28 minute read
go to encourage staff back to the workplace? Beware memorandums of understanding – they can bite
BEWARE MEMORANDUMS OF UNDERSTANDING THEY CAN BITE
It is a common occurrence: you’ve had exploratory discussions with a potential supplier/investor etc., leading to an understanding of core issues that justifi es starting serious negotiations. You don’t want the understanding fi xed in stone just in case you need to renegotiate or the negotiations go nowhere.
Meanwhile, the supplier wants to rely on that understanding – either because there is no point in further negotiating without it or because it needs to spend money on the next stage and is only willing to do that if the understanding can be relied upon.
So, despite having diametrically opposed motives, you both sign a memorandum of understanding (also known as a ‘heads of terms’, and sometimes as a ‘term sheet’). It is written loosely to accommodate the contradictory motives. Typically, memorandums (or memoranda) focus on headline topics: who, what, where, when and how much? Stage two of negotiations cover the 1,001 points
of detail that are essential for a contract to actually function as intended (e.g., quality standards, ordering/delivery process, invoicing, problem resolution, etc.)
Problems arise when stage two never happens or goes nowhere, but one of the parties has begun to take (expensive) steps in expectation of a contract. Their fall-back position is to claim the memorandum was a binding interim agreement, not a non-binding record of negotiations. Where such cases end up in court, the judge will go back to the very basics of contract formation.
The starting point is that a contract is automatically formed when two parties who are (i) able to form a contract (e.g., not five year-olds) want to (ii) do something legal, with (iii) the intention of forming a legal relationship to do it (negotiating an imaginary deal doesn’t count) and (iv) have agreed on enough core terms to allow the contract to actually be carried out and (v) one of them has made an offer to deal which the other has accepted and (vi) some form of benefit has been exchanged or promised between them (otherwise one is simply making a gift to the other).
The mistake businesses make is to assume that merely by entitling a document a memorandum, they automatically sidestep the above contract formation test. That is incorrect. If the above requirements are met, then a contract is formed – which could be very bad news for one of the parties – if only because not all the important terms would have been covered in the memorandum.
The cases that come before the court are invariably those where one party says the memorandum is legally binding, but the other disagrees. In such cases the court has basically applied the old abductive (no pun intended) test: if it looks like a duck, walks like a duck and quacks like a duck then it probably is a duck. This means that the more the memorandum looks like a contract, the more likely it is that the court will agree with the party claiming that it is a binding contract.
To avoid this, make sure that your memoranda are not written as if they were contracts: consider not signing them; try not to use wording like ‘the parties have agreed…’ or ‘the parties shall…’. Make sure that the memorandum is headed ‘subject to contract’ and is liberally sprinkled with reminders that it is not intended to be legally binding. Of course, if you want the option to be able to claim that the memorandum is binding, then write it as if it were a contract.
James O’Connell, Partner Mayo Wynne Baxter, solicitors www.mayowynnebaxter.co.uk
INFLUENCERS FORUM
The world has changed over the past year in ways we could not have imagined and many of our working practices have changed with it.
Marketing has become a tricky landscape and new navigation tools are now required. This Influencers Forum will look at the subject of marketing, public relations and brand recognition in the new world.
People will feel differently and act differently. But what will that mean for brands and the way they market their products and services? What will actually change and what will stay the same? And how can brands make sure they thrive in a postpandemic world?
There’s no doubt that different industries will see different effects as we progress out of the covid era but there have been some fundamental changes that will affect all brands, no matter their size, audience or current offering. From online conferences and virtual networking to shopping for essentials and a new-found appreciation for efficiency – brands have quickly found new ways of doing things and consumers’ expectations have, unsurprisingly, risen at the same rate.
