Making the most of the recession - Brighton College - April 2009 Way Back Wednesday 1.
Making the most of the recession – Brighton College – April 2009 Way Back Wednesday 1.
Making the most of the recession – Brighton College – April 2009 Way Back Wednesday 1.
Good morning everyone
We are recording this as video so please behave yourself and don’t swear.
I just want to mention very quickly, before we get started, the soldiers, I’ve got with me some soldiers and I’ve got a hand grenade, that is because I am at war with the recession. So it’s a good idea, I think, to have some soldiers and a hand grenade.
We are going to be using soldiers,as this is supposed be an interactive session so if you have something useful or interesting to say, please say it, and if we all think it’s useful and interesting you will get a soldier and at the end of the session we will have a little count up and we will see who the generals are. Ok, so that’s the soldiers you don’t really want to know what the hand grenade is for, I’m hoping we won’t have to use that.
So that’s our soldiers and the hand grenade.
I just want to talk very briefly about our experience. I was selling Farming News during the BSE crisis,so I am used to a crisis, I work in sales and marketing so I’m really used to a crisis. Our experience of this recession is that it might of landed on us in the middle of October 2007, up until that time we had a little queue around the block with people wanting to come and talk to us about marketing. We used to see a lot of people every week and typically they would end up doing something with us. Until one day it happened that these people started saying Martin it’s all great, we’re really excited about what you will be doing for us and we really want to do something, but we’re just going to wait and see what happens. What happens if you wait and see is that nothing happens. That started a little trend in our business where people were excited to be talking to us, they were still talking to us, but they started just to wait and see what was going to happen.
So what’s happened with our business in the eighteen months since October 2007 is that we have had to evolve to meet the needs that people have right now, in this current climate. That’s what I’m here to say to you today, I think that this recession, this economic downturn, is the best opportunity that there has been for small businesses in the last 15 years.
You could look at me like you believe me, that would be good.
That’s what I’m looking to convince you of in the next 40 minutes.
I have a bit of an agenda. What we’re going to do firstly is to talk about what all the fuss is about, we are going to look at the victims of this economic downturn, we are going to think about what this means for small businesses, and we’re going to think about how we realise the opportunities presented by this economic downturn. That’s exciting, is it? Yes, good.
Okay, what I wanted to do is understand what all the fuss was about so I went to the newspapers because I thought it would be a really good idea to have a look at some of the headlines that we’ve all been experiencing for the last eighteen months. I’ve got lots, when we put the search“official recession” into Time, I’m not picking on Time, its just that they have a fantastic way of archiving their news, it came up with 1105 results, that’s 1105 news articles that contain the terms “official recession.”
Now, I don’t know about you but I think that’s a little bit excessive, we’ve only officially been in recession since January the 23rd and they cannot have written eleven hundred news stories about the official recession in that time. When I came to look at this is what I saw is that actually they’ve been talking about the official recession for a long time. I’ve picked up the story around August 2007 when they we’re already telling us;If you thought it could not get any worse, think again, that was August two thousand and seven. Housing bubble about to burst, they published in September 2007. Bank queues branded irrational, remember this? When people were queuing to get their money out their accounts? Mortgage lending falls by twelve percent, this was October 2007. Consumer spending drops to two-year low, that was in February 2008. Hundreds more jobs are lost as economy reels, hundreds they are talking about in July 2008.
New house orders down thirty five percent in August 2008.Stirling’s fall against the Dollar at rate not suffered since 1975,August 16th 2008. Nightmare on Wall Street, this is when the LehmannBrothers fell over, that was in September 2008. Britain is in recession and 500,000 jobs, now 500,000 jobs, will be lost by Christmas. So we can see how things are really starting to ramp up now. This was a black day for me and all Manchester United fans, when it turned out that the credit crunch had struck Manchester United’s 56 million pound shirt sponsor that’s when I started to take the recession.
Okay, this was a shocker,October 2008,Britainsforced to dip into their savings for the first time since 1958. Britain faces crisis of negative equity to reach two million households, jobless to reach 3 million, but don’t worry says the Prime Minister, let the unemployed lag houses. This is the week that we went into recession warning that economy will shrink until 2010, this is 18th of October 2008, and we are still not officially in recession at this time I have to tell you. Recession takes toll in the high street as sales slump. Return of the dole queues in October 2008. Brown vanishes as official figures reveal that economy is diving into recession. Pound crashes to five-year low against the dollar. Economy shrinks threat of worst post-war slump as major economies fall into recession.
