Which way to vote? Finding the party for small business.

I am a floating voter.

I can’t ever recall having been so interested in the outcome of an election and my vote is there for the taking by the party that can convince me that it is the party for small business.

After more than 12 years of Labour government, and a definite sense of this being the low point, I can see the argument for it being time for a change. I live in dread, however, of the country being slammed into reverse by a Conservative party that is bent on unwinding all previous policies and that will spend at least 2 years blaming its performance on the situation it has inherited rather than concentrating on recovery.

As I have said in an earlier post, I rate Brown as a financial manager and the prospect of Osborne in No.11, who I have yet to hear say anything meaningful, leaves me cold.

To help resolve my dilemma, I have spent the morning reviewing the websites of the 3 main political parties to try and decipher their policies for small businesses.

Surprisingly, or not, depending on your persuasion, the Labour party doesn’t have a specific section for business on its website, nor does it list business under its policies. Surely, this is a major own goal.

I want to know where the Labour party stands on business in general and employers' NI and Corporation Tax in particular.

Employers' NI is an explicit tax on recruitment and it seems illogical to me to be increasing this at a time when we want to get people back into work. Corporation Tax drains small businesses of funds for investment or survival. What was the rationale for removing the £10k tax free band and, more importantly, does Labour propose to bring it back?

The Conservatives do a lot better. Business is listed as a clear policy area on the website and within it there are pledges that counter the Labour position.

The Tories promise to abolish tax on new jobs created by new businesses.

I like the sound of this and want to know more. Will the policy only apply to businesses that start-up post the election? I hope not. There should be an incentive for all small businesses to take on new staff. Established small businesses offer a more stable and secure employment environment than start-ups and are better able to fuel sustainable growth.

The Tories also say they will cut the small companies’ Corporation Tax rate. Unfortunately, there is no detail on when, how and by how much.

The Lib Dems seem destined to remain the perennial third party. They too promise to cut the rate of corporation tax and say they will do this through the removal of complex reliefs.

Digging a little deeper I find a policy that says the party will allow small businesses to choose to be taxed on cash flow rather than accounting profit. This sounds interesting. In theory, it will allow growing businesses like ours to reinvest.

As a business that has just moved premises and is investing in their improvement, the Lib Dems' pledge to cut business rates for smaller businesses and calculate rates on site values also catches my eye. The present system of total rental value penalises us for the improvements we are making.

So, a mixed bag with intriguing, but unsubstantiated ideas dotted all around.

The one thing that all the parties have in common is a promise to cut red tape and ease the burden of regulation. Politicians always make great play of this and yet never seem sure about what red tape and regulation they are referring to. This seems to be an easy line to bulk up the manifesto, without any real substance or measure of success. Red tape and regulation are nowhere near the challenges that tax and cash flow are and I wonder if it simply betrays a lack of understanding of where the real issues are.

Despite lauding small businesses as the engine room of the economy, none of the parties seem to be talking about the sector in any detail yet. I have written to each of the parties with specific questions. The best response is likely to get my vote.

Why most marketing fails

If I had a pound for every time I’d heard someone say: "we tried marketing once and it didn’t work", I could have retired long ago.

Not only does the phrase betray a lack of understanding of what marketing really is, it is often a reliable indicator of how the fateful marketing programme will have been run in the first place.

Despite many advances in knowledge and information sharing, marketing remains one of the least understood of the business disciplines. Shrouded in mystery, and slippery in its accountability, it is a topic that everybody has an opinion on and most people believe they can do better than the marketing department.

Marketing isn’t rocket science, nor does it demand significant creativity or originality (albeit a little imagination helps). Largely it is a matter of process, understanding of the human psyche and persistent effort – otherwise known as hard work.

Most marketing programmes operate like this:

A marketing campaign will be sent out. The target buyer will respond or not (most often not). Any orders will be followed up (hopefully) and the remainder will be discarded and forgotten.

This formula applies whether we are talking about a direct mail campaign, e-shot, advert, trade show or any other form of marketing.

Is it any wonder that responses are typically way below 1% and that there is no return on investment?

