Product Launch

Our client has recently launched a new energy savings product into the B2B market, targetting their traditional sectors of retail as well as schools and colleges. The product itself includes an energy management system that allows users to monitor and then manage how they use electricity by creating their own energy schedules. Individual appliances, whole circuits and ring mains can be accessed remotely from a desk top and switched off if necessary. Users are already reporting a reduction in electricity usage of between 20% - 40% (that really is loss prevention).

Our client's MD recently sent us an email that contained a photograph of a local university library block. He had taken the photgraph shortly after 6.00am the same morning. The building looked like a lighthouse in the gloom. Almost every light in the building was switched on and had been on all night long.

Sales Strategy

Our client rightly complained in the email of a waste of electricity and of tax payers money and requested that we try to book an appointment with whoever was responsible for operations within this particular university.

Our knowledge of the product lead us to creating a spur of the moment sales strategy. A quick internet search lead us to the head of finance at the university and so we put in a call to him with the aim of shocking him with the information that the photgraph revealed. On average 40% of electricity used by businesses is consumed out of working hours, (no wonder the energy companies continue to rake in huge profits).

Appointment Setting

As anticipated, the University's head of finance was horrified to learn how much money they were literally burning and supplied us with the name and contact details of the person responsible for energy savings intiatives and the permission to pass on the instruction that a demonstration of the product should be arranged at the earliest possible opportunity.

The whole process from receiving the initial email from our client to setting the appointment took no more than 20 minutes. It demonstrates the benefits of maintaining a close working relationship with clients, the importance of product knowledge and the power of a compelling sales story that is tailored to a specific situation.

                     Plain Fred Goodwin:  A real life Gordon Gekko?

PROFIT SUCCESS FOR HESTER

Goodwin may well have reaped what he sowed as he became the embodiment of Michael Douglas' Wall Street character Gordon Gekko, but the pressure on his successor Stephen Hester to refuse his share bonus, at times bordered on the hysterical. By all acccounts Hester has done a brilliant job in a difficult climate and turned around a bank that was literally on its knees when he took over. A 2010 third quarter loss of 1.6bn became a 2011 third quarter profit of  2.0bn. If ever there was a solid case for what was effectively a paper bonus to be made to a banker, then this was it. Hester remains on course to steer the RBS group to even greater profits and return the billions loaned by the tax-payer at the height of the banking crisis. This feat alone should have ensured that he received praise and not damning criticism.       

RBS Chief Stephen Hester

It's almost as if the word 'profit' has become a dirty word. When it's reported that a large group has made mega-profits, particularly in the public sector, sections of the media would have us believe that those billions are to be distributed among just a few executives. There's little talk about reinvestment into infrastructure, research and jobs that such profits allow for. Why would there be? Publishers need to sell papers...to make a profit!

APPLE PROFITS

Where was the press outrage when Apple announced in January quarterly profits of $13 billion? With its 'cool image', it is viewed as an iconic company and representative of the 21st century; a self-styled culture which it cleverly manipulated because we've bought into the idea that we need new and trendy technology to help us 'stay in touch' while we are on the go. Where were the demands for a windfall tax then?

ENERGY COMPANY PROFITS

On the other hand, take the energy companies. On its own website British Gas shows that its last operating profit was £120m. When those figures were first announced the calls for a vast cut in the cost of our energy bills was deafening. But look at it another way. British Gas serves around five million homes which means that the profit they made from my home was an 'inflation busting' £24.00 per year.

To bring down the cost of fuel, the energy companies need to make cuts. It's highly likely that British Gas overspend heavily in areas and so finding a way to reduce overheads without having to cut jobs maybe possible. But if we're going to have a go at companies like British Gas, let's have a go at them for the right reasons, not for making a profit or paying the going rate to executives who have ensured that the company remains a profitable one.  

My point is that more often than not we need to look beyond a sensationalist headline. Those profits of £120m mean that British Gas are able to improve its infrastructure and research new technologies which will hopefully lead to the development of cheaper fuel types. Those profits also guarantee jobs. The difference between them and Apple is that I-Phones are sexy and we choose to buy them, while fuel is not sexy and we have to buy it. But in terms of business development, what's the difference? Both companies make a profit; both companies offer huge employment opportunties; both companies reinvest profits into research and development.

PROFIT NOT GREED

While it's true that some organisations may have paid dividends to shareholders when they shouldn't have and others have paid excessive bonuses to greedy executives, regardless of success or failure, shareholders are investors who invest for one reason - to make a return and we have seen what happens when people choose to stop investing.

So instead of jumping on the 'dirty profits' bandwagon, maybe we should be thinking in a more positive fashion about companies that make large profits. This is particularly true in the current climate when more than ever we need them to stay strong and be in a position where they can keep offering employment opportunities to so many.

Maybe profit has become confused with greed. But there is a distinct difference between the two. Gordon Gekko said greed is good, but the difference between profit and greed is like chalk and cheese or maybe even Fred Goodwin and Stephen Hester.