Managing and Maximizing Your PR and Corporate Communications Budget - ABF Conference Singapore

MANAGING AND MAXIMIZING YOUR PR AND COMMUNICATIONS BUDGET CNI’s Journey, Mistakes, and Lessons Learned Kenny Ong CNI Holdings Berhad

Way back in 2004… Thomas Cup, Indonesia

Now in 2007… CNI ‘Beemax’ Factory Visit, China Top Leaders Product Development Media

Problems from the start No money Split Objectives: Sales? Share Price? Image? Difficult to hire Independent entity Charity center MLM image nightmare Multi-cultural & Multi-lingual Close Regulatory scrutiny (food act, health act, Jakim, KPDN) Public Listed

The Roadmap to Failure Fred Wiersema and Mike Treacy Performance Time Clear Sailing Today’s performance Ad-hoc Tactics Denial & Defense Doom Projections Overdue Failure The Moment of Truth X Performance Freefall Tomorrow’s actual performance Downpresure of Unclear Strategy

Denial and Defense “ It’s not really good value our competitor is offering, because it doesn’t include a lot of our features.” - ABC vs Air Asia “ It’s good value but not in our preferred customer market.” - ABC vs Toyota “ Sure they’re hurting us, but with their unfair advantage, what can we do?” – ABC vs MILO “ The rules we are playing by have always worked before” – AMEX vs VISA

Ad Hoc Tactics Selectively hold discounts to hold business that has started to go elsewhere Introduce new promotions, terms, conditions, and offers to confuse and cloud the market Beef up customer service by adding people to fix mess-ups and quicken delayed shipments Delay capital investments and adjust accounting methods to portray quarterly financial results more favorably Introduce “new and improved” products that are new in form, but not in substantive ways that are of consequence to purchasers

Before moving on… How is PR budget not maximized? Because I can - Competency problem Poor business value – Ignorance problem No Budget lah - Alignment problem Not exciting lah – Glamour problem

Contents: How can PR budget be maximized: Linking Comm to the real world of Business Driving WOM as ‘do-or-die’ mission Comm as Integrated affair Virtuous Cycle for full $$ Impact Continuous Networking vs. Fancy Campaigns

A. Linking Comm to the real world of Business The anchor for all PR decisions

About: CNI 18 years old Core Business: MLM Others: Contract Manufacturing, Export/Trading, eCommerce Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan Staff force: ± 500 Distributors: 250,000 Products: Consumer Goods and Services

Intro: MLM Sell through people Buyers = Members (most of the time) Members = Sponsoring Product Integrity R&D Training Functions & Events Tight regulations

Intro: CNI CNI’s Business Model background Factory CNIE DC SP Leaders Customers R&D

COMM Market Research Internal External Leaders Distributors Suppliers Associations Universities NGOs Investors Media Government Public Authorities Proactive Reactive Proactive Reactive COMM Tools COMM Tools

What is the purpose of COMM? Ultimate Objective of Marketing: “ Get more people, to buy more things, more frequently, at higher prices.” Sergio Zyman “ Retention and Loyalty are useless if No Conversion is happening.”

What is the purpose of COMM? “ Retention and Loyalty are useless if No Conversion is happening.” “ Comm (PR) is useless if No Conversion is happening.”

Problem… “ In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied .” HBR March/April 1996

What are they really buying? "Exactly what I need" Customized products Personalized communications "They're very responsive" Preferential service and flexibility Recommends what I need "I'm very loyal to them" Helps us to be a success "They are the most innovative" "Constantly renewing and creative" "Always on the leading edge" "A great deal!" Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership "A no-hassles firm" Convenience and speed Reliable product and service Product Leadership Operational Excellence Customer Intimacy

Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)

Product Leadership New, state of the art products or services Risk takers Meet volatile customer needs Fast concept-to- counter Never satisfied - obsolete own and competitors' products Learning organization Strategy: Value Disciplines Operational Excellence Competitive price Error free, reliable Fast (on demand) Simple Responsive Consistent information for all Transactional 'Once and Done' Customer Intimacy Management by Fact Easy to do business with Have it your way (customization) Market segments of one Proactive, flexible Relationship and consultative selling Cross selling

The McPlaybook* Make it easy to eat 50% drive-thru Meals held in one hand Make it easy to prepare High Turnover Tasks simple to learn & repeat Make it quick “ Fast Food” Tests new products for Cooking Times Make what customers want Prowls market for new products Monitored field tests *Adapted from: Businessweek , Februrary 5 th 2007

How does that impact PR? Philosophy COMM Strategy Corp Comm Strategy Structure Resources Leadership Person

Our Philosophy “ We are more than just a business. We strongly believe that every individual has the opportunity to attain a better quality of life and health through CNI.”

