How giving stuff away makes you more money

Years ago (during the industrial revolution) humanity didn't really make much. So selling became an operation around production. If you could make it you could sell it.

Move on a few decades and we started having to sell. There were lots of people making things, so producers had to find ways to shout loudly 'buy this'

The marketing landscape had changed massively from one of under supply to one of over supply.

Then we had another seismic change. People got to know and understand the tricks marketers used and so the tricks stopped working. Marketing had to work towards building relationships with their customers

Wind forward and all of a sudden the landscape has changed again. People can get all sorts of stuff really easily. The big change is that if you give things that people value away for free then you'll make more money.

This weekend I've been out of town. I found a coffee shop and a pub that offered free wifi. In a small town the pub was one of five and I chose them because they advertised free wifi. I bought drinks and food and spent time there. The next evening, when I was thinking where to go I didn't even consider the competitors. The original pub had thrown its competitors out of the game.

I did exactly the same during the day with the coffee shop. Being able to pick up my emails on my laptop is really valuable for me but for the two businesses probably cost £20-£30 per month. Nothing in the great scheme of things.

Think about the sorts of problems your customers face. Can your business give something of value away? If you can tap into this mine of goodwill then it's distinctly possible you could throw your competitors out of the game.

Why Wayne Rooney is like a chip shop

Stick with me on this one...

I was looking at all the ways that football players can leave clubs and thought how it's just like buying and selling businesses.

Clubs can choose to sell a player, can receive an unwanted offer for a player, have the player (or more likely his agent) demand a move, have a player retire or just not perform well enough.

You could choose to sell your business. Just like football clubs distributing details of players that are available (the much discussed transfer list) you could contact a business transfer agent and ask them to circulate your business details. With a bit of luck an interested buyer may turn up and eventually a sale price (transfer fee) gets discussed.

Another business could see yours and think that it looks like a good idea to buy. Maybe it fits in with their offering by complementing or providing a competency they don't have, or maybe they just like the fact that it's very profitable. They contact you and ask if you fancy selling in exactly the way the football clubs CEOs will talk such as in the Gareth Bale transfer saga.

Players these days have a coterie of agents and advisors. Often they get paid when a player moves or negotiates an improved contract so they got to the players current club and ask for just that. The business owners could get exactly that in the form of an MBO. The managers of the club go to the owners and ask to buy the business. Hopefully in the business example the negotiations will be less fraught though!

Sometimes, sadly a player just doesn't perform well enough. The club spend time and money trying to understand why. They employ sports psychologists, trainers, dieticians all to no avail. Finally they allow the players contract to expire or sell them on cheaply or for no fee (or even with a reverse dowry). A business that isn't performing may go through the same ritual. Consultants, accountants, business coaches are all deployed but in the end the owning business just feels it's not worth pumping good money after bad.

Of course some businesses just reach the end of the road. The brand is tired, the people bored and lacklustre and the brand just gets put out to grass in the same way that a striker who gets to his mid 30s retires to own a pub or become a pundit on Sky.

Although this piece started out a little tongue in cheek it's surprising that the similies are pretty much all valid.

Have you got another way that a football club is like a business? Maybe you have another sport in mind.

The more I practice

I heard a story once...

Arnold Palmer* was playing in a major when he hit a drive into a bunker on the edge of the green. He strolled up, selected a sand wedge, chipped the ball out of the bunker onto the green and it rolled neatly into the hole. Behind him a spectator muttered something about him being lucky. Palmer turned to the unfortunate chap and said 'you know what, the more I practice, the luckier I get'.

It's interesting because recently I've been getting that feeling. Not about golf (I'm a lousy player) but about work.

The more effort I put in, the more background reading I do, the more I talk to people and the more training, testing and modelling I do, the better things go.

Sometimes I can see people giving me the old 'why is he asking that question? Of course we've thought of it.' But the truth is that you can never assume that people have thought the same way you do and checked what you would have.

In the future I'll be writing some of my findings from the world of project management. It'd be cool to think that maybe somewhere in the world, someone's project went a little bit smoother because of a lesson I learnt on a tiny project in a little company somewhere in Dorset.



* Of course I've heard this story recounted many times since. Often it's a different golfer involved and the wording is slightly different. Maybe it's true, maybe not. Funnily enough this doesn't seem to matter because the point is the same. Practice, preparation and effort all make a difference.

I knew I liked him!

