Author: pippa@aurik.com

Three levers of change re-shaping the future – and how to get your business ahead of the change

Written by pippa@aurik.com on June 22, 2020. Posted in Aurik Business, Innovation, Leadership, Trends.

Covid has certainly fundamentally changed the environment we live and operate in, but before and beyond Covid there are three major trends that remain relevant. As a business owner you need to understand these, and develop an approach to your business that is likely to position it as relevant to the future.

The noise can be reduced to three main levers of change that are reshaping the business environment of tomorrow.

Listen to the podcast from The Money Show on 702 & CapeTalk :

What are the three levers of change?

Environment

From Carbon emissions to plastic, the world is waking up. Militant reactions to perceived threats to the environment will escalate at an accelerated level across the globe. From water, where the next battle will begin affecting all industries linked to its consumption and contamination, to energy. Conscious abuse and unconscious misuse will be punished by consumer responses.

Economic exclusion

Global growing economic disparities are enabling populist reactions. Corporate entities that accumulate too much perceived wealth and give little back are being targeted. The EU and now, in the lead up to the American primaries in 2020, we have already seen sights set on the global tech firms. Profit without taxes is no longer acceptable and even then, beyond a certain size or market presence, taxes are not enough.

Technology

The rate and pace of digitisation, mechanisation and automation is unstoppable. The race to lead the global economy is being fought through technology as evidenced in the trade wars and America’s attempt to halt the adoption of Chinese 5G technology. In the UK, an intensifying focus on revenue/employee is being used to create incentives for businesses to modernise through digitisation, automation and mechanisation for fear of being excluded from the global economic value chain. This carries attendant implications to jobs, balance of payment issues and the currency etc.

What framework can you apply to position successfully into the future?

An Asset of Value™ is a business that is well positioned, supported by systems and people and releases your time to be strategically focused away from the noise of daily operations. It’s also a business that is very responsive to customer activity. Changes in customer behaviour will be felt and translated through the systems of an Asset of Value™, acting as signals of future opportunities.

We work with established business owners to grow their businesses into Assets of Value™. The nature of this work has exposed us to all sectors and industries across 4 continents. This helps us lend perspective. Once a direction is agreed, we work with you to successfully reshape your business into the future. Let’s talk and build tomorrow, today.

How do we Innovate and what do we innovate to survive the storm?

Written by pippa@aurik.com on June 22, 2020. Posted in Aurik Business, Innovation, Leadership, Mindset, Positioning.

When a hurricane hits an island it hits with its most violent force, and everyone has to literally baton the hatches: lock yourself inside and board up the doors and windows. You then have very few options but to hope and pray it will pass so that you can go out again.

Once the hurricane is over, it is often followed by a storm, which brings torrential rains that cause massive destruction to infrastructure, deadly mudslides and cause as much if not more, damage.

As a business owner, this analogy should be in our minds now.

The lockdown was the hurricane but this emergence into the economy is the storm, which is leaving an environment profoundly different and uncertain.

Listen to the podcast of Pavlo Phitidis’ discussion about this on 702 & CapeTalk:

Just as there were very different behaviours in lockdown – with clear winners and losers, so there are going to be different behaviours now, which will impact on who wins going forward.

Mindset

The first point of strength or weakness resides within you as a business owner – it is in your mindset and attitude. There are broadly two different mindsets, and you can see the telltale signs of who is who immediately. If I start talking about innovation and finding the opportunities in the new environment, and I find that the business owner focuses on what the government, banks, landlords and other external sources of support are or aren’t doing, then I know this individual is operating on hope and fear.

If the session starts with small talk around the big macroeconomic issues but swiftly focuses on their customers, what the customer is doing differently, and what their new lived experience is – I know this is the earliest stage of innovation. And this individual is driven by the right mindset.

The crisis is not over, it is just changing shape, and we can’t escape it.

Growth

A business owner noted, correctly that the environment is going to be uncertain for a long while yet, years even, and he asked Pavlo how he could rationally make the investment Pavlo suggested at a time like this.

Pavlo’s response is that sometimes growing is not spending and expanding. It may be contracting and re-shaping but always guided not opportunity not fear. It is a deliberate process to preserve capital that will be able to cushion the business against future shocks and simplifies the business which makes it more manageable.

