What you say is not what you do

There is a bit of ruckus at the moment about the power of Australia’s supermarket duopoly – Coles and Woolworths.

In the past the criticism was that the two supermarket chains had too much market power – over 80% of the Australian market. That percentage probably remains the same today despite all the brouhaha about market dominance over the past decade (i.e. there were lots of protestations at all levels of the community, and a number of government inquiries, but there has been little tangible action to reduce this market dominance).

The main brunt of the criticism relates to market concentration (the duopoly has reduced competition in the market) and has too much market power on the buying side (the duopoly can squeeze suppliers to almost unsustainable levels). In addition, supermarkets can cross-subsidise their products when it suits them, thereby using their market power to artificially lower prices in “competitive” products.

In 2008 there was the Australian Competition and Consumer Commission (ACCC) inquiry into the competitiveness of retail prices for standard groceries. In September 2002 there was the Report to the Senate by the Australian Competition and Consumer Commission on prices paid to suppliers by retailers in the Australian grocery industry.

One of the interesting snippets of information from these public inquiries is that there was evidence that showed a difference in pricing at the supermarkets depending on whether the duopoly was in the one location and where the duopoly had a third supermarket in competition in the one geographic location. In the scenario where a location had three competing supermarkets, the Coles and Woolworths retail prices were generally lower than at locations where it was just Coles and Woolworths in competition. Well, as Michael Porter identified, businesses try to avoid price competition wheneve they can because it directly affects margins.

The impact on suppliers is clear enough. It was loud and clear when I worked at Rabobank throughout the first half of the naughties. I would hear how the supermarkets were screwing agricultural suppliers through reduced prices and increased compliance costs. For example, one banana producer told me that the bananas had to be packed in a box in a very specific way otherwise Woolworths would not accept delivery.

Nowadays, farmers have the same concerns but there are increasing demands from the duopoly concerning on-farm activities. Recently, one berry producer told me that having a dog on a berry farm was unacceptable because the dog may have been washed in a chemical bath that could get onto the berry fruit!

The supermarkets say that driving down consumer prices shows that a competitive market exists. Driving down the retail cost of milk to one dollar a litre makes a lot of sense if one wants to sell lots of milk but milk has a relatively inelastic demand – the lowering of the price does not necessarily see an increase in consumption. For the duopoly, however, a low price for a food staple like milk makes a lot of sense because it attracts shoppers to the supermarket rather than the corner store. If a shopper perceives the saving on milk is large enough, the shopper will alter his/her shopping behaviour to shop at the duopoly at the expense of other food retail providers and small businesses. Instead of going to the local convenience store to pick up milk and some ancillary groceries, the shopper will concentrate their total grocery shopping activity to the supermarket.  The duopoly wants consumers to stop buying any skerrick of grocery items from alternative convenience stores and grocery retailers. The milk war is less about increasing consumer demand for milk, but increasing the market power of the duopoly.

Currently, there is a lot of concern over the duopoly supermarket chains driving down supplier margins even further through “home brands” (also called private labels).  This article and this one sum up the private label issue nicely.

Everyone is out there saying how dreadful it is that the supermarket duopoly can do all these terrible things. However, the supermarket duopoly reduces prices on grocery items at the checkout for consumers (the same consumers who are equally screaming about the high cost of living).

A recent poll in the Sydney Morning Herald found that over 70% of people are against home brands because they limit variety (i.e. consumer choice). There is plenty of chatter to indicate that a similar percentage (or more) of people think that the supermarket duopoly has too much power.

But what does the behaviour say? Talk is cheap when there is no direct and tangible linkage to benefits or costs (i.e. there is no benefit or sanction as a consequence of our response to a survey or to give an opinion). A poll or a survey asks us what we think and we say so. We really believe what we say as well - Coles and Woolworths are bad.

However, it is likely that the very same people do their weekly grocery shopping at Coles or Woolworths. Mums and dads have Coles and/or Woolworths shares as an investment; either directly or via a superannuation fund. Our actions really do speak louder than words.

Whilst the supermarket duopoly is an important economic and marketing case study, the implications of saying one thing and doing another are huge. Are opinion polls really worth anything at all? The monthly tabloid treats of political opinion polls tell us the Gillard government will be wiped out if an election was held today – but it’s not. The next federal election (the real poll where an outcome actually happens) isn’t for another couple of years. Opinion and speculation are now touted as fact in the media. However, these same opinion-makers are not held accountable when the future unfolds in real-time and they are proved wrong.

If we are to make any sense of opinions linked to action, we need to actually examine the behaviours. This applies equally to marketing, economics, and knowledge management. It’s the logic behind behavioural economics, real-life behavioural research, and user experiences. Mark Hurst’s Good Experience is a good example of looking at what actually happens as distinct from what reportedly happens.  It’s the logic that we need to apply in our knowledge management research as well.

Online retailing doesn’t always deliver

Hey, Gerry Harvey and the crew of the whingeing Australian retail coalition – online retailing doesn’t always deliver!

If you’ve been following the brouhaha here in Australia over online retail then you would know that some of Australia’s biggest retail behemoths have been whingeing boldly and loudly about the non-application of GST (10%) to overseas online retail below $1000 in value.

If you believed these retail dinosaurs, you’d think that online retail was a great evil attacking the very fabric of fair-faced capitalism! Nothing could be further from the truth.