To run a marketing campaign in this way borders on insanity. No regard is given to the buying process and little respect is given to the intelligence and needs of the buyer. In other words, the campaign is not buyer centric.

In earlier posts, I have referred to Jolles model of the buying process and the stages that we all go through when considering a purchase. The stages apply whether it is an impulse buy or a major capital investment – all that changes is the speed with which we go through the phases and potentially the number of people that will be involved in the decision.

If we take a step back for a moment, it is clear that the buying process is highly sophisticated. The buyer operates under a whole range of influences:
– Past experience
– Peer group comment
– Social media
– Google searches
– Webinars / Seminars / Events
– Advertising / direct marketing

While advertising and direct marketing still has a role, we as buyers are much more resistant to it. We like to feel that we are researching and finding our own solutions and only want to engage the sales person in the final stages of the buying process, when our mind is pretty much made up.

An intelligent marketing programme therefore needs to take account of the buying process and run like this:

The buyer will be engaged at all stages of the buying process with methods and content that are appropriate to where he or she is in the cycle.

In the consideration phase, which may be conscious or unconscious, we need to be educating and informing to stimulate interest. This could be with White Papers, blog posts and press releases or indeed with advertising and direct mail – it is the content that is important, not the medium of delivery (which should be varied).

Once the buyer has decided to act, he or she will then start to work out exactly what they want from their purchase. Case studies, product sheets and seminars can be useful in this phase.

When the criteria are defined, the buyer will then start to look for solutions to meet those needs. Past experience, peer group recommendations and web searches will all come into play.

If our previous engagement programme has been successful, we will be firmly on the consideration list – and potentially the only name on it.

The process of converting a prospect into a client can take many months – years in some cases. Jolles tells us that we spend 79% of our time in the consideration phase, umming and ahhing over whether we have a need or not. Our marketing contact programmes must therefore be multi-faceted and continuous.

Of course, the process doesn’t stop when our product or service has been selected. We need to keep engaging the client to make sure that our solution has properly met the need and then stay in touch to ensure retention, repeat purchases and up-sell.

When we look at the buying process in this way it is obvious that simple outbound campaigns are destined to fail. Marketing must comprise multi-touch activity that builds dialogue and engages the prospect at all stages in the buying process.

The theory, when converted to practice, produces results. Recent research by Forrester Consulting showed that businesses that market successfully:

1. Focus on lead generation as a process


2. Profile and segment prospects based on customer behaviour (not just demographics)


3. Design content that builds dialogue


4. Employ some form of lead scoring / prioritisation measure


5. Nurture prospects that are not yet ready to buy


6. Make certain that marketing works collaboratively with sales
   

The Forrester research further shows that these businesses enjoy a more robust pipeline, better customer insight, improved marketing and sales accountability and ultimately improved marketing ROI.

What more can anybody want?

Acknowledgements

How managing leads pays off in a stronger, more qualified pipeline - Forrester Consulting November 2009

Adam Needles - Demand Generation Blog 2009-10

Real Business #2 - Henry Kaye

Real Business is a series of posts that analyses the marketing opportunities and challenges of real businesses in the South East. The articles are also appearing in The Courier.

Sevenoaks-based Henry Kaye recently opened a showroom at its headquarters in Dartford Road – so that members of the trade and the public can view the company’s wide range of wedding accessories, which include bridesmaid dresses, wedding shoes and boots, hosiery, gloves, jewellery and wedding umbrellas.

Sharon Gavin bought the business in 2006 from Mr Henry Kaye, who aged 82, wanted to retire. The company was then based in Eastbourne, but Sharon moved it up to Sevenoaks and, for the first year or so, operated it out of her home. Sharon moved the company into its premises at 47 Dartford Road in November 2007.

Henry Kaye had been operating for more than 20 years and one of Sharon’s first moves was to update the range, as well as introducing new, more modern, colours – moving away from pastels to include shades such as plum and coffee. The company already had a website, but Sharon made a priority of building a new one and getting it fully optimised.

While sales have continued to grow, customer behaviour has changed during the current downturn.

“People are still getting married, but they are spending less – perhaps having one less flower girl, or not buying as many extras,” she explained.

Today, company sales are split 50:50 between the trade and consumers.

