Three financial ratios to instantly assess your organisation’s health

When analysing your organisation’s financials it can be easy to get caught up in an array of numbers and hard to know the financial health of your organisation. Key financial ratios can help you focus in on particular financial areas and highlight any potential risks that may be present.

The three ratios below highlight keys areas that all organisations should know and monitor. These three ratios and categories help indicate the financial status of an organisation and can be used to very quickly assess financial health.

The three ratios and categories are:

1. Liquidity

The term liquidity refers to the ease in which an asset can be bought or sold in the market, with cash being the most liquid asset.

In the context of financial health, we want to know if an organisation has the resources available to pay its bills and meet its upcoming financial obligations as they become due.

Upcoming bills and commitments that need to be met in the next 12 months (and usually in the next three months) will sit on the balance sheet under Current Liabilities. Current Liabilities may include accounts payable, accrued wages and PAYG to be paid.

Conversely liquid assets such as cash and accounts receivables will sit on the balance sheet under Current Assets.

Current Ratio
(Current Assets / Current Liabilities)

For example an organisation with Current Assets of $1.75m and Current Liabilities of $1.1m will have a Current Ratio of 1.59.

The Current Ratio (sometimes referred to as the liquidity ratio) simply compares Current Assets to Current Liabilities to highlight an organisation’s ability to meet its financial commitments.

A ratio of less than one indicates that the organisation does not have sufficient cash and/or liquid assets to meet its upcoming financial obligations and may be trading while insolvent.

2. Cash Reserves

Although every organisation is different, there is a strong argument that all organisations should have a level of cash reserves.

If liquidity refers to meeting known, upcoming financial obligations – cash reserves refers to preparing for the unknown and/or planned future spending.

Cash reserves will soften the impact of adverse effects. If a key customer is lost or grant not renewed, cash reserves can allow for business to continue as normal for a period of time whilst the organisation recovers.

The level of cash reserves that an organisation should hold is not a straightforward answer. It depends on your revenue model, operating costs, employee commitments and risks, alongside other factors. It is not possible to give standard formula for all organisations. Holding a level of cash reserves is almost always a good thing, but an absolute dollar value is meaningless given how varied organisations are in size and risk exposure. For example $200k in cash reserves may sound good but if the organisation has a monthly payroll of $120k then this may be well below what the organisation requires.

Month Ratio
 [ (Current Assets – Current Liabilities )  /  (Total Expenses less non cash items such as depreciation) ]  x  12

The month ratio highlights the number of months of cash currently available to cover expenditure. For example an organisation with Current Assets of $1.75, Current Liabilities of $750k and total expenses excluding depreciation of $300k, would have a month ratio of 3.33 months.The preferred number will be highly personal to the organisation at hand and organisations should consider their business model and funding profile.

3. Sustainability

An organisation that lives beyond its means and continues to make a loss is clearly not sustainable. On the opposite end of the spectrum, an organisation that earns more than it spends will be able to build cash reserves that can be used to mitigate risk, invest in infrastructure or revenue-generating activities, or increase its spend on its social objectives.

Net Surplus Margin
(Net Surplus / Total Revenue)  x  100

The net surplus margin, commonly referred to as the net profit margin, is expressed as a percentage and tells us how many cents are left over for the organisation for every dollar of revenue earned.

For example an organisation with a Net Surplus of $5,300 and total revenue of $1m would have a Net Surplus Margin of 5.3%. This indicates that for every dollar of revenue earned, 5.3 cents is left over, after all expenses are paid, and this can be used by the organisation to build cash.

A net loss will of course produce a negative number and this may indicate that the organisation is operating in an unsustainable manner.

An organisation will want to achieve the highest possible net surplus margin whilst also achieving its social objectives.

To summarise, when next reviewing a set of financials ask yourself the following questions:

  1. Can the organisation meet its upcoming financial obligations?
  2. Does the organisation have sufficient cash reserves?
  3. Is the organisation living within its means?

If you feel that your organisation would benefit from a financial health check, please contact 1300 763 505 for an obligation free consultation with one of our CBB consultants.

Dimitri Matsouliadis
Business Consultant
Email: dmatsouliadis@cbb.com.au
Phone: 1300 763 505


Rebranding? Know before you go

You might think about changing your brand name or logo for many reasons. Perhaps your logo is looking a little tired, or your organisation’s name no longer reflects the value you offer or the market you service.

Changing your brand is exciting – it’s also a lot of work! Executed poorly, a rebrand may have little effect or even worse, send your organisation backwards… Done well, and supported by a solid strategy, renewing or refreshing your brand can be just the trick to drive your mission forward.