Shrink in a smart way, to be more focused on who you serve rather than the knee-jerk reaction to do whatever it is that can make money right now. If you jump at anything, you’ll soon get caught out as delivering to and servicing this new market will inevitably result in rising costs as it’s not your core business.

Digitise

Regardless of what you’re doing – don’t let go of your early stage digital gains that you were forced to make during lockdown. This has to be doubled down on to ensure you stay competitive.

Innovation

Innovation is talked about at length, but what is it?

If you want to become more innovative you need to do two things:

Ask yourself why you do what you do. If you’re in it purely to make money, you’ll chase the transaction rather than the business. But if you have a longer term view to build something with a legacy, you’ll go to the source of innovation: your customer.
Customers will give you the answers. Speak to them, listen to them, understand their needs: this is the seed of innovation.

Aurik works with business owners to help them to find their seeds of innovation, to set their mindset right and to build their businesses into Assets of Value. Contact us to see how we can work together to do the same for you.

Webinar: How to manage your people through uncertainty

Written by pippa@aurik.com on June 17, 2020. Posted in Aurik Business, Leadership, Mindset, Team.

One of the most difficult parts of a business to manage through Covid-19 or any crisis, is your team, and the human relationships you have with your network including clients and suppliers.

Pavlo Phitidis hosted 2 webinars to offer practical insights on how to work with the human beings around you, who are also feeling anxious and uncertain.

In the first he focused on the human level:

How to get up again after you’ve been knocked down
Understand where you are, emotionally
Understand the different realities your team members are dealing with
Use 3 tools to take control of yourself, in order to lead your teams through this difficult time.

WATCH:

In his second webinar, Pavlo focused on more pragmatic matters including:

How to engage your team over this period
How to redirect the work they do over this period
How to assign and manage tasks
How to right-size your team given your business
How to lead and manage the process to get to the other side ready to grow.

WATCH:

The Upside of Down: book launch with Bruce Whitfield

Written by pippa@aurik.com on June 15, 2020. Posted in Innovation, Leadership, Mindset.

Bruce Whitfield’s book, The Upside of Down looks at the opportunities amid uncertainties. Certainly, it could not have come out at a more apt time, just as we were thrust into the Corona Economy. Pavlo Phitidis, a regular on Bruce’s show on 702 and CapeTalk, spoke to Bruce right at the beginning of lockdown about the relevance of the stories and principles in the book, to our current circumstances.

The book is available at all good book stores, from takealot.com or as an e-book from Amazon.com

Tune in to 702 or CapeTalk each Thursday night from 19h30 to hear Bruce and Pavlo discuss an issue relevant to building your business into an Asset of Value.

Building a pricing strategy to grow your business

Written by pippa@aurik.com on June 11, 2020. Posted in Aurik Business, Lead generation and conversion, Positioning.

Pricing sensitivity has driven innovation for years. Because the economy is a massive, complex ecosystem, everything in it is linked and poor growth drives pricing pressures on us all. Yet, the fundamentals of pricing are static. How then do you deal with pricing in this economy when you face the challenges stated in the message below?

This is a Twitter message from a listener “The pricing game is emotional…Suppliers raise prices and you are forced to decide:
1. Do you segment and risk alienating the very people you want to be serving or,
2. Run at a loss until economies of scale kick-in and you can negotiate better bulk cost price. HELP”

Listen to the podcast here:

Pricing can become very emotional. A challenge to your pricing feels personal, especially when you are in the early phase of your business growth cycle. But it never is. Pressure from a customer on your pricing might be real or part of the game in business. Figuring out which one it is and understanding the levers you must manage for your pricing are both science and art…. but mostly science.

Pricing Pressure – real or game?

Customers negotiate pricing for several reasons: Affordability, better pricing elsewhere, just because it’s in their nature, corrupt intentions, alternative substitutes that come in at a better price, perceptions of value are a few.

For so long as someone negotiates, they want to engage. People who are unhappy about pricing and simply walk away, rob you of the opportunity to improve and grow your business. Seldom is it personal.

