22 January 2013

Moving with the times

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Change is the only constant in life said Greek philosopher Heraclitus some 2500 years ago.

 

This observation has never been more true than for business in Australia today. The arrival of broadband, the growth in social media, the use of iPad, digital and online technology, the higher Australian dollar and the so-called two-speed economy are all changes that have impacted the business landscape. Those businesses that do not adapt to this new environment could well find themselves facing failure.

 

To survive and thrive in the shifting sands, businesses need to harness new opportunities, constantly, and understand how innovation can improve outcomes, because not all change, is good change. The first step on this journey of transformation is to analyse your business. That involves looking at your products and services; determining where your business has come from, where it is going and how it is going to get there; assessing both current and future potential competition; examining the ability to survive in the coming years and mapping out short, medium and long‑term goals.1

 

Changing landscape

Among recent changes has been the rolling out of broadband in Australia, with major and mostly positive implications for many businesses, making them more agile and responsive to their customers’ needs. Additionally, it may lead to lower operating costs and the opening of new markets, particularly in terms of taking business online with greater use of graphics, high definition video and other multimedia, plus the development of smart phone applications and products.2

 

Social media is playing an increasingly critical role for business in marketing and reputation management, while online blogs and reviews are directly influencing consumers’ purchasing decisions.

 

According to the Sensis Yellow Social Media Report published in June 2012, some 27per cent of small businesses, 34 per cent of medium businesses and 79 per cent of large businesses have a social media presence.3 The report indicates that nearly 70 per cent of social media users read reviews before making a purchase decision and on average they read about 12 reviews. However, it seems that only 24 per cent of online users actually post blogs or reviews, so reaching that small number of ‘influencers’ is becoming an important strategy for marketers.

 

Businesses have a clear opportunity to build relationships with their customers using social media as well as boosting their sales. The Sensis data shows that social media users are most interested in discounts, giveaways, product information, advice and coupons4.

 

Winning strategies

The recent announcement that discount footwear giant Payless Shoes had gone into administration sparked claims that the proliferation of online shoe shops in recent years was partly to blame. And if the example of successful online footwear company styletread.com.au can be drawn on, there could well be substance to the claims.

 

Styletread.com.au has gone one step beyond being innovative by offering spectacular customer service, albeit in the virtual world.

The company delivers for free, has a 365-day free return policy and offers express refunds. This type of service takes most of the risk out of buying footwear online and has unsurprisingly attracted a growing band of customers.

 

When Crust Gourmet Pizza Bar decided to take on the majors of the pizza industry in 2001, they wanted to create something fresh

and different.5

 

Their pizzas were healthy, the first to receive the heart health tick, and they used online and social media strategies to build the brand and grow their business. They focused on winning market share through online promotion of discount coupons and meal deals.

 

Using social media, Crust was able to harness the power of word-of-mouth as a way to promote their story while retaining their brand integrity. Without the need for a big marketing budget for traditional media, the company differentiated itself and its products and built a

loyal customer base.

 

Forging communities online continues to be one of the strongest tools Crust has in its toolkit for taking on the big pizza brands. Since 2001,it has grown to 120 locations around Australia.

 

Constant analysis

Many Australian businesses struggling under the weight of the high Australian dollar and increased competition from cheaper online global providers are constantly reviewing their business models.

The successful ones are adapting their products and services and looking ahead to the next profitable market and the most cost efficient way to reach it. Next time you review your super fund or managed fund investments with your adviser, consider which ones are truly innovative and making the necessary changes to adapt to the new Australian business landscape. As Charles Darwin observed: ‘It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change.’

 

Australian Government, 2012, <http://www.business.gov.au/BusinessTopics/Innovation/CaseStudies/Pages/Abusinessadvisorsperspective.aspx>

2 ‘Opportunities for small business and community organisations in NBN first release areas’, February 2011, Report to the Department of Broadband

Communication and the Digital Economy by The Allen Consulting Group, <http://www.nbn.gov.au/files/2011/05/Allen-Consulting-Opportunities_for_

small_business-in-NBN-first-site-areas-copyright3.pdf>, p. 8-9

3 Sensis Yellow Social Media Report, June 2012,Sensis in association with Australian InteractiveMedia Industry Association, <http://about.sensis.

com.au/IgnitionSuite/uploads/docs/FinalYellow_SocialMediaReport_digital_screen.pdf , p. 43

4 ibid., p. 5

5 M Logos, ‘The Social Media Success of Crust Pizza’,3 June 2011, Dynamic Business, <http://www.dynamicbusiness.com.au/small-business-resources/growing/social-media-success-crust-pizza.html>

The author is an employee of Verante Financial Planning in Castle Hill, Corporate Authorised Representative of Magnitude Group Limited, Licence No 221557, Magnitude Group Limited ABN 54 086 266 202.

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