What’s in a brand?

Brand is more than your logo. Every contact your organisation has with stakeholders is a brand-building activity, because at the end of the day, your brand resides in the minds of people. Your staff, your suppliers, your business partners and especially your customers.

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” – Peter Drucker

Strong brands are consistent – they offer a consistent promise or message to the market that matches the actual experience.

What we often call ‘the brand’ refers to unique, memorable assets or brand codes. These can be visual (as in a logo, a colour or a font) or auditory (think about the intel sound, or the Louie the Fly jingle for Mortein bug spray – now try to get them out of your head!) These brand codes allow people to identify your brand, and when applied consistently, create an association.

Take Nike as an example. Most people would instantly recognise the tick or “Swoosh”, associating it with sportswear, fitness, elite athletes, etc. Thanks to a long history of good branding and consistent messaging – including a very memorable “Swoosh” – most would also associate the Nike logo with a feeling of high quality or superiority over other brands. It’s the strength of this association that generates value.

Just about all organisations will have at least two valuable brand assets – most often your name and your logo. Some tips on looking after your logo can be found here.

Renew, refresh, or retain?

Before you hire a designer, choose a new name or start sketching your new logo, be very sure about its current value.

You might like to do some market research to test how well people know your brand and which assets are the most memorable. If you find your current assets (or brand codes) are very strong, it may be best to retain your current logo, name and other valued brand features. Changing it completely could risk losing recognition among the stakeholders you want to connect with, or damaging your brand value. For example, other aspects of your brand (such as your customer engagement, service quality or accessible pricing) maybe the assets that your customers value most.. If your customer has to work harder to find your brand, they may not find it at all. If you no longer offer the brand assets that they value, they’ll go elsewhere.

Look at your competitors. Are there similarities between your logo and theirs? Is there a common image or visual that depicts your service offering? Do they use similar colours?

Let’s consider distinctiveness versus differentiation. Distinctiveness is how your brand is recognised and identified by your customers. It is not a reason for purchasing a product or service, but simply a person’s recognition of an organisation and its brand. Differentiation is what drives a customer to make a purchase. It is a relevant, important difference that your organisation offers over your competitors. Is your organisation distinctive? Do you offer differentiation over your competitors?

Next, consider whether your name reflects your offering? If neither your organisation’s name or logo reflects your service offering, you might consider adding a tagline. In our last article, we discussed how CBB often uses a tagline that states “salary packaging and business consulting” to clear up any confusion about what it is we do. It can often be a simple way to add clarity, or can be used as a differentiator between your organisation and your competitors. If you do decide to add a tagline, be sure it adds value.

Sometimes a refresh is a better option. Retaining the assets that people recognise (like a specific colour, for example) while updating the look to better fit your values and help you stand out in your sector.

If you find any of your brand codes send a message that doesn’t serve your purpose, then it’s probably time for a change.

How to tackle your rebrand

A few things to remember if you decide to rebrand:

  • Start with strategy. Getting a market orientation can help you understand where you are now, and allow you to plot a course for change, based on the needs of the community that you serve. Read this article for more information on market orientation.
  • Measure the effectiveness of your current brand assets. If any of your assets are particularly strong, consider keeping them or modifying them, rather than removing them altogether. Any assets which are weak and don’t add value to your brand should be replaced.
  • Do your research! Compare your brand to your competitors’. What works and what doesn’t?
  • Set a budget. Whilst rebrands can be done cost-effectively (particularly if you have the required skills within your organisation), the costs will vary based on the size of your organisation, and how far you want to take it.

This article on How to nail a rebrand from the get-go provides some great tips for planning a rebrand for your organisation.

Decided to stick with your logo and name? Here’s how to look after it. Still unsure? Do some homework on your brand now and you’ll be on the path to making the right decision.

If you would like some help with understanding your market and your brand assets, contact our consulting team.

Louisa Canning
Marketing Officer
Email: consulting@cbb.com.au
Phone: 1300 763 505

 

 


Ageism and our lack of respect

The Aged Care Royal Commission’s interim report makes for difficult reading. Its single word title “neglect” is, in itself, a smack in the face for anyone who cares about how we treat older people, which should be all of us.

