There are tasks to complete, systems to build and margins to optimise.
For new business owners it can be very beneficial to create a small business advisory board. Many owners and managers do this because they recognise that they might do well on their own, but are likely to do much better with help from experienced individuals.
Here is an overview of how a small business advisory board can help your business.
Direction and Mentorship
The biggest benefit to a small business from an advisory board is direction. Small business owners often get caught up in the daily tasks required to serve clients.
This leaves little time to focus on the business.
An advisory board can be there for your small business to provide direction for the business. The board can also provide mentorship and advice on common business decisions.
The folks that occupy advisory boards are often business owners themselves with experience dealing with the situations new entrepreneurs will face.
Someone To Push You
It’s also good to have someone to push you. Small businesses are often solo ventures or small groups of individuals. Again, it’s easy to get caught up in the regular day-to-day work leaving no time for focus on the business.
While you’re likely self-motivated it’s good to have an advisory board to push you. One of the things a board can help with is budgeting and setting goals.
They will also be there to ask questions and push you when it comes time to review your budget.
Compensation is a good idea for anyone involved in your business. It can range from providing for any expenses incurred as a result of meetings or communication to full investment options.
Paying your advisory board gives them an additional incentive to see your business succeed.
In most cases, the members of your board will want to see your succeed regardless, but making sure they’re invested in the outcome is good for you and it can be good for them as well.
Finding Your Advisory Board
Your business network is a great place to start in looking for advisors. You can reach out to people you know and respect in real life and maybe some you’ve met on networks like LinkedIn.
It can be a good idea to look outside your group of “friends” for mentors. They can bring a different approach to the relationship and not feel like they need to tell you what you want to hear.
One possible source for this kind of advisor is your client base. If you serve business owners with your small business, you likely deal with some successful people that could provide you with great direction and mentorship.
You could also ask the people in your network if they have any recommendations for people that would make good advisory board members. You don’t have to know the people directly at first.
You can develop the relationship to see if you trust them. From there the relationship will revolve around the interest in your business and that’s a good place for an advisory board relationship to begin.
Owning and operating a small business has many advantages. You’re free to work on your own and you’re in charge of your professional fate.
But it’s difficult to find success completely on your own. The best entrepreneurs in history have often had assistance.
Consider adding an advisory board to your small business. It can help you in a variety of ways that all would lead to the growth and success of your company.
With thanks to: http://getquaderno.com/blog/why-you-should-have-a-small-business-advisory-board/
The job of a CEO has never been more challenging and rewarding. However, the job can be a lonely one despite the generous compensation, perks and attention. Boards, and CEOs are increasingly turning to engaging professional executive coaches to assist CEOs in their performance and growth and reduce attrition.
Why should CEOs have coaches now? Previous generations managed without them. Today’s president or CEO faces more pressures than ever. Business leaders are dealing with rapidly changing markets, technologies and workforces, increased financial and legal scrutiny . . . and more. Top executives who feel that they can handle it all by themselves are more likely to burn out, make poor decisions or make no decisions – potentially resulting in significant loss of opportunities, human resources and financial resources. The job of CEO is unique from several perspectives: No one else needs to hear the truth more, and gets it less from employees; no one else is the focus of criticism when things go wrong; no one else is the final decision maker on difficult and often lose-lose decisions; and finally, no one else enjoys the almost hero-celebrity status and rewards.
The success rate and longevity of top executives is vast different than a generation ago. In the past two decades, 30% of Fortune 500 CEOs have lasted less than 3 years. Top executive failure rates as high as 75% and rarely less than 30%. Chief executives now are lasting 7.6 years on a global average down from 9.5 years in 1995. According to the Harvard Business Review, 2 out of 5 new CEOs fail in their first 18 months on the job. It appears that the major reason for the failure has nothing to do with competence, or knowledge, or experience, but rather with hubris and ego and a leadership style out of touch with modern times. Research shows when someone assumes a new or different leadership role they have a 40% change of demonstrating disappointing performance. Furthermore, 82% of newly appointed leaders derail because they fail to build partnerships with subordinates and peers.
A study by Kelly See, Elizabeth Wolfe Morrison, and Naomi Rothman, published in Organizational Behavior and Human Decision, concluded one characteristic of powerful and successful leaders is high levels of self-confidence. Unfortunately, the researchers say, the higher the self-confidence, the less likely these leaders are open to advice and feedback. They also make the point that powerful leaders seldom get useful feedback in their organizations. Subordinates are loath to give bad news or critical feedback, and many boards are not diligent in seeing feedback for performance improvement, particularly relationships, as important as other things, such as financial results. See and her colleagues also contend that today’s leaders are under enormous stresses. These stresses often produce anxiety, fear and physical illness, which strong leaders are hesitant to divulge over concern about judgments that may be made about their capacities or longevity.
Why is this leadership crisis happening? One reason may be the gaps between how leaders see themselves and how others see them. Call it self-awareness. These blind spots can be career limiting. The wider the gap, the more resistance there is to change. It also makes it difficult to create a positive organizational culture where openness and honesty are not encouraged.
Good leaders make people around them successful. They are passionate and committed, authentic, courageous, honest and reliable. But in today’s high-pressure environment, leaders need a confidante, a mentor, or someone they can trust to tell the truth about their behavior. They rarely get that from employees and infrequently from board members.
Paul Michelman, writing in the Harvard Business Review Working Knowledge, cites the fact that most major companies now make coaching a core part of their executive development programs. The belief is that one-on-one personal interaction with an objective third party can provide a focus that other forms of organizational support cannot. A 2004 study by Right Management Consultants found 86% of companies used coaches in their leadership development program.
Marshall Goldsmith, a high profile coach of leaders in Fortune 500 companies and author of The Leader of the Future, argues leaders need coaches when “they feel that a change in behavior—either for themselves or their team members—can make a significant difference in the long-term success of the organization.”
Eric Schmidt, Chairman and CEO of Google, who said that his best advice to new CEOs was “have a coach.” Schmidt goes on to say “once I realized I could trust him [the coach] and that he could help me with perspective, I decided this was a great idea…” Mike Myatt says in his article, The Benefits of a Top CEO Coach, “Executives who rise to the C-suite do so largely based upon their ability to consistently make sound decisions. However while it may take years of solid decision making to reach the boardroom it often times only takes one bad decision to fall from the ivory tower. The reality is that in today’s competitive business world an executive is only as good as his/her last decision, or their ability to stay ahead of contemporaries and competitors.”
Douglas McKenna, writing in Forbes magazine, argues that the top athletes in the world, and even Barack Obama, have coaches. In his study of executive coaching, McKenna, who is CEO and Executive Director for the Center for Organizational Leadership at The Oceanside Institute, argues that executive coaches should be reserved for everyone at C-level, heads of major business units or functions, technical or functional wizards and high-potential young leaders.
Despite its popularity, many CEOs and senior executives are reluctant to report that they have a coach, says Jonathan Schwartz, one-time President and CEO of Sun Microsystems, who had an executive coach himself. Steve Bennett, former CEO of Intuit says, “At the end of the day, people who are high achievers—who want to continue to learn and grow and be effective—need coaching.”
John Kador, writing in CEO Magazine, argues that while board members can be helpful, most CEOs shy away from talking to the board about their deepest uncertainties. Other CEOs can lend a helping ear, but there are barriers to complete honesty and trust. Kador writes, “No one in the organization needs an honest, close and long term relationship with a trusted advisor more than a CEO.” Kador reports conversations with several high profile CEOs: “Great CEOs, like great athletes, benefit from coaches that bring a perspective that comes from years of knowing [you], the company and what [you] need to do as a CEO to successfully drive the company forward,” argues William R. Johnson, CEO of the H.J. Heinz Co., “every CEO can benefit from strong, assertive and honest coaching.” The cost of executive coaches, particularly a good one, is not cheap, but “compared to the decisions CEOs make, money is not the issue,” says Schwartz, “if you have a new perspective, if you feel better with your team, the board and the marketplace, then you have received real value.”
