Archive for February, 2012

The latest Harvard Business Review case illustrates a theme park trying to decide whether to offer a reduced admission ticket on a social deal site. While a social deal would likely increase attendance numbers, there were concerns that social deal customers would not become loyal returning customers.

A Forbes report from last year illustrated that over 200 social deal sites reach more than 100 million people. Furthermore the social deal site market is predicted to grow to $6 billion by 2015. Here’s what business leaders need to know before committing to doing a social deal offer:

Attract New Customers: The big advantage to social deal sites is that they can help your business to attract a new group of customers. Last summer my husband and I wanted to go sailing on Lake Tahoe. We had never been before and had found three companies in the area that offered sailing excursions. One day I got an e-mail offering a LivingSocial half-price deal for Tahoe Sailing Charters. We were sold and I thought it was such a great deal I shared the deal information with a colleague who also went with her husband. According to LivingSocial 748 tickets for Tahoe Sailing Charters were purchased, not bad for a deal that ran during the off-peak season from late August through September.

Easier Short-term Sales Forecasting: Social deals require an up front purchase resulting in an organization knowing how many deals have been sold prior to the deal being redeemed.

Being Prepared For Increased Demand is Key: Preparation is key from increasing staffing levels during the promotion, to ensuring all staff are up to speed in order to win over these new customers. Corey Kaplan, owner of New York City Bagel Deli in Chicago gives some great advice in the video below on how a business can prepare to optimize their social deal site promotion: 

Negative Losses Can Occur: My advice to small businesses considering offering a deal through this channel would be to create a cap if possible to ensure demand doesn’t exceed supply capabilities. Small London business ‘Need a Cake bakery’ offered a 75% Groupon deal on their cup cakes. The deal was a lot more successful than the business owner had anticipated and attracted 8,500 people. The organization’s staff of eight employees struggled to make 102,000 cupcakes to meet the orders and the business lost approximately $20,000 on the deal. Also worth considering when determining what discount to offer is the social deal site’s commission percentage to ensure you can break even on the deal. Therefore products or services with high profit margins may be more suited to a successful social deal site campaign.

The Returning Customer Conundrum: Some reports suggest that customers that embrace daily deals are cheap and will not become loyal returning customers. This is an over generalization and is likely to become a premonition for businesses doing daily deals who have poor service and substandard products or services on offer. A social deal can be an opportunity to turn these one-time customers into returning ones by offering great products or services and delivering outstanding customer service. My husband and I had a great time on the Tahoe Sailing Charters excursion and would consider returning in the future, particularly if we had friends or family visiting.

Market Research: Social deals also offer marketers the opportunity to find out more information about what attracts customers to the company’s products or services. In the case of our sailing excursion customers had a choice between an evening sail or an afternoon one. Thus Tahoe Sail could gain insight into customer’s time slot preference. In addition organizations could obtain contact information from customers and gain geographic and demographic information from the sign ups.

Increased Online Publicity: A report by Chatmeter on social deal sites indicates that following a deal a company’s online publicity increases, particularly on review sites such as Yelp. This can be problematic if your deal disappoints, thus having a quality offering and good service is key.

Social deal sites can be extremely effective way of creating buzz and increasing sales if done correctly. Businesses should be aware of the positive and negative factors involved in doing a social deal offer, rather than leaping on the bandwagon.

So what do you think? Share your comments below


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This week’s edition (February 20th – 26th) of Bloomberg Business Week contained an article titled (in the print edition) ‘Would You Like Fries With that Title Policy?’ The article reported on the purchase of O’Charley’s casual dining chain by Fidelity National. On February 6, 2012 the title company agreed to purchase O’Charley’s 340 restaurants for approximately $221 million in cash.

Diversification into unrelated markets is not a new business concept, however it is unusual in the current economic environment. Given the economy in recent years many U.S. businesses have been very cautious with growth strategies even in related markets. While growth in general is risky, to attempt to grow through diversifying into unrelated markets has even more risks attached.

