Gain, train and sustain to retain your team

It’s a satisfying feeling when we know we have completed something and done it well.  It’s a good feeling that goes beyond the immediate returns.

CC-BY Image - https://www.flickr.com/photos/63369864@N00/3970308905
CC-BY Image – https://www.flickr.com/photos/63369864@N00/3970308905

If feeling good about a job well done is so simple, why do we need to be concerned about job satisfaction?  Because, if you have a great team, you need to understand them in order to retain them. What is it that motivates your team?  Is it rewards? Is it encouragement?

Here are four key areas to concentrate on when aiming to retain your staff:

  1. Gaining the right staffing – To know how to attract the right people in the first place, you need to know why your current staff work for you and why they might leave you.  You can find this out by undertaking anonymous surveys, having informal conversations, asking the right questions during performance reviews, and conducting exiting interviews.
  2. Training your team to be their best – Research shows that your business will gain a return on investment of more than 30% through targeted training.  It will also mean that your team will feel more confident in what they does. There are many forms of training, including: Formal and informal learning, on the job learning, project/action based learning, and through community of practice
  3. Sustaining your team’s motivation – Your leadership style plays a big part in how you can motivate and sustain your team. People are more motivated by intrinsic motivators (eg praise, autonomy) than extrinsic motivators (eg money, holidays).  So consider this when you are using carrots to motivate your staff versuses when you are using a stick approach.
  4. Retaining your team saves you money – Replacing a staff member can cost your business almost two years of salary in fixed and hidden costs, as well as the time and energy involved in recruitment, so it’s crucial to realise just how important it is to retain your staff.  Great ways to retain your staff include offering things like Rewards programs, Employee Assistance Programs (EAP), social activities and sharing good news stories through regular team notifications and emails.

Keep in mind that there are many reasons why people stay in a job, including: personal ambition, being recognised, having rewarding challenges and flexible working hours, having a supportive environment and the opportunity to be trained/given responsibility.

Collaboration is the key to success

A modern business operates in a very complex environment that requires its people to work collaboratively with one another if the business is to survive.

CC-SA image by Scott Maxwell - https://www.flickr.com/photos/lumaxart/2137737248/
CC-SA image by Scott Maxwell – https://www.flickr.com/photos/lumaxart/2137737248/

Collaboration is a process of shared decision-making in which all team members constructively contribute to workplace processes to achieve jointly determined outcomes.  Creating a collaborative workplace often results in a win-win situation, where everyone involved can gain from the experience through successful outcomes and the feeling of achievement.

When working collaboratively, a team needs to:

  • have a shared vision to work towards which has been jointly determined
  • have clearly defined goals which outlines what they are trying to achieve, and
  • which builds upon, and develops, the interests and skills of each team member

Collaborative workplaces don’t just happen – they are created through effective leadership by:

  • Collectively deciding upon team goals and outcomes
  • Participating in regular meetings to discuss the team’s progress and collectively make decisions
  • Undertaking activities which promote individual accountability
  • Encouraging the equitable sharing of the workload
  • Determining the mutual benefits for both the individual team members and the team as a whole
  • Building trust within the team by providing encouragement and praise of all involved

A collaborative workplace also recognises that people are different and these differences should be valued and accepted.

The commitment and involvement of other leaders is also very important.  So is the inclusion of other stakeholders from the different parts of organisation. This inter-dependence of all stakeholders will result in mutually beneficial solutions and outcomes being reached.

Creating and supporting a collaborative workplace takes time, and conflicting interests or when interests of a few are allowed to drive an agenda can derail the collaborative process, so it is important that as the leader, you help your team stay focussed on what’s important eg providing the best product or service for their customers that you possibly can.

CC-SA image by Scott Maxwell - https://www.flickr.com/photos/lumaxart/2137737248/
CC-SA image by Scott Maxwell – https://www.flickr.com/photos/lumaxart/2137737248/

Support your team’s ongoing development and growth

The world is an increasingly complex place where people need more and more skills to be effective contributors to the workplace.  To develop new and higher levels of skills, people need to be able to learn, unlearn and relearn continuously throughout their lives. 

CCO Creative Commons image by johnhain - https://pixabay.com/en/potential-development-expression-1353776/
CCO Creative Commons image by johnhain – https://pixabay.com/en/potential-development-expression-1353776/

Learning no longer only happens in classrooms, with around 70% of learning happening as informal learning in the workplace and beyond. The time has also come where learning needs to shift from simply listening to others share their second-hand experiences through lectures and books to actually experiencing things first-hand.

