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Monthly Archive for January, 2009

Your Top Tips for 2009

Published by Business Link on 23 January, 2009 in Top Tips • 0 Comments

Make a marketing plan, analyse what you spent last year, and what gave you the best return. Write down a month by month action plan, with costs and responsibilities allocated, and make a resolution to stick to it, measuring and monitoring everything involved. Dianne Edgar, I-Marketing Services Ltd

The most critical element for any business success is making and setting goals, having a business plan, a plan of action, an action plan, a road map to success – with out a map the journey could be down to guess work, you could become distracted from going directly to your destination because you could take a wrong turn costing you time and money. David Plimmer

Be creative. You don’t have to be an artist or designer to be creative, take some time to look at how you can do things differently. At prime entry we have regular staff meetings where we just throw some ideas around and see if we can do things better, it promotes teamwork and you would be surprised at what ideas come out – from advertising and promotional to our work environment and how we can help our clients better. Recently we just cleared out a load of rubbish and gave the office a big clean, this simple act created a huge amount of enthusiasm which has led to some inspirational ideas for 2009. Ask, “how can we do things differently?” Kevin Whitehouse, Prime Entry Ltd

Avoid paying unnecessary compensation money to staff by seeking advice before you take any steps towards dismissal, including redundancies. It is very sad to see so many businesses making this mistake and having to pay out thousands of pounds in compensation and fees because of a technical breach of the employment regulations. See a specialist before you act.” Jennifer Renney, Renney and Co.

Remember, ‘what you think – you become’ or put another way ‘What you think about – you bring about’ so if you think you are going to find 2009 a struggle, you will! Be careful what you wish for! Julia, Bay Tree Interiors

Focus on the positive aspects of what your business can offer. The media will always focus on doom and gloom, and there is always some-one who is in a worse position than you are. Whatever is going on in the world and in your business, use January as a fresh start to think about how you can create a happier outlook to your customers. Offer them true value for money and the best service you possibly can and keep smiling. Cut back where you can on your personal expenditure and keep some money aside for leaner times, we can all cope with less that we think we can, and if you use this time to re-evaluate your income and outgoings you will become more cash efficient. Being positive doesn’t cost anything, being negative could cost your business. Angela MacAusland, am:pm PA

Cash is king! Sue Stockley, Begbies Traynor

Protect your intellectual property… This could be by filing applications for Patents, Registered Trade Marks or Registered Designs… It could also be by ensuring you have adequate employee contracts in place to ensure that an idea doesn’t get taken by an employee, when they leave, to a competitor… Talk to your local patent attorney about any of these issues. Lewis Hands, Handsome I.P.

Be persistent. Don’t take rejections personally, if you believe in your service and in yourself, you owe it to yourself to keep going… Get connected. Self employment can be a lonely and uncertain ride. Avoid becoming jaded, get together with others, join or form a networking/support group to give the opportunity to gain fresh ideas and perspectives from others in similar situations… Take stock regularly and review plans. Your business will be organic and grow in directions you may never have planned. Get yourself a mentor, a coach, see a business link adviser to support, advise and inspire you. Ronnie Murray, Diamond Lifeskills Coaching & Training

“I see no Financial Crisis”… Sometimes in business it is best to ignore standard orders and “normal” rules, to stop fearing the approaching enemy and just follow your gut instincts towards a glorious victory. George Verghis, Enjoycard Ltd

It’s true what they say: if you fail to plan, then you plan to fail… My tip for 2009 – be prepared to invest in your business for the coming year. I’m not talking about investing money, but a much more precious thing, time… Take time out to reflect on the past year. Celebrate your successes – what did you achieve, and how did you do that. Learn from the things that didn’t go so well. Look ahead and set yourself some challenging goals; make sure your goals are specific, measurable, achievable, realistic and time bound. Then create a plan to ensure you have clear focus. Most importantly, you must then take ACTION… I think the following thought would be a great one to keep in mind “Success is a state of mind. If you want success, start thinking of yourself as a success”. Jackie Wright, Ganesha Coaching