As this latest article identifies, online retail has some problems that should be familiar to anyone who has spent a little bit of time understanding the phenomenon. Problems facing consumers shopping online include:

• non-delivery
• item was not what was claimed online
• privacy and security issues with internet transactions
• confusion over application of domestic consumer law to overseas purchases

One of the reasons consumers shop online is because “bricks-and-mortar” retail has let them down.  Big retail in Australia generally has poor customer service and the range of products on sale is far fewer than what is available online over the internet. The first problem is something big retail could fix but it would cost them extra money in recruitment and training, something they all want to avoid. The second problem is unavoidable due to globalisation and communications – something that has been obvious over the past 20+ years.

Rather than spend the millions of dollars on a public relations campaign whingeing about a paltry tax payment, big Australian retail could actually improve performance through good ol’ fashioned competition. They could provide better service. They could offer a wider array of products. They could lower some of their prices to be more competitive with online (still higher, but not the umpteen hundreds of per cent differences we often see now). This comes at a cost to the retail monoliths and this is the real reason why they fly the online tax propaganda.

Retail stores in Australia have a huge advantage over online:

• products are visible and tangible
• products can be bought on the spot
• there is no postage charges and overseas currency banking fees to pay
• good customer service builds consumer trust and improves word-of-mouth marketing
• Australian retail can use their own online stores to supplement their retail stores, thereby being both supportive of the business and enhancing the brand (but only if the online store actually meets consumer needs)

The trouble is, big Australian retail needs to put in some effort to compete. That’s why the CEO and Board of Directors get paid the big bucks – to work hard on strategy and operational performance. Quite frankly, I don’t see much evidence that they are willing to work hard beyond the easy fix of spending their company’s money on simplistic advertising drivel.

Online selling is here to stay

No doubt you have heard the mad ravings of big store retailers like Harvey Norman, Myers, and Borders complaining about unfair competition from online retailers.

Please note that much of their ranting fails to distinguish between online sellers in Australia and overseas, although the propaganda campaign really targets non-GST payments of overseas retailers. Mind you, Gerry Harvey has had a long-time spat with Australian online retailer Ruslan Kogan who sells televisions in direct competition to Harvey Norman. Perhaps Gerry Harvey has had it so good for so long he has forgotten what competition is all about.

The GST exemption is for goods under A$1000 in value purchased by Australian consumers overseas. At 10%, the maximum tax that could be applied is a pretty paltry A$100.

But of course most people who buy from online retail (about 2% of all retail sales)  don’t do it for tax reasons and don’t necessarily spend big. For example, I buy the odd book or CD from overseas when I cannot source the items in Australia. If  my purchases come to A$60, then the GST exemption saves A$6. I bet it would cost more than A$6 to manage the application of GST to such small individual purchases. But then, the big Australian retailers don’t have to fork out for the costs of administering the tax – the Australian taxpayer does.

The PR campaign from big Australian retail is a whinge that reflects more their lack of adaptability in the market than enything else. Business journalist Michael Pascoe sums it up here and Michael Fox here.

More fundamental to the attack by dinosaur retail in Australia on new methods of consumer shopping is the fact that consumers have far greater visibility on choice of product and price. Whereas before, Australian consumers pretty much had to take what retail offered in their stores. Nowadays Australian consumers can buy what they want and when they want from anywhere. Moreover, Australian consumers can see the different prices for the same goods from many, many different retail suppliers.

Along the same lines, but at least a dinosaur moving into the 21st century, is newspaper mogul Rupert Murdoch with his proposed Ipad newspaper. The digital newspaper will be called the “The Daily”, but the launch has been delayed slightly. Murdoch has in the past vociferously complained about news media’s failure to generate income from news on the internet. This new venture is obviously something Murdoch is pinning his hopes on for the future.

The content will be important if it is to generate big sales.  Murdoch’s News Corporation has often been criticised for right-wing bias (Fox News in the US is a classic example). It will be interesting to read the tone of the content on the digital newspaper and what that means for online sales.  If Murdoch gets his content and pricing structure right, then this will be a huge success.

One of the myths about online is the belief that people want everything for free. The massive increase in online shopping over the past five years belies this myth. The fact is that people will pay for a service or a good online (like anywhere else) when they see it delivers what they want at a price they find acceptable.

It will be interesting to watch the digital newspaper take-off in the same way it will be interesting to watch loud-mouth big Australian retail adjust to the new shopping realities brought about through online shopping. (It seems that the Australian big retail bully boys will persist with their campaign – read here. A more sensible response can be found here).

All of this will have a huge impact on online marketing and communications; a trajectory that continues to advance online media over the traditional forms of media communication.

Reflections on Web 3.0 social media conference

I have had a few days now to reflect upon what was presented and discussed at the Web 3.0 social media conference that was held in Sydney last Thursday and Friday.

The key point is that social media cannot be ignored by companies and nor can it be ignored by “marketeers”. “Marketeers” is obviously some cutesy professional term used these days to describe marketing executives or marketing departments; a noun that I find strangely childish and stupid.  But I digress.

For the organisation, social media offers scope, range, and reach to potential customers and clients. Using social media tools such as blogs, Facebook, Twitter and LinkedIn allows organisations to communicate using channels that are becoming increasingly popular. 

