With both supermarket chains pushing their fuel discounts heavily many small business retailers are joining similar schemes connected to independent fuel outlets. It seems to me that these small businesses are copying the giants because they fear it is the only they can compete – by offering the same.
This is nuts.
Fuel rebates are so common that I don’t trust them. There is no point of difference any more. I don’t trust that it is a discount off an already fair price for fuel. I don’t trust that there is any element of reward in the offering. Okay I am probably in the minority – a space for cynics. However, the reality is that Australia now has 6 or 7 fuel discount offers.
The other aspect of the fuel offer which does not make sense to me from a small business perspective is that I say thanks to a customer for shopping with me and reward them by saying, hey, go buy some fuel and there’s your reward. Why can’t I offer a reward from my own product offerings? It seems to me that I have more control and more to gain by offering reward from in house.
In house rewards allow me to be more flexible, they can be used to encourage a higher spend from the customer and they make me work smarter within my business.
Fuel discount programs being offered (pushed) on small businesses have a cost and drive traffic elsewhere and that’s where I have big problems. They are the easy way out. In the case of newsagents, offering fuel discounts as part of a loyalty strategy drives consumer traffic to retail outlets which compete with newsagents. Surely there is more to gain by rewarding newsagent customers by offering discounts on newsagent product?
Coles and Woolworths control the fuel outlets they are driving consumers to. They have purchased and established these outlets in response to consumer research. Small business does not have the same needs to move traffic cooperatively between their businesses and fuel.
Small businesses are better off rewarding from within and with a view to generating incremental business within. The win is better in your pocket.
Apropos of nothing which I usually talk about here…
I’ve read The Latham Diaries cover to cover. I’ve also read, seen and heard much of the commentary about the book.
The book is well worth reading, especially the essay at the front of the book. I was surprised that only a few commentators have commented about the essay yet this is what provides context for the diaries and context for how Latham feels today.
I’m not a Labor voter nor do I have any axe to grind with any side of the politics involved. When it comes to Federal politics, I’m an average swinging punter.
This book exposes politicians, media and the cynical self serving political process. The selfishness, lack of intellect and lack of humanity are a shock. The media compliance in publishing spin as reporting, while not entirely unexpected, is disappointing. While I accept that there is some spin in the book, that there has been corroboration of key claims encourages me to believe more of the book.
Mark Latham has done Australian voters a service in publishing this book. I wish we could have such a frank expose from the other side of politics. Then we could clean the parliament out and start again. Latham was as bad as the others while he was in parliament – playing the game and not believing enough to be open with the constituency.
While I am disillusioned with Australian politics and those who represent us, on all sides, I am pleased to have this insight which until now was unavailable to me.
I was in Singapore for most of last week and was reminded of the value of leaving the business for a while to gain perspective. Away, some issues don’t seem as important as they seemed when closer. Other issues seem more so. I find this type of travel, overseas and for a few days, like spring cleaning for what’s on my mind. So, next week will be about refocus, ensuring priorities are right for the run home to the end of the year.
So much of running a software company like ours is about agenda setting, innovating for our chosen marketplaces while at the same time taking care of the core needs. Constantly moving so that the software we develop improves in value. This is crucial to generate the support revenue necessary to feed the infrastructure necessary to provide support.
One of my take aways from this trip is the need to focus more on transactional detail. While some customers like big picture stuff like new reporting tools or deep analysis of their business, for most it is about shaving 100ths of a second off this or that function so that their business is more efficient and so that they can serve their customers better. This time travel has allowed me to see good and bad execution of technology in the retail situation. This is where we can and will help our small business customers.
And Singapore? A wonderful city. Lunch in Little India eating off banana leaf was a treat as was dinner at My Humble House.
I was at a clone coffee shop, no, not Starbucks, in a foreign city this past week. I went to the same coffee shop twice and each time the words used when my coffee was ready were the same. Small latte, nice day, next.
