by Peter H Frank | Oct 30, 2015 | Business |
Earlier this month, I gave a lecture on critical thinking to an association of Hungarian economists in Targu Mures. At the end of the conversation, I was asked two questions: what was my first impression of business in Romania when I arrived here six years ago? And, what advice do I have for a young person looking to start a business?
As occurs all too frequently, it was not until after I gave my answers and sat down that I realized I wished I had answered them differently. After only a few minutes of reflection did I see how the two answers were perfectly related and how important they both are now as much as ever. Here is how I wish I had answered:
My first impression upon coming to Romania was of a reality that unfortunately remains as true today as when I arrived. Actually, I noticed it even before I arrived. After changing planes in Italy, I was on a Tarom flight to Bucharest looking through the in-flight magazine when I saw an advertisement for a Bancpost-American Express-Tarom credit card.
Having spent 12 years at the world’s largest credit card issuer and the pioneer of affinity/cobranded cards (and then several years after that teaching and writing on the topic), I immediately shook my head and saw what a financial failure that product was likely to be. I knew firsthand that this type of three-branded arrangement existed in other places, but replicating what you see from outside – without understanding the very challenging particulars that lay beneath – was a recipe for disaster. And from what I was reading, this was not going to work.
It was not until after I landed and began to live here that I found more and more examples of exactly this syndrome, whether in banking, in media, at retailers, in restaurants, or even inside American-inspired bars and cafes. Yes, the veneer looked the same – the products and logos and menus and concepts – sometimes, in fact, they were even more American than they were in America.
But it didn’t take long to discover that the product and messaging and service and flavors were but superficial in appearance and misunderstood. Indeed, there was generally a lack of any deeper understanding of the structure and of the strategy within the businesses and products that are required for success.
Six years later, unfortunately, I see little improvement. There still remain too many examples of this fundamentally wrong approach. And too many companies, from banks to newspapers to retailers to restaurants, still fail to understand. Most of them, especially Bucharest newspapers, seem to have no concept as to why they’re in business.
As I know the credit card and loyalty businesses rather well, let me give you a few examples I observe from that sector. In the several years after my introduction to that Tarom credit card (which, by the way, has moved to another bank), I came across the BCR Zambet card, a confused and expensive product that I’ve criticized before for not knowing what it was or why it existed. And after obtaining the bank’s internal presentation some time later, I could see the confusion. There were lots of superficial benefits, but little recognition of the challenges.
Then I noticed Raiffeisen’s cobranded SMURD MasterCard, which I confess led to a sad laugh. The demographics might be good, but clearly the basics of card affinity are not well understood. And then there’s a Steaua card – again, a good idea in other places, but a seriously dubious product here.
Or look at the other big banks and the hundreds of things that were copied and brought here: a credit card for doctors, for small businesses, for entrepreneurs, for students, for shoppers. Discount cards. No-interest borrowing. Points and rewards. Elaborate cash-backs. In each case, I guess, someone saw them in other countries, or read about them somewhere.
But also in each case I can tell you it doesn’t take long to see that too much is wrong – from ineffective benefits to badly constructed messaging to misconceived positioning to card designs without purpose to descriptions intended more for bankers than consumers – overall creating dozens of different products either virtually indistinguishable from each other or giving potential customers no good reason to want them.
And while I don’t know their profitability, these card programs must be attractive to issuers. Some banks are now willing to effectively pay you 100 lei to sign up or some other amount if you bring them your friends. But that’s not likely to work either as short-term acquisition does not necessarily translate to long-term utilization – not with the customer marketing that you find here at the banks.
In fact, of all the bonus and loyalty cards being offered here (whether from banks or any of the retailers), not one that I’ve seen is truly conceived and structured as anything but a product – not a program – and loyalty, to succeed, is not a product to be sold. No. Paying cash for new customers is not a way to build loyalty.
The fact is these could be tremendously successful if done correctly in this market. But there is not a bank or retailer here that seems to fully understand how to correctly position these loyalty, advantage, bonus points, or affinity programs – whatever you want to call them. Instead, it appears they have merely designed card products to look the way they think they should and they are probably wondering why none of them succeed as well as they do in other places.
In other words, what I found when I got here – and still find all too often – is that Romania has businesses that do everything done elsewhere. But all too often, they throw products on the shelves and compete mostly with price and waste a lot of money on new customer acquisition. And when all is said and done, it appears they lack the essential understanding of why these products exist or where they’re headed in the future.
One of the more common excuses I hear is that this or that product was already tried and it didn’t work. Or times have changed and the product won’t sell. Or it’s only been 20 years – you have to give it more time. What this typically means is the person has failed to understand. My guess is they did try that product as they saw it someplace else with the attitude that “I’m a smart person, I can see how it’s done.” But the truth is, they cannot. They never tried the product the way it actually exists someplace else. So they never tried the product the way it needs to succeed.
And that, very simply, takes me to the answer to the second question I was asked.
What advice do I have for young people and entrepreneurs looking to launch a new business? It sounds so obvious, yet it’s so often overlooked. Understand your business – better than anyone. Because once you truly understand what goes into a successful product and then design it accordingly, what you’ll be offering is precisely what your customer wants – not only what you’ve seen without understanding from a distance.
