The trend to local

Is it just me or is there a shift back to local retail and away from shopping malls?

Here in my hometown of Melboure Australia I’ve noticed high street retail becoming revitalised. In my local shopping centre in the last six months an ailing milk bar (convenience store) has closed and been replaced by an Italian deli, three restuarants have opened and two new coffee shops have opened. The local two screen cinema has been re-developed into a four screen centre. There are some new (non national chain) retailers opening too. Not just in my local suburb but all around the city.

On the Internet there’s a push for local content and consumer generated content (through citizen journalism sites). This report shows the importance of the internet when consumers are searching for local shops.

What does all this mean?

Is local back in vogue?
Are consumers showing they want choice rather than the limited offerings of the national chains? One can only hope so.

Independent retailers and small businesses do more to support and enhance the culture of a city and, indeed, country than the national chains every day.

Microsoft no longer a partner

I feel as if I have let myself and my team here down by not being aware that Microsoft was entering our patch as a supplier. I had no idea they were entering the small business accounting space until I read it a couple of days ago.

I’ve written a fair bit about independent retailers and the daily battle they wage with the national chains and ignored the threat this hungry giant poses to my business and others like mine.

While I am confident that customer focussed independent software companies like mine will continue to thrive, it appalls me that Microsoft with their ability to bundle products and mass market like no other will enter a well served space.

My company has spent tens of thousands on Microsoft product. We experience their version of customer service regularly. It’s poor. We experience their software every minute of every day. I’d rate it barely 5 out of 10. Yet they are the giant. Their size makes them lazy and complacent.

Small business computer users need to purchase from small business specialist software companies. They need to support their small business community. By ignoring the new Microsoft offering small business owners have an opportunity to register how mad they are at the national chains trying to take over the world.

Microsoft ought to back off.

Double standards (part 2)

Due to inconsistent and sometimes uneconomic performance of product from some suppliers to users of our software, we have integrated automated benchmarking tools whereby our users’ systems send to us data to enable us to compare supplier and category performance in their store against our broader user base.

We created these tools to help provide a higher level of assistance – beyond that of a traditional software company. It’s proof of the level of partnership we feel with the independent retail sector. Our motivation is pursuit of a fair deal for our clients compared to what some of them experience from suppliers today.

To me, this type of work is more interesting than sexier technology.

Once we have a reasonable database we’re going to approach suppliers with the results.

Double standards

In one of our marketplaces (newsagents) we serve 1,300 small business owners with vertical market software. On their behalf we deal with their suppliers (pubishers like News Corporation and Fairfax) on maintaining interfaces between small business systems and the supplier systems.

It’s a lopsided relationship with the small business owners being required to provide data on time and to a strict quality while the suppliers refuse to engage in discussion about providing accounting data electronically so that small business can save time.

By my reckoning newsagents, 4,600 of them nationally, could save at least 10,000 manhours a week. That’s worth A$10 million in a year. We’re about to make our case again and while it has nothing to do with developing software, we feel an obligation given that we understand how easy it is to implement the type of EDI solution which can fix this.

Goliath stirs

It’s disappointing to see Microsoft enter the small business accounting space. Their doing so has the potential to harm small business software developers who are serving their user community well.

While the press will focus on the battle between Microsoft and Intuit (makers of Quicken and QuickBooks) and MYOB (when Microsoft releases Australian accounting software), it is the Microsoft push against small software companies where sigficiant damage will be done.

There are thousands of small software companies serving clients well and providing quality software for fair pricing who will suffer at the hands of the goliath Microsoft.

Moneyball – a baseball book for business

I’m not a fan of business books, they tend to take too many words to get across the simplest of messages. I think we tend of have answers ourselves if only we looked at our businesses and ourselves.

I’ve just read Moneyball: The Art of Winning and Unfair Game by Michael Lewis. This book about the Oakland As baseball team was consistently outspent 3:1 by opponent teams on players yet seemingly effortlessly outperformed these opponents on the field.

