Well, thanks. Thank you, everybody, for that introduction. That saves me having to do it myself.
And it should be about marketers job to self-promote I think and you've heard a lot from the introduction there
about about retailing now I think there's only actually one retail example and what I want to say this evening,
because some of you may have been thinking, well, if this guy just knows about retailing,
why am I here listening to him talking about small, firm marketing?
And it's particularly important that we distinguish between the kinds of marketing
that certainly I cut my teeth on in working for Coca-Cola and for Tesco,
which was the marketing undertaken by very large organisations, particularly consumer facing organisations,
and the kind of marketing that you might be involved in in your own businesses, particularly business to business, business service firms,
small science, technology, start ups, the kinds of organisations that we see from the kinds of incubator activity that we have across the university.
So although I will, I think refer to certainly one I think retailer we want to talk about this evening,
it's very much around the kinds of marketing challenges that face small and medium sized enterprises and how they might be overcome.
Now, one of my first, I think, lessons is about clear communication to someone coming from the back.
I can't see that very well because it's it's turquoise on grey.
Okay. So those of you that are a bit worried about that, the rest of the slides are actually reversed.
So you able to see them quite well, I hope, as we go through.
Now, let me start by just reminding us, of course, that marketing can be a very persuasive activity.
And I want to show you a couple of examples of that to kick us off.
Some people think the Internet is a good thing the most powerful educational tool the world has ever known.
It's preserving our history, making sure that in the future we never forget the past.
When disaster struck Asia, the volume of aid donated by ordinary people through websites outweighed that of their own governments.
The Internet is a place that is free of state regulation, censorship and control.
The only place where freedom of speech truly exists.
Orwell was wrong. It is not the state that holds all the power.
It is us. Some people think the internet is a good thing.
What do you think? There's a classic piece of persuasive marketing.
Are you persuaded that the Internet is a good thing, or do you feel perhaps the reverse?
Some people think the Internet is a bad thing.
Some way your identity can be stolen, your home invaded, and your savings robbed without anyone setting foot inside your door.
It is one of the most dangerous weapons ever created.
A way for the unhinged to spread evil.
Free of supervision or censorship. A place for mankind.
To exercise its darkest desires. An open market where you can purchase anything you want.
Orwell was right. The Internet has taken us to a place where everything we do is watched, monitored and processed without us realising.
Some people think the Internet is a bad. What do you think?
So here we have the creative talents. You can imagine the three in the basement working out how to do this and create a good out in a bad ad.
But it shows the creative talents of marketers and advertisers. Set to a purpose to create a value proposition.
And that value proposition in this case can either be the Internet is a good thing or it's a bad thing.
In this case, they're putting it side by side and asking you to decide.
But actually, from my point of view, the creativity and the skill that's going to that is largely irrelevant.
What really matters is, does it work? Has it sold more AOL subscriptions or more egalite?
If you have spotted that these were both ads for AOL, anyone use AOL on a regular basis?
Oh. Oh, dear. All right.
We'll speak to you later about transferring your account. But, you know, it has to be to an effect.
Fantastic advertising, really compelling, really interesting.
We could deconstruct that 4 hours to see how they did it with the music, the tone, the imagery and so on.
But did it work? Did it actually build market share for AOL?
Well, actually, no. 1 billion losses in one quarter, the second quarter of the year this year.
And the nice thing here is AOL. Yahoo! Doesn't impress alone altogether.
You might have missed it, but the two nineties brands that keep sputtering along in spite of themselves made some big announcements last week.
There's even talk of them possibly emerging as anybody really care.
So, okay, so all the good marketing in the world cannot help a dove value proposition.
Okay, so there's nothing at the heart of what you're trying to market to a customer base, then frankly, it's not worth bothering.
And that has to come first. So what I want to do this evening.
I want to start off with some basic questions. What are the kinds of things that as a as a Start-Up,
as a small business you should be thinking about in terms of your marketing activity or the questions you'd ask yourselves?
I also do think about what are the differences between marketing for companies like Coca-Cola and Tesco,
companies I work with and a small organisation.
What are the strengths that you can build upon within a small organisation?
Because there are a great many strengths that you can use to create an effective marketing strategy.
And then we'll talk a bit about how to create and keep customers.
And you'll see that talks about value creation and co-creation.
Because one of the messages that I want to put across this evening is that marketing,
whether it's with large firms or small firms or particularly with small firms,
it's about working hand in hand with your customers, not waiting until you've got your product or service finely honed and ready to ship.
But actually right at the very early stages of the design process, right at the stage where you're thinking about, well, what is the need?
Where's the gap? What need is my fulfilling in creating this wonderful device or this wonderful service?
So that co-creation comes at the very heart of that process.
So creating customers is about well, it's about getting known.
It's about raising awareness. And small businesses have a hard time getting their heads above the parapet,
actually standing out from the kind of white noise that surrounds us, particularly at the moment with, as we've seen, the growth of the Internet.
But then reaching those customers, working with them and then keeping them and keeping them is not just about sending them things over six months,
but it's about creating and sustaining relationships.
We hear a lot of rhetoric, a lot of hype about relationship marketing.
I want to debunk some of that this evening, but I also want to give you some practical steps about how you might seek to
keep in touch with those people who think what you're doing is interesting,
worthwhile worth paying for. I will talk a bit about that as well and we'll talk a bit about delivering service quality.
So maintaining customer inspection, retaining loyalty of your customers over time and delivering quality.
And at the end, we'll perhaps share a bit of further reading material that you can look out to to build on your understanding.
