Corporate Image 101

Corporate Image. 

This is a concept spoken by many but understood by few.  Essentially, corporate image could be translated as: “You are what your clients see”.  In other words, corporate image is all about the perception that clients have about an organization.  Corporate image is about the so-called “Physical Evidence” that the marketing gurus so cleverly praise.

In the past week, Skopus Business Consultants had appointments with three very prominent brands in a specific sector.  These appointments reinforced the idea that there is more to corporate image that shiny entrance foyers or advertisement campaigns showing smart people in expensive suits.  The truth about corporate image is found behind those shiny entrance foyers with faux-marble, impressive glass panels, expensive wood furniture with equally expensive upholstery.

In one case, the meeting room for the appointment led through a work area.  Grey, dishevelled furniture, broken cabinets, half-dead plants and staff with thousand yard stares reminded one of Siberian gulags.  The energy of the staff on the floor where the meeting room was represented the proverbial flat line.  One of our associates paused and asked someone, who appeared to be a supervisor, how it feels to work in a company who is said to be one of the best in its class.  Admittedly, we were not surprised by the answer we got:

“Does it look like the best in class?” the supervisor answered.

For the other two appointments, we also had to go through a work area to get to the respective meeting rooms.  But, what a difference!  Throughout, an atmosphere of professionalism and high levels of energy greeted us.  Bright colours, quality furniture at work stations, stylish signage that gives each work cell a unique identity stood in stark contrast to the Orwellian universe of the aforementioned appointment.

The surroundings send a very clear message of “Here, things are done with energy and to the best of our ability”.

We went away from our appointments with clear affirmations of what we have been advocating about corporate image to our own clients:

To understand how effective your corporate image is, ask someone to look behind the beautiful decor.  If the “back office” creates the same impression than the “front office” your corporate image could be seen as a success.  But, if the back office tells a different story than the front office, understand why a potential client decided to give that big order to your competitor.

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

The Skopus Prize is a trademark and intellectual property of Skopus Business Consultants.

More details about the Skopus Entrepreneurship Prise can be found at www.skops.co.za

Big Profits and Greatness

Big profits do not say anything about the greatness of a company.  In fact, big profits can change the focus of an organization so dramatically that it peters out into competitive irrelevance over time.

Consider two large companies.  One stated in their annual report that they aim for a 35% increase in profit for the next financial year.  The other company stated in their financial report that they aim to increase the profit by only 5% for the next financial year.  The management team of the first company has also been given a so-called stretch target and was asked to aim for a 40% profit increase “so that we can at least make 35%”, stated the CEO to the staff in one of the quarterly town hall meetings of the company. 

At the end of each company’s financial year, the results spoke for itself.  The first company announced a profit increase of 31% instead of 35%, blamed the recession, and announced company-wide job cuts.  The second company, also in the same economic cycle, announced a profit increase of 7% and stated that they are going to expand.

In the following year, the first company noticed a decline in market share (more than half of their market share was lost in a matter of 18 months).  Having spent hundreds of thousands to understand why market share was lost, a startling fact was discovered.  Customers lost confidence in the company because they became so numbers-oriented that they forgot about the real shareholders in their company.  To paraphrase one of the previous American presidents “it is all about the CUSTOMER, stupid!”

Customers also complained that the quality of staff at this company deteriorated.  Obviously, management was shocked to hear this news and believed that the view “is only that of a disgruntled few”.

Closer examination showed that this company has cut its training budget dramatically so that they could deliver on the 35% profit increase they announced so boldly.  When the CEO was advised by the HR manager that this step could have an impact on customer service, the debate was settled by the CEO’s remark “we have great people working for a great company”.

On the other hand, the company that announced a single-digit profit growth also announced a doubling of their staff training budget despite a raging recession.  They understood that the lifeblood of their company is well-trained employees that can interact with customers.  They also understood that an educated workforce is one of the biggest constraints of doing business in South Africa.  Last, they understood that South African consumers are becoming more sophisticated and that customer focus in South African companies is generally lacking.

The World Economic Forum’s Global Competitiveness Index underscores the view of this company very clearly.

Although there has been an improvement since 2008 in educating our workforce, not enough has been done to make a significant change.  Companies who are not going to invest in the education of their workforce will not be able to sustain themselves for long.  In 2011, South Africa took the 31^st place (out of 142 countries) in the world in terms of customer sophistication.

