Thursday, November 25, 2010
Condolence & Thoughts For Pike River Families
Our warmest thoughts and condolences go out to the families and victims of New Zealand's Pike River mine tragedy. Such a terrible thing for anybody to ever have to experience. It certainly puts things in perspective.
Wednesday, November 24, 2010
Gerry Harvey - Is the Economy all to blame?
In recent days Gerry Harvey has voiced his concerns over the bleak and severe battering ahead for Christmas retail trade in the media, sighting interest rate rises, drops in consumer sentiment, heavy discounting, a stronger Australian Dollar and an increase in online store trading as some of the major factors in this gloomy retail picture. Mr Harvey is not a happy man with the current state of things.
While I dont necassarily diasagree with Mr Harveys claims, it does raise some very valid thoughts to ponder.
Lets start with 'Online Trading': As the technological generations mature to become a larger percentage of the consuming economy, coupled with increased internet trust and security by existing consumers, the move to online purchasing and retail trading is inevitable. You can buy your groceries online safely and efficiently now. You can even buy homes, boats, cars and yes TV's all from the comfort and security of your home. I have even heard rumours of full shopping centres currently being developed...a virtual centre you can go online and buy all your favourite brands.
Can I raise the point though, that if there is no perceived difference between buying in person and buying on the internet, the internet will inevitably win. By this I'm not talking about price, I'm talking about personalised friendly service that is designed to assist and build a relationship with the customer. The internet is impersonal, you are offerred no assistance as a customer, it is very much point, click, hand over your credit card and the goods arrive. If the experience I receive when I walk into a retail store to purchase a TV is very much the same impersonal and transactional experience, then why would I not save the time, fuel and energy and buy online?
Retailers need to look at the internet as an opportunity to improve their traditional sales, marketing and operational models. You can not rely on people just walking through the door and handing over their limited hard-earned cash. You need to build a relationship and trust. Every person that walks in the door is a prescious resource to be nurtured now. It's the new economy! (although it should have been there in the first place).
If we look at Heavy Discounting: Discounting has been alive in retail for many, many years and always will be. Everybody likes a bargain! As a consumer, if you leave a store feeling you have had a win, you are happy. But discounting is a very tough way to make money. Let me explain... If you currently operate with a 30% Gross Profit Margin and you offer a discount of 10% to your customers, you need to increase the actual amount of goods you are selling by 50% to make the same profit. In tough economic times discounting is always the first point of call for many retailers.
Why not go the other way and offer value and package deals or bundles. There is nothing more frustrating when you have finished negotiating a "cash price" for an appliance then you get to the counter and the salesman starts to rattle off all the other cables you are going to need and keeps adding to the agreed price. Why not have a less discounted experience with an all-up price, so that the customer feels they have received value and all my needs are met?
Interest Rates are rising and will continue to in my view in the next twelve months. Consumer sentiment is dropping but I am a firm believer people will still be purchasing. They still have needs, they still have a thirst for consumption and technology. Go for a walk in an Apple store on any given weekend... they are packed to capacity! Even with interest rate rises, even with increased online sales, people are walking out the door with Apple bags. They are meeting the needs of the new economy. They have developed a marketing machine that brings people in. You can touch and experience their products. Their shops are bright and simplistic yet have a feeling of efficency and currentness about them and can I just say they are not just young tech-head customers they are attracting. Many, many of the customers are over their mid 30's. Yet Apple are nowhere near the cheapest technology and computing solution, they dont heavily discount their products, you never see big "On Sale Now" signs in their stores. They are meeting their customer needs. When you buy an Apple product you get a box and its all included and most importantly when you go to pay they don't slug you with extras or a 2% surcharge or EFTPOS fee penalising me for how I choose to pay for my experience in their store. THAT is my biggst pet hate!
So, I agree with Mr Harvey, the factors he speaks of are out there and having a huge toll on traditional retail strategies. But I think there is a need for many retailers to take a good hard look at how they are treating their valuable customers and meeting the needs of the new economy.
While I dont necassarily diasagree with Mr Harveys claims, it does raise some very valid thoughts to ponder.