Since when did “have a nice day” truncate to “nice day”. I never really liked “have a nice day” because of the lack of feeling with which it was often delivered. Also, I didn’t like the obligation of it – in the giving and the receiving. But I accepted it as part of the Americanisation of our culture. I even use it occasionally when working behind the counter in my retail business. Not all the time, just when it feels right.
So, twice in this one coffee shop “have a nice day” became “nice day”. When it happened the second time I wondered if the suits at a far off office had decided to cut the two words and save time or whether it was an efficiency push at this store or by this employee as a lone crusader for efficient communication. Who knows? I didn’t ask so all I can do is speculate.
Regardless, it’s nuts. “Nice day” could be a commentary on the day, a command to me or pure laziness.
I suspect that this employee was so busy and they were stepping through the motions of each sale as mandated by the corporate manual that without thinking and that “nice day” was another tick in the sale process they needed to deliver every time to ensure compliance.
What a waste of time.
The coffee was good and that alone would get me back there. Not the consistently frustrating service. Not the mediocre compliance with operation guidelines.
What is the world coming to? Not this truncated retail speak I hope. We ought to encourage and cheer individuality in our businesses. Individual social interaction is an important part of any transaction.
Small business, a crucial part of any economy, bears more than its fair share of costs. We pay more for products than big business; put more into in store marketing; provide better and more expensive service; (probably) pay more tax per dollar earned; and give more back to the community.
I was thinking about this today when blogging elsewhere about a decision by Vodafone to cut the commission newsagents earn for selling their product by 37.5%. This is the second cut this year by the big business Vodafone. It’s hurting this small business channel.
It seems to me that small business is hit with such cuts first. We bear the brunt of cutbacks and fee increases. Primarily because we do not have negotiating power. yet we generate more economic benefit.
Newsagents are responding by pulling down Vodafone signage in their stores. A protest is forcing. While I am not sure where I sit with such a protest I can understand the frustration of small business newsagents. Like any small business channel they seem to get the raw end from big business too often.
What Vodafone has done is appalling and greedy. If the face of strong profits they have hit hard at the retail channel which is their face to the consumer. They have seen newsagents invest in infrastructure on the basis of a revenue model and then hacked away at the revenue model. Bad form Vodafone.
This is but one story about big business arrogance against small business. Small business need to fight for itself.
With the installation of self checkout technology by major retailers increasing rapidly I was glad to have an opportunity to touch and play with a unit first hand this week. What I noticed immediately is that purchasing is a lonely and technology driven event. No smile, no chat about the weather, just you and the machine. You and some cold and heartless metal.
While those companies adopting these technologies will spin that they cut costs and the savings mean cheaper product, they dehumanise retail and without human interaction what is retail anyway?
These devices are not progress. They are about retailers telling consumers that they make more money by interacting with them less and that’s bad for society.
Having played with a self checkout unit I see them as an opportunity for small business retailers. By increasing human contact and the quality of that contact we can reinforce the social value of small. We can demonstrate that self checkout is about profits for the big retailers, profits at all costs.
If I were in a situation where a competitor was about to install self checkout I’d have a campaign running already. Hit them hard and long. Machines don’t smile. Machines don’t share anecdotes. Machines don’t follow football. Machines don’t make mistakes. Machines don’t have a family to support. Machines don’t contribute to the social fabric of our society. Machines won’t add value to the business transaction like a cooking tip.
Sure we can codify some of these requirements into technology. I don’t want codified emotion or social interaction. I want human interaction. Otherwise what’s all this for?
Self checkout dehumanises interaction in each store where it is implemented and this affects the community around it.
Unrelated to what is usually posted here; I am two thirds of the way through reading The Latham Diaries. Regardless of your politics, this “occasional diary” has all the hallmarks of a blog except that it’s been published on the page. I’d like to see Mark Latham blogging today on the reaction, personal and public. Through such a blog he could engage in a dialogue which demonstrates the power and connection of the medium as well as continuing the discussions in the book, particularly those in the essay which precedes the diary entries.
