Start Up Blog

Ok, so this isn’t about to win any awards or be sent off to Cannes. But it might be funny / relevant enough for a few people to send to a few friends…. we’ll see.

• It took 20 mins to film
• Zero cost for media (thanks to Youtube)
• I earned $63 in tips for my troubles
• It was a lot of fun

How many CEO’s do you know who’d risk such humiliation & a bung knee for their business?

Here’s a tale of two cafés. Both are within walking distance of the startup blog office. After a while I noticed a few things changing in my favourite of the two. The decore, the Barista and eventually the clientele all changed.

Coffee is personal. The caffeine, hot steamed milk and the chocolate sprinkles are only part of the experience.

So I moved to the café up the road. I’d even walk past the other café to get my ‘new’ caffeine haunt. It was pretty obvious that the first café had lost its cache and customers along the way. I still trades, but not nearly as well.

Then I discovered the owner actually sold about the time everything started to change. The new owners put their spin on things, tried to improve it…. fully leverage the ‘goodwill’ they purchased. Seems the opposite has occurred.

And so it is with restaurants and cafés alike.

The owner is the goodwill.

People buy coffee from her. Her greeting, her skill, the ambiance she created. It can’t be passed on. It can’t be bought from a sole trader.Exceptions such as coca cola, big macs and starbucks grande lattes are already replicated thousands of times…

When buying a business from a sole trader – Goodwill? – No such thing.

Quite often we must make decisions by looking at the balance sheet. It’s a fact of business life. But when it comes to marketing such decisions can be the death of a brand. The fact is, most marketing efforts are immeasurable before the decision.

Irish brand Waterford Crystal has just done some Balance Sheet Marketing.

A quick summary for the uninitiated:

Waterford city is the Crystal County of Ireland

Waterford has been making crystal here since 1783

Currently one fifth of their products are made in other parts of Europe

They haven’t made a profit in 5 years

They’ve just cut 500 jobs in Waterford Ireland to move all production

Their Chief executive Peter Cameron was quoted as saying, “We can source things from Eastern Europe under the Waterford fanchise. That’s not going to be an event that will change the perception of the brand”

Maybe Waterford Crystal have underestimated the emotional links passionate users have with brands.

Start up blog view:

Maybe they should charge what it costs

Maybe consumers would pay what it’s worth

Maybe they should tell consumers they must increase price or leave Waterford

Maybe ‘all’ production should be in Waterford Ireland

Maybe they should sing this fact as loud as possible

Maybe they should leverage their history a bit more

Maybe that would turn a profit

The best financial decisions protect innate brand equity, not destroy it.