Sharon said: “We sell nationwide to the trade and are successful because we are affordable and hold everything in stock, while many other companies make dresses to order.”

Sharon has recently expanded into girls’ dresses and dressing-up outfits and has launched a dedicated website for this range called www.girlspartydresses.net. The range is also available in the Sevenoaks showroom.

Sharon is currently looking for ways of building the Henry Kaye brand.

“We are well-known within the trade and our sales are continuing to grow, but we want to be a recognised brand outside of that,” she said. “We exhibited at the National Wedding Show in London this year and our stand was swamped. However, most of the visitors were planning weddings for 2011, so that was a profile-building exercise for us, rather than one which resulted in lots of sales.”

Now that the showroom is open, Sharon wants to build on that and is looking to form partnerships with others involved in the wedding industry in the local area.

The Marketing Eye says:

Before embarking on a brand building exercise, Sharon should define the brand she wants to build.

There are two very distinct markets for Henry Kaye: the trade and the public. The trade wants low prices and ready availability. The public wants a wide range of choice, an attractive and easy to use website and good service.

Now could be the time to think about updating the brand, or even running two brands side by side. The Henry Kaye brand could be retained for the trade, as there is good recognition in this area, and a new identity developed for the public – something aligned to the proposition rather than the name of a previous owner. This will allow appropriate marketing to be delivered to each audience without creating conflict.

While search engine optimisation is one tactic to maximise visitors to the website, it is important to find other ways of building the brand and driving traffic to the business. A Google search for wedding accessories doesn’t bring up Henry Kaye very quickly, so pay-per-click advertising should be investigated to supplement the optimisation activity. Sharon shouldn’t overlook off-line marketing, such as advertising, events and direct mail either.

The fact that the stand was swamped at the National Wedding Show is a good sign that the proposition is right. These visitors are only likely to return if they are re-marketed, so capturing data and building a marketing database to stay in contact with potential customers is vital. Local shows might be more successful than national ones for consumer business in future.

With thanks to freelance journalist, Angela Ward, who is interviewing the businesses featured in these posts.

2009: A year in review - and our predictions for 2010

2009 was a challenging year for marketers. This time last year we were talking about the collapse of Woolworth's and still recovering from the shock of Lehman Bros; the banking crisis was in full swing and we were surrounded by fear and uncertainty.

Fortunately, we seem to have been spared the worst fears of the naysayers. Whether this is because of, or despite, government intervention divides opinion and we will all get our chance to record our point of view in 2010.

In a tough and uncertain climate, marketers were called on to perform in a way that we haven't been for some time. The pressure for short-term, measurable results financed with slender budgets overpowered any sense of long-term planning and brand building. We rushed head-long into social media, not I suspect, because we knew how it would work, but because it was trendy and cheap.

In the office, we had to improve relationships with sales and finance to ensure stakeholder buy-in and a seamless progression from concept through to delivery: it is bizarre to think it might ever have been any other way.

Unfortunately, little progress has been made with improving marketers' sense of self worth. The hand wringing continues, with many marketers bemoaning their lack of influence at senior levels within their organisations, yet seemingly unable to devise a strategy to put it right.

On a more positive note, the summer months saw The Marketing Eye engaged in the debate about marketing automation. Led by the US, this still has some way to go in the UK, but it is encouraging to see people trying to harness technology to support sound marketing principles.

Our involvement came about via this blog, which has proved popular in many countries and has a particularly strong following in the US. The appetite for new content in the US appears insatiable. Our post on the differences between B2B and B2C marketing still attracts more than 100 readers a month and a plethora of comments.

The year saw fewer than normal corporate re-brands, but the controversy they created was no less heated. AOL, Kraft and MSN where amongst those that offered us evolved identities. Starbucks sent bloggers into a spin with their experiment with un-branded coffee shops in Seattle.

The big story of 2009 was, however, the explosion of Twitter, which came of age with the revolution in Iran. Twitter is still growing and is now finding its natural level. We have still to see the first Twitter-born brand, but the growth in the personal brands of people like Stephen Fry and Ashton Kutcher suggests the potential is there. Compare the Market is the best example we have seen in the UK so far of Twitter being incorporated into a broader marketing strategy, building the personality of the brand via the incomparable meerkat, Aleksandr Orlov.