By no means complete or scientific here is my list of ten reasons why we need independently owned retailers in Australia.
1. Community. Small businesses are more likely to support local traditions and tell stories which need to be passed on.
2. Creativity. Whereas national and global businesses make creative decisions a long way from the place of execution, local businesses make creative decisions in the back room and at the counter – in the local community. This helps develop creative skills and interests of those working in the business.
3. Competition. In a global only world, competition is by arrangement whereas independent businesses compete for day to day survival.
4. Diversity. No two independent retailers in the same channel are the same. Yea!
5. Entrepreneurship. Independent retail is where entrepreneurs cut their teeth and where motivation begins.
6. The local economy. Independent retailers are more likely to hire locally, shop locally, live locally and invest locally.
7. Family. Independent retailers offer families places where teenagers can get their first job, they offer flexible credit terms, they are less corporate and therefore more likely to be family friendly in decision making.
8. Leadership. Impendent retailers are developing leadership skills and assisting their employees to develop leadership skills since more decisions are made in an independent retail business than a national or global brand store.
9. Life. Whereas the local outpost of a national or global brand is a number on a balance sheet, the independent retailer is a living breathing, stumbling and excited representation of the life of business.
10. Humanity. At an independent retail business you’re more likely to observe humanity at work because there is no corporate manual of dos and don’ts.
My list is as incomplete as it is unscientific. Some points could be compressed. As it is, though, it serves as a reminder about what’s important abut independent retailers and small business to a country and its people
I talk with many small business owners every week. They’re usually in a stressed situation and wondering if they will ever get their business performing well. A question I ask is why are you working for yourself? Half don’t have a ready answer – they drifted into small business ownership. Most of the other half are in business for themselves, in pursuit of the dream. Usually the dream is economic as opposed to social.
Just as many people spend a fortune on being princess for a day at their wedding, many small business owners spend too much time and money on the feeling of business rather than the operation.
Owning a small business is not a dream come true, it’s not a fairy tail. It’s hard work and it’s serious. The obligations are enormous: economic and social. There’s no point in stepping onto the path unless you have a mission. A mission is crucial to providing the drive and the ability to overcome what seem like insurmountable obstacles.
Just as the marriage is the thing, as opposed to the wedding; the business and its achievements are the thing rather than being the boss.
I’ve owned this business for 25 years in January 2006. It’s a long time in one place. While it is a successful company, it is not wildly profitable in a financial terms. The real benefit of ownership of this business is the opportunity to give opportunities – to colleagues, to clients. I feel that on our small patch of the world we carry more than our weight in terms of economic value – measured by the value to our clients of our software; our number of employees; tax paid; efficiency improved etc…
I also feel that we are performing well socially – in community support; providing assistance beyond traditional business assistance; being environmentally responsible etc…. I count people who got their start with us, positions we created to give a person a break, the number of people we provided their first overseas trip to, the number of people we provided their first ever flight to, the marriages, the babies born … every human connect like this makes me smile. It’s a reason to be in business. To help people achieve their own goals.
It is the area of social responsibility where we need to improve and this is a key driver for me and for the company as we move into our 26th year. We want to engage more with the community and leave footprints of which we can be proud. It’s a challenge and a motivation.
That’s why I own my own business.
We had a trade show last weekend in Brisbane and we were relying on Allied to get our brochures, giveaways and products to Brisbane in time. They left our office with plenty of time – three days in fact.
Alas Allied let us down. We rang and made an arrangement to collect the items which they confirmed were in Brisbane only to find that they missed the arrangement. We now find out that Allied sent the goods to the Gold Coast.
So, we went to the trade show without the materials we needed.
Do Allied care? No. What’s their response? To invoice us for the items which arrived after the trade show ended. The only consolation was that they paid to ship the goods back to our Melbourne office – and that took a week to happen.
This is appalling service from Allied.
Last year I had cause to write to the Australian Taxation office about an adjustment they had made to my tax return. It took six letters before someone from the ATO called me to advise that they could not write to me because they did not recognise me at my home address. They said they would only write to my accountant.
