Woolworths, Maleny and local communities

The battle continues in beautiful Maleny in Queensland between the Woolworths corporation, independent retailers and many in the community who do not want Woolworths in their part of the world. The Maple Street Co-op news has a front page story about some of the tactics Woolworths has reportedly been using to track who visits their new store. As recent reports in the UK have shown, local communities can have their opinions count when it comes to companies the size of Woolworths. The key to is ensure that everyone in the community is fully informed about the economic and social cost of large corporations compared to small businesses and that an equal or higher over the counter price for an item may, in fact, be more economically valuable than a lower price at a major store.

The Maleny battle is far from over according to the co-op news and what I read at the Maleny Voice website. All of us involved in independent retail need to support the Maleny action in any way we can. Otherwise, the big two will get bigger and too many of our number will disappear in their wake.

How lucky are Coles and Woolworths?

With petrol high again, the discount coupons from Coles and Woolworths are seen as more valuable. The perception of saving is enhanced by the Coles Flybys loyalty program. I wish there was greater disclosure on these deals so that consumers could be more informed. We’re like the silver balls in a pinball machine, bouncing between the bumpers (petrol and supermarkets) and never scoring.

Catching employee theft

We offer our clients a free theft check service which involved us analysing data gathered using our Point of Sale system in search of usage patterns which suggest theft. We’ve just caught another employee stealing from the business. The story is the same each time. Denial by the owners as to the magnitude. This is following by a pit of the stomach sick feeling. Then comes anger and, usually, a call to the police. The cost to the business goes way beyond the financial loss. Despite every one of our systems having tools to enable the owners to track and even stop much of the employee theft, too often these are not used. Employers in small business are more likely to trust their employees and the crooks know this. I’ve seen instances where poorly run small businesses are sought out because of the opportunity. Justice takes too long to be achieved if indeed the goal is reached. I know of once instance where a case was been dropped because the cost in terms of public funds – this is despite the insurance company paying out and weeks of time spent by many including us gathering the necessary evidence.

My biggest frustration in all this is that the small business owners who need to use the tools they have at their disposal are those who ignore them. Maybe they get what they deserve.

Newsagent software at the core of what we do

We’ve been in business 25 years now and what began back in 1981 as an idea on a kitchen table has developed into a solid national business service Australia’s 4,600 newsagents. Our software has been re-written from scratch five times. We started with a newspaper home delivery package and quickly moved into the point of sale (POS) space. Today we serve in excess of 1,300 newsagent users. In addition to our core newsagency software we also have magazine sorting software (for the Network Services Delivery program – NSDP) and school booklist magazine software. Both of these have been made available to the industry at no cost. While the business of newsagents has changed and ill continue to change, our business is strong as is theirs. Newsagents are evolving. We know because we own a newsagency ourselves and we have a considerable shareholding in a newsagency franchise group – newsXpress.

We’re about to launch several new products through our software for newsagents. These include a betting recharge product which will take newsagents into a service area new to them. By adding value to the POS without any capital outlay, we able to boost the return newsagents achieve from an investment in or technology. This extends our reach and enhances their business.

By getting involved in newsagency businesses in this way we’re strengthening our connect. Being exclusive with these products further boosts our sales.

So, while many aspects of the newsagent marketplace are challenged, entrepreneurial newsagents and suppliers are working hard to build a strong future.

While we enjoy working with jewellers, bike retailers and hair salons – and invest in software development for their businesses – it’s our newsagent connection which sits at the core of Tower Systems.

The CRM search is getting too hard

Our search for an ideal CRM (Customer Relationship Management) solution has been going on, in earnest, for almost a year. In that time we have had three different favorites we expected to do business with. In each case, at the last minute, something got in the way – a new release from a competitor, an internal user complaining that a particular package failed their needs, a mysterious drop in price. We’ve been badgered by claims and counter claims by some sales people. Some are too ready to bag their competitors. The proposals are written in a way which makes comparison of price offering next to impossible. Just about every question is answered with a positive response until you want to see it in action then you’re often faced with smoke and mirrors. Too much is left to the implementation where you’re paying by the hour and where, in most cases, the true scope of the work is not documented until the meter starts running.

I understand that CRM companies are in business to make a profit. However, I come from a background of providing small business with software based on tangible outcomes. The needs of my company are not that unique. I’d suggest that any small to medium software company would share the needs we have. Yet too many of our requirements are greeted as unique and therefore requiring customisation. This is when I get suspicious.

I’m happy to take an off the shelf solution and modify business practices around it as long as it is in the playing field of our needs. This is proving to be a challenge for us to find.

We’re going to take a break and spend time talking with others who have implemented. It seems that there are many varied experiences with CRM out there and it might be that by talking with those who have gone before us we find the path we need to follow. The stories I have read in some forums about wasted investment in CRM are the reason for our pause.

In the meantime we’ll sell our own small business software to prospects on the basis of tangible outcomes experienced in more than 1,300 small businesses.