The much asked question about coaching is its ROI. The majority of studies including a major one by Joy McGovern and her colleagues at the research firm, Manchester, indicated that the executives who received coaching valued the service between $100,000 to $1 million ROI. Joyce Russell, the Dean of the Robert H. Smith School of Business at the University of Maryland contends that once considered a concern of an employee or executive was assigned a coach, now it is viewed as a privilege and a sign that the organization values the executive’s contributions and is willing to invest money in their future growth and development.
Robert Lee former President and CEO of the Center for Creative Leadership provided a research study for the Society for Industrial and Organizational Psychology regarding the use of executive coaches in organizations. He identified the most common areas of focus which included: dealing with paradox and ambiguity; shared power; personal visibility vs. private persona; interpersonal distance vs. personal closeness; narcissism and pride vs. humility; approachability vs. tough mindedness; emotional openness vs. rationality and logic; empowering and enabling vs. directive and forcefulness; extroversion vs. introversion; leading from the heart vs. leading from the head; ethics and morality vs. pragmatism and the ends justifies the means.
Professional executive coaches can help leaders grow and improve performance, reduce or eliminate their blind spots and be open to constructive feedback, not only reducing the likelihood of failure, and premature burnout but also provide an atmosphere in which the executive can express fears, failures and dreams. Smart CEOs and progressive organizations now realize the value of a good CEO coach.
Do you want to tap into a panel of experts to find out whether your brilliant business idea has legs?
Check out our Google Hangout to hear three business advisers discuss just that and offer advice on what you need to do as a start-up, the challenges you are likely to face and what support is available.
Taking part were
Andy Hamilton – chief executive, The Icehouse CEO
Andy is the founding chief executive of Auckland business incubator The Icehouse and is also a councillor on the Japan-New Zealand Business Council. He has been chairman of Incubators New Zealand and Angel Association New Zealand. The Icehouse Andy was a lawyer, PA, sales and marketer, and corporate VC.
Debra Chantry – Business mentor and coach
Debra works with the businesses at The Icehouse and is passionate about working with firms and boards to ensure that they grow profitably. She has held general management, leadership and governance roles across a variety of multi-national businesses with a particular focus on business, sales and marketing strategy. Debra is a member of the Institute of Directors, a Fellow of the Institute of Chartered Marketers.
Nick Churchouse – venture manager, Creative HQ
In his former life as a business journalist Nick saw big business at its best and worst, small businesses grow and fail, entrepreneurs try and win, deals fly and flop and international markets take New Zealand to task. Every turn was a potential story. Now, as venture manager for Creative HQ, he takes a similar ruler to its start ups and entrepreneurs. Great people with great ideas create powerful stories, and the businesses that come from that can be the legends to inspire the next generation of entrepreneurs.
Janine: Welcome to our business Google hangout. We are here to offer some advice to those of you who are starting small businesses or looking at start ups. We’ve got some experts here with us to answer your questions. If you do want to leave a question, you can leave it on the story that you’re watching on stuff that you’re watching down in the comment section, and we will try to ask as many questions as we can. Firstly though, I want to introduce our experts that we have with us. Let’s start with Nick.
Nick: Hi everybody, my name’s Nick Churchouse, I am the venture manager for creative HQ, Wellington’s startup incubator. Pleased to be here. Looking forward to it.
Janine: Right, and over to Andy and Debra.
Andy: After you Debra.
Debra: Okay, good morning. My name’s Debra, I’m a business coach and EIR, here at the Icehouse in Auckland, and I’m with Andy our CEO.
Andy: Good day, Andy Hamilton from the Icehouse. Been here for a while, since 2001, and I’m also an investor, and start up companies as well.
Janine: Great, thanks guys for taking the time from your busy schedules to be here. We’re going to spend the next twenty to thirty minutes talking about starting a business. First question I’m going to put up there is pretty broad. If you had a brilliant business idea, how do you know if you have an idea for a business, or if it’s just an idea?
Do you want to start with an answer there, Andy?
Andy: Sure, I’ll do whatever I’m told. That’s good, being told what to do. I think all of us know that you got to have an idea, you got to have a creation, and that’s critical, but the next thing you got to do is fit that to a market, and a market need, and so whether you call it lean start, or market validation, the fundamental philosophy is get the creation, and then get them to the market to kind of understand and identify what is called a pain point. And if you end up matching a pain point, you can build a business off of that, but there are lots of ideas out there that ultimately won’t go anywhere, maybe because they’re a crap idea, or maybe just because of timing.
Our advice on this is really think about how you do interviews in the market, to understand what people are doing, and how that’ll help you work out whether you could build a business off that idea.
Janine: Great. Do you have anything you want to add to that Debra?
Debra: Yeah, I think it’s really important. Often we’ll have an idea, we’ll talk to our family and friends, and of course they’re going to be one hundred percent supportive of you, but they are family and friends, and what they have to say is only an opinion, so it’s really important, as Andy said, that you actually go out there and develop market validation, you talk to some people who are in your target audience, and you get some real ideas as to whether it is, 1) an idea that solves a pain point they actually have, and b) if they will actually open up their wallet and pay cold hard cash for it.
Andy: I think the other thing is, seventy percent of the people that we work with on validation fail through that first phase. And I think Nick probably would have a similar story in Christ Church, you know, it’s a good thing, because you learn a lot about the market, and you also don’t waste your time on something that may not actually be that good of an idea at the end of the day.
Janine: Great. Good advice. Nick, do you have anything you want to say on that topic?
Nick: I’m going to endorse all of that. Andy, just for the record, we’re in Wellington, not Christ Church, but I love the fact that you think we’re across everything. The only thing I would add is, I often say to entrepreneurs that are at the stage of validating your ideas, that if you don’t know your customers by name, you don’t know them at all. I get a lot of generic, “Oh yes, I understand my customers.” and I get a lot of generic descriptors, but if you’re not talking to real people and understanding who they are, where they’re coming from, what their buying behaviors are, and how they see your product, then you’re not really validating in a way that Andy and Debra have described.
Janine: Okay. Move on to the next question, we’re off to a great start. So you’ve decided that your idea can actually be a business, but what then, are all things that all startups need to know or to do in the first six months, when they try to kick their idea off? Maybe we can just go around in the same order again, starting with Andy.
Andy: I’m going to hand over to Debra, because I got distracted.
Debra: Okay, the question was what were the four things they need to know?
Janine: Yeah, to get started in the first six months.
Debra: Okay, the first thing you need to understand is, as Andy said before, is what is the pain point you’re actually solving, who is the potential target audience for you, and then you have to start thinking about being really clear about what your long term goal is for the business, and what you personally want to get out of it. We do a huge amount of work with people on the leadership side of things, because there are very many different reasons why people want to go into business. Unless you’re really clear about what you want to achieve, it’s very difficult to measure success along the way. So the fourth thing you have to have is a plan to achieve that success.
Janine: Sorry, Nick?
Nick: Yeah, hi. I agree with that. Starting with that first question, it’s very important to get in front of those customers, and understand who they are, but also to quantify how many of them there are. A lot of people will say that they’ve got a product that the entire world wants, I would say that’s perhaps too many, pair it down and find the niche number of people that you can actually start to target and talk to. Equally, if you’re too niche, or you’re getting very specific, you need to understand whether there is a global market for this, in which case, the hundred people that might buy in New Zealand could become a couple of million, or ten million world wide, and that’s really important, to understand the size of your market, in terms of getting people to buy into the potential.
The last thing I would say is, what can you actually do? What’s your skill set, what’s the skill set of your team? And if you haven’t got what I call the Three Hats in your team, you need to look for support outside of them. And the Three Hats are your market, what we call the main knowledge, do you understand your customer, do you understand the demand to which you’re selling, all of their behaviors, how the market works, the sort of political forces that are at stake.
Secondly, do you have someone on your team that can actually build your product, can it actually be done, if you’re relying on hiring someone in to do that, it’s going to cost you a lot of money, it’s going to take a lot of time, and they won’t necessarily be invested in the outcomes the same way you are.
And third hat, I would say, is that business hat, understanding how you can apply a business model to your product that’s actually going to turn out profits, and a future that you actually want to invest your time and money in, because this stuff is hard work. You put your time, you put your effort, you put a lot of money in, and you’re often asking other people to do the same, so you need to understand how this is going to play out in terms of the business.