This ongoing development and growth is critical to the success of individuals and businesses but this will only happen if it is supported by a ‘culture of ongoing development and growth’ at an organisational level.

For your business to succeed, you need your team to be able to:

  • find and determine what is relative information from different sources through critical literacy skills
  • develop informed opinions and be able to articulate them through written and verbal communications using various multimedia and social networking technologies, and
  • be creative and innovative by using their imagination to solve complex, unscripted problems with others

This ever-changing environment needs your team to increase their capacity to deal with new and unknown situations through the skills and knowledge they have gained in their informal workplace and/or daily life experiences, as well as participating in formal education at ever higher levels.

This requires your team to have self-directed learning skills.  Unfortunately, self-directed learning cannot be solely left to the individual to manage as learning rarely happens in isolation.  In order to help your team manage their own learning, you need to create an environment which directly supports them to reach their potential. Goleman (2002, p. 18) states that “getting the best out of people pays off in hard returns” as learning ensures an organisation remains relevant. Without the creation of these learning environments and the involvement of others in self-directed learning, “lasting change can’t occur” (Goleman, 2002, p. 111). The key to managing this change is by creating a culture of ongoing development and growth in your organisation.

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This post is an updated version of the very first post on this site in January 2012 called “Looking to the future … creating a culture of ongoing development” – interesting that the need for ongoing development and growth has only increased since the original post.

Good communication is complex

Good communication is complex so it is important to keep this in mind when you are communicating important messages to your team.

How you communicate with others is based on the assumptions you have learned over your lifetime.  However, these assumptions can seriously impact how you communicate with others. 

CC-BY https://commons.wikimedia.org/wiki/File:Ghozt_Tramp_-_Business_Communication_Duplicat_model.jpg
CC-BY https://commons.wikimedia.org/wiki/File:Ghozt_Tramp_-_Business_Communication_Duplicat_model.jpg

For example, different cultures have different ways of communicating with one another.  Some cultures show respect for others by not giving them eye contact. However, in White Australian culture, this communication style is seen to be rude and disrespectful.   

Your ability to effectively communicate with others is an important skill, especially when you need to engage people to do things that they might not want to do.

In order to communicate effectively, it is important to really understand your audience and clearly articulate your message by ensuring you provide all parts of the information needed to effectively get your message across.  

While verbal communication is a very rich means of communication, your non-verbal communication skills often influence others more because your body language makes up two-thirds of the way you portray messages to others.

The key component of good communication as a leader is providing feedback to your team, especially constructive feedback, so that the person can ‘hold face’ in their job role following this feedback.  

You do this by:

  • Taking your emotions out of the conversation and only focusing on the facts
  • Providing the feedback in a private place so others cannot hear the conversation
  • Providing the feedback promptly so the feedback can be taken on board quickly and the behaviour is less likely to be repeated
  • Focusing on the specific behaviours which need changing
  • Ensuring the person receiving the feedback understands what the appropriate behaviour should be by providing examples or role models
  • Assuring the person receiving the feedback that you trust in their ability to do their job
  • Articulating the steps needed or the solution required so the behaviour does not happen again
  • Documenting the feedback for future reference

Leadership is multi-dimensional

Leadership is about inspiring and influencing others to work together towards a common goal while allocating scarce resources to achieve change.  Leadership is your business’s core competency in meeting the many challenges it faces. 

CC-BY image by Scott Maxwell - LuMaxArt Silver Guy Phone Support - https://www.flickr.com/photos/lumaxart/2295910115
CC-BY image by Scott Maxwell – LuMaxArt Silver Guy Phone Support – https://www.flickr.com/photos/lumaxart/2295910115

But Leadership is also multi-dimensional, so here are 10 top tips for leading your organisation:

