Business Times May 2012 by Keith Platt

business & Leisure: Frankston | Mornington Peninsula | Dandenong

MAY 2012 | $4.95 (GST inc.)

behind the lens of a fishing & lifestyle series

The age of ‘buy time’ TV management creating loyalty is not just about prices

marketing keys to surviving those surveys

planning Factoring in heritage as a cost of developments

Talk to the business bank of Melbourne. Call 13 82 66 or visit bankofmelbourne.com.au Find us on Facebook

Bank of Melbourne – A Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.

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Departments Appointments, News 4 Busy Bites 6 8 Networking News 11 Arts: Access for hearing impaired 14 17 Unlocking capital for business Retail 18 23 Business Directory

COXY HELPS LITTLE INDIA’S FIGHT FOR SURVIVAL – P18

TONY MURRELL KEITH PLATT MARG HARRISON DAVID HILET MELANIE LARKE SIMON BROWN Design MARLON PLATT

Publisher / Director Editorial Director Sales Director Managing Director Material production / Prepress

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Columns Planning: Megan Schutz Health: Mike Ellis Markets: Richard Campbell Managing: Hamish Petrie

MAY 2012

business

& Leisure:

Frankston

on Peninsula | Morningt

| $4.95 (GST

COVER: Phil Harris’s TV series River to Reef is shown on two stations and has racked up 184 episodes. Harris explains how he buys TV time and creates the series using proceeds from advertising deals he makes: SEE P.12

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of Westpac

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ABN 33 007

457 141 AFSL

and Australian

credit licence

19 20 21 22

233714. 30/04/12

5:56 PM

ISSUE 23 / MAY 2012

FRANKSTON / MORNINGTON PENINSULA / DANDENONG

BusinessTimes is published 11 times a year by BusinessTimes Pty Ltd and printed by Galaxy Print & Design, 76 Reid Parade, Hastings, Victoria 3915. Postal: PO Box 428, Hastings, Victoria 3915 Tel. 03 5979 3927 Fax. 03 5979 7944

Features

MAKING TELEVISION: Fishing & lifestyle series creator strives for the reel deal.

SOCIAL SCIENCE: Keys to surviving those surveys.

Are you in BusinessTimes? For advertising, contact Marg Harrison on 0414 773 153 or marg@businesstimes.net.au Make sure every business knows your business. DISCLAIMER: Information in BusinessTimes contains general advice only. No article or column has been prepared taking into account any individual reader’s financial situation, investment objectives or particular needs. Readers should personally consult professionals for advice on any matter, including investment, health and the law. While all care is taken, BusinessTimes accepts no responsibility for errors or omissions in the published material. Views expressed are not necessarily those of BusinessTimes Pty Ltd. All content is copyright.

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FRANKSTON residents living close to the heart of & sa town are getting an early briefing on implications of the expanded central activities district (CAD) counsel serv . corporate mooted in the structure plan review.

. business debt recov Councillors called for an April public meeting to discuss defence & govern the state government’s plan to extend the area covered.by the contrac structure plan south to William St, east to Lardener Rd and north to Rosella St. They hoped the meeting – as well as informing residents –. employment

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would arrive at a consensus view of building heights, setbacks . commercial property and zonings. Councillors were clearly concerned that the CAD structure . franchis plan was released for public consultation without mention that its scope had been extended to cover neighbouring residential . insolvency & bankru areas. “In the interests of transparent and democratic government,property licen . intellectual residents and land holders should be informed as soon & astechnology trans possible that changes to their current zonings, uses and height limits that could see very large buildings built on what are . commercial lea now low level residential areas,” said former mayor Cr Alistair . local governm Wardle, who proposed the meeting with residents. “…we need to inform our residents and be guided by them offsets before such changes are even considered, so that we .can avoid& industry p housing insecurity and areas becoming slums during transition . probate & administrati deceased esta

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Centre’s plan looks at neighbours periods, as happened with the bulky goods development and what is now occurring along sections of Nepean Highway to the north of the CAD, (like) The Ambassador site.” The city’s development manager said public consultation on the draft plan was scheduled for July and August, allowing comment on boundaries, building heights and forms. The inclusion of surrounding residential areas in the structure plan boundary was flagged two years ago in the Department of Planning and Community Development’s ‘Structure Planning for Activity Centres Practice Note 58’. Council’s development manager said the inclusion of neighbouring residential areas was seen as “an opportunity to provide clear guidance on the preferred redevelopment … for these areas …” “There is the potential in the structure planning process to propose objectives for these areas which may include minimal change to the existing character. “The FAA Height and Built Form Study (commenced) in March 2012 provides an opportunity for council input on preferred heights, setbacks and urban design responses for all areas within the structure plan boundary,” the development manager said. The Preliminary Draft Structure Plan of 23 December, 2011,

recommends a height limit of two to three storeys for established residential areas to the east and south of the activity centre core, with opportunities for three to four-storey redevelopment identified along key roads in these areas. A height limit of four storeys is currently allowable for much of the areas to the north of the business centre.

Frankston’s commercial footprint could be expanded under the central acrtivities district structural plan review.

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BUSY bites

One in five are casuals ONE in five, or 19 per cent, of Australian workers were casual employees in November 2011, said the Australian Bureau of Statistics. This represents just under 2.2 million people. The majority (62 per cent) of employed people were employees with paid leave entitlements, while a further nine per cent were either independent contractors and a similar proportion were other business operators. Females were more likely than males not to have paid leave entitlements (23 per cent compared with 16 per cent). More than half (64 per cent) of all employees in the accommodation and food services industry did not have paid leave entitlements. Other industries where there was a high proportion of employees without paid leave entitlements included agriculture, forestry and fishing (48 per cent); retail trade (40 per cent); arts and recreation services (39 per cent). Sales workers (48 per cent), followed by labourers (46 per cent) had the highest proportion of employees without paid leave entitlements. Managers (6 per cent) and Professionals (10 per cent) were least likely to miss out on paid leave entitlements.

