I can't help but think that the current global economic crisis may be a good thing. Not to be insensitive to those who have / will lose their jobs and suffer hardship, but it has, and will continue to force us to take a long hard look at ourselves. Living beyond means, both in a business and consumer context, is by definition not sustainable, so the crisis may in fact be salvation.
From ordinary folk we have over extended themselves have been brought down to earth, both in terms of their material spending, but also what is really important to them. In times of trouble we see people turn to family, friends, focus more on their health, maybe even what is good for the planet.
Businesses the same - most famously obviously financial institutions who have lived on borrowed time for too long (although not sure how much they will really change other than increased oversight), so the Detroit 'Big 3'. Burying your head n the sand as GM, Chrysler, etc. have done for so many 'good' years is no way to run a business. Isn't hindsight a wonderful thing.
And even at a small business level, we are finding through research and personal experience that times like this help foster an entrepreneurial spirit which will inevitably launch new initiatives designed at addressing the issues we now face, rather than faced 5, 10 or 20 years ago.
One area I believe will significantly benefit is the environment. This has been a bigger issue than most would like to admit for many years, with clearly insufficient being done by all for fear of the financial repercussions (from reluctance to recycle due to time and cost, to not addressing renewable energy for fear of disrupting the world oil and gas markets). Well, the world is well and truly disrupted now with consumers looking to change their behaviour to save money, and businesses looking to tool up for the more environmentally conscious future, both resulting in more cost effective and sustainable activities. So far from the environment dropping off the agenda, losing priority to financial worries, it could be the real kick start we have needed for years.
The only trouble is we may need one of these financial crises more often than we would like to keep us in check.
Friday, December 5, 2008
Thursday, October 23, 2008
Crunching travel
It comes as no surprise that air travel is taking a hit in the wake of the financial crisis - many companies have immediately imposed a travel ban. A few weeks ago I noticed this when travelling on the normally ultra popular Singapore - Shanghai route, and the plane was only half full.
I was reading this morning about the success of budget airlines in Asia increasing their bookings from business travellers - those non-bankers who are still allowed to travel. Jetstar in particular offering budget travel, with one additional flight time change for no fee - a nice offer for business travellers monitoring costs but still wanting flexibility.
It's great to see that good consumer insight is one thing that can shine through and make a real business difference in the current times.
I was reading this morning about the success of budget airlines in Asia increasing their bookings from business travellers - those non-bankers who are still allowed to travel. Jetstar in particular offering budget travel, with one additional flight time change for no fee - a nice offer for business travellers monitoring costs but still wanting flexibility.
It's great to see that good consumer insight is one thing that can shine through and make a real business difference in the current times.
Wednesday, October 15, 2008
What I love about New York
It's a bit grimy. But it gives it loads of character.
Everyone walks fast. It's just such a pleasure that people actually have a desire to get somewhere rather than just meander.
Everyone talks fast - and generally to the point - thank goodness for directness.
Big breakfasts.
Big people - I feel virtually slimline, a contrast to Asia where I consider myself to be borderline obese.
Road names in Manhattan. Organising a street plan by blocks and numbered roads may appear to lack character, but actually has the opposite effect (I never tire of asking taxi drivers to head to '54th and 7th') and makes it a damn sight easier to navigate.
Everyone walks fast. It's just such a pleasure that people actually have a desire to get somewhere rather than just meander.
Everyone talks fast - and generally to the point - thank goodness for directness.
Big breakfasts.
Big people - I feel virtually slimline, a contrast to Asia where I consider myself to be borderline obese.
Road names in Manhattan. Organising a street plan by blocks and numbered roads may appear to lack character, but actually has the opposite effect (I never tire of asking taxi drivers to head to '54th and 7th') and makes it a damn sight easier to navigate.
Thursday, September 25, 2008
You're havin' a laugh...
The F1 circus is now very much in town in Singapore and many businesses have seen $$ signs appear in their eyes. From ice cream sellers to shoe shops and even bread shops, everyone is producing F1 related products or promotions.
Some are well intentioned - for example the 10% off high heeled shoes for women holding an F1 pass, for those who get invited at the last minute to Lewis Hamilton's victory ball and forgot to bring their own (even the well-heeled are looking for bargains right now - see previous posts).
Others are less smart - for example the ice cream seller who has creatively produced a range of F1 themed ice creams, which have temporarily replaced the normal menu and are being sold at vastly inflated prices. People aren't stupid - if they think retailers are taking unfair advantage, they will boycott (if the ice cream seller also had the normal range in addition and gave the choice, his sales will probably be higher).
