Category: Business Management

Jeremy Larochelle, MBA’s insights into business management from his time both “in the trenches” and in the books.

Stakeholder Management – The Key to the Business Ecosystem

Jeremy Larochelle

Note: The following article is copied from my LinkedIn feed. Follow me by clicking here. 

 

Stakeholder management is vital to a business’ success. Not to be confused with the financial “shareholders,” stakeholders represent all the persons with a “stake” in your company. This can be anyone from customers to employees, suppliers, and shareholders to the local community and even the planet.

Stakeholder management reminds us that the organization doesn’t exist on a deserted island. Rather, it is part of an ecosystem that constantly must be reviewed for signs of in-balance. Listening to stakeholders helps the savvy manager maintain harmony in this ecosystem.

Entertainment venues are no different. Say, a theater isn’t listening to traffic and sound complaints from the neighborhood in which they operate. Community members have been voicing their opinions across social media. However, social-listening and reporting is not part of the job description for the marketing department’s social media specialist and the issue goes unnoticed. Soon, the complaints gather steam and reach city hall. Afraid of not being re-elected, city officials initiate a temporary noise ordinance and amp up ticketing around the venue. Almost immediately the business begins to suffer and the organization is forced to go on the defensive. This costs valuable financial resources, jeopardizes important relationships, and can even tarnish the brand name.

This example may seem simple, but it is not uncommon. Even more bothersome is the fact that it can be rectified rather easily and with minimal cost. They could assign one of their marketing employees (even an intern) to troll the web for bad reviews on sites such as Yelp, Facebook, Google Search Results, TripAdvisor, Manta, etc. If staffing is an issue, anyone can set-up alerts for the business name on Google. Then, when someone posts said name on the web. .. you’ll get notified about 75% of the time.

Surveys are a great tool to get specific feedback from your customers, suppliers, and employees. Survey Monkey makes that real easy.

Finally, get out and talk to your customers, employees, and community. This may be the greatest stakeholder management tool at your disposal.

The key is to realize that your business exists “because of” the ecosystem in which you operate. That system consists of you, your customers, employees, government officials, competitors, suppliers, the community, and planet. Actively listening to their concerns fosters better cooperation between all involved and initiates greater success.

What’s Your Baseline?

Jeremy Larochelle

 

Have you ever had someone tell you something is a “good investment?”  It could have been a salesperson trying to sell you a new piece of machinery; a broker presenting a new stock;  a business partner serving up a new opportunity, or that new condo your spouse found.

 

But, how do you “really” know it is a good investment?

 

While the complexity of the answer is dependent on the level of investment, your risk tolerance, and other external factors. The solution boils down to two fundamentals. Your forecast of that return and the baseline from which you are making your analysis.

 

Today, I want to focus on the baseline as I plan to tackle the concept of forecasting in detail in subsequent posts.

 

Time and money are not infinite. This is economics 101. If you choose to spend either on one item. You take the same amount away from something else. E.g. if you have $1 in your pocket and purchase a soda for $1. You cannot purchase that $1 bag of chips as well. In this simple form, it seems ridiculous that someone couldn’t comprehend that concept, but you would be surprised how things change when it comes to long-term investments such as stocks, machinery, or large-capital projects.

 

Part of the problem is that potential investors do not have a go-to baseline to gauge the true value for the use of their money. Something that isn’t arbitrary. For instance, you can’t assess the success of one project against something else for which the returns must also be estimated, such as a stock or even another plan you are considering. Simply, you need something with a consistent history of positive returns from which to analyze your investment.

 

Personally, I gauge all potential investments against the 20-year T-bond. While nothing is risk-free, this financial vehicle is issued and backed by the faith of the US Government making it an ideal baseline for your analysis.  This is why many investment advisors follow a diversified portfolio that includes a chunk of these assets.

 

Using my suggestion, you would forecast the return on your investment. For instance, if you plan to buy a piece of machinery that will last twenty years and increase your business by 3%. You would weigh that against what you would get if you placed your funds in a 20-year T-bond. If that bond’s coupon rate is 4%, you may want to investigate that investment, your forecasts, and your decision a bit further.

 

A few notes of caution here. If you crunch the numbers and the bond turns out to be a better investment. Try to avoid engaging in confirmation bias – “the tendency to interpret new evidence as confirmation of one’s existing beliefs or theories.” Don’t re-do your numbers until your potential investment looks better on paper than your baseline. Second, depending on the current state of the bond market. You may want to use the yield instead of the coupon in your analysis as this metric takes into account the future value of the bond you are considering. Finally, keep in mind the gut instinct. If you trust your math and truly feel that the investment will be a wise choice. Go for it. However, give it a night’s rest before you sign the check.

 

Your baseline does not have to be a bond. It just has to be quantifiable, historic, and relatively risk-free. For example, if you are considering hiring musical entertainment for your venue. You could analyze your bar and food sales for six to twelve months before you bring in the talent and then weigh your current numbers against those historic metrics.

 

In a future post, I plan to discuss how you forecast possible returns. However, for today. Remember that to measure anything. You need a device from which to gauge the opportunity. You need a baseline.

 

 

KPI’s in Venue Management

Jeremy Larochelle

I recently asked my LinkedIn network what KPI’s, besides revenue, they use for their entertainment venue analysis.

 

I figured this would be a tough question because I removed the most prevalent answer when it comes to venue management analysis – revenue generation. I wanted to omit the low-hanging fruit to force my network to consider other Key Performance Indicators regarding their entertainment space and how valuable they can be.