I'm addicted to The Great British Bake off.

I love baking (as a lot of people at previous workplaces know) and the bake off has been brilliant inspiration for new recipies and techniques.

It's also a reality show that in general doesn't indulge in wholesale bullying of the contestants or use their difference as a stick to beat them with.

My fervent hope is that ITV see that there is a way to make great telly that doesn't end up with the people involved having nervous breakdowns.

Anyway one of my favourite contestants on the new series is Ali. Then i find out he's an Alumni from my own university.

I knew there was a reason i liked the guy - go Ali!

Leicester graduate to take part in The Great British Bake Off — University of Leicester

Producing content is what I do. That's why businesses that need a good blogger come and find me on my content marketing website Yellow Tomato. 

Numbers and levers

In the second of this series I'm looking at why you should always present a number with a lever attached.

When you present numbers to a director or a manager what do they want?

Generally if you ask they'll say words like 'clarity' or 'understanding' but in fact what they are really after is the information to make a decision.

The question they are really asking is 'should I pull this lever'.

Levers can be all sorts of things - 'do I increase my adwords spend?', 'Should we buy more stock?', 'Where should we invest our surplus cash?'

What's important is what drives your business. There's actually very few drivers for most businesses. British Airways for example found that the one Key Performance Indicator (KPI) for their business was the gate turnaround time. If they turned their very expensive aircraft round quickly they were able to run more routes thus increasing their profit.

The question you need to ask is 'what thing drives my business?' There may be more than one of course but it's unlikely there'd be more than say half a dozen.

Some examples of drivers

If you run a shop then a key performance indicator could be the sales per square foot. If  you change your stock mix, increase your prices or bring in new lines then it's likely that your sales per square foot will be affected. Make a change and watch how your KPI changes. You then know whether you should pull the lever that says 'buy different stock'.

A bakery might monitor waste. If you throw a lot of bread away then it suggests you're either not baking what people want to buy or simply baking too much. It tells you to pull the lever marked 'change your bake plan'.

A transport company may monitor MPG. When the vehicles start using more fuel then they are either worn and in need of replacement or a service.

Of course there are things that really aren't KPIs with levers attached. Monitoring your rent is usually not productive. Most firms rent doesn't change month on month and because they are tied to a lease there's little they can actually do about it. No lever. Reporting the rent is simply confusing the picture.

In summary then the figures you report need to be something you can affect by your behaviour. A lever is something that is not only variable but can be affected by management action and all figures reported must have a lever attached.

Crossing the Ts

Sometimes things go right.

In my job there are often times when it gets very tedious. You spend a lot of time crossing Ts and dotting Is.

That's because it's all about detail and preparation. If you put the groundwork in then nine times out of ten things will go well. If you don't then you're in the lap of the gods.

Today things went well. We spent time getting detail right, practicing, testing and finally doing.

It was a boring job - migrating a clients chart of accounts from an old state of affairs to a new, shiny, tidy version.

The best compliment was when the users looked at me as though I was mad when I spent time walking the floor asking if everything was OK. 

 After all - why wouldn't it be?

Everything wasn't perfect

This weekend we visited the Kneedeep festival in Cornwall.

It's a weekend of indie bands, beer and food and interesting because it's non-profit, run by volunteers and not perfect.

We kind of expect everything today to be right. Deliveries on time, Food at the correct temperature, TV on demand, that sort of thing.

So when something isn't perfect then we get irrationally mad. 

But kneedeep showed that not only can people manage when things are a bit haphazard but also that we haven't lost the ability to improvise and adapt.

It rained several times during the weekend but it didn't stop people sitting and enjoying the music, they just put on waterproof, ripped holes in bin bags and put up umbrellas.

The music started at 2pm and there wasn't a whole lot else going on otherwise. Some of the guys got a ball and organised an impromptu game of football. Jumpers for goalposts that sort of thing.

Jumpers for goalposts

There were some great bands there. There were some not so great bands there. Some of them gave the performance of their lives, some didn't. They were all cheered though. The good feeling sat around the camp like a benevolent budda, emanating happy.

One of the great bands at Kneedeep

The lack of plastic, perfectly produced signage was evident and the festival was all the better for it. People were left to organise themselves and they managed perfectly well without a health and safety consultant to guide them. There wasn't an 'official guide' but attendees still found the beer tent and no-one told us to have a good time, but we managed it just as well.