Understanding the reasons are vital because in them lies real value for you to respond in a meaningful way. For example:

Nature

Customers who have a trading mentality and legacy have negotiation built into their DNA. Its how they see the world and how they operate and respond to the world. They will negotiate despite themselves. In many industries and in cultures around the world, trading and negotiation is part of what makes business fun and engaging. It builds relationships and creates commercial social engagements and in that, friendships, and relationships.

Value

Customers cannot see the value you are offering. That’s your fault and the blame stays with you. Value is a hard thing to demonstrate. It does not come from a product and its features. There are many products out there with similar if not better features. Value comes from effective messaging and communications from your marketing and sales process. It is then amplified or destroyed by your fulfilment and delivery process which should get the promised service or product to your customer. It is an experience as much as it is perceived and its real as much as it’s quantified.

Competition

Everyone faces competition. This is when your product faces comparison with another product. Mostly you can compare feature to feature, for example, a car. If you want a 1.8 sedan, there are loads in the market across many brands. Competition on the product is direct and real and big price differences swing the buying decision.

Substitutes

This will come from products or services that deliver a similar outcome for the customer. For example, a substitute service to the horse in 1902 was the car. Both achieve a similar outcome, getting you from A to B. If the car is dramatically more costly than the horse, then the horse would’ve remained in play. In today’s terms, think Uber versus buying a new car.

What are the levers of pricing?

The pricing of your product has three technical levers and one artistic lever. Technical levers include the costs and competition.

Costs

You must cost out your product or service. If you are making something, it’s easier to cost out as opposed to a service that you have created. Both have input costs including raw materials, manufacture and production, fulfilment and delivery. Everything from the pencil to the power you use to produce this product must be costed and understood.

Competition

You must understand the difference between you and your competitors. If you have a product company, then product comparisons are likely and so features and abilities of the products are a big deal. That’s half the game.

The other half lies in understanding the final experience the customer will have and costing that out too. Once you have this understanding, position yourself in the market to win as best as you can. Remember, your pricing will enforce that positioning. You cannot be the cheapest and best quality. Both carry costs and those costs add to the final price you offer your customer along with the promise of the experience that they’ll have from you.

Value

This is hard to get right. Most businesses claiming to offer value rely on marketing messaging but have no real answer to how value is calculated and sold. There is a formula for this and here it is: Value = Difference between a customer’s problem not being sold and the cost of your solution to that customer.

Quantifying a customer’s problem requires a few things:

A profound and deep understanding of your customer and the problem you solve for them. there is no such thing as a luxury buy from a customer. Everything anyone and everyone buys, solves a problem for them. if you can’t articulate that problem, you do not understand both your business and your customer. Read more on getting this right HERE.
Costing out that problem in real money is the true test to which you understand the customer and the problem you claim to solve for them. It must include everything leading up to the problem, everything in the problem and everything after the problem – all solved. For example: Competing with Chinese imported products should be calculated not only on the product but the entire cost of doing business to get that product into store, sold and serviced thereafter.
Get the math right – persist in understanding the maths and be sure that your costing strives to continuously improve the accuracy of these costs.

Your artistic lever is how you ascribe and communicate your value.

This lever is all about wrapping. You have a beautiful product/service, make sure you communicate it widely and simply. The extent to which you achieve this is entirely dependent on who your customer is, how they buy, why they buy, when they buy and so on. You can see why trying to be all things to all people and serving all customers will lead you to become nothing to anyone, resorting to a haggling, price negotiation on each sale.

What if you’ve done it all and still can’t win?

There are a number of alternative strategies but consider these two for now:

Dead End

Then your business is flawed. Some products and services require massive muscle to succeed. These are the generic, commodity businesses. Baked beans are a pricing game in urban areas. Fynbos infused tissue oil is not.

Innovate

Innovation is all about necessity. If you can’t win by playing by the rules, change the rules. That’s what Uber did, you could do it too. But we have already discussed how to get that right. Check it out HERE.

If you have a great product or service and you can see it solving 101 problems for 101 customers, let’s talk. If you have a good business that’s done well in the past and is now facing formidable pricing pressures, let’s talk. Leaving both “conditions” unattended will take you to the edge of the precipice. Then little can be done to run that fateful next step into a new direction, and with that, a business that thrives once more. We call this journey building an Asset of Value. It’s all you should be doing, all the time and its something we’d be glad to do with you.