Are you depressed yet?
Unemployment hits eleven-year high have one point of 1.82 million, they were telling us it was going to 3 million two weeks before this. Household spending falls. Retail figures fuel fears of long recession. Recession Britain, it’s official, 23rd January 2009. The reason this date is striking to me is because at this time the press have been banging on about the recession for 18 months and I knew because we had been feeling it in our business. The other reason that this dates strikes me is because I had the news on this day and it went something like, official we’re in recession, and it’s like, about time,you’ve been banging on on about it for long enough. The next thing was the third how long is it going to last and how bad is it going to get? Now, I’m not sure if that’s news, how bad is it going to get? I’m sure that is speculation, and I think it is this sort of speculation that has actually damaged our economy.
Okay more its official. Recession could be the worst since the 1930s. US economy shrinks. Daimler and GM announce job cuts. Bailouts to add 1.5 trillion to national debt as taxes tumble. Bank of England cuts interest rates to one percent. Over 50’sfrozen out over the credit crunch, the old are going to suffer. 19,000 jobs to go in the building. Unemployment to soar to 3.4 million now, but it’s still actually much less than two million.
I’m sorry I had to do this to you this morning but I had to get you to understand how serious this recession is. So this is all of the fuss,but what is all the fuss is about, do we know?
How much has our economy shrunk by, does anyone actually have any idea how much the economy has shrunk by? I’m not economist, I’m an optimist, but I think, from the reading that I’ve done somewhere around one, one and a half, or 2 percent. One, one and a half, or 2 percent is how much the actual economy has shrunk by. it’s run by. So what would one, one and a half, or 2 percent1 do to your business, if your sales were to slow down by that much, or your turnover. I think we could cope couldn’t we? I’m pretty sure we could cope.
Right, I want you to a little about exercise because I’m a little bit hoarse now because I have been shouting.
Who is here who has felt the effects of the recession, actually felt the effects of the recession?
Okay, a few of you have felt the effects of the recession.
Who has seen work slowdown, who has see a reduction in enquiries and the actual work that they’re actually getting slow down?
Who knows someone that has lost their job?OK, so this is actually reaching us.
Who is worried about the outcomes of the recession, who’s worried about where it’s all going to go in the end?
Okay, who’s mortgage rates have gone down? You see that’s happening but no-one is talking about that very much.
Who is busier than ever?
And who is excited about the recession?OK, give it another half an hour.
So we know now what all of the fuss is and what all of the fuss is about.
So what I want to look at very quickly is some of the victims of this, there are some very famous victims like Northern Rock, Fanny Mae, Freddy Mac, Estate Agents and the property market, AIG, JP Morgan, Morgan Stanley, the banks have obviously suffered, the motor industry is clearly suffering in a big way as are some of the high street retailers. So there are some very famous names and businesses that are not doing very well out of this recession.
The question that I ask then is, is this recession exclusively a big business affair, is this something that is only effecting the biggest players?
Actually it does has an effect on small businesses and there is a huge rise, apparently, in companies going bust.
In fact the rise is 220%, so 2.2 times as many businesses are going out of business now than a year or 18 months ago. What they reckon is that there are 120 small businesses a day going out of business every single day. So thats a surprising statistic isn’t it?
You are all still there?
You will get a chance to win some soldiers in a bit.
Audience: So what was it a couple of years ago?
A couple of years back, this is now. I don’t know, its gone up by 220%. My maths isn’t that great, in fact when I did this next sum last night I had to phone my father-in-law to make sure it was correct,cause my maths isn’t that great. So if you think, this is last week’s news, that 120 small businesses are going out of business every single day.
If you think about it there are four million small businesses in the UK, four million. This is the sum that I had to get my father-in-law to check for me – that is 0.003% of small businesses in the UK are going out of business every day.
So what that means is that if we sustain that rate for a whole year then 1% of small businesses in the UK will have gone out of business. So that is 1 in a hundred businesses in the UK going out of business in a whole year. Have I made my point? There’s not likely to be a business in here, if there were twice as many people here there is a chance that one of us will go out of business this year and I think we’re doing sensible things.
So what does this mean for small businesses?
For me it means a return to age-old practices. For me, what is going on now is a return to normality because ten or fifteen years ago we didn’t do business like this, we weren’t reliant on credit, we weren’t reliant on mortgages or bank loans or any of those things, you had to generate your cash to sustain your business.
