Saturday, 23 May 2009

What price a relationship?

Business life is rarely without its ups and downs and there are occasions when we all have to call in the odd favour.

Such was the case this week, when an issue arose with an advert for one of our clients. With the fault laying fairly and squarely at our door, our first response, after apologising to the client, was to arrange to run the advert again at our expense.

Having worked with the publication in question for many years, and purchased a reasonable amount of advertising from it, we asked for some leeway on the price. The response was an uncompromising 'No. This is your problem, not ours'.

This might seem perfectly reasonable. After all, why should the publication compromise its margins to help us out, particularly in these straitened times?

The answer lies in the pricing strategy.

The incident brought home to us that what we had seen as a relationship, the publication prefers to treat as a series of unrelated transactions, each to be exploited for the maximum possible price. No value is placed on our future spending power: the priority is to maximise revenue now.

This is a legitimate pricing strategy, but not without its consequences.

The discovery forces us to re-appraise the way that we will do business with the publication in future. The loyalty that we have felt towards it now looks misplaced and leaves us feeling a little foolish. We must now start to treat each transaction as the publication does and judge it primarily on price. We are also motivated to look more closely at the competitor publications and get to know the people behind them a little better. These are all the characteristics of a transactional relationship.

In contrast, a small concession would have deepened our sense of loyalty, encouraged our advocacy and even left us feeling a little in the publication's debt.

The publication has great confidence in its brand and, if it is right in its assessment that it is the No1 brand in its niche, it can indeed dictate terms in this way. For most businesses, however, applying transactional pricing in a relationship situation is a dangerous and short-termist approach. The pursuit of margins, in the absence of, or at the expense of customer loyalty, ultimately shifts economic power to the customer. Customers quickly leave when a better offer arises elsewhere.

Sour grapes? We hope not. We accept our misjudgment of our worth and respect the publications right to act as it pleases. We are happy to work under the new rules.

Friday, 15 May 2009

Spinning out your expenses - how to handle a PR crisis

Most of us are, of course, scandalised by the revelations surrounding MPs' expenses claims. Finding out that our elected representatives are troughing away at tax-payers expense to feather their already gilded nests has hit at the very heart of our trust and confidence in the political system.

The news has temporarily eased the failure of individual banks and the financial crisis in general out of the headlines, but the one thing that both issues have in common is that they are nightmare scenarios for the PR teams of the companies and institutions involved. Rarely the recipients of sympathy, one can only imagine the head-in-hands feeling that these people are suffering as they think how to salvage the reputations of their hapless charges.

We have seen an evolution in the tactics adopted by PRs in recent weeks, undoubtedly determined by the magnitude or sheer indefensibility of the circumstances they find themselves in. At one time, the standard reaction to a crisis was to deny that one existed and then swiftly follow it up with an attack on the accuser's credibility. One thinks backs to the handling of the infamous dossier used by the Blair government as justification for declaring war on Iraq.

More recently, denial has given way to attempts at justification (or even laughable claims of "I'm the victim in this") and then gushing apologies and requests for forgiveness.

The contrast between the banks' approach to the banking crisis and that being taken now by Parliament is marked.

RBS struggled to throw off its institutionalised arrogance when the scale of the crisis in the bank first emerged. Head of PR, Carolyn McAdam, doggedly issued 'no comment' responses on behalf of her bosses to the frustration of the media and the public alike. Sir Fred Goodwin and Sir Tom McKillop then did little to engender public sympathy with their forced apologies in front of the Treasury Select Committee. Only under new management has RBS shown contrition, which is now being rewarded by public acceptance and early signs of progress.

In Parliament, we have seen a much more rapid journey from denial through to apology. Last month, Home Secretary, Jacquie Smith, denied any wrong doing over her husband's late-night viewing choices. Since then, once it became apparent that the collective hand had been well and truly caught in the cookie jar, the tactics have changed. MP's have been forced in front of the media, apologies issued, jobs lost and statements of corrective action made. In no way, does this defend the indefensible (or pass comment on the sincerity of the apologies), but it does show how, when faced with a PR crisis, quickly choosing the right response is vital to mitigating the damage.

Knowing how to handle a PR crisis should form part of the disaster planning in any organisation. With new media, such as Facebook and Twitter, crisis situations, not always founded on reliable facts, can occur very rapidly and it is important to be able to react quickly and appropriately.

The lessons from the events of 2009 so far are to:
  • Respond promptly and address the public as quickly as possible. Failure to do so only fuels the rumour mill

  • Maintain honesty. Lying or attempting to cover up will be discovered and make a bad situation worse

  • Be informative. If there is a sense that there is more to come out, the story will run and run

  • Be sympathetic to the victims of the crisis. Take whatever steps you can to relieve any loss or anxiety

  • Maintain relationships with the media. A team that is seen to be helping the media will generally receive more favourable treatment, than one that blocks it with a terse 'no comment'.

A crisis communications plan doesn't have to be a weighty tome, it can be a simple set of guidelines that first considers the types of crises that could occur and then walks through the main steps for dealing with them. Like any form of insurance, to leave such things for another day is tempting, but dangerous. Temporarily diverting PR efforts away from new press releases to writing and fine-tuning a crisis communications plan could prove a valuable investment in the long run.

Do you have any experience or advice in how to manage a PR crisis? We are particularly interested in hearing opinions from professional PRs on how the current MPs' expenses crisis is being handled.

Saturday, 9 May 2009

Reasons to be Cheerful - Part 1

'Tis a brave man indeed that calls the bottom of the market.

