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3 steps to online B2C: How to create a new channel

High street retail will recover, but spend may never quite return to previous levels. Restaurants and hotels will re-open, but it may be years before business is fully restored.

In the meantime, consumers are buying online like never before, online purchasing has increased by some 50% to 75%. Many consumers have adopted online for the first time, and, of course, many will retain this new habit forever. The SARS outbreak of 2003 changed consumer behaviours in Asia permanently; Covid-19 will do the same throughout the world.

So all consumer products businesses must ask themselves the question: how do I create and grow a B2C online channel?

Consider the experience of two different F&B wholesalers the coronavirus took from thriving concerns to the very edge of survival. Pivoting to direct-to-consumer sales seemed their best shot at staying alive.

The first company is a mid-sized restaurant supply firm. When all the restaurants closed, the company had to find a way to keep selling their stock, much of which was perishable. They hit on the brilliant idea of selling directly to consumers after all. The established grocery delivery services were already overbooked, people were afraid of supermarkets, and many shelves were empty anyway.

At first it went well. They were successful with high-profile guerilla marketing, and, while they were used to selling in bulk, it wasn’t difficult to repurpose areas of their warehouse to process individual orders for certain products. They put in place new delivery arrangements and temporary customer service and returns handling.

But within a fortnight they became a victim of their own success – overwhelmed by orders, the website crashed. And in the rush to serve their new customers nobody stopped to figure out if they were even making a profit. Now they’re burning through cash, deliveries are late, and they’re losing the goodwill of their customers. Their brand and the reputation of the management has been genuinely damaged, and their next step is uncertain.

The second company is a well-established meat supplier for high-end restaurants. They too nearly panicked when their customers closed their doors. But instead of rushing headlong into a new market, they carefully (but quickly!) considered which products would be more appealing to consumers and how best to fulfil orders. These guys have seized market share and created a new platform for growth.

These stories are being repeated quite literally all over the world. Some companies have pivoted nimbly and look well-placed to survive and thrive in the direct-to-consumer market. Too many others won’t last through the summer.

The ultimate question is, How to pivot? We’re not talking about stopping the bleeding but creating another long-term channel of substance. Obviously, it’s not going to be easy. But this is a whole new opportunity for the long-term; here’s how to get it right from the start.

Step 1: Understand what to sell and what’s not worth the bother

Many wholesalers and bricks-and-mortar retail stores are creating a new online, direct-to-consumer channel.  Here are just a few of the sectors in which we’ve seen mid-market businesses pivoting in the past few weeks:

The first step for any business is to take an honest look at your products and consumers. Successful wholesalers understand the sophisticated business demands of retailers, and successful high-street retailers understand shopper behaviours. But the online buying journey and rationale is different.

What’s selling right now and why? Where are you making money now, and where would you make money online? And who are your customers, what do they buy and why? Don’t make any assumptions; let the data lead you to the answers. These will be the products and people to focus on. (If you’re having issues with reporting, we can help.)

Look for opportunities to upsell and cross-sell. The idea is not to squeeze every penny you can out of your customer, but to serve them better. If they’re buying a cleaning spray, do they need kitchen roll? If they’re buying pet food, do they need grooming products? Such tactics may seem obvious; after all, we see them whenever we use Netflix or Amazon. Still, companies pivoting quickly to direct-to-consumer sales may miss the obvious opportunities!

This is also a good time to ask yourself what you can get rid of. It’s time to jettison products that aren’t moving, especially if they’re perishables.

With every product you sell, the questions should be quite simple: am I actually making money with it, and is it sustainable?

These are challenging marketing questions, and your own team may have the skills and knowledge. Or you make need external help. Be honest with yourself about the capabilities and limits of your team.

Step 2: Understand how to sell it

Marketing, technical and operational skills need to blend to create an attractive, convenient and reliable engine for bringing people to your products, helping them to buy, delivering, and handling service issues. Establish clear ownership for each function and establish who is accountable for joining all these up.

With direct-to-consumer, every aspect of this journey is critical in how consumers make judgments about your brand. Online DTC marketing skills like SEO, paid search, newsletters, and social are different from B2B wholesale and high-street marketing. Your marketing team may be able to adapt, but they will also need new tools and data to support this transition. Effective integration with price comparison and aggregator systems often makes the difference between success and failure.

While a utilitarian website may have been fine for, say, the above restaurant wholesaler, they will not retain their new customers without an attractive and easy-to-use front end. On the back end, companies like Amazon have inflated customer expectations and simple things like poor packaging, picking errors, unreasonable shipping costs or stock outages can have a very negative effect on your brand.