And that's AOL calling. I don't want to know if I can do something, but but basic questions.
We hear a lot about the value proposition. I think I've even heard about some of that so far on this program.
From a marketing point of view, a value proposition, something that just falls out of the tree and lands in your lap, a value proposition,
something you would have to work hard at creating and at defending and at arguing the case for who is it being created by?
For whom? If it's been created for a certain group of customers?
What are they going to value in it? How much they want to pay for it?
Where do they want to get it? How is that going to change over time?
Because certainly if I think about something like this product, for example,
you know, the value proposition is not necessarily about making phone calls.
Okay. When this was first introduced, it was about saying, I've got this and you haven't.
Okay. It was about a status goal. Okay.
It wasn't about the fact that he could make phone calls and indeed, the current version can't make very good phone calls.
Even now, the version for this thing, if you hold your thumb in a particular place.
But it's certainly about creating a kind of value.
And that value changed over time. It changed from, you know, something which was about, I've got this and you haven't.
When I went home in the park and ride bus the other day, everyone had one of these.
I'm saying, Well, so why have I got this? Why am I paying more for this than I could be paying for any other device?
Well, perhaps there are some good functional reasons why I use this.
Perhaps it's the the ease of use.
Perhaps it's some of the design effort, which is quite nice, are now defending my purchase of this device rather than necessarily,
you know, making it clear that there's a value proposition. But it can change over time.
So what's now become the status symbol of choice in this particular brand?
The category is that. So you're just thinking about, well, how will this evolve over time?
Because actually we don't know what the value proposition is for this at the moment.
When this is first introduced, everyone says it's a bit large for a phone.
You know, when Steve Jobs sort of came on with this like this, you know, he didn't do that with it.
But actually, they are going to fit this out with the next next version will have some phone capabilities.
So we've got to think about the way the value proposition will evolve.
And actually, in this case, it's the customers who are helping that value proposition evolve.
But how do we keep for Apple? How do we keep these people buying this thing and not shifting to a cheaper alternative?
How many of you have one of these? How many of you have a Kindle?
How many of you want a Kindle for Christmas? How many are you going to get?
One. Okay. Right. So, yeah, there are always cheaper alternatives.
And as the ads will tell us, you know, the Kindle is the one where you're sitting next to the babe at the pool.
That's the screen you can see. Whereas the geek with the iPad is try hard to see what's on the screen.
So yeah, there are always competitive differences in relation to value propositions.
So how are we going to retain our customers? And these questions apply to small firms as well as to large firms like Apple.
The reverse of that is about capabilities as far as marketing is concerned.
What what experience, what capabilities do we have in marketing?
Clearly the large organisation do not have a great many capabilities and smaller less so.
Secondly, can we set aside our own personal biases and preferences?
One of the things about marketing is, you know, you leave your values at the door in a sense,
because actually if you don't, then you start trying to market things that you want rather than your target market.
And thirdly, and most importantly, if you're spending money on things like Facebook pages or major twit Twitter campaigns or ads,
AOL, you know, are we seeing a return on our investment in terms of the payback from our marketing spend?
So those are basic questions that any organisation should be asking about its marketing activities.
Now, if you buy a textbook on marketing and this is one of mine. Sorry, you'll see a diagram like this.
Okay. The diagram will talk about understanding value. We'll talk about designing, communicating value or something similar.
Look about maintaining it, which is all about loyalty and profit at the end of the line.
But actually for a small organisation, as you'll see from already looking at your handout, you won't know you see it now.
Actually, complex marketing theories may not be appropriate for small businesses,
so you can throw away a lot of those textbooks, even mine, if you want to do that.
I know death row admonish you hang on to that because I can cite at the end of you have a much more valuable copy if you'd like to do that.
But for small businesses, I think in some senses these are over complications.
We should be asking some simple questions and taking some simple, practical steps to creating and reaching and maintaining our customer connections.
Let's think about marketing as small firms,
because although marketing theories might not be critical to the success of small firms and to market decision making,
actually marketing insight and marketing knowledge is. So knowing about your customer base.
Having deep understanding of their needs, wants, desires, dreams, nightmares, preferences,
dislikes is going to be absolutely critical to getting your proposition right.
The problem is that, of course, most small businesses don't have that kind of expertise, don't have that kind of resource.
If you think about it in a formal marketing sense. Indeed.
When you look at the research on SMS and marketing and there's quite a lot of it around that through more research on surveys and marketing sometimes,
and there is actually the marketing resource within the firm itself.
What you find is that the owner managers who run many of these smaller enterprises are generalists, as we know.
And actually, perhaps marketing is not one of the skills they may have picked up on.
But often you find that for many SMEs you'll find that the consideration is marketing is a non-problem.
Anyone can do that, anyone can sell, we'll get from them to do it.
We'll leave it to sales. And they're quite sales marketing or they're quite marketing with advertising.
But actually it's just advertising, isn't it? It's the personality of the boss who thinks that marketing is just advertising nothing else,
despite the fact that our political parties are demonstrated, you know,
in the US and in Europe, that actually good marketing can achieve a great deal.
It isn't just about advertising, it's about PR, personal presentation, lobbying,
a whole range of activities that larger organisations get involved with.
And for some, also an SMS marketing can just mean the full piece because I read that somewhere in a textbook.
And if you don't remember the four piece, they are a price promotion place.
And what's the other one? Thank you.
So everyone knows that for PS4, although there are actually five or six for anyone, which book you might want to read.
So you know know is the usual kind of dinner party conversation of choice.