3M repsponds to poor service, offers nothing

As a follow-up to my complaints (documented here), representatives from 3M met with my hardware and support management people. While they admitted that there had been a massive failure on their part, they refused compensation. Our experience is that their unit based on resistive technology is flawed and should have been recalled. We have advised to them that the only reasonable course of action is the immediate replacement of the resistive units with capacitive units and appropriate compensation for disruption and lost business. That is has taken more than a year just to get attention of 3M is an indictment of their customer service. we will not recommend 3M again.

Inefficient supplier hurts small business

I’ve been chasing a supplier of products to newsagents to get them to provide invoices electronically. This would enable users of my software to load new stock in a fraction of the time it takes for manual entry. We started doing this in our software in 1990 and that there are suppliers sixteen years on still questioning why they should do this is appalling. The same supplier provides electronic data for a national chain but NOT for small business newsagents. I know if I named them here I’d burn the capital I have with them but they would get an EDI link working with newsagents. I ask them again and if they continue to make excuses I’ll out them as the disrespectful and lazy supplier they are. I estimate that providing invoices electronically could save an average business eight manhours a month. That’s worth $200.00.

Business ethics (again)

What do you do about a competitor who consistently bags you to prospects? While the best approach is to trust that any good prospect will see through bullshit and make a choice based on facts, sometimes this is not the case. We’ve encountered this in the last couple of days. A competitor has said that they have switched many of our clients over to them in the last year. No such mass switch has occurred. The challenge on hearing this is how to react. The prospect is not at fault yet how they react to such a lie could mean you win or lose their business. We play it straight and focus on the facts. Sometimes that is not enough. For example, I still am treated badly today by a long lost prospect from 15 years ago who was lied to by a competitor. My mistake then was not dealing with the lie well. I hit out at the prospect for believing the lie and this, I suspect, convinced them that my company was as bad as they were told by a competitor we were. That’s in the past. Today, on the occasion of such a situation, we use facts for those who want to listen. It usually works. In this latest instance we will find out early next week.

It’s odd to me that in 2006 a software company would knowingly spread bullshit about a competitor to win business for themselves.

Ethical dilemma

I have a retail store and we sell AFL football cards. We have been approached by someone who wants to weigh each pack of cards to find those containing bonus (more valuable cards). Once found, he will buy only these packs. The sale could be worth in excess of $200.00 which for a football card sale is excellent. However, it leaves with the knowledge that none of the remaining packs contain the bonus cards. This means we already know that a kid spending his or her pocket money on a pack of cards in pursuit of the rarer bonus cards is going to miss out. What is right for the business in the short term is to take the $200.00+ sale. The sooner I move the stock and bank the cash the better. Ethically, it is better to ask this guy and his scale to leave and let each customer try their luck with fair odds. The ‘card shark’ would trade the cards at a profit, extracting more money from the kids. Some are already on eBay.

Fairness is at the heart of this and it’s a consideration on various levels. The ‘card shark’ uses the scale to gain a significant advantage. Is it my job to police that? Is the world a fair place? No! So why should I perpetuate the myth? Taking the money and running and not letting on to the kids is business at work. The reality, however, is how I live with myself. If I expect fairness in business and life then I need to deal with it that way myself.

I’ll tell the ‘card shark’ to get his stock elsewhere.

Social responsibility index for business

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I’d like to see a social responsibility index established to allow consumers to compare businesses. It is a point of difference more important that price yet it won’t matter until it is too late for many small businesses. Small businesses can compete with the chain stores by being actively socially responsible and using a rating system (like my idea above) to rate their performance against four key criteria. The better we in small business educate consumers about the difference our businesses make compared to others the sooner we can achieve some traction to counter massive advertising budgets. I see such a rating system as a practical step towards greater social responsibility for all businesses. While some tout their businesses as socially responsible, the lack of a transparent measure means that consumers can only go marketing noise and too often this is more hype than substance.

A responsible government would implement something along the lines of the ratings I suggest and provide consumers with a trusted measure. It would put my small software company on a even footing with Microsoft and others with whom I compete. Prospects could make a decision on more than price alone.

I first posed the idea of businesses including a label like this at their front door in October last year.

What are the ethics of photographing customers?

We have linked our POS software to our security system and can easily track who purchased what and when if the store owner wishes? This enables easy checking in the event of a dispute over a refund or change given. With appropriate signs in in the shop I see no problem with this. The same technology can be used to track who enters the shop. This information cold be used for more than traditional theft management purposes and it’s where I have ethical questions? What if the images are being used to track people protesting against your business? What if you’re involved, somehow, in racial profiling? What if there is a more sinister purpose to you capturing images of browsers as well as those who purchase products? My feeling is that the store owner would need to disclose such behavior and to make the data available to any customer seeking access to their records. I’m interested because it’s been suggested to me that at least one major retailer is testing face recognition software for scanning people entering its retail locations.

