Six Degrees of Separation

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It is a sobering realisation that we are each, potentially, just six contact points away from personal conversations or private audiences with the likes of Nelson Mandela, The Pope and President Barack Obama.

It is a sobering realisation that we are each, potentially, just six contact points away from personal conversations or private audiences with the likes of Nelson Mandela, The Pope and President Barack Obama.

Australian Prime Minister Kevin Rudd may be another proposition, with questionable value for the effort expended!!!

The reason why most people and entities do not enjoy and achieve being in the presence of such luminaries is a lack of planning, sequencing, focus and intent. Most things are possible.

Success in marketing, particularly in the current volatile marketplace, requires similar discipline and the application of a like disciplined framework. The six degrees of separation, from ordinary to exceptional, in the current business arena are:

1ST DEGREE - TARGET AUDIENCES

For sheer efficiency, effectiveness and economy, diligent and discrete targeting of primary, secondary and tertiary target audiences is imperative.

The term "mass media" is to a large extent now an oxymoron, a contradiction within itself. Media channels are fracturing. Broadcasting is to some considerable extent a thing of the past. Today, the reality is narrow-casting. Reliance on the use of a single medium is limiting.

Communicating to and interacting with those who are outside the profile of prospective, current and immediate past customers and consumers can, and typically does involve the expenditure and investment of considerable time, money, people and other resources, often for little return.

Particular care needs to be taken in the differentiation between customers (who buy) and consumers (who utilise). The needs, preferences, actions and roles in the buying process of both subsets differ appreciably.

Women remain the prime and key influential buying agents in up to 70% of instances for consumerable, durable and, to a lesser extent, capital goods and services.

There is a rich vein of gold to be mined among existing customers, who are largely unrecognised and not exploited. Develop and exploit the relationships.

The mantra, "share of wallet" in preference to pursuit of share of market has great potential for more immediate and significant returns.

Thus, seek out, communicate personally with, service and satisfy those whom you know best.

2ND DEGREE - PRODUCT / SERVICE RANGE

Hundreds of millions, possibly billions of dollars of under-performing products and services reside within the inventories of retail, wholesale, and manufacturing entities, big and small.

There is little or no scope for sentiment, nostalgia and inertia in business decision making in the prevailing marketplace. Opportunity costs, an impost borne, are not entries on traditional asset and liability statements.

Obsolesce is a further burden which impinges on and limits performance.

Stockturn ratios, sales conversion rates, internal rates of return and stock ordering lead times are not of themselves guarantees for better business performance levels and success. However, they are benchmarks to enable effective monitoring and measurement of absolute, relative and comparative progress to ultimate goals.

Recognition of the need for specific action is the first step to an improvement and success.

Individually and collectively they provide meaningful insights and sound bases for responses to the ubiquitous question:

 "How are things going?"

Without objective and accurate measures things may not be going at all. They may be "sticking"....... to the shop and warehouse floors.

An integral part of the success of the complex and diverse product range of the 3M Corporation, is that at all times a minimum of 60% of the product/range has been introduced into the marketplace within the past 5 years. That implies a strong dose of dynamism. In short, clean out, shape up and move forward.

3RD DEGREE - SUPPLY CHAIN

The disturbing and disappointing attrition rate of the new and innovative products and services is a sad testament to poor and inadequate supply chains and distribution networks which operate globally and throughout Australia in particular.

Effective chains and networks deliver products, services and above all the key points of consumer appeal, convenience.

Inadequate distribution facilities are the primary source of failure in up to 70% of product launches.

Sophisticated, discerning and "now" oriented consumers and clients demand immediate access to those items they most need or want. There is a noticeable lack of tolerance in the marketplace. Offers of "rain checks" in which the products or services are guaranteed to be available at the same price at another nominated time are typically declined.

Short lead times, on-line real-time interface between the computer software of manufacturers, distributors and retailers, and paperless invoicing and ordering through automated imprest inventory systems are no longer ideals. They are increasing mandatory, for entities to minimise costs and to return to competitiveness.

It is noticeable that market leaders like Woolworths in Australia, Wal-Mart in the USA and Tesco in Britain have invested heavily in upgrading their supply chains over the past decade. Significantly, there is no slackening in the pace of such investments and innovations.

Which raises an interesting question. What industry are you in? Today, there is only one answer.  Supply chain management, regardless of the related disciplines, products and services.

4TH DEGREE - DIFFERENTIATION

The recent public announcement by the Australian Federal Government of the introduction of legislation to remove differential labelling and branding in the packaging of cigarettes is an important lesson for all.