Mark Higginson from Nielsens reported that growth in the online sector in Australia was strong, even showing a growth in online media use from the 55-plus demographic. Moreover, in the words of Alex Crompton from Aussie (Home Loans), “It’s (social media) where the people are.” In other words, look at where your audience is and work out the best (if not all) the media channels necessary to connect with them. The online space will continue to eat into traditional advertising channel revenue as people spend more time online.

Not surprisingly, the case for social media use was strong. Not only did presenters emphasise the communication and marketing aspects, but many also told us of the importance of “community”, “engagement” and “the social” aspects of the online universe. Online brand reputation and “tribal support” are significant, as both Alex Crompton (Aussie) and Karen Ganschow (Telstra) indicated in their presentations. Products and services can be improved by using social media as a way of listening to customers, and then using the feedback to enhance the customer (and brand) experience - all good commercial sense. Generating online champions who advocate (and even solve problems) on your behalf, is even better!

Nick Love from Fox Interactive Media was confident that the internet in the near future would be totally about “the social”. Nick was so confident , that he forecast that “social” media would become redundant since the social aspects of online use and interaction would become embedded into everything that happens online. Nick referred to the “social web” as a way of explaining how pervasive the shift to social networks was becoming. Mark Higginson from Nielsen wasn’t convinced (and nor was I) that the internet in the future would be totally social, but I think Mark and I would agree that the social aspects of online communication and engagement will continue to grow and become very important.

The three of us would agree, however, that social media has an important “reputation currency” associated with it, something at the heart of authenticity and engagement. It remains to be seen how marketeers will leverage “authenticity” and “engagement” to sell their wares and promote their brands.  Actually, it is already beginning to happen on social media sites such as Youtube where content is becoming monetised (product placement is a classic example).

Karen Stocks from Youtube keenly promoted (financial) success from Youtube celebrity spinoffs and content creators such as Australian Natalie Tran. Youtube offered global reach, attention, and eyeballs for product placement and brand awareness. At the heart of Youtube success was “viral marketing” – some authentic and often accidentally successful Youtube clip that captured “people’s imagination” and took off. One quoted example was the Mentos mints in the bottles of diet coke that literally took off, and with it sales of diet coke to boot! Of course, it’s not all beer and skittles (or mints and coke) for Youtube content creators. Naomi Klein warned us in No Logo that companies prowl for ideas from a range of sources (and these days social media is one of them) for emerging trends and then commercialise without any profit going to the edgy content creators who displayed their ideas first.

Michael Kordehi proved that Microsoft has informed and entertaining speakers with a great presentation on enhancing a richer and deeper personal experience with the web. Michael showed off some of the IT whizz-bangery that he and his team had done for NineMSN’s Grazia magazine. The image quality of the digital fashion shoot photos were enhanced for much finer image detail (something clients wanted from fashion photos online) AND also to enhance the way readers could share these images with their friends. Using your own navigation around the images, you could then save and send it to friends so that they saw the same sequence of images as you did. I think he referred to it as an “e-journey” but I think he’ll need to do more work on that term to make it part of the popular lexicon.

Other professionally presented talks were from Paul Borrod of Facebook and Cliff Rosenberg from LinkedIn, both of whom promoted the social media benefits of their respective services. I already use LinkedIn but I must say that I am a little more inclined to take Facebook  more seriously than I have in the past, based on some improvements to the interface and an assurance to improve privacy.

Marc Lehmann (Saasu.com) talked about the naturally selected web which pretty much was about getting the web to cut through the mess and give you exactly what you want without relying on search. Because we are all still time-poor, we need a more life-like web that relates to our own needs and our own digital identity. Marc thought that today it is not about the web, it’s all about the data. How can we get the data we need and personalise the information to meet our individual demands and save us time?  And Nicholas Gruen, in his presentation on Government 2.0 and web 3.0, also advocated how the provision of (government) data could be used by people in many different ways – the classic example was the Gov 2.0 mashup late last year at which an inventive bunch of people reframed and rearticulated government data into informative and interesting ways. In other words, put the data out there and let the people work out for themselves how they will use it and what meaning they will derive from it.

One of the best presentations from the conference was from Sandy Carter of IBM. Sandy gave some excellent real-life examples of companies using social media for a variety of strategic purposes. The message was clear: before using social media, an organisation must articulate and understand the problem it is trying to solve and then work out how (or if) social media can make a positive difference. In fact, 80% of your time should be about planning and setting out the objectives and the strategy, while the remaining 20% is about the technology and the tools. Much of what Sandy had to say, and in far greater detail, is in her book The new language of marketing 2.0. The book outlines a set of six steps (ANGELS) that provide a useful guide to utilising traditional marketing techniques with what web 2.0 has to offer. And thanks Sandy for the free copy!

There  were other interesting papers that I summarised in my notes but I need not go into detail here. Suffice to say, the conference encouraged thought and good discussion about how social media can be leveraged to improve communication, enhance marketing and customer engagement, and promote new forms of interaction and community among online participants. The conference was very impressive indeed.

On knowing the customer and what they want

It always amazes me that some internet sites are not really set up to serve the needs of the customer.  You see examples of it time and time again.  As many readers will know, I am a big fan of Gerry McGovern and Mark Hurst, both of whom extol the common sense line that the customer experience is all important and should be uppermost in the mind of any selling organisation.

One of the first maxims of internet or intranet design is to know your customer and what your customer comes to your website to do.  People are busy, and in the majority of cases, go on the internet to do something; find some specific information; complete a task.  Sure, there is serendipitous search but website design is not about focusing on the per chance customer; internet design should be about identifying your customers and servicing their needs. 

