Since the New Year it has been very disappointing to hear of several well known and long established retailers in Norwich going out of business. Clearly the trading environment both before and after January 1st has been very difficult. Before January the market was very competitive, highly price sensitive, and demand for good deals was high because customers knew of VAT rate increases to come. Small independent retailers were often faced with trying to compete with nationwide or sometimes global chains with demonstrably greater purchasing power.
After 1st January things really seems to change as customers felt the full force of higher fuel and energy prices, higher VAT, high food prices on commodity items, and sadly often some job insecurity within the home. In the background inflation continued to rise at a faster rate than salaries or wages, and many home owners know in the back of their minds that their mortgages will only cost more in the future.
It seems to me that all of this makes it a very difficult trading environment. I am very sure it is much easier to say than to do this, but it does seem to me to only reinforce the importance of understanding ones business model, sticking to it robustly, and adjusting critical resources accordingly. Small businesses and independent retailers clearly don’t have the buying power of national chains or internet retailers, but they are very flexible. They can change the levels of resources they have and the customers they choose to target to meet the climate they trade in.
It is easy to ignore the challenges the environment puts to businesses and to customers, but it at the peril of the business to do so. In difficult trading times it is more important than ever to rigorously understand the business model, understand the constraints it places on the business, and most importantly translate that into tangible practical action that protects the business. Not easy, but essential none the less!
Project FB – Update.
So recently we have completed what I would describe retrospectively as the nice, exciting, and even easy parts of starting a business. We have done the brain storming, looked at the opportunities and evaluated them, come up with the ideas and concepts. Finally having considered all of this, we have said OK – this is our product, our idea, our brand.
It has several advantages. The product sits in a category that has been highly commoditised, so we can offer a premium alternative and refresh the market. The product does not currently seem to exist in a premium fashion; it isn’t like producing another niche beer, another premium meat pie, or another special cake. So everything sounds like a good opportunity exists, but this is where the challenges really lie.
How does one go about converting the idea into a tangible product at low cost to gauge consumer feedback? I have read a lot recently about a concept called “the lowest cost viable product”. In essence this is saying, what are the bear essential aspects, ingredients, or materials that are needed to produce something that can be used to gauge consumer opinion? Whilst this may sound like just a sensible approach to buying an initial proto-type it is actually a much deeper thought than that. This is because it fights in the face of a person’s natural tendency to want the product to be received well and therefore engineer in un-necessary and costly attributes that are not needed or perhaps not relevant to the consumer or customer. The challenges we have faced include under pricing the product and being too easily moved into reducing the price point, over packaging the product to give a premium feel, providing un-necessary marketing support material, a tendency to rush the flavour development process, and a drive to bring too many flavours to market too early.
My learning from the process is simple but very valuable. Use other people to sense check what you believe to be essential purchases or aspects of a proto-type. Don’t assume you know what the consumer expects, start bare and then work up if you need to. Resist calls to lower price at least until you have let real consumers have their say. And be comfortable with accepting you may still be working with a proto-type even when others start to think of it as a finished product – keep listening and refining.
The next challenge…. if we have a brand and product that people like….. can we build a business model that is robust?
Last night I finished reading this great book. Scott Belsky, founder and CEO of Behance Network, considers the question: lots of people are good at having ideas, so why do some people seem to manage to translate these into tangible useful things, whilst others seem to never get past that initial creative spark. Belsky argues that this is not just about a predetermined mind set or skill set, but that instead we all have a tendency not to make ideas happen, some people have just developed a set of useful tools to overcome these tendencies.
Through his book he provides a set of useful and practical tools that are suitable for both individuals and teams. He gives relevant and practical examples to illustrate his recommendations and conclusions. Belsky talks first about the importance of organisation, not system design, but a method of identifying and managing the key actions required to keep projects moving forward that individuals are intuitively comfortable with. He then discussed the importance of a strong support team, and the importance of extending that team far beyond the comfort zone of an individual. Finally he considers leadership in its own right, and splits this into two distinct areas, leadership of oneself and leadership of a team. He argues that both need to be considered separately but are interconnected.
The nice thing about this book is that it is written in the same style as Jim Collins’ Good to Great and Built to Last, both in the style of reading and formatting. Better still many of the core concepts and ideas seem to inter-connect. If you have a great idea, maybe you should read Good To Great…… if you have a basis for a company but never seem to execute the big idea, maybe you should read Making Ideas Happen…….. if you are like me and still just starting out, I recommend all three!
It is about 18 months since I first developed my Saturday Kitchen programme. The idea was and still is to offer people an affordable, focused, and individual session to help their business move forward through better marketing and business management. What is better Marketing? Well it is different for every organisation, but in essence, it means a clear sense of strategy led by insight, a clear plan which is affordable to the business, and a clear idea of what returns the marketing activities should bring into the business.
The sessions have proved very popular and there are a number of recommendations on my linked in profile. After speaking with some clients over Christmas I have decided to relaunch the product as a set of business services Norwich based organisations can tap into. I have tried to consider the times when an individual is likely to need help and support and develop specific agendas or themes to help them.
Please take a look at the page about Saturday Kitchen, and do get in touch if you think it could help you or a business you are familiar with. People can also buy these services on-line which is ideal if you want to buy a Saturday Kitchen session as a gift for someone else.
As always, the sessions involve a Saturday morning when clients are away from their business day to day focus, some good food and coffee, and around half a day one to one. At the end clients get a summary of the key outcomes along with any support materials required to help them move things forward.
See you in the Kitchen!!
Yesterday was the second day of the Common Purpose matrix course in Norwich. For much of the day we were listening to leaders in the city and the challenges that they are currently facing. Perhaps one of the most interesting topics was the question of how a business built on the reputation of a founder can stretch the ethos and culture behind that individual to represent the whole business as it begins to evolve. Internal marketing and ensuring that people inside the organisation understand the brand as well as external stakeholders have become a growing part of the marketers role. I wonder how many people in large companies understand their brand to be the same as the understanding their customer have?
Other challenges included the quest to continue to focus on Marketing Norwich and to build the World Class Normal For Norfolk campaign, and the pressure of funding that so many not for profit or social enterprise organisations are now facing. It struck me that throughout the day people were not responding to challenges through the constraints that their job roles may typically impose, but instead there was a sense of liberation and freedom to express ideas and put forward suggestions and solutions. Is leadership sometimes compromised or restricted purely by the individual’s perception of where their boundaries sit?
Marketing Consultant Resources, Marketing in Norwich, The Wider Topic Of Business | admin | 
January 30, 2011 10:17 pm | 
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