Bankruptcies higher in south-east MELBOURNE’S south-east has most bankruptcies in Victoria, according to figures showing regions suffering the greatest financial stress. Bankruptcies topped 180 in postcodes covering Cranbourne and Frankston over the 12 months to June 30, 2011. The 3977 postcode – Cranbourne, Cranbourne West and Cranbourne South – had 98 bankruptcies while the 3119 postcode, covering Frankston, had 87. Matthew Deacon, of id Consulting, said Cranbourne’s bankruptcies corresponded with strong population growth and a high rate of new mortgages. He said mortgage stress was associated with high-growth areas in part because mortgagors were more likely to default early in the life of their loan. He said the area covered by 3977 had grown from about 43,000 people in 2006 to about 75,000 today. On the other hand, Mr Deacon said the number of bankruptcies in the Frankston area was surprising, as it was not an area of high population growth. ‘‘You could say that 3977 (the region including Cranbourne) has exploded, while Frankston has done almost nothing,’’ he said. The median number of bankruptcies for postcodes statewide was eight. Victoria had 4518 bankruptcies, a 21 per cent drop on the previous year’s 5716, less than in Queensland and New South Wales.

CONFIDENCE down on uncertainty

Business conditions improved modestly last quarter as sales picked up, but firms were less confident on the outlook and reluctant to hire, according to the National Australia Bank’s (NAB) quarterly survey. The survey of more than 900 firms showed its measure of business conditions edged up a point to

three in the first quarter, a couple of points above the long-run average, reports The Age, Melbourne. However, its measure of business confidence dipped two points to -1 with firms blaming uncertainty about the outlook for the global economy. The gap in business confidence widened further between Western Australia and the rest of the country. Sentiment among executives and decision-makers fell to negative-6 in Victoria in the first quarter from negative-4 in the fourth quarter. Over the same period, for Western Australia, it shot up to 11 from a flat reading in the final quarter of 2011. “The divide between the stronger mining and serviced-based sectors and the weaker consumer and trade dependant sectors remained a marked feature of the economy in early 2012,” said NAB chief economist Alan Oster. Business confidence in Queensland also plummeted to negative-1 in the first quarter Alan Oster from 12 in the final quarter of

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2011, amid falling home prices and the hard-hit tourist industry. Australia’s domestic economy has struggled in recent months, forcing the Reserve Bank to concede that ‘‘output growth was somewhat below trend over the year’’. Broadly the economy has showed little sign of rapid growth outside of mining, the NAB report showed. Forward looking indicators suggested soft demand in the near-term, NAB said. ‘‘Despite the recent improvement in conditions, which largely reflected strength in trading conditions rather than employment, the survey still suggests of an economy that is, fundamentally, going sideways,’’ said Mr Oster.

$15.2 m. for city projects GREATER Dandenong Council will tender to borrow $15.2 million to partly financed major projects in the city’s 2011-12 budget. The loan will help fiancee the new municipal building project ($9m), Noble Park Aquatic Centre ($5m) and the Springvale civic precinct project ($1.2m) The principal and interest loan will be for a maximum of 25 years Council’s total loan borrowings are projected to be $35.920m at the end of the current financial year.

tax grab fear

Market marketing guarantee that it will “never abolish work-related deductions in order to increase the tax burden on working Australians”. The government has said that it is “not government policy” to accept the Henry Report’s recommendation. NTAA spokesperson Andrew Gardiner said that the Assistant Treasurer’s office, when pressed on the matter, referred back to an earlier media release, which stated “no taxpayers will be disadvantaged by the measure as taxpayers with expenses above the standard deduction will be able to continue to claim those expenses when lodging their tax return under the existing rules”. “But this gives no commitment that they won’t change the rules”, says Mr. Gardiner. “All we need from the government is the same commitment that was offered by the Coalition. “That is, hard-working Australians must be permanently entitled to claim their work-related expenses and receive their annual tax refunds. “The NTAA is now asking government to say that it will never remove the right to claim work related expenses.”

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AUSTRALIANS are in danger of losing their right to claim work-related expenses, and may even lose their tax refunds, if the Gillard Labor Government wins the next election and moves to adopt a key recommendation of the Henry Report. It would amount to one of the biggest tax grabs from working Australians in recent history, according to the National Tax Accountants’ Association (NTAA). Each year Australians claim around $14 billion in work related expenses, resulting in an estimated $5 billion in tax savings. The government has already accepted the Henry Report’s “standard deductions” and has not yet completely ruled out a recommendation to limit working Australians’ claiming work related expenses. The NTAA believes that the government has left the door open to claw back billions of dollars from Australian workers “by eliminating many legitimate deductions”. The NTAA has written to both the Australian Government and the Coalition asking both to spell out their position on taxpayers’ rights to claim workrelated expenses. Only the Coalition has replied with an iron-clad

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NETWORKING

1973

1. Dandenong Jobs and Skills Expo, organised by the Australian Governmentâ&#x20AC;&#x2122;s Human Services Department, was held at Dandenong Market on Thursday 12 April. From left Sharlene, Jennifer and Erin, of Job Support Dandenong. 2. Mornington Chamber of Commerce and Industry met at Mornington Yacht Club on Tuesday 27 March. From left Melanie Sayers, marketing and promotions manager of the chamber, guest speaker Jacki Mitchell, of Brandstorm Marketing, and Karen Pedley, of Splash of Red Hair Design. 3. Frankston Business Chamber met on Tuesday 17 April at City Life Mission, Frankston. From left Peter Sowinski, of Geoff Shaw and Partners, Leonie Harcourt, of hms Print Management, and Dean Van Campfort, of Compliance Services, Australia, 4. Frankston-based the sports injury clinic made a donation to Frankston City Life Mission when the mission hosted a business chamber networking night. From left Pastor Mark Whitby and Ron Crosling, of the mission, and the clinicâ&#x20AC;&#x2122;s director of personal training, James Miller.

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8 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | May 2012

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5. Annette Went and Gerry Acquaro, of Café Onde, Mornington, hosted Mt Eliza Networking Group on Wednesday 11 April. 6. Peninsula Networking Group met at Mornington’s Tanti Hotel on Tuesday 3 April. From left Annie Flynn, of Key 2 Success Website development, Keith Lawson, of Southern Timber Floors, and Su Pilkington, of So Much Potential.

7. Monash University Business and Economics faculty (Peninsula campus) had clinical psychologist Dr Elizabeth Celi as guest speaker at its latest Business Associates Seminar breakfast on 1 May. Panelists Robyn Anderson and James Thyer discussed behaviour in the workplace. Pictured are guests Stephen Griffin, of FSG Design and Print, and Sara Schwarz, recently appointed business development officer with Mornington Peninsula Shire Council. 8. Monash breakfast guest speakers and panellists (from left) Robyn Anderson, of HR Navigation Australia, James Thyer, of Monash University, and Dr Elizabeth Celi.

