I asked him to list out where they spent their marketing budget. His answer:

• Creative Company
• Leaflets
• Posters
• Advertising
• PR
• SEO
• Website Development

The list was pretty good. I was impressed. They definitely were not shying away from spending money on marketing.

There was a problem, however. His franchisees were still complaining to him that they weren’t seeing return for their marketing levy. They weren’t happy, and they were letting him know about it.

He asked me the question: How can that be?

From my view it’s pretty simple. Just because you’re spending money doesn’t mean it’s money well spent. If you spend £70K on an advertising campaign that only generates £20K worth of business, do you really think people will be congratulating you on investing so much on your marketing? Like hell. They’ll be asking you why you wasted all that time and money with no reward to show for it.

You don’t get points for trying. You get points for results.

Back to my conversation. I more or laid out this same idea to him. The reason his franchisees were unhappy was that they weren’t seeing any benefit from the marketing spend. From their perspective, all they were seeing was money flying out the door. It never seemed to be coming back in.

Sure they got the leaflets delivered every month, and yes they were very pretty. But there was nobody helping them with what to do in their territory. Nobody really helping them get the most out of what they had to work with.

Now THAT is where local marketing comes in.

And the even better news?

It’s normally cheaper and more effective.

How? It’s a simple numbers game.

Let me give you an example. Say our franchisor decides to put on an offer and send it out to all of his network. He prints up 500,000 leaflets and gets them distributed to all 50 of his franchisees. It’s the same offer to everyone, with no recognition of the differences between the different local markets.

Now in this scenario, only about 15 of his network thinks that the offer will work in their territory. 15 out of 50. If we assume that they will only use about 30% of the printed leaflets, the numbers start to get scary:

500,000 Printed Leaflets: £5000

Distribution to 50 Franchisees: £500 (£10/franchisee)

Total Expenditure: £5500 (£110/franchisee)

Sure that’s not a lot of money. Only £110 per franchisee.

But hang on. Only 15 of the 50 are going to use the campaign, and they will only use 30% of the leaflets. If we look at those numbers we really only need to print up 45,000 Leaflets. That’s a much more targeted way of doing a marketing campaign – send out the most effective materials for those areas. The numbers look better:

45,000 printed Leaflets: £650
Distribution to 15 Franchisees: £150 (£10/franchisee)
Total Expenditure: £800 (£54/franchisee)

See any difference? We can make it even more brutal:

Total spent on mass campaign: £5500
Total spent on targeted campaign: £800
Wasted Marketing Spend: £4700

That’s 85% of the campaign budget being flushed away.

THAT is the importance of local marketing.

THAT is where franchises need to focus on.

And if you want to know more, give me a shout.

- Jordan

(This article was originally written at www.franchisemarketingsystem.co.uk – please contact Jordan directly if you’d like to learn more about Designate’s unique local marketing systems for franchises)

But early this morning, as I checked my Twitter feed on the iPhone that always lies next to my bed, the news of his death did cause me to do something.

I started to think a bit about his technology.

I admit it. I am unashamedly and unabashedly an apple fanboy. I love their kit. My office is full of iMacs. I carry around an iPhone and an iPad. I want an iPad2.

(Scratch that: I need an iPad2)

It’s always been a bit of a battle-ground for me and some of my friends. They hated Apple’s products for a variety of reasons. Too restrictive. Too much arrogance. Too pretty. No command lines. Whatever. We’d battle it out on a fairly regular basis – never coming to any agreement, but always willing to waste a few minutes (hours? days?) almost coming to blows. I’m not sure any of us really cared that much about the companies involved (I mean, they HATE Microsoft) but there did seem to be a fundamental difference in the way we saw the technology. They thought I was a follower in some weird cult. I thought they needed to have more curiosity about the world.

I have a confession to make. I’ve recently been testing a lot of non-Apple products. I’m a bit ashamed to admit that. My girlfriend has been looking at the HTC phones, my flatmate needs a cheap laptop…it’s not really me (I swear) that’s interested, but it’s me that needs to find out more and give the advice. I promise.

So recently I’ve played with a lot of different kit. I’ve tried five or six other tablets. I’ve tested three or four netbooks. I’ve fiddled with six or seven other phones. And this morning it finally crystalised, for me, where the difference truly lies.

