“The 4 Horsemen’’ coined by Scott Galloway are businesses worth over a trillion dollars. The big four include Facebook, Apple, Amazon, and Google. These companies are involved in almost everyone’s day-to-day lives dominating not only our online experience but also the corporate world. But, what makes these companies so successful is their ability to identify and satisfy human needs.
2: Appealing to Human Instinct
Google has become the replacement for a higher power. In this modern age Google becomes the first place a person turns to when a question is left unanswered. Apple adds to a person’s sex appeal. When someone has an Apple product they are perceived as wealthier, fashionable, and increasing sex appeal. Amazon has become a ‘temple of consumption’ as it provides us with a seemingly endless assortment of products. With over 1.2 billion daily visits to their site, Facebook has managed to gather nearly one-sixth of the world’s population in their digital space on a daily basis. By appealing to our daily human needs, these four companies have grown to dominate the business world and play an essential role in our daily lives.
3: Benjamin Button Effect
The ‘Benjamin Button Effect’ represents an algorithm or product which appreciates in value with every usage from its customer. The ‘Recommendation’ tab on Netflix systematically changes and improves each time a user watches a new tv show or movie. As the individual increases the number of movies and tv shows watched more data is added to the system creating a more personalized selection for the customer. Providing both an assortment of entertainment and an algorithm catered to every individual user, Netflix has become globally renowned as the preferred hub for movies and tv shows. Amazon utilizes a similar effect with a “Similar Products’ function. Its algorithm recognizes what each user has recently or frequently purchased in the past and offers similar products in hopes of increasing sales. Companies which utilize the ‘Benjamin Button Effect’ gather more insight on the customer and are more aware of sudden changes in consumer behaviour.
4: T-Algorithm
The T-Algorithm, developed by Scott Galloway’s L2 Market Analysis Company, was used to identify startups which would join an elite group of companies worth more than one trillion dollars. This algorithm was identified by analyzing the characteristics of four companies: Amazon, Google, Facebook, and Apple. These companies are characterized by the same 8 variables: Product Differentiation, Visionary Capital, Global Reach, Likeability, Vertical Integration, Artificial Intelligence, Career Accelerant, and Geography.
5: How do the ‘Horsemen’ reflect these variables?
Each of the four have the ability to deliver superior products. Apple has their appraised iPhone, Amazon has a myriad of products in their assortment, Facebook brings one-sixth of the world together in their digital space, and Google can answer virtually any question thought of by the human mind. With Visionary Capital, each of the four have a long term goal in mind. Facebook wishes to connect the world in their digital space while Google seeks to organize all data on their platform. The four Horsemen have extended their reach on a global scale as people from all over the world either use or are familiar with these companies. To avoid intervention, a company would need to develop a sense of likeability if it wishes to be accepted in society. Each of the big four hold vertical integration as they control each step of the production and distribution of their products. To create an efficient algorithm to gather and store countless data, powerful artificial intelligence must be used. Strong artificial intelligence and digital presence is a pinpoint for brands wishing to establish their name in the business world. An amazing business requires an amazing team. For a business to join the big four it must be seen as an accelerant for one’s career if it wishes to attract talented individuals on their team. The final variable in geography. Each of the big 4 are established around top tier universities which allows the recruitment of the brightest minds.
“The Digital Age is Heraclitus on steroids: change is a daily constant,” added by Scott Galloway, NYU Professor of Marketing. By cutting costs, establishing a recurring relationship with customers, and communicating risks and visions, companies can greatly increase their survivability in these disruptive and uncertain times. Businesses seeking to improve in their digital presence should follow the eight variables found in all four trillion dollar companies if they wish to remain agile and develop a long-term, sustainable business strategy.
Selling through digital channels has been accelerated a decade forward in a short span of three months thanks to COVID-19; and it has happened across every industry. As a global leader in collaborative commerce solutions, VTEX is ready to help you succeed with your commerce strategy, be it B2B, direct-to-consumer or launching your own marketplace. Working together with BORN Group, an award-winning full-service digital commerce agency, we help organizations deliver collaborative commerce experiences to meet today’s “new” buyer demands.
