If you missed last week's, catch up here and below you will find the highlights of episode six.
Quote of the Episode: "Problem: Doesn't make money. Solution: I'm out." Peter Jones
Product: Peel Engineering - The world's smallest production car with an electric engine
Investment sought: £80,000 for 10 per cent
Handling: They have an initial product but too many 'flights of fancy' revenue streams. Requires focus and a stronger business proposition.
Outcome: A hard fought negotiation saw them secure £80,000 for 30 per cent of the company. James Caan also secured himself one of every design of the vehicles.
Verdict: With a strong business partner and savvy investor, the pair could make a good go of their business.
Product: Angel Cot - a multi-purpose baby unit.
Investment sought: £150,000 for 40 per cent
Handling: A relatively straight forward presentation suddenly descended into a ridiculous pitch with the second half being performed through the medium of song. Product was trying too hard to be all things.
Outcome: No investment
Verdict: Pitch poor and then there was the singing...
Product: Advanced Building Designs - A variety of products for the plumbing and building industry
Investment sought: £89,000 for 15 per cent
Handling: A beautifully choreographed presentation. They would be great on a TV shopping channel. The product was deemed unnecessary and 'fixing' a problem that did not exist.
Outcome: No investment
Verdict: James Caan said, "You are just going to burn my money"
Product: Funky Moves - Interactive play equipment
Investment sought: £120,000 for 20 per cent
Handling: Set the cat amongst the pigeons revealing costs for tooling to create more stock and disclosing that he had received £140,000 in Government grants to establish the product. Some Dragons were well and truly riled. Duncan threatened to go offshore.
Outcome: A joint investment from Theo and Peter saw Funky Moves give away 50 per cent of his business in order to secure £120,000
Verdict: Once Peter Jones saw the bigger picture, the investment was always going to be forthcoming.
It’s holiday season in the UK, the time of the year every company dreads, but every employee looks forward to. For business owners it’s a bitter sweet time of the year. I am no exception having just returned from an excellent weekend break to watch the F1 in Budapest.
In between the trips to the race track I did what tourists the world-over do, which is to explore. During one trip with friends we discovered a fantastic bar called Szimpla (http://www.szimpla.hu/). The Szimpla ethos is brilliant. When a building is deemed unfit for purpose, instead of knocking it down they take it over and set up a bar. Szimpla, by my reckoning, is an excellent example of how to turn something old and unloved into a business that is both exciting and profitable.
In business there can be a huge temptation to simply consider everything that appears past its sell-by-date as completely irrelevant. I know I have done this many times in my career, sometimes to my cost. This is especially important in the tech market, which a colleague of mine often refers to as nothing more than a fashion show!
We can really learn from this. I am a massive advocate for innovation, always looking for the next big thing to invent or focus on. However innovation should be twinned with a focus on reusing and recycling what you already have. Especially in this economic climate, it just makes complete sense.
The media is full of one story – Government cuts. NHS cuts. City council cuts. All sorts of cuts! In times like these your marketing budget may feel like a luxury and history shows that in an economic downturn, the top of the list of cuts for businesses is marketing. But cut your marketing budget at your peril. Here’s why:
We live in a competitive environment. Brands are competing for attention like never before. Cut your marketing budget and your impact on your target audience will reduce significantly, if not die out because you’ll be swallowed by competitive.
It takes seven touches to move from being unknown into conscious awareness. Let’s use the example of Swirl Printers.
1. Potential client stumbles across the Swirl website from a Google search. They opt in to their e-newsletter.
2. They later receive the Swirl e-newsletter.
3. Then they see a Swirl advert.
4. At a networking event potential client meets a Swirl representative. Potential client takes a Swirl leaflet promo.
5. Potential client comes across the Swirl leaflet promo a few days later and places it in a draw for safe keeping.
6. Another Swirl e-newsletter reminds them of the leaflet promo in the drawer.
7. They visit the website and can quickly find further information on the promo (reinforcing the leaflet). The telephone number is easy to spot and they take action.
Without a marketing budget Swirl Printers would not have had the website, e-newsletter, advert, the representative at the networking event or the leaflet promo.
The seven touch theory also relates to the process of increasing brand awareness. Through those seven touches, Swirl Printers increased their brand awareness to their potential customer. Educating your target audience about your brand takes place through a similar progression of drip fed communications. You’ve got to speak to your target audience frequently so they do not forget your brand.
In a downturn marketing it is even more important than it was before! It is now more than ever that you want to attract customers. Therefore you need to communicate. Since many people stop marketing in a down turn, if you keep it up, or even increase it, you will be at an advantage.
I’m not talking about a million pound budget! I’m suggesting you cover the basics and do it well. You need a simple but effective website that is up to date; some information you can give out on request such as a promo leaflet, booklet or e-mailable PDF; exposure in the form of adverts or articles in relevant magazines, on or off-line; and if your target audience is other businesses then keep networking.
And then there’s the free stuff. They demand some of your time but they do wonders to raise your profile if you add value and are consistent. Use Twitter; blog regularly; get on LinkedIn; write and post articles and press releases; and, offer to speak at relevant events.
These are just a few hints and tips. Don’t follow the trend of cuts, cuts and more cuts. Rather invest in your marketing wisely.
Week 5 of Dragons' Den signals the halfway mark in the current series.
If you missed last week's, catch up here and below you will find the highlights of episode five.