So we have to get away from these sorts of attitudes about marketing because actually within SMEs,
I would argue there is a great deal of resource and expertise and it's not recognised, it's not made explicit.
The problem is if you think about marketing in a conventional way or think it's a non-problem or it's sales or
it's advertising and you don't prioritise it at the right stage in the development of your product or service,
your marketing is going to be pretty unplanned, is going to be spontaneous and haphazard.
More importantly, though, it may be too late because we've already made the mousetrap.
And you're worrying why no one is beating a path to your door.
So there are some challenges around how an entrepreneur SMB will acquire marketing capability.
But as I say, I think there are a number of things that SMEs have going for them that in some respects
large organisations don't because they've lost touch with some of those aspects.
Well can we characterise the as having well pretty good personal contact networks.
It's the nature of entrepreneurship to be social, to be networking, to be in touch.
And those networks are not just people looking for funding, but the networks for ideas for potential customers or potential sales.
So the network is an ideal place to start because they will know about your business, they will know about the market.
We often hear discussion of the bandwidth.
The market is basically the accumulation of all the networks operating in the marketplace and the relationships of that marketplace.
But as a start of organisation, as an asset me, you are likely to have quite a tightly defined network of friends, investors,
people who know about things that you're doing and can refer, you can recommend,
you can talk about you to others using really very effective word of mouth.
But that network can also help you guide your marketing decisions, and it could also help you with generating sales inquiries and contacts.
So mind that network. Minded relentlessly and remorseless remorselessly, because actually that's the place we can start in generating a customer base.
But there are also some competencies within the business that are made up of the kinds of people that start new firms.
What do we know about those people? We've heard over the last few weeks the nature of entrepreneurship.
But actually, people that create firms are themselves often imaginative.
Creative. They have vision. I actually have good standing skills because otherwise how would they be able to command the kind
of investment in their organisation that they have been able to do to start the business up?
So they have selling communication skills and they have experiential knowledge.
You know, they have in some cases, they may have tried and failed to start at new businesses.
They have gone through several iterations. Their experience of doing that, that process and the experience of their network is absolutely critical,
but is also there to be harnessed as a resource. So investing in those kinds of competencies, recognising them,
making explicit is actually things that SMEs can do, I think much more successfully the larger organisations.
But in some senses, you know, marketing is something that is, that happens functionally,
formally, institutionally, whereas within smaller firms it can happen informally.
It can happen in a kind of social networked manner, which is often far more effective at that stage in the development of a firm.
So let's think about what a small firm might do. And it won't come across the will it blend?
So this. Yes. So let me just see if we can get this going and give you a demo of this.
This is a great little organisation that started actually about 35 years ago.
It's called the Blend Tech Corporation.
It's a guy called Tom Dixon, who was a Start-Up back in 1975, and he had a newly patented micro noise in Greenville.
Okay. But the actual mechanism he used for creating the blade and the the chopping and
blending motion saw its best application in terms of a domestic household blender.
So how does he communicate? Well, he's still going strong.
He's the chairman of the company, founded the company. Well, that blend is a question.
I love my new iPad. It does a ton of cool things.
But will it blend? That is the question.
It doesn't quite fit in the jar, but I can take care of that.
I knew I could get the iPad in a blender. Total blender.
I think I'll press the high blend button. Whoa.
Oh, had smoke. Don't breathe this.
That was one tough path. Okay.
So, well, he also has a website that I've got to see more. I mean, you know, that stands out.
First of all, he's the CEO. He's posting, promoting his product. Those with iPads, you can uncross your legs now it's safe to look again.
He has got rid of it. But again, what you see to demonstrate the point of difference is value proposition.
This thing will blend anything. Okay. And he's put his personal commitment behind that.
And this is again, you know, this is a firm that is 35 years old.
But actually he is using contemporary communications media.
This is actually on a YouTube channel. You can subscribe to it and get the latest things that he's blending,
but it taps into his own creativity, his own skill at selling, his persuasive abilities.
So never to be said that those skills don't exist in a small business because almost by definition,
the creative skill does and can be harnessed to good effect.
So let's think about this creating customers piece of the equation, and here's where a piece of theory does come in handy.
One of the ways in which marketing is changing, at least academically, is moving from what it was called sort of good, dominant logic.
You made stuff and you sold it and actually you told consumers what to buy, even though you might have understood what their needs were.
You know, there wasn't much kind of communication or consultation between buyer and seller.
So the producer was was experienced, knowledgeable, says they're innovative, creative.
The consumer was anything but passive, recipient of product or service.
And, you know, as you saw with the iPod, the value was destroyed in the consuming of the product.
That's moving now to what's called a service dominant logic,
which effectively means that value is not created by a firm and then passed on to the customer, but is co-created.
And that kind of phrase co-creation is something which is now preoccupying many marketers.
But actually it makes sense when we think particularly about small businesses,
it's harder to think about, I don't know, Lloyds Bank or Tesco co-creating value with its consumers.
You know, there are millions of them. How do they do that? But you can see it for a small organisation working creatively,
integrating resources and ideas and experiences with a small group of potential customers to to actually refine and adapt an idea.
And indeed, many of the the larger organisations that try to do this have had to do it using technology.
So here's the here's the Starbucks site.
My Starbucks, I did com which when I took the screen capture had generated 22,500 coffee and espresso drink ideas.
Now okay. A wedding line of coffee mugs and a Starbucks in Herning, Denmark may not be particularly innovative,
but the interesting idea is and if only one or two of those out of 1000 turns
out to be an effective way in which Starbucks can increase its market share,
can re-engage with its customer base, then it's been worth an effort of engagement.
