A High Flying Dragon
We talk to media consultant, property magnate and Dragons’ Den star Gavin Duffy
At 18 you set up a local radio station? What was it that attracted you to radio?
At 17, I got a summer job working on a pirate station in Dundalk. One day I switched on the station. I knew all the DJ had was a twin pair of disco decks
and a microphone plugged into a four valve, medium wave transmitter but at that moment the magic of radio struck me. A year later I set up a radio station
in Drogheda.
That’s quite young to have your own business – what motivated you?
Desperation - I was desperate to set up a station in Drogheda as nobody else looked like they were going to do it. it was a huge undertaking. That said, I
loved the buzz of it all and the belief that we were pioneering a new form of communication for local communities.
You come from a family of entrepreneurs. Was that a big factor in how your career progressed?
At the time it didn’t feel like it was a big factor but looking back now I realise it was. My mother was always very supportive to anyone who was having difficulty in business. She always told me to never be afraid to fail. Her motto was
‘You cannot truly appreciate success until you have failed’.
Is there anyone in Irish business that you really admire?
I admire anyone who has created a business that sustains jobs. We over-praise
some of our sports heroes but it’s the businesspeople who create employment that we should admire most. Sadly, many good businesses are struggling to survive just now. Survival is the current goal then it’s to be ready for the recovery.
What about internationally – any heroes?
I’d like to meet Tim Berners-Lee, shake his hand and thank him for inventing the Internet. What I love about this man is he didn’t try to sell it, he didn’t try to profit from it - he just gave his creation to the world.
You’ve invested in a lot of start-up businesses. What do you look for in a new venture?
Customers. I ask myself whether people will buy this product or service and, importantly, whether it can be delivered at a profit.
What advice would you have for anyone starting up a business in the current economic climate?
In a recession people look for value. If you have a value offering it has a great chance of success.
What do you think it takes for a business to become a success?
I believe the biggest factor in creating a successful business is the driving
ambition and determination of its promoter(s). Most people get deflated if all
their colleagues say that it will never work. But the odd person reacts differently. the same comments drive them to achieve. They’re the ones who
create successful businesses.
What’s the best business decision you’ve made to date?
Appointing my wife as my business partner. First and foremost we are parents, secondly we are life partners but thirdly we are business partners. It works for us!
How and why did you get involved with the Dragons’ Den series?
It was either a mid-life crisis or my ego got the better of me! It’s been a fantastic experience though and I love it. I’ve learned I am more of a gambler than an investor. I take a punt on things. The four companies I invested in from series 1 have all been very successful and I’ve become very good friends with the promoters.
You’ve seen a number of pitches on Dragons’ Den. Are there any opportunities you feel you missed out on?
Yes. In the current series. I was being too smart for my own good. I opted out early. I knew two other dragons would go for it. I intended to make an offer during the equity percentage negotiations but the promoter accepted the first offer without any negotiation. You win some you lose some.
Is there a lot of rivalry between the Dragons?
Yes. You put five, so called, self-made business people into a room and there will be rivalry.
Have you any plans to go back to presenting business shows like ‘Marketplace’?
No. I was very lucky to be a presenter of RTE’s first ever business programme at the age of 25. I don’t think I would go back to presenting a weekly business show.
As one of the biggest players in the Irish recruitment industry, can you tell us which sector is showing the strongest growth in 2010?
That’s an easy one. In the HRM Group we are pleasantly surprised that the
Pharmaceutical sector is still recruiting strongly.
You’ve enjoyed success in a number of industries including property, recruitment and media but if you’d to choose just one, which area would you say you enjoy most?
Media consultancy. it is a fantastically interesting business so I suppose that is my favourite - it is never, ever boring.
You’ve been training spokespersons to face the media for more than 25 years. How has your task changed in those years?
There are so many TV channels, radio stations, newspapers and magazines.
a spokesperson must be very consistent because they are likely to be interviewed many times on the same subject on different channels across both
radio and TV. But the one thing about media consultancy, if you operate at the premium end as my company mediatraining.ie does, it is, thankfully, recession proof. our business was up 40% in 2009 over 2008.
