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BackgroundClient : T.O.M Organic
Website: www.tomorganic.com.au
T.O.M Organic offers a range of tampons to keep you chemical free, every ‘Time Of Month’.
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Client : Black and Krantz
Website: www.blackandkrantz.com.au
Decisions made simple…
Black & Krantz is committed to actively attending professional education programs to keep abreast of all the changes in the Australian Taxation System. We strive to improve our knowledge and expertise to ensure we excel in, and provide, the very best accounting, taxation and financial services and deliver continuous peace of mind for you.
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A 2008 PwC survey, “Private Business Barometer IV” paints a depressing yet realistic picture of the Australian small business state of play – about 92% considered cutting their marketing budget. Gregory Will, partner at PwC, rightly points out that these are the very areas that are the source of most small businesses’ competitive advantage. 3 years on and nothing much has changed!
The reality seems to be that we’ve gone from riding on a sheep’s back to acting like them at a time when we need leaders, not followers!
You can call farmers “battlers”, but not the majority of SME business owners – their droughts are mostly self inflicted. The following is a statistic I found on the CPA Australia website – 3 years ago – and it estimated that one in three new small businesses in Australia fail in their first year of operation, 2 out of 4 by the end of the second year, and 3 out of 4 by the fifth year, with only approximately 8% of small businesses succeeding beyond five years.
Failure to plan is a plan for failure
Conducting a business without a formalised plan is much like trying to drive a car to an unknown destination without a map. Yet the estimates are that only 3% to 5% of Australian small businesses starting from scratch prepare a business and marketing plan; that is, know that their business is feasible and have a formal plan to steer that business towards success. Based on the fact that a Feasibility Study, a SWOT Analysis and a Marketing Plan are a part of any Business Plan, I suggest that approximately 70% of all business failures and almost 100% of lack of business growth are due to inadequate Marketing.
Peter Drucker, the grandfather of modern management said business is about 2 things and 2 things only – innovation and marketing! A number of studies conducted since WWII showed something that marketers have known all along – keep marketing through the downturn. The following quote is from Professional Marketing, Oct-Dec 2008 – article titled “All Hands On Deck”: “…companies that increased marketing spend (relative to market size) during a recession, increased their return on capital employed by 5% in the recovery, compared to a 1% decline for the budget cutters”
Most businesses are either ignorant or choose to ignore the empirical evidence for maintaining or even increasing marketing investment in a weak economy
– Competitors tend to cut spending, creating opportunities
– Maintaining promotional spend will sustain or even grow market share
– Stealing share of mind is a bargain during a recession
– Consumers don’t “go away” during a recession, they become more conservative
For most SME’s marketing is an expense and not an investment.
Most SME business owners do not understand the meaning of marketing or branding let alone have any basic understanding of advertising principles to effectively and efficiently reach their target audience. Much of the SME marketing efforts are wasted anyway – just open your local paper, look into your mailbox and see the standard or the lack of it in SME marketing communication. Only a few weeks ago the ABS released a frightening statistic that 66% of Australian businesses do not have a website!
Attitudes have to change
“Ego and advanced ignorance have killed many a business, and continue to do so. …ignorance is acceptable because it means we don’t know. Advanced ignorance, however, is ‘knowing we don’t know’ and doing nothing about it! It’s deadly….there’s information readily available on every conceivable issue relevant to growing a healthier business, but it’s far easier not to seek anything at all.” Says Brett Lowe of Business Planning Works.
There are businesses still around today, that perceive customer service to be a “Thank You” on the invoice
A study of 460 B2B organizations that employed 100+ people, conducted by Strike Force Sales, found that only 6% of Australian companies pick up the phone and respond to a web generated sales inquiry with a phone call. The MD of the company, Chris Moriarty brings this reality home with another statistic that shows 46% of the time auto-response emails are never followed up.