We can’t stress this enough: streamlined operations are vital to saving time and money and keeping errors to an absolute minimum. Delivery, packing, returns, and customer service are all critical in direct-to-consumer. Each step can make the difference between success and failure. The cost of one wrong delivery, with the subsequent customer service calls, return and resend can wipe out the profit on twenty correct orders.

Front-end to back-end systems may initially be joined by manual efforts when volumes are small. But as the business grows, you must have a plan for systems integration and automation. Customers need accurate product, stock and pricing information; back-end systems must be able to rapidly process new stock; dynamic and intelligent pricing must be automated.

To get live quickly may require much of this to be outsourced, at least at first. Either way, you must always own your brand and set the standards for the customer experience.

So set a realistic plan divided into a series of simple and agile sprints. Ensure clear roles, good communication, and a commitment to jointly overcoming problems. In our experience, success is built on collaboration, fact-based decision-making, and a can-do attitude.

Step 3: Evolve and build 

Creating a start-up within an established business creates new challenges. You’ve got to be smart, and you’ve got to rapidly evolve and grow.

What worked on Day 1 may not be right after a month, and probably won’t be right after a year. Decisions about insourcing and outsourcing will need to be revised to start building margin and to create a sustainable core of skills internally. Third party logistics (3PL) and fulfilment strategies mitigate short-term capital barriers and accelerate speed to market but slick systems integration and automation are the real key to scalability.

Reputation management will become increasingly important. Minimising issues and errors not only maximises profits and cash but it also retains your brand promise. Review and rating tools and aggregation engines can become an important part of your marketing strategy.

But these are mid- to longer-term questions that you can tackle after you’re smoothly taking orders and your customers are happy.

Just remember that short-term solutions have a tendency of becoming permanent, and it may be necessary to confront dependencies on other organisations that can end up being serious risks. For example, Amazon is a convenient answer, but they can be very particular; you may or may not want your brand associated with them, and one change to their algorithm may put your business in jeopardy.

We do know for sure is that online is the key to survival. No ambitious business can ignore the consumer revolution that has been accelerated by Covid-19, and the need to embrace multiple routes to market to minimize your risks and maximise your opportunities.

If you have questions or concerns about your own transition to B2C, then please get in touch. We’re helping our clients navigate these issues right now, and we’re always up for a low-pressure chat.

Visit our Knowledge Centre which includes all content related to this topic. You may also want to look at our Digital Transformation Knowledge Centre.

Freeman Clarke is the UK’s largest and most experienced team of part-time (we call it “fractional”) IT leaders. We work exclusively with ambitious organisations and we frequently help our clients use IT to beat their competition. Contact Us and we’ll be in touch for an informal conversation.

How do I prepare my business for the coronavirus?

As the CEO of a growing business, you likely spend most of your time thinking about your products, customers, and staff, as well as how to keep growth on track.

But soon enough, you may have a new priority –  how to keep your business running when threatened by coronavirus.

We certainly don’t believe that the end of the world is nigh. But we do see a real possibility of disruption due to illness or quarantine. You may have employees looking after sick relatives, or their children’s schools closed to reduce the risk of infection.

(For up-to-date coronavirus information and guidelines, see this link from the Department of Health.)

The good news is that there is a relatively simple way to prepare your business for disruption – home-working, meaning providing your employees with the flexibility and equipment they need to work remotely. Preparing your business and staff for remote work provides a robust means to handle health scares, as well as most other disaster scenarios like power failures, bad weather, strikes, or transport disruptions.

As an example, a long-standing Freeman Clarke client provides a 24/7 business-critical service. They can’t afford an outage, so they have spent a lot of time and money preparing for emergencies, including ensuring they could continue to deliver their service uninterrupted with everyone working from home. They’ve tested it and it works.

Emergencies aside, enabling your staff to work remotely is a great way to attract and retain the best talent. Many businesses employ ‘knowledge workers’ who can function effectively from home or the coffee shop with management, processes, and facilities set up accordingly.

Planning for remote work in the event of coronavirus goes beyond prudence. It’s a step in the right direction for your business.

How to get started

The good news is that even if you’re considering this scenario for the first time, it’s not too late. Our advice is to gather the senior management team and ask two questions:

  1. Which members of your team are critical to the ongoing survival of the business? Also: who can cover a colleague’s job in case they’re not available?
  2. What processes are absolutely critical to running the business? These processes might include taking payments, getting product to your customers, answering customer calls, and so on.