Janine: Right, thanks for that. We’ll move on a little bit then, and thinking about the strategic way people can sort of get their business ideas and plans happening. What would your advice be in what people should include in the business plan, as they’re putting that together? Nick, do you want to start?
Janine: Sure. First and foremost, objective proof of all the things we’ve talked about to date, a lot of people will start with a business plan, and start putting down lots of assumptions. These are great, and as Andy said, you have to start with an idea, you have to start with that blue sky thinking about what’s possible, that’s where all the great brainstorming comes from. Your next job is to list those assumptions of what you think the market’s going to do, what you think your product can do, how you think it will be received by your customers, and then you go and prove those.
So every time I hear a entrepreneur, or a wannabe entrepreneur come to me with a whole lot of assumptions, they’re typically coming to me saying, “I think this, I think that.” I tell them to listen to yourself. Every time you hear yourself say, “I think”, you turn it into, “I know.” and if you have objective proof of all those things, then that makes an excellent business plan. And business plans can look all sorts of ways, but that’s the most important thing, is proving those assumptions up front.
That’s me. I’ve lost Janine.
Janine: We are heading over to Debra and Andy. You guys there?
Andy: I can hear, we’re back in. You hear us all again?
Janine: Sorry everyone.
Andy: Hey, that’s cool. Just what I wanted to say was, who needs a business plan? The reality is, if its the purpose and the stage you’re at in your business, so what I would think about is everything that Nick said, and being really focused on getting through the next phase, as well as what Debra said earlier, which is about getting your vision, but then getting really technical around the stuff that you need to do to take it to the next phase.
And a couple of things I want to mention, if you haven’t read Eric Ries’ The Lean Startup, or Rob Adams If You Build It They Will Come, have a look at that. Both of those books are fantastic, I suppose manuscripts you could use to guide you through your journey. Another thing is, it’s easier to read a book, it’s harder thing to stay committed to that execution side of it, so I would just think about how you can ensure that you stay on the plan as you go through the execution. Debra.
Debra: Yeah, no, I back up everything that both Andy and Nick have said. I think the other thing is being very careful around what is defined as a business plan. A business plan you put together for a bank, for example, would be very, very in depth, and often a very workable document. I prefer to break things down into pragmatic bite sized junks. So looking at your sort of thirty, sixty, ninety, hundred and eighty day plans and goals, and something you can actually work with on a daily basis, so it becomes a working document, rather than something that gets shut in a drawer.
Andy: And that you could share with your team, and your advisors. One of the things that we heard Nick talk about is building a team that matches the risk and a challenges that you have over the next wee while, you know, you want that plan, whatever that is, to be owned, not only by you, but your advisors, your investors, even your customers to some extent, so they all get on the journey with helping you actually make this thing real, and successful.
Nick: If I can just add something on the end there, it’s a point Andy made, which is really important is, your business plan has to be fit for purpose, and so it is an active document that’s constantly changing. Typically what you’re using a business plan for is to present to someone else, whether it’s a bank, like Debra said, or it’s an investor, or someone who thinks they need a busines plan to see, and one of the key things, which people will be looking for, in terms of buying in to what you’re about, buying into your dream, and helping you with it, is what you’ve done. What momentum do you have, what’s your traction?
Even if you haven’t sold to any customers, show exactly what you’ve achieved in the time that you have had this idea, because most people won’t buy into an idea, into a business dream, even into an operating business, unless there is a definable history of momentum, and you show that you can actually execute on your idea, even with limited resources.
Debra: I’d like to add to that as well, please. Nick, I think you’re absolutely spot on, you have to show the success you’ve actually achieved to date, and also the next step, sort of the next step to actually going to do, because quite often people will come in, and say, “We’ve done this, this, and this.”, but investors, and banks, and other people who are interested want to know what your next steps are as well. So you’ve got some momentum as well, you’ve got some real customers you want now.
Janine: Okay, I’m going to go to a couple of questions that we’ve come through from people watching our hangout. This one is a question here, “I have just started a new tech company, launching a new app in the south island, what are the biggest things I should be looking out for? Is it things like IP protection?” Andy, do you want to start?
Andy: Wow, that’s one of the great things about apps, and in this day and age, is that you can launch anything from anywhere. IP protection is really just about barriers to entry, and in the software world it’s a lot harder these days, to be able to patent things, and the reality is, it’s often an execution game. That doesn’t mean that you shouldn’t consider IP protection, it just means you got to think about how do you protect, or build value in your business. And execution may be the best way to do that, unless you’ve got something that is truly inventive.
There’s cross sections of how you do IP protection, but I think the other thing to reflect on, when we had the first app stores, it was easy to get measurable in that app store. Now, it’s really changed, so I’d just be thinking about you can get that product out, get partnerships, to get you scale, so that you can click the ticker on the way through, in terms of just building that scale of usage. Same fundamentals exist, in my view. And if in doubt, go and see some IP lawyers, to get some advice around what your IP strategy should be.
Nick: Can I jump in here, Janine?
Janine: Yes, do.
Nick: Look, this is something I hear a lot, and I’m quite hot on it, because an app is not a business, an app is a channel to market, and you need to be more specific about what exactly you’re doing. It’s like saying, “I’m starting a shop.” or, “I own a car.”, you need to be more specific if you’re looking for specific advice on your business, I need to understand what that app is doing, and equally, if you’re asking questions like, “Do I need IP advice or protection?” and certainly, if you’re looking for help a lot, I think it’s really important that you don’t describe your business as an app.
Your app is just how your customers interact with your business. As Andy said, it’s a great mode of connecting with the market, because it scales really well, you can get it out to a lot of people fast, and you can change it fast, you can be really nimble, which is cool. But focus on what actually you’re doing for your customers, through that particular medium, being the app. It’s just a small part that I think is important when you’re talking about your business.
Janine: Thanks for that. Did you have anything you wanted to add, Debra, or should we move on to the next question?
Debra: No, that’s fine. I guess going back to the Rob Adams, If You Build It They Will Come, the same thing kind of applies to when you’re building an app. Your apps, and you’re right Nick, it is just about the way you do business with your customers, a lot of people think they’re going to put an app out there, and they’re doing to get hundreds, and thousands, and millions of people signing up to it. It doesn’t quite work like that, you actually have to have some pain point first of all, some reason for them to open their wallets.
Andy: Yeah, hey, just on that note, Rob Adams is actually going to be in the country in July, and is going to be running some regional workshops across the country, so it’s a great opportunity really, in going to a world wide expert around how you validate your new product or service. Find that out, more information on the Icehouse website, if you’re keen to come along.
Janine: Thanks. I’ve got another reader question here, it’s quite a long one, from Andrew, and I’m going to paraphrase the way that Andrew, if you are watching, “I’m a young south islander who four years ago, found a market for a product that didn’t currently exist. Hummed, and hawed about if you three years, before I took the plunge, and I spent a decent chunk of my savings having a beta product developed and am in Australia testing. The response has been incredibly positive, but I’ve been stuck on what to do next. I want to get it to a saleable standard, into the market in the coming months, it’s an international product, which in specific countries will be in high demand, and the product is mainly a software product. Is there any chance that you could give me a rundown of what you feel I should do next? Should I get in touch with an incubator straight away, find funding from family, or develop the product to a saleable condition?”
Over with Andy and Debra, would you like to answer that one?
Andy: Well, you know, the curse of an entrepreneur is the product is never good enough, and more and more money gets spent on the dev, to make it perfect. The reality is, the minimal viable product approach just goes, if you can get them to the market, and it matches a need, you can get some experience, get some knowledge, and good enough is good enough. I’m not to say that Microsoft is the way to build your business, but they built a pretty successful business, so my advice is there’s nothing better than cash flow that comes from customers. If you can convince some early adopters to even come on board and pay you money, that just helps give you the funding, and gives you the experience to work out where to go to next.
