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Points for Purpose - A currency of change
Brand development and marketing:
Unfair contract terms
Wearable devices:
Franchise disclosure document (FDD) updates
Optivance 360: How we add value to your organisation
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Welcome to the November 2016 edition of OptiViews™.

As always, this edition contains news and views on a range of key business areas, including: the latest loyalty, brand, marketing and franchise topics.

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Optivance Article

People are usually presented with options when deciding which loyalty programs to join, and how best to utilise and redeem the reward points that they earn. Very often, these rewards are never redeemed and, even when they are, the value proposition is often diluted, due to lack of choice or circumstances.

Imagine IF these under-utilised points could be applied for social good!

In this regard, Optivance 360 has been engaged by Imagine Foundation to create and establish an alternative value proposition for reward and loyalty points.

Imagine Foundation (IF) works with enterprises to develop loyalty and reward programs with the specific outcome being cause related. Shoppers or members of associations are asked to nominate a charitable cause of their choice from more than 2500 registered causes so that points earned as reward for loyalty are actually paid to the nominated charity or cause. By selecting this option the point recipient is making a donation which is tax deductible, in most circumstances.

Furthermore, charities have a product that they can offer their supporters such that each time the supporter spends with a participating supplier, a charitable donation is being created. Non-profit organisations, schools, clubs and associations can benefit similarly.

Imagine Foundation hopes to encourage banks and large institutions to work towards adopting Points for Purpose as their currency of choice so that customers and employees can support the causes that are most significant to them, no matter how small.

For more information on Imagine Foundation and Points for Purpose please contact Stan Zets on +61 414 577 714.

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Optivance Article

When it comes to marketing, organisations are often content to have a plan of sorts. In my experience, though, the quality of marketing plans varies markedly from outstanding to downright poor, and everything in -between.

Furthermore, in many instances, enterprises do not have a distinct marketing strategy for the plan to follow.

Strategy should always precede planning, and is essential because it involves the optimal use of limited resources in a competitive environment. Correctly chosen and implemented an optimal strategy empowers an organisation to attain and sustain the most meaningful competitive advantages.

Faced with different options, the chosen strategy reflects the nub of an organisation’s choices in determining where and how it will compete, and best create, communicate and capture value for stakeholders to optimise performance, relative to competition, in prevailing market conditions. Clearly all strategies should place a heavy focus on outcomes.

Whilst strategy primarily signifies the what and where, planning focusses on how.

Whilst both strategy and planning are crucial, strategy is of a higher order and, as such, organisations are encouraged to ensure that, as a precursor to any marketing plan, a professional strategy is in place.

From both a strategic and planning perspective it is important to adopt a holistic view and not view situations in silos.

There are many criteria on which successful strategies can be based, including:

  • Pricing points and/or perceived value
  • Point/s of difference and points of parity, in combination
  • Innovative targeting
  • Superior positioning across target groups
  • Innovation of product or service
  • Market advantage (e.g. distribution) and/or the creation of new sectors or markets
  • Blue Ocean initiatives
  • Applied learning

In the same way that strategy is of higher order than planning, brand occupies a more elevated position within organisations, than marketing. At Optivance 360 we share the stance with those who bellieve that whilst brand and marketing are closely interconnected, they are not simply one and the same.

As such, we consider brand development a necessary precursor to broad marketing endeavours, which overwhelmingly need to reflect the brand’s identity and core values.

Brands are potentially assets of great value and should be treated as such. In fact, in some instances (e.g. Disney, according to an Interbrand report) brand value can constitute the majority of a corporation’s overall worth.

Whilst marketing endeavours can and do change regularly (in this regard chain store advertisements are a good example) your brand should have longevity, and consistently reflect its core values across all stakeholders, both internal and external.

Your brand is not simply a name, logo and tagline as many believe, but instead part of a much larger whole, encompassing a brand identity, positioning, architecture and much more.

Brand development commences with vision, research and objectives and then develops, in stages. Once an optimal brand identity has been formulated much flows from there, including the elements that constitute the desired relationship between your brand and its target market, which is crucial.