Our top tip for 2009 – Be shrewd, save money, and never miss a sale again. Take advantage of the tremendous sales that are on offer and plan ahead with your buying – wait until you see a sale and buy what you need for less. Tim, firstdaysale.com

Tighten up your credit control. If you don’t already have a formal process now’s the time to create one. Philippa Turnbull, Software-Matters

The motivation for financial depression is driven by others the media being the main offender. Business is driven by personal motivation, innovation and ambition. Don’t confuse the two. What did you do today? Brian, Love 33

What do your customers really think about you and the degree to which you are meeting their expectations? Mystery – or Secret shoppers provide the answers!… Secret shoppers cast a critical eye on the general layout of the premises and the welcome received. Test the knowledge of staff on the products. Many can also conduct research to find out what people really think of the services you provide as well as visiting your competitors and conducting a comparison, conduct surveys by telephone or by post on your behalf… If you are thinking of starting a business or opening a new outlet in 2009 finding out about your prospective customers is even more important. You cannot trust the opinion of just family and friends… The cost of a secret shopper has come down and many local services are tailored to the small firm or ‘one man band, shop, café, or store. Bill Brandwood, Motivation Business Services

Talking talent

Published by Business Link on 23 January, 2009 in HR & People Development and Strategy & Operations • 0 Comments

You don’t need us to point out that your employees are one of the fundamental drivers of your business. And you probably don’t need us to mention that nurturing your employees’ talents should therefore be a key business priority.

In an ideal world, all businesses would find the time and resource to effectively manage and nurture the talents of their employees. Unfortunately, the world is far from an ideal place at the moment. As a result, many business and HR leaders are facing numerous competing pressures that dilute focus away from the task.

The irony of this picture is that now, more than ever, is the time for nurturing talent. We explore the reasons why, and the main obstacles that are holding most businesses back.

Why nurture talent?

Improved business performance

A 2007 survey from Capital Consulting and Cranfield School of Management, which questioned over 600 employers, found that 94 per cent of respondents see talent management as important or very important to the bottom line of their organisation. In addition, a 2008 learndirect report called ‘Nurturing Talent’ writes that establishing a link between talent management and organisational objectives “has been shown to be key to business performance”.

Together these observations support the notion that – when linking the process with an organisation’s strategic objectives – talent management has a positive effect on business performance and thus the bottom-line.

It’s sensible to think so, because both employees and businesses tend to exhibit skills gaps which, if filled, serve to boost performance. And in addition to plugging gaps, nurturing talent can increase overall productivity simply by fostering more motivated and loyal employees.

Cost advantages

learndirect’s Nurturing Talent report also found that: “One of the main advantages of nurturing talent is cost effectiveness… Almost half of respondents (44%) agreed that they had saved money by growing their own talent. Developing staff internally, rather than recruiting externally is generally perceived as being more cost effective (38% for development compared to 13% for external recruitment)… Ultimately, staff development is used more often by companies that need to focus on cost effective human resource (HR) strategies. Arguably, this will apply to a significant number of organisations if economic conditions worsen and training and recruitment budgets are squeezed.”

These findings suggest that effective talent management strategies are cost-effective in their own right, and are also potentially cheaper relative to sourcing new talent from outside the organisation. And, particularly at a time when budgets face tighter control, talent management is a viable cost-effective approach to both closing skills gaps and improving business performance.

In addition, nurturing talent aids staff retention, which helps to reduce additional recruitment costs, and also keep valuable knowledge inside the organisation. As we discussed last month, employees tend to hold more critical business knowledge than most employers realise, including not just what they know, but who they know. Both staff turnover and knowledge-loss are therefore costly strategic risks that nurturing talent can help to alleviate.

Timely motivation

Keeping talent motivated is important to maintaining a productive and stable workforce, whatever the economic climate. But now, during times of uncertainty, it’s an especially crucial endeavour.

One overriding factor proven to motivate employees is a commitment to training and professional development. Research from the Learning and Skills Council, which questioned over 2000 employees, found that 61 per cent of respondents “want to work for an employer who demonstrates a commitment to training”. And over half of respondents think that a good boss is “someone who believes in their employees’ futures by encouraging professional development”.

learndirect’s nurturing talent report also comments that “according to employers, developing employees is seen as an effective way to increase staff motivation and improve staff retention”.