This is a must read business book. It shows the value of breaking the rules and understanding that what looks good is not always good for you. It teaches something about the inefficiencies we too often take for granted.

Reading Moneyball makes you go back into your business and challenge conventional wisdom. It tells us to base decisions on cold hard facts and not what looks good or is the way things have always been done. Moneyball shows how a baseball team got businesslike and taught their competitors a lesson.

Lewis has written book about baseball which is accessible to those who know little about the game. I am sure many faculties will add it to required reading lists.

There is an Oakland As opportunity waiting for most of us in our businesses.

Self service checkout

I’m not a fan of putting technology between the consumer and customer service. I see it as a marketing ploy by IT people keen for stuff to sell. Maybe I’d accept it in a library or for purchasing petrol (gas) but not traditional over the counter enterprise.

I accept I’m not a loud voice in my displie of self service checkouts. The IT press is full of stories as you can see here and here.

Already there are sites with dialogue on getting around self service checkout systems as this rottenegg.com entry shows.

In researching this it was comforting to find a blog entry from ‘nelson’. He says I miss the human interaction with the clerk. But mostly I found the experience intimidating.

I own a software company and it doesn’t make sense to me that we are trying to create technology products which dehumanise retail. No sense at all.

Service Fatigue

Don’t you sometimes want to go into a shop, browse and leave without being asked if you need assistance or being told of some special offer? I know I do. I crave being left alone in retail situations. No, I don’t need help! That’s what the loom on my face screams if someone asks sometimes. I suffer from being over serviced and drop out of shopping on days that happens.

Businesses large and small have their troops on the shop floor asking customers if they ant to be helped. All customers. When in fact they should train employees to read customers and only approach if they look like they could use some help.

In one shop recently I was stalked throughout the shop until I left frustrated because I wanted to make a purchase but refused to give the employee (stalker) the gratification of a sale and a notch on her belt. I reckon it’s one reason men are enjoying the online experience more than women – they like not being over serviced.

I think service fatigue is real as is advertising fatigue and loyalty fatigue covered in the previous two entries. Someone does something. It’s reported in the media and the world follows rather than creating their own original approach.

Give me a different experience and I’m yours.

The customer service experience has to be intuitive, personal and memorable. So memorable that you tell others. Easier said than done but it must be your goal. This is where small business can excel.

Advertising fatigue

Following from my comments yesterday regarding loyalty fatigue, I felt it appropriate to consider advertising fatigue. This continues a series on the “me too” approach to business adopted by many small businesses and independent retailers. Where has original thought gone?

I’ll declare – I am tired of advertising. The TV commercials, ads in newspapers, the billboards, the telemarketers, those awful signs on trailers pulled behind cars and motorcycles, ads at the movies, radio commercials, SPAM, cell phone junk messages. All of this intrusion in my head space annoys me to be point of turning me off the major offenders. What really irks me is the insidious whisper campaigns and the product placement in movies, computer games and now rap songs.

Independent retailers think they have to join in and so you see ads in local papers, billboards on shop walls, posters in the shop. Clutter soon takes over.

Surely we should all be building businesses which offer good products and services backed by such exceptional service that advertising is not necessary.

Independent retailers should claim the GREEN ground. Pursue less noise in advertising. Spend the money on the business. Improve customer service. Make a public statement about the approach. Denominate what you will save in paper, ink and noise in this noise drenched world.

We have opportunities within existing customer traffic and relationships to reinforce business offerings and therefore reduce reliance on advertising. I know this is true in our own software company and our retail newspaper/magazine business. We do better serving existing customers than chasing new owns as it’s the existing customers who point the new customers your way.

From a software perspective we can and should build facilities into our systems to help independent retailers rely less on traditional advertising. Look at the real estate we manage – receipts, screen space, customer displays. We can also structure front line associate/consumer interaction. We can guide up sells. We can also more effectively manage appreciation shown by the business to customers post purchase – through direct mail and other communication mechanisms to show appreciation. All of this for small business without the need to add to what consumers will perceive as advertising noise.

