MANAGING AND MAXIMIZING YOUR PR AND COMMUNICATIONS BUDGETCNI’s Journey, Mistakes, and Lessons Learned

Kenny OngCNI Holdings Berhad

Problems from the start

1. No money

2. Split Objectives: Sales? Share Price? Image?

3. Difficult to hire

4. Independent entity

5. Charity center

6. MLM image nightmare

7. Multi-cultural & Multi-lingual

8. Close Regulatory scrutiny (food act, health act, Jakim, KPDN)

9. Public Listed

How to fail without trying

The Roadmap to Failure

Fred Wiersema and Mike TreacyP

erf

orm

ance

Time

Clear Sailing

Today’s performance

Ad-hoc Tactics

Denial & Defense

Doom Projections

Overdue Failure

The Moment of Truth

X

Performance Freefall

Tomorrow’s actual

performance

Downpresure of Unclear Strategy

Denial and Defense

• “It’s not really good value our competitor is offering, because it doesn’t include a lot of our features.” - ABC vs Air Asia

• “It’s good value but not in our preferred customer market.” - ABC vs Toyota

• “Sure they’re hurting us, but with their unfair advantage, what can we do?” – ABC vs MILO

• “The rules we are playing by have always worked before” – AMEX vs VISA

The Roadmap to Failure

Fred Wiersema and Mike TreacyP

erf

orm

ance

Time

Clear Sailing

Today’s performance

Ad-hoc Tactics

Denial & Defense

Doom Projections

Overdue Failure

The Moment of Truth

X

Performance Freefall

Tomorrow’s actual

performance

Downpresure of Unclear Strategy

Ad Hoc Tactics• Selectively hold discounts to hold business that

has started to go elsewhere• Introduce new promotions, terms, conditions, and

offers to confuse and cloud the market• Beef up customer service by adding people to fix

mess-ups and quicken delayed shipments• Delay capital investments and adjust accounting

methods to portray quarterly financial results more favorably

• Introduce “new and improved” products that are new in form, but not in substantive ways that are of consequence to purchasers

The Roadmap to Failure

Fred Wiersema and Mike TreacyP

erf

orm

ance

Time

Clear Sailing

Today’s performance

Ad-hoc Tactics

Denial & Defense

Doom Projections

Overdue Failure

The Moment of Truth

X

Performance Freefall

Tomorrow’s actual

performance

Downpresure of Unclear Strategy

Before moving on…

• How is PR budget not maximized?

1.Because I can - Competency problem

2.Poor business value – Ignorance problem

3. No Budget lah - Alignment problem

4.Not exciting lah – Glamour problem

Contents:

How can PR budget be maximized:

• Linking Comm to the real world of Business

• Driving WOM as ‘do-or-die’ mission

• Comm as Integrated affair

• Virtuous Cycle for full $$ Impact

• Continuous Networking vs. Fancy Campaigns

A. Linking Comm to the real world of Business

The anchor for all PR decisions

About: CNI

1. 18 years old

2. Core Business: MLM

3. Others: Contract Manufacturing, Export/Trading, eCommerce

4. Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan

5. Staff force: ± 500

6. Distributors: 250,000

7. Products: Consumer Goods and Services

Intro: MLM

1. Sell through people

2. Buyers = Members (most of the time)

3. Members = Sponsoring

4. Product

5. Integrity

6. R&D

7. Training

8. Functions & Events

9. Tight regulations

Intro: CNI

CNI’s Business Model background

Factory CNIE

DC

SPLeadersCustomers

R&D

COMM

Market Research

Internal External

Leaders Distributors

Suppliers

Associations

Universities

NGOs

Investors

Media

Government

Public

Authorities

Proactive Reactive Proactive Reactive

COMM Tools COMM Tools

What is the purpose of COMM?

Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”

Sergio Zyman

“Retention and Loyalty are useless if No Conversion is happening.”

What is the purpose of COMM?

“Retention and Loyalty are useless if No Conversion is happening.”

“Comm (PR) is useless if No Conversion is happening.”

Problem…

“In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied.”

HBR March/April 1996

What are they really buying?

"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Product Leadership

OperationalExcellence

CustomerIntimacy

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Value Disciplines

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Strategy: Value Disciplines

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Value Disciplines

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Value Disciplines

The McPlaybook*

Make it easy to eat• 50% drive-thru• Meals held in one

hand

Make it easy to prepare• High Turnover• Tasks simple to learn

& repeat

Make it quick• “Fast Food”• Tests new products

for Cooking Times

Make what customers want• Prowls market for new

products• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007

How does that impact PR?