Increased scope for innovation

As we discussed in business i creative this month, most innovative ideas come from within an organisation, specifically from its employees. We also wrote that diverse new influences and experiences, including knowledge sharing, training and development, provide the kind of inputs that creative, talented minds need to come up with new ideas. (see article)

The process of nurturing talent, through giving employees the diverse inputs they crave, therefore also leads to innovation, value creation and competitive advantage. Innovation is often cited as a main driver of business success during economic downturn, and also positions companies well to take advantage of economic recovery when it comes.

Obstacles

Time

In a survey by The McKinsey Quarterly, 59 per cent of respondents – made up of business and human resource leaders – said that the number 1 obstacle to good talent management is that “senior managers don’t spend enough high-quality time on talent management”. In addition, 45 per cent said that “line managers are not sufficiently committed to people’s capabilities and careers”.

Such an absence of time and commitment amongst management may be unintentional, in that managers would like to do something but have neither the free time nor resource. Or to be cynical, a straightforward indifference to the task might be to blame. Either way it seems apparent that in many organisations talent management is simply not a strategic priority. Ultimately, the time, focus and resource is often not provided or enforced from the top-down.

If talent management does not become a strategic priority, it’s likely this picture won’t change, and may even get worse as the pressures of our business climate further impact the time and resources available to management.

Money

Money is a second key obstacle to talent management. There are obvious tangible costs of nurturing talent, such as training, mentoring and coaching programmes, and intangible costs, such as the time burden mentioned earlier.

To an extent financial concerns can be offset as the cost-effectiveness of talent management is realised (and may also be reduced by capitalising on cost-effective training initiatives such as Train to Gain). But in the short term, such financial pressures may be a dissuading factor which prevents management from taking action.

Putting talent on the agenda

If you believe nurturing and managing talent should be strategic priorities, the single most effective first step in pursuit of a talent strategy is to place the issue high on the management agenda.

As pointed out by McKinsey & Company’s research, a lack of time and commitment from “senior managers” is the foremost obstacle in establishing effective talent management.

By putting the task firmly on the agenda, businesses can begin a dialogue on how best to nurture, develop, motivate and retain talented employees. And from this, begin to establish both the time and commitment to pursue such a strategy.

More info

More info on learndirect’s Nurturing Talent Report

More info on Train to Gain, and Train to Gain Grants

Guide – Make the most of the skills your staff already have

What’s your worth?

Published by Business Link on 23 January, 2009 in Management & Leadership and Strategy & Operations • 0 Comments

Some might say the only measure of business value is financial; profitability is the ultimate goal and thus should be the sole measure upon which companies are valued.

But this argument overlooks two key points. First, that value creation across non-financial dimensions can contribute to the bottom-line and thus drive financial value. And second, that despite the economic forces that direct businesses, some may be driven to create value in additional dimensions than merely financial.

During our research on this topic, we found a few models for measuring business value, from the informal ‘business value’ approach to the ‘balanced scorecard’ method. In an attempt to distil thinking on the subject, we have created our own ’six measures of business value’ that companies might use to measure their worth and direct their focus:

Financial

The economic value of a company is foremost, not just because it determines long-term survival and profitability, but because value creation across other dimensions requires financial resource. Cashflow, return on investment, profitability and shareholder value are all crucial measures of business value and health. Financial value also reflects whether a business’s strategy is effective, and thus drives strategic thinking.

Customer

Customers are customers because they value what you offer. In return they provide the cash that drives your financial performance. It’s this simple exchange that places customers at number two in our six measures of value. By creating customer value, and then creating more of it, you can acquire more customers and cash. This process demands a close customer understanding and requires a business to both maintain the value it already offers, and create additional value to satisfy unmet or undiscovered customer needs. Understanding customer value also helps communicate effectively through more customer-conscious marketing communications.

