10 things you shouldn’t do when expanding abroad

July 5, 2014

Published originally on Real Business

4 July 2014 by Peter Higgins.

As chairman of Cath Kidston, Peter Higgins helped grow the retailer into a renowned global success. But here he reveals it was at shirtmaker Charles Tyrwhitt that he learnt some of his most painful and instructive lessons…

1. Don’t launch in a country just as it enters the worst depression in its history

Back in 1996, when Charles Tyrwhitt was the 26th largest shirt retailer in Britain, founder Nick Wheeler and I decided on World Domination of the shirt market. Being former strategic management consultants, we had a plan so cunning that even Blackadder himself would have swooned.

It went like this: which country has lots of money, does mail order and loves British kit? America… er, no Japan. So Charles Tyrwhitt Japan was launched in November 1996 – just as the Nikkei collapsed.

2. Don’t completely ignore the experts

Recognising we needed help on the ground we had a simple choice: do we use either a) the best mail order consultant in Japan or b) an Irish friend of a friend. Naturally, we opted for the latter – and then wondered why we lost £100,000 in six months.

3. Don’t change your entire supply chain just to go into a new market

We could not understand such an unmitigated disaster: our shirts were great quality, the prices unbeatable. It was just the Japanese – they were too damn short for our shirts! If in a new market they don’t like what you produce, it’s usually a hint: get out.

4. If you have to do business in France, ensure your French expert is not Belgian

Undaunted, we reverted back to our cunning plan, this time choosing somewhere a little closer to home: France. OK, so Lands’ End had just withdrawn their Gallic operation, but what did they know? Quite a lot as it turned out – media and list costs were extortionate and the delivery system abysmal.

However, this time we hired a French mail order expert. Problem solved? Not exactly. A quarter of our parcels failed to arrive in Paris. Eventually, a group of extremely well dressed Parisian postmen were arrested. And then we discovered our French expert was actually Belgian. Another £100,000 down the drain – but, boy, were we learning fast!

5. Do not repeat errors…

With remarkable self-confidence/utter stupidity, we dusted off the map and entered the German market. When a reputable German list manager offered me 20,000 names of ‘35-55 year-old wealthy businessmen who have bought shirts for more than 100 Deutschemarks each, by mail order,’

I thought I was onto a winner. The resulting 0.1 per cent response rate made me realise he may have been a tad economical with the truth. We ended up losing £1m in four years on customer acquisition.

6. …or mention the war in Germany

Our German brochure was almost identical to our UK one, though we’d cleverly left extra space for German copy – their words are roughly a third longer than ours. It was only when the brochure was printed that it dawned on us that perhaps the Spitfire cufflinks on the front cover might be inappropriate for a German audience. However, the Germans really do have a sense of humour. We sold 60 pairs in that one book – a lot for us in those days.

7. Do not play a foreign market

Amazingly, the German business started to take off. Nick and I had a strong hunch, based on our expert knowledge of foreign markets, that the Deutschemark was about to strengthen. Our 1m DMs would soon be worth £300,000 not £250,000 and then we’d convert them back to sterling. However, sterling promptly went on a bull run that lasted pretty much until the day we finally converted our Deutschemarks; we got £225,000 in the end. Which is probably why we’re not FEX dealers.

8. See point five… and pay attention this time

Around 2003, we decided to launch in the US. With a team of brilliant local experts? Nope. By ourselves, yet again. (I finally learned my lesson taking Cath Kidston into Japan, once we’d found the right Japanese partner).

9. When opening retail stores in the US, avoid locations where customers are about to lose their jobs

At first we had some moderate success in the US, but then we opened two stores in New York – one on the ground floor of the Bear Stearns building, the other at the Lehman Bros head office. It could have been worse; at least the deal on the Merrill Lynch building fell through.

10. Don’t go abroad until you’re sure you’ve squeezed everything out of your UK business

Eventually we managed to make the multichannel model work in the US and Charles Tyrwhitt now has a good business in Germany too. But my biggest tip on international expansion, which I took on to Cath Kidston and Joe Browns, is deciding what NOT to do.