The issue is how far is this kind of rhetoric and hype and how far are these kinds of ideas really acted upon?
And yeah, we can see a whole variety of them to do with with coffee and espresso drinks.
I wrote that with a 2000 ideas could be, you know, actively worked within the organisation.
It's a bit like the UK Government seeking ideas for cutting interest in bureaucracy that they,
they had 30,000 suggestions and they implemented four of those.
Okay. Because most of them were in principle. I think so but the.
The principle was there, but it was actually working with the consumer to try and refine, develop, harmonise the need and value proposition.
It's only if you look at the theoretical models around this, the things like service industries, we find everyone talks about co-creating value.
They talk about immersing yourselves in customers.
And most of the textbooks along this line will talk about you getting down and working with your customers.
Kind of all kinds of mechanisms, ranging from an observation of what the how they behave,
what they do, right the way through to developing scenarios with them, segmenting them,
which sounds rather damaging, getting involved with what's called means and chain analysis, for example,
which is try to understand what their fundamental reasons for behaving as they do actually are.
So a whole series of steps you can take to actually try and create that sort of value.
But do they care? Do you, for example, to work with Tesco to create the next generation of Superstore?
I rather suspect not. Okay, so another issue around creating customers and working with customers is do they want to work with you?
So are your customer especially interested in what you're trying to do to work with you to make a better product or service?
And this is around involvement and we can think of this in consumer market terms.
We can think about, for example, what might encourage customers to want to work with us.
Well, for example, if something is very expensive, if they buy it rather infrequently, if it has high symbolic meaning,
so something like a an iPad just to impact them has sort of high symbolic meaning, has high social visibility at the moment.
So there's a lot of interest in trying to work together to create a better product in order to meet those sorts of objectives.
But actually, if your product is cheap, it's frequently purchased.
It's pretty incidental. It doesn't take a much time to consume like a soft drink.
It's not very socially visible. The toothpaste, I mean, you don't know what brunch of places I've used this morning on my my teeth.
You don't really care as long my breath smells fresh and we talk over drinks afterwards, you know?
So thinking about social visibility is an indication of the level of involvement.
So we can sort of think about co-creation, but really only if our customers care enough about what we're doing to want to work with us.
And the challenge is to help them achieve that. So one of the ways of trying to find out whether our customers care is, well, asking them.
And there are a variety of mechanisms.
So in the example I've chosen this evening, I've drawn directly from university start-ups and certainly university related activities.
And here's my first example, which is Galaxy Zoo.
Anyone use Galaxy Zoo? Two, three, four.
It's a crowdsourcing application. You come across these these are quite nice examples of trying to crunch through a
problem using the mass power of linked computers and networks and individuals.
And this is about crowdsourcing classifications of galactic objects.
It's about as far from the iPad, I suppose, as you can get, although there's a pretty neat app for that.
On the iPad, there's launched about four years ago.
They were trying to initially to differentiate elliptical and spiral galaxies.
But the important point to put across here is actually about awareness raising,
because this process of actually gathering people who are interested in doing this sort of stuff,
who want to spend their evening not watching X Factor but classifying galaxies, I don't know which I'd rather be doing, frankly,
given where Wagner is at the moment, but I think we have a very good way of identifying potentially interesting prospects.
Now, a quarter million collaborators working on our Galaxy Zoo,
which actually is bigger than Oxford, 138,000 people in Oxford, big in the British Army.
And my favourite example is more than the number of Quakers in North and South America combined.
Okay, now collaborating in this Galaxy Z project and the awareness that has been generated for this, you know,
for people here, using it online is, is quite substantial internationally as well as within the UK.
So again, there are now technological mechanisms for gathering intelligence about people who might be interested in what you're doing.
Here's another example of more, I suppose more relevant example for those of you interested in scholarship and research.
This is a Start-Up from a marketing Ph.D. student.
The other guys from medicine, I think, who have started up a small organisation which is around a research management tool for scholars.
So often these days we're doing cognitive research between departments of university,
between different universities, keeping each other in touch internationally,
particularly with papers that you've come across with interesting ideas and you annotations of views on those papers is quite difficult.
You can't send the PDF because of the copyright issues and so on.
Mandalay dot com is an organisation set up to to establish the online research network so you can create collaborative networks online,
share your research findings or your research literature with others.
And this is the thing here is actually this has taken off again exponentially through word of mouth.
So creating awareness. This particular service now has gone through the last well,
the last two or three years from just being a sort of a specialist bespoke interest
of a few Ph.D. students because of the amounts being lectured on by academics in
universities trying to cut costs and encourage people to use these kinds of free to air
services rather than actually buying that expensive database aggregation services.
But the point I wanted to mention on this particular example is not so much the awareness raising,
but the way in which Mandalay has creatively sought to reach out to its customer base.
So every university campus, for example, has a series of brand ambassadors that will market the the Mandalay Service on on behalf of the business,
as well as the usual Twitter, Facebook activity. And and so peer reviews, those are kind of spread the word service.
So incentives to to spread the word about the the activity and also to become an advisor.
This is critical. Becoming an advisor means that you can help play a part in the way in which the Mandalay Service develops.
You can help prioritise particular features and push on others that are less important.
There's a kind of creative evolution going on here with some of the leading super users, if you like, at Mandalay,
who are helping to to create a more usable, useful and durable and, frankly, competitively defensible product.
Because the the customers are working with Mandalay to create a mutually useful value proposition between this research network.
And already Mandalay is in the top ten of the top tech companies.