  1. Have a clear vision or understanding about what you are trying to achieve –  Without having an end goal in mind, it is hard to determine what direction to take
  2. Have a very good understanding of your environment, both internally and externally –  This will provide you with the insight needed to make appropriate choices, and it may provide you with creative ideas and strategies to sustain your organisation’s competitive advantage
  3. Take an entrepreneurial orientation by really understanding what your core business is and who your target market is – as this technical expertise will provide you with mechanisms to cope with complexity and change.  It will also provide you with insight into what your competitors are doing or what your organisation could be doing
  4. Understand the legislative/regulatory environment of your industry and organisation – These external rules provide frameworks/guidelines by which you/your organisation must function because to work outside of them puts your organisation and your staff at risk
  5. Develop/understand appropriate organisational policies and procedures that reflect the culture of the organisation – because these operational guidelines provide exemplars of best practice which allows your staff to consistently do their job properly by providing quality products and services to your customers
  6. Understand your own leadership style and work preferences – so you know how tthey influence your decision making, work outputs and your relationship with others
  7. Develop effective communication strategies and networks – as this will ensure that you are emulating the right messages which will instil trust in your team.  Effective networks will also provide you with sounding boards and opportunities
  8. Understand your teams’ work preferences and ways of working – humans are unique so each of your team members will have their own ways and styles of working.  Understanding these means that you can help match the right people to work with one other, while also determining what their individual needs may be
  9. Knowing your team beyond their job and the workplace – by understanding your teams’ physical/psychological needs you can take these into account when making decisions
  10. Take many approaches to performance management – humans thrive in the right situations and with right rewards and recognition.  This comes from understanding the lay of the land in the workplace and how people are functioning in that environment

Leading – You’re not always in control

Being a leader means that you need to inspire and influence others to work together towards a common goal.  However, there are many internal and external factors which influence your leadership style.

Internal factors – The culture of your business is based on its vision and

CC0 Public Domain image by quicksandala  -  https://pixabay.com/en/leader-crowd-stand-out-group-2815528/
CC0 Public Domain image by quicksandala –
https://pixabay.com/en/leader-crowd-stand-out-group-2815528/

values which then evolve into strategies and decisions that ‘set the scene’ for how your staff will function in your organisation. Consider how your business’s vision and values impact how you need to lead to achieve these.

Your business’s competitive advantage strategy also dictates how your staff will produce your products or deliver your services. Whether your business offers the cheapest or the best quality, this will impact how you inspire or influence your staff to interact with your product or deliver your service.

All business thrive on the information they have about how the business runs and who their customers are etc.  How your business manages this information determines how your staff can access it.  For example, if this knowledge is all in your head, then they are always reliant on you to provide this information.  If you get it out of your head and into policies, procedures and databases, then your staff can ‘self-serve’ and contribute to this knowledge.

The communication systems you have are also important as people absorb messages in different way.  Using a range of communication systems eg meetings, emails, briefing documents etc, will ensure that your message has many ways to filter through to your staff.

External Factors – All businesses are impacted by globalisation in one way or another, eg new international competitors. The political and economic environment of your region also impacts your business, so it is important to know which government policies and laws which affect it.  

Other external factors include the bargaining power of suppliers and buyers, the threat of new entrants if the entry and exit barriers of the industry are low;  the possibly of other substitute products/systems offering better value propositions, as well as the competitive advantages of your competitors – so keeping an eye on what happens outside your business.

While you may think you control your own leadership style, remember the many and varied internal and external factors which also influence it.

Unleash the creativity which leads innovation

Creativity and innovation play an important role in the survival of any business.

Creativity is the connecting or viewing of things in a different way than the status quo.  Creativity is not only about solving a problem, but also about providing better aesthetics, happiness or for the betterment of people, animals and the environment in general.

Innovation is about taking creative ideas and/or processes and turning them or making them into reality – which is the backbone of any successful business.

A good example of this is when Jack Ma, a Chinese school teacher, used his creativity to believe that he could revolutionise how the Chinese could buy and sell online.  However, the real innovation happened when he brought together a team of people who had the skills and processes to make this vision happen through his company, Alibaba.

CC0 Public Domain by Flash Alexander - http://www.publicdomainpictures.net/view-image.php?image=185411&picture=bright-idea-quercus
CC0 Public Domain by Flash Alexander – http://www.publicdomainpictures.net/view-image.php?image=185411&picture=bright-idea-quercus

 

Where does creativity come from?

The application of creativity requires three components (Amabile 2012):

  • Domain-relevant skills – some expertise in the area of creativity
  • Creativity-relevant processes – skills and attributes to be a divergent thinker
  • Task motivation – the ability to thrive on intrinsic or ‘self-satisfying’ motivation

Everyone can be creative, however, creative people can be described as having the following traits:

  • Come up with more than one idea or way of doing something
  • Using a variety of thinking styles to see things differently
  • Do not automatically follow conventions or assumptions
  • Are intrinsically motivated
  • Appreciate diversity and uniqueness
  • Are willing to push the boundaries and take risks

Unlocking the barriers to creativity

Unlocking the barriers to creativity is understanding what creates the barrier to creativity in the first place, such as (Davis, 1999):