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May 2012 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 9

Seven technologies that help small business owners get away for a holiday We all know how hard it is running a small business and many business owners struggle to get away for a holiday. For those of us who need or want to still have some control when they are away, here are seven technologies that can really make a big difference and enable business owners to get away more often. 1. Skype: I tried Skype a few years ago, and the call quality was pretty ordinary, so I only used it for long distance calls. The quality has improved dramatically, so it is a really good way to control the costs of phone calls when you are overseas. 2. Portable Wireless Router with a SIM card: To use Skype, you will need internet access, which can cost a fortune. Both mobile phone calls and internet access are very expensive overseas. On a recent trip, one of our friends racked up over $3000 of internet charges, just by downloading emails over a five–day period! The solution to this is to get a local SIM card with included internet. Put the SIM card into a portable wireless router and your phones and laptops will be connected wherever you are. Mine fits in my pocket so I can still check emails, even when out and about. 3. Yammer: Yammer is a great free tool, a bit like Facebook for businesses. People can post updates and questions. It is designed to increase communication between different teams and groups and we have used it to increase communication with those employees who are offsite more often than not. 4. Video Cameras: If you need to see what is going on in the office or factory when you are not there, video camera technology costs have decreased significantly, with single camera systems costing less than $400 installed, fully viewable from remote locations and even with 2 way sound. You can even view the camera from your iPhone or Smartphone. 5. Remote Desktop: Need access to your spread– sheets, word documents and other files? No problems with a range of remote access solutions, including a Terminal Server and Remote Desktop. Many of our customers connect into their network whether they are at home or across the other side of the world.

What’s wrong with this picture? My glass of red is empty! Mobile router for 3G connection and headphones for Skype, meant that whenever we had mobile phone coverage, we could check emails, talk to the team or customers and generally stay connected with the business.

6. Digital Dashboards: When you are away on a holiday you want to devote the shortest amount of time possible to running your business. We use a digital dashboard that displays the key metrics for the company, so that when I am away I can find out exactly how the company is going in just 30 seconds. 7. Acer Ultrabook: When you are overseas, you don’t want to carry around a big laptop, so we use Acer Ultrabooks. They are very light and have good battery life. Perfect for life on the road. With Solid State Hard drives, they are very quick to boot up, which is great when you are trying to sendg a few quick emails at the airport or on the go. So hopefully there is something here to help you be a little more productive when you are on the road. Or, if you haven’t had a holiday in 10 years, some of these tips can help you to take a week or two off. Go on – you deserve it!

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Erosion safeguards FRANKSTON Council were to address risks of land slippages on Olivers Hill at its April 24 meeting following a meeting with residents affected by a proposed Erosion Management Overlay (EMO). In the meantime council will release a report by A. S. Miner Geotechnical confirming that much of the land west of Nepean Highway has a high to very high susceptibility for landslide. This includes the flatter land below the landslide scarp, where deep drainage has been installed. The investigation of the Olivers Hill area at Frankston South by the geotechnical consultants followed recommendations made by an independent planning Panel. The investigation covered the area between the sea and Nepean Highway, where several landslides have occurred. Its purpose was to more accurately

define the area of land to be included in the Erosion Management Overlay (EMO) to restrict housing development on the hill overlooking Frankston and Port Phillip Bay. The findings will guide council in finalising a Planning Scheme Amendment (C46 Part 2) that will require state government approval. In mid 2009 the council exhibited planning controls to address the landslide hazard. The controls were the subject of an independent Panel hearing in early 2010. After considering the Panel’s recommendations, council adopted part of the amendment (as Am C46 Part 1), introducing an EMO along lower Sweetwater Creek and facilitating restructuring of lots in Clyde Court and Whitecliffe Av. Council said some findings of A S Miner Geotechnical’s investigation did not align

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with the expectations of the Panel, including evidence that land movement is linked to periods of higher rainfall and groundwater levels. Increased movement has been recorded since the Panel hearing, following above average rains in 2011. Council said the Panel seems to have been persuaded that deep drainage works had stabilised the area and reduced movement to a minimum, however the data presented to the Panel covered an extended period of below average rainfall. The investigation concluded that the EMO could be removed from land adjoining parts of Yamala Drive, Gulls Way and Nepean Highway because that land was outside the area assessed as being susceptible to landslide. • Embarrassing for VicRoads when a $1 million retaining wall collapsed on to Nepean Highway at Olivers Hill on Thursday, 19 April. The wall of rocks contained within mesh, designed to prevent land slippage, was pushed out by backfill.

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Established 1965

May 2012 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 11

Selling that idyllic lifestyle of fishing and boating is a reel turn for series creator MORE used to being behind the camera, Phil Harris has to make a few adjustments when confronted by the black hole of a zoom lens.  More used to telling people to relax than taking his own advice, Harris manages a grin and politely asks if enough shots have been taken.   A cinematographer who edits his own footage, writes scripts, lines up sponsors and sells ads, Harris is the product of the digital television age.   From a nondescript factory in Mornington, Harris’s Lennox Productions creates a fishing and lifestyle television series that currently screens on two TV channels (one pay and one free-to-air) in four states.  River to Reef is about to switch a channel, which, as Harris explains, is nothing surprising in the digital age.   An increasing number of TV programs are aired on bought time, with producers paying the channels for airtime and then seeking to cover costs through sponsors and advertisers.   It is a finance model pioneered by free community newspapers and, indeed, by this magazine, BusinessTimes. Marketing company STW Group has signaled its entry into what is now being called “branded entertainment” by backing Hatch Entertainment, which already claims to be considering five “branded” productions. The idea is certainly nothing new to Harris who has been producing River to Reef for the past six years. The early shows were made in conjunction with radio host, the late Glenn Knight, and were a visual version of a fishing and boating program he ran for 18 years. The rough nuts and bolts for River to Reef were basically worked out over a long lunch when Harris was in between jobs. “I thought ‘what do I do now – corporate videos’, but then I

by Keith Platt

thought about doing a series, the same gig every week.” A pilot and two episodes were put forward to Channel 31 which agreed to air the show, beginning the start of a weekly show which, in the end, set a pace that was impossible to keep up. “We bought air time, set up an office at Patterson Lakes – things were bubbling along quite nicely.” The crew would go to an area, visit the local pub to find out where the fish were biting and who was catching them. “We used the local fishos to tell the story. It was like making a silk purse out of a sow’s ear, but we made 97 episodes.” Harris and Knight split amicably two years ago and the show was revamped and centred on taking a (sponsored) boat with a (sponsored) car and trailer. “We’d travel to a location to go fishing and show the lifestyle available there.” River to Reef gained a following and a reputation and big name companies in boating and fishing began approaching Harris. With the “Barefoot Fisherman” David Hodge as host, the show “did really well”, enabling Harris to increase advertising fees. The global financial crisis and the loss of three major sponsors in “one fell swoop” sent the show reeling, this time financially, nothing to do with pulling in a fish. “TV is a tough field when you’re producing something,” Harris says in reflection.