The CTO of Amazon.com says he strongly believes that Mandalay Mandalay can change the face of the face of science.
Certainly, it can help improve personal and research productivity.
Absolutely. So that's the value proposition. If you know any researchers,
if you are that researcher that has a room full of print out or that has a laptop which has whole hard disks full of undifferentiated research papers,
the Mandalay is the service for you, and I'm not even an advisor, so I can highly recommend it to.
Okay, so creating customers is about using those networks.
It's about using innovative ways of reaching out to interested parties, working with them to create the product at an early stage.
Let's think a little bit about keeping those customers because it's all very well.
Getting excited. Raising their awareness, raising their expectations.
How do we think about keeping that custom?
Well, in many ways, the keeping of customers for a small organisation is very similar to that for many larger organisations.
Some choices. Are you the kind of organisation that's simply into transactional exchanges?
The left hand side, are you just selling stuff to people? You know, there's no one else in the marketplace.
So, for example, the value of alternatives is pretty is pretty many.
The naturally you could end up simply being an anonymous transact product along with everybody else.
But actually, if there are relatively few alternatives, people will be the path to your door.
People want collaborative exchanges.
People want to continue to work with you in refining the product, as Mandela is saying, but perhaps will also want to recommend you to their friends.
I would also want to perhaps get you to produce bespoke things for them to do for a business business activity.
So thinking about whether you're at the transactional end of the spectrum or the
collaborative end of the spectrum is a choice that you need to think about.
The other factors are going to be important as well. Again, how important is the purchase for the buyer?
How complex the purchase is? The purchase is very complex that actually the buyer is going to want to quite close to.
You want to work with you to understand the full implications of what they're buying.
Perhaps there are complex after sales services and add ons that you'll want to produce that will make that collaboration quite important to the buyer.
Perhaps there's a lot of scope for information exchange, perhaps. It isn't just about buying it, walking away and using it.
Perhaps there are many things that the buyer will have to talk to you about afterwards.
If you could invent or create those kinds of things, then you have a way of maintaining that relationship.
But I think the word relationship has been overused, frankly, for many large organisations.
There is a deliberate attempt to try and disrupt cosy relationships between buyers and sellers because
you get into very dangerous territory once you start to get a bit too cosy between buyers and sellers.
And so what you find is a decision making is a larger firm is actually quite formal.
It may even be a procurement committee that is considering your product or service and then the people
to actually have the relationship where there's not so much the the initiators or the deciders,
but actually the gatekeepers, those people who control the flow of access to the firm they are trying to supply to.
And often that's the buyer or the secretary or the PR or the person that actually signs away at the front desk who helps with the phone number,
the person you want to reach. So appropriate relationships may be quite important in dealing with formal buying structures.
I think the relationship metaphor itself has been considerably overused.
Again, you know, do you really want a relationship with your supermarket as a loyalty card?
And some might imply that you do. I was a small firm, though.
I think the relationship you have with your immediate network is very, very important.
When you get large and very few companies really have, I think,
reached the kind of nirvana of having a kind of a genuine relationship with some of their customers.
I think of operations like Harley Davidson, for example, the Body Shop had this.
Southwest Airlines in the states that have loyal and, you know, regular recommenders of what they do.
Actually, frankly, most of us deal with organisations on a transactional or loose relationship basis.
We don't think about Tesco in the same way. We think about our partner at home or our boyfriend or girlfriend, thank goodness.
So what's my thing? So thinking about some of these ways in which academics think about relationship marketing, the marriage model.
They talk about the life cycle.
You know, you go through establishing this relationship, you court you got for a while, you know you you procreate, you have children products.
You know, these kind of analogies are all rather dodgy, frankly,
when it comes to thinking about how, again, small firms may need to work in this kind of area.
So relationships can be quite a dangerous analogy to use. Dangerous metaphor to use.
We also hear a lot of talk about brand communities. I think brown communities are quite interesting in this area because what the Brown
community is is in effect a stable relationship between an organisation and its admirers.
And just like any other community, we know who the other admirers off of that brand.
So, for example, you know, again, who's got an iPad? Yeah.
Okay. So, yeah, well, we're all we're one of a kind plus I part owners.
Okay, so there a consciousness of kind. We go through rites and rituals.
So we'll. We'll do an exchange of apps later over drinks.
Okay. Have you seen this really great one? You know, there's a mall responsibility.
So if I dropped my iPad on the floor, you know, every iPad owner will groan, but many of them will rush to my aid.
Okay. Thought you may laugh, but actually the research shows that for car ownership, for example,
you're more likely to stop for the person that is driving a car like yours than you are for any other person.
So what about the maybe your next motor? Okay, you'll stop for them because they're driving the same colour Saab as you.
So they must be like you. And you know, you wouldn't want to let like a situation, would you?
So a brown community is very much around, you know, moral responsibility and obligation to each other.
Now, you know, again, within a small organisation building that kind of close community,
the small number of buyers who are mutually interdependent, who understand the values and motives of the organisation,
the trust the organisation is really,
really critical to retaining the customer base and in some senses the Brown community is actually a very effective way of trying to do that.
They hard to create. So here's an example of one anyone to use Wolfram Alpha.
Oh, more hands this time. Very good. So some mathematicians in the room, which is excellent.
Now, Wolfram Alpha, as you may know, those were the hands of at least, you know, it was actually a an in fact, a specialised search engine.
So so specialised. You need a training to work out how to ask the question, let alone understand the answer.
Okay. But here's a great example of a brown community, a small business as it started up.