So when someone at a board meeting asks ‘Should we do international?’ say no the first nine times. On the tenth, ring an expert, make a detailed plan and file it at the bottom of your in-tray – until you run out of ideas in the UK. If you think it’s hard here, just wait until you get abroad.

Extracted from ‘Going Global: 30 Years 30 Insights’ by Piper, the leading specialist investor in consumer brands.

Peter Higgins and Nick Wheeler were management consultants at Bain & Company, before Higgins joined Wheeler at Charles Tyrwhitt in 1990. He stepped down as CEO in 2005 and became chairman at Cath Kidston, taking its profits from £250,000 to £12.5m during his five years at the home furnishings brand. He is currently a director at Charles Tyrwhitt, fashion etailer Joe Browns and German clothing company Schneider.

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Supreme Court supports PRCA and Meltwater in landmark blow in favour of internet freedom

April 29, 2013

Last week saw a monumentally important decision for the PR industry in the UK. The Supreme Court rejected an attempt by the Newspaper Licensing Authority (NLA) to make browsing newspaper articles online effectively illegal without paying an exorbitant "licensing" fee. Victory in the case, bought by Meltwater and the PRCA, means that the NLA has no legal right to claim copyright infringement merely for the act of browsing an article online, even though technically speaking the browser is making a copy of the article. The ruling will now go forward to the European Court of Justice for further clarification across the EU.

We are really happy about this as we have long felt that the attempts of the NLA – and indeed its sibling organisation the CLA – are nothing more than a thinly-disguised attempt to rip money out of people. Yes there must be protections in place for cases of genuine copyright infringement; but is it not the case that much of what ends up in the newspapers and magazines actually comes from PR companies in the first place? So how can it be right that we are being charged to view material we wrote in the first place! Not to mention the fact that without the efforts of professional and conscientious PR people helping to research and source material, the lives for many editors on the smaller trade titles would become impossible.

Here is the full announcement from the PRCA – well played, guys!

London, 17th April – The Supreme Court today agreed with the PRCA and Meltwater that Internet users have the right to browse online freely without the threat of copyright infringement.

The Supreme Court, the highest court in the UK, accepted all of the arguments of the PRCA and Meltwater against the Newspaper Licensing Agency (NLA) that browsing and viewing articles online does not require authorisation from the copyright holder, because it is protected by the temporary copy exception of UK copyright law. It has now referred the case to the Court of Justice of the European Union (CJEU), so that this point can be clarified across the EU.

The Supreme Court states that accepting the NLA’s position would be “an unacceptable result, which would make infringers of many millions of ordinary users of the Internet across the EU who use browsers and search engines for private as well as commercial purposes.”

The Supreme Court further rejected the NLA’s argument that rights-holders would be exposed to piracy as a consequence, as right holders have effective remedies against those who are more obviously at fault.

Francis Ingham, PRCA Director General, said: “We are delighted that the UK Supreme Court has accepted all of our arguments, which we look forward to making again at the CJEU. The Supreme Court understood that this does not just affect the PR world, but the fundamental rights of all EU citizens to browse the Internet.”

Today’s decision represents important forward progress in the series of cases where Meltwater and the PRCA have challenged the NLA on its high fees for reading freely available news. In a previous ruling, the PRCA and Meltwater were successful in reducing the fees for all businesses totaling more than £100 million over three years. The savings for Meltwater clients alone are more than £24 million in the same period.

Jorn Lyssegen, CEO of Meltwater said: “We are very pleased that the Supreme Court overruled the previous rulings of the Court of Appeals and The High Court that the simple act of browsing the Internet could be copyright infringement. This ruling is an important step in modernizing the interpretation of UK copyright law and protects UK Internet users from overreaching copyright collectors.”

– ENDS –

Notes to editors

The Supreme Court ruling can be found here: http://www.supremecourt.gov.uk/decided-cases/docs/UKSC_2011_0202_Judgment.pdf

The PRCA contested at the Supreme Court in February the Court of Appeal’s decision (link) that that the temporary copies made through the purely technological process of displaying a web page on a computer to enable a user to read that web page is a violation of UK copyright law if made without the explicit consent of the copyright owner.