Internal

Internal value refers to value created within an organisation across a number of distinct dimensions. It’s about the effectiveness and efficiency of internal processes, from administration, financial or IT, to the value created by strong leadership and effective people management. In addition, a business can create internal value by nurturing, developing and training employees, who subsequently contribute new ideas and productivity right back into the bottom-line. A commitment to people also creates value through fostering a motivated, loyal and happy workforce; a factor which could in turn attract more people talent into an organisation.

Competitive

Competitive value refers to points of differentiation between your business and its competitors. What makes your business different and unique? Points of differentiation help to distinguish your business from the competition, and thus attract consumer interest. Such value also helps with marketing, enabling businesses to create marketing messages that highlight the unique value offered by a business, its products or services. And finally, identifying and tackling negative points of differentiation – where you are weaker than competitors – can help to fill the gaps and become a more competitive business.

Creative

Creative value is about the level of innovation and new ideas coming from your organisation. Are you creating new and unique products or services, or figuring out better ways to do things? Innovation, by definition, is the creation of value from new ideas. So even though it may sound like the most vague of our six measures of value, it’s arguably the most important one of all. Innovation drives value across every element of your business. Most new ideas come from employees, so again this measure touches on human resources and people development.

Environmental

Environmental value measures the value a business adds to or takes away from its micro and macro environment. A business that minimises its macro-environmental footprint is not only more responsible, it’s potentially a more attractive proposition to consumers (thus creating customer value). In addition, energy saving and environmental initiatives can provide cost-cutting benefits too. In the micro environment, environmental value might be measured based on a company’s support of the local community or its attitude towards corporate social responsibility. Environmental value therefore refers to both the global, social and local issues of our time.

Creating value

Those who believe financial worth is the only measure of business value might offer a couple of reasons to ignore the five additional measures outlined above. First, they may argue that measuring financial value is sufficient to guide strategy and decision-making. Other forms of value may exist, but they are intermediary and only serve the ultimate goal of financial gain. Second, they might insist that efforts to measure and increase business value across further dimensions serves only as a distraction. If decision makers are given too many goals and measures, they may become confused and ultimately diverted from the primary intent of financial profit.

In some ways such criticisms are warranted, because it’s true that financial health and success is paramount for most companies. But regardless, it’s also true to say that value-creation across our additional five dimensions, and possibly others too, can contribute directly to financial value. Thus, even financially orientated firms should be at least aware of additional dimensions, and at most, aim to create value within them.

Interactive Tool – Conduct an online business review

Guide – Measure performance and set targets

Pay per click advertising

Published by Business Link on 23 January, 2009 in IT & eBusiness and Sales & Marketing • 0 Comments

“Anyone can learn it.”

That’s what a leading industry expert thinks about pay per click advertising. In this special report, we explore the fundamentals, and reveal further insights from our exclusive interview.

The fundamentals

They click. You pay. The fundamental principle of pay per click (PPC) advertising.

As an advertising model it’s somewhat unique, in that costs are incurred only when the viewer of an ad actively expresses an interest in what’s being offered. And in fact, this may be PPC’s number one benefit.

PPC ads can be placed on search engines, advertising networks – services that match advertisers with websites that want to display ads – and a myriad of other websites such as news sites or community blogs. Most websites wishing to display ads register with PPC services, including those offered by search engines. Advertisers then sign up, and the intermediary links the two based on their relevance to each other. The result is an ad placed on websites that are most relevant to the subject, content and offering of the ad.

Broadly speaking, three key components make up a PPC campaign. First is the ad itself, which usually contains a headline, a few lines of copy and a web link, but could also include graphics or animation. Second is a collection of keywords, selected by the advertiser as words their potential customers are most likely to search for or be interested in. And third is the landing page, which is the webpage the ad links to. This might simply be the advertisers home page, or a specifically designed page which acts as a continuation of the original ad’s theme or offer.

All three elements are important, but it’s the selection of keywords that poses challenges for PPC advertisers. Every distinct keyword or phrase carries an average cost per click. Therefore, the PPC advertiser must not just decide which words or phrases potential customers might search for, he must also decide how much he is able or willing to pay, per click, for the desired terms. To illustrate, one PPC system currently quotes a cost-per-click of 80p for the word ‘tea’, compared to £1 for the phrase ‘green tea’, and £1.50 for ‘gourmet tea’. A gourmet tea retailer would therefore need to decide which phrases to bid for, and at what price. In large part, the advertiser that pays the most will have their ad displayed more prominently than others; although importantly, other factors also affect prominence, as discussed in our interview below.