My attitude, in terms of whether to reach out to incubators, reach out to people who can help you get through the next fights. Whether that’s an incubator, a mentor, an investor, it doesn’t matter. Friends and family are great, because they believe in you, and they love you, that doesn’t mean they’ll actually help you, so I would just think about basically, I think there’s a saying, would you stand on the shoulders of giants to do what you want to do, or would you do it yourself? Why do it alone? Find somebody who’s been there, done that, get him or her to help you, and get some customers paying you some money. That’s the best validation you could ever do.
Debra: I agree. I think the best thing a small business owner starting could ever do is just ask for help. Don’t be afraid to ask for help. And learn from those that have already done what you’ve done.
Janine: Anything to add to that, Nick?
Nick: Yeah, I agree, it’s about asking for help. But the thing is, you can plug into so many avenues of support around the country, there are some great courses that are run through some of the [inaudible 00:19:04] education institutions around the place. Local incubator’s probably a good place to start, because they’ll know where all these things are. They might not be the actual outfit that can help you, but they’ll be able to plug you in to the often tech circles, or some of the local meet ups, where you might be able to meet these team members that Andy and Debra talk about, and meet their advisors, you might be able to engage with your business, and give you some early advice, and if they’re interested enough, then they can become really key members of your team. Whether actually they’re working along side you, and have a stake in the business, or whether they become an early advisory board, and start to steer you in the right direction.
The most important thing is that when you’re asking for help, that you’re identifying that these people ca actually take you forward, and that they understand where you’re going. But if they ask hard questions, that’s a good thing, if you start getting a lot of easy questions, and you feel really comfortable, then I’d question the advice you’re getting, because it gets harder from here, when you’re actually connecting with the right people. I think incubators are a great place to start. There’s plenty of stuff out there.
Janine: Thanks you guys.
Debra: I’d like to add to that as well, please, very quickly.
Debra: I think what Nick was saying about the whole advisory board, and having many different people actually critiquing what you do is really important, and so often just asking one person who may have been there, done that, may give you one view, one opinion, one of experience. Once you get involved with an incubator, or the programs that we run, you can actually get a whole group of people who can offer different perspectives, different insights into it, and can be quite critical of the business. Whether, a formal advisory board, or through a networks through the incubators is a great way to get that varied advice.
Janine: Okay, moving on. How does someone who is trying to get a startup off the ground, how do they decide which sort of finance is for them? Nick?
Nick: Good question. Typically your own. In my view, and it’s backed up by stats internationally, that the top three sources for startup financing, your own savings, family and friends, and I always ask people what’s the number three, and they always say it’s investors, and it’s not, it’s actually credit cards. Right around the world startup founders load themselves up, and they do it themselves, and that is through their own means. That speaks volumes, when you actually get to the step when you’re asking people outside your close knit circles to engage in your business. It’s no easy road, going down the investor path, it is frought with pitfalls, and can often be an extremely challenging place to be.
Equally, I get a lot of questions of people saying, “Hey, can I get some government grants on in?” No, that money is out there, but it’s not free money. There’s no such thing as free money, it comes with a lot of hoops to jump through, it comes with a lot of reporting to do, and often it’s not aligned, long term, with what you’re trying to do. I would start by looking at your own resources, and making sure that you have invested in your own idea, and if you’ve done that, then I would say start talking to those people that we talked about in the last question about where the options lie for you locally, because there will be options out there.
Andy: You know, so why, and what for. I would say, everything Nick said is right. The other thing I would just think about is investment money that comes, that doesn’t help you accelerate quicker is money, but it’s not money with a cherry on top. And so I just think about how money can be a bit of oxygen with talent that can really help get you there quicker. The biggest insight I’ve had, working at the Icehouse over twelve years is this, an entrepreneur thinks differently to an investor. For you to get an investor on board, you need to think like the investor, to understand because I don’t want to hear you talk about sixty things you’ve got to do over the next three weeks. What they want to hear is the one thing you want to do over the next three weeks that will increase value in the business, and that’s just a different perspective.
Janine: Did you have anything else you wanted to add, Debra? We’ve got quite a few written questions, so I’m wondering if we might be able to power through, and get into it. Let’s get into it, okay. We might need to keep the answers a wee bit shorter, so we can get through what we’ve got.
Andy: Okay, Nick, short answers, mate.
Janine: “I just started an online business which supplies information and advice to landlords. I would like to know what medium you suggest for advertising, and your views on LinkedIn, and other social media.” and that was from Carrie. Should we head over to Debra and or Andy for this one?
Debra: Sure. You know what I’d be doing? I’d be going and talking to some landlords, and finding out where they hang out. You know, social media is just another channel to get out there to people, so I’d be going, talking to your landlords, to your customers and saying, where would you expect to hear about this kind of information. And from that, build a picture, build a persona of the type of people you’re actually going after, and then target those places they hang out naturally.
Janine: Anything else to add, Andy?
Janine: No, okay, we’ll move on. “Hi team, I have an idea for a new gaming genre. I’m working on promo videos to highlight they key points, as well as the differences with current genres. My plan is to start a website with these promo videos to introduce the concept to the world. Do you have any suggestions?” Who wants to go with this one? Andy, why don’t you.
Nick: I’ll talk on this one.
Janine: Great, great.
Nick: This is a really hard thing to get a handle on. Gaming genre promo videos, creating website to push it to the world, haven’t actually got too much idea of what exactly you’re looking to get back from your market, who your customers are, how you’re engaging with them. What I would say is, this is a really hot space, there’s a lot of interest around gaming. Traditional businesses are looking to gameification models to try an accelerate what they’re doing in the online space. So I say you’re on to something, but go back to those tenants we’ve been talking about right through this is, talk to the customers, identify who you’re speaking to, who you want to get in front of this website, and why they’re there. If this is a business, or are you doing them a public good by educating the market. Both are valid, one of them will pay more money than the other.
Andy: Yeah, and I just jump in, the whole fundamental principle of marketing where we all want to get to, is word of mouth. And there are a number of different tools today that you can use to get to word of mouth, including websites, including social, including mobile, and they’re all just going to go into the mix of your tactical strategy to actually get the word out. And the great thing these days is that you can get access to some of these also celebrity people, who give you huge reach when they start talking about you. I just think about word of mouth, and how I can make that happen.
Janine: Thanks. Along the similar lines to that, we have a question about a startup for helping suppliers engage with external retail staff, who advise customers on what product to purchase, centered around online training, and what I want to know, how can I generate publicity around it to create general awareness that it exists at head office level corporates, preferably internationally, and get corporate sales outside of hosting blatantly promotional plugs on news websites?
Debra: As Andy just said, it’s quite good to look at who the influences are, so people who actually have influence on the people you’re trying to reach, and get them on board with you, so they can actually start to talk in a more heartfelt way about the business, rather than you just blatantly promoting it.
Nick: One of the key things on this is case studies. If you can get involved with a corporate that understands your business, that can lend some value from your business, and then get them talking about it, it’s much more compelling than you saying, “You got to buy this.” You got an existing customer who’s seen value in it, so you can seek out those early adopters, and get them on there.
Andy: Yeah, and one thing that’s really important to that, we hear time and time again startups signing deals with Microsoft, and HP. All those deals, they normally never make money out of those deals, but what it does is, it gives them the credibility that other people look at them, and that’s called momentum. So don’t always reach too fast at the early stage on getting pricing, that enables you to make merger. You’ve got to build momentum that other people start to go, oh, I believe in those guys. And then one day, maybe somebody will come along, and maybe buy you, if you’ve got good momentum.
Janine: Great. Thanks for that. We have a question now on, what are the biggest issues with New Zealand’s entrepreneur network, and how can New Zealand make it a better place for start ups? I’ll start with you, Nick.
Nick: That’s a really good question. It’s the big question, and it’s the question all of us are, in this core, particularly are asking, because that’s what we’re trying to do every day. That’s why the Icehouse exists, it’s Creative HQ exists, and why a lot of the organizations who support us exist. The biggest issues with the entrepreneur category in New Zealand, I think one of the key things which I would get on is, the DIY gene that we tend to have in our New Zealand psyche, that rarely begets the thing that we’re talking about a lot here with the team, the focus on team, getting people alongside you, asking for help.