Is there any free advice that one of Ireland’s leading communications skills consultants could offer our readers?
The media are not out to get you but they are paid to make you interesting. You have a choice, learn to tell your story in an interesting way or have
the media extract it from you. I am telling you, you do not want the latter.
When you’re not working, what do you do to relax?
I’m into horses; show jumping, eventing, hunting, hunter-trialling. It’s a disease for me. When I want to escape I get up on a horse.
Post.Trust - An Post leads digital sign up
Electronic signatures enabling trustworthy paperless transactions will now become a reality for many Irish businesses thanks to An Post. A new deal recently signed by Post.trust, an Post’s certification services Provider (CSP) subsidiary, will enable businesses to create electronic documents embedded with legally binding digital signatures. These electronic documents can replace paper documents, which rely on a physical handwritten signature. This development also seamlessly provides the dual benefits of author identity and document integrity verification -a growing and increasingly essential requirement for Irish business.
“These electronic documents can replace paper documents, which rely on a physical handwritten signature”
To mark this exciting development, Post.trust is launching its desktop electronic document signing solutions Post.Trust i.d® and Speedisign™. Post.Trust i.d.® is targeted at the ‘lite user’ with a low volume requirement to digitally sign adobe PDF documents while Speedisign™ is targeted at the higher volume ‘power user’.
“More and more businesses are seeking to deploy electronic document workflows in a bid to reduce costs, enable operational efficiencies and enhance security. Using Post.trust document signing solutions, individuals or companies can undertake contract execution, invoice generation or even just general business correspondence, entirely by electronic means,” John Cronin, managing director of Post.Trust Ltd.
Post.Trust - because business is built on trust™
For further information, please visit the Post.Trust website http://www.post.trust.ie or contact Kevin Mullen, business development manager on 1890 617 171.
Meet the Sales Team
Colm Kelly , Account Manager
I serve customers in…
a suit and tie! I look after Dublin 4, 6, 6W, Longford and Westmeath.
One word to sum up my job…
unpredictable.
What I enjoy the most about my job is….
its variety and the large level of exposure to all business sectors within An Post. And my colleagues and my manager of course!
The strangest request I ever received from a client is…
to change a punctured tyre. A client got a flat tyre in a hotel where a meeting was to be and couldn’t change it. Strangest part of this was he was the MD of a tools company.
The one bit of advice I’d give to mails customers is…
stay in touch with your account managers (and shower them with gifts). This will ensure you have the most up to date information on price and procedures. They can provide immediate expert help.
Last postcard I received was sent from…
friends of mine on a world tour, who were in New Zealand at the time.
At weekends I like to chill out…
with the family. My boy is 18 months - a great fun age. I love the cinema. What’s better than a good action flick, a large Coke, popcorn and Maltesers?
My idea of a challenge is…
eating my lunch in the car without destroying my tie for my next meeting. Or something where creativity is required, where the answer is not clear-cut but will test me on multiple levels before reaching the final goal.
I envisage the biggest changes with the postal system in the future will be…
liberalisation - the behemoth of challenges facing us. We’re coming into a new open market where our customer focus will count for everything and loyalties will be truly tested.
Websites I always check (at the weekends of course!) are…
YouTube, Gamespot, RTÉ, Ryanair and iTunes.
The last thing I bought online was…
flights to Sardinia.
When I retire I will…
be older... and enjoying an active and healthy retirement hopefully.
Travelling a lot, I didn’t travel when I was young so I hope to do a lot of it when I retire.
Eamonn Fallon
Tells us about creating Ireland’s biggest property website
Daft.ie is Ireland’s largest property website but how did it all start?
Daft.ie was founded 13 years ago at a time when most people used newspaper
classifieds to rent and sell property. we set out to change all that because we felt the internet could provide a much better experience for both sellers/ buyers and landlords/ tenants. now in 2010, almost no one looks at newspapers when they are looking to move, everything is online.