Consumer behaviour is constantly evolving, but there are certain behaviours that Covid appears to have expedited. Some are obvious, others less so, but what’s interesting is to see how brands are already starting to plan for the new normal. Now more than ever, empathy and prioritising customer experience will help brands stand out and build a loyal customer base. We expect this to continue way beyond the pandemic era. Will this be the end of inperson networking events, the death of the humble physical business card thereby indirectly decreasing the opportunistic referrals many businesses rely on to keep their pipeline filled? We don’t think so, but it has opened up the possibility for far more events to be moved online. Smart businesses are already scrambling to find the best way to stay in touch with their customers online and stand out in what is already a crowded space. Brands that find new ways to communicate and stand out short-term are also likely to be the ones who fare better in the longterm. B2B brands may notice the difference more as they shifted from in-person to online conferences and many find them to be more efficient and more accessible to their audiences.
For many of us, the pandemic has made us appreciate our similarities and has drawn us together – this will be reflected in how we reach out to clients and how we ‘behave’ going forward.” There will be a far deeper focus on storytelling/actual relationships – all as a form of retention. There will not be a focus on growth at all costs - every brand will rely far more on their core customer base and how to keep them engaged and profitable.
PAUL TOWNLEY-JONES
Managing Director, Paparico
Paul is a marketing expert with over 20 years’ experience in consulting, digital marketing, advertising strategy, and market research. Through his agency, PAPARICO, he is now utilising emerging technology in marketing, in particular artifi cial intelligence.
PAPARICO is a marketing consultancy powered by artifi cial intelligence. Through AI technology we are able to take a truly data-driven approach to marketing, optimising campaign performance and delivering maximum ROI.
www.paparico.co.uk 07919 566 338 hello@paparico.co.uk
JOANNE EMMERSON FCIM
Managing Director, Bark Like A Big Dog Ltd
Joanne has over 30 years’ marketing and design experience; 25 years of that as an agency owner and consultant. Joanne is a Fellow of the Chartered Institute of Marketing and specialises in Neuromarketing (the behavioural adaptation of marketing and design). She is known for her creativity and incredibly high performing direct marketing campaigns (and being hilariously blunt and straightforward).
Bark Like a Big Dog is content marketing agency, specialising in neuromarketing and focused on helping small business to bark like the big dogs – for little dog prices. Proven, effective and affordable!
www.barklikeabigdog.com 01256 541441 joanne@barklikeabigdog.com
LESLEY ALCOCK
Commercial Director, Platinum Media Group
Lesley is a marketing professional, having spent many years with Capital Radio in London and the Observer Newspaper, and was instrumental in the launch of the Observer Magazine.
The Platinum Media Group is the largest circulation business publishing group in the UK, reaching up to 720,000 readers each month across three titles.
www.platinummediagroup.co.uk 07767 613707 lesley@platinummediagroup.co.uk
RICHARD FREEMAN
Managing Director, always possible
Richard is CEO and founder of always possible, and a specialist in organisational strategy, cross-sector innovation and connecting grassroots entrepreneurs to big ideas in education, research and thought leadership. For the past 20 years he has been designing professional development programmes, business scale-up projects and cultural festivals.
always possible is one of the UK’s fastest growing development companies, helping clients to solve problems and seize opportunities.
www.alwayspossible.co.uk 0208 242 1630 ideas@alwayspossible.co.uk
HELEN BOGIE
Marketing Director, Kreston Reeves
Helen has more than 20 years’ experience working in business development and marketing for professional services and tech businesses.
Her focus has been on helping professional services fi rms to understand their client needs and deliver solutions that win, retain, and grow client business.
Kreston Reeves help dynamic businesses, not for profi t organisations, private individuals and families with much more than accountancy, business and fi nancial advice.
www.krestonreeves.com 0330 124 1399 helen.bogie@krestonreeves.com
MAARTEN HOFFMANN
The Platinum Publisher
Maarten Hoffmann is the facilitator for the Platinum Infl uencer Forums
Welcome to our panel of Infl uencers. A recent study noted that brand experience is the most important factor for the consumer and l will turn fi rst to Joanne with your view on this statement
JE: I agree 100%. We specialise in European and global marketing and what we are seeing is that the fi rst reaction is panic. The need to make up for lost time and brand experience is vital to reconnect with your network. But it must be a measured approach. What we have learnt from this is that people are craving relationships, whether that be with family members or the brands they love. It’s about how you reach out, how you wrap them up in your arms and make them feel part of your community. HB: Clients are at the heart of our business and what l see is that it is all about offering a very personal experience. You need to understand these behaviours: it is about competing with their last brand experience. Kreston Reeves are in professional services and even there, we see the need to personalise our approach far more than we had to pre-pandemic.
