The Meirc Blog

A Loyal Customer is a Good Customer!

(... Or is he? A brief look at the Customer Profitability Whale Curve)

Companies are spending so much effort and money trying to create loyal customers that any dissenter to the assertion made above runs the risk of being ridiculed, labeled an ignorant and of having her voice being quickly smothered before infecting anyone else with that heretic thought.

 

How do you measure the impact of your Sales and Marketing decisions?

Sales and Marketing people take decisions all the time. This might seem normal, but how would you evaluate and measure the effects of your sales and marketing decisions? If you don't, sometimes the output might turn to be catastrophic on profitability margins, the product/company image, inventory levels, etc.

Universities have always concentrated at the under graduate and on the post graduate levels on scattered courses relevant to different arrays of concentration (accounting, finance, marketing, HR, etc). Rarely are the academic institutions who promoted the idea on how to think in a "transversal" way? For example: How can marketing decisions be measured or validated in financial terms? How can HR decisions contribute to improving sales revenues? In real life situations, this is all you need to understand and do!!

How often are you asked to prepare reports? always!? and I bet one of the ways you retrieve the data is by importing or copying the raw data from your system and pasting it to Excel. then you insert rows, columns, move cells, highlight cells, delete some unneeded data, then...you are lost and you start over!!!

Pivot Tables comes to the rescue. I can truly say that Pivot Tables is the most efficient tool EXCEL has developed in the early years of 1990. This tool, once you know how to use it, professionally, will transform the way you manage, analyze, and report your data. I, personally was able to prepare a comprehensive budget variance reports, by department, in few seconds, among many other dynamic reports.

The newest news is Excel 2010. It comes packed with enhanced Pivot Table tools. Have you tried Excel 2010 yet?

In the G-20 summit (the richest 20 countries on this planet), and in the midst of the financial crisis the world was facing, leaders were discussing accounting rules!! Not debits and credits! I don't think they go into that detail! But what they are demanding from the accounting profession is to come up with one set of accounting rules that all companies can use regardless of their location. OK,... what does this have to do with the financial crisis? And how would one set of accounting rules help in solving the problems of the world's economy?!

Let's go over the definitions first: IFRS stands for International Financial Reporting Standards which are established by the International Accounting Standards Board (IASB). GAAP stands for Generally Accepted Accounting Principles which are established in the US by the Financial Accounting Standards Board (FASB). Basically, these are two sets of accounting rules dominating the accounting profession globally with few differences ... few but might amount to millions of dollars!

An example of the differences is in the methods allowed in inventory costing. Last-In First-Out (LIFO) is allowed, and widely used, in the US while it's NOT permitted under IFRS - most companies applying IFRS either use Weighted Average or First-In First-Out (FIFO). In one of our accounting training programs, we apply different methods to the same data and we notice that net income under FIFO is higher by $1.5MM had we used the LIFO!

 

"Ideas are the currency of success."

Edward de Bono

Innovation, improving quality of services and products, reengineering, self and organizational change are all vital issues that begin with creative ideas. So, what is creativity? A simple definition of creativity is the ability to generate new ideas by combining, changing or reapplying existing data and ideas. What is it, then, that enables few people to have creative breakthroughs while the majority only gets creative breakdowns or paralysis? Are some people "born" with creative abilities? Or is creativity a skill we can learn? Meirc training and consulting in Dubai will answer these questions in our Creative Problem Solving and Decision Making training program in Dubai where the theme of Innovation and Creativity is covered.

 

The Marketing concept states that a firm's goal should be to identify and profitably satisfy customer needs. In Marketing Warfare Al Ries and Jack Trout argue that marketing is war and that the marketing concept's customer-oriented philosophy is inadequate. Rather, firms would do better by becoming competitor-oriented.

To illustrate their point, Ries and Trout compare marketing to a football game. If a team simplClosey identifies the goal line and moves the ball towards it without regard to the competing team, they most likely will be blocked in their effort. To win the game, the team must focus its efforts on outwitting, outflanking, and over-powering the other side. This is the case in football, war, and marketing according to Marketing Warfare. Because of the importance of the competition faced by the firm, a good marketing plan should include an extensive section on competitors.