The interim report outlines the following key issues:

  • Difficulties in navigating the system – once older people reach the stage of needing formal care (beyond support which can be provided by family and friends) they are thrust into a system of applications and assessments, which commoditise them into a care package and are largely conducted by phone and internet
  • Whilst home care is often the preferred option for older people, and can maintain their independence for longer, significant waiting times for home care packages are putting many people at risk and increasing the pressure on family and other informal carers
  • Substandard care is all too common in residential aged care, with ‘thoughtless acts’ that “when repeated day after day, become unkindness and often cruelty. This is how ‘care’ becomes ‘neglect’.”

The report discusses some underlying, systemic factors that may be contributing to this situation.

The consumer model

There is a dichotomy between the consumer driven care model of modern aged care and the reality for many older people and service providers. Whilst the intention of the model is to offer people choice, often this is not the reality. Limitations in access to funding, waiting lists for services, challenges in navigating the system and the availability (or lack of) your service of choice in your community mean that informed, genuine consumer choice simply doesn’t exist for most. The flip-side of the consumer model should be that providers are more market focussed: understanding and responding to their customers’ needs and wants. According to the interim report, this isn’t happening either. There is a disconnect between people providing the service and the users of those services – to the extent that known issues of poor care, neglect and abuse are not consistently dealt with. The changing demand of consumers are also not being met.

We have also heard about how the aged care system has not kept up with changing needs and community expectations. The preference for care at home is increasing significantly. Consequently, the complexity of the care needs of people entering residential care is also increasing. The aged care system as a whole has struggled to adapt to these developments, as have specific providers. These changes require different care models, investment in new expertise, reconsideration of funding models and a stronger, closer interface with the acute health care sector.”

Our attitudes to old age

Perhaps the most worrying finding of the Royal Commission is the lack of respect and value we give to our older citizens.

“the language of public discourse is not respectful towards older people. Rather, it is about burden, encumbrance, obligation and whether taxpayers can afford to pay for the dependence of older people. As a nation, Australia has drifted into an ageist mindset that undervalues older people and limits their possibilities. Sadly, this failure to properly value and engage with older people as equal partners in our future has extended to our apparent indifference towards aged care services. Left out of sight and out of mind, these important services are floundering. They are fragmented, unsupported and underfunded. With some admirable exceptions, they are poorly managed. All too often, they are unsafe and seemingly uncaring. This must change.”

Those of us working in community services will appreciate that this lack of value extends to the workforce too. If we don’t value older people, why would we value those that work with and care for them?

“We have heard about an aged care workforce under pressure. Intense, task-driven regimes govern the lives of both those receiving care and those delivering it. While there are exceptions, most nurses, carer workers and allied health practitioners delivering care are doing their best in extremely trying circumstances where there are constraints on their time and on the resources available to them.

The aged care sector suffers from severe difficulties in recruiting and retaining staff. Workloads are heavy. Pay and conditions are poor, signalling that working in aged care is not a valued occupation. Innovation is stymied. Education and training are patchy and there is no defined career path for staff. Leadership is lacking. Major change is necessary to deliver the certainty and working environment that staff need to deliver great quality care.”

The Royal Commission acknowledges that there are service providers who are providing quality care and putting their clients first; they recognise the efforts of committed staff and praise the tenacity of devoted family carers. But, they are working within a failed system.

Within days of the publication of the Aged Care Royal Commission Interim Report, the Disability Royal Commission held its first hearing, which included stories of children with disabilities being bullied and excluded, by their teachers. Australia prides itself on cultural values of mateship and a fair go. The interim report from the Aged Care Royal Commission makes it pretty clear that we’ve let our old mates down. Early signs from the Disability Royal Commission indicate that we haven’t been giving people with disability a fair go either. Unless we fix the systems that are supposed to be caring for some of the most vulnerable people in our communities, that expression that ‘getting old is better than the alternative’ may no longer hold true.

NDS has produced a helpful summary of the lessons from the Aged Care Royal Commission for disability service providers. I won’t repeat it here, as we’ll be hosting an ExecNet event in Adelaide next month where we’ll hear an update from Henry Newton, Senior Policy Officer at NDS, about the Disability Royal Commission, and Dr David Panter, CEO of ECH Inc  will share his  learnings of the Aged Care Royal Commission

If you’d like to join us at the ExecNet, you can book your spot here.

If you’d like to speak to our consulting team about making your organisation more customer focused, you can book a call with one of our consulting team here.


Jane Arnott
General Manager, Consulting and Business Services
Email: jarnott@cbb.com.au
Phone: 1300 284 364


Strategy can’t be created in a vacuum

There have been radical changes to the way in which community services are funded in recent years. It’s not as simple as the money just coming from a different place, the changes have completely transformed the business model for many organisations, particularly in areas such as aged care and disability, where purchasing decisions are now made by consumers, not commissioners. This comes alongside other changes in the way that people engage with causes, organisations and work; and rapidly developing technologies and stakeholder expectations of how organisations use technology to engage and deliver services. All this means that, even if you haven’t had a major change in your business model, your organisation is still going to be impacted by a changing external context.