However, customer orientation and, by implication, customer service levels offered by companies do not match customer expectations.  In the same year (2011) South Africa was in the 67th place (out of 142 countries) in terms of customer service.

All of the above leave Skopus Business Consultants with one question.

Do high profit growth targets mean true organizational greatness?

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

The Skopus Prize is a trademark and intellectual property of Skopus Business Consultants.

More details about the Skopus Entrepreneurship Prise can be found at www.skops.co.za

Our Service Excellence Seminars are designed to help bridge the gap between customer expectations and levels of service excellence.  More detail can be found on www.skopus.co.za

The Heart of the Economy

It is said that between 60% and 80% of this country’s GDP is generated by the activities of entrepreneurs that employ between ten and fifty employees.  Assuming that these numbers are true, then entrepreneurs form the heart of the economy.

Over the last view months, Skopus Business Consultants detected a slow groundswell of interest from people who want to start their own businesses.  Many cases we encountered were about people who do not know where to start or who are intimidated by lack of finance. Banks are still very prudent in their credit policies.  In addition, the past recession and the slumber in the present economy affected many peoples’ credit records, thus not making them an attractive risk for prudent banks.  On the other hand, venture capital from non-banks could be murky waters to navigate.  It is a world in which even the boldest hesitate to enter.

These were some of the factors that we considered when we announced the Skopus Entrepreneurship Prize.  We hope that this initiative can help to make a difference in many South African lives.

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

The Skopus Prize is a trademark and intellectual property of Skopus Business Consultants.

More details about the Skopus Entrepreneurship Prise can be found at www.skops.co.za

The Entrepreneur's Acid Test

Here, at Skopus Business Consultants, we encounter many entrepreneurs that are in the start-up phase of their planned business.  What always strikes us is how many entrepreneurs, who start up, believe that a big business loan equates to equally big profits.

Consider a case where someone wants to borrow Ten Million Rand over five years at nine percent per annum.  As simple calculation will show that the borrower will have to pay back almost R 208 000-00 (Two Hundred and Eight Thousand Rand) a month!  Over a twelve-month period, such loan will cost the enterprise almost R 2 500 000-00 (Two and a Half Million Rand) per annum.

Assuming that one has meet all the requirements from a bank or an investor and that one has received such an amount of finance, what does it actually mean to the entrepreneur?

It means that one has to sell at least R 208 000-00’s worth of goods just to show a zero profit!  It means that the entrepreneur would have to work extremely hard to sell enough to cover such loan repayment.

At Skopus Business Consultants, we are not pessimists.  Indeed, we know of many cases where entrepreneurs borrowed a large sum of money and where there are success stories on how that risk paid off in the end.  In fact, if the entrepreneur’s business plan convinces the lender or an investor of having potential, such loan could easily be granted.  If such loan is then granted, it stands to reason how the entrepreneur will make enough sales to cover the capital loan, pay all the other costs, and still make a modest profit.

This is the true acid test for the entrepreneur: putting the cleverly sculpted words of the business plan into three hard results:

1.      Sales;

2.      Sales;

3.      Sales.

Many a business plan that we encounter is vague about how hard results will be achieved.  We spend many hours with our clients to clarify and test their sales and marketing plans.  We insist that the business plan is not just a piece of paper to hand in when asking for a loan.  In fact, another perspective of our acid test is that anyone who does not see the business plan as a living document must question his or her capability to make the business plan come true.

Whoever sees his or her business plan as a historical inconvenience has no future to plan for.

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

Customer Service Excellence - Part 1

Customer Service Excellence

This is one of the most elusive concepts in many businesses.  Lots of fancy words and Harvard-speak are used to describe service excellence.  Yet, many a company fails dismally to provide good service.

One is tempted to think that big corporations are very good at customer service excellence.  In addition, there is a belief that small enterprises do not have an ability to deliver outstanding customer service.

When asked, “What is the definition of customer service”, organizations find it hard to come up with a clear and crisp definition.  Some believe that superior products are the apex of customer service.  Others believe that the answer can be found in they way they handle customers, while still others believe that they offer superior service because they have been told that for the past forty years.