Philosophy

COMM

StrategyCorp Comm

Strategy

StructureResources

Leadership

Person

Our Philosophy

“We are more than just a business. We strongly believe that every

individual has the opportunity to attain a better quality of life and

health through CNI.”

B. Driving WOM as ‘do-or-die’ mission

Big picture, Small picture. PR’s role in both pictures.

What is the Objective?

Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”

Sergio Zyman

“Retention and Loyalty useless if No Conversion is happening.”

What is the Objective?

Loyalty is Useless…

• Virtual Consumption vs. Real Consumption

What is the Objective?

Loyalty is misleading…

• Heavy Consumption ≠ Loyalty

• Loyalty ≠ Heavy Consumption

What is the Objective?

1.Comm = Relationship (something like Dating)

2.Comm ≠ Media glitz 3.Comm ≠ ATL/BTL/BwTL/ArTL/FTL4.Comm ≠ CSR5.Comm = Get more people, to buy

more, more frequently, at higher prices

What is the Objective?

‘Do-or-Die’ KPIs for CNI• Revenue• ARPU

• Sponsoring• Retention

• Commission Plan (BDP)• Product• Corporate Image

What is the Objective?

Sponsoring

BDP

Why should I join?

Credibility Product

Corporate Comm

What is the Objective?

• So…the ultimate objective of Corporate Comm is to drive Word-Of-Mouth.

• That’s it.

• Now, it’s easy to maximize the budget.

C. Comm as Integrated affair

Unity is worth more than the annual budget.

COMM

Market Research

Internal External

Leaders Distributors

Suppliers

Media

Government

Public

Authorities

Associations

Universities

NGOs

Investors

Proactive Reactive Proactive Reactive

COMM Tools COMM Tools

Integrated affair

Conversion

Comm

S&M MBSCCD

[Internal] [External] [Creative]

Example: What we needed

• The birth of Malaysia’s 1st Tongkat Ali Ginseng Coffee

Example: AGM and myCNI

Integrated affair - GROUP

Group Media

CCD

CNIE

InfusoQP[MLM]

[Contract] [Café]

CNIH

[Investn]EM

[Export]

KESB

[eCom]

D. Virtuous Cycle for full $$ Impact

Feed you, Feed me.

COMM

Market Research

Internal External

Leaders Distributors

Suppliers

Media

Government

Public

Authorities

Associations

Universities

NGOs

Investors

Proactive Reactive Proactive Reactive

COMM Tools COMM Tools

Virtuous Cycle

Internal External

Feed

Feed

Full $$ Impact Both Sides

Internal• Halal Committee• Social Education

(e.g. SCK)• Umrah trip• China Trip• RBOS• CFA/HFA• Coffee Van

External• Sponsorship• Donations• News clippings• Newspaper Ads• MHI• Awards• Corporate Profile• AGM• Gov. Celebrity• Analyst research

Full $$ Impact Both Sides

Internal• Entrepreneur Dev.• Health products• Health education• “Made in Malaysia”• Events• Media Celebrity

External• Website• DSAM• Yayasan• Publish Book• Social Education• Crisis Comm• Children Education• National interest• Analyst BD

connections

E. Continuous Networking vs. Fancy Campaigns

R&D in Totality

Remember…

1.Comm = Relationship (something like Dating)

2.Comm ≠ Media glitz 3.Comm ≠ ATL/BTL/BwTL/ArTL/FTL4.Comm ≠ CSR5.Comm = Get more people, to buy

more, more frequently, at higher prices

Example Networking activities

• Durian Party

• Wisma Tour

• Hampers

• Umrah

• China Factory Visit

• Large Events

• Donations to Media

• Jakim visit

Issues and Challenges

Problems, Problems, Problems

Sources of Image problems

Industry

Management

Staff

Frontline

Sup

plie

rs/V

endo

rs Retail/D

istributor

Industry-inspired problems

1. Get-Rich-Quick Schemes (Skim Cepat Kaya)

2. Direct Selling myths

3. Bad Hats

4. Imposters

5. Products on Shelves

6. Hazardous products by other companies

7. Increasing Regulations

Don’t know how to use to maximum effect

1. ATL

2. Web

3. Blogs (Web 2.0)

4. Mobile

5. Investor Relations

IR problems

“Good news for stockholders can be bad news for other

stakeholders.” Gregory Miller, Assoc. Prof., Harvard Business School.

Summary

Summary

How to maximize budget?

1. Focus on the right Priority – WOM

2. Drive WOM by Integration and Virtuous Cycle

3. Build Integration and Virtuous Cycle using Constant Networking (hardwork)

Thank You.

soft copy of slides: http://totallyunrelatedrandomanddebatable.

blogspot.com/