And more importantly, is actually sharing on the journey. Getting people on board, but also rewarding them for the particular help that they’re giving It’s the old adage of grow the pie, don’t try and grow your own slide. So I would say, get that DIY gene, and flick it over your shoulder, move on, and wait to get better.
Andy: Nick’s right, we all spend a lot of time kind of working in the system, but what kind of solves this is that, my view is, actually things are going pretty well in New Zealand. Do you know, it doesn’t matter if you’re in New Zealand, or in the Valley, or in New York, or in Ohio, it’s bloody hard starting a business, and there’s going to be a lot of failure rate. The cool thing’s some of the stories. I mean, listen to the companies, SLI’s listing today, Vin, Zero, Diligent, Orion Health, Howard By Proxy, the Lighting Lab companies that have just pushed over the last few weeks, it’s a cool time to start a business, and some guys are making really good money here in New Zealand.
It’s still really hard to get up to the Valley, but I’m just going to end with one final story. This young fellow called Ollie, from Talpo I think he is, he’s building a business, he’s just spent three months in the Lightening Lab in San Francisco. How did he do that? Who cares? But he got off his ass, he got on a plane, and he went to the Valley, and he’s had an incredible experience, he’s come back, because his Visa’s run out, and he’s moved to Auckland, as I believe, to continue his business. There are no problems in New Zealand, it’s just hard, and I encourage anyone to get out there, have a go, if it doesn’t work, try again.
Janine: Anything else to add to that, or are we moving on to the next one?
Andy: Next question.
Janine: Next question. Okay, what have we got? We’ve got quite a few coming in here, let me grab, sorry, I’ve got to pick a minute. “Hi team.” Oh no, that’s a different one. Okay, what have we got? “I’m involved in an online startup, which is very close to launch. We aren’t sure what to expect following the launch. We could grow very quickly, or things may go a little slower than we initially anticipate. Is there any advice growing too quickly? And on the other side, not quite taking off?” It also says, “Nick, I actually met you last week at your Lightening Lab presentation in Queenstown, and really enjoyed it.” So maybe we’ll go to you to answer that one, Nick.
Nick: Excellent, I met a bunch of people in Queenstown, and they’re all awesome, so good to have you on board. In terms of growing too fast, I mean, it’s a nice problem to have, isn’t it? But absolutely, you need to be able to deliver to your customers, and I would say you want to stage your growth, and understand what you can actually service. One of the key things that online startups don’t factor in is actually that customer service aspect. They think if we can get a website up, then a million people can use it tomorrow, you know, quite aside from the actual [inaudible 00:32:35], and the server issues, and it being able to cope with the volume.
Depending on what you’re doing, you may well have a bunch of people that need help using your product. It’s easy to access online, but sometimes it’s not as easy to use as you think it is. And I’ve spent a lot of entrepreneurs spend a lot of time answering emails, we’re in there twenty four seven, it’s affecting their families, and all sorts of things, and it becomes an absolute onerous burden. So I’d make sure you get that customer service up front.
Janine: Over to Nick, and Debra, anything to add on that one?
Debra: No, just more the same really. Just be prepared, that way, if things do go wrong, and often they will, just have that really, really great customer service. Twitter, when it first launched many, many years ago, crashed on a regular basis, but they managed to deal with it in a way that people didn’t seem to mind, and that’s kind of in the valley you want to get to.
Andy: And I’d just like to say, hope is a virtue, that’s not a strategy, or a tactic. You should know whether it’s going to go well or not. If you don’t know, then that’s a problem.
Janine: Okay. I guess sticking around that idea of focusing on what you’re doing, and being aware that there might be challenges, what do you think that biggest challenges someone starting, trying to set up a startup is going to face?
Andy: To me it goes back to the validating the market, I think we all think in a linear way. I fall in love every day that a new business comes in, because I want them to succeed, and the reality is, only a very small percentage of those ones will even have a good market. So for me, that is the single greatest challenge. Is getting through that first phase.
The next phase is how you have to become a chameleon, as an individual, as you grow, and you have to move yourself into different areas, and functional capabilities, which really stretch you. So first phase, it’s all about finding the path, and ensuring that you’ve got the right market to go after, the second phase is how you can grow and change as a person to help the business as it goes through that.
Janine: Do you have anything that you would like to add to that, Nick?
Nick: I think one of the biggest things I see intro entrepreneurs stumble with is typically these people are pretty good at building a product. You’ve got to get your head out of your product, product actually doesn’t matter at the end of the day, you got a team that’s you, and your team, and you have your market, whatever goes in between, as long as you’re solving a pain in the market, and someone will pay for it back the other way, the product, what it is doesn’t actually matter. Once you get your head around that fact, it becomes a hell of a lot easier.
Janine: Thanks for that. What’s the main reason why startups do fail?
Andy: They don’t validate their market, one, two, they don’t grow their team to cope with the challenges.
Janine: Nick? Debra?
Debra: Going back to that whole addressable market as well. Often people will come in and they say, “I’ve got a product for dogs, and there are three million dogs in New Zealand, therefore my market is three million dogs.” That is not your addressable market. That is the number of dogs that are actually in New Zealand, your addressable market gets a lot more leash than that, because there are people who won’t buy stuff for their dogs, there are working dogs, there are people who just won’t pay money for that sort of stuff, so you have to think very, very critically about how big that addressable market is, and I think the other reason they fail is, because they don’t think about what it will actually cost, in terms of time and money, to get this thing up and running. Most people completely underestimate the amount of time, and the amount of money required to actually get something off the ground.
Andy: And what’s really interesting is that you go on to the, I think it’s on pandodaily, it was a great blog that I saw around the cost of ses service businesses, and looking at the list of companies in the US. The amount of money that these companies spend to get into ses market as a company is just mind boggling.
It almost turns you off, doing any ses business. You got to look at Zeroes, however, they’ve been able to get into the market way cheaper than a lot of other have, and so I think a lot of this just comes back to having clarity around where you’re going, and the costs, and being ahead of the curve every which time. The old adage, work on the business, not in it.
Nick: I’d support that. I’d just say that I see a lot of young business run our of runway, they run out of resources, all the things that Andy and Debra have talked about in terms of time and money. They always disappear, and what you have to be is, you have to be looking ahead a year, and know what resources you need. Often entrepreneurs will go into a funding round, and win, and get some investors on board. That just makes it harder, because that money will run out, and you need to know where it’s going to come from in the next round.
Typically in New Zealand we don’t have the access to the types of funds they have in the US. The one key thing I would say that Andy mentioned earlier is early revenues. If you can get people paying for your product early, it gives you a lot more of a comfort factor, in terms of cash flow for your business, which will extend your runway.
Janine: Thanks, Nick. We’ve only got time for a couple more questions, I think. We’ll see how we’re going for time. For those startups that are trying to get off the ground, what kind of support is there available, that they can tap into, to help them succeed? Andy and Debra, take this one.
Andy: I actually think there’s a plethora of support out there. Whether it’s expertise, whether it’s networks, or whether it’s funding, there is a bunch of organizations, twenty or thirty organizations in New Zealand, and just as I told the story about Ollie, there’s nothing to stop you jumping on a plane, and going and staying in a backpacker’s place in Silicon Valley, and reaching into things like the Kiwi Landing Pad which is out there.
I think there’s a lot out there, including business mentors, in New Zealand, and the like, but the key is the value that that organization or person brings to help you, and the relevance. The thing I’d say, if you’re doing something for the first time, find somebody who’s done it before, who can actually help and guide you. They won’t necessarily want to do it, and don’t be afraid of sharing some of the upside with that organization, or that people. But be demanding on what they can actually do for you.
Janine: Debra, do you have a comment on that as well?
Debra: I agree with everything Andy just said.
Janine: Right. Nick?
Nick: Absolutely. Keep the noise up, squeaky wheel gets the oil. We have a couple venture companies, about twenty on a rolling average in the Creative HQ portfolio, and the ones that I see that move the fastest are the ones that are constantly looking for help, constantly putting their hand up and saying, next please, next please, I need more help, I need more help. Because when you ask, it comes. New Zealand’s got a very strong entrepreneureal support ecosystem, and if you put your hand up, people will crowd around if they like what you’re doing.