I heard another example from my father last night - of an air show in the UK which had been hugely successful on the basis of free entry. This year the local council also thought they had the golden goose and started charging - the result? People still turned up in their hundreds of thousands, but stayed out of the official GBP5 enclosure and stood further back. The retailers suffered and no doubt next year less of both will turn up. Better to raise more money through allowing additional retail stands or increasing the charge to them.
Two morals
A successful deal requires both parties to feel like they have won.
Don't cut off the fuel that drives demand for your business by getting greedy.
Some are well intentioned - for example the 10% off high heeled shoes for women holding an F1 pass, for those who get invited at the last minute to Lewis Hamilton's victory ball and forgot to bring their own (even the well-heeled are looking for bargains right now - see previous posts).
Others are less smart - for example the ice cream seller who has creatively produced a range of F1 themed ice creams, which have temporarily replaced the normal menu and are being sold at vastly inflated prices. People aren't stupid - if they think retailers are taking unfair advantage, they will boycott (if the ice cream seller also had the normal range in addition and gave the choice, his sales will probably be higher).
I heard another example from my father last night - of an air show in the UK which had been hugely successful on the basis of free entry. This year the local council also thought they had the golden goose and started charging - the result? People still turned up in their hundreds of thousands, but stayed out of the official GBP5 enclosure and stood further back. The retailers suffered and no doubt next year less of both will turn up. Better to raise more money through allowing additional retail stands or increasing the charge to them.
Two morals
A successful deal requires both parties to feel like they have won.
Don't cut off the fuel that drives demand for your business by getting greedy.
Wednesday, September 24, 2008
Singapore on Fire!
Finally, the F1 circus is in town here in Singapore. It's been a long time coming and has generated much discussion, mainly around it being the first night race, combined with a new street circuit and the first time GP has come to Singapore since the 60s and 70s.
The fascination for a night race got me thinking - what were people hoping for? The action among blazing headlights, the evening party atmosphere? No, much of the earlier discussion was about the potential excitement of sparks flying and engines blowing under the over of night. Despite the facts that the megamega watts of lighting will make it appear as day, this re-affirmed one of the main reasons people watch motor sport - for the drama of the unexpected. Even if that means blazing fires. Touch wood.
The fascination for a night race got me thinking - what were people hoping for? The action among blazing headlights, the evening party atmosphere? No, much of the earlier discussion was about the potential excitement of sparks flying and engines blowing under the over of night. Despite the facts that the megamega watts of lighting will make it appear as day, this re-affirmed one of the main reasons people watch motor sport - for the drama of the unexpected. Even if that means blazing fires. Touch wood.
Friday, September 19, 2008
Power to the people
Pretty much everyone knows that there's a financial crisis going on around the world, particularly apparent right now in the US and UK, with the fall of or major rescue plans for major financial institutions. But how is this affecting your average man on the street? From MEC research during the last couple of weeks, we have found that for those who have been dumped in the financial mire, they are really taking control of their own destiny. Not particularly burdened by embarrassment, through the knowledge they are by no means alone, people put in place their own action plans, which are often the polar opposite of their recent consumption behaviour. From spending freely on credit, to taking the scissors out; from regularly going out to bars and restaurants to only going to 'free' places, if at all; from not really knowing their own financial situation to be painfully very aware of it, down to the last penny or cent. While I have no doubt people do not take pleasure in being in this situation, they do derive some satisfaction from taking positive action and getting back in control. The fighting spirit of the human race reassuringly comes to the fore again.
Brands should take heed from this. Firstly, knowing what is on consumers' minds (and their financial situation is often all consuming right now) when they are standing at the shelf, using their products or researching a purchase. Secondly, to take control themselves - not to throw arms in the air and assume nothing can be done, but to take positive action - understand how consumers' decision making and needs have changed, and respond by sympathising and providing solutions to their problems.
Brands should take heed from this. Firstly, knowing what is on consumers' minds (and their financial situation is often all consuming right now) when they are standing at the shelf, using their products or researching a purchase. Secondly, to take control themselves - not to throw arms in the air and assume nothing can be done, but to take positive action - understand how consumers' decision making and needs have changed, and respond by sympathising and providing solutions to their problems.
Thursday, September 18, 2008
Managing other people's money
At MEC we spend lots of other people's money. Companies' money which they want to spend advertising and promoting their brands to encourage people to buy them. This money is spent on wide range of activities, from TV ads to websites, sponsorships to retail promotions, events to trade support. Basically a potentially vast array of different activities.
Every now and then, these companies have a justifiable right to ask whether the money that has been spent for them has been spent in the best way, and has given them a good return. Often prompted by a question from the CFO at annual budget time. But a fair enough and simple question, right? Wrong. Well, actually right.