In an integrated PPC campaign, these three key elements would be considered in detail. Each step is crucial because each has a bearing on the ultimate goal of converting consumer interest into action. If the keywords are not relevant to your audience, then they will never see your ad. If your ad is not compelling, they will never bother to click and thus never see your landing page. And if your landing page does not facilitate a consumer’s further learning about your offer, valuable interest will run cold.

Exclusive interview

To gain a deeper insight into PPC, we interviewed University of the West of England graduate Edward Foster, who has been working as global director of search engine marketing at Universal McCann for the past three years. Here’s what he had to say…

Ad placement

We first asked Edward about the question of ad placement, which determines how prominently one ad appears compared to another.

Edward commented that two measures determine PPC placement, “maximum cost per click, the how much you’re prepared to pay, and quality score, the secret score given to the ad”.

Referring to the secret quality score, Edward said he would “be shocked if they weren’t basing this score on SEO principles”. SEO principles, as discussed last month, largely centre around the creation of high-quality, relevant, functional, and well-designed web content.

As one PPC provider puts it, “because this ranking system rewards well-targeted, relevant ads, you can’t be locked out of the top position as you would be in a ranking system based solely on price”.

Cost

The cost of a PPC campaign depends primarily on the level of competition for the desired search words or phrases. Some cost pennies, some pounds.

Edward agreed that competitive industries – with highly competitive keywords – could be costly and thus prohibitive for smaller businesses, but remarked that “you won’t know for sure without taking a proper look”.

Edward suggested that cost-conscious PPC advertisers focus on “tail terms”. “Let’s say 20 per cent of keywords drive 80 per cent of traffic. That 20 per cent is going to be competitive. But the rest – the 80 per cent – represent opportunities, however small. The sum of small wins inside this 80 per cent overlooked by competitors could make an effective campaign”.

Local

Search engines are working on technologies to link PPC advertising and geographical mapping technologies. And trends in mobile computing are enabling numerous innovations in location-based search. When asked about such developments, Edward simply said “local’s a huge part of our future”.

Right now, PPC advertisers can target ads by location, bid for the names of town, cities or regions, and in some cases create business listings on online map services. These features are useful, but currently limited in functionality and scope. In the future, PPC systems should be capable of linking advertisers and users by location much more effectively. Such improvements could build a new level of convenience to search, where products and services are displayed which are not just highly-relevant but also geographically nearby to users.

Today, location is an important factor to consider when creating PPC campaigns, especially for regionally-focussed businesses. Tomorrow, once local search and mobile computing come together, location based PPC advertising could create rich new opportunities for local businesses. Because of these trends, Edward emphasised that online marketers should “master the fundamentals now, so you’re ready to take on local”.

Top 3 tips

In summary, Edward offers three top tips for the PPC advertiser:

Do your due diligence. Run with highly targeted keywords and high-quality marketing copy. Dot your i’s and cross your t’s. It’s a science, but anyone can learn it.

Make allowances for other media. Search is a barometer of other noise you make in the market. If you’re running radio ads, direct mail campaigns, press releases or any other marketing activities, there’s going to be a spike in search. So make sure you have PPC campaigns supporting such media activity.

Track, test, improve. Learn from the last campaign and keep on improving. Do this and your return on investment will continue to improve too.

 

More information:

Guide – Monitor the effectiveness of your e-marketing campaign

Guide – Advertising on the internet and in online directories

Six tips for reviewing suppliers

Published by Business Link on 23 January, 2009 in Finance and Strategy & Operations • 0 Comments

Successful supplier relationships require balance between obtaining as much value from suppliers as possible, and maintaining positive and mutually beneficial relationships. Push too far and suppliers may feel less inclined to perform satisfactorily. Push too little and you could pay too much for not enough.

By conducting systematic supplier reviews, you can objectively judge suppliers’ performance in relation to cost. If the balance of cost and benefit weights against you, such findings can be used for re-negotiations, or as benchmarks for evaluating alternative suppliers.