RF: We have helped over 200 SMEs deal with this issue. The fi rst thing is don’t panic. Stay in touch with your customers, put your arm around them and make sure they are OK. That is the fi rst step to a personalised experience. And this involves the whole team not just the marketing department. It’s the team that know the business better than anyone and they are best placed to offer opinion and advice on what clients are looking for within the individual business.
PTJ: We need to be very careful how we speak to clients. Going directly into a sales pitch can almost be regarded as rude these days. You have to genuinely care about the client and their circumstances and that is where the SME comes into their own. Personalise your approach and their experience of your business.
JE: If l can interject there, an important factor here is the human brain. Remember your brain can’t read and it is driven by visual and emotional connections and for the fi rst time in living memory, it is not about reintroducing your business but understanding that you’re talking to people who have been locked away and have been afraid for the best part of the year. They might have lost family members or been ill themselves, so businesses cannot talk to people in the same way we used to. Bashing them over the head with the sales pitch is not what people need or want right now. They want to feel safe, confi dent and understood. Humans are risk averse creatures and although the world around us has changed, human nature has not.
We know how the big brands like McDonalds and Ford do it with unlimited budgets but how do smaller SMEs tailor-make this experience?
So is this a permanent change or will we all revert to business as normal?
HB: I think it’s certainly a permanent shift. Everyone’s experience has changed fundamentally and there has to be trust and social conscience around everything you do. Another thing to factor in is that the consumer has changed, their tolerance level has changed and with the mass move to online purchases, they want what they want right now. PTJ: I agree. There’s been a cultural shift and this is a great opportunity to rethink your strategy. Certainly family life has taken centre stage and this has be considered in the mix with your marketing strategy. RF: I certainly feel this is a permanent change. We work across many sectors so it is probably too early to finally decide but so many sectors are seeing change. Take the construction industry that we work closely with, customers are much more precise and determined to have what they want as the home has become the centre of their personal and work life and that sector in particular is having to adjust how they approach their customers.
LA: I think there is a huge change and the method of communication is so very important. There is a tremendous feeling of camaraderie, understanding that we are all in this together. What l see a lot of with clients is the topic of social values. These have to be built into marketing and consumers are looking for more from brands - it’s all about what that brand is doing for the local community, what values they hold and how they transmit those values. Often, the true understanding of the values does not come from the top, rather is comes from the team. At Platinum, we decided early last year to stop making any kind of sales calls. Instead, we started calling clients for no other reason that to see how they were and if their family was fine. I think it was refreshing and truly appreciated.
JE: We all took what we had for granted but when it is taken away, you realise what really matters. We are all sweaty cavemen and at the end of the day we found new joy in reconnecting with our neighbours and our friends and this is something that l don’t think we are prepared to let go. We are pack animals and we are only just starting to realise that. Fear will subside of course and we will see an evolution in emotional and experiential marketing.
RF: Marketing is about presenting a particular story about your business and l think consumers, especially local buyers have realised that businesses are made up of people just like them and they are suffering too. This does not work with the major brands but for smaller local businesses this is a great strength that can be capitalised on. In my view, this is a very healthy result of the pandemic.
PTJ: There is also a big push towards the sustainability of business. We work with a lot of small breweries and they have certainly seen customers far more interested in their sustainability credentials than ever before. Brand values is the key but be very aware of not being seen to just jump on the bandwagon - it has to be genuine and authentic.
HB: I agree and these values have to be understood by the entire team. If we accept we are all in this together then we have to accept that supporting your local community is vital in building that authentic approach and this is where smaller businesses can really excel.