Lets start with 'Online Trading': As the technological generations mature to become a larger percentage of the consuming economy, coupled with increased internet trust and security by existing consumers, the move to online purchasing and retail trading is inevitable. You can buy your groceries online safely and efficiently now. You can even buy homes, boats, cars and yes TV's all from the comfort and security of your home. I have even heard rumours of full shopping centres currently being developed...a virtual centre you can go online and buy all your favourite brands.
Can I raise the point though, that if there is no perceived difference between buying in person and buying on the internet, the internet will inevitably win. By this I'm not talking about price, I'm talking about personalised friendly service that is designed to assist and build a relationship with the customer. The internet is impersonal, you are offerred no assistance as a customer, it is very much point, click, hand over your credit card and the goods arrive. If the experience I receive when I walk into a retail store to purchase a TV is very much the same impersonal and transactional experience, then why would I not save the time, fuel and energy and buy online?
Retailers need to look at the internet as an opportunity to improve their traditional sales, marketing and operational models. You can not rely on people just walking through the door and handing over their limited hard-earned cash. You need to build a relationship and trust. Every person that walks in the door is a prescious resource to be nurtured now. It's the new economy! (although it should have been there in the first place).
If we look at Heavy Discounting: Discounting has been alive in retail for many, many years and always will be. Everybody likes a bargain! As a consumer, if you leave a store feeling you have had a win, you are happy. But discounting is a very tough way to make money. Let me explain... If you currently operate with a 30% Gross Profit Margin and you offer a discount of 10% to your customers, you need to increase the actual amount of goods you are selling by 50% to make the same profit. In tough economic times discounting is always the first point of call for many retailers.
Why not go the other way and offer value and package deals or bundles. There is nothing more frustrating when you have finished negotiating a "cash price" for an appliance then you get to the counter and the salesman starts to rattle off all the other cables you are going to need and keeps adding to the agreed price. Why not have a less discounted experience with an all-up price, so that the customer feels they have received value and all my needs are met?
Interest Rates are rising and will continue to in my view in the next twelve months. Consumer sentiment is dropping but I am a firm believer people will still be purchasing. They still have needs, they still have a thirst for consumption and technology. Go for a walk in an Apple store on any given weekend... they are packed to capacity! Even with interest rate rises, even with increased online sales, people are walking out the door with Apple bags. They are meeting the needs of the new economy. They have developed a marketing machine that brings people in. You can touch and experience their products. Their shops are bright and simplistic yet have a feeling of efficency and currentness about them and can I just say they are not just young tech-head customers they are attracting. Many, many of the customers are over their mid 30's. Yet Apple are nowhere near the cheapest technology and computing solution, they dont heavily discount their products, you never see big "On Sale Now" signs in their stores. They are meeting their customer needs. When you buy an Apple product you get a box and its all included and most importantly when you go to pay they don't slug you with extras or a 2% surcharge or EFTPOS fee penalising me for how I choose to pay for my experience in their store. THAT is my biggst pet hate!
So, I agree with Mr Harvey, the factors he speaks of are out there and having a huge toll on traditional retail strategies. But I think there is a need for many retailers to take a good hard look at how they are treating their valuable customers and meeting the needs of the new economy.
Wednesday, November 17, 2010
Do you have a Customer or a Client Culture?
A customer by definition is "somebody who buys goods and services." A client, on the other, hand by definition is "somebody who depends on the protection of another."
So many businesses we see have a customer culture of selling goods and services. A one dimensional transaction to gain as much profit from the transaction as possible, and falsely believing we have satisfied the needs of the customer. A transaction that may happen just the once.
Contrast this with a client culture, based on protecting the needs and requirements of the client. The development of trust and a bond with your business that goes much deeper than a quick profit. A relationship that will see the client return more than once, even bond them for life, but also have them singing about you to others.
How much more business do you think a client culture would attract?
There is an old story about the person walking into the hardware shop to buy a drill. He asks the attendant, "Do you have a 10mm drill?" The attendant takes him over to the drill section and gives him a 10mm drill costing $10 to take to the register to pay. This is a customer culture.
Another person goes into a different hardware store and asks for the same 10mm drill. The attendant recognises that this person doesn't need a drill, they need a hole. They begin to consult with the person, asking if the hole required is going into timber or masonry, as each will require a different type of drill bit. What is the hole to be used for? Is it for fastening or hanging? Do they have the appropriate fixtures? Is it to be temporary or permanent?