  • Learning and habit barriers – humans are creatures of habit which they have developed through positive responses to correct behaviours – this barrier provides a ‘comfort zone’ of familiarity
  • Rules and traditions barriers – social, cultural and legal norms are needed to guide human behaviours, however they also present restrictions on how people feel they can act in different situations
  • Perceptual barriers – through a lifetime of learning from, and being influenced by others, humans have a predisposition to perceive things in a certain way based on their interest, biases and values
  • Cultural barriers – social expectations and pressures to conform to the status quo, and the desire to know what one’s identity is, means humans are susceptible to following what others have done before them
  • Emotional barriers – emotional blocks of fear, anger, love, hate, and anxiety have the ability to block a human from thinking clearly or beyond the status quo
  • Resource barriers – shortage of essential resources such as time, money and supplies, can create a demand or conflict for these resources, preventing people having the freedom they need to be creative

Luckily there are many ways to prevent barriers to creativity, such as:

  • Reducing competition between people and asking people for input into how a team functions
  • Providing people with the opportunity to practice being creative in a safe and non-threatening way so they can play to their ‘A’ game
  • Helping people appreciate how other people process information so you can tailor communications so the message is understood more clearly by the receiver

Individual vs Group creativity

Individual creativity has traditionally been seen to be focussed on a lone genius who was sought after to fuel the innovative energy room of an organisation, such as Steve Jobs at Apple or Bill Gates at Microsoft.

It is now, however, more widely accepted that group or collective creativity, whereby people from diverse backgrounds, personalities and experiences are brought together to come up with and produce new ideas, is the secret to a business’s innovative success

Whether we participate in creativity as an individual or within the context of a group is a bit like the question: “Which came first – the chicken or the egg?”  

Consider this – an individual’s creativity is built upon how their senses have made ‘sense’ of the world around them, and the people they interact with.  While the group is made up of individuals expressing their creative ideas and solutions, and it will be the skills of a good facilitator who will be able to harness these ideas to take them to the next level.

An example of this is where organisations allow their employees individual ‘R&D’ time to work on a project of their own creation. However, it then requires the individual to work and rely on the ‘team’ and other key stakeholders (eg customer participating in prototype testing etc) to bring about billion dollar creative ideas.  

This model of individual creativity leading into group creativity is a great motivator for employees to want to do great work as it provides them with a challenge, a feeling of accomplishment and an opportunity to be acknowledged among the crowd of employees.

Creating the right environment

Core elements to support individual and group creativity can include:

Individuals

  • Openness to experience new things and ideas
  • Passion with emotional stability
  • Adopting ‘right brain’ thinking strategies

Groups

  • Openness to share information 
  • Reflective dialogue
  • Diversity
  • Facilitation and effective leadership

While everyone is creative in one sense or another, it is important for business leaders to lead their organisation’s creative capital, both within individuals and groups, by facilitating the opportunity of right brained thinking people to work effectively with left brained thinking people .   

This can be done through Stanford University’s Jim March’s Theory of Novelty (Amabile, 2008) by providing:

  • Stack – the time and resources to experiment
  • Hubris – managers having the confidence to take educated risks
  • Optimism – having a shared vision which is better than the status quo

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Contact us now (email or [+61] 0400 732 270) to discuss how we can help you unleash the creativity which leads to innovation.

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Paid online marketing options – Are they all the same?

Australia has 13.7 million internet subscribers who spend on average 10 hrs per week online and one of the top four activities they do is research and/or purchase goods or services online.

CC-BY Image from http://www.creative-commons-images.com/clipboard/online-marketing.html
CC-BY Image from http://www.creative-commons-images.com/clipboard/online-marketing.html

This means that paid online marketing is a sensible choice, but with so many paid online marketing options, what should you consider when investigating these for your business? And, are they all the same?

Search Engine Marketing (SEM)  

SEM is made possible through the data collected by search engines such as Google about people’s online search activities.  This data is then analysed by special software to ‘predict’ the type of information people are seeking when they use different search terms.  

Online marketing companies, such as Google Adwords, then rank these search terms or keywords according to their frequency of use.  Businesses then ‘bid’ for these keywords so they can linked them to their online adverts so their online ads rank higher when someone uses these keywords in an organic search.

SEM through Google Ads

Google Ads uses sophisticated SEM algorithms to place a paide online business ad in a way which is not too dissimilar to placing a traditional newspaper ad, in that the content of the ad needs to be right to capture an audience’s attention.

