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Honesty is the best policy

August 31, 2010 by Drayton Bird

In marketing, people often say what they would like to be the truth rather than what it is. It always catches up with them.

It reminds me of something I read in a New York Times obituary in 1984. "Honesty is not only the best policy. It is rare enough nowadays to make you pleasantly conspicuous."

This is not only funny; it is very good advice and came from Charles H. Brower. He was chairman of the advertising agency BBD & O — Batten, Barton, Durstine and Osborn — a name the great W. C. Fields said sounded like a man dragging a heavy trunk down a flight of stairs.

When he took over, the agency was in a mess, and he was the architect of its renewal. Today it is one of the world's three biggest advertising agencies.

 Sometimes telling the truth can get you out of a tricky situation. For example years ago I was writing copy for a slimming product when the law changed, and you had to say in your ads that such products had to be used in conjunction with a calorie-controlled diet.

My client was very worried. Now losing weight didn't sound nearly as simple and easy.

I just revised the ads, putting at the start the following:

"Doctors agree: you can't lose weight without having a calorie-controlled diet."

I believe the ads did just as well or better, because most people don't believe in miracles — and the mention of doctors did no harm.

The principle of accepting and even capitalising on your short-comings is well worth considering. Here's another -—something we wrote for a client about a year ago.

"To be honest, you may find a slightly lower interest rate if you hunt around. That's because the loan industry is in a price war. But will there be a guarantee it will never go up? 6.8%APR is one of the lowest rates around (in fact we are committed to being amongst the very best value providers for every product we offer)."

There are plenty of examples where people don't tell the truth in their marketing. What's more, finding a claim that is true and differentiates you is not easy.

But Waitrose - Quality food, honestly priced — may not seem creative but it is good. 

As is Never knowingly undersold — John Lewis

Drayton Bird is a renowned direct marketing teacher, speaker and author. Find out more about him on his profile. 

Dragons' Den digest - Week 8

August 31, 2010 by Anna Mullinder

If you missed last week's, catch up here and below you will find the highlights of episode seven.

Quote of the Episode: "I think you are a product genius." Peter Jones

Idea 1
Product:
Yum Yums – collectible series of books to encourage children to eat healthily.
Investment sought: £100,000 for 20 per cent equity.
Handling: The Dragons didn't look impressed with the dancing fruit that opened the pitch. The company had a good deal with Borders but it went into administration. Peter Jones was disappointed with the stories and the lessons they teach to young children and told them to go back to the drawing board with the whole product. Duncan Bannatyne noticed spelling/grammar errors in the books. Deborah Meaden encouraged them to sell what stock they have left and not to invest any more money.
Outcome: No investment.
Verdict: Lack of attention to detail in the books led to disappointment.

Idea 2
Product:
Valuemystuffnow.com – online antique valuations.
Investment sought: £100,000 for 20 per cent equity.
Handling: Confident pitch but gave over-complicated answers to the Dragons' questions. Peter Jones questioned his figures, but Patrick answered confidently. After three of the Dragons declared themselves out, Theo Paphitis explained that he could see the potential of the buiness and thought that there would be further demand for his services. He offered £50,000 for 20 per cent equity and Deborah Meaden matched it.
Outcome: Patrick tried to negotiate down the equity but failed. He accepted their offer of £100,000 for 40 per cent equity. 
Verdict: As James Caan said: "What a charming man."  

Idea 3
Product:
Odourbuster – toilet odour extractor system.
Investment sought: £75,000 for 15 per cent equity
Handling: Confident, well-rehearsed pitch. Duncan Bannatyne couldn't see a need for the product and claimed he'd never had any complaints about bad smelling toilets in his health clubs, hotels or spas. They changed their tack after this, although their original aim was to remove bad smells, the product also complies with building regulations and removes the need for extractor fans. They struggled to convince the Dragons that it was an investment on which they could make a return. 
Outcome: No investment.
Verdict: A confident pitch but while the product met residential building regulations, it wouldn't work in cubicle rows in commercial premises without a solid wall.

Idea 4
Product:
Power8 Workshop – cordless power tool set.
Investment sought: £150,000 for 5 per cent equity
Handling: Strong pitch and an interesting product demonstration. The Dragons were very impressed by his product design but the complicated share ownership structure led to three Dragons declaring that they were out. However, Peter Jones saw that the real value was in the inventor and the products.
Outcome: Christopher accepted Peter Jones' and Duncan Bannatyne's offer of £150,000 for 30 per cent equity going down to 20 per cent once the investment is repaid.
Verdict: Nice to see a successful inventor in the Den.

What did you think of the episode?

Related articles:

The IT Donut is born

August 26, 2010 by John McGarvey

IT DonutAfter a lot of hard work, more than a few donuts consumed, and assistance from a whole bunch of helpful experts, we're really pleased to announce that the IT Donut has launched.

We're really excited about getting our new site out in the world, so head on over to http://www.itdonut.co.uk to get your fix of IT advice and information for small businesses.

What do you think?

To use a bit of IT jargon, the IT Donut is currently version 1.0. We're pleased with it, but we're still looking for feedback and help so we can make it even better.