So Mathematica, which Wolfram Research founded several years ago, over 20 years ago,
now generated established user base of the mathematical programming language.
And it was that user base that Wolfram used to piggyback on to launch Wolfram Alpha, working with those customers to understand their needs.
And indeed, you know, to to get this was a kick start in terms of both creating and then retaining Mathematica users.
So the kinds of quotes here, you know, could be as important as Google,
but making all systematic knowledge immediately computable and accessible to everyone or otherwise accessible by 14 year old son.
I find it rather harder to get beyond Wolfram Alpha as interface, I must admit.
But you know,
this is certainly a great example of a small firm which is is keeping its customer base onside in the kind of work it's doing through its conferences,
through its seminars and activities, through its outreach,
and through the ways in which it works with its users to continually evolve its products and services.
How do you keep in touch in retaining your customer base?
Well, when you ask many firms, you know, what kinds of communications channels are becoming more or less effective.
This is what you come up with. This is a subject in the US a couple years ago and it's, it's,
it's ranking communications channels by the most at the top, the least the bottom in terms of increasing effectiveness.
And it's quite easy to see that in declining effectiveness. We see newspapers, yellow pages, telemarketing.
So getting your your friends together hit the phones to some of sales may no longer be as effective as we thought it was far more effective,
according to respondents. A social media search. Engine marketing.
Mobile channels. Online video games.
Anyone bought that? Some new game. What's it called?
Thank you. Very good. Who's got that new game?
If you feel this isn't quite right for you, you have an audience of 15 year olds.
Every hand would shoot up. Okay.
But, you know, game marketing using gaming as a marketing channel is a really interesting way at the moment of of promoting products and services.
But, you know, keeping in touch with your customer base increasingly requires skills and capabilities,
not just in traditional channels, but in, of course, newer channels, too.
And the examples I've given you, like Galaxy Zoo and Mandalay could not exist were it not for the Internet and for the social media.
But let's just take a look at companies say this. But what are customers say?
How much do you trust what you hear through various kinds of channels and actually.
Well, email. Sure, I trust it, but only from people I know.
Three quarters. What's the top ranking sort of information source?
Customer products. Ratings and reviews. Portals and search engines.
Yellow Pages. Not online. So actually, even though on the one hand, companies say Yellow Pages are declining in effectiveness,
they're still the number four in terms of people's willingness to search out information.
So again, you can be a bit careful interpreting some of the findings from this kind of research
because it might be quite what people want to think the researchers want to hear.
Of course. Social media. Yes, absolutely. We're all kind of investing in Twitter and Facebook over the next few years.
Of course we are. You know what for? But we're gonna be doing it.
We're actually in fact, you know, perhaps some selected magazine promotions could be an effective way of keeping in touch.
So think carefully about choosing the right kinds of promotional media,
the most cost effective promotional media to meet the objectives and the characteristics of your customer base.
Let's think of two or three examples. So email, first of all. Sure there are great advantages of email.
It's fantastically cheap, i.e. free in many cases because it's subsumed within your ISP cost.
It's a tremendously effective campaign tool.
So if you're into selling or promoting lots of things, lots of people, you know very quickly how effective your promotional mechanism has been.
If you're offering a three, four, one or four for one price offer, you know, you can know very instantly how effective that is.
And it's a it's a push tool. If you're not waiting for customers to ask you for stuff, you're pushing it out to them.
But as I suggested, perhaps, you know, push marketing may not be as effective as the kind of collaborative or consensual marketing,
permissive marketing we often hear talked about today. So we see lots of advantages of email campaigns and track ability.
But we look at how consumers think about email. They're only really interested in getting email from people that they trust that they know.
Increasingly, of course, we have lots of mechanisms now for cutting out a lot of the information overload.
You know, a lot of filters, either manual or automatic to kind of spam, commercial messaging.
So getting and retaining contact with your customers is about ensuring that you are trusted by them enough to be on their waitlist of incoming email.
And what that also starts to suggest is that email marketing may be changing in terms of its level of impact.
Well, I think it actually certainly is.
This data suggests that that actually those people are thinking that the impact of email is actually increasing.
A lot has fallen over the last two or three years.
So the impression is that actually we're not getting perhaps even that's free as much of the impact
as we would like to that current technology or we can engage in this will be addressed later.
This is a qualitative visualisation is a great start start a company called Vaughan's one page summary.
It's highly recommended to the organisation. He's a great index MBA and he's now selling his ability to synthesise onto one page complex stuff.
Okay, so this is how search engine optimisation works.
Okay. Now, I think you might have to get his consulting services for him to interpret this.
And I'm sure that's part of the value proposition for this particular business.
But this book, the one page summary, first of all, says how complex search engine optimisation is.
But it also says little bit about, you know,
how it works in terms of the the the nature of the the rankings of terms and where the money is made by Google and by others in this kind of activity.
So certainly, if you're a company that is seeking to attract and retain customers through search engine optimisation.
Perhaps you've got a product that really is the kind of thing that people will
really search for because they only want something like this once in a blue moon.
Take more trips. How many of you bought a mobile trap recently?
Anyone? Nobody. You. I have.
Sorry. Okay. Now. So we have an allotment and we have.
We have exhausted all possible humane routes to mole disposal.
Okay. So my wife instructed me to go out and find some mole traps.
What I do. I Google mole traps. What do I find?
Search engine optimisation gives me mole traps. Dot co.uk.
And there it is. This is one guy, a traditional mole catcher based in Sussex.
He spent his life catching moles, designing traps with gamekeepers to catch and dispatch moles humanely.
