The Pit - IMI Trust

You are seeing the world of business revolutionise right before your eyes!

Business is not about building databases anymore, it is now about building networks or communities. It is taking what is so powerful offline and utilising the technology available to create networks online.

It is no longer about selling your customers, it is about educating them and providing them with a platform to contribute to your business.. The more you educate and inform, the more loyalty you attract. It is about involving them in the community which you are developing, and allowing them to be active within it.

Advertising platforms allow marketers to target their customers, in ways which 10 years ago… were not even thought of. The way consumers think is now in terms of ‘keywords’. Companies like Google, take an approach to advertising which I have never seen before. That is… the better you are at targeting your customer, and the better you are at relating your text to your customers desires… the cheaper your advertising rates.

For business, sites like LinkedIn have gone from strength to strength. Facebook is now evolving at an amazing rate and astonished the business world when Microsoft invested US$240 into the company for a minor stake. This investment valued the company at US$15 Billion.

Google is on the verge of cracking $700 a share, and it’s aquisition of Youtube has proved wise, with it now being the platform of expression for the new generation. Politics has seen a rapid change, with a strong focus on capturing Youtube’s audience to promote their message.

Now we are seeing Australian politicians John Howard and Kevin Rudd go toe to toe, utilising Youtube and Myspace as their platform.

Promoting your business is now more complex and strategic than ever. Those companies that don’t advance with the changes, will be left behind by the companies that adopt the Web 2.0 and Social Networking models.

How are you utilising Web 2.0 and Social Networking in the growth of your business?

Time to get things off our chest…

It is our experience to steer clear of search engine marketers who boast badges with the Google AdWords Professional qualification.

Let’s be clear.  We, at IMI Trust, love Google and so should you.  It is the reigning champion of search and rightly so…however…

The Google AdWords Professional qualification can be earned if you, as a marketer spend $1,000 per month with Google.  Some people spend much more than this in a day.  Not because they are clever, or skilled in search engine marketing, but because they see the value in this type of advertising.  As they have spent that dollar value they qualify as being a Google AdWords Professional.  Can you begin to see where the issue lies?

There is no qualification in place and people can claim to be an endorsed professional.  This fails in a number of ways.

1. Punters that need help in Search Engine Advertising are looking for reassurance and expertise.  The Google AdWords Professional provides neither, though the name alludes to the fact it does.
2. Professionals who are great at Search Engine Marketing have more trouble finding work because they are competing with thousands of clowns who don’t know their KPI’s from their CPC’s.
3. Google is diluting its brand by offering this nonsense award.  Google do have other qualifications that are far more meaningful but as this is the easiest to achieve because you just have to spend dollars.

We are not against people becoming search engine advertising experts but if they claim to be experts there has to be more to it than that.  Which reminds me…I’ve got an email to answer about claiming my Fijian Medical Degree.

NO NO NO NO!  It is incredibly frustrating to see how people compete on price.

The number one reason companies compete on price is because they are poor at marketing.  It is the worst way to try and grow a business, as your marketing plan seeks to eliminate your own profits and the more aggressive you market the slimmer your margins are.

If your marketing appeals to your target market correctly then it is unneccesary to compete on price.  A well-known Australian Bank split-test a marketing campaign recently.  To a sample of 10,000 people they sent two separate credit card offers.

1. One offer with an interest rate of 12.5%
2. One offer with an interest rate of 16.5%

Clearly, credit cards that have the lower interest rate should be more popular.  Which offer do you think would be the most successful? Remember this was the same company, going to the same client client base.

To their sample, the interest rate of 16.5% was easily the most successful.  So what was the difference?

On the 16.5% offer there was a photograph of an attractive, healthy, female on the letter. Marketing and appealing to your target market wins over low prices.  In this case, just one photo encouraged credit card prospects to take an offer 33% more expensive.

There is so many frontlines in business in which the war can be won.  If you are trying to win it on price… ask yourself if this is really your best strategy

Unless you have been hiding with the weapons of mass destruction this week, you would have noticed that Microsoft have released Windows Vista.

You have to love the hard sell. Not many corporates really do it to consumers anymore. Not Apple, not Google, not the oil companies, not the car manufacturers. They are all into the brand.  Microsoft have allocated US$500million to marketing their new operating system and it shows.  Come back Crazy Frog all is forgiven.

Actually, Microsoft, well done for bringing back blanket coverage in marketing and sticking it in my face everywhere I look. It is a good reminder as to why you are a $300 billion company.

