3 Reasons for Running Sales Campaigns

Context

A friend the other day suggested that he drop his prices for a few weeks and I questioned what the rationale was behind the intended price drop. I wanted to check that there was a valid reason and it wasn’t just a knee-jerk reaction that led to the idea of creating sales campaigns.

Sale on green
Sale on green

I only know of 3 reasons for sales. I’ll define sales as campaigns based on a short-term price reduction, such as end of season sales, January sales, etc. To be clear, I’m avoiding discounting and similar activities to keep specific customers happy and/or make the sale which I see as a different set of activities.

The 3 Reasons for Sales Campaigns

1: Due to Inaccurate Estimates

The provider chain (including the parts supplier, manufacturer, distributor and/or retailer and any combination of the above) has inaccurately estimated the amount that customers will buy at the RRP. So they need to shift stock rather than have it build up in the warehouses or showrooms. This sometimes occurs because a new model is coming out or because the weather was as predicted (and so not as much ice-cream was sold the week before). The answer could be that the MRP/RRP was always too high for the market and so the price drop is, in effect, a reduction to a more valid price that the market can sustain.

2: To Acquire Customers

Another reason for limited campaigns is as the basis for lead generation in terms of selling nearer to cost or at a loss to acquire new customers. A reduction during the campaign can lead to a long-buying customer that otherwise could have been tempted by competitor offers. The typical view is that a the price of the reduction is vastly outweighed by the long-term revenue from the customer. However this should be validated in your own organisation. In some sectors, customers are increasingly becoming used to jumping from competitor to competitor, getting the new deals available only to new customers.

On that subject, it is also worth considering the aspect on existing customer. Some may feel maligned or forgotten, depending on how important the price reduction would have been to them.

3: Short Boost

To create a boost in what customers are buying for a short period of time. This could be to alleviate a cashflow issue, e.g. to avoid company administration or pay annual tax bills, etc, or could be to alleviate another pressure, e.g. warehouse needing emergency repairs so some stock needs to be removed (and sold) rather than stored. In the case of cashflow, this could have been considered as a subset of (1), in the money is the resource. However considering many of the instances requiring short term boosts are unforeseeable, the boost is instead intended to be used as a stabilising factor.

4: Shift unused resources

In most industries, there are resources that do not generate revenue if not  being actively used, but the companies need them available in case of larger contracts. For instance, telcos provide ports to corporate customers, the number is static so spare, unused capacity could be packaged into a campaign. Similarly, larger consultancies operate a bench (usually quite lean) with consultants who are not actively being resold to clients. However this this is just another form of (1). Had the company planned better, then these resources wouldn’t be spare. So we remain with 3 reasons.

Further Thoughts

The better the company at predicting and responding to the future needs of its customers, the fewer sales campaigns it will require. This does require the company to act on those forecasts.

The issue with (1) is that while it makes sense, there should be an associated activity. This secondary activity should be to look at whether the assumptions in the original plan are accurate in hindsight and whether they should stand for future forecasts. For instance, if you’re reducing your price to meet the market expectations, then actually that’s your price, not your originally-inflated price.

So you’re about to run a sale, which reason are you using?

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Efficiency Through Motivation

Efficiency Through Motivation

I started an Instagram channel a while ago. I wanted to start generating an audience for my forthcoming course on Efficiency Through Motivation. I didn’t want to just post inspirational quotes; there are plenty of those channels already. What I wanted to do was to help people explore business architecture and strategy through asking questions of where they are at the moment. I’m using the images as the initial thought-provoker then writing related commentary, often in the form of prompting questions. Go have a look at EfficiencyThroughMotivation, does it work for you?

Actually, better than tell, how about you let me know what you think of the idea? Or even what stage of business you’re at at the moment, what are your struggles and how do you think you’ll be resolving them? You can reach me at Contact Us.

How many objectives do you set yourself each day and how many objectives do you set for your organisation? Are those objectives related?

A photo posted by EfficiencyThroughMotivation (@efficiencythroughmotivation) on

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Enterprise Architecture in Startups: Is it relevant?