What makes Google Ads more powerful than traditional newspaper ads is the use of ‘keywords’ to narrow down where and when the online business advertisement is placed.  These keywords are then matched to the search terms (or keywords) which a person puts into an organic Google search.  

For example, when someone type ‘Sydney accommodation’ into Google, the search results not only bring up the most popular Sydney accommodation websites. The search results also show ‘paid’ online ads from businesses which have bid for the keywords ‘Sydney accommodation’.  

While this process sounds simple, the skill of writing an effective Google Ad and knowing how much to bid on the keywords which will place this ad in the right spot is quite technical.  These types of paid online ads are also very limiting in how information is presented as you can only use a certain amount of text and no images.  

SEM is also something which takes time before the ranking of the online ad can be verified to ensure it is linked to the keywords appropriately eg when someone types in ‘red shoes’ into Google, then only online ads selling ‘red shoes’ comes up.

You should either outsource this paid online marketing to an experienced and successful SEM company, or be willing to do the leg work of learning the art of SEM, and then spend the time testing your approach.  If you select the DIY method, then you also need to stay on top of any changes of how search engines rank keywords for online ads.

Marketing through third party websites via Google Adsense

Some websites, such as blogs and eNewspapers etc, allow third parties to advertise on their website to help generate an income. Placement of online advertisements on third party websites is usually done through an online ad network who offers financial incentives to third party website owners.

The most popular ad network is Google Adsense.  The initial setup process for Google Adsense is usually quite simple however Google Adsense offers limited one-on-one support for small business advertisers.   With these types of paid online ads you can create visual ads containing images and different font types/styles or have text-only online ads.

The majority of Google Adsense ads are CPC (Cost/Pay per click) ads so a business is only charged when a website visitor clicks on an online ad. Creating a Google Adsense advertisement is very similar to creating a Google Ad, as it can be done through your Google Adword account.  However, like Google Adwords, this type of advertising is best outsourced to the professionals unless you are willing to do the legwork to get the success you are aiming for.

Marketing through social media sites like Facebook

All of the big social media sites such as Facebook now offer targeted online ad campaigns.  Although these sites are not search engines per se, they do collect information or “data analytics” about their users like a search engine would. This data then allows these sites to place targeted paid online ads on their users’ Facebook page or in their stream according to their users’ demographics and/or previous activity.  

Social media marketing provides a much simpler option for businesses to market online then SEM via Google Adwords or Adsense due to the increased number of people who spend their time connecting and keeping up to date with what their social network is doing.  This activity allows sites like Facebook to have a captured online audience to market to.  

Instead of having to bid for keywords, Facebook Ads work on ‘impressions’. That is, the number of people Facebook can show a business advert to in their Facebook stream based on demographics such as gender, region or interest. This is much easier to determine than how people are ‘searching’ for things. Social media marketing has a lot more opportunity to be creative and visual compared to a search engine online ad.

Marketing through targeted emails

Done well, traditional online marketing such as email campaigns are still a very effective digital marketing strategy. This is because effective targeted email campaigns are sent to people who have subscribed to and want to receive this type of information through their email, as opposed to relying on a software algorithm trying to predict and match ‘keywords’ or through ‘filters’ which match people’s interests.

Targeted email marketing campaigns can be managed through your existing email account, however, online email campaign services, such as Mailchimp and Constant Contact, offer additional benefits like providing more professional formatting and layout through customisable templates.  

You can also then send more than 500 email address per day (this is usually the limit placed by email services such as Gmail and Hotmail to send in one day to help reduce spam).  Email marketing services also allow you to track how many people open the email, and which links they click on.  They can also act as a quasi-customer relationship management (CRM) tool as they can keep all of your subscribers’ contact details in them.

Targeted email campaigns do require a database of subscribers which you can create from your existing customer details.  It is important not to add people’s email addresses that you haven’t dealt with before or who haven’t subscribed to your list to avoid being reported as ‘spam’.  For more information read about the key elements of the Spam Act here – https://www.acma.gov.au/Industry/Marketers/Anti-Spam/Ensuring-you-dont-spam/key-elements-of-the-spam-act-ensuring-you-dont-spam-i-acma

Marketing through specialised directories

Before the world wide web enabled us to search for a business online, people used telephone and magazine directories to advertise their business. Luckily the function of a hard copy business directory like the Yellow Pages has now been replicated online through sites like True Local, MenuLog, Wotif etc.