I had written November 2004 proposing a face to face meeting. The telephone call to me was made six months later. The meeting I wanted finally happened last week.
By their admission in the meeting last week, the ATO refused to correspond with me because my home address was not registered for my tax file number. They claimed that the Privacy Act precluded them from writing to my home address and responding to my letters.
There have been several instances where the actions of ATO prove it is not the Privacy Act which precluded them from responding to my letters and my request for a meeting:
1. When called by two officers of the ATO on my mobile phone on two separate occasions no effort whatsoever was made to determine if it was me they were speaking with. Anyone could have answered my phone.
2. When I met with tow officers of the ATO last week, no effort was made to determine if I was who I claimed to be.
3. When I requested an ATO officer change my registered address details while at the ATO office last week no proof was sought that I was who I claimed I was. Indeed when I offered the officer proof of identity his response was that the computer does not require it.
Each of these events makes a mockery of the ATO claim that they did not respond to my six letters because it would be a breach of privacy to write to my home address since it was not the address registered with the ATO. The ATO has demonstrated a systemic disregarded for privacy rules.
As a customer of the ATO I expect at least the courtesy of a response to correspondence.
There can be no doubt that this is the era of personalisation. Whereas in the past we would buy a CD, now we buy songs; where we would listen to a radio show, now we can grad the bits we like; where we would buy a newspaper, we can get the stories on topics which interest us delivered to the device of choice.
Consumers can get the content we want when and where we want. They want what they want rather than all the stuff they don’t want. I take this to be a rejection of one size fits all, in part at least. Sure we may not be seeing it in traditional retail, that it’s happening in music and entertainment could be reasonably assed as the start of a possible trend.
We’re seeing something like this through our dealings with our small business clients. Where in the past we would get excellent numbers to our group training sessions and events, now they prefer one on one contact or to access content in a personalised way. The feedback we have is that they like to be able to pick and choose content. This has only come about in the last eighteen months. What’s happening in the broader community is changing how they want to run the IT side of their business. Hence our pursuit of podcasting and other technologies to deepen our connect.
The ability to deliver personal content more closely aligned with the consumer is a point of difference for small business. It’s one we exploit (to our sales success) and one which many of our small business retail clients exploit. Too many small businesses have failed trying to emulate their big business competitors. We’re better off smiling, providing exceptional personal service and gently reminding the customer that they wouldn’t get this attention elsewhere.
Back to my company, the cost of one on one connects is high but so is the customer retention rate.
Given the importance of the various Acer laptops our sales team uses here and given the five day delay to get even straightforward repairs done, we have made a decision to switch to another brand. This could have been avoided if Acer provided the same timely service for computers out of warranty that they offer for computers in warranty. I’m happy to pay, this is not about money. It is about a company which does not understand the mission critical nature of many laptops and their appalling interest in good customer service.
The cynic in me wonders if the Acer policy on out of warranty repairs is designed to encourage customers to replace a sick laptop rather than have it repaired. No matter, we bought the first of our new laptops yesterday and will slowly migrate the rest of the team away from Acer.
We have five or six Acer laptops in use within the company and one of these units needs repair work. It’s seventeen months old and out of warranty – we’re happy to pay for the necessary work. The Acer service people told us today that it will take at least five days before the laptop is fixed. They told us that if it was under warranty the repair time would be 24 hours. We understand commercial demands, we offered to pay more to get on their 24 hours turnaround line. No way they say. No amount of escalation was going to shift the five day minimum it seemed.
As a long term customer Acer is treating us as second class citizens.
Acer makes a lot of noise about their 24 hour turnaround on warranty work. It is a reasonable assumption that this is the turnaround they offer after the warranty expires – especially since you are paying for the work. Not so.
Unless Acer changes its tune on this we will not be arming our field force with Acer laptops in the future.