Let’s take an example – I am going to another city for work or for a holiday and I need a hotel.  What is the information that is most important to me - the customer? 

- the address and service offerings of the hotel
- price (including any discounts or specials)
- availability
- reservations
- maybe booking and cancellation policy for the more detail-oriented patrons among us.

Now, do you think people search for hotels based on price or do you decide upon the place first?  Price is nice, but people want a hotel in a specific place.  Choose the place and then check out the prices. 

So when I went to check out the IBIS hotel (I am an A-club member) in Christchurch, New Zealand, I found this IBIS hotel site.  You will see that the site gives the address and contact details, provides information on the service offerings of the hotel, and allows online bookings and reservations.  This is all good standard stuff.

But what about that header at the top of the page, especially the one titled IBIS special offers.  Naturally, before I check out the price and availability of the hotel I am looking at booking in Christchurch I want to see what special offers might be available.  Well, what you actually get is the global IBIS special offers page with great deals for IBIS hotels in ….. Bregenz, Austria; Marrakech, Morocco; Basle, Switzerland, and Toulouse, France, etc.  There are also major cities to explore …. but not Christchurch.

Please tell me, why would I want to know what special offers are available in Toulouse and Bregenz when I am going to Christchurch?  Why is there a link to these European special offers from the Christchurch IBIS Hotel page?

Well, the answer is that the Christchurch page is a page (a local page) on the global IBIS Hotel internet platform.  The header information at the top of the page is the global banner across all the IBIS Hotel pages, from Christchurch to Marrakech. The banner bears no relation to the local hotel page other than for IBIS Hotels to tell you stuff that you don’t need to know; stuff IBIS Hotels obviously thinks is grand news!

The obvious point is that if you are offering special offers on the Christchurch IBIS hotel page then give me the special offers for the Christchurch IBIS Hotel – that is where I want to go and that’s why I am looking at the IBIS Hotel Christchurch internet page!

The message is: design the web page for the particular customer that you need to service.  Do not design a web page for the ease and ego of the organisation.

On sailing ships and dodos

Dave Snowden told a good story at a knowledge management conference a couple of years ago about the sailing ship.  In the early 19th century, mighty sailing ships with giant masts and sails were the dominant form of sea transport in the modern world at that time.  Along came ships constructed of iron and powered by motorised engines which were more efficient (they could power along whether the wind blew or not) and became more reliable and versatile shipping vessels.  The sailing ship industry responded with even bigger ships with more masts and more giant sails but in the end the sailing ships were doomed by a new technology that made sea transport more efficient and effective.  Perhaps the sailing ship may make a return in an oil-depleted and global greenhouse environment in the 21st century but that’s another story…

And that poor old bird, the dodo, was no match for the slaughter by humans, and by invading pigs plundering their nests and territory.  Alas, they were unable to adapt to the ravages brought upon them in such a short space of time and they became extinct.

Which brings me to this article in the Sydney Morning Herald about a conference in India at which the media moguls of the 21st century are battling to stay in the game in a world enriched and informed via the World Wide Web.  The World Newspaper Congress is hearing from embattled media moguls about how unfair the internet is making the news and information business since they haven’t been clever enough to work out a successful business model for the changed world media environment.

Like the 19th century sailing ship industry, the newspaper moguls are desperate to keep alive a form of business that is actually being surpassed by more modern and disruptive technologies. The internet and social networking are changing the way content is published, consumed, and valued.  Content on the internet is more immediate, more personal, more varied, and more versatile compared to traditional newspaper publishing.  Not only that, but people these days do not have to rely on newspapers for their dose of worldly information since much of the information out there on the internet is provided by people for free and can be accessed for free! Even newspapers and television news programs seek out these stories from ordinary folk who witness events first hand or who have some other form of newsworthy story.

Of course, the newspapers are indeed part of the problem.  Over the past twenty years (at least) newspaper proprietors have dumbed down journalism and investigative reporting so much that newspaper content is hardly superior to much of the informed news and information provided by ordinary people. In fact, it is ordinary people who actually have something interesting to say, without the caveat of having to say something that will generate advertising revenue or hanker for the bouquets from supporting ideologues.

Reading newspapers these days is like reading a bevy of opinion pieces; the opinions being no more informed or relevant than that of bloggers and social networkers.  Instead of lifting quality and gaining some comparative advantage this way, newspapers have taken the easy route and proffered a multitude of opinion, loose reporting and drivel that can be easily replicated anywhere. 

At the same time, newspapers continue to search for more “eyeballs” to convince advertisers that newspapers are still relevant.  Newspapers still want to be found on the internet to capture these “eyeballs”, yet they want to determine and control the method and channels of being found. They want to use the 21st century technology but only in the manner of their 20th century world view of dominance and control of the news. Even advertisers are shifting their world view.  Advertisers are increasingly using new methods of messaging and advertising utilising the new communication mediums available via the internet, social networking, and other forms of communication channels.

At least the newspaper industry hasn’t had it as bad as the dodo. The dodo had relatively little time to adjust to the ravages of invading species before they finally met their final and irrevocable end. Newspapers have had plenty of time, and had plenty of warning about the competitive content available via a host of alternative sources.