You can then plan out how these critical people and processes could continue to work remotely.
The first focus should be on the people. Ensure all critical team members are properly equipped to work from anywhere. That mean at the very least a mobile phone, a laptop, and probably a VPN (virtual private network).

Then sort out the simple details, like ensuring that everyone has their colleagues’ mobile numbers.

Finally, all your people should be confident with using voice (or video) conferencing so they can organise themselves without needing to be in the same place.

The next task is to review the highlighted critical processes and discuss whether they would work if you and your team were out of the office.

Don’t assume that everything has been digitised! Ask your critical staff to look over what’s currently only in paper files, notebooks, or Post-it notes. All this must be available to them online. Fortunately, these days the tech is inexpensive or even free, products like Trello, Teams, and even Whatsapp can be effective ways to support remote work, including exchanging documents.

Don’t forget documentation such as customer contact details need storing somewhere accessible, as do the tools people use, such as bank number pads for accessing bank accounts.

Cloud-based services excel in these circumstances because all you need is an internet connection. System such as Office365 and online accounting systems such as Xero make planning for a disaster far easier. If your business has a lot of its processes based on servers in the office, this is a great opportunity to kick off a project to migrate to the cloud. Aside from protecting you from emergencies, it will ultimately be cheaper, more secure, and more flexible.

Don’t wait for disaster

You’ll need to invest time and money to make all this happen. Consider it insurance against disaster and an opportunity to make your business better.

We recommend that you immediately organise a senior management team to focus on the questions above. Don’t leave the room until you’ve agreed on the necessary actions, the owners and timescales for completion, and the follow-up. Consider having this meeting by video to get the ball rolling!

Visit our COVID-19 knowledge centre, which include more content related to this topic.

Freeman Clarke regularly helps businesses plan for emergency and growth. If you’d like to talk to us about how to make your technology more robust, feel free to get in touch. We’re always up for a chat.

Freeman Clarke is the UK’s largest and most experienced team of part-time (we call it “fractional”) IT leaders. We work exclusively with ambitious organisations and we frequently help our clients use IT to beat their competition. Contact Us and we’ll be in touch for an informal conversation.

Learning from Travelex

Due to a cyberattack, Travelex, the world’s largest foreign exchange bureau, has been at a standstill for more than a fortnight. The reputational and financial impact on the company and its senior leaders will be severe. New laws and regulations, like GDPR and NY Shield, mean that such breaches can no longer be swept under the carpet, and the commercial damage will be compounded by huge fines.

Travelex is a wake-up call to all businesses. In today’s cyber-risk environment, maintenance of your basic IT infrastructure and services is critical to remaining profitable and even staying alive. You may be concerned that if a giant like Travelex gets hacked, how can a mid-market company protect itself? It’s less complicated than you might think.

When we engage with clients, we talk about ‘getting the basics right’. A fundamental part of that is making sure the IT infrastructure and services are fit-for-purpose and up to date. If the basics aren’t right, then there’s no hope of looking at ways to use technology to grow the business and get ahead of the competition.

To provide you with a head-start, here are your first nine priorities:

  1. Prioritise systems maintenance. All systems and services, particularly those that are connected to the outside world, must be kept up to date with the latest software patches. The IT team or your Service Provider must review and update systems in a regular, controlled manner.
  2. Review your backups. Many malware infections encrypt your data and hold it to ransom. Frequent backups mitigate the chance of you losing everything. A regular complete backup of data stored somewhere with no connection to your systems – what’s called an air-gap – will greatly limit the damage of an attack.
  3. Get a penetration test. Get a reputable security company to undertake an external penetration test of your systems and services. Resolve all the concerns raised in the results. Find your vulnerabilities and patch them before hackers find them for you!
  4. Earn a certification. Spend some money, usually less than £10k on earning the Cyber Essentials Plus certification. The process involves making your technology secure, and we’ve seen clients win new business after being certified.
  5. Lock down your data. Each individual in your business should only have access to the data they need to do their job. This minimises the risk of data loss should they leave with it or accidentally click a malware link. Allowing employees wide-ranging access to data is asking for trouble.
  6. Invest in protection. Keep the bad guys out with well-configured firewalls, anti-spam email systems, malware detection software, and pro-active Day-0 protection systems.
  7. Get some insurance. Cyber insurance covers the losses resulting from a cyberattack. It can also aid with the management of the incident itself, particularly reputational damage and regulatory enforcement. Crime insurance covers the loss of money due to theft, fraud or dishonesty and includes theft of money by hackers. Add these two insurances to your portfolio as separate policies, not just add-ons to existing business insurance.
  8. Train your staff. Your employees are the most vulnerable security point in your business. The more they know what to look for and what to do, the better your chances of avoiding an attack. Training is essential for all new starters, and it needs regular refreshing for the whole business – including you!
  9. Plan for the worst. Even with all the above nailed down, you still need to be ready for the worst. Sit down with your top team and discuss potential disasters and plan your way out of them. Who would be in charge? Who is authorised to make major decisions on the spot?