Ludo Board for depicting strategy
Ludo Board

Practitioners of Customer Development, Lean Startup and Enterprise Architecture can all learn from each other. But they shouldn’t enforce their views on each other as there are some incompatibilities. Let’s see how enterprise architecture in startups can exist.

Background

The Startup culture and methods have largely been defined by Steve Blank who wrote The Startup Owners Handbook and later, by Eric Ries who wrote Lean Startup. Both of these consider how newly-created companies can grow quickly and in the right direction for their founders and customers. Many authors and speakers followed, but for this article, we’ll mainly focus on these two.

Enterprise Architecture (EA) functions can be found in many large, mature organisations that have a need to get a grip on their ICT* landscape. Continue reading “Enterprise Architecture in Startups: Is it relevant?”

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Designing for Everyone

Crowd of lego people
Crowd of lego people

Whatever system, process, technology we’re implementing, shouldn’t we be designing for everyone? Or at least everyone in the target customer segment?

Background

In the last couple of weeks, I’ve read a number of articles that have consolidated and made me reflect on my thinking about designing for disabilities and what counts as normal.

Having spent a number of years working in the health and social care sector, I’m well-versed in the practicalities of working with people with disabilities. But I still hate the phrase “people with disabilities” and every other similar phrase I’ve ever seen. I don’t like the word inclusion, not that I don’t like the concept itself, but that I don’t like that the concept has to exist. Hence the title of this article as “Designing for Everyone”.

What’s an average person?

I read The Atlantic’s article on how we’ve ended up with a definition of a normal person. That’s at the crux of a lot of the disparity that we can see in the thinking of a lot of designers; they design for the average person or people similar to themselves. By using the term designer here, I’m not necessarily thinking of an artist or a creative, but rather the person responsible for delivering a changed process, a changed organisation or a changed way of working. They may have a creative background, but often are from their own professional background, e.g. in the front-line work or a change management professional. Fortunately, a more creative influence is coming into the change profession, for example we’re seeing newer methodologies such as Design Thinking, Service Design and Inclusive Design.

The problem with most of these approaches is that they develop solutions for the average person. There may be several average people in the target. These personas should have been based on the likely customers that the service wants to attract/serve. But considering how many conditions and disabilities there are in the world, there’s no way to account for all of them. Instead, we’re back to averaging again and possibly some Pareto analysis to account for 80:20 of the target population. That still leaves 20% who are not included in the thinking behind the design.

And that’s part of the theme of the article; that by defining a normal, we start to react towards the average as the ideal and the non-average as divergent.

How can we be completely inclusive?

Microsoft have released their Inclusive Design toolkit. The start of the toolkit is a touch simplistic, especially if you’re worked in health and social care, but it gets interesting part-way through. I’m also aware that the beginning portion could still be a incredibly valuable education source for those not used to having think from this perspective. So for that reason alone, I’m grateful to Microsoft for having released it to the world.

But more than that, there are a few nuggets of quality information in that method that I haven’t seen written down anywhere else. I’ve had to reign in proposals by pointing out difficulties of interacting in the proposed manner, so the 2 points below resonate with me.

The first is the potential to abstract away from individual conditions and dis(abilities) to perform tasks and instead focus on the interact between the person, the technology and the environment. That way, you can focus on resolving issues or improving the interaction between the person and other people in the context of the environment and the technology used.

The second is that disabilities do not need to be permanent. There’s a description of a spectrum from permanent through temporary through to situational. And there are more people in situational or temporary with difficulties than with permanent disabilities.

I’ve cropped the slide here and clicking on the image will take you to Microsoft Design Practice.

Disability Spectrum showing difference between permanent, temporary and situational disabilities
Disability Spectrum

How do we include views of everyone?

This is an old source for me, but one that I still point people to when they’re thinking of how to approach their change programme. Beware though, it only becomes inclusive if you included a wide range of people in the interviews and in the service design. It’s a concept of Experienced-Based Design that I’ve seen from the health sector. It’s the best example of a co-production/co-design methodology that I’ve seen.

There are two sources for this: The King’s Fund and the archived NHS Institute for Innovation and Improvement.