For more information, please reach out to Mackenzie Johnson, [email protected].
Integrating ERP Systems Into Creative Organizations
Across the board, agencies are seeing a broad shift toward short-term, project-based engagements in place of the familiar Agency-Of-Record (AOR) relationships that dominated the agency landscape just years ago. In fact, Forbes once described this large-scale change as a result of The Agility Era, a phrase that poignantly captures the industry’s newfound preference for flexibility and streamlined production schedules over relatively unchanging client relationships. The question then becomes: what tools does an agency need to work effectively in such an environment?
In order to remain competitive, every ad agency today needs a robust ERP solution specially tailored to the current needs of the industry. There are myriad benefits of ERP software for all businesses, including the ability to integrate information and communication across business management, customer relationship management (CRM), human resources, distribution, and sales. But due to the ad industry’s global shift toward agility over stability, an even greater emphasis has been placed upon an ability to quickly organize data and integrate that information across key business areas. This is where an effective Agency Management ERP solution can make all the difference in the world for your creative organization. For the remainder of this whitepaper, we’ll take a closer look at just how ERP software is defined, how it can help creative organizations, and how ERP systems can be customized for advertising firms. We’ll end by noting that these benefits and more are included in BORN’s unique Agency Management ERP solution.
What is ERP Software?
Enterprise Resource Planning software refers to a category of business management applications that allow the integration, automation, and synchronization of a host of back-office activities pertaining to business management, customer relationships, sales, production, distribution, and human resources. In short, ERPs provide access to nearly every area of business operations through a single digital point of entry. While each of these areas demands a unique skillset to address ongoing challenges, an effective ERP solution allows unmitigated access to each domain for a real-time organization and business management. Key attributes of an ERP system include means for the top-level organization, bottom-level oversight, and synchronization between key business areas. Importantly, these areas of functionality are brought together into a centralized point of reference found in the ERP dashboard, an administrative panel that provides a “driver’s seat” interface for the entire range of ERP functionality.
One of the most important features of effective ERP systems is the ability to function as a kind of command and control center, a central point of reference for the top-level executives of the different branches of an organization. With this bird’s eye view, a manager or executive can, with minimal effort, glide between different areas of business operation and, when necessary, swoop down to sort out the details of a particularly problematic area.
A case in point: a particular client appears to be slow to move forward on a new campaign. All of the elements appear to be in place, including a formal estimate, contract, and work order. Upon inspecting the progress log on this client, though, it becomes clear that they are currently still waiting on the client welcome package, a document that collects the timeline, milestones, project team, and deliverables in one convenient location for the client. Because this client was promised such a document upon agreeing to the contract terms, they continue to wait for it before moving forward. Such bottlenecks, while they may seem trivial, can pose significant detriments to the success of a creative organization.
This client management anecdote brings us to another important function of ERP software: the ability to provide detailed bottom-level oversight for specific business activities. ERP systems excel at allowing a broad-level view into business operations. Another area of strength is the kind of transparency into individual business domains required to quickly diagnose problems before they affect other areas of operation. Here’s an example: it becomes apparent that one of your agency’s top client projects is significantly behind schedule for delivery on an upcoming milestone. Upon looking into the project management dashboard, you notice that only one assigned designer belongs to the project, whereas such a workload clearly requires two or more on the job. So, after checking with human resources, you locate two internal designers currently without major commitments. With a quick email, you invite them to work on the high priority project. Problem solved.
The last important general feature of ERP software concerns the ability to synchronize across disparate areas of business operations. Many imagine synchronization as the heart of any business. Indeed, the image of a creative organization as a “well-oiled machine” is perhaps as old as the world of commerce itself. Successful synchronization of activities across different domains can transform a business from an inefficient operation with many loose ends to an optimized “machine” that regularly nails ambitious and high-visibility projects for high-profile clients. Practically, synchronization means that the aims of sales and business development match up with the numbers from finance and accounting, which feed flawlessly into human resources and resource allocation. Once the silos between these domains have been removed, the components can march in lockstep. When used correctly, an ERP can turn a business into a smoothly functioning creative machine.
