Archive for Random Rants

Should Ireland Increase Minimum Wage

There’s been talk of late, especially from the Junior Minister of increasing the Irish minimum wage from €8.24 to €11.50. It’s been interesting to listen to both sides of the argument, in expensive locations like Dublin city center, with high rents and cost of living many suggest that €11.50 is a “living wage”. While IBEC has pointed out that increasing the minimum wage makes Ireland highly noncompetitive to our EU and Brexit counterparts. In other words, people will import products rather than buy Irish because while they want to buy from Irish companies they aren’t willing to pay the premium. Think of the rise of the foreign supermarkets (Lidl, Aldi, Tesco) and other big chains in clothing and electrical.

What I’ve been contemplating though is the short term thinking of the policy makers. With a relatively short shelf live of our politicians and lets be frank, a lack of prolonged sectorial experience are these people qualified to evaluate the outcome of the decisions? Sometimes I think of the Borris and Brexit situation, where a politician says they want something because it looks one way to take that stance, but deep down know that the reality would cripple the economy. However, by proposing a loose concept (extra money for those who need it), they look good and the common sense politician looks bad as they try to explain complex reaction theory to those likely not to be able to understand.

While in Japan recently I ate in a fantastic restaurant, where there was minimum staff. Orders were placed on ipads at the table. Food was prepared by a mix of robots and humans, then delivered by conveyor belt. It was novel, enjoyable and the meal was high quality but remarkably cheap. Not only was the lack of waiters or waitresses not a problem… in this scenario it was a benefit. Two deserts? Who was there to judge me. Turnover up, cost of service down, cheaper dinning experience and the restaurant next door was empty yet there was a 40 minute queue to get into this place when I was leaving.

Its a supply and demand issue. Assuming people will always choose the low cost item for the same or better utility (in this case a product) then if cost of delivering goes up, in the short term consumers will be less likely to embrace the new prices immediately. So for a period people will be open to new methods of making their money stretch further and in this period the old model businesses that created minimum wage jobs will begin to become redundant, jobs between the old rate and the new minimum wage will be proportionally redundant.

There will be an even bigger divide between the have and the have nots, because if the leap to get on the bottom of the ladder is so high many may never even start a career.

Taxi, Truck and Courier Drivers – Driverless car automation
Cashiers – Auto checkout, think of the current supermarket model
Builders – 3D printing of whole houses, office blocks and hotels
Accounting and Admin functions – replaced with rules automation and machine learning.
Warehousing – automated picking and packing
Restaurants – Robot preparation.

Its not as far away as people think.

The issue then becomes that the only entry level jobs available are those that runs the machines and develop the systems. High level, high paid and the skill set is of those with huge qualifications. Not ones that would previous received a minimum wage.

While progress is good and I love technology, I have a deep fear that the politicians and leaders of the western world have their heads in the sand when it comes to these issues. We need a plan for when these jobs become obsolete, social welfare at scale doesn’t work and until such a time that we have upskilled our workforce to add a minimum value of 11.50 we simply cannot accelerate the replacement of the lower wage jobs by automation.

Motivational Alarms

Lately I’ve been pushing things harder than ever before, while i normally bounce out of bed – Lately I’ve needed to get up several hours earlier than sense would dictate.

My coach sent me this clip on facebook and as an experiment I’ve decided to reprogram my alarm to use it’s audio to wake me up in the morning. For those app developers out there – I think there might be a business in it. Wake up every morning to a new inspiring, motivating and be ready to take on the world – Now i’d pay for that.

Obviously the motivational video is meant for sport, but for me my game is business. If you want to be the best in the world at anything, you need to out preform all others, it does matter if you want to be the best parent, business or sports star. The difference is making the hard decision when the easy decision would suffice.

Inspirational Talk – Neil Gaiman

Motivation of an Entrepreneur

Lately I’ve been very focused on my MMA training and my coach sent me this vid which I have to share.

In many ways it could be a metaphor for being an entrepreneur. It’s never easy, you have to want it really bad to make a success of yourself. Like the train scene, expect to be lonely on a crowded train with everyone the far side during tough times and then when you make it others will enjoy your success from afar, but never truly appreciate what you have because they didn’t partake on the journey.

The master sales approach

I think everyone can learn a thing or two from sales man Kenny Brooks.