This person was not after a drill at all. They were wanting to hang a picture for their wife and had been putting it off for months. Items sold included 1 x masonry drill $15, hanging hooks $10. And the relationship established? Invaluable. This a client culture. Where do you think he'll shop next time?
Think about it the next time you buy something - what experience are you having? What do you have in your business - a customer culture or a client culture?
Do something different, start referring to your customers as clients or guests. Start training your team to think of people this way in your business. It will make all the difference.
So many businesses we see have a customer culture of selling goods and services. A one dimensional transaction to gain as much profit from the transaction as possible, and falsely believing we have satisfied the needs of the customer. A transaction that may happen just the once.
Contrast this with a client culture, based on protecting the needs and requirements of the client. The development of trust and a bond with your business that goes much deeper than a quick profit. A relationship that will see the client return more than once, even bond them for life, but also have them singing about you to others.
How much more business do you think a client culture would attract?
There is an old story about the person walking into the hardware shop to buy a drill. He asks the attendant, "Do you have a 10mm drill?" The attendant takes him over to the drill section and gives him a 10mm drill costing $10 to take to the register to pay. This is a customer culture.
Another person goes into a different hardware store and asks for the same 10mm drill. The attendant recognises that this person doesn't need a drill, they need a hole. They begin to consult with the person, asking if the hole required is going into timber or masonry, as each will require a different type of drill bit. What is the hole to be used for? Is it for fastening or hanging? Do they have the appropriate fixtures? Is it to be temporary or permanent?
This person was not after a drill at all. They were wanting to hang a picture for their wife and had been putting it off for months. Items sold included 1 x masonry drill $15, hanging hooks $10. And the relationship established? Invaluable. This a client culture. Where do you think he'll shop next time?
Think about it the next time you buy something - what experience are you having? What do you have in your business - a customer culture or a client culture?
Do something different, start referring to your customers as clients or guests. Start training your team to think of people this way in your business. It will make all the difference.
Monday, August 9, 2010
Run Your Own Race!
The Sydney city sky is turning from black to the lightest of pinks and blues as the sun wakes the city for the new day and the buildings that were just minutes ago towers of coloured neon are now solid towers of concrete and glass. Monday has arrived and I am sitting in my hotel room thinking about the race I have just taken part in the day before, The 2010 Sydney City to Surf.
80,000 people running through the city 14kms in search of the ocean, as if it would end the world if they didn't reach it by lunchtime. An endless snake of people funnelling through the city streets and tunnels in search of water and the ocean. There were people in Batman suits, Spiderman suits, dressed up as blue smurfs, Santa even made an appearance running along the road stopping to hand out presents to children spectating with their parents and of course there were the serious participants using every bit of their energy to get to the finish (I was in the later group as I had misplaced my smurf suit).
As I was running along I got to thinking (as you do!) "every one of these 80,000 people are here for their own reasons" - some for fun, some just to finish, some to win, some to beat their personal best. They were all "running their own race". It didn't matter that people were dressed up in clown suites or stopping along the way for a drink, or walking and talking... they were all running their own race.
It is one of the greatest gifts we have in life, the freedom to run our own race, and it is one of the greatest gifts we all have in business.You can decide today how you are going to operate your business. You can decide how you are going to service your customers and clients and you can decide your success and future in doing so.
Get passionate, Set Goals, Set Strategy, Achieve and "Run Your Own Race". Don't be drowned by negative media, or people trying to pull you down. Rise above it.
My Goal was to beat my personal best time...and I did it.
Enjoy your journey.
80,000 people running through the city 14kms in search of the ocean, as if it would end the world if they didn't reach it by lunchtime. An endless snake of people funnelling through the city streets and tunnels in search of water and the ocean. There were people in Batman suits, Spiderman suits, dressed up as blue smurfs, Santa even made an appearance running along the road stopping to hand out presents to children spectating with their parents and of course there were the serious participants using every bit of their energy to get to the finish (I was in the later group as I had misplaced my smurf suit).
As I was running along I got to thinking (as you do!) "every one of these 80,000 people are here for their own reasons" - some for fun, some just to finish, some to win, some to beat their personal best. They were all "running their own race". It didn't matter that people were dressed up in clown suites or stopping along the way for a drink, or walking and talking... they were all running their own race.