ERP Benefits to Ad Agency Project Management
Many of the principal challenges for advertising agencies lie in the area of project management. How can a team remain on top of timelines, meet important milestones, and deliver a product that meets and exceeds the client’s expectations? How can teams avoid some of the pitfalls of communication missteps, scheduling conflicts, interpersonal issues, and exceeding project budgets? Each of these challenges can be conceived through the lens of project management, an area that, as noted above, has become increasingly important as creative agencies turn more and more toward working on a per-project basis. Indeed, without the security of AOR relationships, agencies must work harder than ever to maintain a consistent pipeline of projects. Thankfully, the effective use of ERP software can facilitate such a steady stream of client successes, which then translate into a consistent source of agency revenue. Let’s dive specifically into ERP’s four major benefits to project management: communication, scheduling, organizing time entries and invoices, and collaboration.
One of the most frequent and important problem areas for every creative organization is communication. So much rests upon the ability to obtain accurate information and convey it to the appropriate internal departments and, when necessary, to clients. An ERP can help facilitate clear and effective communication by providing up-to-date information in a given area and allowing one to cross-reference that data with the operations of another domain. Through direct database integration, managers can quickly match resource allocation to project needs and communicate these needs to executives or account managers. Similarly, a chief executive officer can ascertain which clients are optimal for the company to devote more resources to and which to scale back. Armed with such unambiguous data, communication between specific business channels becomes just as lucid.
Related to communication is the issue of scheduling, a task that becomes more complex as an agency scales in number and grows in geography. How can a creative organization, regardless of its size, coordinate between employees of varying status to ensure they are able to have effective meetings, on the one hand, while enjoying concentrated “heads down” time, on the other. Although seemingly straightforward, achieving such a state can pose quite a challenge—especially for agencies who work with talent (and clients) in multiple time zones. This is an area that the project management tools included in an effective ERP system handle with ease. With the ERP interface, a project manager can schedule meetings that bring together internal creative talent with the appropriate personnel in management to spearhead a project. An ERP can also help facilitate client meetings and keep track of both internal and external preferences for scheduling and time management.
Related to the issue of scheduling is the need for every creative agency to keep track of work hours as they pertain to specific projects, along with the ability to generate corresponding client invoices. In most agencies, designers and other creative talent work on multiple projects simultaneously. Using an external bookkeeping application can work in such a situation, although options for seamless horizontal integration remain limited. Want to correlate projected profitability with the current number of logged hours for a project? If you’re willing to toggle between at least three or four applications such a task is possible. But another, more streamlined, way to approach such a task would be to use the time to track features of an effective ERP solution. This data can be correlated directly to additional metrics such as profitability and specific financial goals.
There is perhaps no better-defining the feature of a successful ad agency than its ability to collaborate. From building internal teams of talent to working with external contractors to striking the right creative chord with each client, collaboration—the task of providing the conditions for people to work together—is a critical aspect of every creative organization. Project managers are often put in charge of making sure these important relationships continue to flourish in ways that are beneficial for all parties involved. Here, as with other areas, ERP software can be one’s best partner in the facilitation of the kinds of collaborative relationships that help drive a successful creative team. Specifically, by tracking information related to the personalities and preferences of each team member, an ERP can help project managers match talent to project in efficient and productive ways. To this end, project managers and executives combine high-level project data with low-level HR information to build composite images of how teams collaborate.
The above-mentioned benefits to ERP users focus on activities that typically relate to project management tasks. It is important to note, though, that the perks of ERP software extend far beyond those of a project management tool. Indeed, benefits to agencies using ERP software also include customer loyalty, increased revenues, reduced overall costs, and even data security. Customers receive consistent treatment across multiple projects, each of which is executed with efficient communication, time management, and collaboration. Satisfied customers come back for more work. And such results are even further enhanced through built-in ERP CRM tools. As a direct result of this increased activity, overall revenues increase and costs fall due to an increase in efficiency. Finally, because documentation, process flow, and project management are kept in a protected business area, as a result, the agency’s security is improved.