In reference to my earlier post complaining about the new $27.00 fee Qantas now charges for making a booking through their call centre, I have been thinking about other companies which charge consumers a fee for doing business with them by way of human contact rather than online. I can only come up with some banks. No one else. If you think of other business models which offer online and call centre access – insurance companies, banks, entertainment tickets etc, non charge the human contact fee which Qantas charges.
It amazes me that the media has not picked up this story.
I’m in a competitive situation in one of the marketplaces my company serves in which is most frustrating. A competitor says their software is, say, $1,400 and points at ours costing three times that amount. The fine print reveals that they have a mandatory annual access fee if you want to keep using the software. In our case there is no mandatory fee – the software keeps working regardless of whether you take up our support service. Even including our software fee our solution is cheaper over a four year period.
The problem is that the marketplace this is being pitched to is so not tech and contract savvy that some will take the bait and not discover the higher cost until they are locked in.
While we can go to the ACCC about the matter I have no faith in their interest in such things.
Being a small business (around 40 employees) we get to participate in our fair share of transitions. Employees coming and going, engagements, marriages, births, deaths, divorces, holidays and the other changes to lives. Being a small business we get to notice these transitions more than in bigger companies. I guess it’s a reason I like being part of a small business.
The transitions of employees departing can be bittersweet. There is the loss of the asset yet the joy of watching someone move on and the hope that they have something valuable to take elsewhere which they have learned from their time with you.
Small business plays an important role in giving people a break in their first position in the workforce. More important than that is the opportunity for people to step up into roles which extend their skills and confidence. My sense is that small business provides these opportunities more than big business. We certainly see this as our responsibility. Often the faith in the person stepping up is justified.
While departures unlock a raft of emotions, hindsight, more often than not, leaves me with a sense of pride at what the time with our business has meant to the individual and a sense of thankfulness for the contributions they have made to the company and its community.
I’ve been thinking about my post a couple of days ago about the new $27.00 charge by Qantas for telephone bookings and our journey toward a CRM purchase decision.
If Qantas were running my software company they would charge my customers for using our help desk service in addition to the annual software support fee. The additional charge would be for human contact.
Think about it. I want to fly from Melbourne to Sydney and back and the flights will cost, say, around $600.00. That includes the various government taxes and multiple fuel levies imposed by Qantas. Since they have an online booking service they seem to have the view that I can use that without cost or that I can use their human booking service for $27.00. I find that a human booking can be done in less than 2 minutes. $27.00 for 2 minutes plus their various other surcharges and you see the money which can be made.
If Qantas ran my software company and given that most of the support we provide is available in a self help form, Qantas would be charging my customers at least $135.00 per call since an average call runs for ten minutes. The annual support fee would be the knowledge and the per human call fee would be for those accessing the knowledge using a human.
If Qantas ran my software company they would be out of business in no time. Their arrogant pricing policies would not be acceptable to the small businesses I deal with.
I think we’ll be taking the CRM plunge without any additional charge to our clients and with maintenance of all current human contact for no charge. It’s the way small business operates.
We are in the final stages of assessing whether to replace several in house developed technologies with an all singing all dancing CRM system.
For the CRM investment to generate a positive return we need to achieve revenue growth directly attributable to this investment or a cost reduction. However, given the nature of our client base it is unlikely that our clients will want a self serve help desk experience – that is, they like speaking with a human compared to navigating the technology to find an answer for themselves. Also, we’re not the type of business which will cut positions with a technology solution. (I’m glad I wasn’t around during the start of the industrial revolution.)
I want the consistency of service, management reporting, duplicated effort elimination and goal focus of a good CRM yet I am wary of where the financial benefits will come from given my aforementioned reluctance to use this to replace people.
My frustration is that the sales people we have spoken with are not clear about the business case other than vague comments. We’re a small business software company and they are used to selling to big companies. They wouldn’t survive down here in the rough and tumble of small business territory.
For CRM to work in my business I need to understand the cost benefit equation (without losing employees) and to see this reflected in the experiences of our customers.