It is one of the greatest gifts we have in life, the freedom to run our own race, and it is one of the greatest gifts we all have in business.You can decide today how you are going to operate your business. You can decide how you are going to service your customers and clients and you can decide your success and future in doing so.
Get passionate, Set Goals, Set Strategy, Achieve and "Run Your Own Race". Don't be drowned by negative media, or people trying to pull you down. Rise above it.
My Goal was to beat my personal best time...and I did it.
Enjoy your journey.
Friday, April 23, 2010
Is Business Bad Or Are You Just Doing Bad Business?
I have the pleasure of seeing hundreds of different types of business's each year and as an adviser I love nothing more than to see them prosper and exceed in their own expectations. It is a very large part of my role as an advisor and something I am very passionate about to this day.
On the flip side of helping and talking with business owners I also get the privilege of utilising the services of a lot of businesses both locally and nationally and it is to this end that I remain constantly astounded at the way in which people conduct their business's.
Let Me Explain!
A common complaint is that "business is bad" "nobody's buying" "the phones have stopped ringing" and so on... but is business really bad or are we just doing bad business? Let me give you two very real and distinctly different stories -
We recently had the interesting experience of using a local business to undertake some reasonably large work that needed careful planning and attention. After providing them with a detailed scope of the project, a quotation was provided of which we accepted and it was 'happy days'...or so we thought.
In going through the process of this project I was continually amazed at the amount of times that things were promised, but not delivered. People who said they were going to show up on a date and time did not show up. In one instance, the business owner promised to come three days within the one week and on each occassion, never did. Not a phone call, a message, even an apology for not delivering on what they said they would. It then took weeks to have them eventually come and do the simple job.
Yet, they tell me "business is bad". "No body's buying". "The phone has stopped ringing".
If I contrast this with a recent experience I had with a well known company Dell Computers.
One of our very important file-servers crashed and died on Easter Monday, of all days. I rang DELL technical support on Easter Monday evening at 6.30pm to report the issue, as I had a full team of employees coming to work the next day.
A friendly technician called me at 7.30 pm that same evening and asked me if I would like him to travel immediately from Brisbane to the Gold Coast this evening to fix the problem? I couldn't make the poor man travel for an hour on the last night of a long weekend, so he promised he would have the parts on our doorstep first thing in the morning, along with a technician to fix the problem.
To their word the parts arrived on time, the technician arrived as promised, our server was fixed as promised and all rubbish and faulty parts where removed. By the time they had finished, you wouldn't have known they'd been there at all.
This is not a one off instance. On another occasion we ordered critical parts at 4pm in the afternoon. They promised they would be delivered that evening at 7pm as they where coming once again from Brisbane. At 6.45 they phoned me to say they had been held up in traffic and would be 15 minutes late. To their word they arrived at 7.15pm, problem solved.
Is it because Dell is such a multi-million dollar company that this kind of service is acheived? Definitely not! Michael Dell started this business from the boot of his car in a university car park.
My point is they are doing business well and that is why their phones are still ringing, They are still growing and people are still buying.
Do they make mistakes? I'm sure they do. We are all human but what is their normal service and business standard? What experience do they strive to provide their customer no matter how big or small?
What is your business standard?
What are your service values?
I suspect in a lot of circumstances business isn't THAT bad?
On the flip side of helping and talking with business owners I also get the privilege of utilising the services of a lot of businesses both locally and nationally and it is to this end that I remain constantly astounded at the way in which people conduct their business's.
Let Me Explain!
A common complaint is that "business is bad" "nobody's buying" "the phones have stopped ringing" and so on... but is business really bad or are we just doing bad business? Let me give you two very real and distinctly different stories -
We recently had the interesting experience of using a local business to undertake some reasonably large work that needed careful planning and attention. After providing them with a detailed scope of the project, a quotation was provided of which we accepted and it was 'happy days'...or so we thought.
In going through the process of this project I was continually amazed at the amount of times that things were promised, but not delivered. People who said they were going to show up on a date and time did not show up. In one instance, the business owner promised to come three days within the one week and on each occassion, never did. Not a phone call, a message, even an apology for not delivering on what they said they would. It then took weeks to have them eventually come and do the simple job.
