Life is full of lessons. We all know that. They
start in the earliest of childhood days, move more routinely into
classrooms, and turn up every day for all of our journeys.But why,
if we are so aware of this, does the evidence submit that we are so
delinquent in heeding the daily, weekly, monthly, yearly
lessons?
In the earlier days of starting a business we used
to regularly stop and note the valuable learnings from the week's
work in the 'Lesson Book'. A physical action to help imbed the
essence of the experience into our conscious and subconscious
memory files.
You have to wonder how much better the business world would be
placed today, how many disastrous decisions would have been
avoided, how many opportunities would have been grasped if the
world shared a 'lesson book'? (and with the wondrous capabilities
and capacities of the net, it could even be
possible).
For the moment we will stay with the simpler task of looking over
our shoulders for the lessons of some of the most telling
happenings of the year we recently signed off.
1. To fix a global economic melt-down takes a
lot, lot longer then we want to accept
It was labeled the GFC and the initials are probably OK.
But the 'C' should not be for 'Crisis'. A
crisis mostly turns up without any warning and either blows you
apart, or you take swift remedial action.
This 'C' should be for 'Cancer'. It came with some discernible
symptoms to the vigilant observers, as a deadly mix of Ego and
Greed and very quickly was deep into the system. Like most cancers
it can be cured - but it takes time, pain and the most skillful
treatment.
In Australia, we suffered a relatively low-level, treatable
setback. This has been seriously helped by the health and strength
of our big northern neighbors.
But for Europe and the US, they are taking a long time to show
confident signs of a sustainable recovery. Some severe lasting
damage has been inflicted.
This is not good for us, given our disturbingly high number of
major corporations owned in these parts of the world, and/or are
dependent on their markets. So their nervous, tentative path back
to recovery plays on our minds, our confidence and our financial
markets.
And the business press makes sure we get a daily dose of graphic
reminders, even when stretched for contagious influence.
The lesson: Right out of that old axiom about 'when things
look too good to be true...etc, etc.'
2. Running an economy with the major lever called
'interest rates' is an engineering model in need of a
re-design
Technology continues to give us a bewildering array of enabling
tools to create, develop and manage almost every component of our
businesses.
We can segment markets as never before and apply the right,
discreet offer, service or control to effectively manage different
needs in different, relevant ways.
Yet the blunt instrument of interest rates hits all levels of
our society and economy, from the biggest global corporates, to the
smallest, weakest family or individual with the same indiscriminate
whack.
It must not be beyond the wit of our economic minds to find a
more selective set of levers that work with more incisive impact,
rather than the one big easy-to-pull master switch.
The lesson: 'That's the way it has been done' is never a
reason to keep on doing it... especially with new tools of
technology coming constantly into our hands.
3. Too many promising messages were again shot down by
the related behavior
a) Customers remain the focus of corporate
missions, visions, values and business plan narratives. But the
words are still a telling distance from the evidence of the
actions. Plans still stall in the real world
implementation. Alignment is a buzzword, ironically out of line
with the reality.
Don't think so? Try calling a customer help line, if you have
the patience to wait to get to a human contact. Call a telco, or an
energy supplier, or your financial services company (the one that
has YOUR money) for an answer to a simple enquiry (like why have
you billed me twice..?) and see if you feel like you are the
customer. Question: What if the savings targeted from having an
Indian call centre (where your customer ID does not help the
'voice' to know anything that might 'connect' you) were instead
deducted from the marketing budgets being rendered impotent by the
uncaring experience? What if real dialogue was possible? What if
customers were telling other people about the rare service
experience they enjoyed?
b) Political leaders with wonderfully crafted
messages continue to fall down when it comes to the crunch of
theaction.
WesawitherewithaPrimeMinister'sexitarrangedfromwithintheparty.
Weareseeingitin the US with an electorate turning away from a
leader who promised so much in the heady days of the campaign and
the excited hope from the victory. The compelling words have not
converted into the wanted outcomes.