In terms of measuring return, it's a complex question in terms of evaluating the impact of the wide variety of activities and their individual contribution to the overall goal (sales, awareness, requests for information, etc.). This is where, if we have sufficient data on the spend and timing of activities, together with data on the goal - usually sales, we can employ market mix modelling to get pretty close. But to provide a clear evaluation of the return on investment requires a simple process, regardless of what activities you are employing.
First, be clear on what you are trying to achieve - are we trying to improve the brand perception among a particular target audience (or address a brand perception problem)? Are we encouraging people to try our product for the first time? Are we trying to get people to talk about something we've done? It can be all of these and more (although the more objectives the more difficult it is to measure..). Once we're clear on objectives, we need to work out how we're going to measure each one. Companies usually track sales, and may have ongoing research tracking awareness and brand perceptions. If there's not, we need to put research in place before and fater the activity to measure the change. That's all at the macro level i.e. what all activity is doing for the brand - at the micro level, we would want to measure how each individual activity has performed. For the website, how many unique users or page impressions, or downloads have we achieved? For the TV campaign, how many people did we reach and how often? Did it appear in all the desired programming we wanted in the plan? For the event, how many people attended, what did they think of the event, and did they notice any brand activity there? This combination of business (e.g. sales), marketing (e.g. awareness, perceptions) and channel (media, event, etc.) evaluation will give you an excellent picture.
In terms of the first question of making sure we spend the money in the right way, this can also cover a number of things. We should be spending the right amount in the first place, and behind the right sub brands and categories the brand may operate in. To make sure we spend the right amount on the right activities should be dictated by a core idea. This may be to always communicate with consumers in the morning, before breakfast (e.g. for toiletries or cereal brand), or may be to always associate with high performance (e.g. cars, sportswear). This, combined with a full understanding of what our target audience likes, consumes, reads, watches and talks about with friends will guide which TV programmes, which events, which types of websites we should consider using. And everything we show to the consumer should be more than just wallpaper - it should engage them, whether this makes them laugh, cry, mention it to a friend, play a game, find out more information, call a number or buy the product.
If we do all this properly, then we get to continue spending other people's money, which let's face it, is always more fun than spending your own.
Every now and then, these companies have a justifiable right to ask whether the money that has been spent for them has been spent in the best way, and has given them a good return. Often prompted by a question from the CFO at annual budget time. But a fair enough and simple question, right? Wrong. Well, actually right.
In terms of measuring return, it's a complex question in terms of evaluating the impact of the wide variety of activities and their individual contribution to the overall goal (sales, awareness, requests for information, etc.). This is where, if we have sufficient data on the spend and timing of activities, together with data on the goal - usually sales, we can employ market mix modelling to get pretty close. But to provide a clear evaluation of the return on investment requires a simple process, regardless of what activities you are employing.
First, be clear on what you are trying to achieve - are we trying to improve the brand perception among a particular target audience (or address a brand perception problem)? Are we encouraging people to try our product for the first time? Are we trying to get people to talk about something we've done? It can be all of these and more (although the more objectives the more difficult it is to measure..). Once we're clear on objectives, we need to work out how we're going to measure each one. Companies usually track sales, and may have ongoing research tracking awareness and brand perceptions. If there's not, we need to put research in place before and fater the activity to measure the change. That's all at the macro level i.e. what all activity is doing for the brand - at the micro level, we would want to measure how each individual activity has performed. For the website, how many unique users or page impressions, or downloads have we achieved? For the TV campaign, how many people did we reach and how often? Did it appear in all the desired programming we wanted in the plan? For the event, how many people attended, what did they think of the event, and did they notice any brand activity there? This combination of business (e.g. sales), marketing (e.g. awareness, perceptions) and channel (media, event, etc.) evaluation will give you an excellent picture.
In terms of the first question of making sure we spend the money in the right way, this can also cover a number of things. We should be spending the right amount in the first place, and behind the right sub brands and categories the brand may operate in. To make sure we spend the right amount on the right activities should be dictated by a core idea. This may be to always communicate with consumers in the morning, before breakfast (e.g. for toiletries or cereal brand), or may be to always associate with high performance (e.g. cars, sportswear). This, combined with a full understanding of what our target audience likes, consumes, reads, watches and talks about with friends will guide which TV programmes, which events, which types of websites we should consider using. And everything we show to the consumer should be more than just wallpaper - it should engage them, whether this makes them laugh, cry, mention it to a friend, play a game, find out more information, call a number or buy the product.
If we do all this properly, then we get to continue spending other people's money, which let's face it, is always more fun than spending your own.
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