12 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | May 2012

COVER STORY

PHOTO: KEITH PLATT

PHIL Harris makes a fishing and lifestyle television series from his company’s headquarters in the factory area of Mornington. Right: On location with presenters Robbie Nethercote (top) and Theo Rozakis.

However, Honda Marine had been waiting in the wings, along with Surtees Boats, Club Marine Insurance, Dunbier Trailers and Icom, a Japanese communications company. “We moved to Foxtel about two and a half years ago [after a falling out with Channel 31] but are now also back on Channel 31.” Harris says. “And we’re about to move to TV for Me, a Channel Seven digital channel. “It’s branded content so we have to buy space [air time]. I’ve pitched the program to the networks many times but they don’t know what they want.” The show these days has two presenters, Theo Rozakis, co-director MY Marine, Dromana, and Robby Nethercote: “It’s a bit like Getaway meets Rex Hunt.” While he still makes some corporate videos, Harris says River to Reef takes up 90 per cent of his time. He shoots and edits the footage and negotiates with sponsors and advertisers. Although the show is widely recognised, Harris still has trouble gaining support from tourism groups of local councils when arranging a shoot in their area. He says “they just don’t seem to get it” when contacted and told he’ll be arriving to shoot enough footage for half a dozen episodes of a program that will freely promote their area and a tourist destination.

A debacle in Tasmania and, more recently, lack of co-operation on the Mornington Peninsula has seen him again revamp the format, replacing much of the planned “location branding” with paid advertisements. Dealing with people is not difficult for Harris, who left Monash High School at 15 to later become a qualified motorbike mechanic “who’d always had a passion for filmmaking”. He worked and saved hard to buy a super 8 camera and always wanted rolls of film for Christmas or birthday presents. Libraries became a happy hunting ground for books on filmmaking which he consumed at a rapid rate as well as undertaking a course on video production run by Open Channel. Being invited on to the set of Ground Zero, a film starring Colin Friels, “was the verification of everything I’d ever read”. Harris bought some video gear and started making “freebies” for music groups which eventually led to paid jobs, including The Seekers’ Judith Durham, Glenn Shorrock, Russell Morris, John Denver and The Village People. Corporate videos, product promotions and television commercials followed. He has been a news and documentary cameraman and was instrumental in setting up Channel 31, which used Channel Seven’s broadcasting tower with links provided by the ABC. These days River to Reef runs to a production formula that sees about 20 hours of taped vision cut down to 10 episodes of 26 minutes each. After 184 episodes Harris knows how to call the shots but remains ever alert to staying ahead in an industry that is as fluid as the water’s that are the permanent prop for his television series.

May 2012 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 13

THE ARTS

AN iPhone and iPad app costing less than $2 is allowing people with hearing loss to enjoy live theatre. The GoTheatrical application is the latest development from Adelaide-based company The Captioning Studio. It enables hearing impaired theatre lovers to access live captions of performances on smartphones and tablets. Frankston Arts Centre, which last Friday night trialled the new application at a performance of Namatjira, is the second venue in the country to introduce captioning technology for some of its theatre season performances. FAC staff had tested the new technology several weeks earlier during a performance of Let the Sunshine. Friday’s full blown trialling of the app during a regular performance was “a fantastic success” said Frankston arts access officer Tim Dakin. “Feedback from the audience, including hearing impaired people using the Show how captioning application for the first, was

The Captioning Studio boss Alex French (right) demonstrates the GoTheatrical application to audience members at ‘Namatjira’ on 27 April. The app received the thumbs up from users.

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Show and tell role for new theatre app very positive. There were no complaints from audience members sitting near those using the app. One young woman who used the application for the first time told one of the lead actors after that she had never before felt so connected to a character or a performance. She said she would be a regular at captioned performances at Frankston.” Dakin added that Olympian and disability advocate Dean Barton-Smith, a guest on Friday, “has been raving about the night on his Facebook page”. The night confirmed FAC as a leader in arts accessibility and also confirmed the faith shown by Frankston law firm White Cleland in directing its sponsorship of the arts centre to arts access initiatives.

The Captioning Studio’s managing director Alex French said he was delighted with the overall response to his company’s new application. Also complimentary were arts access officers from two municipalities, officials from Better Hearing Australia and the Australian Communication Exchange, and David Geoffrey, marketing manager of Melbourne International Arts Festival. “Our staff and colleagues who used the app believe it will increase accessibility, inclusion and the opportunity for more to enjoy a live theatre experience – and sit where they want in the theatre,” said FAC business development and marketing manager Gillian Thompson. The next captioned performance is Stop Rewind on May 23.

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May 2012 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 15

marketing

Keys to surviving those surveys By Keith Platt

IT seems in the media that surveys are the new gospel. Each week news releases are emailed across the country to media outlets announcing the latest findings or revelations of “research” or “investigations”. Too often the source of the source of these findings goes unquestioned, let alone unchallenged by peer review. A small-sample poll made over the phone by a call centre answered by who knows who, is often given the credibility of scientific research. The more startling the outcome the bigger the headlines and exposure. Of course, that is exactly what is being sought by the public relations company hired to spread the word to the media. Chocolate, red wine, asprin, owning a dog, avocado oil, visiting health resorts, toothpastes, washing up liquids and staying tuned are all good for you. Of course, keeping up with all this stuff is like running on a treadmill – it’s exhausting. For the marketers, a good outcome is seen when the findings of a survey become fodder for talkback radio or a television current affairs program. Bingo, publicity and recognition that cannot be bought. But it has been bought. First with the cost of the initial survey/research/poll and then with the costs of hiring public relations or marketing people to spruik the findings. Social scientist David Chalke (profiled in the October 2011 BusinessTimes: ‘Looking back to see the way ahead’) knows a bit about surveys and whether the results reflect reality and society. Chalke assesses the nation’s trends based on the answers to a prodigious questionnaire filled out by 2000 randomly chosen Australian residents. The annual AustraliaSCAN survey has been running since 1992. “In very simple terms, you can divide sample survey research into two types according to the purpose of the study; what I call clean and promotional,” Chalke says about market research. “The clean type is an attempt to measure objectively and or track some aspect of

