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The reason Malcolm understands small business is that he owns and runs one. Malcolm Auld Direct, known as MAD, is one of the most awarded agencies in Australia, yet it faces the same day-to- day challenges as any small business. This allows Malcolm to bring big brand thinking to small business challenges.
Top Tips:
- The most important thing in business is to make and keep customers profitable
- Understand your personal strengths and find people to support your weaknesses
- Marketing must be continuous to be effective
- The more you can value add to customers in little ways the better
- You need a good political antenna to detect the customer’s real agenda
- If you don’t have a database, create one immediately
Relentless Customer Focus
As a child, Malcolm Auld’s career aspiration was to become a professional soccer player but to his parent’s relief he followed a more traditional career path and became one Australia’s most respected direct marketing experts.
When Malcolm left school he undertook a business studies degree in marketing with an advertising sub major, but during his eight years of part time study, there was minimal attention given to what was then a relatively new stream of marketing called direct marketing.
For Malcolm, what was of more value than his academic study was working with his Father in the family’s small supermarket on Sydney’s North Shore.
Here he learnt the key to business success is a relentless customer focus.
Some of his lessons were:
- Always focus on the customer – treat them like people you care for
- Make and keep customers happy and the profits will come
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The more you can value add the better
- Never underestimate how stupid or smart customers can be
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Customers have very long memories
 After his work in the supermarket, Malcolm held several positions that purported to be marketing jobs but were, in fact, sales roles. Finally he became the National Marketing Manager for Group Four, which was an amalgamation of four TNT business-to-business divisions; payroll systems, security systems, alarms and armoured cars. Here Malcolm got his first hands-on direct marketing experience – building databases, call centres, mail follow up and direct response advertisements.
At this time Australia was undergoing its first “big burst in direct marketing” and the large advertising agencies were opening their own specialist agencies. Malcolm’s experience as a client -where all he wanted to achieve were sales leads - was invaluable and it wasn’t long before Ogilvy & Mather Direct asked him to join its team. He relocated to New York then came back to Sydney as Managing Director of Ogilvy Direct. Four years later he opened his own agency.
Whilst the agency became one of the most awarded in Australia, ‘Malcolm freely admits he made the same mistake as many small business owners. He had created a business that couldn’t survive without his time and attention. He had worked seven days a week for five years when a health scare provided a reality check. At exactly the same time Malcolm was approached by a large multinational advertising agency and he agreed to a merger.
Malcolm describes this as the biggest mistake of his life and soon he and his new partners parted ways. But by now Malcolm had re-prioritised his life. He had married and started a family and his new business had to reflect his new priorities. He became a stay at home Dad whilst building his new advertising business, but this time the business fitted around his family responsibilities. He now knew he didn’t want an enormous business, which would turn him back into an administrator.
Malcolm’s philosophy is that he wants to walk to work and drive to the beach or vice versa. Although he now has an office in Manly, he encourages people who can operate using email and phone to consider working from home. He also predicts that as Sydney’s traffic gets worse, there will be an increase in “enclaving” with people refusing to commute.
Marketing 101
Many small businesses are confused about how to define marketing and advertising. Marketing creates the need, sales fulfil the need, and advertising is one very small part of marketing. Malcolm says that people get confused because advertising is the high profile part.
There are two ways to market. Direct marketing is where the marketer deals directly with the customer, like the way Dell Computers operates. Indirect marketing is where the marketer positions the brand in the mind of the customer. Here the weight of repetitious media exposure and the creative ideas of the advertisements mean that when the customer is in a position to buy, he or she will buy your product.
This worked well in previous times when you could reach most people through TV and people tended to believe TV. Today, this has changed. For example, if the NRMA has lengthy response times, no amount of advertising will change the mindset of people waiting to have their car attended to. Malcolm says that brands only exist in the mind of customers and as in the NRMA, the experience must match the brand. People buy emotionally but justify rationally.
 Every business should have a database, as there are dollars in data. Malcolm says that direct marketing is a way of combining Mum and Dad values with computer technology. At its best, direct marketing is as powerful as sitting down with a person in front of you and having a conversation, expect it is multiplied many times over. In fact this is the way you should converse with your customers, whether it is print, email, web or telephone.
Malcolm says that you should talk to your customers regularly but only when you have something new to say. To work out how much you should invest in direct marketing, Malcolm recommends calculating the lifetime value of a customer. How much you invest in marketing to them should reflect how much they spend with you. Malcolm says that the cliché of 80% of your business coming from 20% of your customers is true, so you need to know whom the most important customers are.
The Brave New World
Malcolm is extremely optimistic about the future of Australian small business. He predicts that with the increased use of technology, the competition for large brands will not come from other multi-nationals but from smaller operators.
In the new Internet age, Malcolm believes that for any small business, an optimised website as the entry price for a viable business. Today, search marketing is a huge part of the marketing mix and small business owners must understand the opportunities it presents. As a starting point, he recommends looking at services such as Google AdWords to elevate your business’s visibility.
Once you have established a website, look at providing practical information for potential customers. This could include white papers that give your business credibility or a mini book that is independent, and not a sales pitch.
He also advises all small business owners to constantly read books on their own industry and outside it, to improve their business skills. He says that the funding of businesses is still a huge issue and he recommends that you don’t use profits for your growth as it puts pressure on not just you, but the whole family.
Malcolm believes that it is the responsibility of business owners to create their own path, not sit and wait for opportunities to come to them.
Source: Malcolm Auld interviewed by Paul Buckingham for The Small Business Mentor Club
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