This context is vital to effective strategic planning. There are some well established ways of bringing the external environment into your strategy planning sessions – such as PESTLE and SWOT analyses – but these too frequently rely solely on your internal resources providing their view on what’s going on outside, and that’s rarely the full picture.  The 2017 report from the Asia Pacific Social Impact Centre Philanthropy: Towards a Better Practice Model, gives some vivid examples that the way we see ourselves, and consequently the lens through which we look at the world, can be very different to how other view us. As well as key differences in priorities between philanthropists and the organisations they fund, there were very different views about their mutual relationships. 84% of philanthropic respondents thought they built a good relationship with the organisations that they fund, but only 38% of not for profit respondents said that they had strong relationships with their funders. Relying solely on your self-perception of your organisation, and of your customers’ needs and expectations, can be dangerous.  It risks leaving you with lots of blind spots, the worst of which can be complacency.

We’ve been working with organisations on strategy from a couple of different perspectives. The first is focused very much on market insights. In these cases, organisations have come to us for independent, expert analysis on their market, particularly around the size of their target market (or as near as we can get with public data) and their competitor mix. In many cases we’ve completed this analysis for organisations to discuss with their leadership and board, to inform their strategic decisions about market focus and growth. Some clients have approached it from the other end – asking for support with a more traditional strategic planning exercise, but in the context of a fast evolving external environment, it’s becoming increasingly difficult to run traditional planning day without having some reasonable market data. Strategy development – particularly for organisations on the cusp of closure or growth – can’t just be a navel gazing, introspective exercise. It needs to be located in a real world context and, in consumer driven community services, that means understanding market and customers.

We really encourage you to bring an external perspective to your strategic planning – and not just in the form of a session facilitator. As a minimum, look to understand your customer market and competitors.  If you’re working in an area that is subject to evolving government policy and regulation, understanding these is also critical. Your leadership team may be all over it, but don’t assume that your board has the necessary understanding of the implications for your customers and your organisation. If their day job is in a different area, you can’t expect them to be across the detail unless you’ve provided it to them, and the risk is that their perceptions of aged care or NDIS may be more determined by media coverage than the real life experience of your organisation and its customers.

So, before you arrange your strategic planning session, try pulling together some data on the following:

  • Potential size and spend of your target market
  • Information on your competitors
  • Data on your existing services and clients, including volumes, financials and how these have changed over time
  • Information for your board on the overall policy and regulatory context

If you’re a fan of a SWOT or PESTLE analysis, you can still go ahead with the exercise, but now you’re working with data, not just instinct, to help you determine the realistic opportunities for you, and the risks. This in turn can inform the detail of your planning, helping to identify low hanging fruit, risks to be navigated and priorities for sustainability and growth.

For help with market analysis and strategic planning, please contact:

Dr Ellen Schuler
Business Consultant
Email: eschuler@cbb.com.au
Phone: 1300 284 364


Key person risk – Is your organisation vulnerable?

If your business depends on you, you don’t own a business – you have a job. And it’s the worst job in the world because you’re working for a lunatic!
– Michael E. Gerber

Organisations can live forever, but people cannot. In the UK, the oldest not for profit organisation is said to be King’s School, Cantebury which was established more than 1400 years ago in 597.

There are many factors that contribute to the longevity of an organisation and one of them is ensuring that key person risk is mitigated.

An organisation has key person risk when it is highly reliant on one individual or individuals. Whilst employees with unique skills and knowledge are an invaluable resource to have, what happens when they leave? A simple test is to ask yourself, how would the organisation operate without that person? On one extreme, a one-person organisation simply would not exist if that person stopped working for any reason. And whilst key person risk may not always result in the organisation ceasing, it may cause serious pain. If not properly managed, the loss of a key person can result in a productivity downturn and a decrease in profits, as well as effect the confidence of other employees.

If your organisation has key person risk, the question arises as to whether or not you want the organisation and the services it provides to outlive the working life of that key person. If the answer is yes (it usually is!), then you must mitigate all key person risk. This can be done by developing systems and processes, automating workflows and cross-skilling staff.