Newspaper organisations are like the 19th century sailing ships trying to battle their way forward using their existing tired techniques and old-century attitudes, and failing to confront the new realities of a brave new world.  Like those 19th century sailing ships, newspapers as they exist today will die off and be replaced by a more efficient and effective form of  news communication that does not rely on old thinking and old technologies.

Newspaper moguls can whine all they like but they need to accept the new communication realities and make the necessary adjustments, or go the way of the sailing ship and eventually, the dodo.

On purpose and need: an example

In my previous blog post I strongly advocated the need to determine purpose and need in our knowledge management planning and strategic thinking.  In fact, purpose and need are important in most business contexts.

To illustrate the point more, I was pleased to read in my latest Good Experience newsletter about how a major US hotel chain (Courtyard by Marriott) went about reinventing itself in order to deliver a better service to meet customer need.  You can read the interview from the Good Experience blog.  Also of interest, and something I have advocated previously, is thinking about marketing principles and practices and how we can use this in our knowledge management activities.

The key message from the interview was in defining a purpose (who is our customer and how do we service that customer to ensure they prefer to stay at Courtyard by Marriott) and working out the best way of meeting that particular need.  The method Courtyard by Marriott took to undertake this transformation was in good market and customer research.  Out of this research came “a set of insights based on what we learned from our segmentation, interviews, and ethnography”. Courtyard by Marriott calls these results the “brand blueprint” and the rest of the interview talks about how the hotel chain went to work making the “brand blueprint” come to reality.

And the result: “We’ve seen a dramatic change in our market share, almost 10%, a 28% increase in guest satisfaction from the new lobby, and average food profit has increased 113%”.

The classic marketing approach to determine who really is your customer is something that practitioners in knowledge management should also consider seriously.  Sometimes, it is important to realise that one cannot service everybody to the same extent or in the same way.  It is certainly the case that people have different needs even inside the one organisation.  When the hotel chain determined who was the main game, they sought to understand this particular segment in order to determine how best they could match their needs.  I am curious to find out if they used any form of archetype analysis in their research. 

As a consequence of the research and analysis, the company worked out strategies and designs that would support the now-recognised needs of the customer.  Listening to your customers is very important and doing what is best for them (and not just for yourself) is critical.

I think that those of us in knowledge management can take some lessons from this essentially marketing experience to enhance our own abilities to rethink our purpose and meet the needs of our particular client groups.

On a writer in residence and the airport experience

The bods at Heathrow Airport in London are reported to have hired author Alain de Botton as a writer-in-residence. The idea is to give de Botton unfettered access to the airport so that he can write about the modern experience of airport life. As de Botton says in the article, airports are a good microcosm of the global themes of human life (ok, I paraphrased a bit here).

However, de Botton will only have full access to Heathrow Airport for a week so perhaps the tag writer-in-residence is a little on the exagerated side. I guess that the term short-term publicist doesn’t have the same sort of public interest as writer-in-residence for those high brow types in London. But let’s wait and see what de Botton gets to the bottom of at Heathrow first before speculating any further as to the outcome of the exercise…

I suppose the bods at Heathrow Airport are hoping that de Botton can write something positive about the airport experience since it has continually underperformed passenger expectations. The opening of Terminal Five last year was a disaster. And when I travelled through Heathrow in 1986 on the day Terminal 4 opened, there was a baggage handlers strike and the best part of the Heathrow experience back then was leaving it!

Yet now in this modern age I am surprised that de Botton wouldn’t just blog or tweet about his airport experience. The fact that he has been contracted to write a book based on his one week tour of duty at Heathrow smells suspiciously like a publicity stunt to me. Moreover, the chap needs to be given more time – let’s say a writer-in-residence for three months. We all know that one week doesn’t make a summer!

So de Botton will write a book that will be published and all will be revealed then – hopefully including the answers to many a passenger problem at Europe’s busiest airport epicentre.

But speaking of answers, Heathrow Airport should just listen to the thousands of customers that use the airport each day if they really want to know what goes on in the airport and what people really think. Having a well-known author intermediate these airport experiences in the 21st century is no longer necessary – go straight to the source and get the information direct from the people using your services and respond accordingly. I am sure there would be plenty of narrative fragments (stories) that could be collected from customers and suppliers,and then aggregated to identify common patterns or themes that the airport owners would need to address.

That is, of course, if you’re really serious about understanding the true airport experience.

On getting your website right

I have just moved house and have bundled the utilities and telecommunications through ACTEW. As part of the deal, I am entitled to a Privileges card.

I received the membership card and an introductory letter telling me that “I am minutes away from accessing discounts and special offers at over 500 participating businesses”. I need to activate the card from the Privileges web site.  I go to the specified web site to activate the card.

Note exactly what I am doing. I am going to the web site under instruction to perform a specific task – activate my membership card. I am NOT going to the web site out of any ineluctable desire or to admire the postcard-like pictures from the home page. I just want to activate the card. I am wanting to complete a task.

Now, do you think that the words “activate card” appear prominently on the home page, or even appear at all? Nope. No activate anything. Naturally, I scan the page and look for how I can activate the card. Nothing. There are a number of other options available to me via a horizontal navigation bar and some graphically rich content area in the middle of the home page. I will obviously need to explore further.