Apple’s products are aspirational. The other products are not.

What does that mean?

Sometimes you can’t put your finger on it. Is it how a line is drawn exactly right. Is it the curve of a corner? Is it the blend of perfect design with perfect interaction? It could be any one of these things. It could be all of them.

But there is a much more important ingredient: Apple’s products are trying to be the best they can be. The others aren’t.

Test me on it. Go out and try some of the other tablets out there. They are a response to the iPad. That’s it.  They have no life on their own. They weren’t dreamed up. They were made. They weren’t designed. They were spec’d. They exist because a market was created and a company wanted a piece of the action. That is their reality. That is their dream. The iPad wants to be more. It wants to be the best device it can be.

Aspirational products change the world. They change how we work. They change how we live.

I can’t think of a better tribute to Steve Jobs than that.

Can Aspirational Be The New Exit?

My early morning thoughts about Steve Jobs and Apple also stirred something else in me. Something that has been stewing in there for a long time.

Is this the problem with the majority of new technology start-ups in Scotland?

How many times have I sat through an “investor presentation” over the past six years and heard more about the market opportunity and exit plans than I have about the company’s aspirations for the future? Ninety percent of the time?

(To be honest, how many times have I been the one asking them about their exit? I’m just as guilty.)

I’m not saying that we shouldn’t think about the hard-nosed financial realities of business. We should. In fact, I think a lot of times, particularly at universities, we don’t think enough about it. We don’t give the reality check of commercial viability.

But a lot of the times, we spend most of our time taking the aspiration out of these businesses. And that’s not what I got into business to do.

Maybe it’s down to who is in the room. Nine times out of ten the main people who get involved in these projects at an early stage are lawyers and accountants. Can you think of a better way of killing off innovation and aspiration than surrounding them with lawyers and accountants? Seriously.

But it’s not all the lawyers and accountants’ fault. We do it to ourselves.

I was at an event a couple of weeks ago and had a really enjoyable conversation with a professor from some university in England. We laughed a lot about the shoddy way universities handle IP and commercialisation, and we talked about some of the good bits that happen in other countries. I spoke about my experience working with some biotech VCs who install a professional business team to run the companies, and let the technology guys do what they do best – create technology.

We were joined by someone from Scottish Enterprise. She said an astounding thing: “We don’t have the appetite here for that.” Are you kidding me? This is coming from someone who is supposed to be fostering innovation and growth? Her take on it was simple – be happy with what we have. Don’t rock the boat. We can’t do that. It won’t work. We can’t succeed.

With her it was all “No, no, no, no and no”.

What a load of tosh.

I look around in Scotland and I see nothing but interested and enthusiastic people. I see innovative thinkers and hard workers. I see risk-takers and salespeople. I see entrepreneurs and leaders.

But give it five minutes and someone will pop up and remind us all that it can’t happen in Scotland. We don’t have it. We don’t have the risk mentality. We don’t have the appetite. We’re doomed to fail if we try.

Is that aspirational?

I’ve been in business for almost six years. In that six years I’ve seen success and I’ve tasted failure. I’ve been up against the wall and I’ve thought I was untouchable.

I’ll let you into a wee secret. I didn’t get into business to make billions of pounds. I started a business because I wanted to build something – a team, an idea…I’m not always sure what. But I know it when I see it.

And if I stopped believing that? I’d quit. It wouldn’t be worth it.

Back to Steve. The quote you’re most likely going to be bombarded with over the next few days comes from his 2005 commencement speech at Stanford University. If you haven’t seen it yet, go look it up on YouTube. Seriously. It’s a great speech. The quote most people will be throwing around on Twitter and Face book is :

“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

But that’s not my favorite part of his speech. My favourite part comes at the end. He talks about the Whole Earth Catalogue’s final message to their readers: “Stay Hungry. Stay Foolish.”

Now that is aspirational.

- Jordan

The hospitality industry thrives on customer service. Some get it right, others get it disastrously wrong. Here are two places in Edinburgh that I love, and I love them (in part) because of the attention they pay to their customers.