Social scientist David Chalke says the prime intention of promotional research is not the search for truth but to gain attention.

life while minimising the inherent errors in sample surveys. “This type of survey will expend considerable effort and money to ensure that the sample of people surveyed is truly representative of the population as a whole and is free from unintended bias. “Without this, no matter how large the sample, it will always be inaccurate. The analogy is digital photography. If the initial shot is out of focus it doesn’t matter how many megapixels you have, it will always be out of focus. “It is also important to ensure that the sample size is sufficiently large to give the

16 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | May 2012

results statistical significance. Questions also have to be asked in such a way as to avoid prompting a given answer. “The findings when presented will include details of how the research was conducted, what questions were asked, what was the sample size and, usually, the level of statistical significance of the results. Think of Newspoll, or studies from the Australian Bureau of Statistics. “By contrast, promotional research is just that. Its prime intention is not the search for truth, but to gain attention, make a point, engage an audience or entertain; not proper research at all.”

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Chalke offers clues to spotting “promotional research”: l The research produces some headlineworthy findings directly related to the sponsor’s business, such as ‘New study shows that most Aussies are xxxxxxx’, sponsored by a maker of the cure for xxxxxxx. l The respondents to the survey were self-selected. That is, they read a certain magazine or paper, watch a certain TV show or listen to a certain radio station. This is illustrated by public voting for the Logies or Dancing With The Stars. This is engaging but meaningless in research terms. l The respondents are ‘professional respondents’ who have signed up and are paid to answer questions. Most online surveys are conducted using panels of pre-signed respondents. The potential for uncontrolled sample bias is huge. l The sample size is so small as to be statistically meaningless. A simple rule of thumb says anything less than 100 people is not a valid survey; 500 respondents will yield results accurate to plus or minus five per cent; 1000 or more respondents is robust and worth taking notice of. Chalke believes “our latest squeaky clean research shows that we have lost respect for The System [his capitals]. “In no small part this is fuelled by the nonsense that is Canberra. We’ve stopped listening to our so-called leaders and resolved to look out for ourselves, make our own choices and decisions. “We are comfortable living with internal contradictions and paradoxes and, aided by the new media, link up with like minded folk. “As a consequence, we are fragmenting at such a pace that we describe it as the Death of Trends. There are unlikely to be major new mass movements like environmentalism ever again. “Diversity and micro trends, often contradictory, will be the norm. “Sales of massively expensive racing bicycles are booming as some people become superfit, while at the same time obesity rates rise as we sit on our a*se watching MasterChef wishing we were fitter and healthier. “So, micro trends means tight target marketing; loving your existing customers to death; being accessible 24/7 and having great apps for the iPhone, Android and Windows.”

Convert personal property to business capital position has changed under THE Personal Property the Act. Securities Act 2009 applies It will mean that suppliers an Australia wide scheme or other beneficiaries of that will increase the range of retention of title clauses personal property available will need to include an to small business (and others) The new Act allows for the appropriate seizure and sale that can be used to raise registration (previously clause to allow seizure of capital. unavailable) of security goods and sale upon default, Personal property under interests in personal and put into place processes the Act includes both tangible property. The concept is similar to a mortgage but to register any security and intangible property relates to personal property interests in goods before (other than land). instead of land. they are sold. The new Act allows for – Richard Goldsmith, For example, Carroll the registration (previously Carroll Smith Lawyers Goldsmith, Mornington, unavailable) of security Mornington has assisted a client who interests in personal property. previously supplied automotive spare The concept is similar to a mortgage but parts to retailers on 30 days credit. Before relates to personal property instead of land. the new Act they relied on a common For the purposes of the Act, personal “retention of title” clause in their terms of property encompasses a range of classes of trade as security. The problem with that is property, including: if there is non-payment, the parts may have • Goods and inventory been on sold or become attached to other • Motor vehicles, aircraft and watercraft property (that is, a truck) and so our client • Financial property (including cash, bank could not recover. accounts, financial instruments) The Act allows registration of a Security • Agricultural property (including crops and Interest over the customer specific to the livestock) parts sold and so now our client can, upon • Intangible property (including intellectual non-payment, enforce that Security Interest property, licences) and recover the goods themselves or the • Certain personal and/or contractual proceeds of sale. rights; and Also, the register allows suppliers to • Proceeds of personal property. register a single security over an individual Why is it important for businesses? or company relating to all debts. Security The central piece of the legislation is Interests that are registered are prioritised the creation of an Australian Personal according to time (earlier registered interest Property Securities Register that will has priority over later interest) contain a record of registered securities. Impact on Business Creditors will register their interest in the Businesses need to review their operations personal property by submitting details of and make arrangements to ensure their the security, the debtor and creditor on the interests are protected now that the PPSA is register. operating. The new rules that are most likely to Businesses must have their terms of trade affect small and medium enterprises (SMEs) updated to allow them to make use of the are those relating to Retention of Title PPSA. There are complex rules about how clauses in contracts. to document and register the interest, and if Retention of Title clauses cover the registration is not completed in accordance situation where a purchaser has possession with the Act, the interest is void. of property, however does not acquire title Business operators also should be aware from the vendor until the full purchase price that others will register Security Interests is paid. against your business. It will be important These types of clauses were formerly that any old or lapsed Security Interests recognised at law and did not require taken out against you are removed. registration to be effective. However, this May 2012 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 17

RETAIL

Little India’s battle to survive By Keith Platt

A HUGE event organised on the smell of incense, co-operation from the City of Greater Dandenong and a grant from the Bank of Melbourne, Dandenong’s inaugural Bollywood Festival attracted crowds of thousands to the officially recognised Little India precinct. But while dancers and crowds swayed to the music, an underlying fear that it could all soon end was never far from the mind of one of the organisers, Kathryne Turton-Lane. Foster St was bedecked in pink and orange and the council “could not have been more helpful”, according to Turton-Lane. Everyone was happy. However, there is no getting away from the fact that Little India and all it represents is under threat from the $290 million Revitalising Central Dandenong project originally managed by VicUrban, now replaced by Places Victoria. Foster St and its old buildings are seen as ripe for redevelopment. A booklet published by VicUrban and carrying the logos of the state government and Greater Dandenong Council uses many images of the area that Ms Turton-Lane sees as being under threat. The festival was “about showcasing our amazing cultural precinct, we want the street to be left alone so it can continue to thrive and showcase Indian culture for generations to come”. VicUrban’s booklet: “The streets in central Dandenong’s shopping district need attractive shop fronts to create engaging and lively places for people to shop and visit. … Building on the multicultural strengths of the city, and its current affordability, central Dandenong has the potential to provide a unique, sought-after shopping experience that attracts people from all over Melbourne. Foster St … is a unique attraction that, if strengthened and promoted, could attract more visitors.” Ms Turton-Lane believes that situation exists already and should not be tampered with. However, since properties in the street were bought by Places