Remarkably, data about customer service excellence is mostly anecdotal.  Moreover, when hard data exists, there are many voices disputing what the hard data tells.  As an example, if the data suggests that the organization is unresponsive, a protest cry will sound and reams of anecdotal evidence will be offered as a counter argument.

Curiously, organizations hardly ever talk or think about customer service from the perspective of the customer.  Surely, the “voice of the customer” buzz-phrase is strewn around in very intelligent sounding Harvard-speaks. Nevertheless, when customers point out a service failure, not all the Harvard-speak in the world can change one, irrefutable fact:

Quality service lives in the mind of the customer.  

In other words, no matter what a company says or believes will change the mind of the customer – being it to the good, or for the worse.

At the very best, and because it lives in the mind of the customer, the concept of service excellence can be viewed as a highly elusive construct.  If, as an example, a customer experienced a bad day, the best possible service could be viewed as bad.  Conversely, when a customer experienced a good day, questionable service could be tolerated or overlooked by the customer.  There is thus a strong link between the customer’s state of mind and the way that the customer experiences service.

Not all entrepreneurs can say that they have a qualification in psychology so that they can understand the customers’ behaviours or states of mind.  In all honesty, entrepreneurs (or any other business for that matter), need not be behavioural scientists to understand the customer, or how to deliver service excellence.

A few common sense pointers exist in academic and popular literature and the entrepreneur should be aware of those pointers.

Over the next few weeks, some of these pointers will be discussed in detail.  In fact, our service excellence seminars use practical examples to illustrate these pointers.

In the next blog, we will answer the question, “What is customer service?”

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

What Is In A Name?

It is believed that Shakespeare asked, “What is in a name?”

Indeed, what is in a name? For the entrepreneur and for any other business, a name is valuable. It says something about that business. Whoever hears the name can associate with that business and associate with products, services, and value that are offered by the name. The name of a business can therefore be seen as an organizational mantra. The more the name is being heard by clients or by potential clients, the more the products, services, and value of that business are being reinforced in the psyche of the hearer.

From the principle of name recognition, it is very important for a business not to tamper too much with its name or the name of its ancillary businesses – especially when the ancillaries share a name common to the rest of the organization. As an example, if ABC Corp. has an ancillary named ABC Venues, it is easy for clients to associate with what ABC Venues does. It is also easy for clients to know that they are dealing with part of ABC Corp. The name thus creates a reassurance to the market. It sends signals to the market and the market will, potentially respond to those signals.

Unfortunately, there is a habit under some enterprises to change names more often than politicians may change affiliations. Said name changes are more common amongst the ancillaries of an organization. The pattern is that the parent name remains in tact but that the ancillary keeps on showing strong chameleon behaviours. The advocates of such name changes argue that the name change helps to make the organization help to keep the enterprise and its ancillaries competitive.

Is this true? Can a name change make an enterprise more competitive?

Consider the case of ABC Venues that suddenly decide to change its name to ABC Horizons, whilst is still provides the same products or services they had under the previous name. How will the market respond? Will they still associate with the products and services that are being offered? On the other hand, in the worst possible case, will the market be confused?

Perhaps a few simple principles should be considered.

·        Names should be consistent with products and services offered;

·        Names that have been used in the market for a long time may best be left alone, unless the enterprise rebrands the parent name. In this case, ancillaries should follow a similar change so that it can still be associated with the parent name;

·        Unless the ancillary is being unbundled from the rest of the enterprise, name changes may be inappropriate.

A well-known brand name has renamed one of its ancillaries no fewer than five times in the last eight years. The products and services of that ancillary have remained more or less the same for the past eight years. In addition, each time a restructure, (three in eight years) took place, a name change of that ancillary was a guaranteed outcome. Last, each time such name change took place, it was associated with a promise that the ancillary will become more competitive and that it will create more market share. Each of the arguments sounds noble at face value. Yet, this famous brand’s ancillary found that its market share dropped from 35% to less than 16% over the last eight years.

Of course, the loss of market share is or grave concern for this brand and its ancillary. Many causes have been offered for the decline in market share. Millions have been spent on expensive consultants that write tomes about all they leant in business school. Worse, despite the advice of the army of consultants and all the other restructures and name changes, the market share remains terminal.

Did anyone consider the effect that name changes have in the mind of the market? Enterprises should realise that one of the most important attractors of market share could be found in a simple name.