Did you seek advice from any other successful businesspeople when starting Daft.ie?
The internet took a long time to take off in Ireland, so it gave us a lot of room to make mistakes. Given the fact that the industry was so young, we didn’t really have anyone to go to for strategic advice. We were so young ourselves, we didn’t really know anyone to go to for business advice. This meant that we learned by trial and error. We explored countless commercial strategies that went nowhere. This really stood to us in later years as it gave us an ability to spot quickly what works and what doesn’t.
What was missing from the Irish market when Daft.ie was set up in 1997?
Print classifieds have many problems that were fixed by the introduction of Daft.ie. For example, long descriptions on all ads, full colour photos on most ads, location of property on a map, etc. In addition to these problems, only a small subset of properties actually got advertised in any one newspaper, which meant people had to look in many places to find a property. Now with Daft.ie we have about 95% of every single property currently for sale or to let listed on the website, so there is no need to check anywhere else.
What were the major challenges you faced when starting Daft.ie?
When we strated there were only about 50,000 people in Ireland on the internet, so it was difficult to convince people that it was a worthwhile medium to advertise on. Nowadays, over 2 million Irish people use the internet on a regular basis, which is more than the amount of people who read newspapers.
The business model on which the whole online space was predicted pre the dot-com crash was ‘build traffic, get advertising dollars’. This was the model Daft.ie was following, i.e it was free to search and free to advertise. When the dot-com crash occurred, it became clear that this model was not sustainable. We tried many things out but eventually switched to a paid-for advertising model (just like newspapers had been doing for decades). The difficulty was that people weren’t used to paying for things online, especially non-physical online services.
Was there ever a point where it felt like it wasn’t going to work?
When we switched from free to a paid-for advertising service, we were afraid that it might seriously impact the number of people advertising which in turn would impact the number of people searching (i.e less ads to look at so therefore less people looking). The fear was that this would become self-reinforcing and that it could potentially be the end of the business.
That said, we had tried every other option – and while it was nice running a hugely popular website, if it couldn’t pay the bills there was little point.
There was also the worry that the newspapers would put us out of business in the early days by trying to make the move online, but I guess they never noticed the potential of the internet.
What would you do differently now if you were starting all over again?
I would try and find a mentor to help me through the early years. We were very slow to take risks and to hire. This meant that we grew much more slowly than we could have in the early years. Although this meant that when the dot-com crash happened we didn’t go out of business due to debst, we simply changed tack.
Why, do you think, has Daft.ie been so successful?
Our product delivers more value than anyone else in the market. We are the larget site in terms of audience (over 1.2m unique visitors per month) abd we have the most property for sale and to let. We always focused on traffic to the website first and revenue second. This meant that people advertising property on the site got better response rates than anywhere else. We wanted to make sure that if someone put up an ad on the site that they were guaranteed to have their phone hopping with leads.
As the business has grown, you’ve clearly taken on more staff. How did you take to management?
After a crazy growth period, we realised a few years ago that we couldn’t do everything ourselves. So we spent three years building up a proffesional management team and now the business runs very smoothly.
Transitioning from 16 hour, edge of your seat working day with a four person team to the current environment was a long process. We needed to learn how to delegate, and to share information and decisions with the team and to learn how to give people the things they need to be great at their jobs. We learnt this slowly but surely from people we convinced to join the management team.
How would you describe your management style?
I spend lots of time in the hiring process so that I hire really good people. Then I just let people get on with their jobs.
Daft.ie has just launched a site in Poland? What was that like to set up? We were always looking for new opportunities abroad. We spent about a year in the development and planning phase for Daft.pl. Given the unprecedented number of Polish people moving home from Ireland, we belive that we can leverage the affinity these people developed for the Daft.ie brand while renting in Ireland over the last number of years. We work very closely with our local partner – Szybko.pl – in Warsaw and it is going very well. It’s exciting to have a footprint in a country that has 10 times the population of Ireland.