A first step is to take stock of the key individuals in your organisation and assess whether those people may be a “key person risk”. Senior roles are often the first to come to mind, but ensure all key roles and responsibilities are reviewed, even the unsung heroes of the team, who other employees turn to for assistance and support. In many cases, it could well be someone in an administrative or assistant role who does more in and around the organisation than you realise. It is only when they leave that their true role and responsibilities become obvious.

Once you have identified any employees that pose a key person risk – and it may even be you – the next step is to look at your current systems and processes. In order to mitigate key person risk, you must develop or introduce new systems and processes that are independent of a particular person and can be executed by any appropriately trained person within the organisation.

Consider your current business model and structure. Are there individuals within your organisation that are the sole holders of important knowledge and relationships? Spread that knowledge through cross-skilling. Not only will the sharing of information and skills help to nurture teamwork and cooperation, but it will enhance the talents of employees for the long-term benefit of your organisation.

Succession planning is also important, particularly if you identify a senior member of your team as being a key person risk. And if you are aware that they are planning to retire in the near future, then you need to start looking ahead… Having them mentor another member of your team may be a great way to make the key person feel appreciated and valued, but also allow them to share the high-level knowledge they’ve acquired through years of experience.

The effectiveness of your efforts to mitigate key person risk can be easily tested by removing the key person from the organisation for a trial period, either whilst they are on leave or secondment. Did things fall apart as feared, or did the rest of the team step up with a “can-do, business as usual” attitude?

If you can identify employees who pose a key person risk to your organisation, and you’re not sure how to tackle it, get in touch with our team. CBB has several consultants with experience in processes mapping and the streamlining of organisational systems and processes to help you mitigate key person risk.

For an obligation free consultation, please contact us on 1300 763 505 or email consulting@cbb.com.au.

 


The value of a logo

In previous issues of Foreword, we’ve looked at different aspects of marketing such as brand reputation, marketing strategies and social media marketing to name a few.

Whilst all of these things are important, how much thought have you given to your organisation’s logo? It’s one of the first things people notice when they’re looking for your organisation.

Next time you’re driving home or watching television, look at the logos you see in advertising. There’s many that you would instantly recognise; the famous golden arches of McDonald’s, the three diamonds of Mitsubishi and the colourful letters of Google. Your recall of the product or service they offer is almost instant. These are all good examples of a logo doing its job.

Now think about your organisation’s logo. Is it new or has it been around for a few years? Does it tell people what you do, or has it honestly seen better days? Not all logos make the product or service obvious. In these cases, organisations might decide to add a tagline – a short statement or a few words about their product offering.

For example, CBB’s logo is three green letters with our name in full underneath. Community Business Bureau is our incorporated name. We’ve had it since 1995 and we wear it with pride. The word Bureau may be a little outdated and can be tricky to spell for some, but it explains exactly what we were formed to do, and still do to this day. This may not be clear to everyone, so depending on its use, we often add a tagline that states “salary packaging and business consulting”.


We try to use our tagline logo on promotional merchandise whenever possible. Our lip balms and pens may end up in the hands of someone who doesn’t know who we are, so our tagline tells them. What’s your logo saying?

Tips for protecting your logo

Your logo is your organisation’s gold. It needs to be protected and used with care. I’ve seen some terrible uses of logos where they’ve been stretched to fit into a space, pixelated and/or re-coloured. Poor quality logos look unprofessional and that’s not the message you’re trying to send to potential clients or customers…

Here are a few easy tips to ensure your logo is displayed correctly:

  • Always keep an original version of your logo saved in a safe place (somewhere other than the main location you keep your logos). As we all know, it’s easy to overwrite a file and once you’ve saved over the top of it, it’s hard to get it back!
  • Keep an electronic folder with different logo versions ready to go. Below I’ll give you an explanation of what to use and when.
  • Be careful who you give it to. Graphic designers know how to use a logo, but if you’re sending it to someone externally, always check how it looks before anything is finalised. Ask for a proof or visit the website that it’s being displayed on. If you’re not happy with it, ask them to change it.
  • Consider investing in a style guide. Graphic designers can provide one of these so you have a reference as to how your logo should be displayed, depending on the situation. Style guides can also incorporate instructions for the use of your organisation’s fonts and brand colours in different situations.

What type of logo and when?

There are a range of image file types for different uses. By using the right file type, you’re halfway to getting your logo looking the way it’s meant to. Here are some common ones you might come across or be asked to provide:

AI – Adobe Illustrator document

This is your original file that a graphic designer used to create your logo. Your logo’s AI file can be used to make all the other file types below, however you will only be able to open or edit it if you have the Adobe Illustrator software. An AI image file can’t be inserted into documents or websites as it’s not an acceptable file type.