Marketing Warfare using the war metaphor talks about the various strategies for winning. The authors have done a great job in using studies like Von Clausewitz' On War, to show what works and doesn't work in war or in marketing.  The most memorable part of the book was the fact that historically, if you wanted to win a battle, you need to have more people on the battlefield than the enemy.  The authors therefore recommend going after niche markets since the enemy doesn't have many if any people on your niche battlefield.  This led to a great saying in another book of theirs, 'If you aren't number one in your category, create a new category.'  I strongly recommend this book because the authors speak from experience and the information is something that can immediately be put into practice.

The recent Economic crunch has exposed many weaknesses in organizations. Organizations have seen their dashboard indicators turning red and they are faced with tough decisions to make. Executive teams went back to the board rooms and revisited their strategy in an effort to put plans to survive and stay in business. The Question was "what shall we do know? Do we drop our scorecards and KPIs? Which projects should we drop? Do we cut down on our work force?

For months, many leadership teams have had only one strategic goal in mind: survival. Grander visions have been forgotten. Research from Boston Consulting Group suggests that corporate hibernation only works if recessions are short, if the outside world goes back to the way it was before, and if all your competitors are equally inactive. In 2009, not one of these conditions apply.

Companies realized that they need to go back to a Quality driven culture. Showing the added value to their customers through quality initiatives seemed the only logical strategy at this time. So what quality plan should be adopted? The role of the quality team now seems to have more presence at the senior management meetings.

"MUDA" as Japanese call it is the waste in organizations. We are not talking about industrial waste here. We are talking about process waste. Service and administrative processes are full of waste.

Customer Relationship Management is a strategy that seeks to... see more engage an organization’s culture, processes and technology in analysis and interaction activities that acquire, retain and develop customers to secure long term profitability for the organization. It is a comprehensive approach that provides seamless integration of every area of business that touches the customer - namely marketing, sales, customer service and field support - through the integration of people, processes and technology. Moreover it is a business strategy that seeks to improve the company’s profit and revenue generating ability by better understanding its customers and delivering value to them.

The building blocks of CRM allow an organization to manage this cycle and use the knowledge on customers to enhance the Life Time value of the customer portfolio. No organization has perfect information on its customers. Knowledge of customers is continuously enhanced through the CRM dynamic. Much of CRM is about gaining customer loyalty: its role, within your organization, should be to attract your target customers, convert them to lifelong customers through your high level customer service and build a relationship between them and your company. Since so many pitfalls exist in the implementation of a CRM strategy, it is important to first have a clear idea of how CRM fits into your business model.

 It is necessary to examine your infrastructure with respect to your strategic needs. Examine the technical roadmap that exists throughout your organization and determine what existing infrastructure you have and what you need to get where you want to be. This involves identifying gaps in the company, defining new business processes, identifying core competencies, and exploiting them to help your company achieve its goal Where Do We Begin With CRM? Begin with an assessment of your current CRM situation and determine where you want to be and what are your limits. You can then choose the approach that best meets your company’s needs.

 

This is a first in a series of articles on Meirc's site related to Health, Safety and Environment (HSE) in the workplace. Also be sure to join the group "Together for a safer workplace" where you can share your opinions, experience and knowledge about the topic.

To Be Safe or Not To Be Safe...? This is the Question.

To be healthy you have to be safe and to be safe you have to prevent injuries of all kinds. Injuries alone cost businesses hundreds of billions of dollars yearly ($170 Billions in USA in 2007). Are you surprised? Are you afraid to get caught by surprise? Are you an employee or an employer? Whatever the answers to those questions may be, you better be safe than sorry.

Body language is a powerful concept which successful people tend to understand well.

So can you.

The study and theory of body language has become popular in recent years because psychologists have been able to understand what we 'say' through our bodily gestures and facial expressions, so as to translate our body language, revealing its underlying feelings and attitudes.