(and yes, the food is awesome too)

Mark Greenaway
Last night I took my girlfriend out to visit Mark Greenaway‘s restaurant on Picardy Place. I go there all the time on business, but last night was the first time I got to experience the restaurant in a relaxed social occasion.

(as Nicola, the Maitre’D, said to my girlfriend “whenever he’s here he’s always talking, never eating”)

Now if you haven’t been there at lunch. Go. Stop reading this and call them (0131 557 0952) to book a table. Do it now. This is the steal of the city. £16.50 for two of the nicest courses you’re going to find. You can’t beat it. It’s insanely good value. I mean almost criminal. I bring a regular business group here every month and everyone who comes is amazed at the food and the value. It’s quite simply the best place in Edinburgh to have a business lunch (we get a private room for our lunch meetings – makes it even better).

Back to last night. My girlfriend has some food intolerances. You know – Gluten, nuts, some dairy – that sort of thing. I talked to Nicola and Mark beforehand and they assured me they could handle everything. And boy did they. From start to finish they did a lot of little things that made our evening pretty special. To start with, the ‘amuse bouche’ that everyone else (including me) got had some cream in it so, without any fuss or mention, they brought out a special one just for her. It looked awesome. I was slightly jealous.

Bread is another thing. It’s one thing not to give her any bread (most places) but they went a really nice step further and brought her some rye bread (which she can eat). That was awesome. I could eat my bread without stealing guilty glances at her.

Now the food. Ohhhh the food. Just unbelievable. I had scallops as my starter and she had langoustines. Both were amazing. Now I go diving for scallops, so I’m an old hand at cooking scallops and I always judge a place pretty harshly on the quality of their scallops. These were stunning. Fresh and perfectly cooked. The taste combinations were amazing. Yum.

Without any fuss, they modified the dishes to suit my girlfriend’s intolerances. Nothing was a problem, and they were more than flexible. That meant a lot to both of us.

The mains were the same way. I had a stunning beef dish which may have been topped by her duck, which was sublime. I loved the beef, but that duck was good enough to make you cry.

(On a side note, they had put aside some of the purple mash and made it without cream so she could have that if she wanted. Nice touch.)

Dessert was a tough one. She can’t have cream or gluten, so most of the desserts were out. They put together a lovely summery eton mess (minus the cream)  for her and gave me one of the nicest chocolate fondants I have ever had. Seriously. I almost had to get a room so I could be alone. I’m not kidding. Have it. Bring a hanky.

At the end of the meal, Mark came out to say hi. We’re going back in a couple of weeks with some friends, so he offered to put together a special dessert for my girlfriend so she could enjoy some chocolate too.

Sum it up? The food was sublime, but the business moral is even better. There were a lot of little things they did to make our evening special. A lot of little things that meant my girlfriend could have an amazing meal without worrying. That doesn’t happen at a lot of places. And it’s a great advert for what makes good customer service. Attention. You have have to pay attention. It doesn’t have to be big things, in fact, the little things matter even more. Mark Greenaway delivered in a huge way. On every level.

(and guess what? I’m back there for lunch today. I’m spoiled…)

Illegal Jacks
Slightly different from Mark Greenaway. Just a bit.

I love Jack’s place. I’m an official #jackaholic. I just don’t have the t-shirt yet.

But anyway, let’s get to the point. Illegal Jack‘s has a pretty big  following in Edinburgh. They do a lot on social media and they get a whole lot of repeat customers. There is a reason for this. And only part of it is the food.

The food is awesome. I personally can’t tell you how many times I have had a craving for an Illegal Jacks’ burrito that went almost to the physically disabling point. I mean, what the hell do they put in their burritos? Is this another Coke thing? Should I be worried? If you haven’t tried Illegal Jacks yet, let me give you some advice. Beef/Pork burrito is the only thing you will ever need (their chicken wings and nachos are great too). Get a burrito. Load it up with pinto beans, beef, cheese, sour cream and salsa. And good luck. They are a susbstantial meal, but I have never failed to eat it all. I can’t stop myself.