You were quite young when you set Daft.ie up – did you always want to be an entrepreneur?
It was more something I grew into. I don’t believe that people are born entrepreneurs. I think it comes from being lucky enough to be presented with an opportunity to do something and then having the confidence to see it through.
And what advice would you give a young entrepreneur starting out in Ireland now?
Focus your idea down to one thing and do that really well, all those other ideas can wait until you start making money. When you’re a young startup, there is a dangerous temptation to take every commercial opportunity that comes along, even if it is not your core business focus – often in the form of consulting or selling your time. Unless you’re building a consulting company this is generally not a good idea as you find you’ve no time to focus on developing your own idea.
What is next for you?
We’re always looking for new opportunities. We launched Daft.com in Northern Ireland in July and now have over 50% of the market listed. We are also very excited by developments at our other non-property sites; boards.ie and adverts.ie. Adverts.ie is a kind of adft-for-everything-else site and we will be relaunching a new improved version in 2010.
What do you do for fun when you’re not working?
I love to travel and try and visit a new country every year. I ski regularly and play a bit of squash. I’ve tried golf, but it’s not for me.
If you weren’t running Daft.ie, what would you be doing?
There is no better job!
An Post launch new Mail Media website
An Post’s mail media unit’s website is set up to promote excellence in the direct marketing industry and to become a valuable resource for any business that wants to make direct mail work for them. Direct Mail is a proven marketing tool that can increase your revenue, build your brand and grow your customer base. To help your business do just that, An Post’s mail media unit website offers a host of innovative products and services, along with practical support and helpful advice when you need it most.
From choosing suppliers to navigating the latest trends and research, and from campaign tips to revealing case studies, we’re here to help you make the best decisions. What’s more, to inspire you to think of even smarter strategies, we host regular talks where the best marketers in the industry, from here and abroad, share their insights and expertise. Not only are they a chance to gain invaluable knowledge, they’re a fantastic opportunity to network with businesses large and small.
We’re always looking for new ways to help businesses. So take a look through our website, www.anpost.ie/mailmedia, register for an event, and if there’s anything else we can help you with, email us at mail.media@anpost.ie or write to us at Mail Media Unit, An Post, GPO, O’Connell Street, FREEPOST, Dublin 1. We’re here to help.
Log on to www.anpost.ie/mailmedia and enter our Postmark competition and you could be in with a chance of winning €10,000 worth of advertising.
EBS Breakfast Morning
Building the foundations for success
Having a strategy to increase the response rate of your campaign is one thing, selling it to the powers-that-be is another. This was the challenge facing the EBS Building Society’s Bernadette Hurley, Head of the Member Experience team and Tara Grehan, Market Research and Customer Insights.
They spoke at the Mail Media Unit Industry Breakfast that took place in the Royal College of Physicians in November. The jam-packed crowd eagerly listened to how they successfully built a segmentation strategy that helped raise response rates.
Bernadette Hurley admitted that selling their idea to senior management was one of the biggest challenges of her career. she explained how that if they were to stand any chance of success they would have to first prove their strategy’s potential through a pilot programme.
Tara Grehan, a specialist in delivering Change management programmes that integrate database findings and market research, set about developing insight-driven databases. Her team’s findings led to some creative testing of their theory, the results of which helped them sell their strategy to senior management.
The hard work paid off for the EBS marketing team and those that were lucky enough to hear about it that morning, headed to work to put their own plans in action.
To find out more about what Bernadette and Tara had to say, simply log on to www.anpost.ie/mailmedia if you’d like to be there for our next event, please mail us at mail.media@anpost.ie
Frankie Sheahan
For sponsors everywhere, rugby is the no.1 growth opportunity. As a result, players and sponsors need a go-between who knows both rugby and business. We speak to Irish rugby legend Frankie Sheahan about his company Front Row Entertainment.
How has 13 years of proffesional rugby experience helped you in business?
With Munster we initially dealt with a lot of tough experiences. It taught me that in failure and adversity you learn from your mistakes. You ‘fall forward’. That means if something knocks you down, you make sure to fall forward and learn from it. It’s an attitude that creates opportunities and in business that’s really important.