Those age-old things are cash, for example, but cash is becoming a thing of the past where we don’t have to actually carry it in our pockets. I actually felt put out recently because I went to the chemist and because I was spending less than £10 they insisted that I pay in cash. I had to go the cash machine and leave with £3 in change in my pocket. I thought that was a huge imposition. So you need to have cash in your business.
Value. People are looking now at their suppliers and they are looking for those suppliers that give them value. So if you want to keep your customers you need to make sure that you are delivering value and if you want to stay in business you need to make sure that you are getting value from your suppliers. Does that make sense?
Need. Do you remember this? When you used to need stuff. Because for the longest time if you needed anything you could just go and get it, put it on your credit card, organise a loan. None of us have actually needed anything. Christmas has become embarrassing, its like what do you want? Well I don’t want anything. What do you need? I don’t really need anything. If I need a book I’ll go and buy it, if I need a holiday I will take a holiday. So need is coming back.
And the big one for me is opportunity. Opportunity is coming back and the reason that I think this is a fantastic opportunity is because what is happening is that the British economy is finally becoming dynamic. For too long the economy has been stodged up with credit and too many businesses that don’t actually deliver any value to their customers. So even though it is moving in the wrong direction by .5 or 1% at least it is moving. Nobody is talking about these 120 businesses that are going out of business everyday, nobody is talking about their customers. Where do these customers go once their suppliers go out of business?
We are seeing it already where one of our customers is an IT supplier, if their competition go out of business they have to replace that supplier in a hurry. It’s not like it was two years ago when they were thinking about replacing their IT supplier so they would go through a procurement process, its not happening like that at all. If you can do the job then you are in and you can win the customers.
So if each of these 120 businesses have only 10 customers each that’s 1200 customers a day are in a hurry to find a solution. That for me, is a huge opportunity.
OK, I’m feeling a little bit hoarse, I have a question for you.
Oh, let’s talk a little bit more about this opportunity.
This, apparently is a fact – more millionaires were created in the last recession than any other time in history. That for me goes to the need issue – out of adversity comes opportunity, for definite.
the other thing that people are saying is that businesses that start in a recession are more resilient, more persistent than any other business. Why? Because they have to do it properly, they have to do it properly to make it work so they go on to become the most successful businesses.
And here is a good news story – 2nd eBay millionaire emerges from the recession. So this is actually happening right now. People have very real needs that really need to be met, and if you can meet them you can be doing very well.
OK, the question, I have a question because I am interested in this idea of opportunity what I would like you to do right now, in about 5 minutes, you have to be quite quick, is in your tables, to talk about something that you could be achieving in your business that you couldn’t have been achieving 12 months ago. Then we are going to pick one from each table and talk about those in 5 minutes time.
So your time starts now and when we come back we are going to talk about how we are going to realise these opportunities.
OK, so talking in rather hushed tones but I thought quite excitedly about opportunity so maybe this isn’t going to be quite so bad. What I’d like to think about now is how we realise these opportunities. For me, the danger is in waiting, what happens if you wait and see, nothing happens is my experience. The way I am thinking about this is what if the world has changed, what if this isn’t just a transitory thing where we can sit it out and in a year or two the whole thing is going to come back and people will be throwing money at us again whether we are offering value of not.
That’s how I am thinking.
Right, so you will be not surprised to hear that the way i think you. will realise these opportunities is through effective marketing and the big opportunity for you now is to run your businesses properly.
What I am going to do, there is an opportunity here for you to be picking up soldiers so this is where it gets interactive. I have checked with my insurance and I am not insured, so if you get hit by one of these soldiers please do not make a claim, there is no money coming to you.
OK, I need someone who can write quite fast and won’t give me any trouble.
Well done Ros, is that too high for you?
So we have six steps to effective marketing.
Step one is know your business.
Step 2, understand where you want to go, objectives.
Step 3 is about positioning.
Step 4 is about proactive marketing.
Step 5 is about maximizing sales.
And step 6 is about measuring your effectiveness.
Ok cool, so if you know your business, what do you know? For soldiers.
We really need to go fast, we’ve got 10 minutes to do this now.
So if you know your business what do you need to know, quickly!
Customers, you need to know your customers, you need to understand your customers, what do you need to know about your customers.
What they want, firstly, their value, their budget. All of these things, is that how you spell what?
What else do we need to know if we want to know our business.
What your good at, What your good at, yes, that’s fantastic.