Christmas FM Raises €116,749 in 2011

One of my true loves in life is Radio. Since my Teenage years I’ve been involved in radio presenting. Every Christmas for the last four years we put together a temporary licensed radio station called Christmas FM which we run to raise money for charity. We’ve finally counted up all the donations and I’m delighted to announce we generated €116,749 for our charity partner Focus Ireland, which help the homeless community in Ireland. This figure is way above our target for 2011 and brings the total raised in the last 4 years to €320,000 for our Irish Charity Partners.

A big thanks to EBS and the Irish Daily Mail, who are the stations co-sponsors and the Alexander Hotel in Dublin who donated a suite for us to base the studio in. Here’s a quick look at the set up:

Christmas FM will be back in 2012 bigger and better then ever. I look forward to talking to you on air then.

Halloween Costumes – A Branding Opportunity

In the Halloween Costumes industry there has been a recent fascinating development that should make all marketeers stop dead in the tracks. It’s become a real game changer this year. Companies who have developed characters, cartoon or otherwise, to use in the TV and marketing campaigns are starting to awaken to the new social economy. By Licensing their costumes to be manufactured and sold to loyal customers who love their marketing / brand so much that they are willing to pay to dress up and represent their brand for the night, they have living social endorsement. This is the kind of marketing that we as the business community spend hundreds of thousands trying to achieve and mean while there is a queue of people, willing and ready with cash in hand to pay for the pleasure in promoting your brand.

Now the arguments are vast why many brands will turn down the opportunity of this new form of customer engagement, what if The Burger King was to be photographed eating in McDonalds or The Honey Monster was to make a wholly show of himself on the dance floor doing a funky chicken impersonation. To me this is yesteryear thinking and trying to control the conversation. People are smart enough to know it’s the guy in the suit who can’t dance and either way, the brands just given them a bit of a laugh and will be at the forefront of their mind for the next few days.

The Juxtaposition of customers adopting brands that represent them in their Halloween Costumes isn’t suitable to every brand, but if you have a brand with a character it could be massive untapped potential. Certainly for a new brand wanting to make a splash and that has a decent TV and Billboard budget, it’s worth considering should you create a character with this as part of your strategy. At the moment my industry is actually paying the brands to license their characters, however I expect come next year the tables may turn and they will infact be aggressively encouraging it.

Changes from Laser to Debit – Increase Fee’s 5,100%

It seems in the recession businesses are being squeezed for every drop they can get from the proverbial stone. However the the merchant banks increase has to take the biscuit. Banks are in the very slow process of changing Laser cards over to Visa Debit cards, in a move that most people assume was just re-wording a card that does exactly the same thing – allow you to spend money which you already have in your account, without the need to write paper checks.

Merchant Bankers Profits

Merchant Fee Increases

What myself and nearly every other retailer in the country didn’t realise was that some were infact positioning themselves for instant, supernormal gains.

A €500 purchase last year paid by Laser card would have cost the retailer roughly 15c. The same purchase for the same customer & amount this year, using their spanking new Laser replacement, Visa Debit Card, would cost the retailer €7.75 – An astonishing 5,100% increase in their fee’s on the transaction with the flip of a switch! The change happened because by moving from Laser which is a fixed fee charge to a Visa debit, they “can” charge a percentage commission on. Banks are one of those institutions which you tend to have as little contact with as possible, you assume if there is a change in their rates they will pass them on, like when the ECB change interested rates your mortgage changes too.

The above is a personal example from My Merchant Bank – Elavon, however other banks are also benefiting, some only taking double digit increases in the fee’s. As I’ve said before Merchant bankers are probably our least regulated banks in Ireland.

Now what really gets me is when I happened to stumble across this injustice and bring it to their attention, they “offered” to reduce the 5,100% rate increase to a MERE 360% increased fixed fee, but there is a further cost too for this mere increase. If you fix the fee at 54c, up from 15c, but better than 1.55%; Should someone spend only 5Euro, their cut on the transaction is over 10%. One way or another they will squeeze some money from the stone.

Now put this in perspective of your business. How much is this change in a technicality going to cost you? And were you aware of it? If you want to fix your fee on transactions via Visa Debit it is possible, so you will need to approach them and request to negotiate the deal. The problem with negotiating with these banks is there is no real leverage. They hold all the cards and competition amongst them is extremely poor, in my experience it’s been a tale of who’s the least incompetent to preform what is an automated function once you’re set up.