Are you an optimist?
I can be annoyingly positive at times. I’ve learned that you can’t do everything right. Sometimes things just don’t happen for you. But I’m a firm believer that the harder you work the luckier you get.
Are there any parallels between success in sport and success in business?
For success in anything you need to set goals. In sport you might want to improve your fitness levels, in business it might be sales figures. Setting firm targets trigger motivation and tahat, along with enough hard work, leads to success. If you want to achieve something you have to prepare. So set your goals and then push yourself from there. Put simply, you get out what you put in.
Have you been thinking about starting Front Row Entertainment for long?
Yes, for the last couple of years. I wanted to provide more than just contract negotiation assistance. I look after players commercially, the media side of things, their career training, their financial needs, their life insurance, income protection cover and mortgage protection cover, everything.
Where do you see Front Row Entertainment going?
I source after-dinner speakers for companies, so, more of that would be nice. We can get anyone from business, sports, comedy, even politics. And personally, I’d like to do more motivational speaking.
During your playing career you had a reputation as the man to go to if you needed something done. Was this a natural progression for you?
Yes. I’ve always loved meeting people. I enjoy identifying people’s needs. Now I get a chance to come up with ideas and solutions to met those needs for the benefit of everyone involved.
What was the hardest thing about starting your own business?
Not being guaranteed a paycheck at the end of the month!
When you were starting Front Row Entertainment did you seek advice from established business professionals?
My father Frank would have been heavily involved. There was the likes of Oliver Coughlan from Big Fish Games in Cork, Munster Chief Executive Garrett Fitzgerald, Philip Browne, Chief Executive of the IRFU and Gary Brown, Chief Executive of RMG Target. They all had great advice for me and steered me in the right direction. To get an opportunity to pick these guy’s brains and sit down with them was invaluable.
Is there one service that Front Row Entertainment offers now that wasn’t available when you were a young proffesional?
It’s a one-stop-shop. In my day an agent just looked after your contract negotiations. I’m looking to develop players but also prepare them for life after sport.
Is there an Irish businessperson you really admire?
Denis O’Brien. How successful he’s been, the way he carries himself, he’s a great success story for Ireland. Certainly someone I would aspire to be like. What he’s done for people and the causes he supports, he’s very generous.
One of your areas of expertise is contract negotiations. How have they changed in the last 13 years?
They’re much the same. But nowadays everybody wants a bit more. There are more incentive based contracts. They make sure everybody’s protected and that everybody has an incentive to perform.
Have any of your former rugby colleagues come to you for advice?
They don’t ring me up and say give me advice on this. We talk like friends. I give them my opinion and they give me theirs. When I was young Donal Lenihan was very good to me. He was a mentor. That was invaluable. I try to do the same for others.
If there was one international sports star you’d love to represent, who would it be and why?
83% of Irsh sponsors and right holders agree that personal endorsements are an effective form of sponsorship so I’d choose Brian O’Driscoll. With Brian, you don’t have to go out and look for endorsements, they all come looking for you.
Now that Ireland is a major force in world rugby, has this affected demand for Irish players commercially?
Certainly Irish rugby has exploded and as a result Irish players are in hughe demand. ‘Onside Sports’ conducted a recent study and found that 3 of the top 5 ‘most admired sports stars’ in Ireland were rugby players. Had the world economy not imploded, the fees of Irish players would have increased. As it is, they’ve remained roughly the same as they were two years ago. Which considering, is a good result.
With only four professional teams, is it difficult for young Irish players to break through?
It is. Especially when you have such successful teams with established players. The flip side of that of course is that our young players are in a situation where they’re learning from the some of the best international players. When they do break through, they’ll be very well prepared.
What business advice would you offer to any young sports star?
Give it your best shot – it’s not going to be forever. Always be willing to learn. It’s the same in business and sport; everyday you’ve got learn something new. Work hard!