The food is only half of it. Jacks really love their customers. And it shows in everything they do. Again it’s the little things. I reserved a table for my birthday and they always print out a nice reservation notice with your twitter handle on it. This time, it mentioned me as the “Birthday Boy”. It made me laugh. If you have anything you need that’s special or you want to do something a bit different for someone, they are up for it. They are there all the time for their customers. They want to engage. They want to hear from us.

And that’s what makes it special. Yes the food is awesome, but you feel like you’re a part of Illegal Jacks. You feel like it’s your place. It’s like Cheers, with no Norm. Well, maybe not exactly like Cheers, but you get my point. They pay attention to their customers. They pay attention to the little details. They make their customers feel special.

There it is. Two fantastic places to eat in Edinburgh. Two places with amazing (albeit very different) food. Two places that really care about their customers and understand that customer service is about one main thing: paying attention to the little details.

(and now, after all of that, it’s 08:42 in the morning and I’m absolutely starving)

-j

Anyway, there was a bit of a sales pitch on his side of the table, but he was a nice guy and, at the very least, he was honest about it. I appreciate that. I liked him.

Of course what always happens in these meetings is that the two of us play a bit of ‘show me yours and I’ll show you mine’ footsy. Here’s what we do. Oh yeah? Here’s what we do! Repeat.

As I was talking to him a bit about what Designate does, I started to talk a lot more about what makes us different from most marketing companies. The short 3-second answer?

Sometimes it’s our job to tell you that you look fat in that dress.

I’ll elaborate.

Most marketing companies are really just glorified creative companies. That’s not a slight by the way. I admire them. I really do! I also use quite a lot of them on different projects. But let’s not confuse what they do with what real marketing is about. Real marketing is placement. Real marketing is the ‘what’ and the ‘why’ and then the ‘how’ and the ‘where’. The pretty skin on top is the last part of the equation. It’s a critical part, of course, but if it’s not grounded with a proper understanding of the fundamentals, it’s also a useless part. Most creative companies will act on what they are given. They don’t question…they execute on what they are asked.

Not us.

I gave him an example:

We’re working with an exciting software company right now. They have developed some very cool technology and they came to use to figure out a strategy for them. How could they turn their business from one that uses their technology to service clients into one that sells their technology and makes a lot of passive income. It’s a big question. It’s a huge change in business model but, if they could manage it, they could see the benefits. And they have been trying to figure out how to do it for years with no luck.

Well we took a look at the technology and, based on where they were, said forget it. You can’t play in that field, and going forward like that is suicide. You won’t make it. There isn’t enough of a market to make it worthwhile. Ouch eh?

Was that the end of it? Of course not. Our job isn’t to do what you tell us to do – it’s to come up with a strategy to accomplish what you want to do. If you knew how to do it, you wouldn’t need us.

Now we could have accepted the project on spec. They briefed us to do something, we execute the brief. Job done. Chance of success? hmmm..I’ll say about 5%?

Instead, we did what we always do. We worked out where the best opportunities existed and we made a case for a strategy to go after them. We got our hands dirty. And guess what? We have been helping them leverage their technology into specific niche markets. And it’s working. And they are happy.

That’s one of the things I love about what we do at Designate – it’s not our job to be reactive. It’s not our job to do as we’re told (of course we value our client’s opinions and experience and of course we put them first…don’t be stupid). It’s our job to question. It’s our job to poke holes. It’s our job to think of the better way. It’s our job to give the unvarnished truth.

And our clients appreciate it. They benefit from it. They profit with it.

So yes, my dear, you look fat in that dress. But the good news? I found a company willing to pay for it….you’re going to make a fortune as a plus-sized model….

- jordan

P.s. Please don’t send me email about using weight as an issue. It could have been anything. I’ve just used this analogy. Grow up.

I was at a good meeting this morning. There were three of us sitting around the table in a hotel bar (this isn’t the start of a really bad joke) having a good discussion about the mixture of talent and investment needed for a lot of the companies we regularly see.

I think that’s an important mixture to make clear, because a lot of companies look for investment because they see the ££££ (or $$$$) necessity in their business. And money is important. Of course it is.

But equally important to get right in this mixture is the talent. What talent needs to be brought in? What areas of your business need to be tightened up and who can be the right fit to help you achieve that?