Yet, they tell me "business is bad". "No body's buying". "The phone has stopped ringing".
If I contrast this with a recent experience I had with a well known company Dell Computers.
One of our very important file-servers crashed and died on Easter Monday, of all days. I rang DELL technical support on Easter Monday evening at 6.30pm to report the issue, as I had a full team of employees coming to work the next day.
A friendly technician called me at 7.30 pm that same evening and asked me if I would like him to travel immediately from Brisbane to the Gold Coast this evening to fix the problem? I couldn't make the poor man travel for an hour on the last night of a long weekend, so he promised he would have the parts on our doorstep first thing in the morning, along with a technician to fix the problem.
To their word the parts arrived on time, the technician arrived as promised, our server was fixed as promised and all rubbish and faulty parts where removed. By the time they had finished, you wouldn't have known they'd been there at all.
This is not a one off instance. On another occasion we ordered critical parts at 4pm in the afternoon. They promised they would be delivered that evening at 7pm as they where coming once again from Brisbane. At 6.45 they phoned me to say they had been held up in traffic and would be 15 minutes late. To their word they arrived at 7.15pm, problem solved.
Is it because Dell is such a multi-million dollar company that this kind of service is acheived? Definitely not! Michael Dell started this business from the boot of his car in a university car park.
My point is they are doing business well and that is why their phones are still ringing, They are still growing and people are still buying.
Do they make mistakes? I'm sure they do. We are all human but what is their normal service and business standard? What experience do they strive to provide their customer no matter how big or small?
What is your business standard?
What are your service values?
I suspect in a lot of circumstances business isn't THAT bad?
Thursday, March 11, 2010
Negative Gearing A Tool Not An Investment
Negative gearing is a financial tool not an investment
Made popular in the times of high inflation and no capital gains tax back in the 70's, negative gearing was a way to borrow money to buy more of an investment that was increasing in value.
The aim being, by using one dollar of your money and one dollar of the banks money, as the investment increased in value you hopefully made four dollars when you sold the asset. This would leave you with a profit of two dollars after you pay back the bank instead of just one dollar, had you just used your own money.
Now days the tax and investment environment is a lot different. We have capital gains tax that can bite into profits and inflation is not as high. Care and proper advice should always be taken when considering using such a strategy as it is not a "one size fits all" solution.
Yes, there can be tax advantages and it is still an effective way to acqiure more of an investment in a rising market however, you must do your numbers to ensure you will be in front in the end.
Many people that come to see us see negative gearing as an investment ie They want to buy a negatively geared property instead of looking at it as a financial tool and asking: Whats the best way to buy a property for my own circumstances?
Made popular in the times of high inflation and no capital gains tax back in the 70's, negative gearing was a way to borrow money to buy more of an investment that was increasing in value.
The aim being, by using one dollar of your money and one dollar of the banks money, as the investment increased in value you hopefully made four dollars when you sold the asset. This would leave you with a profit of two dollars after you pay back the bank instead of just one dollar, had you just used your own money.
Now days the tax and investment environment is a lot different. We have capital gains tax that can bite into profits and inflation is not as high. Care and proper advice should always be taken when considering using such a strategy as it is not a "one size fits all" solution.
Yes, there can be tax advantages and it is still an effective way to acqiure more of an investment in a rising market however, you must do your numbers to ensure you will be in front in the end.
Many people that come to see us see negative gearing as an investment ie They want to buy a negatively geared property instead of looking at it as a financial tool and asking: Whats the best way to buy a property for my own circumstances?
Saturday, January 30, 2010
Your New Years Resolution - 1 Month Down
It's Saturday morning January 30 2010 and the coffee's fresh. The office that not more than 12 hours ago was a buzz of staff, phones ringing and the usual hustle and bustle of conversation and client appointments is now empty and the only sound is the soft, mellow hum of the air conditioning unit above my head.
The peace is music and as I take a deep breath to reflect on the week that was. I am suddenly alerted by the realisation that the month of January 2010 is over. The first month of 2010 is done.
One month since setting my goals for the year ahead has passed at the blink of an eye. What has been achieved to date? What steps have been taken to move closer to these goals?
Do you have a plan for your business? What steps have you taken to move closer to achieving this?
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