As a business, The Marketing Eye has come of age too. We have new people, new offices, and a recently appointed Chairman designate who will help steer the business towards its full potential. We are firmly set on a road to growth and the final few weeks of 2009 were spent immersed in strategy and operating models. Our goal is to grow the business four-fold by 2012, which we will achieve by hiring the best marketing people and staying true to our philosophy of 'every client is our only client'.

So what will 2010 hold for us? As a business, we will take on more staff, enter new markets and strengthen our internal processes so that we can continue to put customers first. For the world of marketing, our crystal ball reveals the following:

• Twitter will continue to grow globally: its value for search and news will be realised. Marketers will still struggle to harness it for commercial purposes - but will keep on trying


• The shift towards spending on digital marketing vs. off-line will increase, probably because it is cheaper, not because it is proven to be better


• There will be some renewed growth in branding. Businesses that have neglected their brands over the past couple of years will now be finding that a revamp of the external and internal brand is overdue. At a visual level, an updated identity will signal renewed optimism as we claw our way out of recession. The business case will still have to be made and investment will be hard won


• Marketing budgets will nudge gently upwards as we come out of recession or as businesses start to adjust to, and accept, the 'new normal'


• A change in Government seems inevitable. As a marketer, I'm interested to see how the parties make use of new and old media to win our votes. As a businessman, I want to know which is the party for business.

What were your main marketing memories of 2009 and what do you predict for 2010? We'll be interested to hear your views. Whatever your role and wherever you are, may we take this opportunity to wish you a happy and healthy 2010.

Happy New Year!

Real Business #1 - Crazy Bags

Real Business is a series of posts that analyses the marketing opportunities and challenges of real businesses in the South East. The articles are also appearing in The Courier.

Launched in 2000, Crazy Bags is one of the UK’s leading providers of eco, carrier and promotional bags. The company was established in Southampton and moved to Crowborough two years ago. Now a £2 million turnover company, Crazy Bags has recently relocated to stunning offices within Eridge Park near Tunbridge Wells.

“The reusable bag has become embedded in the consumer psyche and brands are now looking for innovative, fashionable and practical bags to help boost their visibility and lengthen the life of their marketing campaigns,” said MD, Andy Steavenson.

The office in Eridge is the company’s head office – but all the warehousing is now based in Nottingham, where thousands of eco-bags are stored ready for printing. This allows Crazy Bags to meet the very tight deadlines of the promotional industry. Orders can be filled within seven to ten days, rather than the industry norm of eight to ten weeks.

Crazy Bags has worked with myriad customers over the years – including: Shell, Coca-Cola, BP, Sony, Sunseeker, Glastonbury Festival and Rolls-Royce: it has recently also signed deals with fashion store Boden and hair stylists Toni & Guy.

The company is one of the UK’s only providers of Fair Trade accredited bags and it is also a member of The Supplier Ethical Data Exchange (Sedex) – a membership organisation for businesses committed to continuous improvement of the ethical performance of their supply chains.

With eco-bags now prevalent in supermarkets across the UK, the next step is building that momentum on the High Street – and Crazy Bags is already talking to a number of retailers and department stores.

“It would be wonderful to have a crystal ball and find out how the eco-bag market will evolve,” said Andy.

In the meantime, Andy is delighted with the company’s new offices in Eridge Park where 12 people are located, with room for expansion. However, he admits that the company isn’t well-known locally – something he intends to change.

The Marketing Eye says:

The business has two key selling points which should be accentuated in its marketing: the short delivery times and the ethical production. In the current climate, businesses are making decisions to undertake promotional activity later and later, so the ability to supply at short notice, and meet corporate social responsibility standards, will help win business that might otherwise have been lost. There is also an opportunity to charge a premium for being able to deliver what the competitors cannot.

The business has a diverse customer base and the move into events, such as the Glastonbury Festival, shows good innovation by the management team. There should be a constant search for new products and new markets. The product is currently fashionable and markets that would not have been receptive in the past could be receptive now. Toni and Guy is a good example of this and there should be more. Trade shows provide a ready market and there is a growing trend for towns and villages to produce community bags that are handed out by the local retailers.