Although you might be forgiven for thinking not quite so humane when you see some of the images there.
But here is again a single bloke who has gone around using new technology to reach and retain customers.
I've been talking about this guy to my neighbours who are equally trouble with moles for the last six months.
His profits must be going through the roof, but he has managed to retain the customer base, not through email,
although he does have an email subscription service, but actually simply through intelligent use of the search engine optimisation technology.
And but if I look at this now, there is now a competitor.
Okay. More traps online. Okay. So here we have a mole in case you hadn't seen one before.
But you see the trap there. It's not very nice if you're looking for a, you know, a nice, soothing image of how to buy a mole.
There's there's a problem. You see that? That's the problem that you're trying to solve.
Whereas mole traps online. Well, you know, they're just talking about the the nasty metal trap that you have to buy.
So it's search optimisation for certain kinds of parts.
And services can be a very effective way of communicating and keeping in touch with your customer base.
But frankly, far more effective, I think is, again, smaller organisations, word of mouth, particularly electronic word of mouth.
Keeping in touch either through talking to prospective customers,
talking to your friends through recommendation or through some kind of sponsored activity, some kind of forum.
And there's been a substantial growth in third party for people who are interested in certain kinds of things.
So the Galaxy Zoo, for example, has a has a forum, a number of these kinds.
Mandalay has a forum for its users. It's a way of keeping in touch with developments.
It's a way for users to talk to other users and to keep themselves excited and enthused about your products and services.
Now, some of these are quite spontaneous. Some of them are actually sponsored or hosted by third parties who are seen as being neutral objective.
The less successful ones can sometimes be so corporate sponsored, a bit like brown communities.
You know, if you look at them too carefully, they go away.
They always have to be spontaneous and from the grassroots and from your users, rather than imposed and created by you as the firm.
And of course, social media and all also about social media at this point.
It really is to say, look, be very, very careful that you're clear.
Again, what are your objectives for using social media? Do your customers or customers use social media?
Which ones do they use? What does what role does your Facebook page or your YouTube channel or your Twitter
channel play in the bullying decision making process of your ideal customer?
So don't just jump on the bandwagon. Don't just launch a fan page or Twitter feed.
I was just. For the fun of it.
Clearly, I have nothing better to do with my time spending some time assembling a list of rather redundant Twitter feeds by companies,
and this one by a company called Electro Space, which tweets every time it has a new solution to a problem.
Okay, now I region will know that in fact my most useful Twitter feed is actually now Eurostar because Eurostar tweets very,
very often and successfully that I didn't last Christmas when things went badly wrong.
But that tweets a lot about the reliability of trains under the channel.
And my second most useful Twitter feed is actually the people who complained about first great western.
If you search for hashtag on Twitter,
you will find that there is a word of mouth community who basically are united in their hatred and despise of First Great Western as a service.
And you can read some cracking anecdotes in 149 characters, one of two characters of of their commuting experiences.
They finally feel great, first great western. I've been monitoring that to understand how my consumers felt about my brand.
I'm not sure they do. Or if they do, they well, they didn't do much about it.
So social media is clearly around a variety of objectives.
It's about certainly that that intelligence keeping in touch with what your user base is thinking,
because almost certainly there are people tweeting in this room now who are saying he's gone too long.
It's 2 minutes to go and he's still talking. Isn't so much about the last bit you want to talk about.
So. So there's always this back chatter going on with Twitter that we need to be aware of.
But again, these kinds of channels are largely free to air.
How do we use them effectively?
It's going to be a consideration for particularly for small firms who see this as a potential mechanism to reach the marketplace.
If you don't, your customers may do so. Here's a great example.
In Japan, actually, this is of 25,000 Japanese consumers had nothing better to do with their time to
tell each other about where the best deals are in the regional supermarkets.
Okay. And they're driving these firms out of business.
So they are simply sharing all this discount information and sabotaging, as it says, their efforts to save Japan's economy from stagnation.
This is a bit like the time when Japanese consumers were were collecting telephone cards with charge
money on them and at one point had something like 5% of GDP wrapped up in collected telephone calls.
So there's this thing called phenomenon is actually crowdsourcing of intelligence, consumer to consumer intelligence.
So it's got to do with ultimately small businesses keeping customers when it
comes down in the end to sustaining customer satisfaction and customer loyalty.
Satisfaction is a dangerous word, as is loyalty, frankly,
because actually many customers will often tell you what they think you want to hear rather than what you want
to know about how they're doing for how you're doing in terms of your provision of products and services.
So it's thinking about how you gather satisfaction data is quite important.
Similarly, thinking about how you move from satisfaction to loyalty, what kind of loyalty you're looking for, you're looking simply for price loyalty.
Well, we are cheapest this week. Or are you looking for that real emotional loyalty that might lead to a lifetime relationship with a customer?
That will determine the way in which you seek to cultivate and retain your customer base.
Now if you're a service organisation then similar things will apply.
But actually the way in which you will want to move from simply ensuring good quality services to
ensuring innovation in services is something that you're going to want to have to think about.
And the challenge here is really about service quality,
because when you're consuming a service and let me give you an example of a classic service that is not will it blend,
but actually is is one started up by a former engineering manager student here, Caroline Plum and her colleague Charlie Osman.
Caroline recently went with David Cameron on the the business investment trip to India.
So it hasn't she done well and is also on the advisory board for the for the business school.
But she started as a small organisation with fresh minds,
which started off using the talent of university students to do cheap consulting for companies undercutting Deloittes,
McKinsey, Bain and maybe even doing a better job. Who knows?