The lesson: It pays to listen past the seductive messages,
whether it is a person, a brand or a market, to look for the likely
performance. You need to be sure of the relevant facts, the track
record and push harder for the critical insights to have the best
chance of seeing what can realistically be achieved.
4. Social media is the most talked about game in town.
Is it as right for business application as the proponents would
want us to believe?
Yes. If it is used in appropriate circumstances, e.g. where
connecting people with shared interests on a much larger and
potentially richer scale is enabled by the tools of social media,
such as is the case in building 'communities', in co-creation and
other products of group energy and ideation.
The recruitment industry has been reshaped by the extraordinary
reach and linking through social media applications.
But is it the holy grail of connecting brands and people? No.
And is it a creator of real relationships? Not likely. Is it
capable of actually damaging brands, corporate reputations and
businesses, if misused or lacks scrutiny for unintended
consequences? Yes.
Social media is another powerful development in the enabling
spectrum of communications technology. It was called 'social' media
for obvious reasons. It was not labeled 'commercial' media and
building a bridge across these two very different spaces is as
risky as it can be rewarding.
The lesson: Like all media (despite Marshall McLuhan), the
end result comes from the message, not the carrier or facilitator.
Beware of the 'gee whiz' and concentrate on the desired outcome
with the necessary diligence to apply the right tools in the right
business context and control the game.
5.The consumer has re-calibrated how they define value -
is this a passing phase or a fundamental shift in shopping
behaviour?
A lot has been written about the retailers battle in recent
months to get consumers to keep up the spending habit. Views on the
causes range from the scars of the GFC, to better informed
shoppers, to online sales taking dollars offshore, to the leavening
of conspicuous spending, and so on.
In all of this, a rigorous assessment of value is the constant
issue. And it is not just for retail purchases. It reaches the
biggest ticket items such as real estate, and a range of services,
financial to personal, entertainment and other leisure spending. So
to find the answer to the question, we need to sort out the
knee-jerk, passing reactions which have had heavy doses of media
noise, from those changes in value judgement which have evolved -
and will go on evolving.
Too many marketers failed to do the hard yards in understanding
the elements that made up their value propositions - from the eyes,
hearts and wallets of the customer viewpoint.
Too much of the assumed value was in the (non-differentiated)
features and too much of these alleged advantages became the focus
of their marketing.
Too much self-obsessed nonsense was allowed to masquerade as
'building brand equity'. Too many 'clever' messages were
highlighted by the 'look what we can do' tricks of technology
without having any base in a vaguely relevant idea.
Too many desperate dollars were thrown into mindless price
promotion. Shoppers were again trained to buy on price alone.
And, as we now know, too many consumers took the time to
recalibrate what it would take to make them part with their
money.
They have actually seen value in saving. In not having credit
card balances keep them awake. In waiting for the offer that suits
their needs and conditions.
These changes are not about to do a sudden back-flip. The
re-energising of consumer spending has to be driven by deeper buyer
behaviour understanding and an adjustment to the way we define
value.
The lesson: Value, as always, is in the eyes of the buyer.
It is not a simple judgment. It changes with circumstances within
the market and spending power of the same person. It takes the most
rigorous, constant digging for insights to know how to keep a
customer looking for your product or service with their wallets,
open to the right offer. It is NOT a seasonal or global phenomenon.
It is a day in, day out, home town reality.
Going forward we will be pushing for more lessons on the
value of lessons. We will regularly highlight some of the
stand-outs and would welcome input from the readers of our
newsletters and blogs to help fill the pages of our 'Lesson
Book'.
Who knows, we might learn something that avoids a repeated
calamity and a few things that just need a timely reminder to
unlock the learning and win in the marketplace.
If you are interested in discussing any of the ideas presented,
please email Kevin Luscombe at kevin@gsg.com.au or
call Growth Solutions Group on (03) 9670 4700.