Conclusion for Designing for Everyone

Implementing changes for people with disabilities is difficult to achieve since you’re already on the back foot with that perspective. We can see this by the difficulties involved in making websites accessible when that’s been added as an afterthought. Instead, by bringing the focus on a more inclusive design up-front in the process, we have the opportunity to design changes that suit many more people.

Above, I’ve listed a few articles and methods that could help influence others around you. The main item to take away concerns perspective; anyone involved in change has to be able to shift perspective to include that of all customers in the target segment.

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Stakeholder Analysis

This is just a brief introduction to a classic method for performing stakeholder analysis. It’s a simple concept and I’m including it since it’s another good example of a 4-box model.

To misquote Helmuth von Moltke the Elder:

No project survives contact with the customer

Background

Every change activity has to deal with people. Whatever you’re planning, you’ll affect some people more than others and some of those people you affect will have a greater opportunity to influence your progress.

Continue reading “Stakeholder Analysis”

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When is it Innovation?

The terms innovation and invention are thrown around with abandon. This is rife in the startup domain where the innovation is often relating to a business model and in ageing corporations where innovation is being used to revitalise the organisation. But when is it innovation? Or could we actually be thinking of invention, improvement or creation instead? Continue reading “When is it Innovation?”

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An Example of Bad Facilitation

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The Change Stand-off in Innovation

Circular Star Pattern by Anna Anikina
Circular Star Pattern by Anna Anikina

For a long time now, I’ve had the view that we only have so much time to change an organisation before the organisation changes us. I’ve seen it happen with dynamic people that become subdued over time as they encounter obstacle after obstacle, resistance, red-tape and other forms of organisational resistance to change. Maintaining innovation, or rather the ability to innovate and to generate innovation in a client, is key with external consultants.

Background

In reading this article today on Why Outsiders are the Most Innovative People  adapted from work by Scott Barry Kaufman and Carolyn Gregoire, I was reminded why it’s important to introduce a fresh perspective.

I’m independent in that I’m not tied to any company or organisation and I enjoy what that brings to both me and my corporate clients. Yes, I’m prepared to challenge what client staff have accepted as normal over time. It’s the response to that initial challenge of the status quo that gives me an idea of how well the planned change activity will progress, or at least how much commitment we should expect to receive from client staff.

Continue reading “The Change Stand-off in Innovation”

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When is the Right Time to Change Your Mind?

When is the Right Time to Change Your Mind?

Reflecting
Reflecting

You have many opportunities in life and business to change your mind. Each of us has many opportunities, but we don’t always take those opportunities. We may be conforming to social constraints and expectations or don’t want to risk appearing inconsistent by changing too often. Let’s look at a non-serious example and extract nuggets we can apply in a business context.

1) The Background

I’m in a situation right now where I’m having to re-evaluate my aims. Fortunately it’s not a serious situation and there are a few parallels to my professional life. I play guitar and I own a few guitar amplifiers. Each guitar and amp has its own tonal identity and quirks. I pick the right tools for the job; playing in a 60s Motown/soul band requires different guitars and amplifiers than playing in an 80s hair metal cover band.

At a gig at the beginning of Summer this year, I played using a very nice amplifier and it sounded awesome with the band. I really enjoyed how it sounded and I probably played better because I was comfortable that it did the right job.

2) The Hypothesis

I thought that I could use the same amplifier with a few changes in my set-up (i.e. a different effects pedal or two) and I would again have an awesome sounding rig, but this one would be suited to the 80s hair metal cover band I’m currently playing in.

Two things to learn from this: Continue reading “When is the Right Time to Change Your Mind?”

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Applying Lean Startup in the Public Sector

Yesterday, I presented at #Leanconf 2013 in Manchester. It was the first Lean Conference covering Lean Startup in Europe. There was a great energy to the 2-day event with a variety of planned and unplanned talks plus lots of opportunity to network without the usual tradeshow conference feeling of being stalked by sales managers.

I don’t think I’ve seen a community spirit like that in a long time; every attendees helped someone else no matter how far along their own ideas were.