Your business does nothing without customers. And the best type of customers are the ones who like you. Customers who value you. Customers who like doing business with you no matter your industry or the flavor of your product.
And how do you create that? Through the design of your products, the delivery of your services, the internal procedures of your business, and the treatment of your employees. Everything aligned to satisfy your customers.
Whether you are a bank or a newspaper or a shop or a neighborhood restaurant, it’s not enough to offer your product and then pay for new customers. You must inspire your employees, create a business that others enjoy and be a good neighbor (whether you’re local or on the web). Your customers will feel it and the profits will come.
And never forget that it all starts with you.
Yes, the opportunities are out there. Others’ lack of understanding is like a gift made for you.
That’s how I wish I had answered those questions.
by Peter H Frank | May 11, 2015 | Business |
I love a good list. A list of rules, a list of crimes, a list for shopping, a list of favorite books, a list of favorite lists – to-do, wish, bucket, Franz. I love them all.
What I don’t love is when they are compiled by amateurs and then presented as if they are the wisdom of ages compacted and made sufficiently pithy for bumper stickers and tattoos. Or magazine articles.
Take, for example, this latest one from Forbes: The 10 Worst Body Language Mistakes. (Find it here.) I don’t know who this Travis Bradberry is, but clearly he doesn’t get out much. Or go to many business events. Or get invited to parties. Because if he did, he would have known better than to call these the “worst” mistakes. I’ve seen worse mistakes made by the Pope.
His list, in a nutshell, is: Don’t avoid eye contact, slouch, frown, have a weak handshake, fold your arms, look down, stand too far away, stand too close, look at a clock, or fidget with your hair.
Yep, amateur. (Although I like the last one as it apparently indicates you are feeling anxious or perhaps that you’re wearing a toupee.)
Now, I’ve been in a lot of meetings and often stayed awake so I can tell you, from personal experience, what we professionals consider the REAL 10 Worst Body Language Mistakes. (Don’t believe me? Just give them a try. I have.)
1. Do not double over in silent mock laughter while listening to someone, or in any way practice other mime exercises, including being trapped in a box.
2. Do not begin jumping up and down while speaking as that can suggest you are feeling too excited, which can indicate anxiety and insecurity.
3. Do not yawn repeatedly or lie down on the floor for more than three minutes when someone is speaking as that can indicate you are feeling too relaxed, which can also indicate anxiety and insecurity.
4. Do not pick your teeth while speaking as it can indicate you just finished a lunch to which the other person was not invited, which in some cultures is considered selfish.
5. In general, when making a presentation, do not suddenly point at a woman in the audience and give her a thumbs-up.
6. Do not pick your nose excessively as it can indicate you are suggesting the other person should give you a tissue, which can be considered aggressive in some cultures.
7. Do not repetitively wrinkle your nose and stick out your tongue when someone is speaking as that can indicate you’re an idiot.
8. If you do feel the need to stand inordinately close to someone, either because it’s culturally more comfortable for you or because the two of you are whispering and pointing at others in the room, be sure to refrain from any excessive scratching below the waist.
9. Unless you don’t know the person, avoid putting your finger in your mouth like you are making yourself gag after pointing at the person speaking to you.
10. When a woman is speaking to you and you are staring at her breasts, do not create a puzzled expression on your face and tilt your head to one side as that in some cultures can be considered excessively humorous.
by Peter H Frank | Apr 18, 2014 | Business, Culture, Politics |
In case you missed it last week, the European Commission announced it wants to make it easier for companies with single shareholders (meaning small and medium-sized firms) to operate throughout the EU. It would do this by standardizing lots of things so folks would not have to travel around or spend lots of money to expand their businesses to other EU countries. [Link here]
I say “hooray!” Great idea! There are lots of companies in Romania that would love to start doing business internationally. And now, thanks to the EC, they’ll soon have a little help.
But really, come to think of it, why stop there? The world is bigger than Europe. Just aligning a few things here is a good start, but why not do something that will have a REAL impact? Many of the companies I’ve met here dream of truly hitting it big. They are writing their websites in English, hungrily peering across the Atlantic, seeing their futures conquering the US.
So no, I say if these brains up in Brussels really want to be useful, they would concentrate on doing something even more important than merely unifying regulations and standardizing documents. They would give these small-business folks a list of vital dos and don’ts that goes beyond just the documents and helps standardize behavior. (more…)
by Peter H Frank | Dec 18, 2013 | Business, Media |
I was told I should put more photos in my posts. So here you go. It’s got nothing to do with what I wrote, but I hope you like it.
Ooops. It seems I was mistaken yesterday when I wrote that short item on Facebook about the brains behind F64’s successful PR stunt a few days ago – the one that involved lying to the press when the photo retailer announced it was being sold to a foreign investor. (It was to Santa Claus, it later yucked.)
I apologize. So for all my faithful readers, let me write a correction. And while I’m at it, let me ask you all a rhetorical question: Just how perverse can things get here? (Wait, I’ll show you.)