Surfing through the week's headlines we have seen:

Add to this that base rate has been held at 0.5% for a second month, the FTSE100 is up 21% since the start of the year and RBS has managed to only lose £897m in the last 3 months (bonuses all round), it would be a glass-half-empty reaction indeed not to feel the smallest glimmer of hope.

Of course, it's not all good news:

A lot of this so called 'good news' is based on slowing rates of decline rather than a return to growth, but could we at least say that we are bumping along a rather stony bottom?

Like many of the small businesses that we meet, we are not experiencing a catastrophic downturn. The decision making process remains protracted, but the enormous fear that has prevailed since last October is subsiding.

'Tis a brave man indeed that calls the bottom of the market.

Let's do business.

Friday, 1 May 2009

12 tips for trade shows

We were at the Federation of Small Business Expo in East Sussex this week, which prompts us to share a few thoughts on what we learned while there. Here are our 12 top-tips on making the most of a trade show.

1. Advertise your presence
Your leverage of the event should start from the moment you make the commitment to go. Arguably it is the role of the organisers to promote the event, but it does no harm to give them a hand where you can. We told our contacts that we were exhibiting and also made announcements on Twitter and Facebook.

2. Don't skimp on the stand size
We took the second smallest stand available and frankly wish we had gone bigger. The extra cost for a larger stand deterred us at the time of booking, but would only have been a relatively small increase on the total cost of attending. Give yourself enough space to operate and make the biggest impression you can.

3. Invest in your stand
We invested appropriately in large panel graphics for the stand as well as a flat screen TV to create a moving display of our work.

Many other exhibitors failed to do anything like this. A trade show is a shop window and yet many businesses' stands looked more like a car boot sale than a boutique.

Plan in advance and be creative: you will be surprised how little it costs to make a stand look good. Whatever you spend on hiring the stand space, we recommend budgeting at least as much again on furnishing the stand itself. This is your brand and first impressions count.

4. Arrive early
Arriving early (even the night before if possible), means you can get the stand set-up calmly and deal with any of the last minute hitches that inevitably occur. This also gives you the opportunity to network with the other exhibitors, who could all be valid prospects (they certainly are for us). There is a camaraderie amongst exhibitors, which normally makes them receptive to approaches. The time not to try selling to them is when they are promoting their own services to delegates - you will be deservedly ejected from the stand if you do!

5. Take a team
Working on a stand is physically and mentally draining and, no matter how strong you are, you will need a break at some point. There is nothing worse than an un-manned stand, so make sure you have some cover. A rest will re-energise you and having somebody else on the stand is good for maintaining the motivation.

6. Brief the team
We had a team briefing just before the doors opened to go through our pitch and generally remind ourselves of why we were there. The money we had spent on being at the show was made known to everybody, as was what we needed to achieve to make a return on the investment.

7. Work out your pitch in advance
Once the doors are open and people start coming past your stand, the time you get to put your pitch across is tiny, so you need to be ready and confident with what you are going to say. Savvy B2B marketers wrote a very timely blog post on the elevator pitch, which we used to structure our own approach. We have provided a link at the end of this post.

8. Don't be afraid to approach people
Hiding timidly in the back of the stand isn't going to get you very far. Talking to people is why you are there.

The need to approach people is another reason to have a good opening line worked out in advance. The IT support business on the stand next door to us simply said 'Do you have a PC at home or in the office?' The answer was invariably 'yes', which set up the opportunity for a longer conversation.

9. Celebrate success
When somebody on the stand gets a lead, celebrate it. Everybody likes a pat on the back and success breeds success.

10. Stay until the end
Have you ever watched how many people leave a football match 5 minutes before the end? Why do they do this? Is beating the traffic more important than the money they have spent to be there? And how many times is there some amazing action in the dying seconds?

The same principle applies at a trade show. Always stay until the end, even if it seems all the action has passed. We got our best lead at a previous show right at the end of the day when everybody else was packing up. You have committed the time and the money to be there, so use every minute. Getting home early could be more costly than you will ever know.

11. Review the results immediately
Despite the fact that everybody was exhausted at the end of the day, we didn't go home until we had been through all of the leads and reminded ourselves of the potential of each one. Memory fades, even overnight, and staring at a pile of business cards and hastily filled out lead forms in the morning can be a confusing and frustrating experience.

Going through the results was another chance to show everybody how well we had done and to thank people for their efforts.

12. Follow-up
The whole exercise is wasted if you don't follow-up on your leads...and quickly. Going through the results the night before allowed us to prioritise who we needed to contact straightaway, who we should diarise for contact across the course of the next few days and who we should simply be adding to our email data-base (no contact is ever wasted).

Prompt follow-up is polite, professional and another reflection of the efficiency of your business.

Our results
We identified 8 'hot' leads on the day, 7 warm leads and a number of additional contacts that might prove useful in the future. Inevitably there were a number of non-starters, including people who approached our stand with services that had no relevance to our needs.

By lunch time on the following day, we had been in touch with all of the 8 'hot' leads, had 4 firm appointments in the diary and an agreed way forward on the others. The other leads had all been appropriately followed-up by the weekend. The ball is now firmly in our court to turn these leads into clients and achieve our target ROI.

If you have any tips on how to make the most of a trade show, please comment. We're happy to share them and learn.

The perfect elevator pitch - Savvy B2B Marketers
Exhibition support services employed by The Marketing Eye - PR Exhibitions