Advertising fatigue is a real phenomenon. We should respond before consumers do.

Loyalty fatigue

I’ll declare from the outset that I am a skeptic of customer loyalty schemes. It seems to me that you spend a lifetime accruing points so that you can get some lame discount or free product or flights from an airline if you’re prepared to travel overnight and make 6 stops.

Loyalty schemes are on my mind today because small businesses feel they are missing out because of what their big business counter parts offer. In Australia we have FlyBys. It’s a crock – certainly not what I would call a loyalty scheme – you know, a scheme which genuinely rewards loyalty. FlyBys in my mind is designed to dupe customers into thinking they are being rewarded when they accrue points at the point of purchase. It works!

Some of our small business clients want to imitate it regardless – because they think that’s what they have to do. They think that big Australian businesses have got it right and that accruing points for redemption is the best form of loyalty management.

I reckon they’re wrong because most of them do not have capacity in their bottom line for the level of reward they want to provide. Also, copying big business in this way is your way of saying to customers that you want to be compared to big business.

With the number of schemes out there and the greater awareness among consumers about the dubious value, loyalty fatigue is creeping in. Thankfully!

Independent retailers and other small businesses can capitalize on loyalty fatigue and differentiate themselves from big business. We’re small at the small business end of the world. Surely we can come up with something unique and therefore turn our back on the FlyBys and other big business loyalty?

As a software developer we’re working on this right now – a fresh loyalty model managed by the software which presents a unique value proposition which the independent retailer can put to their customers. In part it is based on the campaign we have been running in our own shop.

I think it’s time for some instant gratification.

Imitation leads to failure

Software companies have an ethical and commercial obligation to not only create valuable software but to drive its appropriate and valuable use.

We must encourage, lead and even force our user community to extract every cent of value from the investment. See what we do here. This means rolling up the sleeves and working along side the users so that they understand the software tools and use them at full throttle. We have to ensure that our software provides the right structure and internal systems which genuinely help our clients compete.

In independent retailers and small businesses, too often software is used at the minimum level. The independent retailers lose and software companies lose because a user who does achieve the potential of a system is not a good reference site. It is our obligation to force deeper use of the software.

My view is that if your software company is in the small business / independent retailer space you need to believe in the mission and share the road of the mission every day. We have to help our small business clients compete with Wal-Mart, Woolworths, K-Mart, Staples, Office Depot, Officeworks, Coler-Myer and the other national chain brands hell bent on putting our clients out of business. It bothers me when I hear of Microsoft entering the small business space. Microsoft does not have the capacity to walk in the shoes of small business to create useful solutions and strategies to support them.

As a small businesses ourselves we have learnt that one does not compete with big business by imitating. So, we don’t build big business imitation tools into our software.

Green software

IT companies have an obligation to deliver real benefits to their customers. We have a social as well as commercial contract with our customers. For too long many IT companies have pursued more sizzle than substance by listening to the marketing department more than customers. And they do this in the belief that sizzle sells.

Yeah, sizzle may sell IT but does it give a business oxygen? Rarely!

How many hardware and software advances really help their users improve the return they get from their IT investment? Ask them and all will claim they do. Ask their customers and many will be judged as not helping.

I’m suspicious – especially the hardware and software upgrades people have to pay for.

IT companies ought to have a ‘green’ policy – one which sees systems used to their fullest before they are discarded. This can apply to software code as much as hardware. Sure it impacts the bottom line through less upgrade business. But surely it will win more business from new customers wanting to partner with a company which helps a user extract maximum value from the investment before pushing you to spend more.