So rather than just take it on the chin and complain, I propose we do something about it. Lets get some leverage and form a buying group, with this group we use the combined buying power to not only lower or bring back transaction prices to, wait for it, “the good old days of the 2008”; but also we could insist on basic common decency like responses to calls and emails within 48 hours and advanced warning on when ‘minor’ changes in their industry are about to set us back tens of thousands on our balance sheets.

Very interested in your thoughts and comments below, If your interested in the buying group for merchant services (companies big & small welcome) send me a message on Twitter @Ronanob.

———————————–# Update 12/08 #———————-

As a further comparison, UK retailers are paying 12p to process visa debit cards Vs our 1.55% variable or 55c fixed fee options. Its yet another reason why Ireland is such an expensive country to do business in and has difficulty in competing in the export market.

———————————–# Update 16/09 #———————-

Thanks to all who have joined the buying group, I’ll be sending around information next week via email. In the mean time I really must stress that if you have a merchant account you should contact your merchant bank to find out if you are on a fixed or variable rate for visa debit and make an informed choice which provider is now offering the most suitable rates.

All of the merchant banks have been very willing to participate in quoting for the group so I believe we have a very fair process in place now, buying rates will reflect the merchants risk level, turnover and industry so that everyone is treated fairly. In the process Elavon have met with me and taken on board suggestions to address other concerns I had and make improvements in their security, which is a very positive step forward. I’ve also been impressed with AIBMS who have changed a good deal since we worked with them some years ago.

I still believe the industry has a long way to go however there is signs of competition and “a customer centric” approach, which is a very welcome insertion. Thanks to all of those in the media who featured this blog post in their newspapers, radio shows and tv news.

Conversion Optimization Talk at the Athlone Conference 2011

Recently I was asked to speak at the Athlone online business conference on conversion optimization and converting online traffic to sales, below is my talk from the conference and the Q&A session at the end.

The talk focuses on the basics of online business and how to use data to work out conversion rates, then implementing an equation to make the requirement of a “marketing budget” a thing of the past as the marketing cost becomes a variable sunk into the sale price on each unit sold.
Ronan athlone presentation 21.6

Could Groupon Help Ireland Out of the Recession?

When businesses have too much supply or perishable products, they often turn to the likes of Groupon or Facebook deals to stimulate demand. The deal generally works on the basis that the customer can get an extreme deal, on something they would not otherwise be buying. The business pay Groupon / Face book a large chunk of the realisable amount so the business only generally gets about 25% of the regular selling price. Saying that Starbucks and other big firms have been able to use this model to stimulate demand and make money on the back end. So could we as a country do the same???

The answer is surprisingly yes in my opinion. So lets assume the country is a private company with a mission to create jobs and make profit – big stretch I know but bear with me. As a marketeer here’s how I’d structure the deal for maximum effect.

The Irish Gov own 25+% of former state airline Aerlingus and the Majority of our hotels have less than 50% occupancy due to the government incentives to create them. Now the Irish Government is effectively broke at the moment, so assuming it was a business with cashflow problems, part of the remit would be not to spend any cash. Impossible you may say? Not really, I’ve done it many times! The government has other assets it can barter with.

Remember the remit create jobs and bring money into the country. To incentivise the airlines and hotels to come into the scheme and give free seats and rooms – the government can barter PRSI credits which is a tax on jobs. In other words the airline and hotels can reduce their outgoing expenses in exchange for using a perishable good that would otherwise not be sold. So for no upfront costs they could get airline seats and places for the tourists to stay, these tourists then spend lots of money while in the country, called the back end potential. Which eventually makes its way to the government in VAT and income taxes. The tourist sector will need to hire more staff to cater and entertain the visitors to the country so more jobs are created. Hotel owners fill their rooms without any upfront investment either, sell the residents food and beverage; all while increasing staff numbers and decreasing PRSI costs.

The beauty of this model, is that is sustainable. Groupon and Facebook deals are geographical target-able. Every week they could target a town or state in a different country. We could turn them off for St. Patrick’s day when demand is high and ramp them up to all of the USA for the quiet January period.