Andy: And just think about that. Sometimes when you’re starting out, it’s quite a good idea to get an advisor who’s got a bit of a reputation, who will then bring in other people as well, so think about your networking, just like you get early customers to build momentum around advisors. You know, if you get a Sam Morgan, or a Rod Gery, if they had time, but you probably won’t get them on the first go, so just think about other advisors that can help bring credibility to your business, and that will just help take it to the next level.
Nick: Now, one thing I’d just add on support, is make sure you do something with it. Go into these conversations with mentors and such with open ears, and a willingness to listen, but more important, a willingness to act on the advice. You’ll waste a lot of people’s time if you just add it off, and do what you were always going to do in the first place.
Janine: Well, this is a question that maybe we should’ve actually started off this whole chat with. Is not actually a good time to start a business in New Zealand? Nick, I’ll pass that to you first.
Nick: Absolutely. People often ask me, does the economic cycle effect startups, and some people have the opinion that in a down cycle there’s more startups, but it’s also more challenging to get enterprised customers on board, because budgets are tighter, etcetera, etcetera. Typically what you see around the world is that startup are doing it hard, no matter what the time, what the economic cycle, what the climate is. They’re always doing it hard, lean and fast, so the main thing I would say is momentum. The earlier you start doing the things we talked about, validating your market, talking to customers, and getting those early revenues on board, the faster you’re going to grow in any economic situation, so yeah, today’s the day to do it.
Andy: And you know, what I’d say is any time is right, any time is wrong. The great analogy these days is the baseball analogy; get in, get out. If it works fantastic, ride it, if it doesn’t, go to the next idea, or go get a job from a corporate somebody, some of the young New Zealanders, there’s nothing better than getting some experience from working inside a corporate multinational, because later, when you go sell your starter to them, you’ll know how they work. So just think about how you can map that out.
The other thing I would say is, the cost to get into a business these days is way lower than ten years ago, which means that’s cool. It also means payoff will be lower, but that’s really attractive, because it’s not such a barrier to actually getting into business.
Debra: And I think if you’ve got a real, and growing pain point, and a real and growing audience, then any time is a good time to be starting a startup, with the right team.
Janine: Okay, I think that’s pretty much all we’ve got time for, and we’ll wrap it up now. Do you guys have any final advice that you would like to pass on, maybe we’ll go to Debra first?
Debra: I’ll just go back to what I said earlier; I think it’s really important you ask for help. I’ve been in New Zealand for about twelve years now, and I’ve found that when you actually go out, and you ask people to help you, and ask them to put you in contact with their networks, they will do it for you. So don’t be afraid to do that, and yes, ask for help.
Andy: Yeah, and be discerning on what they can actually do to help you. And I think just get on with it.
Nick: That’s been fantastic. Thanks for all the great questions. I’d just like to say that, look, I think early stage business, and young startups, either tick, or non tick, are the future of this country, it’s what we’re looking for, we’ve got a huge undercurrent of innovation that runs through every kiwi, and all the people that are on here, tell all of your friends all the things you’ve heard, because it’s good advice, and you’ll heard it when you reach out, as Debra has suggested. Go for it.
Janine: Thanks again. I’m sure that advice has been really helpful to those who asked questions, and for those who are watching. We really appreciate all of you guys taking the time out to help us out with us, and take part in our Google hangout. We hope we can do it again soon. Thanks everyone. See you all later.
Few top businesspeople in this country think social networks such as Twitter and Facebook place their firms’ reputations at risk, new research suggests.
The public relations company that helped carry out the research says the results are a concern.
But a social media consultant says the study simply highlights the fact that many companies have moved on from being afraid of having their “brands trashed” by users of the technology.
A survey of 80 chairmen, chief executives and top managers undertaken by the Institute of Directors in New Zealand and communications agency SenateSHJ found only 7 per cent of respondents thought social networks put their companies at risk of reputational damage.
More than 40 per cent of respondents viewed such websites as an opportunity to develop a viewpoint, while a further 40 per cent said they were neutral about the risks or benefits of social media.
SenateSHJ chief executive Neil Green said the results of the survey were concerning.
“Too many respondents only see social media as a channel for positive outreach, thereby disregarding it as a channel that could create reputational risk and harm,” Green said.
“Reputational storms are hitting harder and faster than ever before. Directors and CEOs need to understand that how their companies engage in social media will have a disproportionate impact on corporate reputation.”
But social media consultant Michael Carney said the survey was reflective of the “more enlightened view” companies now had of websites like Facebook and Twitter.
“I think we’ve moved on from the days when we were paranoid about getting our brands trashed in social media,” Carney said. “It’s far more of an opportunity than it is a problem.”
As members of Springboard, Appoint Better Boards & Women on Boards, this article from stuff resonates with us – couldn’t have said it better ourselves 🙂 – http://www.stuff.co.nz/business/small-business/8629699/Does-a-SME-need-a-board?goback=%2Egde_4174358_member_238017102
When should a small business make the jump to having a board of directors?
Anytime, unless you’re not going to listen to what they have to say, according to one Kiwi governance adviser.
Simon Telfer, managing director of Stimulus strategy and governance consultancy, said small to medium businesses (SMEs) could draw huge benefits from having a formal board, but only if they were prepared to share decision-making and be challenged by an independent person outside the business.
“If they’re not, it’s a waste of everybody’s time,” Telfer said.
But if they were, a board could give and SME great advantages and help in growing to the next level.
Telfer has created the website www.appointbetterboards.co.nz to match small businesses with the right directors and advisers.
Many New Zealand businesses still held to the pioneering spirit and the belief they should be doing everything themselves, he said. Others were put off by the perception that taking on a board of directors was complicated and costly.
“It’s important to remember it’s a continuum,” he said.
“Most people think of a board of directors and think a large number of people, and a very structured process with a high cost.
“Maybe that’s something to aim for eventually but you can start with a mentor, then call them an adviser. Then get two advisers and turn it into an advisory board. Then formalise one of those individuals into an independent director, who would be legally responsible for the business and registered at the companies office. Then you’d get other directors and form a board.
“It doesn’t have to be all or nothing,” he said.
Telfer created Appoint Better Boards because many small business owners liked the idea of a board but were often at a loss on where to go to find the right people.
Giving up even a modicum of control was not easy for some of these business owners and they were cautious about finding people who would be the right fit for them.
First port of call was often the business’ lawyers and accountants, which rarely worked, Telfer said.
“They’re trained to mitigate risk, which doesn’t lend them to focussing on strategy and growth,” he said.
“Plus once you have the client relationship it’s very hard to change it and to start to challenge and critique.”
In most cases friends and family did not work as directors because they did not have real independence and objectivity, he said.
The key to a good board, or adviser was a balance of those with some experience in your industry and those new to your industry who could provide a fresh perspective.
The other key element, Telfer said was diversity of thinking.
“You want people who all think slightly differently,” he said.
“We place a lot of women and young people on boards because we think that’s a proxy for diverse thinking.”
NZ Women on Boards (NZWOB) CEO, Lesley Whyte said women added real value to boards because they tended to think differently to men and have fresh perspectives and ways of challenging convention.
Diversity in terms of expertise was also vital.
“It means you get all the styles of thinking and expertise, whether it’s finance or marketing or digital media,” she said.
But she added it was important for business owners with boards to still do their own due diligence. “One thing that’s come out of the collapse of financial institutions is that you can’t rely solely on the advice of the person who’s an expert in something,” Whyte said.
“Do your own due diligence and make sure you have your own understanding of the situation.”
One business making the most of having formal independent advisers is Auckland company Rubbish Direct. The waste management company took on an independent adviser nine months ago, with assistance from Appoint Better Boards, when it became apparent there was a gap in its strategic planning and governance.
Joint-owner Rodger Howie said having grown the business from nothing, he and his partner realised they would need expert advice and help to take it to the next level.
“We are believers in surrounding ourselves with people who know more than us,” Howie said.
“And we saw a need for professional expertise in governance if we were going to get the business to where we want it to be.