Victoria traders “lives have been fairly unpleasant”. “I don’t think they see the bigger picture,” Ms Turton-Lane says. Little India is “culturally intact” and she doubts that any major redevelopments would be made in such places as Lygon St, Carlton or Ackland St, St Kilda. “They’re not five star buildings [in Little India], they’re eclectic. “ Shopping centres in contrast were “homogenised, with all the same chain stores and nothing unique”. In Dandenong’s Little India each shop was different, traders wares reflected their varied backgrounds and beliefs. “I know one lady who came here three times a week because it felt like home. She could hear the sounds and find the tastes of her country. She didn’t feel lost.” Ms Turton-Lane believes that will end once the street has been redeveloped. “It may look prettier, but it won’t work as well. “Rents will go up and traders won’t come back. It will drive them out to Moe or somewhere.” Some traders have had some legal victories with compensation being paid for disruption to business, but other cases are pending and a Save Little India campaign is being run on Facebook. Shops have five-year leases, but the fine print includes a demolition clause. Ms Turton-Lane says trade has been badly affected by problems with parking and new traffic rules. “Not everyone wants to walk or come by train. “I’m lucky having customers [at Heidi Rose Clothing] willing make the effort. We’re not making up stories, traders are saying they’re bleeding. “This is not about compensation, we want to stay here. It’s about being allowed to trade without feeling harassed. “Places Victoria should say ‘Guess what, we got it wrong’ and leave the street alone.”

18 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | May 2012

PLANNING

The cost of heritage Many applications for planning permits require submission of a Cultural Heritage Assessment or confirmation that a Cultural Heritage Management Plan has been approved in relation to the land. This requirement was introduced in May, 2007, when the Aboriginal Heritage Act 2006 came into operation and integrated the protection of Aboriginal heritage into the planning and development approval process. Under the Act, a Cultural Heritage Management Plan (CHMP) must be prepared for developments proposing a high impact activity in a culturally sensitive heritage area that has not been subject to significant ground disturbance, or where an Environmental Effects Statement is required, or where the Minister directs a plan is required. Without an approved CHMP in place, the Act prevents the granting of a planning permit. What constitutes a “culturally sensitive heritage area” is set out in the Aboriginal Heritage Regulations 2007. The definition is also mapped by the State Government’s Aboriginal Affairs Victoria. Large areas of the Mornington Peninsula fall within the defined area that includes waterways, land within 200m of a waterway, dunes, coastal land, sand sheets (specifically the Cranbourne Sands), and the Koo Wee Rup Plain. In addition to falling within a cultural heritage sensitive area, proposed developments must also fall within the definition of a “high impact activity” and involve “significant ground disturbance” to require the preparation of a CHMP. These terms are defined by the regulations and include three or more dwellings, roads longer than 100 m, subdivision, a helipad, or construction of a building associated with a change of use. These activities proposed in culturally sensitive areas would only be exempt from requiring a CHMP if there had already been significant ground disturbance on the site, the subject of the proposed development, or the activity did not involve significant ground disturbance. The definition of significant ground disturbance has a low threshold. It means disturbance of the topsoil or surface rock layer of the ground or a waterway by machinery in the course of grading, excavating, digging, dredging or deep ripping.

by Megan Schutz* Planning lawyer

Inevitably, nearly all development involves this activity. If, however, a development qualifies as an “exempt activity” or it can be proven “significant ground disturbance” has already occurred on the development site, then the CHMP requirement can be avoided. However, the council may still require preparation of a cultural heritage assessment to demonstrate that “significant ground disturbance” has occurred on site or the development is clearly exempt. There are VCAT decisions analysing what is meant by the terms. Exempt development includes one or two dwellings, works ancillary to an existing building, minor works, demolition, consolidation of land, development of the seabed and emergencies. If an approved CHMP is required for a development to proceed, then the Act requires that the owner or developer (as sponsor of the plan) engage a Cultural Heritage Advisor to carry out the process. This is a person who is appropriately qualified in archaeology or the like and is recognised as having extensive experience managing Aboriginal cultural heritage. The cost of preparing a CHMP is significant and usually runs into tens and sometimes hundreds of thousands of dollars depending upon the size of the development site, the complexity of the assessment required, and the nature of the Aboriginal cultural heritage found on the site. In some instances, it can raise serious doubts about a development’s viability. Added to the cost of engaging a cultural heritage advisor, is paying for the attendance of representatives from Aboriginal stakeholder groups when undertaking investigations on the site. There is no Registered Aboriginal Party (RAP) for the Mornington Peninsula but a well accepted and expected practice that the three recognised Aboriginal stakeholder groups relevant to the area – the Wurundjeri, Bunurong and Boonwurrung – will be involved in the process. At a cost of $800 for each representative a day, this can significantly add to the CHMP’s cost where detailed field investigations are required.

Often it is difficult for the layperson to understand the significance of findings at a site. Artefacts can take the form of what appear to be small stones and shells which may be remains of tool carving from Aboriginal occupation of the land tens of thousands of years ago. This requires detailed analysis and dating of samples collected in the field by the heritage advisor and related experts. For the developer, findings of Aboriginal cultural heritage significance are often met with dread. To get their CHMP approved, a development management approach must be proposed which avoids or minimises harm to the Aboriginal cultural heritage significance. A management strategy may, for example, take the form of excluding development from a particular area or undertaking salvage excavations. On the Mornington Peninsula, the decision maker for CHMPs is the Secretary of the Department or his delegate as there is no RAP. Where a site is complex, it is often warranted to meet with AAV officers before submitting the CHMP in order to agree on the methodology for a management strategy. As long as a reasonable effort is made to avoid and minimise harm to Aboriginal cultural heritage (and Aboriginal stakeholders have been involved in the process) then a CHMP is likely to be approved. It is difficult for developers to accept significant up front expenses of the heritage process before securing a planning permit. While the secretary’s decision on a CHMP is appealable, there can be uncertainty about the viability of a development until both the planning application and CHMP are approved. Once a CHMP is approved, the development must be carried out in accordance with its requirements. Any material change to the approved development resulting, for example, from refinements during the detailed development design process, may require going back to the drawing board. The prudent developer should carefully consider the management approach set out in a CHMP and ensure it has enough flexibility. Megan Schutz is director of Schutz Consulting, providing planning and legal advice on development projects. Call +61418888894; or email megan@schutzconsulting.com.au Megan was previously Principal Planning Lawyer in the State Government’s Department of Planning and Community Development.