B. Driving WOM as ‘do-or-die’ mission Big picture, Small picture. PR’s role in both pictures.

What is the Objective? Ultimate Objective of Marketing: “ Get more people, to buy more things, more frequently, at higher prices.” Sergio Zyman “ Retention and Loyalty useless if No Conversion is happening.”

What is the Objective? Loyalty is Useless… Virtual Consumption vs. Real Consumption

What is the Objective? Loyalty is misleading… Heavy Consumption ≠ Loyalty Loyalty ≠ Heavy Consumption

What is the Objective? Comm = Relationship (something like Dating) Comm ≠ Media glitz Comm ≠ ATL/BTL/BwTL/ArTL/FTL Comm ≠ CSR Comm = Get more people, to buy more, more frequently, at higher prices

What is the Objective? ‘ Do-or-Die’ KPIs for CNI Revenue ARPU Sponsoring Retention Commission Plan (BDP) Product Corporate Image

What is the Objective? Sponsoring BDP Why should I join? Credibility Product Corporate Comm

What is the Objective? So…the ultimate objective of Corporate Comm is to drive W ord- O f- M outh. That’s it. Now, it’s easy to maximize the budget.

C. Comm as Integrated affair Unity is worth more than the annual budget.

COMM Market Research Internal External Leaders Distributors Suppliers Proactive Reactive Proactive Reactive COMM Tools COMM Tools Associations Universities NGOs Investors Media Government Public Authorities

Integrated affair Conversion Comm S&M MBS CCD [Internal] [External] [Creative]

Example: What we needed The birth of Malaysia’s 1 st Tongkat Ali Ginseng Coffee

Integrated affair - GROUP Group Media CCD CNIE Infuso QP [MLM] [Contract] [Café] CNIH [Invest n ] EM [Export] KESB [eCom]

D. Virtuous Cycle for full $$ Impact Feed you, Feed me.

Virtuous Cycle Internal External Feed Feed

Full $$ Impact Both Sides Internal Halal Committee Social Education (e.g. SCK) Umrah trip China Trip RBOS CFA/HFA Coffee Van External Sponsorship Donations News clippings Newspaper Ads MHI Awards Corporate Profile AGM Gov. Celebrity Analyst research

Full $$ Impact Both Sides Internal Entrepreneur Dev. Health products Health education “ Made in Malaysia” Events Media Celebrity External Website DSAM Yayasan Publish Book Social Education Crisis Comm Children Education National interest Analyst BD connections

E. Continuous Networking vs. Fancy Campaigns R&D in Totality

Remember… Comm = Relationship (something like Dating) Comm ≠ Media glitz Comm ≠ ATL/BTL/BwTL/ArTL/FTL Comm ≠ CSR Comm = Get more people, to buy more, more frequently, at higher prices

Example Networking activities Durian Party Wisma Tour Hampers Umrah China Factory Visit Large Events Donations to Media Jakim visit

Issues and Challenges Problems, Problems, Problems

Sources of Image problems Industry Management Staff Frontline Suppliers/Vendors Retail/Distributor

Industry-inspired problems Get-Rich-Quick Schemes (Skim Cepat Kaya) Direct Selling myths Bad Hats Imposters Products on Shelves Hazardous products by other companies Increasing Regulations

Don’t know how to use to maximum effect ATL Web Blogs (Web 2.0) Mobile Investor Relations

IR problems “ Good news for stockholders can be bad news for other stakeholders.” Gregory Miller, Assoc. Prof., Harvard Business School.

Summary How to maximize budget? Focus on the right Priority – WOM Drive WOM by Integration and Virtuous Cycle Build Integration and Virtuous Cycle using Constant Networking (hardwork)

Thank You. soft copy of slides: http://totallyunrelatedrandomanddebatable.blogspot.com/

Managing and Maximizing Your PR and Corporate Communications Budget - ABF Conference Singapore

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