Will Travelex survive this attack? Who knows – the reputational and commercial damage may be terminal. But by following these nine steps, you can avoid that fate for your own company.

For more information see our Knowledge Centre about Cybersecurity.

Freeman Clarke is the UK’s largest and most experienced team of part-time (we call it “fractional”) IT leaders. We work exclusively with ambitious organisations and we frequently help our clients use technology to beat their competition. Contact Us and we’ll be in touch for an informal conversation.

6 Steps to Business Clarity

At Freeman Clarke, we use the term ‘vision’ quite often. But we don’t only mean imagining what’s down the road for your business. We also mean asking yourself if your reports and management information allow you to see your company clearly right now.

You can grow in the short term by reacting to opportunities as they arise. But to grow a business sustainably you need to clearly see your activities and the outcomes, your customers and the wider market.

Clear vision of this information requires a platform of systems and processes that are not easy to implement. The good news is that we’ve done it many times. Based on our experience, we have created this simple list of the six steps for CEOs to achieve clarity.

  1. Clarify who’s in charge. Create a strategy and architecture for where master information is held and how it is shared between systems and people. Which system is the master? Which teams are responsible for creating and maintaining the data?

    Automate links between systems where possible to avoid manual effort which is expensive and (inevitably)  prone to errors.
  1. Set the rules. Set standards for data management and maintenance. Decide who is responsible for ensuring data is correct and for training and policing those standards. Monitor how often these rules are broken and whether specific teams or people are repeat offenders.
  2. Be efficient about reports. Finalising reports for specific individuals can be endlessly time-consuming. Instead focus on the broad areas of information that managers or directors need. Ensure you have flexible tools and reporting skills so you can build and change reports easily.

    Review your reports regularly and ask yourself which reports are valuable and which are not. Stop producing those that are no longer useful. Or change formats where ‘report fatigue’ has set in and useful information is being missed.

    Again, automate wherever possible. Manually generated reports are a great waste of time and money.
  1. Take a hard look at what you’re reporting. Often reporting is focussed on old-fashioned financial indicators. Identify the more relevant indicators, especially the non-financial ones, which will allow you to strategise and manage events as they unfold.

    For example, as well as monitoring sales last month, monitor web activity or numbers of enquiries, which may be indicators of future opportunities. Monitor unusual changes in stock levels or supplier lead times, especially of critical items, to avoid future issues with fulfilment.
  1. Analyse profitability by product, client, and service line. Ask yourself, What are the real drivers of cost? Where do you have influence over cost?

    Use this information to drive cost-reduction projects to provide an extra few points on your profitability for the coming year. Using it to inform the sales and marketing strategy can be transformational to the overall success of the business.
  1. Free your Board from operational distractions. Where in your business is ‘expert judgement’ important? How can you generate data that would allow you to use machine learning? Perhaps to improve decision-making, or to reduce manual effort, or to allow you to scale your business and to free up directors to spend their time elsewhere?

Freeman Clarke is the UK’s largest and most experienced team of part-time (we call it “fractional”) IT leaders. We work exclusively with ambitious organisations and we frequently help our clients use technology to beat their competition. Contact Us and we’ll be in touch for an informal conversation. 

Team Development & Leadership

Your IT team and tech suppliers should be part of your growth strategy, helping to drive improvements in efficiency, customer service and innovation.

Freeman Clarke are systems and digital leaders with a team of technical experts who are widely experienced in leading and managing IT teams and suppliers. With careful leadership and guidance Freeman Clarke can help your business to succeed.

For more information on this topic, click here to visit our Technology Roadmap for Growth Knowledge Centre.

Freeman Clarke is the UK’s largest and most experienced team of part-time (we call it “fractional”) IT leaders. We work exclusively with ambitious organisations and we frequently help our clients use technology to beat their competition. Contact Us and we’ll be in touch for an informal conversation.

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Graeme Freeman
Co-Founder and Director

Subscribe to our Business Insights

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Thank you.

You’ll now receive regular expert business insights.

Call us on 0203 020 1864 with any questions.