Monthly Archives: August 2014

Joining Australia Post’s “National Conversation”

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In a previous blog, I offered some thoughts on the possible digital future for AusPost. In response, I have been contacted by one of their social media consultants, drawing my attention to the “National Conversation“.

First, I acknowledge that AusPost is attempting to have an “open” conversation with customers, but I don’t see how this is really helping, other than generating a range of (conflicting) opinions, with little cohesion around the key issues. Participation rates in the Topics to date has been very erratic (in terms of numbers, and geographic distribution).

Second, I have read CEO Ahmed Fahour’s latest address, and frankly it did not inspire me. Basically, it was a whinge about the decline in letter volume, and the “challenges” of the Internet (which, as he says, has been with us for 25 years…. hardly a new event!) I also think there are some factual inaccuracies in Mr Fahour’s assumptions: I don’t believe that Australians are any less digital citizens than their OECD counterparts – they have always been reasonably early adopters of new technology (as evidenced by the number of smart phones and tablets). Where they have been slow is in moving to online services, but this is in large part due to poor Internet services (notoriously slow connection speeds and restricted bandwidth, and exorbitant access fees), coupled with a paucity of reliable online platforms – which is ironic given the push towards eGovernment, eCommerce and the digital economy around 1999-2001.

Third, and staying on the topic of eCommerce, the one recurring theme that does emerge from the National Conversation so far is the high cost of sending small parcels. I agree with some of the feedback that it is often cheaper (and quicker!) to order consumer items from overseas online retailers. Shouldn’t Australian consumers expect to benefit from the economies of scale to be achieved from a growing parcel business?

Finally, my previous blog suggested that digital transactions are the future for AusPost (while acknowledging the need to maintain its statutory obligations for letter delivery) – but apart from e-mail and bill payments, Mr Fahour’s address was rather silent on this point. That scares me, as it suggests a lack of vision for an integrated digital strategy. After almost 5 years in the job, you’d think a few more ideas would have emerged by now.

(Afterthought: maybe AusPost should check out what Shomi is doing – a local start-up with some smarts in linking the physical and digital worlds.)

C-Suite in a quandry: To Blog or Not To Blog…

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Should CEO’s be on social media? That is the question many boards, PR advisers, marketeers and C-Suite occupants are faced with these days. Partly driven by existentialist angst (“I Tweet therefore I am”), partly a desperate act of “me too”, many CEOs are in a dilemma about how to engage with the new media.

While it might sound like a good idea to have a CEO blog, in the wrong hands or used inappropriately, it can come across as inauthentic, too corporate, or just crass.

The use of CEOs as “personal brands” is nothing new – think of Richard Branson, Anita Roddick, Steve Jobs, Jack Welch etc. And while social media has the potential to extend the CEO’s reach to customers, shareholders and employees, it also abhors a vacuum. If companies do not take control of their public persona, their customers and employees (supporters and detractors alike) will fill the void for them.

I am seeing this debate play out in different ways:

First, there is a difference between a personal brand and a business brand, so it is important to establish boundaries while recognising how the CEO’s personal standing can be used effectively to complement the corporate presence.

Second, having the CEO recognised as an expert can enhance personal influence but may not directly benefit the company if it is not relevant to the business – does Warren Buffet’s prowess on the ukulele boost instrument sales, or help the share price of Berkshire-Hathaway?

Third, if CEOs do choose to outsource their blog content, make sure it is genuine and aligns not only with the CEO’s personal values but also with those of the company, customers, shareholders and employees.

Finally, CEOs or Boards struggling with this topic, or those worried about whether to take the plunge into social media would be advised to consult Dionne Kasian Lew‘s new book, “The Social Executive”, which is sure to become an essential guide on the subject.

 

 

 

Defining RoDA: Return on #Digital Assets

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How do we measure the Return on Investment for digital assets? It’s a question that is starting to challenge digital marketers and IT managers alike, but there don’t appear to be too many guidelines. Whether your social media campaign is being expensed as direct marketing costs, or your hardware upgrade is being capitalised, how do you work out the #RoDA?