Quote of the Episode: “I never used to use salt until three years ago. Then I discovered rock salt” Duncan Bannatyne
Product: Black Nut Iberian Pig Feed - Manufacture of pig feed for rare species of pig
Investment sought: £100,000 for 20 per cent
Handling: Handled questions well but his answers were his undoing. Pitched as 'Organic' when it was not.
Outcome: No investment.
Verdict: Beyond the bizarre idea, this is also a weak business plan and more of a whim.
Product: Tree of Knowledge - Educational play resources
Investment sought: £100,000 for 10 per cent
Handling: Educational products often do well in the Den. Nice genuine and down-to-earth pitch but didn't do enough to convince more than one Dragon wholeheartedly to invest.
Outcome: Peter Jones offered £50,000 for 20 per cent. No Dragon would match his offer and Dragons' Den rules require full value to be met for an investment.
Verdict: Good pitch but fell just short of being a 'Wow' product.
Product: Zigo - A combined buggy and bike invention
Investment sought: £225,000 for 6 per cent
Handling: Theo was shocked by the valuation of the business. The owners said this was due to the $400,000 invested into the business three years previously and further questioning revealed the Dragons' investment would be to cover a loss this financial year.
Outcome: No investment.
Verdict: Peter Jones saw the bigger picture. The product design, although aesthetically pleasing, was not practical.
Product: WedgeWelly - Stylish wellies with heels for festivals
Investment sought: £65,000 for 20 per cent
Handling: Name-dropped a few high street retailers and high-end fashion names to lure the Dragons. A weak grasp of their figures and need some astute business direction but they have a great product.
Outcome: James Caan offered the full asking price. Deborah offered the full amount but sought an additional 30 per cent. Theo offered the same and on the same terms as Deborah. WedgeWelly went for their Dragon of choice over retaining company stake: in the end they negotiated hard to get Theo down to 22.5 per cent. Theo countered with 25 per cent.
Verdict: Fun fashion product and a great deal secured for the business.
We were always known as a pretty dull, phlegmatic bunch, compared to the excitable French, the fiery Spanish and the sexy Italians.
Well, something strange seems to be happening in business.
Across the road from our offices a building firm says it's passionate about whatever it does. Pret-a-Manger is passionate about food. The North East is full of passionate people — and passionate country, too, so their posters claim. And Churchill are passionate about insurance.
Do these people have no sex lives, I sometimes wonder. (Though it certainly proves that many agencies are pretty passionate about copying each other.)
More to the point, all this passion reminds me of a big mistake many who sell to businesses make. That is to assume that business decisions are made on rational grounds and emotion doesn't come into it.
This is nonsense — and to prove it I often ask audiences whether they can think of anyone they work with that they hate. It never fails to raise a laugh of recognition.
Don't you agree that the way we love to label things often does more to confuse than help?
We talk of above the line and below, of b2c and b2b, consumers and business people. Is that how our customers see themselves? Do they have lines running through their brains?
They are all human beings. And we know perfectly well what things motivate people when we sell make-up, a car or even a hair-remover. People want to be looked at, admired — and definitely not shunned.
In business they want what? To be looked up to, admired -— and definitely not shunned. They want to be successful, quoted as examples for other people to emulate and not seen as losers — in life or business.
Pretty similar, right?
So we repeatedly find when selling to business that if something isn't doing well, a dash of passion makes all the difference.
The truth is that you don't grow a second head on your way to the office; and you may spend more waking hours there than anywhere else. It's not necessarily less interesting or emotional a life than the one you spend at home. It is often more so.
People lie, cheat and finagle their way to whatever business goal they may have. And they kill for money — which is what most business revolves around.
Man is not a rational animal at work any more than anywhere else. He (or she) makes decisions on emotional grounds then tries to find logical arguments to explain them away.
So — if you want better results when selling to business, look in your heart — then use your head to find a way of explaining why the emotional argument makes sense.
Drayton Bird is a renowned direct marketing teacher, speaker and author. Find out more about him on his profile.
This is part two of a series of three. Part one can be read here.
According to the experts, Egg – a branding & marketing company in the States, just 7 per cent of consumers are socially responsible to the core, but 70 per cent of the population (I’m assuming they’re talking about the population of the USA) will recycle and occasionally seek out organic food. So there’s a huge market out there for offering sustainable products. But you can’t badge your company “green” and hope that your product will walk off the shelves – there simply aren’t enough consumers that care to their core to make that happen.
No, what you need to do is engage your client with your values. And that’s why I asked you what shade of green your business is. Consumers are looking for brands with values that they identify with, plus communicate with them honestly and create transparency. And that’s why you need to put your brand values at the heart of your marketing plan. And if “green” in whatever form is a part of your brand values, then you’ll find it much more authentic to market your green credentials than if it’s a periphery activity.
If I think about brands that place green at the heart of their marketing strategy, I think of Dorset Cereals, Abel & Cole and Riverford. Their marketing communications are about so much more than say, how good the oats and raisins are in the cereal. They’re about community, sustainability and the environment. Dorset Cereals, in particular have taken their brand values much wider than food, their communication is about “simple pleasures”. They build edible playgrounds for schools and they team up with like-minded businesses who share their values.
How clever is your communication? Dorset Cereals don’t continually bang the drum that “we’re green, we’re green” – it’s implied through their activities, their copy, their packaging and their design. Is your marketing strategy as sophisticated as that?