Would you ever turn your back on business and return to rugby, perhaps as a coach?
I love rugby, I always have. If there was a way I could do both, maybe when my company os well and truly up and going and there was an opportunity for me to help out, certainly. But my focus right now is to make Front Row Entertainment a success.
After a long day in the office, what do you do to unwind?
I try to spend as much time as I can with my wife and kids. I go out and kick the ball with the kids, go for a walk or just mess around with the family.
What’s next for you and Front Row Entertainment?
Just keep working hard. Keep my clients happy and keep delivering for them. And hopefully develop a successful business.
Statistics courtesy of John Trainor of Onside Sports.
Top 10 Tips
When considering Online...
Everyone will say that running a small business can be tough, not in the least that you are constantly wearing different hats to get the job done. What makes it harder still is wearing a hat that you may not be 100% comfortable with, such as developing your online business strategy. There are a few basics to consider, these are really just simple solutions to check off your list. These will enable you to stay competitive and manage your business in the digital field.
1. Your website
Most businesses have a website at this stage. But, it is not enough to just have a website and hope for the best. Your website is a significant reflection of your business so view it as another office or store location. if you strive to ensure your customers have a good experience in your store or when they walk into your office then make certain you have a similar reflection online. Your site is just as important an entry point and thus, no less relevant.
2. Web Analytics
One element that is often forgotten is your web statistics. Whether or not your website has been perfected, you should not hold off in gaining an understanding of what people do once they get there. It is also the basis for determining how well your online efforts are working for you. One of the key features of online activity is the ability to track and measure your visitors’ activities. Web analytics packages such as Google analytics will provide you with this data. You will gain relevant information such as what messages have been successful at bringing people to your online door, the areas of your site in which visitors are most interested and how long they spend there.
3. Establish linking strategies
One way to build online foot fall or traffic is by building up relevant links. Linking is just a pathway, side-street or shopping mall to get you foot fall. Essentially, more websites that link to yours will help drive additional visitors to your website. Look at sites that compliment your offering, talk about your products in reviews, and link to other companies similar to yours. Do a bit of research and put together the longest list you can. You will surprise yourself sometimes with the number of sites you might like to approach for linking.
4. Relevant Domain
The right domain name can be vital to a venture’s success. Look at to whom your business is focused on selling or trading with. It could be an international audience or the local Irish market. Be sure you register the right domain for the right audience. Always register an Irish domain (.ie) if you are working locally in the Republic of Ireland. One tip is to keep your long term goals in mind and pick up a few domain names that cover where your vision for your company is headed. It becomes vital in the long run and can pose future problems if you are in a more competitive environment. They are affordable, so pick up a few.
5. Hosting
Just one little thing to double check, if you are targeting the Irish market, and your website is Irish ensure you host on a server in Ireland.
6. Directories
Many times the best leads are from recommended industry listings, especially in the B2B sector. Directories like GoldenPages, YourLocal, Vazumo and industry bodies will help you, not only with your search engine ranking, but just getting your site on people’s radar. In the consumer sector, directories such as An Post’s Online Shopping Directory offer a good opportunity to widen your reach.
7. Professional affiliations
This may seem like a minor point, but it is easy to execute. Badge any affiliations on your website, it will give visitors confidence that your company is legitimate and trustworthy.
8. Social media, for you
Social media is a buzz word, but it is not a new buzz word anymore. Consumers are very active in this space and your target audience is most likely using some form of social media in some way. This could range from a Facebook page
or a Linkedin profile. It is good to understand where your customers are in this space. Start small and develop your own personal profile if you are not currently active. You network outside of the web, so start networking on the web.
9. Social media, for your business
Businesses are also very active in social media, but each business should determine the strategy for their firm first before entering. Decide how to utilise social media to the benefit of the company objectives (is it to enhance customer service, generate awareness or reach new customers, etc.?) and do not just enter this space to be seen as active. it is not as daunting as it seems. Use your learnings from your personal profile and develop a profile for your business. You can also start by listening and reviewing, and then when you feel comfortable, set up a new group or conversation. Contributing to social networks will widen your circle of influence and build your business network.
10. Don’t always turn down paid-for digital marketing
If the above areas are not getting you the traction you need, a pay-per-click campaign is also recommended. Google is a great way to get started. Not only do they provide detailed instructions, you aren’t limited by budget. Facebook also offer pay-per-click advertising, where you can target your ads to the most relevant groups and profiles.
About radical
Radical is a full-service online marketing agency dedicated to helping people achieve their online business objectives. Services include: search engine optimisation, paid search advertising, display advertising, web design and development, sponsorship, email marketing, online public relations, social media marketing and usability. Founded in 1999, the company has grown with experience and with fifteen employees dedicated to their impressive list of clients, their expertise makes Radical an industry leader in Ireland. For more information visit www.radical.ie
Ask the Expert
Richard Stollery - Building success brick by brick
A few years ago, LEGO made the costly mistake of forgetting who its customers were. Today the customer is again front and centre of the company’s business strategy.
Another busy Christmas has just passed for the world’s fourth largest toy company, LEGO. After their record-breaking year in 2008, global sales for the iconic toy brand in 2009 are expected to be up 23%.
However, five years ago it was a very different story. In its 2004 financial year, the company suffered a DKK1 billion (€134m) loss on sales which led to question marks over whether the family-run institution, established in Denmark in 1932, could remain independent.
Richard Stollery, Senior Director of Consumer Experiences at the LEGO Company, describes 2004 as “a bit of a wake-up call” for the company. At the time, the company dominated the ‘construction’ part of the toy market but it felt it could leverage the brand into adjacent markets such as action figures and even TV. In so doing, however, it took its eye off the ball.
“We got distracted and went away from what made us great in the first place,” he told a rapt audience at a recent Early Bird Club business breakfast in Dublin organised by An Post.
LEGO survived its brush with disaster. Recovery, the company realised, depended on going back to first principles and focusing once more on its core construction business. In particular, it meant building bridges (metaphorically speaking) with its millions of users around the world and rediscovering the concept of customer experience.
“In the last few years we’ve gone back to listening to our customers and responding to them,” Stollery reports. “Customer experience means really understanding what consumers want and recognising that they don’t always know what they want. So it’s about experimenting and innovating and trying out new things and seeing what the response is.”
LEGO is special as a brand in that the positive associations consumers have with it start to form at a very young age, such that when those children become parents themselves, they are very well disposed towards it. This is a huge asset, but also a big responsibility for the brand, Stollery notes.
“Although we have that preferential reputation built up over 77 years, there’s no way we can be complacent or abusive of that trust. We continue to act very genuinely and to place a lot of emphasis on things such as customer service. We know we’re in a preferred position but we can’t take that for granted going forward.”
The multiplicity of contact points – LEGO-branded retail outlets, LEGOland Parks (of which the company has a 20% shareholding), LEGO.com, LEGO home shopping, LEGO Club, LEGO customer service – the list goes on, provides a different way to reach customers and engage with them.
The backbone of the customer communications exercise is the LEGO Club. More of a global user community than a loyalty programme, the club’s membership consists of millions of people – mostly children – whose common feature is their love of all things LEGO. Being a member entitles them to receive LEGO Club Magazine, a free glossy mailed out five times a year and stuffed with information on different sets and updates about upcoming launches. The magazine was first launched in Sweden more than 25 years ago and is now distributed in nine other major LEGO markets including the US, the UK and Ireland. Circulation is an astonishing 3.2 million copies a year.
Producing a glossy magazine with that sort of international footprint and distributing it for free is very costly for LEGO, Stollery admits, but the investment is justified. “We find Club members spend three times more than non-members,” he points out.
LEGO’s customer engagement strategy is guided by the philosophy of the ‘affinity pyramid’ which recognises the fact that any company’s best and most profitable customers (represented by the tip of the pyramid) who are passionate about its products. At the base of the pyramid are the great mass of consumers who may buy its products occasionally but have no great affinity with the brand. LEGO’s key task therefore, Stollery notes, is to drive more and more customers up the pyramid.
“We find that the more you engage customers, the more they move up that affinity pyramid and it becomes a dialogue rather than a monologue. So it becomes about doing things with customers rather than to customers.”
Stollery believes that customer experience is something that all companies can work on and improve. The first step is to test that experience regularly – a basic activity that many companies fail to do, he claims. It is then possible to methodically dissect and analyse that experience. Here, Lego uses tool called a ‘customer experience wheel’ to map the existing experience.
“We understand what is and what is not important to the customer in that experience and then we design a ‘wow’ experience to improve it,” he explains.
One way to achieve this, he adds, is to build an element of surprise into the experience. “We try to build some surprises into our customer experience whether it’s phoning a contact centre, going into a Lego store or visiting a Legoland Park.”
This element of surprise extends to the business cards that its executives hand out when meeting new people. Instead of the usual boring paper version, Stollery proffers a tiny blue and yellow Lego man with his name printed on the front and his contact details printed on the back.
It’s enough to make you feel like a kid again.
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Post Mortem
We look at some successful Direct Marketing Campaigns and ask what makes them work.
O2 Ireland
Agency: RR Donnelly
Client: O2 Ireland
Campaign: Sleeper
The Challenge
An increase in network choice and a decrease in market sales means that keeping the customers you have is more important than ever. Customers demand value and will leave a network if they feel they are not getting it or can get better value somewhere else. The challenge was to create a personal, compelling piece of direct mail that would offer the customer something and show them that they’re better off on O2.
The Target Audience
Correctly targeting specific customers who would value the offer was extremely important, as anything else would have been a poor use of budget. This campaign identified prepay customers who had not used their phone in the last 45 – 90 days, were with O2 at least six months, and those who hadn’t received the same offer in the last 3 months.
The Thinking
The strategy was to target customers who had not used their phone in a long time. They would be encouraged to start using it again with a strong, compelling offer which they would have to avail of the within a short time frame.
The Mailing
A direct mail piece, the front of each was personalised to each customer, was sent out. It told customers by name that they were being given something from 02. This personalization appealed to their self interest and aroused curiosity. The curiousity was resolved quickly as the customer opened the piece to see that they were getting up to €20 free credit when they next topped up.
The Results
The personalisation of the piece, together with the offer of free credit, led to a higher than expected success rate, as the overall average uptake was 14%.
Danone Baby Nutrition
Agency: Strategem Ireland
Client: Danone Baby Nutrition
Campaign: Ireland’s Happiest Babies
The Challenge
Infant milk formula accounts for 60% of the baby food market. As of January 2008, market leaders were SMA, Aptamil and Cow&Gate at number 3. With 70,000 births per year, the base is relatively small, and with 70% of babies being formula fed, the market is competitive. Danone wanted to ensure brand growth by placing Cow&Gate at the top of the consumers’ minds prior to decision-making point.
The Thinking
The strategy was designed to motivate mums and mums-to-be to register, participate and contribute in order to find ‘Ireland’s Happiest Babies’.
The Execution
The website www.happiestbabies.ie was at the heart of the strategy, using online display advertising, email and search engine optimisation to drive traffic. It was developed as an engaging platform, relevant to the audience. The site included a gallery featuring user-generated videos and photos to ultimately find ‘Ireland’s Happiest Baby’, a prize just for contributing, monthly competitions, and a ‘send a giggle’ tool. The digital strategy was integrated with DRTV and experiential marketing (Big into Baby RDS Show). The core campaign idea ‘Find Ireland’s Happiest Babies’ was based on an insight that mums and mums-to-be gauge their success as a mother on the happiness of their child.
The Result
The idea immediately engaged the customer, encouraged interaction and placed Cow&Gate at the heart of this happiness and demonstrated creative integration across all communications channels. The results were outstanding, with recruitment objectives (opting in to receive further brand communications) being exceeded and an active brand experience being successfully created.