May 2012 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 19

HEALTH

A bit of qi thinking way back when I was a zealous student of Chinese medicine, I had a long discussion in a bar with a surgeon friend on the topic of “qi”. OK, it was an argument. These days, most people have heard the word qi – come on, it’s worth 11 points in Words with Friends! Sometimes you see it spelled as “chi”. It’s pronounced chee. And it is the biggest unresolved bone of contention between Western medicine and Eastern. When everything is boiled down, students of both medical systems can translate the concepts of one into the other to some degree. After all, we’re all looking at the same human body. That is until it comes to qi. The Chinese word often gets translated as “vital energy”, but that’s not an entirely adequate translation because the Chinese invest “qi” with a range of meanings. In short, the Daoist tradition in which Chinese medicine has its roots maintains that the entire universe is made of qi, it’s just that some forms qi are diffuse – like, say, the air, or a thought – while others are aggregated – like, say, a rock, or a bone. Perhaps think of matter vibrating at different frequencies (to venture an explanation from physics). When it comes to humans, Chinese medicine holds that we are ultimately made of qi, but also that a type of refined qi flows through the body, just as blood circulates, nourishing the organs and tissues and providing pathways of communication. So in Chinese medicine we talk about a person’s qi being weak, or the flow becoming stagnant, and the health consequences of that. Through the concept of qi, we make connections between parts of the body and aspects of its health that Western medicine does not. It’s a way of grasping a “big picture” understanding of health and illness, while realising that the human body, like the universe at large, is extraordinarily complex and has its own innate intelligence. The basis of acupuncture is inserting needles at points that influence the flow of qi in the body. You can see why this concept could be a problem for a surgeon.

Michael Ellis*

Chinese Herbalist

‘Give 100 people the same drug, or the same diet, or the same idea, and they will respond 100 different ways.’ My friend had made many incisions in people’s bodies, he explained with a half smile, but never once encountered a channel containing qi. He couldn’t see the qi, nor any evidence of its presence, and could explain human physiology to his own satisfaction without it. I asked him whether he saw the human body as a machine, simply requiring any malfunctioning parts to be repaired, replaced or removed. He did. And therein lies Western medicine’s biggest blind-spot. Yes, the body has mechanisms – such as the way muscles act on bones – that may fool us into thinking in mechanical terms. We have therapies like chiropractic and physiotherapy that largely treat it that way, and have their successes. And the phys-ed types continue to trot out the First Law of Thermodynamics as the solution to weight control.

20 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | May 2012

That’s the principle that says as long as energy output equals food input, you will maintain a healthy weight. It’s the one upon which all Western diet and lifestyle advice has been based for 30 years – at the same time as obesity, type 2 diabetes, hypertension and every other metabolic disorder you care to name has been exploding. It’s clearly simplistic. But we should have woken up by now to the fact that the human body is not a machine, but a vastly sophisticated, selfcontained ecosystem. No two of these things behave exactly the same! Give 100 people the same drug, or the same diet, or the same idea, and they will respond 100 different ways. A cascade of intricate chemical (and other) reactions will follow, depending on what else is happening in the ecosystem. It’s why ultimately every Western conceived medical study or drug trial ends up describing its effects in percentages. Or studies even find the opposite of what they expect. A recent study of 5000 breast cancer patients expected to confirm that eating soy increased your cancer risk – since soy contains “dietary estrogen”, exposure to which is thought to be a trigger in some cancers. Did eating soy increase estrogen levels and therefore cancer incidence, as predicted? No actually, it reduced it – dramatically – proving yet again that the simple a+b=c view of how the human body works does not cut it (and nor does the prevailing theory on the causes of breast cancer, but that’s another column). Chinese medicine conceived of the human being as a self-contained mini universe. You change one single input – like the proverbial butterfly flapping its wings in the rainforest – and myriad effects ripple through the system. The more closely you look at those details, the bigger the magnifying glass is required, and the more indecipherable the entire system becomes. This is the path Western medicine has taken with its reductionist, mechanistic viewpoint. And why it can’t comprehend the concept of qi. * Michael Ellis is a registered Chinese herbalist in Mt Eliza. Visit www.mtelizaherbal.com.

MARKETS

New world of gas For years Woodside has been an unavoidable inclusion in any quality portfolio, but as with BHP-Billiton its world is changing. As its huge Pluto project starts up, large competitors on the North West Shelf gas field are also vying to supply energy starved Asia with gas. The immediate outlook looks good. Following the Fukushima disaster all of Japan’s 54 nuclear reactors were gradually closed, meaning that the world’s third largest electricity generator (which relied on nuclear for 30 per cent of its power) now has to fall back on fossil fuels and renewables. It is a perilous situation for one of the great manufacturing nations, but comforting for Woodside shareholders as it has 15-year contracts with two large Japanese customers, Kensai and Tokyo Power. However, as with BHP-Billiton, Woodside’s supplies to an increasingly capricious world. Not only are its competitors on the NWS ramping up LNG capacity, but so are almost a dozen others in the Northern Territory, New Guinea and Queensland. Collectively the gas projects nearing completion or under construction in WA and Queensland will – on paper at least – far surpass the Qatar’s massive 77million tons p.a. LNG capacity. While our high $A and soaring construction costs will delay or kill many of these projects, at least 70 million tons is now locked in. But there is a further issue: in the period of planning for these projects, a series of technical break-throughs has transformed US energy supply. The combination of more powerful rigs, directional drilling and rock-fracturing technology means that the Devonian age shale beds oil that lie beneath swathes of the US mainland have became productive. In the past 10 years, but particularly in the past three to four, gas production from these beds has reached 23 per cent of US gas production with 50 per cent likely in another eight to 12 years. As mentioned in the April column, BHP bought into US shale leases just a year before an already falling gas price tumbled 40-50 per cent to below $2 as the mid west states experienced a balmy winter and a spring that came four to six weeks early. As a result, US gas inventories now stand 50 per cent higher than normal. So the collapsing gas price was not simply a case