Now, I was under the impression that F64 acted without a professional PR agency when it pulled that mindless stunt. It must have, I thought. Apparently, I was wrong – as I’m told the press release was issued by some firm called 2activePR here in Bucharest.
Of course, I would never want to suggest that these specialists must be a bunch of juvenile nincompoops to think that tricking reporters, embarrassing them, and wasting their time was a good idea. No. (You think any press is good press? Ask Tylenol or Wendy’s about that one.) In fact, the PR agency’s stated “vision” on its website reads in part that it specializes in “maintaining and enhancing corporate reputation in the eyes of clients, employees, analysts and the media.” At least with the media, I do believe in this case the agency fully succeeded in “enhancing” F64’s reputation – if, in fact, this result was the reputation the company was seeking.
But wait, that’s not the only reputation that has been enhanced here. I’m also told that while reporters were suckered into coming to the fake news conference, the members of the press were all given stuffed animals and cameras – as a gift you understand, as a token of appreciation, as an expression of heartfelt thanks, as an adorable little lagniappe, as – well, I don’t know, what would you call it? I know what I call it. And, I’m told, when they found out they had all gathered there as part of a joke, no one in the press stood up, objected, and told them where to put their cameras. (I suppose if I got a free teddy bear, making a fool of me would be quickly forgiven also.)
And then, just in case you still have your lunch, the retailer announced that all this had been for a good cause (oh my goodness, this is the Sensiblu Foundation all over again) because the store has a place for customers to bring toys and clothes for poor children.
Hey, I’d like to enhance an idea also. Why don’t the reporters put their pencils away, fill the poor kids’ boxes with the stuffed animals and cameras they were just given (maybe some did), thank the retailer and agency for wasting their time and insulting their professional ethics (even if you don’t have any, doesn’t it insult you that people look at you and assume that you don’t?), and then everybody can go home, celebrate Christmas and pretend they’re professionals.
Happy Holidays.
by Peter H Frank | Sep 25, 2013 | Business |
From my very first experience inside an office in Romania, it was clear to me that one of the most debilitating realities in the workplace here was a lack of managers who provided competent, inspirational leadership.
I don’t mean those one-of-a-kind managers for whom employees would forsake all self-interest and give everything to the company. I don’t even mean managers of pristine character and judgment who spend hours teaching and mentoring. There are very few of those in any country. No. Just a couple good bosses (or editors) for younger and lower-level employees to emulate would be sufficient.
My subsequent experiences in various offices here mostly served to confirm this impression. I again witnessed around me a sad lack of exemplary managers. Well, that’s not wholly true. There were many managers who provided examples. I did see a number of young employees emulate their bosses and (rather than learn from the shortcomings) begin to act with petulance, impetuousness, and in other ways that evidenced the insecurity and immaturity they were subject to.
Unfortunately, after this limited personal experience, scores of second-hand anecdotes, never-ending complaints from friends, generalizations from acquaintances, and various pieces of published journalistic evidence, I am left with the undeniable impression that there are woefully few examples here of senior managers who demonstrate, by example, how to conduct oneself well in the office and how to guide others with confidence and encouragement.
And, fairly or not, I have concluded the problem is indeed worse here than in the other countries I’ve worked where there were always at least some admirable managers in evidence to everyone.
I’m not sure of the reasons behind this, whether it is the outcome of some cultural differences or merely the continuing cycle of bad managers begetting new bad managers begetting new bad-to-be managers.
It’s especially sad because, in my experience, while it might be difficult to be a great manager, it is not difficult to be a good manager. And it’s certainly no mystery. Like learning to be a good parent, there is no shortage of books and experts on the topic. The guidance is all around.
So for all you managers out there – to anyone who has someone reporting to them or just sitting near them – I offer this short excerpt. Because every once in a while you read the thoughts of successful businesspeople who can give advice that is so basic and so obvious that you are struck by how simple a great workplace can be.
(From an interview in The New York Times of Ramon Nunez, chief executive of LiveHive, a software maker. It appeared September 6.)
On managing:
“I was about 27 when I started managing others. I made a lot of mistakes. One common characteristic of inexperienced managers is a lack of confidence, and that often translates into wanting to control. So you set rules that really don’t make people more effective or productive. What I’ve learned is that you have to figure out what needs to get done. What is the team’s mission? How do we accomplish that? You have to have some boundaries and some rules about how you operate as a team, but you let people excel the best way they can.”
On a company’s culture:
“To me, there are four significant principles for setting a culture. No. 1 is trust. You have to trust people to do what they need to do. If you can’t trust your team members, there’s something wrong. Either the team has to change or how you work needs to change.
“The second thing that’s very important is interdependence. That’s a euphemism for teamwork, but interdependence describes what teamwork really is – I rely on you and you rely on me.
“The third thing is integrity. That’s a set of values that keep people from going astray, and when they do you hold them accountable. The fourth thing is customer focus. If you’re not delivering value to your customer, you’re not going to survive over the long haul.”
So, articulating a well-defined mission, treating employees with respect, building an atmosphere of trust, encouraging teamwork, demanding and acting with integrity, and being in business to serve customers – why are these things still a mystery to too many managers?