The truth is the only companies persistantly doing the hard sell is the credit card companies and the banks. Can’t understand why they keep on announcing record profits.  Probably because if you put a product in front of a consumer that services a need then they consume it…

When I checked out the Microsoft site to read the Vista marketing, i was stunned to see 100 reasons as to why Vista is so great. If you were absolutely insane… that is perfect for you to discover all of Vista’s benefits. if you are a bit more human, they had the highlighted benefits. From a marketing perpective, this warmed my heart.

The truth of the matter is I am going to Harvey Norman, or similar electrical retailer, and ask for a PC that is loaded with XP.  I know for a fact they will be fire-sale-ing that stock so I can get one or seven really cheap.  That is only one reason but better than the 100 reasons Bill gave me for getting Vista. 

Experts have come out of the their holes to comment on Vista.  Us included. The reality is in 2 to 3 years time, we all know we are going to be using it. This should impact their share price of (MSFT) Microsoft significantly. Will its recent bull run continue until then?  Maybe.

PS. Bill, I dont care that you have copied Apple, nor do I care that they will release something even more impressive with Leopard. Which they won’t because I’m over operating systems named after big cats.  Just please be taking notes when they do. Look forward to my Wow beginning Now!

Corporations spend billions a year promoting themselves. Advertising on billboards, TV, radio, online banner ads, nearly everywhere you look. On your television, on buses, painted on football fields and even on the skin of boxers, there is brand placement everywhere.

Companies focus on the promotion of their brand as a means of communicating with their clients. They do this through their logo, their slogan, their colours and the types of people that appear in their advertisements.  On the other hand, some companies use the ‘Celebrity CEO’ to push the brand through.  Richard Branson and Donald Trump are known for their amazing abilities for self-promotion.

Web 2.0 has capitalised on this theme. The principles of Web 2.0 are that there are open channels of communication.  Consumers can connect with the company. On the flip side, a CEO can present themselves to be human. This allows consumers to move beyond the brand and create a connection with another human.

This connection creates loyalty.

A good example of this is Jonathan Schwarz. A recent blog post headlined 5 things highlights 5 things you may not know about him.Why does he do this?

The answer is simple.  To break down barriers and create trust and loyalty. It breaks down the myth of the superhuman or the egotist at the head of the company. It allows him to connect.

Branding is an important aspect to the growth of any company. Introducing your clients to a personality within your business builds loyalty.

Steve Jobs at Apple has done an amazing job in pushing forward Apple’s growth. The personality has become an integral part of the Apple Brand where he garners unwavering loyalty from users of his products.  The downside to this is that there is concern about the future of company when Jobs steps down.  It is clear there are benefits to showing personality but there are issues too.  These themes are relevant to your business too.

• How do you build loyalty with your client?
• What personality shines through your business?
• Does that personality appeal to your target audience? 
• What is the impact on your company if that personality disappears?

The answers are different to different companies and their particular situation.  What is crucial is that you should explore these themes and how they can impact your business.  Don’t be scared to try something new.

Da Vinci Code was one of the highest grossing movies of 2006 and it came from one of the best selling books in the last 30 years. However, this post is more to do with the man and than the Dan Brown legacy.

It is a quick guide as to what made Leonardo Da Vinci, a man that will be remembered throughout time.  He was always considered a great artist but few have ever viewed Da Vinci as a businessman… and yet he was exactly that.

Leonardo was a genius in many different ways. He was an inventor, an artist, an engineer, a scientist and a brilliant sales person.  The Mona Lisa is one of the most famous paintings on the planet and a priceless piece of art. There are so many things that could be written about Leonardo Da Vinci but we will focus on his incredible ability to sell and market himself.

To fund his work, Leonardo had to generate an income which would be able to pay for himself, his students and his side projects in which he would work on.

Da Vinci knew exactly where to go. He went to the “Warlords” of his era and propositioned them. His idea was simple ‘Go where the money is!’ Now you may ask… how does an artist get a gig with power hungry and ruthless “warlords”?

It is recorded that one of his employers killed his own brother, committed incest with his sister and would regularly poison his dinner guests. A meal to savour to say the least. This man was the most hated, feared and envied man of his time and known for his bloodthirsty mentality.

And beside him, working for him was one of histories greatest men. Imagine one of Adolf Hitlers artists being regarded, as one of the greatest that ever lived. This same man was that deluded, that he would hire historians to search his bloodline, to prove he was from the bloodline of the Gods.

Leonardo was smart… he knew what the “Warlords” valued and he gave it to them. Leonardo would not pitch them on his ability as a painter. No… He would pitch them on his ability to create War Weapons and then artwork which would appeal to their Vanity.

He was able to satisfy some very powerful motives! He was able to satisfy the desire for Power, Wealth, Social Status and through his art… vanity.

