THESE are testing times for the industry.
Falls in revenue for newspapers’ key advertiser segment, Retail, have hit quickly and fiercely. Top retailer Harvey Norman has this week reported a 31 percent slide in profit. Owner Gerry Harvey was on TV complaining about his margin on electronic goods, blaming that as a major issue. Though, of course, we all know his type of store uses good deals on flat-screen TVs to drive store traffic and sell other items at a better margin.
By Mark Hollands, CEO, PANPA
David Jones, another Australian retailer, has seen a 6.3 percent fall in sales – though it is not complaining about its margin. However, both these major retailers’ troubles underline the economic difficulties that our publishers are facing. And unfortunately, there are similar stories in Singapore and New Zealand.
It’s not like the old days when retailers were not the major part of a big metro’s revenue. The dollars used to come from classifieds, of course, and newspapers were never dependent on a small number of clients to be successful.
The money engine of classies allowed newspapers a much better bargaining position with the likes of Harvey Norman. The shoe, now, is on the other foot. Newspapers now have to balance its traditional business-to-consumer model (B2C) with an emerging business-to-business (B2B) engagement, in which a smaller number of organisations and executives (e.g. Harvey Norman and Gerry Harvey) can determine your success.
This change in dynamics has been happening for several years but this lightning-speed downturn has brought it into sharp focus.
The key in any B2B business is the ability to forge and grow relationships. To do this, you need salespeople who do more than stay 18 months on a journey to work in some pseudo-glam business like TV.
Good salespeople are hard to find. They need to be looked after – with the right systems to maximize their time and decent remuneration for their success. Decent sales people do not work for peanuts: make them rich, they make you very rich.
Management now have an opportunity to analyse the quality of the relationships with their major clients, as well as review the tools, rewards and culture that should encourage successful salespeople to blast through their targets.
Senior managers should be asking:
- Do our sales departments run with decent CRM and forecasting tools?
- Are we looking after our key clients – have we prioritised our relationships and are we carefully monitoring our meetings and conversations with them to maximise every opportunity?
- Do all our business units to work together constructively to create great newspapers that delight readers and demonstrate return on investment for advertisers… or do the these departments work in isolation or fail to collaborate for whatever reason?
Rupert Murdoch has being doing a series of Boyer Lectures in Australia, and he has focused on the importance of technology and the right people to use it for business success. World-class companies see a direct link between good technology implementation, sound business processes, and successful people and profits.
American sales-software specialist, salesforce.com, which offers predictive tools and contact management applications, has just announced a 21 percent leap in sales as companies refocus their efforts on improving their client engagement and sales processes. At the Herald & Weekly Times, I understand Siebel (a salesforce.com rival) has just been installed.
The right tools are essential for staff to compete in a tough economy. I have seen the IT industry have two meltdowns in the last decade – the dotcom bust of the late 90s, and then after 9/11. As hard as this might be to believe, those days felt every bit as vicious as the downturn confronting our newspapers today.
What emerged was that companies with strategy, good processes and good people not only survived but grabbed market share. Those who ignored these realities invariably fell by the wayside, or were lucky and got bought – mostly for peanuts.
If your sales processes are not the best they can be; if you do not reward excellence and success to retain staff who create relationships with key advertisers, then the economic downturn is not your problem. You are.
Tags: sales staff