This is the official blog of Skopus Business Consultants. Visit us at www.skopus.co.za

Promises Made Are Promises Kept!

A few days ago, I visited my favourite little Bistro. They are known for good cheesecake and a pleasant lunch menu. Because it was nearly lunchtime, I ordered the Prego that was on the special menu. What made this Prego special is that the menu announced that it is made with a filet steak instead of the usual tenderised steak or a thin slither of shoe sole that one often encounters at little Bistro’s that offer Prego’s on their menus. At fifty-five Rands, for the Prego, small salad and French fries included, the price sounded reasonable; especially when one considers that the Bistro uses filet steak and nothing else.

Great was the disappointment to discover that the “filet” being used was actually a reasonably cooked tenderised steak. In spite of feeling a bit betrayed, the meal was well presented and flavourful.

However, this is not a restaurant review. I relate this story to highlight a few classic traps that entrepreneurs can avoid if they are alert. In this case, the owner of the Bistro stepped into a long isle of nasty bear traps. In addition, the most unfortunate of this fact, is that the owner do not seem to realise the damage being done to her business.

First, the owner is a restaurateur but does not seem to know a lot about ingredients. Any beef or pork presented as a filet cannot be tongue-shaped when the meat is cut cross-grained. In such as case, filet would rather be medallion-shaped. Second, the owner of this little Bistro told me in a telephone conversation that I was not the first patron who complained about not being served a filet Prego but something else instead. Third, the owner was not on her premises when the incident occurred. She was elsewhere and entrusted the whole restaurant to an inexperienced manager. Fourth, the owner has been using the same butcher for almost five years. This butcher has been selling her tenderised steak at the price of filet for that whole time.

Clearly, there are a few lessons that entrepreneurs can take out of this tale:

·        Know your product;

·        Select your suppliers carefully and make sure you pay what you asked for;

·        Do not hesitate to inspect goods delivered to you by your suppliers. Their dishonesty or incompetence can ruin your reputation;

·        Make sure that you actually sell to your clients what you offered to them. If a filet Prego is on the menu, then the client expects a filet Prego and nothing else;

·        Be at your premises as often and as much as you can. If you need to appoint a manager to take care of your business, make sure that manager is well trained and able to handle dishonest suppliers and irritated clients.

No entrepreneur can afford that your own incompetence ruins your business. It is even more unforgivable if clients complain repeatedly about the same thing and you do not replace that supplier. It is not worth it to let your business suffer to consequences of a dishonest supplier. No matter the level of the good relationship you had with that supplier. Once trust is broken, it is best to walk away in the interest of your own reputation.

This is the official blog of Skopus Business Consultants. Visit us at www.skopus.co.za

Tell It All By Being Different

In the previous edition of our “Tell It!” series, we indicated that the tongue is the most powerful marketing and promotions instrument for the entrepreneur.  We also said that one of the ways to promote your business is to follow up on remarks made to you by people during social events.  Responding to prompts received during social events may contain useful leads.  These are, however not the only source to find opportunities for promoting your business.

In subsequent series, we will discuss basic methods that the entrepreneur can use to promote and advertise their business.  Readers should not view these methods should not be viewed as the only ways to promote their businesses.

Management scientists, business strategists and marketing experts all agree that efficient marketing relies on a differentiation statement or unique positioning.  What does this mean in ordinary language?

Differentiation means that a business is better at some things than others are.  Think, for example of two restaurants next to one another.  Let us assume that both are French Bistros.  Let us also assume that both serve the same menus.  Visiting Bistro 1, the patron notices that an order arrives within twenty minutes after being placed.  The patron also notices that Bistro 2 ensures that an order arrives within twenty minutes.  So far, both restaurants are the same.

Let us now assume that the ingredients used in Bistro 1 are about three days old and that Bistro 2 uses ingredients that came in this morning.  In addition, let us assume that Bistro 1 buys vegetables from the market and Bistro 2 grows its own vegetables in a small organic garden.

Which Bistro differentiated it in the eyes of the patron?  Clearly, Bistro 2 has the so-called edge over Bistro 1.