What your product is, your offering.
Your costs, your pricing.
Other things that you might know other than these things.
What about your competition, is it worth knowing more about your competition?
What about your market, is it good to know the scale of the opportunity?
Competition, I said that it’s very important.
OK, competition, you want to know the same things about your competition, what they offer, who they offer it to, how they offer it to them, who their customers are, where are their customers going to go when they go out of business? Where are your competitors customers going to go when they go out of business? To you if you are watching them, that’s great.
What about your performance?
What about the number of sales you make, the value of those sales, the persistence of your customers. This is a life work, understanding your business. We are quite good at it, we try to do it, we try to do it for our customers – it takes a lot energy and a lot of time but it has huge, huge value.
So think about your performance, things like your break-even, things like your costs, your profit margin, things like the number of sales that you make in a day, or a week, or a year – this is all really valuable, really exciting stuff.
So that is know your business.
Step 2, what was step 2?
Set objectives. What could we be achieving in our busisness? This is the things that we were speaking about a second ago so this should be really easy – for soldiers. We were talking about this two minutes ago, you were talking about it.
Growth, thank you very much.
What else could we be achieving in our businesses?
OK, what else could we be achieving in our businesses?
Audience: Customer satisfaction.
Customer satisfaction, yes. And this is something that we should know. When did anyone here last do a customer satisfaction survey? Actually, go to their customers and say how happy are you?
In the last month?
In the last week? Fantastic.
In the last day? Excellent, you can have a soldier for that.
What else could we be achieving in our business?
Yes Mike, we could be happy in our businesses. Are you happy in your business Mike?
Would a soldier make you happier?
Ok, so we can achieve happiness. What about new customers? What about new orders? What about new product lines? What about, what else could we be achieving? New ways of doing business? New ways of winning customers?
Tim was talking about the contra deals that he is doing, he is picking up first-class customers her in Brighton by offering them contra deals. So by being a bit more imaginative there are lost of things that we could be achieving if we are setting objectives.
This is about knowing where you are going. If I had more soldiers there would be a soldier for all of you for not saying – not going bust.
Step 3, what was step 3?
Positioning, positioning, positioning. What do we mean when we talk about positioning?
Audience: Where you sit in the marketplace.
Yes, where you sit in the marketplace. And your?
What do you do?
Yeah, we mean brand. Your associations, where are you that people can find you? The question for me is if these 1200 potential customers a day are looking for new suppliers are they going to find you? Are they going to find you? They should find you.
It’s much easier to make a sales when they call you and ask you can you help me rather than when you call them and say you don’t know me but I am hoping I can help you. It’s very different indeed.
So again we need to think about our offering. What is it that we are actually offering that our customers need and how do we present that to our customers?
So we’ve got brand, we’ve got associations, industry associations, local associations, chambers, networking. Make sure that you are out there so if people are looking for the things that you do they will definitely find you.
What is the other one? Where do people go to buy things?
Audience: The internet.
The internet. So will people find you for the things that you do on the internet? If they don’t they definitely, definitely should because there are huge amounts of money being spent online.
OK, we might actually get this done in the 10 minutes.
What was step 4?
Audience: Proactive marketing.
Proactive marketing. Now, this is where, when people think about marketing this is where everybody gets on. Nobody wakes up at 4 o’clock in the morning and thinks wait a minute, I haven’t got any customers, I haven’t got any sales, I haven’t got any leads, I need a marketing strategy. No, they think I haven’t got any customers, I haven’t got any leads, I probably need to bang out a few calls, or a few emails, or do some work on the website. If you haven’t done the forward-thinking this isn’t likely to work, this is why we fall down.
So what I am going to do, in two minutes is tell you exactly the proactive marketing that works but before that I want you to tell me, for soldiers, what proactive marketing we could be doing in the way of marketing.
Phoning, we could be phoning, we could be doing some telemarketing, that’s great.
Audience: SEO on the website.
SEO on websites.
Audience: Press advertising.
How are we doing?
Audience: Media articles.
Audience: Direct mail.
Direct mail where?
Media, articles, press.
Audience: Open days.
Open days. I think we get the general idea.
Audience: Giving talks.
Sponsorship. What that you? Are you sure?
What else could we be doing in terms of proactive marketing?
Audience: Giving talks at breakfast.
We have had that one I am afraid. Did you have something else, cause I fancy seeing if I can get a soldier to you.
What else should we be doing, is there anything we have missed?