My first question to myself is whether or not I am actually a member yet or do I have to activate the card to become a member? I know that I am minutes away from all those benefits so perhaps I am still not a member. I look under the heading “Join Privileges” from the  navigation bar, semi-confident that at least I will get a prompt to go somewhere else to activate. No. I now check under the heading “Members”, perhaps optimistic in my status as an official member of the club.  Thankfully, the first option is to activate my card. I click on the link and now I have to fill out a form. I fill out the form and send it off. I get a screen telling  me my form has been successfully sent. But now what? Am I activated or not? Do I need to wait a certain period of time before activation takes place? There is no additional information so I am left hoping my card is activated and I can race out to do all that bargain hunting.

And yet, after all of this, I am still not sure if I only needed to activate the card to get a newsletter sent to me and whether I could have used the card straight away without all this activation business.

Clear communication on a web site and any introductory letter is of paramount importance – please get it right.

On why marketing and communication matters

Via my latest Working Knowldge newsletter from the Harvard Business School, I found my way to this blog post from John Quelch about how marketing won Barack Obama the recent Presidential election in the US. The key message for me was that marketing matters – big time.  And the news isn’t lost on me in terms of my professional work – information management and knowledge management.

The first observation I want to make is that even small actors can make a difference. The blog says that over half of the $639 million of campaign funds raised by the Obama camp came from people making donations of less than $300 each. Aggregation matters.

The second observation is that the Obama message used as many communication channels as possible. This is really important – just because the message goes out on one channel doesn’t mean that there is no need to send out the same message (in appropriate form) using other channels. Naturally, one must consider the overall costs and benefits, not all of us have the Obama fundraising power. However, what we can do is look at the different communication channels and seek to exploit as many relevant channels as possible within our defined limits. Remember, many web-based and digital networked communication channels are very inexpensive. Communication channels extend your communication reach.

Thirdly, while it may be comforting to appeal to your current or known audience, it pays to go that bit further and extend your target zone to people that could come on board. That means looking where the potential gains are with the message and the service you are delivering.

Finally, the marketing pitch from Obama was both emotional and functional. Establishing an emotional response to products and services was something I learned in Marketing 101, but the fact remains that we obtain a greater sense of personal value and satisfaction if we can look beyond just the function. After all, do Ford, Renault and Mercedes just make cars?

I was asked recently about how I would improve the standing of an information service within an organisation. There are three critical responses: deliver to the customer what the customer needs, make the information service visible through marketing and communication (after ensuring you can deliver a quality service AND have the capacity to support new business), and keep up the level of personal communication with your stakeholders AND potential stakeholders, thereby generating trust and emotional engagement. An information service is more than just a function.

The key is communication. And marketing is a form of communication. Marketing is a good thing – use it wisely and it can yield tremendous results.

And if you’re still not convinced, go to your local ABC shop and buy yourself the DVD of the Gruen Transfer – an essential look at advertising and marketing.

On good experience – not

I am currently sitting at a computer in the QANTAS Club lounge at Melbourne airport. My flight is scheduled to board at 7.45pm but the flight is delayed and it’s unlikely we will be leaving before 9pm. Other flights are delayed as well – an aircraft fault here, a cleaning issue there.

Mind you, the 5.30pm flight to Sydney has just been cancelled altogether after almost two hours of telling passengers that QANTAS was fixing a toilet and was sorry for the delay. Quite!

And last evening was the same. I left work at 6pm for an 8.30pm flight from Sydney to Melbourne. The flight takes one hour and five minutes. My flight was delayed and took off at 10.30pm. To compound matters, there was a delay in getting the plane loaded and we sat for twenty minutes on the tarmac. When we finally arrived in Melbourne there was a delay in getting the baggage out to the luggage carousels. By the time I got to where I was staying it was 1am – seven hours after I had left for the 30 minute drive to the airport.

A few weeks ago my flight from Albury to Sydney was delayed. This is my common QANTAS experience and, from what I hear in the QANTAS lounge, is a common experience for many people.

A couple of decades ago Australia had a domestic airline called TAA – Trans Australia Airlines. The popular moniker was “try another airline”. A similar moniker needs to be found for QANTAS.

What does QANTAS do to ameliorate the situation for long-time sufferers of QANTAS’s appalling delays? Nothing. That’s right, bloody nothing! Except for the “sorry for the inconvenience” mantra that even the announcer clearly has trouble delivering with any sense of sincerity, we mug passengers just have to cop it sweet and waste our lives waiting for QANTAS to deliver a proper on-time air service.

Sure, I am in the QANTAS Club (paid for my moi as a fee) so I get to scoff down a few beers and gobble a few biscuits. Pity those sitting around the terminal waiting….and waiting…and waiting.

Let me be clear – I am not having a good experience with QANTAS. I will tell everyone I meet about my experience with QANTAS, and so will hundreds of other passengers whose lives are wasted by the QANTAS “sorry for the inconvenience” service. I can hear four businessmen behind me now describing various methods of torture they’d like to see happen to QANTAS management – and I can see their point.

And no, we don’t want QANTAS to make things worse with shoddy maintenance and unsafe aircraft, although there have been quite a few stories about QANTAS planes and safety issues of late. Ahem.

Imagine if QANTAS was CityRail in Sydney – they’d be copping flak every day from passengers and the tabloids about woeful on-time running and shoddy service! QANTAS, it seems, is treated as though it is special – like an endangered species - and perhaps the route to extinction is the way QANTAS will go, along with other life forms unable to adapt to the demands of a critically competitive environment.