The purchase will provide Fidelity National access to three new restaurant brands: O’Charley’s, Stoney River and Ninety-Nine. The later two of the three brands are thriving, however the O’Charley’s brand has struggled in recent years to differentiate itself from other casual dining establishments. Thus the biggest challenge Fidelity National will face is how to turn around O’Charley’s. As Bob Goldin, executive vice president at Technomic, a food industry research and consulting company acknowledges:

“O’Charley’s has been a leaky bucket for years, I don’t know if there’s a miracle worker who could turn this thing around.”

Strategy expert Richard Lynch in his Strategy textbook says that when an organization moves into unrelated markets, it faces the risk of operating in areas where its knowledge of key success factors is extremely limited. However, in the case of Fidelity National its knowledge of the restaurant industry is not as limited as you would initially suspect. The company actually entered the restaurant industry in 2009 forming American Blue Ribbon Holdings in order to invest in two restaurant chains: Baker’s Square and Village Inn. In 2010, Fidelity National bought Ohio-based casual dining chain Max & Erma’s out of bankruptcy; adding it to American Blue Ribbon Holdings.

Fidelity National justifies such expansion as a way to grow and spread their risk across different markets. The company has a dominant share of the title market and little leverage to further expand in this market due to antitrust regulations. The restaurant market by contrast is very scalable with an indefinable amount of growth potential. Adding O’Charley’s to American Blue Ribbon Holdings has substantial cost benefits for the company, particularly in regards to economies of scale on the supply side. As Fidelity National’s Chairman William Foley explains:

“We have been seeking an investment in a larger, scalable, strategic restaurant operating company to complement our successful investment in American Blue Ribbons.”

Richard Lynch acknowledges that organizations can be successful through unrelated diversification if the holding company managing the venture uses strict but clear financial controls. Time will tell if Fidelity National’s purchase of O’Charley’s was a smart move and if they can turn the brand into a success that they could possibly sell for profit. Since the company also holds minority stakes in HR/Payroll system Ceridian and automobile alternator and starter maker Remy International. One thing is almost certain: Fidelity is unlikely to stop investing outside their core business any time soon.

What do you think? Please share your thoughts in the comment section below.

Photo Credit: Wikimedia Commons user: Cloudbound

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There is an Irish folklore from the 5th century, which tells the story of how St. Bridget negotiated with St. Patrick to allow women to propose to men on February 29th. Her argument was that since February 29th had no legal status, traditions should have no status on this day either. Today leap day is not just about folklore and can represent a great opportunity for businesses to create innovative marketing strategies to attract their customer’s attention.

While not suitable for all types of businesses, many restaurants, hotels, theme parks, car sales companies, radio and TV stations and others are taking advantage of this one in a 1461-day opportunity. Organizations of all sizes can take advantage of leap day by offering sales promotions such as 29% off, flash sales, discounts, coupons, contests, birthday offers for leaplings and other promotions.

Below are some examples of my favorite 2012 innovative leap day campaigns:

Honda’s “2012 CR-V Leap Year Contest”

Honda has created a leap year themed advertising campaign to promote the 2012 CR-V.

Honda’s website for this campaign enables people to create lists of goals they hope to achieve before they take the next major leap in their life. To inspire you to get your list started, Honda is hosting a contest where all lists submitted will be judged on their activity, variety and feasibility. The grand prizewinner will win a 2012 Honda CR-V and free gas for a year.

Disney Theme Parks: “One More Disney Day”

My favorite of all the leap day campaigns is one more Disney day. On February 29th for the first time ever both the Walt Disney World’s Magic Kingdom in Orlando, FL and the Disneyland Park in Anaheim, CA will be open for 24 hours.

The campaign’s big question: What would you do if you had one more Disney day?