Online directories are great for businesses which don’t have a web presence and/or are on a tight budget, as they offer a great way of getting leads due to their large online presence and marketing budget of the specialised directory site.  Specialised directories will often come up higher on an organic web search due to this.  Specialised directories are inexpensive and an easy way to set up paid online marketing compared to the above options if your business is in an industry which has a specialised directory available.

 

As you can see, there are a number of options for marketing your business online, however, each option has many advantages and will cost you time or money to set up.  Whether you decide to outsource the work, employ someone with the skills to do it, or do the work yourself, consider this as an investment in your business and not an expense.  Without effectively marketing your business to the right people at the right time, you will not be able to generate the revenue you need for your business to be successful.

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Contact us now (email or [+61] 0400 732 270) to discuss how we can help you market your business online.

Stay up to date with the latest in being successful online by subscribing to our Digital Capability eUpdate or connecting with us online through Facebook, LinkedIn and Twitter.

Be no 1 by getting to know your competitors

It is important that you know why your customers think your business is better than your competitors as this will help you to understand what is your competitive advantage, and this will improve your business’s chances of success.

You can determine your business’s competitive advantage by undertaking a competitive analysis.  A competitive analysis allows you to determine what your competitors’ strengths and weaknesses are so you can improve your business’s own competitive advantage based on these.

CC-BY Wikimedia Commons - https://commons.wikimedia.org/wiki/File:Understanding_icon.svg
CC-BY Wikimedia Commons – https://commons.wikimedia.org/wiki/File:Understanding_icon.svg

Researching your business’s competitive advantage

To undertake this competitive analysis, you can use both primary and secondary data sources, however, the most cost effective way is by accessing and analysing readily available online information.  

While this means that you are only doing a surface level comparison, that some data may be dated, and that some online data sources are not as reliable or fit for purpose as undertaking primary research methods, such as focus groups and surveys, you can undertake the competitive analysis quickly and cheaply.  It can also determine whether you need to do more targeted analysis.

In this post, a case study of TripAdvisor’s possible competitive advantage as an online travel accommodation booking site will be used to demonstrate the competitive analysis process.

Step 1: Determine who your competitors are

The first stage of the competitive analysis is to determine your direct and indirect competitors.  A direct competitor is a business that provides a similar product in your region, while an indirect competitor is a business that provides a substitute product.  For example: TripAdvisor’s direct and indirect competitors:

Direct competitors Indirect Competitors
·        Hotels.com

·        Wotif

·        Expedia

·        Bookings.com

·        Trivago

·        Travel store or agent

·        Google Maps

Hotels.com and Wotif will be considered as TripAdvisor’s top two competitors to do the competitive analysis.

Step 2: Conduct the research

There are 7 key areas of competitive advantage which should be used to compare your business against your top competitors.  

Here is how TripAdvisor compares to their competitors (together with the data source in italics and brackets):

TripAdvisor Hotels.com Wotif
Services they provide (Own websites) Online travel accommodation booking Online travel accommodation booking Online booking site for flights, accommodation, car hire, package deals and holiday activities
Target market (Own websites) Leisure travellers Leisure travellers Families
Profitability (Various news reports) Yes Yes Yes
Expanding or scaling down (Various news reports) Expanding Expanding Expanding
Length of time in business (Wikipedia) 2000 1991 2000
Positive reputation (Own websites) Independent ‘reviewers’ Find the lowest price Whole travel experience booked on one site
Negative reputation (Various review websites) Poor customer service,

Potential conflict of interest between reviewers and those hotels being promoted on the site,

Fake reviews

Poor customer service,

False claims of ‘best rates’ or using reward points

Poor customer service,

Bookings not being correct when people arrive at their destination

Step 3: Compare features and benefits

You can either use what you know are the key criteria to evaluate the features and benefits of your products and services against those of your competitors, or you can use the key criteria used by ‘Review Sites’ for your industry to do this.

In the online accommodation booking industry, review sites such as TopTenReviews, use a number of key criteria when evaluating accommodation booking services eg pricing, sorting of information, the amount of detail about the accommodation sites, the reservation process and booking help.  

TripAdvisor and Wotif did not make the 2017 Top 10 Hotel Booking Services, whereas Hotels.com was ranked no 8 in the world.  This gives Hotels.com a huge competitive advantage, and provides information to TripAdvisor about what they could be doing to improve their services.

Step 4: Undertake an operational (internal) analysis

The effective operations of a business can provide competitive advantage.  