“We wanted to put the structure in place now for what we want the business to be in three or four years. We needed a strategic plan for getting there.”
Howie said the company’s adviser had helped “with that front-end vision stuff” and now the company had taken on a second adviser to help build a sales and marketing plan.
“We want to grow fairly quickly and we need to do it through sales, so we need a professional sales team – and a plan,” Howie said.
“He’s already given us a much clearer picture of what we need from our sales process, what our KPIs are and how we get to where we want to go.”
The company had just signed a “milestone” new account which would boost growth, he said.
Wow – we’re almost at the end of our journey…. I do hope you have used my tools / tips and are well on the way to having a strong digital strategy.
Now is the time to put it into action!
The last step in any marketing plan is the execution of the tactics.
The best way to get results is to do more of the things that work and less of the things that don’t.
The first step in execution is thinking about how you can test & measure ideas.
Test, Measure & Improve
The great thing about digital marketing is that things are infinitely measurable and easily changed.
So, if something is not working, you can test something different and see if you get improved results. You can even often test things side by side – called A/B testing or multivariate testing.
If something is working, then keep doing more of it, until doing more of it makes no difference or starts to cost too much.
Which brings me to my next point.
What do you measure?
This will be very dependant on your digital marketing goals.
However, do think carefully about what you are measuring and why?
TIME ON SITE / PAGES VIEWED
Does people spending a long time on your website & visiting lots of pages mean that they are engaged with your brand? Or does it mean that they can’t find what they are looking for?
Does tracking the pages where more website visitors exit the site tell you the pages are naff?Or that they were perfect and the customer found what they were looking for?
Do these mean anything unless they’re engaged? Did they just enter because you offered them a prize for entering but have no interest in your product or service? What is the value of these likes?
CLICK THROUGH RATES
Are these important if you’re looking for brand awareness? Or is it the number of people who have seen the advert? And how many sales did they lead to? What is your conversion rate from click through to sale?
35% of people in New Zealand purchase items online. 34% of these researched online and then bought offline…. So where do they feature in your conversion rate? Do you have a unique 0800 number for your website so that you can track people who research online and then call and purchase? Or do your staff ask how what prompted them to buy from you?
There are so many things to measure in the digital marketing environment, and it’s difficult to cover them all in this article – just make sure you’re measuring things that lead towards your ultimate business goal.
To finish off talking about measurement, there’s a great quote that I love to use:
“Only a truly capable manager is willing to measure their results as it quantifies both their successes and failures.” Anonymous
Nothing is really a failure though – it’s just an opportunity to revise your thinking and try again!
Social Media Listening is one of the terms that has appeared over the last few years.
What is really means is having your eyes & ears open to see what customers are saying about you in the online environment – and monitoring the trends.
Are they saying more good things than bad?
Is there an increase in people talking about your product or service?
There are many different tools that you can use to do this but the key thing is, what can you do with it?
What can you do when they say bad things?
Can you do something to turn a negative situation into a positive situation?
Can you amplify the good experiences?
Can you surprise & delight your customers?
One thing about social media, is that you can’t control the environment and if you start to block or hide ‘negative’ comments then it will come back to bite you.
There is never a right & a wrong in a situation…. Just 2 different viewpoints J
The best thing you can do is try to put yourself in the customers shoes and see what you can do to make things right in their perception of the world.
Try to never have a disagreement online or in the digital space… these very quickly become viral!
If you’re not keen to engage in social media as a business then you don’t have to broadcast but don’t stop listening. You need to understand when customers are saying things about your business and product / service.
At a very minimum, have a way to jump in and take the conversation offline to see if you can help them.
If you can continue to do more of the things that get good results and do less of the things that don’t appear to work then you will have a digital marketing strategy that works.
However, just with any other form of marketing or channels, customers & the marketplace change over time…. What worked last week may not work next week.
So, continually review your objectives, strategies & tactics and make sure that you are still getting the result that you need!
That’s all for now folks… Please don’t forget to celebrate success & have some fun with it!
If there is anything in my articles that you don’t understand, you disagree with or you’d just like to have a chat to me about, then please feel free to contact me – email@example.com.
You’re now well on your way to developing a digital strategy. You know what you need to achieve…. Now it’s time to think in more detail about how, what, who, where, when & why?
Decide on your strategy & tactics
Your strategy and your tactics will very much depend on your digital objectives, which fall out of your business objectives.
People often get them confused, so I love to use this example that I found online:
Goal: Win the war.
Strategy: “Divide and conquer.”
CIA spies gather intelligence.
Navy Seals knock out enemy communications.
Paratroopers secure the airports.
Armored Divisions race in and divide the opposing army’s forces.
Drone attacks take out the enemy leadership.
An overwhelming force of infantry invade.
But how does that translate into digital marketing?
The strategy is the what and the tactics are the how & who…
(Note – these goals need to be defined properly as SMART objectives)
Goal / Objective
Examples of tactics
Increase leads for the sales team / sales from the site
Increase awareness of digital channelsDrive on-line customer acquisition
– Keyword strategy- Affiliate marketing- Search Engine optimisation- Drive traffic to website in off-line advertising- Online classifieds- Social media- Micro-site- On-going email communication- Mobile Application- Existing customer database
– SMS to customer base
– Referral programme
– On-line tutorial
– Welcome emails
– Community Leader endorsement
Focus on search engine marketing to drive traffic to the site
– Run google adwords campaign on xyz product / service- Banners on key sites
Improve the conversion rate of traffic to the site
– Run A/B testing for different processes- Engage a conversion rate specialist
Improve Customer Service to reduce calls to the call centre
Develop the website to answer 90% of customer enquiries
– Review the website- Research with call centre to see what the enquiries are about- Develop materials to answer questions online – video tutorials, search engines, Online chat with customer service reps
Improve customer retention
Improve user experience and site optimisation
– Website redesign- Website content- Improve readability of the website- Provide top customers with the ability to feedback / participate in the enhancement- Straight through transaction processing- Increase payment options online- Launch Mobile Phone Application- Email engagement programme- Abandon cart messaging – to encourage them back- Improve current email programme
– Facebook page / Google Plus
– Leverage off-line sponsorships
– Community Consultant
– Customer Ideas Centre
Extend the service and channel portfolio
Drive customer engagement
These are just some examples of digital strategies and tactics.
In most businesses, the key digital asset is the website and so can logically be a starting point.
Take a good hard look at your website.
If you are looking for increased leads or increased sales, explore how well your website performs in terms of people searching on Google.
If you are looking to offer customer service to reduce in bound phone calls then think about how easy it is for people to find the answers to their questions… And do you have on-line customer service or a prominent phone number so that they can call you if they get stuck?
Generally people are looking for increased brand awareness and increased leads / sales, so the first place to start is to think about the keywords that people will use to search for the product or service that you offer.
You can find this out in a number of ways
If you have some website analytics software (like Google Analytics), then take a look at what keywords people are using to get to your website.
Use a tool such as Google trends (http://www.google.com/trends/) or the keyword tool within Google Adwords to see what your potential customers are searching on.
Work with a reputable SEO firm who will help you better understand the market and come up with a keyword strategy.
Next you need to build your website around these keywords. Your page titles, your page descriptions, your heading and your copy all need to reflect what people are looking for.
In many cases you can do this yourself, but I would recommend working with an SEO expert. They can usually immediately help you increase traffic to your site.
There are so many digital marketing things to think about:
Search Engine Optimisation & keyword strategies
Search Engine Marketing – banners & Google Adwords campaigns
Your customer database & CRM (Customer Relationship Management)
Social Media – Facebook, LinkedIn, Pinterest, Twitter, Google +
Places / Geomarketing
I can’t possibly cover all of them and how you can use them for your business in one article, but remember that they are all just marketing channels.
So, here are some tips / pointers around how you decide what is relevant.
Tips / Pointers
What channels are best for your target audience?
Which ones can work for the objectives you need to achieve?
WIIFM? – Ask yourself the question – What Is In It For Me? Not literally you, but from your customer’s perspective ie: Why will they come to your social media site? What will they get out of it?
What can you afford to spend? Both in money & in time to maintain it.
Don’t forget the humble email. If there’s a WIIFM then you will get results.