The PRCA and Meltwater have already reduced the cost of license fees at the Copyright Tribunal, saving an estimated £100m for the PR industry

The CJEU ruling is expected at some point in 2014


Time to weed-out those nasty bizspeak phrases

April 8, 2013

Language is a living thing; a constantly changing and evolving environment in which words and phrases spring into being and live out their lives. Some, like majestic trees, live long and grace the literary landscape with their presence. Others litter the ground like scraggly weeds, stifling clarity and choking eloquence at every turn.

Business writing – a soil particularly well enriched with taurine fertiliser – provides the most fertile environment for such unwanted invaders to take root. Bryan A. Garner, writing in the HBR, has been busy gathering handfuls of the worst offenders (as judged by numerous contributors) in an effort to put this rogues gallery to the scythe.

Bryan urges everyone to "Hunt for offending phrases: Start looking for bizspeak in all kinds of documents, from memos to marketing plans, and you’ll find it everywhere. " And when you do, pull it out by the roots!

Bizspeak Blacklist
actionable (apart from legal action)
agreeance
as per
at the end of the day
back of the envelope
bandwidth (outside electronics)
bring our A game
client-centered
come-to-Jesus
core competency
CYA
drill down
ducks in a row
forward initiative
going forward
go rogue
guesstimate
harvesting efficiencies
hit the ground running
impact, vb.
incent
incentivize
impactful
kick the can down the road
let’s do lunch
let’s take this offline
level the playing field
leverage, vb.
liaise
mission-critical
monetize
net-net
on the same page
operationalize
optimize
out of pocket (except in reference to expenses)
paradigm shift
parameters
per
planful
push the envelope
pursuant to
putting lipstick on a pig
recontextualize
repurpose
rightsized
sacred cow
scalable
seamless integration
seismic shift (outside earthquake references)
smartsized
strategic alliance
strategic dynamism
synergize
synergy
think outside the box
throw it against the wall and see if it sticks
throw under the bus
turnkey
under the radar
utilization, utilize
value-added
verbage (the correct term is verbiage — in reference only to verbose phrasings)
where the rubber meets the road
win-win

Hunt for offending phrases: Start looking for bizspeak in all kinds of documents, from memos to marketing plans, and you’ll find it everywhere. You’ll eventually learn to spot it — and avoid it — in your own writing. You’ll omit canned language such as Attached please find and other phrases that only clutter your message.



Request for proposal? We’ll get back to you

March 19, 2013

Last year, we were invited to pitch for a media campaign for a major international manufacturer of industrial products. The brief was to come up with a campaign to re-invigorate the brand with new advertising and a PR campaign designed to create clear blue water between the company and its competitors. Alongside an incredibly talented team of senior creatives from one of our key partner agencies, Tiga UK, we worked hard to create what we judged to be a compelling pitch that ticked all the boxes. Having packed our presentation documents and visuals, our team travelled up the M40 to meet with the client and make our play.

We didn’t get it.

OK – you can’t win them all. But recently, we discovered that the account in question, actually wasn’t…in question, I mean. The company actually had no intention of relieving the incumbent of the account, and appeared to be merely testing the waters. Or possibly even fishing for new ideas at our expense. Alas this is not an isolated incident. Late last year, we we received a Request for Proposal (RFP) from a European government department. In this case, the sector we were being asked to work in was a new one for us. We were completely honest about our modest experience in this area; but having been assured that the lack of track-record was not a problem, we embarked on putting together a comprehensive strategy to achieve the objectives within quite a tight budget. The 30-page proposal took some serious midnight oil to put together, occurring as it did during our busiest period. But we did it and the document was couriered at considerable expense to the headquarters of the organisation concerned.

We were turned down; The reason? a lack of track record in the sector.