Some supplier relationships may warrant more attention than others, but nevertheless, the following tips should help you begin to review suppliers.

1. Prioritise

Prioritise suppliers based on factors such as cost, complexity of the relationship, or its strategic importance to your business. The depth to which you review each supplier may be decided based on such considerations.

For more involved or important relationships, you might – or possibly should – have pre-existing contracts and service level agreements (SLAs) to guide your performance evaluation.

Suppliers that provide strategically vital resources, or perhaps those that carry the highest cost, are obvious candidates for deeper focus. But even less vital supplier relationships might be candidates for quick review and cost saving.

2. Analyse spend

Revisit and review past, current and projected future spend for each supplier. Not only should this provide an overall picture of where your money goes, it will also help when you come to conduct individual cost-benefit analysis for each supplier.

In cases where financial constraints exist, such information could also be used alongside cashflow forecasts to identify candidates for cost-saving. You could test different hypotheses, for example, determining how a 1 per cent decrease for your top 5 suppliers would affect overall cashflow.

3. Review metrics

Effective evaluation relies on effective performance metrics. Different suppliers may warrant different approaches, so it’s important to devise relevant performance metrics for each individually.

If a contract or service level agreement exists, key performance metrics are likely to be pre-defined, so in large part the supplier review will be a process of comparing these benchmarks to current realities.

If you don’t have a pre-existing agreement, consider factors such as the quality of the product or service supplied, customer satisfaction, reliability, customer service, the supplier’s level of innovation, or their ability to deliver on time and in full.

There are many such metrics, but try to find ones that link with value-creation; that is, where business or customer value should be created as a result of the supplier’s interaction.

4. Benefits and deficiencies

Now evaluate how each supplier performs across its performance metrics. This should provide a focussed list of both benefits and deficiencies for each supplier.

Keep an eye out for intangible benefits which may not be immediately recognisable. For example, a particular supplier might undertake development work behind the scenes to constantly innovate and improve their service, whereas another supplier might be more of a copier than an innovator. Such an advantage may be hard to recognise until it’s gone.

Numerous deficiencies may result from this process, or possibly from any anecdotal frustrations experienced by you or colleagues. These might ultimately be cited when renegotiating a supplier relationship or pushing for rebates or price reductions. Or, when a new supplier is sought, such weaknesses might be in focus to ensure they don’t re-occur.

5. Cost vs. benefit

So far we’ve prioritised suppliers based on their strategic importance, considered their cost, defined relevant performance metrics, and listed the benefits and deficiencies of each supplier.

These steps should provide you with the basic information you need to conduct an informal cost-benefit review, to compare the sum of the benefits you receive against the total cost.

Such a cost-benefit analysis is not always a definitive evaluation. Indeed, more in-depth or statistical approaches might be warranted for some supplier relationships. But, with clear information on both direct and indirect costs and tangible and intangible benefits, you’re more likely to gain a picture of overall satisfaction or dismay at a supplier, and thus make better-educated decisions.

6. Compare to competitors

If, after considering both the costs and benefits of a supplier, you feel that you are not receiving sufficient value, you can either renegotiate or go elsewhere. Either way, it might be useful to shop around and review the alternatives.

Your clear knowledge of what benefits you are receiving at what cost should help you evaluate alternative suppliers more robustly. It might even help to avoid falling blindly for competitors’ over-reaching promises. Use insights from your review to guide you; for example, focus on maintaining the strengths of your current supplier, whilst plugging the weaknesses.

A good start

Whether you want to cut costs, review suppliers with inadequate or expiring contract terms, or simply judge if you’re getting good value for money, an organised and systematic approach to supplier reviews keeps you fair, but also firm. As a result, you can achieve balance between your need to get good value and the need to maintain positive supplier relationships.

As mentioned, some suppliers may require more focus than others. And indeed, more in-depth processes of supplier management and return on investment analysis may be required as part of a longer-term, ongoing supplier review. But, if you are looking for a straightforward way to begin reviewing suppliers, these tips represent a good start.

More info – Manage your suppliers