Growing revenues through indirect sales channels

Written by pippa@aurik.com on June 9, 2020. Posted in Aurik Business, Lead generation and conversion.

Effectively growing your business revenue needs a lot more than just a regular sales effort. Developing and implementing sales channels is a key strategy to get to the next level, and build your business into an Asset of Value. But, before you begin utilising specific sales channels, consider how effective they will be for building your business. You must first understand where, why, and how, your customers want to buy your products and services. On The Money Show with Bruce Whitfield, Pavlo Phitidis shared different types of sales channels, and how you can use them to grow your revenue:

Listen to the podcast here:

WHAT IS A SALES CHANNEL?

A sales channel is the mechanism you use to sell to your customers. These can be direct or indirect, and creating a variety of sales channels is imperative to remain ahead of your market and competitors. But, beware: poorly considered sales channels will not deliver the results you want. In fact, they may well generate more complexity, mixed messaging, cashflow bleed and cannibalized sales. Here are a few that you should be using:

1. DIRECT SALES CHANNELS

Direct sales channels involve selling your products to your customers, face-to-face.

Advantages include:

The ability to easily explain and demonstrate complex products.
The opportunity to learn more about your customers’ unique problems and desires, while delivering a specialised service.
The potential to use and improve your sales skills.
The chance to build a personal relationship with your customers.

Disadvantages include:

Direct sales channels can be expensive to run, requiring a larger team, premises, and travel expenditure.
They are people intensive, creating a variety of performance management and customer experience challenges.
Replicating your success in other regions can be difficult: A successful business in KwaZulu-Natal may not be as successful in Gauteng.
In growing businesses with ambitions to spread their reach and drive sales, opening new branches is a common strategy.

2. INDIRECT SALES CHANNELS

Adding indirect sales channels to your sales generation activity is vital if you want to grow beyond a small, survivalist business.

Indirect sales channels can help you build your business because they:

Change your cost of selling overheads and enable you to reach customers that you would not be able to reach through a direct sales channel.
Enable you to reach and service customers who are not located geographically close to you.
Equip you to sell your products and services in bundled formats, saving you both time and money.
Learn more about your new target market before you invest in creating direct sales channels to serve it.

Using indirect sales channels to build your business can help to build your business revenues, but getting the implementation right is key. Carefully consider your relationship with your channel and design it to become stable and reliable. A watertight agreement, including clearly defined terms and conditions relating to pricing, supply, service, stock, and benefits is important.

3. DISTANCE SELLING

Israel provides the perfect example of distance selling done right. It attracts 38% of all global venture capital investment and is widely regarded as a global startup hub. Israel is, however, surrounded by sea, hostility, and constant conflict. How did Israel get it right? Through the purposeful implementation of distance selling methods. Distance selling means selling by phone, television, or the internet. Using distance selling, you can:

Approach hard-to-reach customers, who may be geographically located far away from you.
Support repeat orders from established customers.
Reach potential new customers and establish your share in new markets through the internet.

Distance selling can be a relatively low-cost way of reaching potential new customers, that enables you to get through to hostile markets, and can translate into subscription or membership-based sales and annuity revenues. Distance can creates a hostile barrier to sales, and demonstrating your products can be difficult, unless you’re able to effectively communicate the ins and outs of your product using the internet. Building relationships of trust can also be difficult through distance selling. Keeping your customer acquisition cost in check is important, especially when using distance selling methods.

4. OUTSOURCED SALES CHANNELS

Using a sales agent, or listing your products with a retailer, means you can build your sales without having to make heavy investments. You won’t need to recruit, train, and pay for your own team, and can take advantage of the agent or retailer’s existing customer base. They may already be selling complementary products, which means they’re able to sell your products cheaper than you can.

Outsourced sales channels can help you build your business into new markets. Again, a watertight agreement is imperative, including clearly defined terms and conditions relating to commission, pricing, supply, service, stock, and benefits. Offering exclusive rights for your products to a sales agent or retailer could effectively cut you off from other potential target markets, so ensure that your contract ensures success for your business.

Building effective sales channels for your business isn’t easy. Aurik can help, as we help you build your business into an Asset of Value.