I recently came across a great article by John Warrillow on Inc.com in which he argues that an RFP isn’t worth the paper it’s written on. The thrust of John’s argument is that by going head-to-head with competitors, you are devaluing your offering (and theirs). By competing on price/cost you are sacrificing your USPs and margins in a race to the bottom that does nobody any good. Least of all you. It’s a convincing case and one that I think will inform our decision to respond to RFPs in future. I for one would rather focus on delivering the best quality of service to clients who value our particular expertise, rather than waste energy scrapping over a morsel dangled from above.


It’s More Important to Be Kind than Clever

September 14, 2012

by Bill Taylor  |   9:00 AM August 23, 2012

We spotted this interesting article from the Harvard Business Review recently which reminds us all that business is first and foremost about people.

One of the more heart-warming stories to zoom around the Internet lately involves a young man, his dying grandmother, and a bowl of clam chowder from Panera Bread. It’s a little story that offers big lessons about service, brands, and the human side of business — a story that underscores why efficiency should never come at the expense of humanity.

The story, as told in AdWeek, goes like this: Brandon Cook, from Wilton, New Hampshire, was visiting his grandmother in the hospital. Terribly ill with cancer, she complained to her grandson that she desperately wanted a bowl of soup, and that the hospital’s soup was inedible (she used saltier language). If only she could get a bowl of her favorite clam chowder from Panera Bread! Trouble was, Panera only sells clam chowder on Friday. So Brandon called the nearby Panera and talked to store manager Suzanne Fortier. Not only did Sue make clam chowder specially for Brandon’s grandmother, she included a box of cookies as a gift from the staff.

It was a small act of kindness that would not normally make headlines. Except that Brandon told the story on his Facebook page, and Brandon’s mother, Gail Cook, retold the story on Panera’s fan page. The rest, as they say, is social-media history. Gail’s post generated 500,000 (and counting) "likes" and more than 22,000 comments on Panera’s Facebook page. Panera, meanwhile, got something that no amount of traditional advertising can buy — a genuine sense of affiliation and appreciation from customers around the world.

Marketing types have latched on to this story as an example of the power of social media and "virtual word-of-mouth" to boost a company’s reputation. But I see the reaction to Sue Fortier’s gesture as an example of something else — the hunger among customers, employees, and all of us to engage with companies on more than just dollars-and-cents terms. In a world that is being reshaped by the relentless advance of technology, what stands out are acts of compassion and connection that remind us what it means to be human.

As I read the story of Brandon and his grandmother, I thought back to a lecture delivered two years ago by Jeff Bezos, founder and CEO of Amazon.com, to the graduating seniors of my alma mater, Princeton University. Bezos is nothing if not a master of technology — he has built his company, and his fortune, on the rise of the Internet and his own intellect. But he spoke that day not about computing power or brainpower, but about his grandmother — and what he learned when he made her cry.

Even as a 10-year-old boy, it turns out, Bezos had a steel-trap mind and a passion for crunching numbers. During a summer road trip with his grandparents, young Jeff got fed up with his grandmother’s smoking in the car — and decided to do something about it. From the backseat, he calculated how many cigarettes per day his grandmother smoked, how many puffs she took per cigarette, the health risk of each puff, and announced to her with great fanfare, "You’ve taken nine years off your life!"

Bezos’s calculations may have been accurate — but the reaction was not what he expected. His grandmother burst into tears. His grandfather pulled the car off to the side of the road and asked young Jeff to step out. And then his grandfather taught a lesson that this now-billionaire decided to share the with the Class of 2010: "My grandfather looked at me, and after a bit of silence, he gently and calmly said, ‘Jeff, one day you’ll understand that it’s harder to be kind than clever.’"

That’s a lesson I wish more businesspeople understood — a lesson that is reinforced by the reaction to this simple act of kindness at Panera Bread. Indeed, I experienced something similar not so long ago, and found it striking enough to devote an HBR blog post to the experience. In my post, I told the story of my father, his search for a new car, a health emergency that took place in the middle of that search — and a couple of extraordinary (and truly human) gestures by an auto dealer that put him at ease and won his loyalty.

"What is it about business that makes it so hard to be kind?" I asked at the time. "And what kind of businesspeople have we become when small acts of kindness feel so rare?"