Bank manager recommendation

Selling small business software is a challenge because you’re competing for cash in a tight marketplace. Our efforts have been helped unexpectedly recently by recommendations by two bank managers. Each has recommended our POS/theft management system to customers in an effort to cut the cost of theft and therefore significantly shortened the sales process. In 25 years with IT I’ve never experienced such support from a bank to a prospect as we’re seeing with out theft management product. Now I only the bank would let me quote their people in our marketing literature. The reality is that a $10,000 capital investment will return, on average, around $70,000 over tree years.

Downer, Vaile, Leadership and double standards

The performances of Alexander Downer and Mark Vaile as revealed at the Cole Commission into the AWB scandal are appalling by any measure. Any employer would sack employees for less. Their performances in their jobs and as witnesses are appalling. We elected them to lead and they have failed us. The only honorable course of action is for them to resign. They have damaged the government, the business of wheat export and the reputation of this country. I wish businesses could count on the same level of protection against the tax office and other authorities that these two have been given by the government in this scandal. Sadly, there is one rule for the elected and another for the voters.

Leveraging the cash register

We have developed three new partnerships which bring new non inventory product to newsagents using our point of sale software. Newsagents can access to new products to sell without capital outlay. We connect, real-time, connects to the suppliers and download non inventory product for sale. The customer pays on the spot. The newsagent pays overnight. Everyone’s happy. It’s a pleasure to be able to bring new products to our clients without the need for capital outlay. Newsagents benefit from greater efficiency since they can access the new product from any register. Suppliers like the links because overnight they can access a network of 1,300 stores. Customers are happy because there are less queues in newsagencies selling through our Point of sale links.

Workchoices

It’s frustrating to give someone a break into an IT role and have them move on barely a year into their position. While I appreciate that some people want to move as quickly as possible, patience is a worthy character attribute especially in IT. For your first IT role, a year is not long enough to build an appropriate foundation to stand you in good stead for the future. I’m proud of the fact that some of the best team members in my company are those who have come back for a second, and even, third time. While we’re not at the cusp of technology innovation, there is more to working here than playing with new toys and techniques.

I write this because one of our team is leaving in pursuit of new challenges. While I don’t think they have mastered the opportunities here that’s not a factor in their thinking. They have to make their own choices. For our part we gave them a break and proved their employability in an IT company. We lose a hefty training and development investment.

Employees are free to make choices like this yet employers are not. While I do not agree with the Workchoices legislation and the unnecessarily greater wedge it has created between employee and employer, I can understand why some employers are happy to have more flexibility in whether to retain some employees. While the scenario described is unfair, I accept it an employee right. It will make me more careful when next hiring.

Size does matter in software companies

We are down to the contract stage in evaluating CRM solutions for our business and it surprises me the difference between what the software providers propose in terms of a support relationship compared to what we provide for our small business customers.

For example, we charge a support fee based on the cost of providing the service. The CRM companies charge based on a percentage of software purchase cost.

Our support coverage is 24/7, theirs 8 hours Monday to Friday.

We take all manner of calls. They have a list of exclusions.

We allow people to make mistakes and to call for guidance. They will charge if we ask the same question more than 2 or 3 times.

We support any user in the client company. They support three people.

We advise the owner if any service is likely to be billed. They reserve the right to charge without warning.

We quote for changes and only bill if the work is done. They will bill us if we decide not to accept a quote.


While I appreciate our two businesses are quite different, I did not anticipate such expensive and onerous support provisions for CRM software. These extra costs for us put pressure on the prices we charge our small business clients. They also say something about the attitude of software companies playing in the big business space compared to the small business space.

The start-up challenge for a mature business

It’s so easy to get comfortable in business. Each year that passes boosts confidence adds to your feeling of comfort. I am reminded of the comfort of being established as we are about to launch an entirely new business. It’s a scary time considering budgets and risk and how much of the years of success one must put on the line to give the start-up life. But what’s life if you don’t take the risk? In this case, the risk is huge as the start-up in a very competitive space which is dominated by huge corporations. That is a motivator in itself. It forces us to offer a better product with greater flexibility and with the ability of connecting in such a way as to enable it to be promoted virally.

Common sense tells me to leave start-ups to others going into business for the first time. My heart says take the risk, compete with the big corporations – this is what you’re in business for – the ride! Our investment is substantial. While we have considered financial partners we have not pursued this because those we talked with early on asked more about their exit opportunities than the business itself. Like any start-up, this will need nurture for some time and it was too premature to even contemplate exit.

The balance of investing in the start-up while growing the core business is trisky. We’re coping and the drain on cash and resources is considerable. Again, one has to weigh up the risk and benefits.

So, we’re riding. We’re late to market but the offering improves with every day. The two years of work will start to surface in a consumer sense in the next few months and a month or so after that we will know if we have wasted our time and money or not.

What’s the point of this post? By talking about this start-up, even in oblique terms, makes it more real and that of itself is a motivator. You know so we have to see this through.