If you have any comments on the information the site contains, or how it looks and functions, send a quick email to info@itdonut.co.uk. Alternatively, leave a comment on the IT Donut website to tell us what you think.

Be one of our experts

We're also working hard to expand the information on the IT Donut. To do this, we're recruiting IT experts to help us.

If you're knowledgeable about any area of IT, we'd love to hear from you. Again, just send an email to info@itdonut.co.uk and we'll see how we can get you involved. In return you'll get exposure on the site, plus the warm feeling that comes from knowing you've helped out lots of small businesses.

Finally, don't forget that we'll be continuing to update this blog as normal alongside the main IT Donut website. You'll soon be able to see all the latest posts directly on the IT Donut homepage, but in the meantime, do keep checking back here for news and information too.

 

If you missed last week's, catch up here and below you will find the highlights of episode seven.

Quote of the Episode: "Not all good ideas are money-making ideas." Theo Paphitis

Idea 1
Product:
Gift Card Converter – online marketplace for buying/selling gift cards.
Investment sought: £50,000 for 25 per cent equity.
Handling: Confident pitch. They want investment to increase their marketing efforts and develop the business further. Duncan Bannatyne doesn't think it will make any money while Theo Paphitis and Deborah Meaden questioned the legalities of the business.
Outcome: No investment.
Verdict: Confident pitch and confident at answering questions, but the Dragons were concerned about whether the business was actually legal. No deal.

Idea 2
Product:
Surviva Jak – foil jacket for walkers to help prevent hypothermia.
Investment sought: £75,000 for 30 per cent equity.
Handling: Good initial pitch but lost their confidence when Duncan Bannatyne questioned their financial calculations. The male Dragons interrogated them over their market research but Deborah defended them, saying she could see they had made mistakes but didn't understand why they were coming in for such harsh criticism.
Outcome: Deborah Meaden offers them £75,000 for 45 per cent equity, they try to barter it down to 40 per cent but she won't budge. They accept 45 per cent. 
Verdict: A rocky pitch, they struggled under questioning, but received a good investment.  

Idea 3
Product:
Citidogs – Dog Crèche.
Investment sought:  £75,000 for 20 per cent.
Handling: Starts out seeming like an investable idea. Duncan Bannatyne suggests they go away and work out their financial projections – they haven't evaluated the true cost of their business as they're not taking a salary and haven't registered for VAT.
Outcome: No investment.
Verdict: Started well but need to think through their finances in more detail.

Idea 4
Product:
The Wand Company – buttonless remote control that works on movement.
Investment sought: £200,000 for 10 per cent.
Handling: Theo Paphitis looked impressed by the demonstration of the magic wands – a special take on remote controls. Product cost £50 when sold directly to customers but just £10 to make. Confident with their figures even under questioning. They received offers from all the Dragons. 
Outcome: Accepted Duncan Bannatyne's offer of £200,000 on a sliding scale starting with 30 per cent share and going down to 10 per cent if they make £1.2 million.
Verdict: Strong pitch and product demonstration. Interesting to see all five Dragons make offers.

What did you think of the episode?

Related articles:

Too much information! Where's the line between sign-up and turn-off?

August 20, 2010 by Emily Leary

I thought I’d take a moment out to tackle a personal bugbear of mine: excessive sign-up information requests.

Many websites quite reasonably ask users for sign-up information in order to access specific features like forums, or to join mailing lists, but sometimes, they just go too far:

  • Mother’s maiden name?
  • Annual net profit?
  • Favourite after dinner mint?

It’s very understandable to want to know as much as you possibly can about a customer so that you can serve them better, but if you ask too many questions, you’re encroaching unnecessarily on their time, and if your questions get too personal, you’re encroaching on their privacy.

Remember, by its very definition, sign-up information is usually requested at the beginning of your relationship, so why ask in depth questions about a person’s business practices and personal life that you wouldn’t dream of asking at a first face-to-face meeting? At best, your customers will plough through the questions with a feint feeling of resentment and at worst, they’ll change their mind and go somewhere else.

Of course, asking for too little information may make it difficult to follow up with customers and target future marketing campaigns, so think carefully about the core information you need to know, and ask for that and only that. Otherwise, prepare yourself for a barrage of aborted sign-ups and false information.

Emily Leary is director of Emily Cagle Communications

Notes on a Donut

August 18, 2010 by James Ainsworth

Some of you may know and some of you may not but this is my last day with BHP Information Solutions and so 15 months of being ‘the one behind the Marketing Donut Twitter account, the joint number 1 ranked Twitter account in Bristol and the one that did that 24 hour election live blog thing’ must, for me, come to an end.

I have enjoyed every tweet of my time here and getting to know what makes a small business tick has been a great education. We have had some great conversations online, you and I. We have created some brilliant articles together and shared some notable success. I am sure that with the help of the Marketing Donut (and the other Donut websites too!) you and your business will go on to have many future successes also.

For the Marketing Donut and @MarketingDonut, it will be small business resources and communication as usual and you will notice very little change from this day to the next. I wish the Donuts the absolute best for the future and know that I am leaving a resource that is truly valued by small businesses.

Best wishes

James Ainsworth

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