QANTAS basically doesn’t care. They have a duopoly in domestic air transport and they have a pretty cosy deal internationally, especially on the Pacific run where competition is limited. QANTAS can keep people waiting without penalty and that’s where the system really breaks down. QANTAS gives us time-poor passengers, the people who pay the fares and fill the seats, delayed services without any compensation whatsoever.

If QANTAS can’t stop the bad experiences then they need to show they actually care about wasting our time by providing some compensation. Here are some suggestions:

1. late running flights of up to30 minutes earn passengers a free QANTAS Club membership or 1000 frequent flyer points.

2. late running flights of up to three hours earn passengers a choice of QANTAS Club membership, PLUS QANTAS Frequent Flyer membership, 1500 frequent flyer points, or a free subscription to Conde Nast Traveller (we can at least dream while we wait for that QANTAS flight to take off).

3. late running of more than three hours give passengers a 25% discount on another return flight of equal geography (e.g  Melbourne-Sydney, Sydney-London), but with another airline!

QANTAS – the time is ticking and I am not getting any younger!

On new ways to connect – the three minute soap

I was reading today’s Sydney Morning Herald online when this article caught my attention. The article is about a new web-based soap that will launch on Bebo next month. Mind you, this is not the first time I’ve commented on this type of thing – see a previous post on snack drama.

The really interesting thing is the genre and the communication channel – both particularly suitable for the mobile world. To date, much of the production of the three minute soap (or snack drama) is by amateurs and budding film producers experimenting through sites like YouTube. The real deal will come when advertisers and professional media production professionals start to invest in a big way in the three minute soap.

The appeal for the three minute soap has so far been on the production side of things. Grab a video camera and start shooting, hopefully with a reasonable storyline that will attract some regular attention. Much of what is produced today and channelled through YouTube is from amateurs and low-budget film-makers wanting to get product out into the world wide web.

The market is being driven by supply. However, demand will grow as more of these soap videocasts become known and gain sufficient following. As the market and consumer awareness develops, the supply will include more sophisticated production elements that will enhance the viewer experience, either through quality of production and/or quality of story and characterisation. Digital word-of-mouth through social networking will be a significant driver of demand. New production and editing techniques may develop that become unique to this type of media presentation and distribution channel.

Commercialisation will come about in a number of ways. Firstly, the three minute soap can be used to promote upcoming television series, movies, or games – almost like a set of pilot shows. Secondly, advertisers will use these digital videocasts for product placement and digital advertising. Thirdly, as the technology allowing for videocasts to mobile telephones improves sufficiently, a new and ubiquitous market platform emerges; just the thing for time-poor and attention-poor viewers to engage in habitual soap alone and with friends. And, there is the ability to leverage characterisation and the soap brand via other digital platforms – social media, blogs and other interactive fora.

Pricing structure needs to be considered. So long as access to the content remains nominally free, demand will accelerate. However, if commercial hunger overshoots demand by charging video subscription charges, then growth will be stymied. My tip is to grow the market first and see what happens before even contemplating pay-for-videocast soap!

But that’s not all. It will be possible for magazines to have sections of the printed product linked to videocasts as part of the magazine subscription or purchased as a stand-alone item. Imagine the gossip magazines with their grainy video shots of celebrities juggling groceries at the supermarket being available via videocast on a mobile phone or laptop? Videocasting using mobile telephony is exceptionally well suited for segmenting magazine news stories, either as stand alone content or as an extra to the print version.

I believe the genre will develop and really take off in the next 12-18 months.  The three minute “soap” is just the beginning of course. The genre can take different forms – news, profiles, and education being examples. My personal interest is in learning and development. Imagine a training manual with links to selected relevant videocasts viewable via your mobile phone for instance.

I will therefore be following the videocast soap (and any permutations) to see how the market grows in the coming year and where those learning and development opportunities might be be. And I’ll be watching mobile telephony technologies just as keenly over the same period.

Stay tuned….mobile digital video on your laptop and mobile telephone is coming your way.

On the value of online communities and social networking

I was alerted today to this blog post from ReadWriteWeb on social networking. The blog post cites some media commentary on a study that says that social networking is a waste of money. The report is based on a survey of over 100 US businesses. Despite spending millions of dollars, the companies could see little tangible benefit from their investments. Much of the disappointment reflected the fact that the numbers of community members weren’t into the tens of thousands, a metric I am not really supportive of to define success for online communities.

Without seeing the complete study, I am not aware of the specifics of the report and its conclusions. However, what I can comment on is that social networking is not about technology – it’s about people. If a corporation wants to spend $1 million on social networks without understanding what social networking is about, and how and why people should be engaged, then it will simply fail. It should come as no surprise that developing online communities without focusing on the people is a recipe for disappointment.

I am often perplexed that companies still don’t understand social networks and communities. Is it because company management employ “workers” rather than “human beings”? Does management not see that social interaction happens all around them and that much of what is work today in the West is knowledge work based on working with other people? Is the social connection not clear here?

Companies really need to understand what they are trying to achieve and how social networking will work before embarking on costly high-tech investments. These days you can have a social network pretty much at no cost.  Have a look at what you can do on Facebook or Ning, for example. There are of course more sophisticated solutions if that’s what is required by the people in the online community. I am not convinced such high-tech costly solutions are always necessary.

The ReadWriteWeb blog post also identified that technology was not the answer but added that developing a social network around a product -especially cat litter – might not be the best approach.