I am not as confident as the panel in that human nature often wins out and l feel there is the chance that in a few years to come when this is all a distant memory, we might slip back to how we were before. I guess Brexit started the ‘buy local’ drive and the pandemic has further cemented the feeling. I hope l am wrong as l think we will have a far better society for it.
JE: I don’t feel we will go back to globalisation because l don’t think that we really wanted it in the first place. We are tired of anything fake, tired of fear, tired of false values. We will end up with a more agile and supple supply chain but the supply chain is just the bit in the middle - business is done human to human and we must remember that.
PTJ: It’s funny that you say that as even AI bots are being reprogrammed to communicate in a different way, a more human way with empathy and understanding. We build bots and l had a client tell me last week that he was shocked when he found out he had been communicating with a bot as it felt like a sincere human communication. Inbound calls went through the roof in the last year and bots had to change to adapt just as humans did.
HB: There has been such an increase in technology take-up within marketing but we have to control technology as it has not been through what we humans have been through, so as Paul said, tech retraining is important.
JE: Technology must facilitate and not lead and now automation has to be much more selective. Many people, and l am amongst them, often crave to speak to a human and no matter how good bots become, they will never replace the human. PTJ: We recently gained funding from local government and this was directed at helping businesses improve their digital presence, as the pandemic certainly showed the weakness in many companies digital capabilities.
We did a quick survey of 100 businesses recently and on the basis that their responses were confi dential. They responded with determination to get their point across to the marketeers. One question, 67% of them did not really understand what content marketing is - would anyone like to have a crack at explaining that?
JE: Content marketing does what it says on the tin. It’s an organic approach, it’s story telling and using your story across multiple channels. It is engaging with customers rather than just telling them the products great, buy it now. Tell your story of how you came to be selling the product, tell customer journey stories, get your team to contribute their experience of the product. Engage don’t sell. Content marketing is a conversation not a pitch.
The next interesting result was over 55% of respondents did not truly understand SEO. In terms of SEO what is it and where’s the value?
PTJ: SEO is of course search engine optimisation and is simply using the key words that describe your product to ensure that the maximum number of people see your company when they type that word into the search engine. As to the value of SEO, fi rstly you have to understand that it is a long game – results do not come overnight. Once clients start to see more leads coming in, then they really get behind it – and it’s free. Sure, you have the cost of the SEO agency and perhaps you have budget behind pay per click but it is a very cost effective way to market and secure leads, and conversions. But this is a very competitive market and you have to work hard to stay in the game.
We are all assaulted daily by hundreds of companies promising to get us on the fi rst page of Google. There are only ten search returns on the fi rst page so how on earth can we all get on that fi rst page?
PTJ: Content is the key. Be very wary of these companies as they might get you there in the short term but possibly with methods that really hurt you in the long term. The algorithms are very clever these days and they take in so many factors that there is no real short cut to this. Use great content, use good SEO and ensure customer satisfaction - these are the keys to rising in the search ranking. Do not expect to see any results for three months and allow for a minimum 12-month campaign.
HB: I think SEO should be replaced with User Experience. It’s great to get your name to the top but if your UE is not great, you will drop out fast. Google are now moving to the best user experience and not the company with the biggest budget to rise to the top and this is certainly a better and human way to approach it. On this basis, a small burger bar in Crawley could beat McDonald’s to the top if they record higher rates of customer satisfaction. No one wants to buy from the burger company with the biggest budget, we want to buy from those with the best burgers.
Another interesting question that came up was how to measure social media engagement?
JE: Over lockdown, social media behaviour has changed. It’s easy enough with the right dashboard to see how many likes, views and clicks you are getting but what about the quality of these clicks. There is no way to judge that unless they buy. More people now are wary of clicking ‘like’ as they know that there is a system somewhere recording these clicks and they will then be chased around the universe with sales calls. Again, social media engagement comes from great content.
What about Aligning Values – this is a phrase that keeps coming up. How does a company align the values of their company?