If I had one more Disney day I would head to the Walt Disney World Resort and relive some of my memories from my days on Disney’s Cultural Representative Program. I would head to the Disney Studios and ride Rock n’ Rollercoaster and Tower of Terror, before heading to Epcot’s World Showcase to walk around my old workplace and buy some overpriced but delicious British chocolate. I would then head to Animal Kingdom to ride Expedition Everest and watch the Lion King show. Once the other three parks were due to close I would head over to the Magic Kingdom where I would stay until the early hours of the morning hitting all the mountain rides and watching the incredible 3D Mickey’s Philharmagic.

Also on leap day Disney will be offering free “one more Disney day” mouse ears to the first 2000 visitors at both Magic Kingdom and Disneyland. In addition, there’s a sweepstake to win a trip to either resort but as you can probably tell I would really like to win so I’m not going to share the details, though they are really easy to find!

Anabella Hotel’s “29 $29 rooms” 

Located in Anaheim, CA the Anabella hotel were quick to react to Disney’s “one more Disney day” announcement by creating a complementary offer. Through their Twitter and Facebook accounts the hotel offered 29 $29 rooms for the night of 02/29, which went on sale at 10 a.m. on February 7th. The Anabella hotel’s leveraging of their social media platforms, helped make their promotion a big success. All 29 rooms sold out in less than 15 minutes.

WIRK Radio: “Take Leapers to Lunch”

Southern Florida’s country radio station 107.9 WIRK has offered to take anyone whose birthday is on February 29th to lunch at Ruth’s Chris Steakhouse on leap day (a cap may be imposed at some point). Ruth’s Chris Steakhouse in North Palm Beach will open specially for this lunch. No doubt the radio station will include this event in their broadcast and this promotion seems ideal for radio or TV stations.

So what do you think? Could your business take advantage of leap day by creating an innovative marketing campaign? Share your thoughts below.

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In recent months I have read several articles on progressive companies who offer unlimited paid vacation time to their knowledge workers. Companies who have initiated this policy require that employees get their work done on time and depending on the role find someone to cover them while they are away.

I am sure this concept may send more traditionally minded individuals into a frenzy of questioning how a company would get anything done? Wouldn’t workers take advantage and take too much time off? But for those companies that have tried it, it seems to be working very well for the following reasons:

  • Increased Retention: employees feel more appreciated when their organization cares enough to allow them this flexibility. Essentially this approach allows employees to find a work-life balance as WeddingWire acknowledge:

‘Vacations are important and we want you to have a life so our vacation policy is simple: take what you need. The concept allows for life to happen and as long as you get your work done, you can take what ever time you need, when you need it.’

  • After introducing unlimited paid vacation, retention at MeetingMatrix International was 100%. Interestingly, a tax services firm called Ryan, introduced unlimited paid vacation after receiving a resignation letter from a rising star. Since their policy change they have seen a significant reduction in voluntary turnover.
  • Productivity: as many of us have observed in the workplace, sitting at a desk from 8-5 does not necessarily equate with optimum productivity. Flexible working practices shift the focus from hours spent at work to what work is actually done. Under the unlimited time off approach employees are evaluated based on meeting job objectives and deadlines.
  • Save Money: this may surprise the cynics but this approach could actually save employers the time and money they currently spend on tracking sick and vacation time.
  • Recruit The Best Candidates: people notice when you combine a good culture with exemplary employee benefits. Being an MBA student word definitely gets around among my classmates on who the best organizations to work for are and benefits definitely factor into these analyses.
  • Treats Employees As Adults: this approach offers employees the flexibility to come and go without explaining every move. By showing that you trust your employees to take responsibility for ensuring they still get their work done; you empower them to perform. Indeed if you don’t trust your employees, you really need to examine if you have hired the right people.
  • It’s Not Just For Big Organizations: while some of the organizations that offer this policy are large, such as Netflix, other smaller organizations such as Red Frog Events, and WeddingWire have had success with this approach.

Overall the concept of unlimited paid vacation is very attractive, particularly from an employee standpoint, however caution is needed. Care needs to be taken by employers to ensure particularly in workaholic cultures that reverse psychology doesn’t kick in and that employees don’t feel manipulated into not taking time off.

So what do you think? Would this work at your organization? And do any businesses in the Reno/Tahoe area already offer this?