EPS – Encapsulated Postscript

An EPS file is one of the most preferred formats by printers, custom merchandise suppliers and signage companies. Again, unless you have Adobe design software, you won’t be able to open or view it.

JPG – Joint Photographic Experts Group

A JPG (JPEG) is probably the most common type of image file that you will come across. It can be used for multiple purposes, provided it’s the right size. Generally, a JPG can be reduced in size, but it can’t be made bigger, as increasing the size past its original dimensions will make it pixelated or “fuzzy”. JPGs can’t have transparent backgrounds, so the best way to display them is on a white background.

Provided they are the right size, JPGs can be used for:

  • Microsoft Word documents
  • PowerPoint presentations
  • Web pages and other online uses
  • Email signatures

PNG – Portable Network Graphics

PNG files are usually a smaller file size when compared to a JPG, but have a slightly higher resolution due to the way the file is compressed when it is saved. PNG files can also have transparent backgrounds, so they are a great option for logos that work well on different coloured backgrounds.

Like JPGs, PNGs can be used for:

  • Microsoft Word documents
  • PowerPoint presentations
  • Web pages and other online uses
  • Email signatures

PDF – Portable Document Format

The advantage of a PDF logo is that it can be viewed on any computer with Adobe Acrobat Reader installed (free to download). It’s also possible to edit a PDF logo with Adobe Illustrator. Some printers may prefer a PDF file for the printing of common office stationery such as flyers, posters and business cards.

If you’ve started thinking about your organisation’s logo and whether it’s still fit for purpose, it may be worth doing a refresh or rebranding altogether. But be aware, rebranding is not a simple task. It can often be a huge undertaking and shouldn’t be tackled on your own unless you have the capability and capacity to do so. Having done one recently ourselves, we know the ins and outs of a rebrand. You can read more about it here.

If you need some help or advice, drop us an email at consulting@cbb.com.au.

 


CBB Community Business Grants

Do you feel fully on top of the business-side of running your organisation? You might be delivering outstanding social impact, but are you confident that your business practices are fit for purpose?

We work with hundreds of not for profit organisations and we see first hand the challenges of juggling the operational realities of delivering community services with the management and planning needed to run a purpose driven business. We know that many organisations do not have the time – and sometimes don’t have the in-house skills – to invest in adequately planning ahead, managing corporate functions, and continuous improvement.

As part of our commitment to reinvest some of our own funds into supporting the sector to build its business capability, we are offering a series of Community Business Grants in 2019/20. Grants will be offered on a staged basis through 2019/20 and will take the form of pro bono consulting projects in areas such as understanding your market opportunities, and financial management.

The first round will open to applications soon. Sign up for news and updates on our Community Business Grant program here, including announcements as rounds open, and access to the grant guidelines.

For any queries on our Community Business Grants contact consulting@cbb.com.au.

Jane Arnott
General Manager, Consulting and Business Services
Email: jarnott@cbb.com.au
Phone: 1300 763 505

 


The importance of knowing what you’ll do with customer feedback – so you ask the right questions

We’ve recently been researching tools to measure customer satisfaction. We’ve heard all about the benefits of their software and how efficient their systems are. But each conversation has focused on measuring how well an organisation has performed, rather than how they can improve.

Wouldn’t it be great if the companies were forward thinking as well as retrospective? This article titled ‘rather than asking customers for feedback, ask them what you could do better in the future’ by Thomas Barta, it’s is a short but informative read.

Asking what you could do better in the future will allow you to understand the needs and wants of the market, allowing you to either start or continue on your journey to be market orientated. 

You can find out why being market oriented matters for your community in this article.

Even if these companies did change their focus, many of the products we reviewed cost over $15,000 a year, which is a hard sell into any CEO and board. But hope is not lost.  Although expensive software makes it easier, you can still collect useful information using free tools and a bit of common sense.

But before you can ask the questions, you need to know why you’re asking them.  That will depend on your planning stage and whether you have a marketing strategy.

Marketing strategy

At this point we must clarify that a marketing strategy is not the same as an engagement/advertising plan.  You cannot look at the 4Ps (product, price, place, promotion) until you have a marketing strategy.  Without it you will not know where to effectively spend your marketing budget to connect with existing and /or potential customers.

In order to create a marketing strategy you need to answer three seemingly simple questions:

  • What market segments will be targeted?
  • What will our position to those targeted market segments be?
  • What are our objectives to each of the targeted market segments?