RF: First, you have to understand what your company values are. For our company we are developing something akin to the UN Sustainable Development Goals. How we behave, what we put back in, what our principles are. This is often judged by the way you market your product, how you engage with issues such as sustainability, what your current clients say about you. If you just jump on a passing bandwagon your increasingly intelligent audience will find you out. Bear in mind recovery takes five times longer than doing it the right way in the first place. Recognise that any company is just a group of individuals and although each individual will have differing values, when they come together, what values do they all share and represent. PTJ: Values are the differential. There might be a hundred firms in your field offering the same product so the customer will choose by understanding different things - your reviews of course but also your values about community, customer service, referrals, and of course, the story you tell. Often consumers will pay a higher price for the same product because they like the story and your company values.
JE: Many companies really struggle to understand and verbalise what their values are and the fastest way to do this is to love and support your team and value them above all else. That is such a potent message and the easiest one for people to articulate. That’s a great start.
That certainly rings true. In a recent Forum on recruitment, it became glaringly obvious that, especially amongst Gen X, they interviewed the company and not the other way round. No matter the salary, if they do not agree with the values, principles and goals of the company, they didn’t want the job. If your values are not authentic or do not align with the potential employee, you are left behind as the top people will not want to work with you. Therefore failing to understand and align your corporate values can seriously effect the bottom line.
LA: That is very true of millennials and Gen X as such things are very important to them. To work in a company for more than the pay-packet. They want to feel good about what they do, with a sense of purpose and integrity and in many ways, employers have been really slow in realising this. This was happening anyway but the pandemic has turbo-charged this and their appreciation of the company’s value framework.
RF: I absolutely recognise that. We recently employed two under 25 year-olds and there is no doubt that l was interviewed by them and not the other way round. They had a very clear sense of why they wanted to work with us. Not the salary but the impact we have on behalf of our clients, the type of clients we deal with and the talk of salary was right at the end, almost as an afterthought.
HB: The value proposition is not just the younger generation. Not long ago when l was returning to the UK after many years abroad, the first thing l looked at in potential employers was their CSR policy, and then digging deeper to see how long they had been doing it to ensure they had not just jumped on the bandwagon. I was looking for a positive working environment and experience. and l certainly found it at Kreston Reeves.
PTJ: Start with why. Why does the company exist? Why does the company sell those particular products? Once you start asking those questions you get into ‘who’ the company is. And this is not only attractive to employees but that’s what draws in your customers.
It was interesting listening to Helen speak of her experience when she returned to the UK. For you Helen, how does a leading accountancy firm make their values attractive to you?
HB: I was attracted by their strap-line first and foremost – ‘helping you to a brighter future’. I found that this runs right across the company, absolutely everyone across all levels. Also, their charity connections, their commitment to CSR, and the amount of time and effort that goes into caring for their clients. I found that hugely attractive and l am delighted to be the Kreston Reeves marketing director. So let’s look at some thing we used to do. Face-to-face networking is a huge generator of contacts and leads. I have run the leading Director level networking forum in the South East, the Platinum Club, for over 10 years and l have very fixed views on this but rather than giving you my opinion, what’s yours – will it resume?
HB: Yes. PTJ: Yes JE: Yes
RF: Yes, however, l have been involved with some online networking and it does have its place. I think there will be a hybrid approach, and the time saving alone is remarkable. There are some benefits to virtual so let’s benefit from both.
PTJ: We do work with various company’s Congress events and although they ran virtually last year and they can’t wait to get back to live events, l think there will be a mix of both - hundreds at the live congress and hundreds attending virtually from all over the world without the need for flying and hotels.
JE: I will certainly do both - some l will attend in person due to the nature or stature of the event and others l will dial into. I must say l am craving human contact as many others are - l am even craving the bad croissants.
There’s an old adage ‘how can you see eye to eye if you don’t meet face to face’. That’s a bit of a kitsch catch-all but the Platinum Club did not run any virtual networking events as l don’t believe that is what networking is about. It’s not about selling, its about building long-term relationships.