Customizing ERP Systems for Ad Agencies
The onset of The Agility Era has meant an increase in demands and expectations for ad agencies across the board. With a highnumber of projects and increased demands from clients and internal stakeholders, creative agencies need to be on the top of their game now more than ever. Out with the slow-moving and reliable AOR paradigm, in with the fast-paced per-project working model that dominates today’s ad industry. Along similar lines, while the emergence of digital media has opened up various online avenues for advertising, it has also sped up turnaround times. Jobs that would have been formerly delivered in five months are now expected in less than five weeks. Quicker turnaround times mean that jobs must be even more tightly organized with clearer communication between each part.
Today, only with an effective Agency Management ERP solution can such demands for efficiency and productivity be met. Importantly, these ERP solutions work the way an agency works, providing simplicity for creatives, flexibility for client-facing teams, and control for finance. These customized ERPs help to manage the entire creative process, from engaging with clients to planning a job, scheduling resources, and project delivery through to billing and reporting on profits and utilization. Agencies ultimately deliver better client results, achieve higher margins, and make work more enjoyable for everyone with ERP software—whether an independent platform or as an integrated solution.
Why use BORN?
BORN Group’s Management ERP solution is unique in that it brings together the basic components of an effective ERP software tool (top-level organization, bottom-level oversight, and synchronization between key business areas) with ad agency project management features (communication and scheduling tools, time entry and invoices, and collaboration tools). By combining these key areas of business, project, and resource management, BORN’s Agency Management ERP remains the top choice for ad agencies worldwide. From a high-level view, BORN’s competitive Agency Management ERP solution brings you:
Project and Resource Management – flexible and easy to use, this component accounts for the day-to-day management of jobs, people, and the creative process.
Financial Management – this component provides complete visibility and control over budgets, finances, and compliance.
Social Collaboration – streamlines communication for jobs across key departments and business areas and in order to drive delivery and meet client expectations.
CRM Scalability – monitor the needs of each client more accurately by tracking resources, costs, and customer satisfaction.
Manage Leads – keep track of lead generation through built-in CRM integration and lead management tools.
As noted above, these enhancements also lead directly to customer loyalty, increased revenues, reduced overall costs, and data security. Additionally, BORN’s solution has been shown to lead to increases in customer loyalty, which can be invaluable for ad agencies working in The Agility Era. Overall, BORN’s Agency Management ERP is a highly effective solution for creative organizations working in today’s fast-paced advertising industry.
Early loyalty marketing started out with premiums offered to customers that encouraged them to return. In the 18th and 19th centuries, brands offered tokens, certificates or tickets that customers could exchange for other items in-store, effectively offering them a discount. By the end of the 19th and well into the 20th century, stamps – the most famous among them S&H Green Stamps, followed by Green Shield in the UK – replaced tokens. Green Stamps could be collected from for purchases at select retailers and redeemed for products from a catalog.
Individual brands and retailers wanting to engage with their customers led to the creation coupons printed on top of packaging that could be redeemed. Betty Crocker started with these so-called box tops in 1929 but it was Kellogg’s offers and tie-in with their cereal boxes since 1909 that inspired so many brands to follow suit.
The modern loyalty program can be traced back to American Airlines’ frequent flyer program that was set up in 1981 and sparked off an entire industry. Since then, frequent-usage points or miles for airlines, hotel, car rentals have become so ubiquitous that the phrase ‘card-carrying member’ has entered the lexicon. In the UK, one of the first in-store rewards cards backed by a chain was Sainsbury’s Homebase Spend & Save card in 1982.
Credit cards have also allowed customers to accumulate points, and it seems like every major retailer has set up a loyalty card (or rewards or advantage or points or club card) that imitates a credit card – with a magnetic stripe – that either offers a better price or points for a purchase made in-store. This ubiquity has led to customers not being very ‘loyal’ at all.