This is important for both the companies and the investing entity:

1. For the companies, it’s crucial that they realise the responsibility they have when they bring on an investor. They are giving up part of their company and they are responsible for that. Very rarely will a company that is looking to achieve this growth through investment have all the necessary skills needed. Very very rarely. The right talent is crucial and the company needs to be willing to take a long hard look at themselves to see where they are weakest and where they need to gain strength in depth.
2. For the investors, it’s equally critical. You can do all the due diligence in the world, but at the end of the day it’s the team that will be driving that business forward. It’s critical that they feel comfortable that the team has the right expertise and understanding to achieve the growth that everyone is so sure they can look forward to.

The subject came up as we were looking at a new investment vehicle that is currently launching throughout the UK. It’s a private equity fund that is looking to invest about £25M. The real catch? It aims to match up proper talent and expertise alongside the financial investment. This isn’t a new concept, of course. There are lots of examples of investors installing an expensive non-exec board which slowly drains the funds away from the company before it ever gets off the ground. What we liked about this fund was the matching of the right professional expertise with the right financial investment.

It could be a good fund. It might not work. We’ll find out as everything moves forward and we see how the landscape falls.

I do think, however, that the point they are making should be driven home in every way possible.

Investment needs talent to drive it forward.

Talent deserves to be invested in by every company.

Don’t be a generalist. Find the specialists you can trust and get them making you better, stronger, faster and more profitable.

- j

In a lot of ways, these last couple of weeks have been a really weird mix.

On the one hand, I’ve been excitedly looking forwards to upcoming projects and new opportunities. I’m looking forward to new clients, anticipating new adventures and genuinely feeling as confident and optimistic as I have for a long time. I’ve worked hard to grow the company that I want to lead, and I genuinely think that it’s been a success.

On the other hand, it’s been a bit of a period of reflection. It’s not always fun to look back on mistakes I’ve made, challenges that proved too great for me and disappointments that I have been hit with each step of the way. And let’s be honest: it’s my company and most of the problems we have experienced came directly from me.

There are a lot of transitions we make in life. Some are forced on us – try as we might we can’t quite master time – whilst others we come to gradually. Some are the result of external pressures and some are ones we bring to ourselves. Over the past five years, I’ve been forced (or have I been forcing myself?) to make a number of transitions.

From musician to businessman. From starting a business to running a business.

(and that’s just to name two)

Every couple of months I will be speaking to someone who doesn’t run their own business but really really wants to. Our conversation will inevitably run towards that subject, and I’m almost always asked:

“What’s the biggest lesson you’ve learned starting your own business?”

I have different answers to this question depending on how trite I’m feeling on the day. They range from the mundane (‘Cashflow, Cashflow, Cashflow’) to the pretentious (‘You never really stop learning’). As I said, depending on my general mood, and the attractiveness of the person who asks me, I’ll chose an answer on the spot.

Today, on the other hand, I’ll ask it of myself.

What have I learned over the past five years?

1. Surround yourself with people you trust, and trust them
   As much as I hate to admit it, and as much as I can be an obnoxious prick at times, I’m a people person and I always have been. I can get along with more or less anyone and I can normally start up a pretty easy rapport right away. I didn’t know it when I started, but this is probably one of the biggest reasons we’re still here.

   Every networking group I’ve ever been to bangs on about how ‘people do business with people’. It’s a bit of a cliche. It’s also very true. Over the past five years, I have surrounded my business, across the globe, with people whom I trust. These are people I can trust with my business, with my clients and with my reputation. These are the people who refer me business, the people I bring in to my clients, and the people who, when the chits are against you, are there to help pull you through.

   My network is the reason I’m here, and I value it enormously.

2. Look to the stars, but keep your feet on the ground
   I’m not someone who settles. I never have been. Looking back, almost every decision I have made over the past five (ten?) years has been based on following my passions, my gut instincts and my heart. That has lead me down some pretty dicey territory, but it’s also made my life incredibly fulfilling.

   The other thing it has done is lead me into trouble. The trouble starts when I take my feet off of the ground.

   In business, that’s normally about the mundane logistics. Managing staff, paying bills, tracking projects, setting targets. None of which is all that sexy is it? Unfortunately it’s all pretty fucking vital if you’re going to be able to pay the bills at the end of the month.