Yet another strategic error we come across regularly occurs when organisations express how much they care for brands along multiple touch points such as social media, PR and point of sale, without first ensuring that the classic or fundamental underlying elements of the brand have been properly developed. This is tantamount to building a mansion on quicksand.

Whilst many organisations (especially SME’s in our experience) spend on a wide range of marketing endeavours, few focus on their brand, first and foremost, if at all.

When you consider that your brand is potentially extremely valuable, and at the heart of your organisation, you need to examine the ‘logic’ of promoting it in anything but the most optimal manner.

Optimising your brand prior to other marketing endeavours is in itself a worthy strategy ideally implemented from the outset.

Please contact Alan to discuss how best he can assist your organisation at:

alankaplan@optivance360.com

In addition to brand, marketing, communications and strategic assignments, Alan is also available in ongoing non-executive advisory capacities.

© Alan Kaplan 2016

Optivance360
Optivance Article

In November 2016 the unfair contract terms (UTC) regime will apply to all large and small businesses in Australia. These will be in addition to any protection under the franchising code of conduct and other laws.

All businesses need to look at their standard contract terms and seek advice as the UTC regime will cause unfair contract terms to be void and unenforceable. These risks accumulate and can be damaging to the brand and highly costly if the business is involved in a class-action or in an action which is highly publicised.

The legislation provides assistance in defining a standard form contract, a small business, upfront price, and where a term is unfair, but what is unclear is the extent that the Australian law courts will take those definitions and whether the pre-court hearing publicity will be enough to intimidate businesses into failing to have proper contractual protection.

Businesses need to understand that many clauses in their contracts may appear at first glance to be unfair but in fact are commercially sound and justifiable. It is vital that advice is obtained from experts with a sound commercial and business understanding to ensure that a quick decision to remove a clause is not made unwisely. In addition provisions which are often forgotten such as severance clauses should be looked at and modified to allow contracts to have single words or phrases removed rather than the traditional reference to removal of an entire clause. Arguably clauses now need to be re-drafted into a cascading series of alternative clauses so that should one section be regarded as unfair, the balance of the clause can remain in ever decreasing severity.

The types of clauses that need to be reviewed will start with:

  • termination and termination fees and consequences
  • clauses that trigger automatic obligations such as renewal and increased fees
  • rights to be indemnified
  • the ability to change clauses within the contract or performance of those clauses without consultation or consent
  • liability limitation clauses

For many fortunate businesses, the legislation will have little impact but for others that wish to make no changes to their current standard form contracts and procedures, advice should be sought on how to continuously collect information which will justify that the contractual terms are fair and enforceable. This may include improving database and technology information recovery which in turn may have other business benefits. Care will need to be taken to ensure that this additional information is not in breach of any other statutory obligations and privacy policy issues.

For more information please contact Alan Branch on +61 413 524 134.

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Optivance Article

One of the biggest international trends has been the growth of wearable devices over the past five years. Although the technology is still relatively in its infancy the notion of a device that is an all embracing status symbol, fitness monitor, and much more (depending on the device and its software) is rapidly gaining momentum internationally, including Australia.

An overview by AC Nielsen, released in September 2016, estimates that over 3 million Australians over the age of 14 wear a device that is more than a mere timepiece. In this regard the Apple Watch and Fitbit are but two examples. According to this report, wearers are most likely to be members of young families (38%) and white collar workers. One in five wearers is part of an affluent family, with a household income of over $150K p.a.

Wearable device users have a high propensity to seek out content and a desire to experience events, such as travel, first hand.

In fact, not only do they also actively seek out information, but most often share it. They are also highly aware of advertisements for products and services that impact their lifestyle. In addition they are above average users of social media, and 61% more likely to interact with health and beauty products, than average. This includes product content and activating special offers.

From trend information internationally, the future of wearable devices is bright from many perspectives, beyond the sales of these devices alone. The state of current software utilised in these devices is such that some can detect heart rate and monitor exercise and other health related issues, as well as user location, movement, activity and the duration and frequency of behaviour, thereby establishing valuable patterns.