Frequent flyer programs, which involve the management of tiers, rewards and redemption, in essence, moving millions along on their customer journeys to become top-tier members, are a complex and expensive exercise. In the US alone, companies spend a staggering US$2 billion on loyalty programs every year. Still, engagement is not high. The average US household has accumulated over 20 loyalty memberships and only uses a fraction of them. In the words of Hal Brierly, the man who designed loyalty programs such as American’s AAdvantage, United Mileage Plus, Hilton HHonors and Hertz #1 Gold, “Programs need to evolve toward a sustainable, profitable structure that’s still desirable for the customer.”
Membership programs
The cons of traditional loyalty programs led to the growth of a disruptive variant: membership programs. Unlike loyalty card programs, which are free to enter, customers pay for inclusion in a membership program. Book and music retailers usually go this route. Amazon Prime is one of the largest membership programs with more than 150 million members worldwide. One of the most successful examples is wholesale club Costco, which only allows members to shop, receive discounts and access special merchandise. The Dollar Shave Club, which allowed members to receive shipments of blades on a regular basis, captured a significant 15% market share in the short period of five years before it was sold to Unilever, and forced competitor Gillette to revamp its membership program. Membership fees increase commitment from customers. The predictability of repeat business and cash flow results in significant cost-savings to the business too, not the least from reduced marketing costs. Retailers can also target customers through better product selection and design.
Paid membership programs are particularly valuable as many of today’s consumers expect immediate gratification, even if they’re making their first purchase with a brand. In fact, two-thirds of consumers report that they’d join a paid membership program offered by their favorite retailer if the rewards were relevant, with that number increasing to 75% for younger consumers between the ages of 18-34.
Cards themselves are being increasingly replaced with apps as eCommerce and digital payment infrastructure take off. Nowadays, mobile-optimized apps that use near-field communications are gaining ground. Even Cracker Jack, which included a novelty prize in its boxes of caramel popcorn starting 1912, announced in 2016 that the prizes would be replaced by nostalgic games that could be downloaded onto its app via QR code.
Things to consider for a loyalty program
Once the domain of majors, now even a smaller player can run a sophisticated loyalty program. Here are a few takeaways gleaned from the successes of the best loyalty and membership programs out there.
Simplicity is key
Keeping the adoption process easy and simple is the key to getting customers on board. Pop-ups, freebies, discounts and reminders on your website can remind them to join. Ask only for information that is really needed. Once aboard, they should easily understand what their status is, what their points are and what their potential rewards are. The Starbucks Stars app, one of the best apps optimized for mobile and through which purchases can be made, goes one further and acts as both a rewards program and payment method. The points system is simple too – US$1 gets 1 star. According to Bond Loyalty Report, 57% of consumers want to engage with their loyalty programs via mobile devices, but 49% don’t know if their programs have an app. Make the redemption process easy to navigate. And of course, make sure you don’t upset older consumers when you restructure programs either.
Reward engagement
Loyalty programs need to reward devoted customers beyond just purchase. Don’t just reward new members, keep in mind existing members too. A tiered solution such as Sephora tri-tiered Beauty Insider program is ideal. Reward them for a variety of actions from sharing on social media to customer referrals. Customer engagement can support a retailer’s marketing, bring in new customers and grow revenue. Track loyalty metrics like churn, response and retention rates. The idea is to move them along on their customer journey as they interact with your brand and finally become advocates, and the rewards and incentives for them to do so should be commensurate, relevant and tailored.
Personalization
The creation of an account for a customer to track lifetime sales also results in a rich vein of data that can be mined to understand shopping patterns and target them better. eCommerce-led businesses can take advantage of the data to come up with targeted sales and marketing for an audience of one. Furthermore, only 11% of loyalty programs offer personalized rewards based on a customer’s purchase history or location data, so there is scope for much more customization of incentives.
Repeat business from loyal customers might be key for businesses to persevere through and bounce back after the COVID crisis, and well-designed loyalty programs that go beyond points and are sensitive to their users’ needs during this difficult time as well as after are going to make it infinitely easier for them to support their favorite brands.