He also created for his employer one of the most powerful tools he could ever offer a war lord. It was absolutely revolutionary for his day. This tool came in the form of a detailed and exact “MAP”. This gave his employer vision and power… and for Leonardo… it gave him money!

He would play stage manager and conductor to some of the greatest parties of his era. He became renowned throughout the wealthy and powerful as the master orchestrator of parties.

He moved to Venice… a city of new money at the time and also a city in crisis.  Leonardo used this opportunity to sell his invention - the idea of an underwater army complete with armour. Yes… the first recording of the idea of scuba diving equipment.

He used his ideas and art to generate income, as well as to protect his own interests! This idea was far fetched, but studies today on some of his exact designs have been tried, tested and proved to be successful.

What was brilliant about this is that without his ability to promote his services, he would not have garnered the reputation he did. The interesting thing is that Leonardo was completely against war, but yet he designed some of the most brilliant war weapons. He designed the first tank. Something which was not first used until WWI.  Now this was not designed to be a motor powered tank, but a man powered tank! His design is ingenious! It wasn’t until World War I, that a tank would be designed and used in a war.

This work allowed him to fund his studies into nature and the human body! More then that, it allowed him to create art pieces. Whilst working for the Vatican during the day, Leonardo would be performing autopsy’s in the evening. One of his discoveries was that the aging process was linked to excessive nutrition of the blood.

This finding is what we know today as cholesterol.

The ability to promote your service is a powerful skill. The ability to market your services and products determines how your clients remember you. Sometimes… you need to sacrifice for the sake of your long term vision, exactly as Leonardo did. Leonardo always tried to make sure that everything he did, generated a uniqueness.

Even though he painted objects, scenes or portraits which had been done many times before… Leonardos unique touch would not be rushed, and would have him known by millions of people after his death.

So as business owners, how can we make what we do unique?
How can we have our clients remember us?
Do we create grand ideas and grand plans but in the background put together lots of small jobs to make it all work?
How can be satisfy the desires of our cleints through our business and through our website?
What are some of your ideas about how you build loyalty with your clients?

These are all modern issues and Leonardo Da Vinci had it figured nearly 500 years ago.   

Whether it occurred by design or coincidence it is hard to say but the Commonwealth Bank has a smart, new advertising campaign.  An advertising campaign that other companies have utilised in the past - Making good news out of old bad news.

Their current campaign highlights the fact that their staff ‘Open Doors’ and they are recruiting new staff all the time to help you.  This is, of course, great news for you as a consumer because you are probably fed-up with inefficient systems and long delays to carry out even the most rudimentary of tasks like paying in a foreign currency cheque.

However, what the advertisement doesn’t highlight is that the Commonweath Bank has presided over 20,000 or so job losses over the previous decade.  This reduction in staff numbers has served a purpose.  To create this ‘new’ era of job creation.  It works very well in the public eye as the average punter has no idea or want to find out about a company’s track record.

This strategy has worked with other banks around the world with Natwest and Lloyds Bank in the UK closing huge numbers of branches over the 90’s, that inevitably turned into glossy wine bars and eateries, and then, some time after, opened new branches with large advertising campaigns promoting the fact. 

Having worked in large financial institutions for the early part of my career I recognise the banking ethos of ‘Making Hay While The Sun Shines’ and ‘Cutting The Fat When Necessary’.  In periods of recession or slow growth, banks readily chop uneccessary, unprofitable arms and when they are profitable, the money they make they spend recklessly with huge bonuses, frivolous spending and increased staff numbers.

So, what is the end result for the consumer?  Nothing really.  As long as the end experience is the same they don’t care.  If it isn’t they notice and they may be motivated to switch to a different provider.

As a business owner, you should look to bad news in the industry or within your company to create opportunity and good news.  The banks have demonstrated how this is done and you can too.  It doesn’t have to be a monumental story, just something that is a point of difference for you and how it can be exploited.   And yes, the use of the word ‘exploit’ is deliberate…

The newspapers and investment magazines around Australia seems to be hooked on trading CFD’s (Contracts For Difference) on the ASX (Australian Stock Exchange). Actually, there is very little editorial coverage of the CFD ‘phenomenon’. Most of the ink is on advertising the platforms on which to trade this relatively new instrument.

An analyst on CNBC claimed that approximately 50% of trades on the London Stock Exchange are CFD trades now dwarfing all the other instruments in the multi-billion dollar derivatives market. Australian investors are trading just a fraction of that number but the figures are anticipated to explode over the coming months.

Because of this, many players are scrambling for market position. How do you get ahead when there are so many people vying for market share?

We have recently been engaged by The Sharemarket College to assist marketing the SMC Trader online trading platform. One of the challenges we have is competing in a very competitive market.