The weekend gave me lots to think about but overall the abiding memory is of a bunch of people in a field determined to enjoy themselves.

If you're not the customer - you're the product

I took the title for my latest post from this blog by Seth Godin here Seth's blog

He makes a very good point that if you are getting something for free then you are probably the product.

We hear a lot in the business world about 'monetization'. In other words how to take something and turn it into cash.

You can monetize a box of widgets by selling them to a customer. You can monetize your addressbook by selling the email addresses and facebook, linkedin, Google+ and all these other lovely free services monetize you by selling access to you.

In this lovely connected world one of the problems we face is actually only being connected when we want to be. I fully expect to see companies sprouting up offering to deconnect you so that you aren't marketed at 24/7.

Of course I'm not sure how they'll monetize that service.

I love being connected

I put an entry into my calendar on my PC at home, Opened up the calendar when i got into the office, checked it on my tablet when i was in a meeting and on the way to the meeting opened up the entry to check the address.

Connectivity is great.

I no longer have a pc at home, I have a laptop connected to a NAS (a little tiny storage box) on which I do most of my work and a tablet that I use to consume information and that I have started to read books on.

My TV is connected to the NAS so I store all my photos in the box and view them on the TV. My CD collection is slowly being transformed into little 1s and zeros and put onto the NAS so that I can access it from any of my devices.

Having stuff connected makes life so much easier.

Take time to remember where you've been

These are my tomatoes. I took the photo so that in the winter, when it's dark and miserable I could look back and remember that it won't always be like that.

It reminded me of a time when my wife and myself were running a business together. In the 3 years since we'd started we'd increased the size by 5 times and had improved the business no end.

But I wasn't happy. I can't remember why but that day I had a right mood on. Nothing was right for me that day. The website wasn't working as well as I wanted, sales weren't good enough for me, the staff training programme wasn't going well.

Then Wifey told me to stop, pause and look back. Think about where you were, look at all you've achieved and realise that actually things aren't that bad.

Yes we should always strive for more but once in a while it's worth thinking about where you've been and giving yourself a pat on the back.

It was a great lesson (the missus is pretty good like that) and it cheered me up no end. The business went on from strength to strength and I never forgot in my quiet times just to think back to where we started and look at how much we achieved.

6 Golden rules of presenting numbers

If you're put in charge of presenting a lot of numerical data to a group then what can you do to make sure people see what you need them to see?

@Joey7Barton is always listening

I have always been sceptical of the value of Twitter, after what of value can be said in so few characters? Who would be interested in what I have to say? However through the encouragement of the Leicester Award for Employability, and due in part to the enthusiasm for the medium of a business colleague I decided to take the plunge and open an account.

It would be fair to say I had low expectations and accordingly set myself simple goals for the project; to better understand how Twitter is used and how it could be useful for me.

Being a technically minded person, in the past I have found it helpful to understand how the mechanism works and then concentrate on content and I used the guides provided through the Award to understand how the platform was organised.

The first step was to find some people to ‘follow’. This was fairly easily accomplished as twitter has become de riguer for any high profile celebrity and I found many people that proved suitable. I set criteria in that I felt it would be less productive to follow random people so I chose a variety such as prolific writers, comedians and sports men and women. I decided to follow not only those who were celebrated for using Twitter but also those who were berated for their outbursts. I felt that this would give me a greater understanding of what not to do!

What I found was that Twitter has its own rhythm and cadence and it’s an art getting your point across in so little space. I also discovered that despite its simplicity, the medium can provide valuable and up to date information but at the same time its immediacy can be destructive as some footballers have found out.

The surprising thing was that I gained followers. Not many, but some people I followed, followed me back and some people I suspect were using a paid for service to follow a lot of random people simply to gain interest and some were people that I actually knew.

What became clear was that the medium is a busy and vibrant place where getting your voice heard is more than about simply shouting ‘me too!’

Twitter was all at the same time everything I thought it would be and nothing like it. It can be a place full of trolls with only negative thoughts but also people with good hearts and intentions. As someone famous must have once said - all of human life is there.

It is also plain to see that it can be a very useful tool for business to interact with their customers and to this end I will start to use Twitter more, initially on a stream of consciousness basis but also late moving towards a more targeted audience with a specific message. This should help with the development of my own business as it will allow me to speak directly with my customers. I’ll use it with caution though as @Joey7Barton has taught me you need to be careful what you say as someone is always listening!