About BORN partner Yotpo:Yotpo, the leading eCommerce marketing platform, helps thousands of forward-thinking brands like Rebecca Minkoff, MVMT, Bob’s Discount Furniture, and Steve Madden accelerate direct-to-consumer growth. Yotpo’s single-platform approach integrates data-driven solutions for reviews, loyalty, SMS marketing, and more, empowering brands to create smarter, higher-converting experiences that spark and sustain customer relationships.
The number of states requiring remote sellers to collect and remit sales tax more than doubled in 2019. By the end of 2018, six months after the Supreme Court of the United States overruled the physical presence rule in South Dakota v. Wayfair, Inc. (June 21, 2018), 19 states were enforcing economic nexus. As of December 2019, 43 states and the District of Columbia have economic nexus laws or rules requiring out-of-state sellers with a certain amount of sales in the state to collect and remit sales tax.
The last two holdouts will likely cave in 2020. Only two states with a statewide sales tax haven’t adopted economic nexus: Florida and Missouri. Both have economic nexus legislation drafted and ready for discussion during their 2020 legislative sessions, which start in January.
A state with no general sales tax may beat them to the punch. Close to 20 local jurisdictions in Alaska have signed the Alaska Intergovernmental Remote Seller Sales Tax Agreement, which was created by members of the Alaska Municipal League and will be managed by the Alaska Remote Seller Sales Tax Commission. The agreement allows local jurisdictions to “implement a single-level, statewide administration of remote sales tax collection and remittance.” Remote vendors could be required to collect and remit sales tax in some parts of Alaska by early 2020.
The rise of the marketplace
If the Alaska Municipal League, Florida, and Missouri all succeed in their efforts, marketplace facilitators will be required to act as the tax collector for third-party sellers in those locations. And Florida, Missouri, and municipalities in Alaska aren’t the only ones looking to implement marketplace facilitator laws in 2020.
Like economic nexus, marketplace facilitator laws exploded in 2019. Only seven states required marketplace facilitators to collect and remit tax on behalf of their third-party sellers as of December 2018, and most allowed marketplaces to opt out of collection by complying with use tax reporting requirements. By contrast, 37 states and D.C. have marketplace facilitator laws now. And counting.
One benefit of marketplace facilitator laws is that they reduce or remove the burden of compliance for the smallest sellers. Another is that state tax authorities don’t have to deal with auditing individual marketplace sellers — they can focus on the larger marketplace facilitators instead.
There are similar benefits when businesses outsource sales tax collection and remittance to a certified service provider.
Simplifying compliance with certified service providers
Before states won the right to tax remote sales, the Streamlined Sales and Use Tax Governing Board came up with a way to encourage voluntary compliance.
Streamlined Sales Tax (SST) member states simplified sales tax compliance for remote sellers by establishing a central, electronic registration system; uniform definitions, rules, and tax bases; and more. They also compensate certified service providers (CSPs), like Avalara, for providing sales tax software and services for businesses that qualify as a volunteer seller.
The CSP program has been such a success that other states are emulating it. Pennsylvania already has a CSP program up and running. Connecticut, Illinois, New Mexico, and the Alaska Municipal League are developing similar CSP programs of their own. Expect more states to follow suit in 2020.
Other sales tax changes
Though they grab headlines, taxes on remote sales aren’t the only news in the sales tax world. As did 2019, 2020 will see changes in exemptions, product taxability rules, sourcing rules, and more. Expect to see sales tax developments in:
Bitcoin: How states treat it and whether tax departments accept it
Digital products: If they’re not already taxed, ebooks and streaming services likely soon will be
Food: Marketplaces that deliver food may be required to collect sales tax
Tampons: More states are likely to exempt feminine hygiene products in 2020
Transportation: More states will look to tax personal transportation services (e.g., Lyft and Uber)
And, of course, there’ll be sales tax rate changes. There are always sales tax rate changes.
Want to know more about 2020 sales tax changes? Get the report.