This is how these 3 companies compared against one another (together with the data source in italics and brackets):

TripAdvisor Hotels.com Wotif
Financial resources (Wikipedia) Independent Owned by Expedia Owned by Expedia
Operational effectiveness (McCarter, 2017) Did not make the 2017 top 10 Hotel Booking Services Website ranked no 8 in 2017 TopTenReview for Hotel Booking Services Did not make the 2017 top 10 Hotel Booking Services
Product range (Own websites) Hotel bookings, reviewing and ranking Hotel bookings, reviewing Offers widest range of online travel booking products
Strategic partnerships (Wikipedia) Independent Owned by Expedia Owned by Expedia
Employees / Culture (Various review sites) Many employee incentives eg paid PD, dogs allowed at work, extra time off in summer, travel discounts, gym, free food Some employee incentives eg reimbursed/discounted travel, gym credits, health schemes Innovative entrepreneurial culture but poor people culture eg gossiping, highly competitive

Step 5: Determine market share

Business statistics websites like IBIS World and business review websites offer easily accessible online market share information.  These can be found (and sometimes purchased) by doing web searches such as:

  • Online travel accommodation website market share in Australia
  • Who leads the market in Australian online travel accommodation bookings?

According to IBIS World, in 2017 in Australia TripAdvisor was not even in the top four market share leaders in online travel accommodation websites, as these were: Bookings.com, Expedia, Luxury Escapes and Webjet. TripAdvisor needs to understand what these four businesses are doing to give them more market share in Australia.

Step 6: Determine competitive objectives and strategies

The competitive objectives and strategies of your business can provide a competitive advantage so comparing your competitive objective, and the strategies you will use to achieve this objective, against your competitors is very important.  

This is how these 3 companies compared against one another (together with the data source in italics and brackets):

TripAdvisor Hotels.com Wotif
Competitive objective (Various media reports) Grow market share in Australia Grow market share in Australia Protect/Maintain share in Australia
Strategy to achieve objective (Various media reports) Advertising Advertising and price Was bought out by Expedia

Step 7: Identify competitors’ strengths and weaknesses

By examining your competitors’ strengths and weaknesses you can put strategies in place to overcome or counteract their strengths as well as work out ways you can take advantage of their weaknesses.

Here are the strengths and weaknesses of Hotels.com and Wotif:

Hotels.com strengths Hotels.com weaknesses
·        Ranked in Top 10 online hotel accommodation booking sites

·        Backed by Expedia, one of the largest online booking sites in the world

·        False claims on offers

·        Poor customer service

Wotif strengths Wotif weaknesses
·        Broad range of services which allows them to offer discounts

·        Strong Australian brand

·        Backed by Expedia, one of the largest online booking sites in the world

·        Poor customer service

·        Poor culture

Step 8: Determine your business’s competitive position and strategies to exploit

After reviewing these your competitors’ competitive objectives and strategies, as well as their strengths and weaknesses, it is now time to determine where your business’s competitive position should be, and how you business will achieve this.

Here are some suggestions that TripAdvisor could focus on so they have a clear point of difference to their competitors:

  • Competitive position: TripAdvisor is an independent online travel accommodation website which has a reputation for independent reviewing and ranking of travel locations and services
  • Competitive strategies: TripAdvisor could improve their competitive position by improving their website functionality and their customer service.

Final considerations

While doing a competitive analysis using a ‘desktop’ analysis via secondary sources of data only provides a surface level understanding of your competitors, it can help you better understand not only your competitors’ strengths and weaknesses, it can also help you discover possible competitive strengths and weaknesses for your own business.  This insight will help you better plan and deliver your business’s competitive advantage.

It is also important to understand that undertaking a competitive analysis is not a one-off event, and it should be done regularly, either quarterly, half yearly or annually.  This is because your competitors, the economy as well as political and social attitudes change frequently, thereby impacting your business’s competitive advantage.  Regularly undertaking a competitive analysis will provide your business with strategies to counter any changes which may impact its competitive advantage in the marketplace.

 

Note: This post was based on the work of the Edward Lowe Foundation – How to Conduct and Prepare a Competitive Analysis.

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Contact us now (email or [+61] 0400 732 270) to discuss how we can help you get to know your competitors better so your business can be no 1.

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Where do profitable business ideas come from?

Business growth is possible either through the acquisition of other businesses or through unique and innovative ideas which have a market which is willing to pay the price for the product or service to make it a profitable venture.  

For most businesses, acquiring another business is either not high on their business objectives or it is not financially viable.  This means they need to be looking for new business ideas to grow their business.