Audience: Touching your existing clients.
Yeah, touching your existing clients, that’s one of my favourites.
Audience: Word of mouth.
Yes, word of mouth, referrals.
Surveys and questionnaires.
Who hasn’t had a soldier?
Audience: Search engine optimisation.
Search engine optimisation, we have had that one I am afraid.
Audience: Pay per click.
Pay per click, Don.
E-shots, email marketing, we love email marketing, it’s fantastic, its almost for free once you have the data.
OK, so what else is there anything else we have missed.
Is there anything else that we have missed?
Audience: Hiring you.
REU? Ahhh, hiring me.
Well, I am available for hire.
Yourself, yeah, just get more proactive.
OK, so do we want to know what, of all of this, works?
Yeah, we really want to know what of all of this works?
Yeah, we do, I really need to see some enthusiasm.
The answer is that all of this marketing works if you do it properly. Even the one that we haven’t got which is advertising, it will work if you do as part of a considered plan.
Let’s turn the page.
Number 5, what was number 5?
Audience: Maximising sales.
Maximising sales. So what is sales? Somebody, what is sales?
Orders, that’s not what I am looking for.
Audience: Cash in the bank.
Cash in the bank, that’s not what I am looking for.
Audience: Selling things.
Selling things, yes. Selling products, that’s what it is. It’s not what I am looking for. Do you think you really have a chance of guessing what I am thinking?
Promotion, no. For me, sales are simply making it easy for people to buy. Making it easy for people to buy, that’s it. If you are spending your time convincing people or answering objections, then you are not really selling. Trying to convince people who don’t really want to buy what you want to sell is not sales. It’s frustrating. That for me is not maximising sales.
For me, the best sales organisation in the world, the ones that never ever phone up for sales training, they don’t need to know about objection handling, they don’t need to know about negotiation, they don’t need to know about any of that stuff is … can we guess who I am thinking about?
McDonalds, well done Jill. Ahh, because you were there on Thursday, that’s a fraud.
OK, so McDonalds, because what happens is that we get to the front of the queue, we ask for exactly what they sell, we pay exactly what they charge and all they do is maximise the sale. Would you like fries with that? Is that large? Can I get you a drink with that? That’s all they do, and for me McDonalds is perfect sale and marketing.
Who here is responsible for selling in their businesses?
Most of you.
Who here has invested in some sales training in the last month? Six months? Year? 5 years?
Invest in some sales training that’s my advice.
Step 6, do we remember what step six was?
Measurement. So for me, who was it? Was it one of the Lever people who said that I know that 50% of my marketing works I just don’t know which 50%. If he were alive today there would be absolutely no excuse for him to say that. There is no reason why, firstly, you should be investing in marketing that you can’t measure, why would you do that. Just give me the money. Secondly there are lots of ways to measure the effectiveness of your marketing, email provides fantastic information, your website will provide fantastic information, you can put dedicated telephone numbers on every single advert that you run, on your business card. So there is absolutely no reason not to understand the value of the investments that you are making in your marketing. So measure everything is what I say and if you can’t measure it don’t even bother doing it, we have already seen that there are 30 other things that you could do. The only place that this falls down is the human element, where you fail, where you might meet someone at a networking and you don’t ask how did you find out about us. But do it, measure the effectiveness of your marketing.
OK, so that was the six steps to effective marketing in 10 minutes, we’ve never done it in 10 minutes before, I’m quite pleased with that.
There are three soldiers still up for grabs but I don’t even know if I have anything left to tell you. What I’ve got now is a little bit of a success story.
Has anyone see this sign, that’s a fantastic little message isn’t it? Does anyone know what this is about, for a soldier?
Audience: It’s from the war.
It’s from the war. Who said that, it’s from the war. So when there was a very real threat that we might have been invaded by the Nazi’s a civil servant somewhere came up with this very simple message. So if we are invaded, I’ve got goosebumps just thinking about it, but if we are invaded, by the Nazis, the advice coming from government, was to keep calm and carry on. Isn’t that a fantastic message.
Whats happened with this now, is that somebody found this behind a load of books that they bought, setup a website, keepcalmandcarryon.com, and is now shipping three to five hundred products a week, cups, t-shirts, posters. Keep calm and carry on is the message. This was a revelation to me when I found this in October and I spent £5 and this now sits on the wall in our office.
But of course, we have evolved the message, so now The Effective Marketing Company are telling you to get excited and kick arse.
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