Webinar: How to digitise your business for a social distancing world

Written by pippa@aurik.com on June 8, 2020. Posted in Aurik Business, Innovation, Leadership, Mindset, Operational systems, Positioning.

Things will not go back to the way that they were, even after the lockdown ends. For businesses operating in this new reality, it’s no longer a choice, you have to digitise.

Pavlo Phitidis hosted a 60 minute webinar in which he unpacked practical, actionable insights to understand:

What the future looks like for your business
What can you digitise in your business?
How to go about digitising parts or all of your business?
What digital skills do you need to develop to stay relevant in the future

Watch it, share it with your team, and start now to get your digitisation strategy right.

Collaborators will be the kings of the Corona Economy

Written by pippa@aurik.com on June 8, 2020. Posted in Aurik Business, Innovation, Lead generation and conversion, Leadership, Mindset, Positioning.

Whatever you did to achieve success pre-Corona is not going to be the same as the things you need to do to achieve success in a Corona world.

Our whole way of interacting with the physical world, and with each other, has changed and will stay that way for a long time yet. Our priorities as human beings and consumers have altered drastically. Things that used to feel like necessities – the cappuccino on the way into the office; the cars we spent hours in, the gym session to clear our heads – none of these is essential in a world of social distancing.

As a business, if you’re waiting for things to go back to ‘normal’ you’re waiting to close your doors. You must reset your business for the new reality, which means understand the new problems that your pre-corona customers will now face, and rebuilding your business to service them.

We have developed three strategies to get this right. Red, during lockdown, is all about resetting your business. Amber, the 3 to 6 months post-lockdown, is what you need to do to turn your insights gained during the red phase, into a rebuilt business during this phase. Finally, green, once you have seen and understood what works, is the time to accelerate and reignite growth.

Remaining positive is crucial. The right mindset, irrespective of your current circumstances, will yield positive outcomes if you act against these 3 strategies. At a recent Aurik client roundtable with 15 business owners in industries as varied as restaurants and rubber manufacturing, we came up with ideas that saw collaborations between these unlikely partners, that fit each of these categories.

In the Red zone, business owners in computing, airfreight and distribution identified that there are not enough laptops in South Africa to meet the demand caused by remote working. So the three of them are exploring the possibility of chartering a plane to bring in these new essential resources.

In the Amber zone, an auto dealer, rubber manufacturer, virtual reality services and computing hardware provider are looking into digitising an outbound sales force.

In the Green zone, a coatings specialist, exhibitions company and a restaurateur are coming together to design a series of physical distancing solutions for retail and industry.

Collaborations are going to be key going forward, to ensure that we can act as quickly as possible to solve the new problems that the corona economy presents.

We’ve hosted a series of webinars that go into depth on many of the points touched on here, visit www.aurik.com/corona or reach out to our team who can support you on your recovery and growth strategy – www.aurik.com/contact

To open or not to open in Level 3?

Written by pippa@aurik.com on June 1, 2020. Posted in Lead generation and conversion, Leadership, Mindset, Positioning, Team.

Most businesses are now able to operate at Level 3 but Pavlo Phitidis argues that this doesn’t mean that you should rush back without considering the implications.

His point is that all the costs you negotiated down to keep your business afloat during lockdown will probably be due once you go back to work. And are you able to cover those costs yet?

Listen to the podcast of Pavlo’s discussion about this with Bruce Whitfield on The Money Show on 702 & CapeTalk:

Re-negotiating with these suppliers, based on a percentage of revenue, for example will enable you to re-start without suffocating under the burden of full costs as per pre-lockdown, when your income is not going to be back to where it was pre-lockdown.

Pavlo advises:

Be cautious

Do not take bets, which if they fail, will sink you altogether. He uses the example of learning to jump from a 3m height. You don’t start at 3m – you start at 30cm and practice jumping perfectly. When you have that, you go up to 45cm – and only move on when you land perfectly, 500 times over, at that height – it has to be safe before you can proceed

Be customer-led

Only choose 2 or 3 of all the products and services you could take to market post-lockdown. See what your customers need – and concentrate on those rather than chasing the ones you THINK will generate the biggest revenues.