This kind of organisation was very much about generating, first of all, a reliable quality research.
It was about also word of mouth.
So people who got good work from this team told them, told their friends, told their colleagues, other organisations they in turn recruited.
It spun off into fresh minds talent. So sure, these students wanted to do some some research work, but they also wanted the job at the end of it.
So the talent division of the organisation and then into independent research as well as simply the thinking activity,
the fresh minds of the businesses has retained its customer base by keeping customers
satisfied in terms of the quality of the service that they have been experiencing.
And think about this diagram.
Ensuring that expected quality is to say what you would expect of high quality consulting service is actually exceeded by experienced quality,
which means your perception is actually wow, that was really great experience.
I have a lot of that is through word of mouth. It's through effective marketing communication and it through past experience services.
Let me finish with a couple of practical examples of organisations.
So there's one retail example. Here's a recent example that started very small.
And again, let's see if we can draw together all the lessons of the things I talked about this evening,
about building customer awareness, about reaching and retaining customers, about ensuring service quality in what you're delivering.
Zappos probably one of the most exciting shoe shops online ever to hit the airwaves.
It's the most extraordinary business.
And in fact, Amazon has sought to bottle the customer service mentality and organisational culture of Zappos by buying the business.
But just before it bought it, it was worth about $1,000,000,000 in terms of sales.
So it started very small. The founder started really just selling a small number of shoe ranges online, grew into this phenomenal business,
which is not really about selling shoes, but it's really about good customer service.
So the value proposition is about in effect.
The kind of quality customer service that you simply didn't get from regular shops,
but for some reason you could get online, which is quite a paradoxical thing.
And that's because that Zappos, as much as much a culture where they recruit their talent,
the way they deal with the customer base, they get 5000 calls a day, torrent of emails a day, they deal with those on the spot.
An email responded to within within half an hour. The loyalty team works around the clock.
They are quite amazing sorts of individuals.
They recruit for weirdness, I think actually, and certainly not your conventional kind of call centre employee,
but very much there's a link to a YouTube video just to see the action,
very much a value proposition which is built around retaining customers through word of mouth effects.
So everyone raves about their Zappos experience because they don't only meet expectations,
but they exceed quality expectations in terms of customer service.
So it does more than it says on the tin. And all the time they're proving they go beyond what customers would expect for a conventional shoe retailer.
My final example is a local firm, and that's alchemical thinking alchemy.
You've got all these things coming together. You've got, first of all, an Oxford start up.
Think it's really great idea. Founded in Oxfordshire around about ten years ago now worth around 17 million.
So relatively modest in terms of revenue over that period of time.
But the business they've got almost sets a C along co-creation of value because what they're about is a stock photography site.
It's not like some of the big ones that you see.
This is actually one that is there as much for the benefit of the the members, if you like, because they're always members rather than customers than,
you know, for some kind of vast commercial profit to be gained by gouging customers of some of the very large houses might be alleged to be doing.
And the way in which they work is very much around keeping customers through fairness and trust.
They have very flexible contracts compared to many of the larger organisations that have a very fixed and often quite exploitative contracts.
They have much higher royalties. Um, they work with customers and thinking about new ways of bringing new services and products to bear.
So here's an example of that, which is the find the photographer service,
which is a kind of Google map mash up where to find an amateur photographer if you want some some
it's not going to be a wedding ranking collaborative ranking the the quality and the interest.
A particular photograph alamy rank using their customers to source,
review and recommendation information, which is a now more conventional kind of approach.
But then also this obsessive customer service, which is really about fairness and around trust.
So those those values of the organisation have been transitioned to a value proposition which is then
communicated to customers and they're not really customers because some of the customers are also suppliers.
So you've got suppliers supplying photographs,
you've got suppliers who are also customers and you've got customers who are being dealt with fairly
and can see that they're making a contribution to the success of amateur photography within the UK.
And as a result we've got 20 of the images, 21,000 photographers, a fantastic network in this case, a resource for that city to use to mine,
for new ideas, for recommendation, for cross-selling opportunities, you know, word of mouth effects.
Where else could you find a 21,000 enthusiastic individuals who will go out and market your business on your behalf?
So I come back to my final point, which is really around networks, around exploiting the networks that you have, making them work for you,
extending them, cultivating them, using some of the more cost effective mechanisms to keep in touch with those networks.
And that's the way in which I think small and medium sized businesses can be successful in their creating and cultivating of customers.
And there are a few final points about being good at marketing in order to finish my final minute,
just with some further reading these you've got an handout, just a couple of books you might want to look at.
In particular, if you're interested in using the Internet for marketing,
then Dave Chafee's book is extremely worthwhile to look at in terms of practical
strategies and those of you interested professional service activities,
business services. Laura Young And then you could look at international markets.
The text there is national marketing is really one of the best designed around the needs of small firms, but actually what this stuff is electronic.
So I'd recommend highly a great blog by a guy called James Jenks on it's called Duct Tape Marketing, which speaks for itself.
It's about making mend marketing in some senses on a small budget.
It's a great ideas in there. And then if you're interested in slightly higher tech or social marketing than national business, it's worth looking at.
And then Dave Chap his own website where he brings together a range of digital marketing experts.
Again, free to air is smart insights. So there are three really useful electronic resources that you can use.
So I start the formal section there. I think we have time for questions now.
We're off to How would you like so? Well, we will adjourn now for, I think, a drink and we're happy to talk to know a lot of questions that point.
But thank you for your patience and your interesting.