If you are still developing your marketing strategy there is an opportunity to ask your existing customers what it is they like about your organisation; why they use your services; why they don’t use your competitors.  From here you can start to define your positioning for each of the targeted market segments.

Marketing tactics

If you already have a marketing strategy in place you can focus on the 4Ps.  In particular, questions around your product and what people need and want.  These will help improve your service to keep existing customers happy and attract new customers.

Understanding what people need and want will also help you decide if you should add any new products to your portfolio; and if so what these should be and when you can launch them based on your organisation’s core competencies.

Conducting the research

There are various ways of asking questions and collecting responses. If you have the budget you can reach out to a market research agency.  But if your budget is tight then we recommend saving that money and collecting the initial information yourself.  There is no point having the answers if you then can’t afford to do anything with the information.

Then, if beneficial, use a market research agency at the end of the process to test your positioning and new product ideas on your target segments via focus groups. Their expertise at this stage will be invaluable and worth every dollar of your investment.

Online surveys

If you, like many organisations, already collect a Net Promoter Score (NPS) this gives you a year on year comparison of how well you’re doing. We suggest adding in other questions based on what you’re trying to achieve. These answers will produce actionable insights, which when acted upon will allow noticeable impact to your organisation and the community you support.

If you don’t currently survey your customers, SurveyMonkey is a great starting place.  SurveyMonkey offers a free plan, which allows you to ask up to 10 questions and view up to 100 responses per survey, and offer other plans that allow you to add more team members, ask more questions etc.  But start with the free account and do a test to see if it’s for you.  There are lots of options out there that you may prefer (just Google ‘alternatives to SurveyMonkey’ and there are numerous comparison articles that you can read). 

Face to face surveys

Depending on the people you support a survey may not be the most suitable option. Asking people a series of questions or making the questions into a series of activities may be the best way to obtain the valuable information you require.

Survey Tips:

  • Keep it short – people are busy
    • You’re better off running a quick survey often, instead of a long survey once a year. If you’re willing to pay people to respond to your survey then you can make it longer.
  • Ask the right person
    • The person who decides which services to purchase with what organisation may not be the service user. For example if your organisation provides support to children, the child may be able to tell you what would make their experience more enjoyable.  But they will not be able to help you define the key drivers that makes a parent allow you to support their child.
  • Focus on one thing at a time
    • Before you start to write questions make sure you understand why you are doing this survey. Focus on what it is you need to know.  Make sure you write the answer down so you keep referring to it.  It’s easy to get side tracked as different ideas pop into your head.
  • Know what you are going to do with the answer
    • Sense check the questions you’ve written, by asking yourself if the answers will help you improve your organisation/service/customer experience.

If you want to find out more about how you can connect with your existing customers and / or potential customers, you can book a free consult.

Meg Drechsler
Senior Marketing Consultant
Email: consulting@cbb.com.au  

 

 


Prepare for a new way to attract donations and volunteers

If your organisation works with consumers rather than businesses, now is a great time to consider if Instagram should be one of the communication channels your organisation uses to connect with your customers, potential customers and supporters.

If you’re completely new to Instagram and you find any of this content confusing, we’ve posted a brief glossary below…

Why now

Instagram launched donation stickers in America earlier this year. Whilst this new way of getting people to donate hasn’t been released in Australia yet, it’s the perfect time to start using Instagram in preparation for the launch, especially if you’re looking to engage with 18 – 34 year olds.

In the middle of July Instagram turned off their like count in Australia. So you can no longer see the number of people that like a post (unless it’s your own).

Mia Garlick, the Director of Public Policy for Facebook and Instagram in Australia and New Zealand told the ABC “We know that people come to Instagram to express themselves and to be creative and follow their passions. And we want to make sure it’s not a competition.” This is an advantage for new pages, as a low level of engagement as you build your Instagram presence won’t be visible to users. Although people can still see how many followers you have on your account, people can no longer see that you only have two or three likes on a post, so they can make their own mind up if they like the post and act accordingly, rather than wondering why it’s only got a few likes and then not wanting to stand out.

Engage with young adults

64% of Instagram users are aged between 18 – 34 [1]. Whilst this age group supports crowdfunding activities, it’s less likely to give to charities. Instagram donation stickers will allow organisations to receive donations via the Instagram app on people’s mobile phones and tablets. This is important as 80% [2] of crowdfunding donations are made via mobile devices, so this is a platform where people are happy to provide donations.

Whilst the primary purpose of your Instagram page is to connect with customers, there is also the potential to increase your volunteer base. Although 43.7% of adult Australian’s volunteer, this number drops to only 37.7% of 18-34 year olds. Instagram provides an opportunity for you to connect with this demographic and encourage volunteering.