New business ideas are all around you

CC-BY Image - Environment Economy Society from Wikimedia Commons - https://commons.wikimedia.org/wiki/File:Environment_Economy_Society.jpg
CC-BY Image – Environment Economy Society from Wikimedia Commons – https://commons.wikimedia.org/wiki/File:Environment_Economy_Society.jpg

New business ideas are all around you, but developing innovative ideas requires a number of personal aspects, such as:

  • Having a ‘new’ mindset which is continuously seeking out new ways of doing things
  • Personal interests that present ideas which you are motivated to pursue
  • Skills and knowledge in an area, either through experience or training, which you can tap into for new ideas
  • Experience to draw upon to seek out opportunities
  • Resources, including physical, intellectual and personnel, which present new ideas or opportunities
  • Personal investment of time, perception, intuition, personal energy and drive which provide the headspace to be receptive to new ideas
  • Personal risk preference which determines the level of risk you are willing to take to follow through with an innovative idea

Drawing upon these personal aspects opens a whole new world of new business ideas.

PACE your business

Free image from Pixabay - https://pixabay.com/en/photos/brainstorm/
Free image from Pixabay – https://pixabay.com/en/photos/brainstorm/

One way to do this is by PACE-ing your business. That is, brainstorming potential ideas based on your area of expertise, experience or interest by considering the prompts under each of the key starting words of problems, analysis, changes and extensions.  

Problems Analysis
Related to:

  • Industry
  • Organisational/Operational
  • Product
  • Customers
  • Regulation/Compliance
  • Break down processes into parts – what can be done better?
  • What trends can be exploited?
  • Niches?
  • Internal – Skills? Talents? Resources? Networks?
Changes Extensions
Related to:

  • Legislation / Regulation
  • Social attitudes/structure
  • Technology
  • Add something before or after an existing product or service


For example:  

Area of expertise, experience or interest =

Helping businesses use technology

Problems Analysis
  • My clients understand the benefits of digital marketing and social media but don’t know how to get started
  • Opportunity – Offer one on one digital marketing/social media coaching and mentoring
  • Most businesses see an increase in their profit when they invest in their digital presence
  • Opportunity – Offer ‘digital first’ health check services which analyse where a business could profit more from their digital presence
Changes Extensions
  • More people are buying online or using the internet to research their purchases
  • Opportunity – Offer ‘how do your customers behave online’ consultancy services
  • My clients don’t know where to source a full range of the services they need to use digital marketing and social media
  • Opportunity – Partner with other businesses in my value chain and offer loyalty discounts to my clients, and cross promote our services on each other’s websites   

Download a PACE template and brainstorm the problems, analysis, changes and extensions for your area of expertise.  

You can do this yourself or with a group of people or get input from others. Also,  allow yourself 1-3 attempts to do this activity eg start the brainstorm, and then leave it for a while, then go back and so if you can add more information and suggestions.

Evaluating these opportunities

CC-BY Image Performance-Evaluation-Process-z from Wikimedia Commons - https://commons.wikimedia.org/wiki/File:Performance-Evaluation-Process-z.jpg
CC-BY Image Performance-Evaluation-Process-z from Wikimedia Commons – https://commons.wikimedia.org/wiki/File:Performance-Evaluation-Process-z.jpg

In order to determine whether these opportunities can become a viable business idea, you then need to analyse the critical success factors:

  1. How unique is the business opportunity? – what special characteristics does the business opportunity have that will draw customers to it, and away from competitors eg what is it the business opportunity’s unique value proposition?
  2. What up-front capital will you need? – what capital will be required to get the business idea up and running eg what human and financial capital will be required?  This will vary depending on the business opportunity.
  3. What is the anticipated growth pattern for the business? – will the risk of investing time and money to launch the opportunity be financially rewarded through low or high profit gains? How quickly can you make it happen and the make a profit?
  4. How readily available is the product or service now? – How long will it take you to get the product and service ready for sale / delivery?
  5. Are there customers willing to pay for the product or service? – Is there a market which needs this product or service, and will these customers be willing to pay the price needed to make the opportunity a profitable idea?

Analysing the critical success factors will help you determine whether any or all of these opportunities have enough potential to be viable and profitable business ideas.  

If you do identify a potential opportunity worth pursuing, then further investigation of this opportunity through a business ideas evaluation is the next step in determining whether this product would be worth investing in and pursuing.

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Contact us now (email or [+61] 0400 732 270) to discuss how we can help you find your next profitable business idea.

Stay up to date with the latest in being successful online by subscribing to our Digital Capability eUpdate or connecting with us online through Facebook, LinkedIn and Twitter.

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