   The biggest thing I have learned over the past five years (and it’s something I’m still learning) is to dream big, to run big, to race big, but to plan small. You need to aggressively pursue the dream without letting the smaller details slip.

3. You have got to learn to let go
   Designate is my baby, but it’s also bigger than me now. It’s not just about me, and I’ve had to learn to let go. A couple of years ago I asked one of my best friend’s to join the company as a Director. That was an awesome thing and a really wonderful occasion, but it also meant that, for the first time, the company was more than me.

   Five years on and the company isn’t all about me. Yes it’s my company and yes I set the direction and the ethos behind it, but it’s much more than me. It’s the staff, the people we work with, our clients and our partners. Designate is an entity in its own right.

   And things don’t always work. Over the past five years I’ve had two major business disputes. That’s not too bad really. The first one was horrible and took a real personal toll on me. It hit me hard. It was a slap in the face. The second has been easier to deal with. But I have also learned I need to let go of it. It doesn’t matter who is right and who is wrong. We’re both right. We’re both wrong. What matters is how we behave, how we act, and how we keep our integrity in the situation. All the negative feelings and anger? Let it go.

So that’s it. Five years today and we’re celebrating on Friday night with a whisky tasting/party at the SMWS in Leith (if you are reading this and you fancy coming to the tasting or the drinks, drop me an email).

Five years and we’re still standing. Let’s see how I do after five whiskies, eh?

- j

Lovely

-j

But life goes on, and the chaps at ‘Will it Blend’ have served up a British-inspired, Dr Who loving, treat for us.

Enjoy:

Brilliant as always. Makes me giggle.

-j

Only two or three have really thought it through.

That does not make me happy.

I’ve said it before, but my company does a lot of work with high-growth companies. These projects range from bringing new products to market to helping them expand into new territories. They all have one thing in common. At some point, they feel it’s necessary to bring on investors.

My question is simple: why?

I’m not against bringing on investors. Not at all. We do most of our business with companies that have active investors. It can be critical.

The problem, as I see it, isn’t the investors. It’s companies that look to investment as  almost knee-jerk reaction. “We can’t get where we want to. Let’s get in some cash.”

That is the wrong reason to bring in an investor.

So is your company thinking about bringing on an investor? Try to remember a few things. They may seem obvious, but at least 80% of the companies I see fail on one of these counts.

1. Don’t forget, investment is a commercial proposition.
   This is vital. Investors aren’t giving you money to make you feel better or to ease your business pain. They are giving it so that they can get back significantly more in return. You need to show them the commercial case for the investment, and you need to make sure, above all else, that this is a commercial case based in reality. You know what happens if it’s not? Really really angry investors who come down on you like a ton of bricks.
2. What’s the point? Where does it get you?
   Investment can be a hugely useful tool in growing your business, but what’s the point? Where does it get you? Where are you trying to go and, more importantly, will this money, expertise and support actually get you there? Investment isn’t cash-flow. You can’t treat it like it’s money in the bank. It should be there to accomplish key commercial goals – it should be there to drive you to a successful financial outcome. The formula should be simple:

   Opportunity + Investment = Growth
   Growth = Return on Investment

   That works lovely. The problem is a lot of companies seem to see it as:

   Opportunity + Investment = Stay Afloat
   Stay Afloat = Goodbye Investment

   Not so good, right? You have to make sure that what you’re asking for is going to lead (as far as you are able) to a solid return. It may not work out that way, but the plan has to make sense.

3. Outline the real proposition.
   Chances are, nobody loves your company like you do. You’re doing things because you love them. You’re doing things because of passion. That’s great. Investors will like that. They need to like that (and to like you). But that’s only going to get you half the way there. The other half is all commercial. That side needs to stand – and stand on its own. Without that, a real investor will look right through you.

As I said. I meet a lot of companies. A lot of companies in this field. There are a lot of excellent opportunities out there. A lot of great Scottish (and British) talent exists and I have seen some really innovate people come up with some cracking ideas.

Now we just have to make sure we get the investment right.

- j

I love this advert. I really do. It still makes me smile and still makes me laugh.

Well done Leith :-)

- j