Richard Campbell* Stock analyst Stock Analyst

Collectively the gas projects nearing completion or under construction in WA and Queensland will – on paper at least – far surpass the Qatar’s massive 77million tons p.a. LNG capacity. of a vast new source of gas, but the elephant in the room of global warming. The only comparable warm winters have all been in the last 20 years. Woodside is fortunate that Fukushima has caused a global re-think about nuclear power, but at the same time energy companies are realising that similar vast shale beds lie below the North Sea, Germany, the hinterland of Brazil, Argentina and the Gobi desert as the two large continents of the Devonian were both

warm and near the equator. This broader realisation creates a complex decision tree. Woodside’s Asian customers are paying high prices for near emergency gas supply, but clearly a US gas surplus is on the way. So far only one company has been granted a licence to export LNG, but with gas pipelines criss-crossing the country, cheapon-shore gas tempered by reduced winter demand makes a formidable mid-term threat. Taking a shorter view, investors might consider the ASX listed Oil Search. Its recent outstanding gas discoveries add to an already growing inventory which can be piped through existing infrastructure to its LNG plant under construction east of Port Moresby. Its mature oil fields are declining as are Woodside’s, but it has two dozen or more fresh targets in the highlands to replenish reserves. Woodside is reacting to these changed circumstances and is looking to sell down part of its interest in the more northerly and deep water Browse Basin, but potential buyers will of course be just as aware that the gas trapped in compressed Devonian shales can be forced to the surface. Maybe capricious is not the word. This gas will halve the CO2 of the coal it replaces, but add vastly more than the nuclear energy and renewables it removes from the market. *Richard Campbell is Executive Director of Peninsula Capital Management, Tel. 9642 0545.

Woodside Petroleum’s Karratha Gas Plant, WA.

May 2012 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 21

management

Creating loyalty is not just about prices Customer loyalty is a funny thing, particularly in this day and age. It is based on a traditional concept that loyal customers will give you most of their business, almost without regard to your competitors’ behaviour. Firstly, customer loyalty is very difficult to create if your business strategy is to compete principally on price. Simply being low cost does not create a long-term connection to customers. There are always competitors who can attract customers away from you based on price alone. Over the past decade or so, the retail market has been training retail customers to focus on price by offering price discounts in special sales events to the extent that a substantial slice of retail customers will only shop during sales events. They will save up a need for a product until it is “on sale”, or drive across town to someone who has their target product on sale today. If you are trying to compete on price, this becomes very difficult to manage and, even a price match policy will not build loyalty, as you will be constantly responding to your competitors’ pricing decisions. Secondly, loyalty is an emotion, which is often not based on logic or facts. Just think about loyalty in the sports context. Supporters of a football club will often commit themselves to the club, irrespective of how the club is performing or who is playing for the club. This sort of loyalty is usually created by personal examples from family or friends who are club supporters. This form of loyalty can be extremely passionate especially when it is continually reinforced throughout the football season. To translate this sort of emotion into a business context is difficult. It requires astute managers who can connect to their customers by building an emotional connection to each and every customer. It also requires everyone on your team to understand why this is important so that they can reinforce this strategy through their connections to the customers. Training every one of your people in the skills needed to connect to customers is really critical to the success of this strategy as they can easily break a customer

Hamish Petrie*

Business Consultant

Training every one of your people in the skills needed to connect to customers is really critical to the success of this strategy as they can easily break a customer relationship by providing a negative experience with poor service or bad personal behaviour.

relationship by providing a negative experience with poor service or bad personal behaviour. If you aspire to have a core of loyal customers then it is up to you and your team to take the first steps towards this. Obviously, you should ensure that each of your sales team has the natural personality to be able to connect well with customers. It then requires you to make it very clear to each sales person how important it is for them to treat each customer firstly, with dignity and respect, and then to look for opportunities to add something positive to the conversation. This takes skill and coaching from someone who

22 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | May 2012

can observe customer interactions. The clearest objective here is to meet the customers’ basic transactional needs and to then add something unexpected so that the customer has a reason to tell someone else about what happened today at your business. When this occurs, you have created an ambassador for your business who will want to come back again and again looking for a similar positive experience. Personalising the relationship with customers starts with your team identifying themselves to the customer. A nametag helps but it is better if your team are prepared to introduce themselves to customers whenever practical. Customers are often prepared to respond and identify themselves and even provide more personal details, which can help you to build a customer database for future correspondence and marketing information. This social style of customer interaction does take more time, so it is best done on those occasions when your business is

not too busy. It may mean that you need some form of flexibility in your sales team so that you have the capacity each day for your team to really focus on building customer relationships. To keep your team behaving this way, you will have to reinforce the positive outcomes with them and provide rewards when appropriate. These rewards can range from the immediate personal “pat on the back” through to financial rewards in exceptional cases or when collective customer goals have been achieved. In most businesses, there are many facets to your customer relationships, as you have technical and operational people

involved in dealing with customers. These people can often enrich the relationships by helping customers to solve their problems. This willingness to listen, to analyse and to solve customer problems is a great opportunity, so you should ensure that these people also understand your customer loyalty strategy elements. One of the hardest issues with customer loyalty is measuring it and monitoring how it is changing over time. There are many techniques, with varying degrees of difficulty that can be used to develop these measures. A creative debate within your team will help to identify your best

measures and a methodology to collect and analyse trends over time. Creating customer loyalty will take a lot of time and effort but there are many long-term benefits to be gained as both your customers and your team members will enjoy the quality of the relationship that comes with a loyal customer community. Action Planning Questions: 1. Is customer loyalty important to your business and, if so, have you incorporated it into your business strategies? 2. Does every one of your sales team understand your customer loyalty strategy and their personal role in it?

3. Have you trained your team in techniques for them to use to build personal relationships with customers? 4. Do you have a reward system to reinforce optimum behaviour and results for your team? 5. Do you have a measurement system to assess customer loyalty trends over time? © Hamish Petrie 2012

Hamish Petrie had a 37-year corporate career including 25 with Alcoa Inc. His last position was VP-People and Communications for the Global Alcoa corporation based in New York. He can be contacted at hamish@nitroworld.net or on 0404345103.

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