The crystal ball that Andy is looking for can be created by market research. A mix of qualitative and quantitative research is required and a specialist market research company will be able to advise on the best methods to use.

The company’s local profile could be raised with a well chosen sponsorship. I would also recommend that the senior management team immerses itself in the local business networks: the recently formed Royal Tunbridge Wells Lunch Club is specifically designed for businesses of Crazy Bags’ size.

An opening event would create both a PR story and an opportunity to bring a number of local businesses and suppliers together. A direct marketing campaign using one-off bags specifically created for the prospect name would provide a graphic illustration of how the product could work for them.

With thanks to freelance journalist Angela Ward who is interviewing the businesses featured in these posts.

Integrated marketing

Marketing a product or service has many challenges. First, there is a need to raise awareness of the brand and promote it's promise; second, the marketing activity must drive sales and get customers to sign on the dotted line. Creating a truly joined-up marketing campaign is the ultimate challenge for every marketer.

Traditionally, marketers have thought in terms of above-the-line for brand building and below-the-line for response. Now the line is more blurred. Pressure on budgets means there is rarely room for campaigns that do one thing or the other: we are being forced to think holistically.

The danger of enforced cutbacks is that we think excessively about channels and too little about target markets and niches. The standard response to reduced marketing budgets has been to make wholesale cuts to specific media and channels. The most dramatic cuts have occurred in newspaper and magazine advertising, swiftly followed by direct mail and sponsorship. The principle beneficiary has, of course, been e-mail marketing and social media, not I suspect because they work, but because they are quick and cheap.

We need to carefully consider if these lower cost media are really effective alternatives.

Rather than scrambling for social media programmes, marketers need to step back and realise that it is the interaction of a variety of media that raises awareness and ultimately drives a purchasing decision. A reduced budget should be addressed with focus on a more tightly defined and better understood target audience, not 'we cannot afford to advertise' or 'we cannot afford the direct mail programme'.

An integrated marketing approach is not, in itself, a strategy: it is the tactical implementation of a marketing strategy. The distinction is important, because without the right strategy, no amount of talk about integrating channels and mediums will make any difference.

When all is said and done, an integrated marketing approach is not an option, it is essential. The notion that different channels perform different roles is wrong.

Moving on up - new offices for The Marketing Eye

Today is another big day for The Marketing Eye as we move into our new offices in Uckfield town centre.

After two very happy years in East Hoathly, we now need to be nearer to our clients and give ourselves more space as we work towards our medium term vision of being the most sought after provider of marketing services in the South East.

The new offices at Nelson House in the High Street provide us with 1100 square feet of working space, separate meeting facilities, a staff area and customer parking. We hope the town centre location will be appreciated by our clients and employees alike.

At the commencement of our search, we looked at properties as far afield as Lewes, East Grinstead and Tunbridge Wells, but we decided to stay in Uckfield because of its central location and friendly business community. While our clients are spread across London and the South East, we have a loyal following in Uckfield and want to build upon it. At the same time, Uckfield allows us to reach Eastbourne, Brighton, Tunbridge Wells, Haywards Heath and Crawley with ease and London is but a short train ride away.

The wisdom of committing to new premises and a larger team when the economic climate remains so uncertain will be questioned by some. At The Marketing Eye, we believe dealing with the recession is a state of mind: we can let it crush us and demoralise us, or we can accept it and work hard to overcome it. We prefer the latter option. There is business out there for those willing to go out and find it and finding it we are.

Now, faced with the prospect of unpacking boxes, plugging in computers and re-printing stationery, our first priority is to maintain business as usual for our valued clients. We will throw open the doors to our friends and neighbours with an official opening event very shortly.

We leave the beautiful Hesmond’s barn with a heavy heart, but great excitement and optimism for the future.


Foot note
We would like to take this opportunity to thank and recommend the following businesses for their help with our move.
Chris Boakes - Acumen Business Law - for all legal matters
James Neeter - Neeter Solutions - for organising our telephony requirements
Tim Knibbs - Knibbs Computer Services - for taking care of our IT and cabling needs.