Tuesday 29 November 2011

Working with the Family


Working with family members can be tough when it comes to business, but when the partnership is right, the relationship can be extremely beneficial. After being interviewed by Business XL on Family Business, RPM’s CEO and Founding Partner Hugh Robertson sheds more light on his hints and tips on working with family members, leaning on his experience working with younger brother Dom, RPM’s Managing Director.

Over to Hugh...
I founded RPM in January 1993, and my youngest brother Dom joined the company in 2000, working his way up to become Managing Director in the summer of 2009. This year, we celebrated our 18th birthday as well as winning Agency of the Year, and we are working with some of the UK’s leading brands including Diageo, BSkyB, E.ON and Heineken.

Your No.1 tip for working with family?
I think the key to working with family members is to re-set the time you have together as family as opposed to business partners, and also ensure that nothing is ever left to fester or remain unresolved. When Dom and I are in the work environment, it is the same as it would be with any other colleague. We also spend a lot of time together outside of work, not talking about work, otherwise it can really dominate the relationship.

Another is meritocracy. Employing a member of the family within your business should be done on the basis of a meritocracy and their ability, not just because you’re related to them. Luckily with Dom, he has always been more than capable and is a very admirable Managing Director.

What are the advantages of working with family?
The advantage with RPM is that Dom and I share a sense of unity, and there’s an implicit trust in both of our abilities to manage our respective parts of the business. I recently had a back operation that put me out of work for over four months. Worrying to any CEO, yet despite being out of the office for a significant amount of time, I knew Dom would help run the business with vigour and great capability, and I didn’t have to worry as much as I potentially may have done had we not been related.

Obviously, if we were a whole family working in one business, and things weren’t going well financially, then family businesses can definitely have their disadvantages. My father runs his own business, so luckily no chance of that happening.

Working with the family ensures that trust is already within the business and there’s an established sense of loyalty. Dom and I share the same values, but we also have complementary skills. Again, when you work with your brother, you already know them well enough not to have to apply the controls required when employing strangers.

Do you think family businesses are important to the UK and business growth?
Entrepreneurial businesses are important to the UK economy, and if they are family, then this is great but not necessarily the most important element. Where there is a trade involved, then I think they are important for a continuance of tradition and expertise.

Friday 25 November 2011

Conversation is King!

Human beings are communal and conversational by nature. If you ask a group of people about their interests and how they spend their free time, regardless of how they choose to spend it, it is highly likely they will talk passionately, and it will entail hanging out and conversing with friends and family. So, it isn't surprising that we’ve seen digital communities flourish in the last ten years. As a result of this, more and more brands are dedicating their campaigns to offering a ‘value exchange’ in order to draw consumers online to help build their brand communities. And the best way to do this? Allowing the consumer to contribute, interact, react, and influence the way a brand behaves. As Canadian blogger Cory Doctorow aptly says, ‘Content isn’t King. Conversation is King. Content is something to talk about.’

Online communities encourage and promote trust, mainly because we’re likely to value and believe the opinions of our peers over those offered through traditional advertising methods. Trust is becoming increasingly difficult to achieve for brands, which strive for greater transparency in their actions and communications. Websites like Trip Advisor, which is based on real-life experiences and opinions, have flourished mainly because there are active communities of ‘honest’ consumers willing to contribute, influence and share knowledge.

Perhaps more staggering is how Starbucks has prospered through brand communities. In 2008, it was facing huge pressures as sales slumped and the brand had to do something to turn around its fortunes. It took a number of steps, including creating the new branded communities, and a year later it reported 4% growth and a 200% rise in profits - a significant turnaround.

The key to any brand community is real-time communications, which require brands to listen, learn and respond to consumers, yet the challenge for brands is how they are geared up to deal with this. We’re currently helping to develop a community for Captain Morgan’s Spiced, which launched in the UK earlier this year. To ensure rapid response, we have a dedicated Communities Manager working on the project. In order to help promote the brand, we have used social media channels to take a lead role in the communications plan through a Facebook page takeover. Using Facebook, we are currently engaging the community in dialogue, running competitions and outbound eComms, driving page traffic, amplifying offline events through digital amplification as well as running Facebook ad campaigns and leading local implementation of global campaigns. Since the transition to Captain Morgan’s Spiced, the Facebook community has grown from 16,000 to over 62,000 (as of November 2011).

Brand communities are based on honesty and transparency, yet how can consumers really trust the content they’re seeing? More recently the provision of content by brands has been under investigation. The two industry trade bodies, the IAB and the ISBA, are working in conjunction with the ASA to put some guidelines in place for the ways in which brands are engaging with social media, including Twitter, Facebook and blogs. The process is being spearheaded by a consultant at We Are Social, who is helping to put together these rules and regulations. The rules set by both associations are basic and include such things as having to disclose when video content is posted on behalf of a brand onto a blog, for example. The brand will need to be completely transparent with its consumers.