Start your Instagram page now

If you don’t already use Instagram the sooner you start the better. Don’t wait until the donation sticker feature is released in Australia to get started. Building an audience on Instagram will take time. By starting now you’ll get time to learn and develop a style that your audience engages with, whilst still reflecting your mission. You’ll have time to build a relationship with your subscribers and build trust, so when donation stickers become live, they will want to support you and advocate on your behalf with their followers, by putting stickers on their Instagram stories to raise money for you.

Things to remember

Before you start an Instagram account you need a strategy. Review your marketing strategy to understand which target segment you are appealing to and what your position to this segment is. Build your Instagram content strategy around this and decide what story you’re going to use Instagram to tell, and what solution you are going to offer people. You can’t just copy your posts from Facebook or LinkedIn over to Instagram. They are different environments and people expect different things.

Instagram is image focused, so start to collect images. The best way is by using your smart phone (so if employees are banned from using their phones at work, you may need to revise your organisation’s policy to get the best results, or consider other options). The best photos will be ones taken in the moment, not staged, so make sure people involved with your organisation know what sort of photos you want to take. You may have sensitivities around taking photos of the people you support, in which case you can decide to take pictures from their point of view, to show what they are seeing.

Maximise your chances of being found. Your ‘name’ and ‘bio’ are the only two searchable fields in Instagram, so make them count. Don’t repeat your organisation name in your bio as space is limited, instead use search insights from your website and weave the most searched for terms into a sentence.

Free help to improve your images is available

There are various apps available that can help you improve your images, even if you’re not skilled in Photoshop. Apps like ‘Snapseed’ allow you to tweak your image at the press of a button, so search for image editor in your app store and find one that works for you.

If you want to brand your images or always have a certain colour as a border that ties back into your brand, you can find apps like ‘Canva’ by searching for graphic design apps that need no creative skill to use.

Live video and Instagram Stories (images or videos that disappear after 24 hours) are very popular with the younger demographic and ‘Unfold’ is the go-to mobile app to allow you to add text and design features to your story. Like the other apps, this needs no design skill and if you’re like me, you’ll soon start using these apps for your personal account too. If you’d rather create stories from your desktop, ‘Stories Creator‘ allows you to convert images (not videos) into stories from your web browser.

If you want to provide people an overview of what an hour or day with you looks like, you can use an app like ‘Life Lapse’ which allows you to do time lapse photography for free. The result is a video made up of individual photographs.

Track your results

A simple spreadsheet may help you track results like the number of followers and the engagement (likes, shares and comments) of individual posts. Once you get over 1,000 followers tools like this one can be used to generate reports showing your audience demography, follower growth and important audience insights to allow you to generate relevant content.

As a benchmark according to Phlanx (a social media marketing platform), the average engagement rate on Instagram based on the number of followers is:

  • 1k to 5k = 5.6%
  • 5k to 20k = 2.43%
  • 20k to 100k = 2.15%
  • 100k to 1m = 2.05%
  • >1m = 1.97%

New to Instagram and completely confused?

What is it? It’s a social media platform, much like Facebook or LinkedIn, but heavily based around photos and videos. You can like and comment on posts in much the same way as on other platforms. It’s mostly used by 18-34 year olds, so is a good platform to use if they are your target age group for buying your service, donating or volunteering.

Bio: your bio page gives background information about you and your number of posts, followers and the number of Instagram users you are following.

Stories: are Instagram pictures or videos that disappear after 24 hours.

IGTV: in addition to posting to your page and stories, videos can be posted to IGTV. These advantage of posting to IGTV is that the videos can be longer than on your page or stories, which are restricted to 60 seconds and 15 seconds respectively.

If you need any help creating a marketing strategy to understand who your stakeholders are, what your positioning is and creating measurable objectives; or creating an engagement plan to communicate with them, you can book a free consult.


Tom Rippon
Marketing Consultant
Email: consulting@cbb.com.au  

 

 


[1]  https://www.statista.com/statistics/248769/age-distribution-of-worldwide-instagram-users/

[2] https://www.entrepreneur.com/article/271466


10 easy ways to protect your brand’s reputation – online

Over the past months the news has been filled with public figures who have lost their jobs due to posts or comments they’ve made on the internet.  Whilst some were recent posts others were in the distant past, but it still came back to haunt them. An organisation is just like a person, over the years comments, news stories and customer reviews leave a story on the internet. So what can an organisation do to protect or improve their organisation’s reputation?  

Continue reading…