In most businesses, measuring the expected RoI of plant or equipment is usually quite easy: it’s normally a financial calculation that takes the initial acquisition price, amortized over the useful life of the asset, and then forecasts the “yield” in definable terms such as manufacturing output or capacity utilisation.

However, when we look at digital assets, many of those traditional calculations won’t apply, either because the usage value is harder to define, or the benchmarks have not been established. Also, while hardware costs may be easy to capture, how are digital assets such as websites, social media accounts, software (proprietary and 3rd party) and domain names being reported in the P&L, cash-flow analysis and balance sheet?

Sure, most hardware (servers, PCs and physical networks) can be treated as capex (e.g., if the purchase price is more than $1,000 and the useful life is 2-5 years). But how do you make sure you are getting value for money – is it based on some sort of productivity analysis, or is it simply treated as fixed overhead – regardless of your turnover or operating costs?

As we move to cloud hosting and #BYOD, many of these assets utilised in the course of doing business won’t actually appear on the company balance sheet. Yet they will have some sort of impact on the operating costs. Most software is sold under a licensing model, where the customer does not actually own the asset. (But, if the international accounting standards change the treatment of operating leases longer than 12 months, that 2-year cloud hosting fee might just became a balance sheet item.)

I was once involved in the acquisition of a publishing business that was converting legacy print products to digital content. Not only did they capitalise (and amortize) the servers and the conversion software, they also capitalised the data entry costs (using freelance editors) to avoid the expense hitting the P&L. Nowadays, that’s a bit like putting the HTML coding team on the balance sheet and not the payroll…

In some cases, the costs associated with maintaining an e-commerce website or registering a URL, will remain as overhead or operating expenses. But over time, businesses will want to have a better understanding of their RoI for different online sales and digital marketing channels, especially if they have been investing considerably in their design, build and maintenance. Measuring online visitor data, customer conversion rates and average yield per sale, etc. are becoming established metrics for many B2C sites. Having a good grasp of your #RoDA may just give you a competitive edge, or at least provide a benchmark on effective marketing costs.

 

If it seems too good to be true, then it must be!

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As someone who commissioned one of the first books on advance fee fraud (sometimes called ‘Nigerian 419’ scams) nearly 20 years ago I find it staggering that people are still being sucked into these ‘get rich quick’ schemes.

While ‘advance fee’ is a particular type of bank fraud, those spammy and ubiquitous e-mails offering you fantastic sums of money in return for simply providing your personal details (and/or a small upfront payment and the ‘loan’ of your bank account) are among the more common form of financial scams on the Internet.

In most cases, the perpetrators (often posing as government officials, lawyers, bankers or accountants) claim to have unique access to enormous funds which need to be transferred out of their country of residence – usually in the context of foreign trade, bank deposits, bequests or international loan transactions. More recently, I have seen attempts to ‘liberate’ the proceeds of deceased estates where there is no legitimate heir.

Advance fee fraud scams should seem obvious by now, and hopefully recipients are wiser about these dubious offers to make them wealthy beyond their wildest dreams. Yet, I can’t help feeling these predatory fraudsters are merely an extreme version of the contemporary snake oil salesmen that inhabit the business world today.

This thought occurred to me, as I was reading about how one self-made millionaire had built his fortune – and, just by following his ‘system’, anyone could do it too. The images used to accompany the article emphasised the material trappings associated with this wealth, as if to reinforce the message: “You too can have a lifestyle like mine.”

Other variants of these ‘get rich in 10 easy lessons’ programmes are business ownership opportunities (mostly outsourced telesales operations), seminars on how to flip real estate (some of which are now illegal unless provided by licensed financial planners), and courses where you learn to build websites for clients (but your only customers end up being people who want to learn to build websites for their clients….).

Call me sceptical, but many of these ‘systems’ are merely pyramid sales schemes (sorry, MLM plans) masquerading as ways to “Be your own boss and kick the 9-5 routine”. Sure, some of these programmes may be free to access, but the likelihood is that the person offering ‘valuable’ business insights on how you can make your fortune is making their money from ‘selling’ the programme to you (via third-party advertising, sponsorship, speaking engagements, etc.).

If these insights are so valuable, why are they giving them away?