The reason behind this is that more and more marketers are seeing the value in producing content to feed their communities, but the means by which this content is produced and distributed is a grey area. This year, the industry has started to uncover the fact that some brands are using questionable methods to build this content; for example, paying people to Tweet or provide editorial content. The issue with this ‘false content’ is that it clearly infects what should be a genuine experience for consumers and compromises the integrity of the brand’s whole community.

Despite this, I believe it is truly an exciting time for online communities. Brands are finally beginning to open their eyes to see social media as a long-term engagement channel rather than something that can be turned on and off, and as a result, we are likely to see more creative and varied approaches to online communities developing. We are also likely to see an increasing number of marketers demanding clear objectives and measurement for their campaigns. Online communities and social media are no longer the new kids on the block. So, just as you wouldn’t dream of creating above the line marketing campaigns without adequate measurement, social media will be subjected to the same rigor.

Tuesday 15 November 2011

Facebook Culling is on the Up, so what can Brands Learn From this Savage Trend?

It’s pretty ironic really. While brands are bending over backwards to get more online ‘friends’ to develop and grow their social communities, the average Facebook user is, quite simply, ‘culling’ theirs. In last night’s Evening Standard, Joshi Herrmann wrote that ‘culling’ friends is on the up as more of us look to settle into more meaningful networks with our friends.

I would argue that brands have something to learn from this trend. While sporting thousands of Facebook followers can certainly help to amplify your brand, contributing towards a powerful impression of industry leadership, brands need to ensure that these followers are actually ‘friends’ who will be happy to interact with you and spread positive messages about you. The last thing a brand wants is Facebook followers who aren’t engaged with their brand and merely sit there for the sake of it. They might even leave the community, or worse yet, click the ‘Remove Friend’ button. And all it takes is a click.

Just as we look to have meaningful interactions on our Facebook pages with those we trust, brands should look to do the same. What better way to build brand advocates than to engage them with insightful and relevant content? Once brands create this value exchange and a path to participation, a significant and influential community is built and sustained.

Wednesday 9 November 2011

The Retail Price War

Simon Couch, RPM's Head of Retailer Engagement, discusses the retail price war that is currently bringing major multiples Tesco and Asda to a head...

In hard economic times, consumers are after the cheapest price, exemplified by the ethos of both Asda's ‘Saving You Money Every Day’ and Tesco’s ‘Every Little Helps’, which clearly show that price comes first. To support shoppers through the hard economic times, grocers are engaged in a fierce price-slashing battle, and for the time being, the emphasis on creating an engaging, high-quality consumer experience has fallen by the wayside. Despite these rigorous, retail price reductions, however, not every retailer is putting price as a high priority. Some have other game plans. Waitrose, for example, along with the likes of Sainsbury’s, do very well to avoid going ‘all out’ on the price war, by playing up other key areas in-store, such as the staff service, quality of product and shopper experience.

It’s difficult to tell whether the price battle is really working for Asda and Tesco, because the reality is that they are always going to be competitive as per their strategic agenda. The question is how far the battle can go in its current guise. I went into Tesco the other day, and there was a bumper packet of crisps priced at 98p. Underneath, in big words, was written ‘Asda 99p’. That is seriously going to war! In this instance, consumers don’t necessarily care about the fact that they’re saving 1p on a packet of crisps, but what it does do is put immediately front of mind that Tesco is really committed to this price war. No matter how much consumers are saving, whether it’s 1p or £1, Tesco is delivering. In this case, the amount of space given to that message is a Brand Manager’s dream in terms of how clear it was, the size of it and the POS exposure.

This is how price-matching evolves, and it’s never got to this state before on this scale, so we’re entering uncharted territory. However, I believe that despite these price drops, it is in fact Waitrose that will come out best. Why? Because it isn't wholly involved in the price war and isn't changing its strategic direction. It's confidently illustrating the fact that it's not out of the ball park when it comes to cost, and it's not getting embroiled wholeheartedly in the price war. For consumers, there are no sporadic comms stating that a particular butter brand is cheaper than that at Tesco. That’s not what Waitrose is about, and people shop there for that very reason. Arguably the only price comparison done by Waitrose is its Essentials range. The pattern is that a shopper will usually go to Waitrose to buy good-quality meat or fish, but then head to Asda or Tesco to buy their essentials. So Waitrose launched the Essentials campaign, price-matching 1,400 key products.

Primarily, major retailers want to be price competitive and get shoppers through their door, yet despite this sales drive, Tesco’s performance was a few % down last quarter, compared with Sainsbury’s that was a few % up. This could be a good time for Tesco to take a good look at itself and ask whether the price match is actually working. Quite simply, it's not winning against its competitors at the moment. With the all-important Christmas trading period just around the corner, it will be interesting to see who the winners are.

The future state of the retail price war will reflect and follow the future economic state of the country. For instance, a serious focus on price-matching started when the economy dived in 2008, and now that we’re double dipping it’s becoming even more prevalent. Economically, we’ll come out of that over the next two to three years, or perhaps even longer, and when we start recovering it is highly likely that multiples will focus on diversity of product. Both Tesco and Asda, for example, will focus on becoming a one-stop shop selling everything from petrol to car insurance, to clothing to bank accounts.