Furthermore the proximity of different people in a group being ‘monitored’ can also be determined, relative to each other. Of course different wearables vary in what each can achieve, by product type.

Future devices may well be enabled to send health information directly to your GP, as well as having the capability to send and receive a host of other information. Whilst privacy matters are, relatively, still in their infancy, there is still enormous potential from a business perspective.

For example, messages can be sent to wearers who are in the vicinity of a store where a relevant item is on sale, and engage with them in this regard. Two people who are members of a dating service could be advised to be on the ‘lookout’ for one another (and photos sent) when both happen to be in close proximity.

As the software is further enhanced the commercial and other uses of wearable devices will largely be limited by imagination, and privacy and other laws, but in essence a whole new world of opportunity awaits across many spheres, commercial and beyond.

For more information please contact Alan Kaplan on +61 418 758 555.

Optivance360
Optivance Article

Each year franchisors in Australia must complete an updated franchise disclosure document. Most franchisor systems need to complete and publish this document so it is available for franchisees by end of October; however international franchise systems may use a different date consistent with their overseas documentation obligations.

Well-organised franchises will collect the necessary data on a weekly or monthly basis, throughout the year, which will make it straightforward to roll over to the next FDD.

Some of the typical details which should be collated to reduce the time and cost burden are:

  • maintain a register of franchisee names and contact details as these will need to be displayed within the FDD
  • document details of businesses and suppliers where the franchisor is entitled to rebates and other benefits
  • ensuring that the franchise system accountant and auditors are fully aware of their need to promptly provide accounting and audit certificates in the anticipation of the next FDD
  • updated intellectual property including trademarks and related matters
  • revised expenses and payments franchisees should expect to make during the next FDD period
  • estimate of capital expenditures to be taken into account from the previous year
  • franchisor earnings information if that information is to be supplied
  • litigation information
  • details of any unilateral changes to the franchise agreement

In addition good faith obligations and the unfair contract act restrictions mean that franchisors will need to be proactive and careful to ensure that they are in full compliance with the Franchising Code of Conduct (FCC). Franchisors should also review and ensure that their staff are aware of the obligation to distribute updated information on changes that may occur during the year as required under the FCC. The ACCC have made many public announcements that they will be conducting reviews of franchisor activity, particularly as there have been significant penalty increases for non-compliance with the FCC.

 For more information please contact Alan Branch on +61 413 524 134.

Optivance360
Optivance Article

Optivance 360 is a management advisory whose members all have over 20 years' experience, at senior levels, in their relevant areas of expertise. As an organisation that focuses on results, we regard ourselves as Resultants.

All our advisers have first hand experience with clients ranging in size from blue chips (such as Qantas Loyalty, Agrevo, Aventis, BASF and World Vision), to SME's (including Royal Copenhagen Ice Cream and Driving Miss Daisy), and have proved highly successful across many different genres both locally and internationally.

Our areas of focus includes:

  • Financial strategy and management,
  • Franchise consulting and the implementation of business development locally and globally
  • Brand development, marketing & communications, including content development.

Our Group advertising and marketing agency, Milestone-Belanova, provides an opportunity for clients to seamlessly implement elements of our recommended strategy and tactics in a convenient and cost efficient manner, should they wish.

We pride ourselves on our ability to view situations holistically and to combine analytical and creative insights, in tandem with our holistic approach and visionary acumen, in order to attain optimal outcomes for clients.

In addition to consulting, we also assist clients to implement our recommendations and have great flexibility in the manner in which we work with clients, including non-executive senior roles.

Contact details:

Stan Zets (+61 414 577 714) or Irvin Gordon (+61 408 599 960) for areas related to financial strategy and management.

Alan Branch (+61 413 524 134) for matters pertaining to franchise consulting and development.

Alan Kaplan (+61 418 758 555) for advice pertaining to brand development, marketing, communications, market research and related, including information about our Group advertising and marketing Agency, Milestone-Belanova.

Website: www.optivance360.com

To view our informative and fun video please visit:

https://www.youtube.com/watch?v=Y7GMhHINC9E