Too little attention is given to the art of effective branding. It is not an overstatement to contend that over 80% of entities, products and services available in the marketplace throughout the world suffer from being labelled rather than branded. 

Commodization reduces, if not eliminates, the inherent value and thus satisfaction which is and can be attributed the uniqueness to a recognised and preferred brand.

A perusal of the real estate section of a weekend newspaper confirms the expenditure of considerable monies in a cavalcade of colourful signage and graphics. Real estate advertisements broadcast on radio stations present a similar cacophony of sound, with little effective branding.

Health specialists forecast that as a consequence of the removal of branding on cigarette packages in Australia (and as a result of 25% increase in taxes on the product range) 100,000 Australians will cease smoking within 12 months. Significantly, it is projected that in the same period of time more than 70,000 adolescent Australians will not take up smoking.  Brand switching among existing smokers will be reduced.

More than ever before the cigarette companies will need to develop strategies and tactics which differentiate their market offerings centred on actual product presentation and below-the-line (non mass media) communication.

Little wonder there has been renewed and increased interest in our exclusive customised keynote presentation,

"It Is Better to Be Different

Than It Is To Be Better"

5TH DEGREE - PRESENTATION

For the past two years cash flows have been adversely affected, budgets have been reduced, financial institution lending policies have been tightened and outlays have been understandably constrained.

Business owners and managers have been confronted with the challenge to do more with less.

The scope of options which are viable, attractive and effective has narrowed.

Two lessons which recur across a broad spectrum of sectors and entities are:

  • PREMISES AND COMMUNICATION PRESENTATION UPGRADES WORK

No one aspect of the 20 elements of the marketing mix achieves greater traction than enhancing, remodelling and modernising one's presentation in the marketplace.  That reality reflects the importance being assigned by many retailers, precincts and communities to establishing an appealing, safe ambience.  Obsolescence, or a sense of such, impedes endeavours.

Subtleness can be a virtue.  Relevance is the objective.

Having a "good" place to visit and to work in, inspires confidence, imagination and demand.

  • MULTIMEDIA MESSAGES ARE IMPERATIVE

It is one thing to upgrade premises.  However, without informing, educating and encouraging prospective and past clients to visit, to enjoy and to become involved, the potential for increases in consumer/client traffic, revenue and profits remains latent.

6TH DEGREE - SALES AND SERVICE

Sadly, too many business leaders and practitioners separate sales and service into two distinct practices and disciplines.

A preferred philosophy integrates the two into a compelling, unified presence of conspicuous benefits and advantages.

During the boom years prior to the Global Financial Crisis (whose impact was universally evident from August, 2008) considerable difficulty was encountered by businesses in the recruitment and retention of qualified, experienced and engaging staff-members. High employee mobility was a common and exasperating experience. Loyalty was isolated, stability a thing of dreams.

Management attitudes hardened. Investments in training were understandably considered to offer little and only short term benefits. Many training budgets were curtailed and in some instances eliminated.

As a consequence, customer satisfaction plunged. Significantly, the primary causes seldom related to the actual products or services, quality, availability and maintenance. Rather it was the poor attitudes, inadequate product knowledge and poor presentation of staff members.

Cuts in training and the lowering of standards in recruitment proved to be false economies.

Leaders in the broader retail sector have been quick to embrace the prioritising of a "positive ambience" and a "great shopping experience" as the imperatives necessary to optimise revenue potential and profits.

Enthusiasm, pride, urgency and a sense of theatre are contagious emotions.  Moreover, individually and collectively they are effective counter weights to a prevailing feeling of dullness, indifference and apathy which impede the realisation of attractive sales potential.  Let me be emphatic.  Good and great customer service costs.  Poor and awful service costs more.

Greater emphasis needs to be assigned to upgrade the service experience for a sales advantage to be achieved and sustained.  Price sensitivity will then be rightly assigned its ranking of the fourth, fifth or sixth most important purchase criteria by customers and clients.

THE NEXT STEP

Progression through the six degrees of separation is simple, but not easy.  Hard decisions cannot be made to be easy decisions.  However, addressing progressively each of the six degrees detailed above does make it easier to make the hard decisions. There are not short cuts. In the current marketplace one wins and retains business by degrees.... six, in fact.

 

Barry Urqhart

www.marketingfocus.net.au

 

 


About

Barry Urquhart, MD Marketing Focus, Perth, is the author of Australia's top two selling books on customer service and is an internationally recognised authority on consumer behaviour and creative visual marketing.

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