In terms of product communities, I am not so dismissive. I believe that it is possible to successfully run online communities around products - perhaps not all products! However, the challenge here is in making engagement with people in the online communities authentic, and not just another vehicle for digital junk advertising and marketing-speak. Phony communities promoting particular products are even worse!

There must be some thinking around why people would want to be involved in your product community and how the company will engage and interact with that community. Above all, what is the purpose of the social networking interaction for the consumer, how will the company respond, and how will the consumers in the online community and the company benefit?

Dell has an online community. IdeaStorm is part of that community. IdeaStorm allows consumers to interact with the Dell company, offer suggestions and feedback, give opinions and value ratings, and generally provide a communication channel into the company. It’s even possible to get real-time interaction these days using Twitter!

Dell has recognised the importance of engaging with people on the web. As Lionel Menchaca from Dell said in a podcast from the SXSW Interactive Conference 2008, conversations about Dell products are happening on the web and in the blogosphere anyway so it is important for companies to be involved in the conversation. Establishing a community forum is a good way of doing that.

Participating and listening to the conversation is where there is enormous value for companies. Social networking plays a positive role in engaging with consumers and using the power of the network to generate and stimulate ideas and discussion.

It really is the people who count.

On possibly an announcement from WordPress

A couple of months ago WordPress started adding automatically generated links to the bottom of the comments section on WordPress blogs. WordPress calls them “possibly related posts”. The rationalisation was that these automatically generated links gave the commenter or comment viewer the option of seeing similar blogging posts from WordPress bloggers. The idea seems to make sense, based on the options one has on Youtube and Amazon (although I have more faith in Amazon than the others).

However, I have noticed some interesting links popping up at the foot of my comment sections. My post yesterday generated a couple of comments and so the automatically generated links were added by WordPress, one to a site on rude cartoons. Now I am definitely not prudish, but I didn’t really feel that such a site was really appropriate to the kind of stuff I want to talk about and the tone of my own blog.

By inference, these links are associated with me and the character and content of my own blog. I have no control over what automatically generated sites WordPress chooses to associate with my blog. I have no say over whether the content is appropriate, according to my standards. WordPress and their monkeys at Sphere determine these links using a “document genome” to do the link matching (sounds exciting, doesn’t it?).

The other issue is that maybe I don’t want my readers traipsing away from my site to explore these automatically generated links. I may want the readers of my comment section to stay on my blog and browse the rest of the site’s content without being drawn away by possibly related posts. And “possibly related” hardly fills me with great confidence that the linked blog posts have any commonality at all.

Furthermore, I can see how this particular automatically generated linking feature could be extended into the realm of advertising, akin to Google ads. How much of any revenue stream will be made by WordPress and how much by the bloggers? I’d be interested in hearing if WordPress is looking at commercialising the automatically generated links to make advertising available in this manner.

Now I want to give WordPress a chance with their automatically generated links to other WordPress blogs. I do believe in serendipity and I do think that cross-linking with other blogs on similar topics is an interesting feature (although doesn’t a blogroll perform the same or similar function?). WordPress said that they are looking at “tweaking” the results to your liking so this is a move in the right direction.

WordPress does allow the automatic linking feature to be switched off all together. I will monitor the automatically generated links more closely in the coming weeks and decide how useful or distracting these links turn out to be. I want to give WordPress a chance but I am annoyed at the lack of control I have as to the relevance and appropriateness of the automatically generated content.

I am playing “wait and see” for the moment.

On breakfast, lunch, and tea

There are a number of ways in which information and knowledge can be disseminated and exchanged, including breakfast, lunchtime or evening meetings. These meetings can be internally or externally based. Organisations, like the Society for Organisational Learning Australia (SOLA) for example, have run morning information sessions for members featuring a special guest speaker. I first heard Dave Snowden at such a breakfast in Sydney a few years ago. There are plenty of examples across a range of businesses and professional associations.

At Rabobank I organised a number of lunchtime meetings featuring a guest speaker to discuss a topic of interest. The last one I organised dealt with water infrastructure and the speaker was a friend of mine from a leading law firm. The lunch and discussion afterwards were a great success. I hope to arrange similar sessions in a different organisational context in the future.

Having been both an attendee and organiser of such functions, it is often difficult to gauge how successful these meetings will be and what size of audience will actually turn up. Breakfast and lunchtimes are often busy times for people too, even if outside the official working day. And worst of all, sometimes the quality of the presentations are marginal, causing a major rethink as to the value of these types of sessions.

So what is it that makes these events a success?

From my experience, and from the example of the Dow Jones Factiva breakfast session I attended this morning (and the previous session last year), there are five key dimensions:

1) the speaker/s MUST be of good quality with something interesting to say (they don’t have to be famous but they need to be able to speak to a group of people in a relaxed style and have something relevant to say)

2) the speaker MUST be able to present in a professional but informal manner

3) the session should not be too long (1-1.5 hours is sufficient) and timing must be tightly controlled to avoid wasting time

4) a good mix of people in the audience widens appeal and scope for questions and post-session conversation

5) the venue MUST be comfortable and able to fit the number of people attending

The Dow Jones Factiva session this morning had three speakers: Chris Pash from Dow Jones Factiva and his self-advertised blog, Hugh Martin from APN Online, and Martin Quadroy from Telstra). All three speakers in their individual ways provided interesting, entertaining, and relatively short presentations covering content, online marketing, and competitive intelligence.

Well done (again) Dow Jones Factiva!