In the last 5 years, I have met hundreds of SME proprietors and completed over 70 SME marketing projects. I have discussed the SME challenges with colleagues and other consulting professionals and have to say that there are glimmers of hope. These generally lie with the younger more entrepreneurial SME business owners who have grown up on the ‘brand rich media diet’.
There is plenty of professional help out there, admitting you need it, is the hard part…
Everybody wants to discover the “silver bullet”, THE solution to all their problems, whether it is to building a profitable online business or to losing weight! That’s the sort of society we live in – Quick Fix, Pop a Pill, so it is no wonder that the “expert marketers” serve up solutions that the market seems to be demanding!
Unfortunately, just like weight loss, developing a profitable online presence in form of a website or blog is not as easy as popping a pill!
During the last week I have come across 2 articles:
that implied just such a piece of dangerous advice. The majority of the advice in the article was sound, however did raise the whole question of D.I.Y Marketing v getting a Professional Marketing solution delivered by the appropriate experts. This is a whole different topic and we have written a whole White Paper about it, which you can download here.
But this discussion focuses on the one piece of advice that is potentially “unhealthy for your business”. I am talking about CONTENT MANAGEMENT SYSTEMS or CMS.
Here are the extracts from the offending articles and their authors:
Below Wendy Kenney answers the reporter’s question: “What virtual tool would you recommend?”
This might surprise you, but I recommend getting a WordPress site above anything else, given that 40 per cent of business owners still do not have an internet presence. With the invention of the WordPress.com platform, any business can have a nice looking website for free – and no programming experience necessary. And for just a small investment, they can have their own customised domain for their website, about US$24 to purchase and then to have WordPress assign the domain to your site.
Wendy, please email me some of these “great looking websites” designed, built, promoted and maintained by your clients, and I’ll critique them for free for your clients or readers of your book!
Let’s be realistic, I’m sure your educational program is fantastic and value for money, but how many of your graduates have replicated your success Ed? Maybe more would be successful f they didn’t try to do it themselves, but used their knowledge to engage and manage the right suppliers!
Here Ed Dale provides his advice and makes some very interesting observations that fly in the face of his own advice:
“Small business in Australia has still not grappled with what happened online in 2002, let alone 2011,” he says supporting the reporter’s earlier point of:
Wendy also says that 40% of business owners still do not have internet presence and an article in June this year states that 75% of all SME’s still don’t have their own website! http://www.theage.com.au/small-business/smallbiz-tech/threequarters-of-smes-dont-have-own-website-20100630-zl56.html
Here’s Ed’s offending statement in his interview:
Expensive web design and confusing technology are no longer barriers to entry. Dale believes a simple WordPress blog and Facebook page is enough for most businesses. “Honestly, a surly teenager can handle the technology requirements of a small business in 2011,” he says. “If they can pimp a Facebook page they are already over-qualified.”
No one could ever argue that a professional online presence is absolutely critical today for any business or that the actual technology costs a lot less, but why would Ed and Wendy “overpromise” so much to their “fans”?
Are they simply delusional and out of touch with the market, like our politicians or are they trying to peddle more of their books and courses?
The research shows that the average SME business owner is scared of the technology, is extremely time poor and hence has no time to learn the technology, no matter how simple the WISYWIG interface has become! Finally and more importantly most simply don’t want to!
Let me explain. Most if not all of us go into business because we love to do what we do – Provide financial advice, solve legal disputes, design and build houses, treat pets, manufacture, engineer and so it goes. All of a sudden the new business owner has to wear, according to the CPA Australia up to 11 different hats and most of us are only good at successfully wearing 2 – 4 of those hats! Yet Wendy and Dale want to “put another hat” on our entrepreneur and make him or her do something that they have no passion for! Here are some statistics and observations from my own experience in providing marketing advice over the last 5 years to the SME market and consulting to hundreds of business owners:
Stark Reality guidelines for marketing success online:
Just like weight loss, success online means doing some hard work, probably getting a personal trainer and watching what advice you consume!
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