A few months ago at the Melbourne Traders Expo there are booths 3×3 in size with companies all attempting to sign you up. As an investor how do you choose which CFD provider to go for?

The Sharemarket College is fortunate enough to have a brilliant product that offers investors state-of-the-art tools to facilitate their investment. In addition, they have over a decade worth of testimonials from their clients that have been through their investment education courses. But how else can you appeal to the average investor?

Do you look at the advertisements in Personal Investor, AFR Smart Investor and Intelligent Investor and think ‘That deal looks good, where do I sign up’? Do you read the ‘advertorials’ in Wealth Creator Magazine or Your Trading Edge and think they contain the right information to make an informed buying decision. Do you ask the man standing in the middle of the Sydney Investment Expo wearing an ‘I Hate CMC Markets’ T-shirt what his opinion on who’s the best CFD provider? I don’t think he will be trading CFD’s with CMC.

As an investor, the choice can be difficult. As a CFD provider trying to claim ‘that’ investor, the road is even more treacherous.

IG Markets, judging by their front-page advertisement on the Australian Financial Review, are offering a good deal. Low commissions on trading they advertise. Low commissions sound good but you’ll find that the discounted rates only apply if certain trading criteria are met. They are making a cut somewhere that’s for sure. They have to. That one advertisement would have cost around $15,000.

There are a dozen other entities all trying to earn your dollar and most show great examples of how NOT to go about your marketing. If you ever want to see poor marketing in action, you will commonly find these two elements.

1. Reduce trading commissions.
2. Throw amazing amounts of money at blanket marketing which offers no real benefits, but mentions your discount trading.

Sounds similar to the IG Markets marketing plan. Effective? Probably. But it may not be as efficient as it should be.

Other domestic players like Macquarie, Sonray Capital Markets and Tricom use a more corporate model. Day trading, online trading, full service brokerage and whitelabelling and referral plans. This is in own right is effective and profitable but they want a slice of the ‘mum-and-dad’ pie too.

The CFD trading revolution has fully hit Australia. Funnily enough, the centre of global trading, the US, doesn’t allow its citizens to trade CFD’s. The rest of the world can trade CFD’s on the New York Stock Exchange and Nasdaq with no problems.

And we will… The Online Trading industry in Australia is going to massively expand over the next few years. CFD’s are going to play a major role in that expansion and we look forward to enjoying the ride.

We’ll be working on promoting the SMC Trader until the end of 2007 so we’ll definitely give you updates on how it goes. If Commsec and ETrade, start issuing statements that they’re numbers are falling then assume we are doing well.
That should happen anyway as both are really limited in both functionality and product offerings. It’s true.

To view the SMC Trader go to http://www.smctrader.com  and to view the SMC Cafe, where traders meet, go to http://cafe.smctrader.net  

Donald Trump’s The Apprentice, is a great show as it offers education, insight and for those fighting to get to the top, it highlights Donald’s business genius. The Donald is a master of self-promotion and has been for over two decades.

He is also a master of promoting his friends. Every single week, the challenges in The Apprentice tie in to ‘a good friend of mine’, their company and the products they are selling. When The Don does the summary he sells them brilliantly. Short, sharp and too the point. Because of the delivery and the context it is difficult to doubt his words for a second.

This form of sponsorship is a sophisticated form of product placement.   At the start of one show, you see the eager contestants waiting for Donald to arrive.  The camera then tracks across to show his arrival in a SL55 AMG.  The faces of the contestants are in awe. Note: Most contestants in The Apprentice are self-made millionaire in their own right so the looks of awe are probably flattering, false and fit for purpose, like everything they do on the show. 

As soon as the car pulled in, you can be sure that Donald had done a deal with Mercedes.  What other car would be suitable to be the carriage of choice for Donald at future engagements?  You guessed it.  As is always the case, when you are one of the richest people, you don’t have to stick your hand too far in your pocket.

Don’t be naive to think that product placement is a rare occurance. Do yourself a favour when you are watching TV. If there is ever a computer showing have a look at the brand. Top marks to the marketing team of Apple. Very effective product placement!  Again, for music players, credit Apple for putting iPods absolutely everywhere.  Don’t forget, mobile phones by Sony Ericsson and Nokia, landlines by Lucent, PDA’s by Blackberry.  

But it is not technology cornering this market, look at positioning of other household products like detergents or toothpaste.  The practice of product placement is rife.

Product Placement Is Prevelant. But Too Much Can Be Ineffective

Die Another Day was the first movie to have its production cost completely covered by product placement.  It works away subconsciously. Obviously, the marketing departments of corporates thinks it works because they are throwing money at it. 

What are some great examples of product placement you have seen recently?  Or better still, any poor examples, that make you say, NO?!