I listen to many conversations at the Platinum events and they are mostly about their kids, or homes, or cars, or their last vacation - getting to know someone as a person and not as a means to an end and then seeing if there is any business connection down the road, is the way to go, efficient networking works, and it makes it more enjoyable. Body language is also an art that cannot be effectively utilised online.
What about crisis management? Traditionally this has been more of the PR role? It seems every five minutes there’s another public or corporate figure who’s not ‘woke’ enough or has been caught doing something they shouldn’t have done. Joanne, l think you have been involved here, has this changed in the new normal?
JE: For me no. The answer is not to blag your way through it. Social media is a double edged sword. The bad news gets out faster but the available methods of response have equally grown. I have been doing crisis management for 35 years now and l have to prevent clients from creating an artificial response as people can sniff that out a mile off. As we said previously, the public are more and more switched on to BS. A crisis has to be faced head on with human emotion and a human face. It’s not just the major big events that happen as every day there is a new crisis on social media, and then they make the mistake of trying to take it off line in the hope it will go away. Don’t. Take it back online and face it head on with empathy and human emotion. Crisis PR is about human stories and human failings.
Another very good marketing strategy is sponsorship – whether it be an event, a charity, a podcast, a sporting event – is this still a good route forward?
RF: Absolutely. But it’s about the right event, the right market and the right story. It’s no longer about paying the money and turning up to the event - it’s about collaboration and ensuring the organiser of the event understands what you wish to get out of it and tailor-makes certain aspects of the sponsorship to your desires and aims. I was the Project Director for something called Essex 2020 aiming to connect business with education to recreate the narrative around the county and to push forward STEM subjects for young people. Everybody won from this event and it was a perfect fit for all the sponsors. I am also delighted to say that ‘always possible’ have joined Kreston Reeves in sponsoring the Brighton and Hove Business Awards - celebrating and rewarding local business, our community, for their efforts, skills and talents.
HB: I totally agree. We used to partner with two other firms about Sustainable Growth and that is aligned with our values and we make sure it’s collaborative. You need the return on investment but that’s not just about cash in the bank, its about your preparation and targeting the right market.
Neuromarketing is a fascinating subject and one that l think Joanne has extensive experience in?
JE: Neuormarketing is essentially understanding how the brain works and human behaviour. The pandemic has made no difference to this as the brain hasn’t changed for ever. It’s a research methodology, we take the findings from behavioural science and apply that to marketing. What people don’t understand is that the brain is illiterate. The best way to think about it is landing on a company site, the brain is searching for the answer to whatever the question is. The faster the brain gets to the answer - for example, can l trust you, will l be safe buying from you - the faster your site or brochure can answer those questions the faster the brain tells the person to go ahead. Simple=True=Trust. If you want to be a world leader you should never have to say it, it should be evident. If you care about your team or the environment, show it. Don’t forget, the brain can’t read. Marketing is like dating - if you want them to swipe right you had better make sure they understand what sort of relationship they are going to have with you, how trustworthy you are and how safe they will be with you.
What about the advent of influencer marketing – has this changed?
PTJ: This has been a growing market and l don’t see it changing much. The problem is identifying the fake from the genuine. Some people see this as a valid full-time career but equally, there are many who buy followers, buy likes and then send in the bill. Do it right and it can work well but it has to be fully contracted with expected KPIs and research into their followers to ensure this is your target market. Authenticity comes into play again as if they are doing it just for the money, most of the audience will spot that and it can damage the brand.
JE: There are regulations coming in every day on this subject. Using people just for their huge following is useless if the Influencer in question is not authentic. Going for the person with half a million followers with huge lips and everything hanging out, standing in Dubai saying’ l love this product’ before doing the same thing for various different companies all day, is over. Consumers are too savvy for this to have any affect.
Well l must say that l now feel that the pandemic has been a force for good, within marketing at least. If we are to become a more caring, more genuine and authentic society then that can only be a good thing and will force a change in the way we all market our products or services. And if the consumer is becoming more savvy and daft publicity stunt style marketing is past, that really does have to be a good thing.
I have really enjoyed this discussion and my sincere thanks to all of our Influencers.
