990s but it didn’t address all of the problems

Management misalignment

Driving the rush for sign ups are usually poorly designed  management Key Perfomance Indicators – a dumb set of executive benchmarks rewards poor  behaviour and creates unforeseen risks. Particularly when those KPIs are focused on short term metrics.

Very quickly the risks in the short term focus become apparent and managers back off from these programs.

In this case it appears Energy Australia’s managers heeded the early warnings and backed off before the problem became too great, unlike the telcos who let the sales teams run rampant before reigning them.

What’s saddening about Energy Australia’s and AGL’s problems is they were totally forseeable and those who warned of the risks in a door-to-door customers acquisition strategy – and there were almost certainly some in these organisations – were overuled by enthusiastic executives aiming to bust their sales and market share metrics.

Sometimes we are condemned to repeat history repeatedly in business.

Similar posts:

Social media and the Gartner hype cycle

Has social media peaked?

“Social media has become a tiresome hobby” complained a social media expert over coffee, “my heart is no longer in it.”

There’s been much hype about social media, if you listen to some people services like Facebook, Twitter and Pinterest were going to revolutionise marketing and fundamentally change business.

Now the hype seems to be escaping from the social media industry as its practitioners, and the businesses who’ve embraced it, become exhausted with the long, hard grind of fighting a revolution.

This exuberance followed by exhaustion is fairly typical in the technology industry, consulting company Gartner describes it in their Hype Cycle, which shows how a new product goes a period of excitement, peaks and then tumbles into a trough of disillusionment.

It could be that social media is approaching that peak.

That’s not all bad news for social media, after a product falls into the trough of disillusionment, the technology matures and industry figures out how to best use the product.

Microsoft founder Bill Gates put it well when he said “in the short run we over-estimate the effects of technology, and in the long term we under-estimate the effects.”

Probably the best example of this process is the World Wide Web itself, the irrational exuberance drove the dot com boom which peaked at the turn of the century and then plummeted into the trough of disillusionment.

Companies like Amazon and Google who stayed the course through the dark days of 2002 and 2003 were richly rewarded when the market came good.

For the social media people who can stay the course through that dismal period they may not become as successful as Amazon and Google, but there’s good opportunities for those who survive.

In some ways, passing the peak of inflated expectations is good news. It means the hard work and adding value is just beginning.

Image from Gastonmag via sxc.hu

Similar posts: