Episode 4 The Bottom Line

of 60,000. You might have the best product or

service in the world, but if you do not sell it right, people are

probably not going to buy it. This week I'll be asking my guests about

marketing. This fine art about finding and keeping a customer. We

would talk about being messy and if they disorderly approach can pay

off. Each week, it little business leaders come to the studio at Fort

The Bottom Line. Now, you can see the discussion as well as see it. -

Let's meet my guests. We have Richard Harden, down there and CEO

of Homeserve, an international emergency home repairs company.

Remind us what of the services that you are offering two people? It is

about home emergency repairs. Buying an annual membership and we

cover things like plumbing trains, electrical wiring emergencies, walk

boiler breakdowns etc. We have a very good competitor in the UK.

Fortunately, most of the international markets we operate in,

there is not a single competitor that we are competing against head

to head. I notice in the countries that you have been to, there are

not a lot of people who are reaching out to China and emerging

markets, but he had been branching out into Spain and America. These

are not booming economy is, how has it been? No, but they share the

same consumer need. Homeowners find it difficult to find a tradesman

when they have an emergency. We have been focusing on the bigger

countries in Europe and the big opportunity, which is the American

market. Mexican guest is Nick Wheeler, founder and chairman of

Charles Tyrwhitt, a Czech company - - my second-guessed.Nick Nick

Wheeler, but the company is named after you? It sounded better than

Nick Wheeler shirt. He founded it after university? I found it in

university, in 1986. It is mainly on mine, it started as a mail order,

but it is mainly on mine. You're catering for men who wear smart

shirts. It is mainly for men who want to feel good about what they

wear. Their main product is surge - - shirts, or about half the company

is Jets. We also sell suits and ties and other things. Are men more

willing to buy things without trying them on than women, do you

think? I think men as a whole hate shopping. I think, if you're going

to sell to them online, you need to really focus on service. You want

to make it very simple for them to send it back. It is banned red wine

on it, we can send it back within three months. -- if they spill red

wine on it. Quite often, men or women will use credit cards without

them knowing. The man's name goes on the order, but from a search, we

found a lot of those orders are actually coming from women. Charles

Cohen, chief executive of the baby company -- gaming company, 'No

Weigh Day'. We operate a number of mobile gaining brands. People can

play slot machines, bingo, can see no tight games on their mobile

phones. Typically they do it sitting on the sofa in front of the

TV. Again there it is exciting times, from reading about him in

the papers. It is slightly surreal at the moment. We have had an

approach from another company, which is obviously in a preliminary

stage. We may or may not make an offer. That is a high street

bookmakers. But there is no announced that he would like to

make? No. Were you affected by the blackberry crash Kinnock no, not

that we have noticed. We have had less e-mail coming in, which is a

delight. Most of our customers use iPhones. There are still lots of

people who used phones, things would buttons on them, designed for

making phone calls. An archaic concept. Lots of people do not want

You might think it was a key to a successful company just to have a

great product, but we know that is not enough. You have to be able to

market and sell it in the right way. We have three guests to come from

very different industries, but I wonder if we will find there are

brawls or principles that they all signed up to. Richard, because you

have quite a sophisticated... I myself have received letters from

Homeserve. Howdy market to people? Direct marketing was the saviour of

the business. We were set up in 1993 with a �100,000 investment.

The business lost money every month. It was set up as a plumbing service

and we really couldn't find the breakthrough. Out of desperation,

when the business was up to losing �50,000 a month, we thought, maybe

we can offer a punning membership and send out a Brearley and

natural-looking leaflet. It was a cartoon, with water pouring out of

a water supply into somebody's garden. For �40, you could join up

to the service. It was branded under the original water company

and it was a final throw of the dice as to whether the business was

going to make it or fail. 38 people from the 1,000 leaflets we send out

signed up. 3.8% pay cub. Generally, if you can get 1% take up from

direct mail, it is pretty good. So, the rest is almost history. It was

the direct marketing from thinking the business is struggling, I got

on my office desk and raised my arm and said yes, we have made it. We

know that 100,000 then got an identical 3.8% pay Cup. Nick, you

had mail order originally. How did your marketing process - digit do a

lot of direct marketing? To start with, I was at university and had

to do a lot of lectures. -- go to. All I could do was send out

leaflets. For �99, I had 5,000 A5 leaflets printed. I had a friend in

the army, he gave me a list of officers, which I assume is highly

illegal now. I send out a leaflet and a letter to each of them. At

the time, there was not a huge amount of direct mail. Now there is

masses, but I think the same principle applied. You need to make

it stand out. I insisted on personally signing the letter. It

was quirky and tried to be funny in my rather sort of strange, weird

sense of humour. We got a fantastic response. You have to be different

and you have to stand out from everybody else. How did get around

- I suspect that it would all have this problem, people getting so

much through their door - how are you not just annoying people?

read every direct-marketing book, because I knew nothing about it

when Homeserve first started. I actually like to rip up the direct

marketing rule book, because it said, set your audience up in the

frame of mind so for the product of her that you are making, when the

envelope lands on their door. We designed a monkey wrench on a

yellow envelope and said, what better way to announce plumbing

insurance to customers. It was a complete and utter disaster. The

lowest take-up rate we have ever had. We found what really people

wanted was the reassurance that knowing the service was recommended

by their local water company. That it is a boring letter that looks

more like customer-service. It is explaining a homeowner's

responsibility for things like their wires and their pipes. That

was the stuff that worked. Charles, presumably making your

gaming sound boring is not the way to get people to take up your

product? We had the added complexity that we are regulated.

There are quite complicated rules about how, when, where you

advertise gambling. We tried lots of different things. Most of them

did not work. If something doesn't work, it did not keep flogging it

to death. Try something different. Eventually, we have worked out how

to recruit customers through TV. TV is, potentially, people are quite

scared of it as a advertising medium. It seems that it will be

incredibly expensive. In fact, it doesn't have to be. These days.

really, there are hundreds of channels. Lots of different ways of

getting to an audience. We have been doing that and it works really

well. How have you made TV work? We have tried it on three occasions in

small, regional tests. We have not make it work for us. We also tried

that and realised the reason it didn't work because it was too

small. We took a deep breath earlier this year and put quite a

reasonable six-figure sum into a campaign for the first time going

on the main channels. The digital channels. It was brilliant and

worked straightaway. The same approach they did not work on the

regional channels, did work on the bigger ones. Irony of the finding

that the new media, the things that we talk about - biro marketing or

using Facebook. have any of you gone down that sort of path? We do

a lot on Facebook. Is that efficient? You claim that you had

tried loads of things and say that it does not work. The claim about

that kind of advertising is that is more efficient because people are

self-selected. You're heading into murky water with things like

Facebook and social media. Businesses that tree that might

mean channels tend not to get much out of it. They are interactive,

people go there to do things with them. What we found works is re-

engaging with people by putting up around Facebook page and baby

coming to talk about the games. We get a lot of people moaning about

not getting a bonus or the customer services jumping on it. It works

really well. It is hard work. had a lot of investment time into

it. We cannot live the criticisms of their for everyone to see.

cannot talent to go away after Bank for our idle boast

traditional? I do not think so. 70 % of abusers is online. One problem

is we do a lot of offers. Facebook is confusing for the customer. You

can give an offer for a new customer. It can be a bit of a

problem. A lot of people say they have been a customer for five years

and why can't they had these introductory offer. We tell them

they did at it an introductory offer when they started. This comes

up a blot on this programme. Another way of saying this is you

cannot say a lot of different things to different people. You

have to be transparent. That is not consistent four you. The internet

is making businesses much more transparent. That is a good thing.

We have a product which is a feedback company. Every time

somebody buys from cars they get an e-mail from them and are asked to

read out product. As soon as they put in their response it goes live

on a home page. You can go on to out homepage, so far 117,000 people

have given feedback. You can just choose the ones that a letter bad

or good or excellent. That is telling the customer we have

nothing to hide. They can see what is wrong with us. The internet is

giving transparency. If you resist that you have a problem because

people will find out through third parties. It is much better to have

a forum you are participating in on your side with a fruit faced Bich

bought witting or whatever. This direct response is taking the place

of the focus groups we used to talk about or traditional customer

research or are you still doing that? We still do lots of focus

group -- groups and traditional research. You had a different

approach when he talked about TV advertising. Edis different to

trialling everything stubby avert the great thing about direct-

marketing his it is the closest you can get to science. You can learn,

do very small testing, you can roll it out if it works and not if it

does not stop Ella the web for us is about bringing in a whole new

group of younger customers. Traditionally our members are older

and wiser and by by direct marketing. Our newer customers are

going to the web because they have never had a home emergency.

Suddenly they do and they are going there to find a tradesman. If you

want to learn more about the topics Albert Einstein is reported to have

said, Oh What is an empty desk a sign? There is a prejudice against

mess in the workplace. We might think messy people are creative but

they do not get the corner offers. A lot of us think we would be more

successful if we were metre. I want to talk with walk you about mess.

The metaphorical sense of mess later. Can we talk about the desk

first. Richard, what is your philosophy? Are very clear desk

means you only handle one thing at a time. In my marketing days,

somebody used to go around the office at night and make sure

everybody had a clean desk. Do you do that? Note. But it is important

to have an uncluttered desk because it means you have more focus on the

task. Tidy desk, tidy mind. would absolutely love to be a clean

desk person. My desk is a bit of a mess which means untidy mind. We

have just done an Office revamp. For a few weeks it looked tidy but

then people revert to type. Some people have tidy desks and some

people who do not. We have great people who did both. It sounds like

you employed a lot of fellow clutter people stop to it not a lot.

There is a good balance. It is important to have a balance.

Creative ideas can come from people who are thinking about different

things at the same time. Charles, which side of the fence are you? My

personal desk? It depends what days. There is the principle of entropy

which means everything to a ends towards chaos. Things tend to

appear out of nowhere. They have a mind of their own. Sometimes life

is too short to spend your time sorting things into piles. You're

liable still talking about aisles. You have not got a paper-free

offers? Many people will be glad to hear that. Charles, do you find it

hard to keep your mind clean it? That is just something you burn out

to do it. Do you organise the individual company in a clear way?

You would have to speak to the people who were forced May to see

if it works or not. The results speak for themselves. Can you

attract great people? Do they feel they are making a contribution?

Does that turn into a good business? Do you feel comfortable

with messy solutions? To you worry about it? If it works, happy days.

I worry about it. I like to have clean solutions. You have a

responsibility to shareholders. When I started the business I never

wanted to float it or sell it. I want a great business in the long-

term. Sometimes you Kent spend a long time waiting for a clean

solution. I don't think so. If you have a messy solution you clean it

up a little bit and refine it and come up with a long-term solution.

That is always right for the long term of the Business. If you are

selling it next week that is different. Unlike the bill Gates

solution which is 85 % of the way there. Then you were a conversion

to and refine it and listen to customers. There is always seek

tension between getting some think it that is good enough to work now

and getting a perfect solution. They bought an elegant solution but

that is three months' work end you need something right now, which is

called a hack, and a hack is terrible. It is dirty Lennon on the

floor, yet from a business you you need to get it to work so they have

to do it. But some companies do not know the difference between the two

and end up hitting a wall and having an inquiry afterwards and

realising it was because they just let the thing grow without any

discipline and they were not tidy when they should have been and they

lost the ability to tell the difference. That is why it is

important, one of the biggest things we have experimented with,

is how do you Keith autonomy to the individual countries because they

have autonomous management, but they all want to share the learning

rather than reinventing the wheel. We have the FIFA award which is

copping an idea from another country and using it. Have a word

with Angela Merkel. Getting back to basics, are the stereotypes true in

your experience? Messy people, are they creative or just messy? I

think they are just messy. I think they can be creative. If they are

accountants then it is dangerous. prefer a tidy accountant to a messy

one. Most people would agree to that but it sounds like on balance,

everybody out there who thinks they need to tidy up their desk, they

probably should. Thank you to Charles Cowan, Richard Harden and