Taking the example further, let us look at the wait staff at both Bistros.  The watrons in Bistro 1 are all well groomed and friendly.  The watrons in Bistro 2 are a bit dishevelled and passive aggressive.  Does Bistro 2 still have an edge over its competitor?  In the view of Skopus Business Consultants, we would not visit anyone of these Bistros.  We may want to consider a place where orders arrive on time, the food is well presented, the chef uses the freshest ingredients possible in a squeaky-clean kitchen, AND the wait staff is friendly and clearly has a passion for what they do.

Differentiation or unique positioning, in other words, is all about how a business can stand out far above its competitors.  And the funny things is that differentiation sometimes means more common sense than spending lots of money on décor, advertising or the clichéd “location, location, location”.  Location is important and we will talk about that later.

However, in our view, differentiation has a slight edge over location.

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

Tell It!

One of the main issues that a new enterprise faces is how to attract clients.  There are many books that one can read about the issue.  Despite what all the gurus say, there is one and only one resource at the entrepreneur’s disposal that will make a world of a difference to any business – whether it is a start-up or a business that has been running for years.  The remarkable thing is that this resource is free.  It costs the entrepreneur not a single penny to use this resource.

What can this magic formula be?  If it is free, then it cannot have anything to do with money.  In addition, how can something that is free, be trusted?  Free is the one word in any business owner’s mind that raises suspicion.  If something is indeed very good, why will the person that has a wonderful solution not add monetary value to it?

A wise businessman gave me a remarkable answer when I asked him what he would regard as the best method to market and promote Skopus Business Consultants.  This man was a retired marketing director at a very large international company.  A few years ago, he decided to leave the corporate world and the start a very successful distribution business.  Let’s call this man “Harold”.

After I asked Harold about the best marketing method, he was quiet for a while.  Then he made on and only one gesture.  He stuck his tongue out and put his finger on his tongue.  “Use this”, Harold said and started to talk about something else.

For a small business, the tongue is indeed a very powerful tool.  It is the quickest and most cost efficient way to promote one’s business.  It may not be as glamorous as full-colour brochures.  It is certainly not as attractive as a clever radio advertisement or a 30-second splash on television.  However, it can be very effective.

Talking someone else about out businesses, carries more power than we can ever imagine.  Telling our stories – how we started and what drives us to believe in our businesses – is a personal endorsement.  It is spoken with enthusiasm and with sincerity.  It compels us to BELIEVE in the success of our business.

Telling someone about our business does not mean it is the only thing we can talk about.  One has to be patient to tell about one’s business.  One has to be aware of situations around you.  One has to listen to what others have to say and one has to be attuned to possible needs expressed by the other speaking.

Of course, timing is everything.  When someone expresses a need at a cocktail party, it may not be appropriate to hog the conversation and tell about your business.  It may be more appropriate to say something such as “you know, I am very aware of the issue you just described.  Maybe you and I can talk about a possible solution at another time?”

If the person agrees, the follow up on the conversation and tell how your business may contribute to meet one or more needs that you were mentioned in passing to you.  Who knows what sales opportunity may arise?

The tongue is indeed a powerful and cost effective marketing tool.

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

The Journey Started!

Here we are.  New to the blogging community.  I must say, that it feels quite intimidating to create one's first blog.  It is a feeling similar to the day that we decided to start Skopus Business Consultants.  I am sure you can relate to that feeling.  You know that starting a new business makes sense.  After all, entrepreneurship is the new economy of the world.  And, even though you know that it is the right thing to do, you cannot help to feel apprehensive.  What if it does not work?  What if it is a failure?

All entrepreneurs are confronted with this dilemma.  In fact, I am sure that many good business ideas never got implemented because of a fear that the idea will fail.  For an entrepreneur, failure is always a threat.  After all, we do not have the same deep pockets as big corporates have.  We cannot afford to spend money on a venture that could fail.  If we loose a thousand monetary units, it could mean disaster for us.

If, however, we keep on procrastinating because we are afraid to start a venture, there would be no entrepreneurs at all!  Wouldn't life be boring if there are no entrepreneurs?

Entrepreneurship can be the most rewarding career in the world.  That is what Skopus Business Consultants is all about.  We teach entrepreneurs how to make a career out of their initial business idea.  We teach entrepreneurs to become resilient because entrepreneurship is not for sissies.

To use a very old cliche: "Watch this space for details!"

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za