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In recent years sustainability has been covered in the business press as an issue that should merit serious business consideration. However, in spite of its extensive media support many business leaders continue to dismiss sustainability as too expensive and under interpret it’s meaning as ‘going green’.

The more I read about sustainability the more apparent it becomes to me what an opportunity this could be for smart businesses if leveraged strategically. Wirtenberg, Harmon and Fairfield (2010) describe sustainability as a company’s ability to achieve its goals and increase long-term shareholder value by integrating economic, environmental and social opportunities into its business strategies to ensure the continued success and strength of the organization for future generations.

Sustainability is much more than going green. In actuality many businesses are already inadvertently adhering to sustainable approaches through their community involvement, recycling and flexible work practices. What a sustainability initiative does is to tie together all these disparate activities into a strategic objective.

Here are five reasons why organizations should consider sustainability initiatives:

1. Enhance brand image
Organizations that demonstrate a commitment to sustainability can leverage this strategic objective to enhance their image with their customers, suppliers, employees, the media and other stakeholders. Sustainability can also be incorporated into marketing efforts as Patagonia has demonstrated through their commitment to sustainability throughout their supply chain.

2. Improve talent acquisition
Many people, particularly my generation (y) aspire to work for organizations that are socially responsible and that they can be proud to represent. A SHRM report demonstrated that a sustainable corporate image could help organizations to attract the best applicants and greater engage current employees.

3. Maintain a competitive edge
Depending upon your organization’s competitive environment sustainability can help prevent losing sustainable focused customers to competitors and or differentiate your organization from the competition. In industries where sustainability initiatives have barely been embraced, opportunities exist for organizations to achieve short-term competitive advantage from being the first mover.

4. Stay ahead of regulations
It is expected that the future will bring increased regulations in regards to sustainability. By getting started now your business can move up the learning curve, becoming better prepared for future legislative changes.

5. Save money
In addition to potential energy cost savings, sustainability initiatives can enable organizations to become eligible for government financial incentives, including subsidies, tax credits, tax exemptions and low-interest loan programs. The federally funded extensive DSIRE database details federal, state and local government incentive programs for organizations of all sizes pursuing sustainable initiatives.

What do you think? Please share your thoughts in the comment section below.

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Growing up in England, I remember being 13 years old and using the earnings from my newspaper delivery route to go shopping for the latest top 40 CD at Woolworth’s.  At the time, Woolworth’s was one of the UK’s best-known retailers, having opened its first store in 1909.  The company’s product categories included entertainment, home goods, children’s toys and clothing, and confectionary.  The company had over 800 stores in the UK and a Woolworth’s store could be found in almost every British town.  I am no longer living in the UK and unfortunately, I’m not the only one.  In January 2009, just short of its 100th birthday Woolworth’s closed its doors in one of the biggest company collapses in British business history.

There were many different reasons cited for Woolworth’s UK collapse, which collectively demonstrate a business that had failed to adapt their business model to the changed 21st century environment. Woolworth’s made a classic mistake that many other organizations make. They were complacent and assumed their past successes would continue into the future.

A Harvard Business Review Article (from July – August 2011) ‘Adaptability: The New Competitive Advantage,’ by Martin Reeves and Mike Deimler addresses how today’s complex changing business world requires organizations to adapt in order to survive and thrive. Reeves and Deimler assert that traditional business approaches assume a relatively stable and predictable world, which is clearly no longer the case. The 21st century business needs to be good at scanning the environment, learning new things and trying out these new ideas not just in terms of product and service innovation, but also in regards to their business model, processes and strategies (Reeves and Deimler).

The purpose for my blog is to explore forward thinking and innovative business approaches, to encourage business leaders to reconsider traditional business practices and to consider incorporating new creative approaches to leadership and the work environment. Business is continually changing and as Woolworth’s, Borders, Circuit City and many others have demonstrated, there is no guarantee that approaches that have been successful in the past will continue to be effective in the future.

Photo Credit: Staffordshire Newsletter

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