My company is in the independent retail space – almost at the end of the IT food chain. The dollars available for IT are low and their interest in rising software support and update fees non existent. So we have had to learn how to grow our business without relying on upgrade revenue and rising prices. (We have not increased software support licence and support fees for more than four years.) We provide a broad range of help to ensure achievement of maximum value.

I have customers who have used the same hardware and software for ten and even fifteen years and more. Now that’s a return. But I bet you only find systems of that age in the small business and or independent retail sector. It thrills me to know that a fifteen year old bit of software is still valuable for a customer. That’s green software for you!

It bothers me when I see the biennial annual push by Microsoft and some of the other majors for long standing users to pass across too much money for mediocre updates. Down at the other end of the software developer chain there are companies delivering more valuable software updates at no cost at all. Yet Microsoft are the heroes to the world. That’s because people get sucked in by their hype that everything they do is good for you and the world.

It also bothers me when I see companies developing hardware and software of no real value. It happens too often. There are some good stories on the Net about abandoned products. Do a search for whatever happened to on Google and read about plenty of abandoned products purchased by hapless businesses. What amount of money has been on such wasted technology? Who knows!

Sure we’re in business to make money. I believe that we will make more for our software businesses if we genuinely engage with our customers and help them ensure a maximum return. We cannot fake this. We have to rely on customer feedback that they are better off this year having partnered with your company.

Go into the office on Monday and check our your R&D spend. Make sure it’s about your customers more than it is about sizzle you plan to use to lure sales. You have an obligation.

Faking it

Just as the story of lemmings following each other off a cliff to thier death is a myth (see American Scientist November 4, 2003) so too is the myth of service of many chain stores.

They’re faking it. On cue their smiles and wishes give off the impression that they are glad to serve you but we all know how easy it is to fake it when we want to.

Hey, for $10, $15, or $20 and hour depending on where you live and your age, you’d be happy to fake it. And you’d fake it without knowing why. Who cares eh? As long as you are paid right and on time.

This is what the sausage factory work experience in chain stores in giving our kids.

Independent retailers don’t need to fake it. No, they and their employees can provide the real thing, the real experience of customer love. People will soon connect with the real experience over the fake have a nice day.

In Australia our supermarkets have ploughed into the fuel retail space and now we have supermarket trained people selling fuel and other things. For months now I have been presenting at the counter to pay and they mumble something which I never quite catch. They gesticulate toward a display of discount candy (Tic Tacs etc) but I still cannot work out what they are saying. I am sure it’s a discount of some sort. But the delivery is so fast I cannot understand it.

The employees in these fuel factories are doing their job. They’re getting the pitch out. But it’s lost on me. In fact it annoys me that they do it every time and so poorly. I just want to pay for the fuel and leave. I don’t need them to do their routine on me even if they must just to please their boss.

The other day I purchased fuel at an independent station. The experience was different. Relaxed. No garbled message. Sure he tried the up sell but it was without the pressure of getting through the choreographed sales routine. His was unique.

For a reality check on how employees feel about their place of work check out this blog site. It’s a warts and all rant by people about their jobs. Some of the entries talk about faking it.

Independent retailers may not be able to match the chains on price or on advertising spend but we can match them on customer love. To achieve that we have to provide employees with a place to work they look forward to coming to. And when they’re not at work they have to think about work in good terms. If we achieve that it shows to our customers and this is gold in their minds – the chains cannot achieve that because gold doesn’t come out of factories.

So, start by talking with your employees. If they’re not happy try and create an environment in which they are happy. If this cannot be done help them find happiness elsewhere. Once you have a happy team the relationship with the customers will become more personal and business will grow. This is not brain surgery. It’s small business 101 and it begins with you then your team then your business and finally your customers.

It’s about the customer stupid. Always and forever.

While our big business competitors talk about customer service they don’t understand the personal nature of it. We do (or should) and if we wholeheartedly embrace it we will WIN more business.

We should leave big business to act like lemmings while we get on with the real work of genuinely looking after our customers.

Consumers can tell if you’re faking it.