Make sure that you have the resources to execute on your plan and that there aren’t any bottlenecks in your environment.
Use a timeline & resource management (or fancy project management software if you have it) to make sure you can deliver all that you need to.
Have a social media diary that outlines what you will write & post and when.
Don’t post the same thing to every social media site – they attract different audiences so customise your message.
Don’t forget the off-line environment! – Ensure that your offline tactics support & reflect your online tactics. Have your website & social media addresses on all of your offline materials.
If you need any help with developing your digital marketing strategy then The Icehouse has digital strategy workshops, where you can work with an experienced digital strategist to come up with the framework for your plan. Feel free to contact me if you are interested – firstname.lastname@example.org .
Next week we’ll look at testing, measuring & rewarding success… French Champagne or Central Otago Pinot here we come J
Last week we spent a lot of time understanding the marketplace, our competitors and developing our SWOT and key areas to work on.
This week it’s time to start developing digital objectives.
Let’s not forget that digital marketing is just a series of digital channels that you can use to achieve your marketing objectives, so your digital marketing objectives are going to fall out of your marketing objectives.
So, how do you go about defining your digital marketing objectives?
Step 1 – Define success
I am a huge fan of having fun in business and this includes celebrating success… particularly with a fine Central Otago Pinot Noir or a bottle of French Champagne!
To do this you need to know what success looks like.
Having an objective of increasing sales from the website is great but it’s not a true success measure… Is one more sale enough to be cracking the champagne? Or do you need 150 new sales? And within what time frame?
The key to making sure that you are celebrating the right things is to set SMART objectives.
Objectives should address the five Ws… Who, What, When, Where, and Why.Use action verbs… create, design, develop, implement, produce, etc.
Objectives should include numeric or descriptive measures that define quantity, quality, cost, etc.How will you and your team know when the goal has been successfully met? What do you need to measure and can it be easily measured?
Objectives should be within the teams control and influence – a goal may be a “stretch” but still feasible.Is it achievable with the available resources?Is it achievable within the timeframe originally outlined?Can it be done at all?
Relevant / Realistic
Is it possible for your team to perform the objective using Digital Channels?How sensible is the objective in the current business context?
Timely / Time-bound
Objectives should identify a definite target date for completion and/or frequencies for specific action steps that are important for achieving the goal.Incorporate specific dates, calendar milestones, or timeframes that are relative to the achievement of another result (i.e., dependencies and linkages to other projects).
Your digital objectives stem from your business & marketing objectives, so look at your business and check if you have SMART objectives for:
– Sales forecast – sales figures, number of new customers wanted?
– Customer service – how can you improve the service to customers?
– Communication – providing information to customers?
– Reducing Costs – saving time & increasing your business efficiency?
– The wow factor! – adding sizzle to make your business stand out from the crowd?
Now take a look at your digital SWOT from earlier and establish SMART digital objectives to help you achieve your overall business goals.
The key thing in developing digital objectives is that they are RELEVANT. Can they actually be delivered through the digital channels?
Many businesses fail to achieve their digital marketing objectives because they have not been realistic about what can be achieved in the online environment.
Overall Business Objective
Digital Marketing Objective
Achieve an increase of 150% in direct sales from the website within 12 months.
Increase leads for the sales team
Gain an additional 25 leads per month from the website by May 2013.Gain 20,000 database registrations by January 2014.
Improve customer retention
Increase retention rates of customers online from 35% to 40%, by the end of 2013.
Improve brand awareness
Increase visitor numbers to the website from 2,000 to 10,000 by August 2013.Achieve number 1 listing in google natural search for the key search term ‘Digital Marketing’ by September 2013.
Reduce number of customers calling for a brochure from 800 to 500 by end of May 2013.Reduce phone calls to the customer service team by 500 per month by June 2013.
Step 2 – Benchmarking
At the time of developing your digital objectives, it is also time to look at what you already have and how it is performing:
– How many visitors come to your site?
– How many people buy from the site?
– How many people visit the site to get information that means that they don’t need to call your business?
– How many emails do you send? And how many people click through?
– How do you rank for the key search terms on google?
There are many, many metrics in digital marketing and not all of them are useful.
Think about what is important for you as a business in terms of achieving your goals.
Take stock of how you are performing right now and use this as the baseline that you can measure increased performance against.
Next, think carefully about how you will measure your journey towards your gaols. What will you need to do / implement to measure your progress?
One thing to think about is how much detail do you need to report on?
Often companies report on very minute detail when a general understanding of the trend is enough to understand whether you are moving towards achieving your goals.
Think about how much time it takes to do the measurements and does it justify the means to the end?
There are also many tools out there to automate the measurement process – don’t recreate the wheel!
Feel free to contact me – email@example.com for a list of tools that you can use to measure your success.
Next week we’ll be moving onto the exciting stuff – the strategies & the tactics 🙂
Last week we talked about your target audience and understanding them. The next step in developing your digital marketing strategy is to look at where you are currently at.
Analyse your current situation
– Are you currently operating in the digital marketing space?
– What are your current marketing assets / marketing channels?
Your digital marketing assets include:
– Website – desktop & mobile sites
– Social media sites – Facebook, LinkedIn, Pinterest, Twitter, YouTube, Instagram etc.
– Email campaigns & email systems
– Videos & Podcasts
– CRM or Customer Relationship Management systems
– Affiliate programmes
NOTE: Think about your target audience and which digital marketing mediums they are using – if you don’t know, then grab the nearest person who meets your target audience criteria and ask them. Repeat this process 10 times and you’ll start to get an understanding of what they use J
STEP 1 – Take a look at your current situation and do a SWOT analysis:
Don’t forget to compare them to your competitors and the marketplace.
Online tools to help:
You can use some great online tools to review the basics of your website and social media – try http://marketing.grader.com/ as a starting point.
As part of your digital marketing asset review, take a good look at your competitors websites, social media sites & digital marketing assets and looking at their strengths and weaknesses:
– What’s strong?
– What’s weak?
– What are they doing well?
Look for companies that are listed and have to put out annual reports to glean information about the marketplace. This can be a great way to understand what they are spending on marketing, employees etc. and to monitor their growth over time.
Step 3 – Key Focus Areas
Revisit your business objectives from last week & from the Digital Marketing SWOT, choose 3 or 4 key areas to focus on that will help you achieve your business goals.
Looking for an increase in sales leads for your team?
Is your company easily found on google for the keywords that people use – either naturally or through google adwords? Have you set up ways for people to easily contact you & for you to gather customer details? Do you cross-sell and up-sell using tools such as email?
Looking for an improvement in customer service?
What tools do you have on your website to easily answer their questions or customer service issues? Q&A sections? Virtual assistants? On-line chat? Videos? An 0800 number?
Looking for increased engagement from your customers?
Do you have interesting & useful information on your website or blog that they will return to on a regular basis? Do you have social media sites that your customers use? Can customers generate their own content? Can they have community conversations? WIIFM?
If you are a start-up then think carefully about your key (and hopefully niche) opportunities.
A quick note about viral marketing:
Most people think that they can use the digital space to generate huge brand awareness with little or no cost. I hear the term ‘viral campaign’ bandied about as a cheap way to get customers to websites or social media sites.
Reality is that true viral marketing (digital or otherwise) is still very unusual and rarely at little / no cost. Often there is a lot of time and resources spent in both creating and seeding a viral campaign and there is absolutely no guarantee of success.
For each successful viral campaign there is bound to have been millions that have failed… Take a look on YouTube at the number of videos posted with just a handful of hits!
The key thing for a viral marketing campaign is that it has to grab people’s attention, usually through the unexpected, and then be worthy of passing it on / sharing, either through humour or interesting / useful information.
This means that it can’t be a blatant advertisement for your business – your branding has to be subtle and indirect. The issue with this is that it may fail to deliver your overall objective.
So, be prepared be realistic about your strengths and weaknesses and don’t see ‘viral digital marketing’ as an inexpensive opportunity.
Now you have evaluated your current situation and identified your key areas to work it’s time to develop your SMART digital marketing objectives, which we’ll cover off next week… See you then!