Pivoting as used in Lean Startup in Public Sector
Pivoting as used in Lean Startup in Public Sector

In the spirit of the energy that I encountered at the conference, I’ve placed the slides on slideshare. If you download the presentation, you can read the notes which will help you make more sense of the slides. Hopefully the video will be online as well soon. When it is available, I’ll update and post a link to it. The slides are at bottom of this article.

Background to the Programme

The programme I discussed in the presentation was a 2+year programme with a large city council in England. The programme was internal to the portfolio that handled Adult Social Care. It had a £1m+ budget with a team ranging from programme manager, business analysts, data analysts and communications officer, plus a governance structure and other associated stakeholders.

The aim was to make Adult Social Care more efficient, by removing waste, focussing on flow and reorganising around the value to the customer. All typical lean concepts. We did this with a mixed method that I’d developed specifically for this client. The method merged elements of Lean with Lean Startup with DSDM and Theory of Constraints, all under a typical local authority governance framework using  Prince 2.

The scale of change was to alter the way of working of 200-300 social workers/care managers, their team managers, their business support plus associated teams. Most were involved in the change and took the opportunity to steer the change in ways that would benefit their service users. Additionally partner teams (e.g. those responsible for 1000+ support workers within the council, NHS staff, payments and contact centre staff) were brought into the process and contributed to the changes where possible.

Customer Development in Social Care

Due to the time available for the talk, I didn’t discuss Customer Development. I’d like to address that here. Firstly, my customers and those of the programme, were the workers on the frontline of social care. However, we also had a duty to their customers, i.e. the service users of the city and, wider still, the overall population of the city.

We used common Lean and Six Sigma techniques (e.g. Kaizenblitz, Voice of the Customer, Gemba plus interviews, workshops, etc) for understanding the wishes and activities of the frontline workers. The default position was always to go and visit the workers where they worked including a visit out to service users where possible and where permitted. There was no “ivory tower” mentality and as little desk-based research as possible.

I did want to get to the wishes of the end user, i.e. getting the answers to what mattered to the service users. We were able to do this through a service user forum and similar activities. Just to clarify, the forum is actually a real meeting, not an online forum. However the typical customer-development approach of “get out of the building” isn’t necessarily a good idea in this case. The reason is that any change has to be ethically sound; it can’t introduce discrimination nor can experiments (or MVPs from Lean Startup) that make the situation worse for those on that trial path.

The ethical dilemma is exacerbated further when you consider the concept of equitability in that any change has to be able to be applied to the entire population of service users if appropriate to them. So if you make a change to services in October, you’d better think about how you’re retrospectively going to apply those changes to service users referred back in April onwards. That could be as simple as a rule stating that they’d change at the next review point or it could be a specific project to apply it now.

A good example of the fundamental ethical issue can be found in the simple concept of asking customers “what can we do to improve?”

I love that question; it encapsulates the whole point of speaking to customers about what they want without biasing them towards a particular solution. It usually turns any negatives about current experiences into positive actions for change.

However, frontline staff wouldn’t want to ask that question of their service users in all circumstances, e.g. those with a current likelihood of being violent, those recently bereaved or in any situation where the service user or social worker is likely to come to harm. That means that the results from a survey of such a basic question would already be biased.

Similar nuances were found in almost every typical method for achieving customer development, whether phone surveys, online questionnaires, paper-questionnaires, focus-groups, questions tagged onto the end of a visit, etc.

Now, as mentioned in the slides, greenfield opportunities such as those found in newly-commissioned projects whether within local authorities or within NHS CCGs (Client Commissioning Groups) are ripe for Lean Startup and may benefit from a more thorough application of Customer Development.

What Messages Can you Take Away from the Presentation?

  • That you can successfully apply Lean Startup in the public sector
  • That if you can do it in local authority (which is about the worst-case scenario for successful implementations), then it should be implementable in other large, existing organisations, whether private or public.
  • That you may not benefit from applying all of Lean Startup; the corollary is true in that you can benefit from using some elements of Lean Startup. It depends on what you are trying to accomplish.
  • That the behaviour of staff (inherited from the culture of the organisation) will likely be your biggest obstacle.

The Slides

 

Any Thoughts

I’d like to hear your comments, so leave a comment below or contact me

 

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