Go to the money

Focus on your customers and categorise them into Red, Amber and Green – in terms of their likelihood to survive lockdown. It may feel very callous but if you are struggling, you can’t afford to invest in your Red clients, who may not be there next month. You need to go to the money – those who will likely pay, and will likely be there next year.

Get to the coalface

If you consider this re-opening as a battle, you need to be right at the frontline of the battle, to listen to what your customers are saying, and to understand what is really working, and what isn’t, to make the calls on what to do next. You have everything to lose as the business owner – so you’ve got to be confident in the market insight that you have.

Get paid

Don’t be bullied by clients who are demanding excessive terms to secure their business – negotiate terms that give you some cashflow – maybe it will be monthly payments for the duration of the project rather than your usual upfront terms, but you cannot afford to invest any time and effort in anything you aren’t getting paid for. And you don’t know how desperate that client is and whether their promises to pay at the end are realistic.

Marketing messages

As we re-open, you need to tell your customers that you are open again. Without knowing what their circumstances and experiences are, you need messaging that is appropriate to the times. Maybe they aren’t opening, maybe they have had to lay off team members, maybe they are scared of re-opening. Consider your tone, approach and offer carefully to ensure your message resonates with their need needs.

Building a positive frame of mind in a negative environment

Written by pippa@aurik.com on June 1, 2020. Posted in Aurik Business, Mindset.

We live in unstable times, and a brief look at the news headlines is almost always disheartening. Constant exposure to the news, along with a teetering economy, can make you feel deflated, frustrated, and ready to give up as a business owner. Here we look at what to do when you’re feeling despondent, by examining seven traits of successful business owners.

USE THE ANTIDOTE OF ACTION

The antidote for fear and depression is found in action. Your growing business is a direct reflection of your own self, so overcoming fear and committing to moving forward, despite current circumstances, is essential. By taking action, you are empowering yourself and your business. Work with what you have and take small steps in your business, taking time to reflect, learn, and build.

GO WITH THE FLOW

Circumstances may not be ideal, but that doesn’t mean you should stop. Rather, go with the flow, and adopt the Master Oogway (yes, the wise turtle from Kung Fu Panda) approach: “Your mind is like water, my friend. When it is agitated, it becomes difficult to see. But, if you allow it to settle, the answer becomes clear.” Your growing business is defined by your approach to it – agitate the waters of it, and it will be very difficult to navigate. But the moment you let things settle and go with the current of your business’ waters, you’ll see your way forward, far more clearly.

PICK YOUR COMPANY

Surrounding yourself with the right type of people goes beyond just who you pick to work with you within your business – it includes the people you spend time with, in any circumstances. Spend time with people who inspire you, and who utilise the positive approach you wish to adopt.

TAKE CONTROL

Circumstances may not be ideal, but that does not stop you from taking control. Just as German business people have re-engineered their businesses to take advantage of unique opportunities abroad, you too can adapt your business, and approach to the circumstances surrounding it, and keep flowing like water.

AUTHENTICITY IS YOUR ONLY CERTAINTY

The oracle of Delphi told people that they need to be concerned with being themselves, and immediately forgive others who expect them to be anyone else. By being real in what you do, and remembering that your authenticity is energising, you won’t easily be imitated, and you’ll retain your focus as you move forward, with certainty.

This was more recently (about a hundred and ten years ago) brought back into light by Wallace D. Wattles who published his book, The Science of Getting Rich in 1910. This unusual piece of writing will sow seeds of hope in all and any that feel the weight of despair in a the midst of negativity and recessionary economic activity. Mr Wallace talks to a mental technique that he called “thinking in the Certain Way, to establish a state of positivity and self-affirmation.

CLEAR THE FOG

The constant stream of ‘noise’ from the outside world can be difficult to ignore, but finding ways to clear your head, and clear the fog, is important. Having clarity of mind will help you to make good decisions, and take purposeful action, for your business.

DO THINGS DIFFERENTLY

Your ability to adapt and respond to new challenges will serve your business well. During uncertain times, you can try new ways of conducting your business, experiment with new marketing methods, or try a different sales approach.

If you’re finding it difficult to move your business forward through tumultuous times, get in touch with our team at Aurik. We’ll help you build your business into an asset of value, no matter what hits the headlines.