 

For those who do not understand what KPI’s are.  Here is a quick and simple breakdown from Investopedia. According to their site. “Key performance indicators (KPI) are a set of quantifiable measures that a company uses to gauge its performance over time. These metrics are used to determine a company’s progress in achieving its strategic and operational goals, and also to compare a company’s finances and performance against other businesses within its industry.”

 

The revenue metrics are the most important and fairly easy to digest in regards to entertainment booking. If you book a band and they sell out the venue. That is a positive KPI. Just remember, if you are in charge of assigning revenue metrics you should include ancillary income such as food and drink sales.  I have seen many situations where one act didn’t sell out the room but brought in a demographic that drank the house dry resulting in an overall larger return on investment.

 

Key Performance Indicators go beyond just revenue-generating metrics. Better institutions will assign them to other areas of the business eco-system such as cost reduction, process improvements, and customer satisfaction. All of these variables work off of one another and when assigned properly and analyzed consistently can lead to exponential growth.  Here are a few suggestions of non-revenue generating KPI’s to consider for an entertainment venue.

 

Cost Reduction: Is the venue overstaffed? Are your performance hours not in-line with your demographic (e.g. does the room die at 11:00 pm, but you are paying entertainment and employees to be on-site until 2:00 am)?

 

Process Improvement: Are you getting your guests in fast enough and moving them to areas of revenue such as the bar efficiently?

 

Customer Satisfaction: Are you monitoring the social chatter regarding your venue?  Are the reviews of your entertainment, venue, and operations positive? Are you surveying past customers to learn about their experiences to share with your team?

 

*BONUS – Employee Satisfaction: Are you talking to your team to see if THEY are happy? Do you survey guests regarding their experience with specific employees through analysis such as Net Promoter Scores and satisfaction surveys?

 

These are just a few suggestions regarding non-revenue KPI’s you can adapt for your entertainment venue. Just remember each business environment is different and you may have to tweak your analysis to uncover your areas of weakness and opportunity.  If you would like some help analyzing your entertainment venue, give me a shout.

 

 

Five Take-A-Ways from Five Years Booking and Managing Entertainment

Jeremy Larochelle

I celebrate my five-year anniversary with Mike Moloney Entertainment on March 1st, 2018 and what a crazy, chaotic, and fun ride it has been. So, I wanted to share with you five take-a-ways from my time as a booking agent and entertainment manager.  Enjoy!

 

It’s Still About Opportunities to See

Jeremy Larochelle

Gone are the days of malls, mom and pop stores, and various other brick and mortar outlets. They have been replaced by online merchants, specialty “long-tail sites like Etsy,” demand channels such as eBay, and social sales through Facebook, Pinterest, and Instagram among others.

 

When the distribution point of your product changes, it is imperative that your marketing strategies change with it. Why? New distribution points suggest you are dealing with consumers who have adopted new purchasing behaviors or, perhaps even more challenging. You need to re-train existing customers on these new digital protocols without losing their business. A great example lies in the fact that online buyers can’t physically touch the merchandise before they buy it. For some, who have grown up in the “online” world. This isn’t an issue. However, for department stores such as JCPenney’s and Macy’s with a funnel full of brick and mortar customers used to handling the merchandise. This is a problem that must be addressed.

 

The savvy marketers at Zappos quickly found the solution to this problem with their free returns and exchanges policies. Today, major retailers (including the aforementioned) have followed suit and now offer free returns. Some go so far as to streamline the process by providing return labels inside their packages and expedited reimbursement paths through the customer’s account section of their site. While John Q buyer still can’t touch the product before he makes his purchase, these policies reduce the perceived risk of their pre-purchase rituals and help close the gap between the brick and mortar and online worlds.

 

This is just the tip of the iceberg in regards to the changes the new “online” marketing landscape has forced on firms large and small. Customer reviews have become imperative for a company’s success as well as PCI compliant websites, PayPal payment channels, mobile-friendly landing pages, and social listening and engagement by the brand.

 

However, one core marketing element remains unchanged.

 

Opportunities to See still dominates the marketer’s playbook. Ultimately, the adperson’s primary goal still boils down to getting the brand name in front of as many relevant consumers as possible, so you can get them into the sales funnel where they will start the buying process.

 

I will argue that it is even more important now than ever.

 

In the past world of brick and mortar selling, competition was somewhat limited by physical location. E.g. you had to have a store or place for your customers to go to compete. Today,  many barriers to entry like this have been torn down like the Berlin Wall. It no longer matters where you are located or how much intellectual and financial capital you have. If you have the will and an internet connection. You can compete. Last year, popular online commerce platform Shopify announced the company supported over 375,000 merchants alone by the end of 2016.  That’s just one “out of the box” provider that caters to the “limited entrepreneur.” Add in other services such as Volusion, Magento, Bigcommerce, Wix, WordPress, and proprietary sites and it is very likely your business (no matter how niche it may be) is competing with a plethora of other brands across the web for the same customer’s attention. However, it get’s even more difficult. Since it takes the average online patron numerous views across multiple channels before they click “buy now.” Getting your message in front of those customers as many times as possible becomes a key ingredient to your success.

 

Yes, the distribution channel has changed and, yes, marketing strategies have changed with it. However, don’t let modern agencies scare you with new terms such as bounce rate, page views, click-through rate (CTR), cost per thousand (CPM). It all boils down to one basic fundamental that hasn’t changed in marketing strategy.

 

Opportunities to See.