That’s what’s really striking about the Panera Bread story — not that Suzanne Fortier went out of her way to do something nice for a sick grandmother, but that her simple gesture attracted such global attention and acclaim.

So by all means, encourage your people to embrace technology, get great at business analytics, and otherwise ramp up the efficiency of everything they do. But just make sure all their efficiency doesn’t come at the expense of their humanity. Small gestures can send big signals about who we are, what we care about, and why people should want to affiliate with us. It’s harder (and more important) to be kind than clever.


Popping the filter bubble

May 31, 2012

What’s the first image that pops into to your head when I say the word "Bubble"? Water? Champagne? Scuba Diving? House prices, the Economy? Whatever it was, my guess is it wasn’t "Democracy". And yet, in quite an ironic way, your choice is a great example of a newly defined "bubble" which potentially could have a profound effect on our understanding of the latter.

Whichever mental image sprang to mind when you thought of the word "Bubble" was not a random idea plucked from the ether, but in some ways conditioned by your preferences, your experiences and your current location. If I asked you this question when we are in an expensive restaurant supping Dom Perignon, or in an estate agents office or swimming in tropical seas, your answers would probably have been different each time.

OK – so what has this word association got to do with the concept of democracy? But before we get to that – let’s consider what the concept of press freedom has to do with democracy. Most people would accept that a functional free press is an indispensable part of a functioning democracy. The ability for ordinary citizens to ask questions, be exposed to different opinions, challenge facts and policies is a fundamental feature of a free society as most Westerners would understand it.  For the best part of 200 years, newspapers fulfilled this function. Now we have the internet, with its limitless capacity to connect us with different points of view and ideas. That’s got to be an improvement, right?

Well, it turns out it might not be thanks to a newly-identified phenomena called the "Filter Bubble". The argument goes that as our preferred internet destinations, Facebook, Google and now Twitter, are basing the information that they present us with on what they know about us, they are in effect creating a bubble around us – presenting us only with the things that, either by direct or implied choice, we have previously expressed an interest in. This is an invisible process, something that happens without you being aware of it – much like your unconscious choice of "Champagne" rather than "House Prices".

The originator of the Filter Bubble concept and author of a book by the same name is Eli Pariser. If you have some time to spare, watch his lecture at last year’s TED – thought provoking stuff.

https://www.ted.com/talks/eli_pariser_beware_online_filter_bubbles.html


New EU cookie law takes the biscuit

April 25, 2012

This morning, an estimated 90% of websites across the EU became illegal under EU law, thanks to an incredibly dumb piece of legislation requiring all websites to ask permission from visitors to store information about their visit on their computers in the form of a cookie. Even more incredible – the law also applies to every single website in the world that can be viewed from within an EU country. So that’s just about every single website on the internet – around 644 million sites at the last count – outlawed at a stroke. Here’s a short video from Silktide.com that explains the main features – and failings – of this bodged legislation.

The law was intended to protect user privacy, but in process of achieving this it has effectively dealt a hammer blow to businesses. Simply put, according to the IT guys virtually every website uses cookies. But to find out whether yours does or not, you’ll probably need to hire a web developer, who will then charge you to add an intrusive pop-up on your webpage which blocks the visitor from viewing your site until they have clicked on a link to explicitly give their permission for the use of any cookies that your site uses, or may use in the future.

So you have the expense of the additional web development work, the result of which is to erect a barrier across the front of your web presence that prevents the casual browser delving further into your site. All that money you spent on SEO? well that’s just toast now because the casual visitor arriving from a search engine will be prevented from seeing that content. Web browsers will once again be plagued by pop-ups and check boxes preventing easy traversing of data.

The effects on site traffic will be dramatic: It’s been reported that traffic on The Information Commissioner’s Office website dropped a staggering 90% when they implemented their EU compliant site.

Oh and did I mention? Failure to comply will result in a £500,000 fine. Yes, you did read that right.

It is difficult to imagine a more ill-conceived, unworkable and downright stupid law. If you want to have your say, you can sign the UK government petition to help get this ridiculous law reviewed