Tuesday, February 9. 2010A Nice Lady Visited Our Offices Yesterday......John Linton ....and advised us that our NF/23BYO Line ADSL2 service had been declared PCUSER's Internet Product Of The Year for 2009 and would be reported as such in the February edition of the magazine (page 54). While the only 'awards' that count in business are the monthly management accounts (and the subsequently yearly tax return) that show the company has achieved a planned profit and a planned revenue growth, getting some sort of external recognition is always a very pleasant experience particularly when it is so unexpected. We have one of the walls in our small reception area in North Sydney pretty much full of the various awards given to Exetel over the last six years (the first one dating back to July 2004; SMH - Best Broadband Product in low download, medium download categories and runner up in high download category) and we have small table the top of which is getting quite crowded with 'trophies'. Of course, in the scheme of things these displays don't mean a great deal but they are a vague reminder to our employees (and maybe to our visitors) that the company is recognised outside its own operations as doing some very good things and consistently doing them over time. (I imagine it also annoys Exetel's detractors to realise their views about Exetel are not held by publications that have wide/widish circulations). Following the Asian Fast 500 inclusion last week and the 'Elephant Project' in mid January Exetel has got more positive publicity in the last four weeks than we have got in most years of our existence (Annette received an email from an acquaintance in London over the weekend saying she read the 'Elephant Project' story in the UK media - pity we aren't offering services there as we had planned! Only time will tell if there are any 'financial benefits' in this little grouping of positive stories about Exetel but, on balance, they can't do any harm. Exetel remains an 'under the radar' organisation that only continues to grow due to word of mouth recommendations and, over the last year, due to its active agents around the country to whom Exetel has paid close to $A2 million in commissions since the program started - not very much by other ISP's standards perhaps but large and more rapidly growing for a company of Exetel's size. Each time something like this happens we get to consider advertising again and how we could use it effectively. Every effort we have made over the past six years (very small efforts for the main) has simply been a total waste of money that has done absolutely nothing for us at all. I have no doubt that advertising 'works' for every other company that involves themselves in it but my experiences (with one exception 15 years or so ago) is that money spent on advertising is wasted money.I wish I neither thought that nor had consistently experienced that but it remains the case for anything I am involved in; and yes, I can understand that a logical conclusion to reach from that track record is for me to never be involved in any attempt at advertising (but I have tried that too). Now that Exetel has passed the $A50 million in annual revenues it is almost certainly past time that we made more effort to promote the company and its services and ceased to rely on word of mouth. I suppose that's why we've looked at advertising more often over the past year. Our problem is that of most companies of our size - we can almost afford to do a reasonable amount of advertising but we can't quite afford the money that is really required to sustain some truly effective (produces more money than it costs) campaign that actually works to the point that we could sustain it on an ongoing basis. It remains a dilemma. As Exetel moves, if in fact we succeed in making it happen, to a much higher percentage of our total revenue coming from buiness users residential advertising will become less of an issue so we may never have to involve ourselves in something we are so completely incompetent at. How we become better known by businesses is a different problem but we have a lot more experience and competence in that than we have in residential promotion. Clearly a cop out but I have no other current ideas.
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Congratulations, that should be a pretty effective PR boost for your marketing activities.
Comments (2)
John, I'm not a client but have always read your musings. In a great many ways we think alike.
However, I'm somewhat at a loss as to your thoughts regarding advertising. On one hand you increase churn/change costs to limit the number of new residential users but now you consider advertising to increase the in-flow of clients. Albeit hopefully more corporate clients. It seems to me, that to increase your corporate client base ( longer lead times etc.) that new residential customers will provide the cash flow required to buffer the expenditure in attempting to secure the corporate clients. Maybe I'm missing something but to limit new residential clients one week then muse about advertising the next seems to me at odds. Comments (2)
Firstly, and you use the correct word "muse" - my rambling writing once each day is simply my musing over recent events or things I am thinking about.
Right now Exetel is receiving too many ADSL residential applications and we have attempted, unsuccessfully, to slow them down having, pretty obviously, set the prices too low in our expectation of actions by the major carriers. Along with the 'award' came the usual advertising rate table which generated thinking about increasing the inflow of business enquiries via advertising - nothing to do with residential inflow where we currently have a problem. Musings, by people with undisciplined minds such as me, go all over the pace and like the Red Queen my musings indicate an ability to hold contradictory views before breakfast. You would also understand that there may well be an element of 'mischief' every now and then contained in the nearly 750,000 words I have written over the past 900+ daily musings. Comments (4)
If you still want to move down the 3G path, maybe you should concentrate an advertisement on that. Something really basic like:
"Just $5/month plus $15/GB. Only pay for what you use." Comments (2)
in marketing speak something like that would probably get promoted as 'Wireless Broadband Access just $5 a month, with pay as you go usage'
big emphasis on the $5 a month as the key driver, when the other offers out there at the moment are centered around $15 to $19 headlines it may be enough to get some attention Comment (1)
Re the advertising, starting small and developing an easily recognisable (and memorable) brand may be a first step. once the brand is out there, it is a small step to an effective advertising campaign.
Comments (2)
"Maybe I'm missing something but to limit new residential clients one week then muse about advertising the next seems to me at odds."
For any small business, a week is a very long time, and a good business owner is always thinking of the future and what could be done to improve the overall business. I think the quick reaction strategy (plan changes, fee changes, etc) causes consternation in the residential market, simply because most residential consumers are used to the Telstra approach, where things don't change for a long time, because Telstra's product pricing can absorb cost fluctuations. A small business whose goal is to provide the lowest cost product, and base their pricing on low margins, will tend to be more reactive and change pricing frequently, to "match" changing supplier costs. Comment (1)
Ahhh JL, I have found that musing before breakfast is not a good thing. The metabolic system is not up to those challenges before being fueled.
Not terribly unlike musing late at night prevents sleep. Will only get you into trouble. (Just ask my first wife). Just keep foremost in your mind the three most important aspects of business. Cash flow, cash flow, and cash flow..... and. Never accept an award which comes with an advertising rate card. You take care. Cheers Comments (2)
I don't have either the time or the freshness of mind to 'muse' at any time other than before breakfast and as 'musings', by definition, are simply random thoughts they are not going to result in any action of themselves but are simply part of human data processing.
In my particular case I also use the process of writing for 20 minutes or so as a process of moving into the working day via a constant path....it mostly works and when it doesn't there are always the chance of some side benefits. Comments (4)
Congrats on the award, it's nice to see that PCUSER is not biased towards some of their current bigger advertisers.
I mostly agree with your thoughts on the value/return of advertising for products with such slim margins. You seem to be doing very well with the new and expanding corporate sales team, so not much much point considering advertising until their orders start slowing. Peter. PS I'd be happy with the $10 donation suggested. Comments (2)
I was surprised about that too - as TPG must spend a lot of money each month buying the premium and one other page in the magazine.
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