Running a business is hard.
There are always so many fires to put out, projects to progress.
Time is always a rare commodity.
But if you want to boost growth and build in a sustainable way, where do you focus?
In this episode, rebirthed Toys R Us Aus/NZ/UK Chairman and international sales and marketing shopper experience expert, Kevin Moore, shares the expertise that he uses to help numerous physical and online retailers to grow their businesses. He explains the pillars he regards as essential to support your business and the levers to pull to ensure fast and sustainable growth. Have a listen, and tap into Kevin's expertise to help you with your business.
EPISODE 2, SERIES 2 TRANSCRIPTION
15th March, 2022
Nigel Miller: In our last episode, we focused on the trends in physical and online retail. In this episode, we're going to focus on the pillars of growth and the levers that businesses can pull to get on the growth spurt that most businesses particularly need in this challenging environment.
Welcome to another episode of The Road to Online Retail. I'm Nigel Miller and with me today, as always, is our international marketing and sales retail guru, Kevin Moore. Hello Kevin.
Kevin Moore: Hello.
Nigel Miller: Kevin, you're very, very passionate about small to medium businesses and helping them grow.
Kevin Moore: Yeah.
Nigel Miller: And you do that in a number of ways and obviously you've done it to fairly good effect by your relationship with Toys R Us, which tell us a little bit about that, where you've started that relationship and where it is now.
And then tell us about your advisory group and why you do an advisory group and how you help them.
Kevin Moore: Yeah, I guess this has triggered from our last conversation when you started to get down into the detail of businesses generally. So although our business together Nige, is about educating people, providing people the, the knowledge resources, if you will, educating, providing people with the resources to be able to grow their businesses in physical retail and online.
And that's great, you know, five, 6,000 people have done the courses that's good and they continue to do the courses every month, which is wonderful. But the backbone of it is just business. I'm a businessman. I'm proud to be a businessman, my tribe are business people and my tribe come and go.
So my tribe come out of university, having studied business and loved business, and that's all they do all their life until they decide to do something else or they fall into it kind of by mistake or by necessity. So it doesn't matter what age they are, what sex, what shape, what religious gluten-free beliefs, what political beliefs they need to do something.
They need to harness their passion for something and bring that alive. And that's been the backbone of what I've done in 40 countries across a career in several different industries. And I still do it now.
So my passion is to get people who want to feed their families and provide the best for their families to give them the structure to make that then the best they can be. Not better than they can be. To make them the best they can be to give them the opportunity.
So that means that specifically around retail and online retail, that is the backbone the, away from manufacturing, away from the entertainment sector, away from mining and the big things, that's where I play. That's where the majority of people can access, normal people can access that sector of business to feed their families. It's hard to get capital to build a factory. You know, it's hard to get capital to dig a mine, build an airline, but it's not hard to get enough capital to be able to set up a shop or to set up an online store.
So that's, that's my passion.
Nigel Miller: Let's just step back a little bit though, because I don't think we've ever actually covered why you are recognised as international marketing and sales retail guru, and why people are inviting you to become a bit their chairman or on their board and all this sort of thing. What's your background that's got you to this position?
Kevin Moore: Yeah, I guess the differentiators is I've done a lot across a lot of geography. So, I've lived in 10 countries, have done business in 40/ 50, I can't remember, and across a lot of industries. And on that way, I've always immersed myself just behind the curve of whatever is happening.
So I say this time and time again, I haven't made one cent of any of the wealth for me and my family around being innovative. I've always been a fast follower and sometimes to the point where the fast following confuses me for weeks or months or a year or two, and then it clicks and I go, oh, and that's how I got involved in the online.
I was very dismissive of it and then I spent my time inside a small agency at Fox Studios in Sydney and I was blown away by the power and reach of that. And that was back in 2014. And that was, you know, that was the chapter changing part of my life, people come to me cause I've done a lot of it over a long period of time.
Generally speaking, I've got most of the business I'm involved, they have grown. If I haven't been able to pull that lever, I know why I haven't been able to pull that lever. But it's about growth. It's about being consistent in the, in the business environment and about bigger picture growth businesses, but it's all around growth.
I don't do big companies. I haven't got the capability, I believe to run a $10 billion business, but I'm really good at 10 to a hundred million businesses, really good at, that's what I like.
Nigel Miller: So, is there a formula? How does it work?
Kevin Moore: Ah, I dunno, so a formula is interesting. So I've been fed through a lot of industrial psychology tests over my career in different places and different countries. There's a number of things that I have blind spots in and there's number of things I'm quite good at. But the one thing that came up has come up three times in quite in-depth is a high pattern recognition.
So what I have is the ability to, to see unrelated things and build a pattern around them. That's why I'm a fast follower. That's why I'm not an innovator. You can't pick a pattern from things that haven't been done, you know? Um, so it's that fast follower. So what I tend to do in most businesses, I can look at a business, I can walk a store, surf, a website. I can move my way through a P and L and balance sheet. I can look at a plan and I can see the patterns very quickly and say, that's a pillar. That's going to work. That's a pillar. That's going to work. We've got, we've got a gap here. We can fill it, but there's a gap there.
I can see it quite quickly. And then it's really just working with the people that have the passion and the values to be able to say, okay, these are the things that are working well. This is where we need to go. And it is quite formulaeic businesses. Aren't complicated things. We make them complicated. The older they get, the bigger they get, they become complicated. Regulators make them complicated, but businesses that you and I run Nigel, you know, 97%, according to Verne Harnish 97 and a half percent of the companies in the OACD turnover less than $2.5 million US. So they're not complicated companies. They're easy to understand. And you can, you can do good things with those companies.
Nigel Miller: But if you're running a company yourself and you've never done it before, normally you're just sort of chasing your tail, trying to get things done. And there's the old adage of, you need to at some point start working on your business rather than in your business. With the people you've been working with in recent years, particularly advisory groups, how often are you seeing that? And what are the things that you want them to start focusing on rather than just doing?
Kevin Moore: So across the businesses that are currently in my advisory group, great guys, I know them, I know their families. This is an important part of being business around, family businesses and, people who own their own businesses. They all do different things. We've got an air conditioning servicing company got a building company, we've got a wine business, we've got a, a packaging conversion company, we've got a digital agency, we've got an accounting firm, and they're all at different parts of their growth cycle. And they can accelerate at any point they choose to. In the life of their business, there's an opportunity to grow, to go to a new pillar or to do more of what you're doing or to bring on people who have skill sets that you haven't got. It's all there. Anybody can do it as long as they have people around them that give them the confidence and can guide them and stop them dropping in a hole.
The question you specifically asked was if you've never done it before, it's very hard. It is very hard. So one of the questions you also ask them is what do you start with? You always start with sales. You always start with sales because sales revenue, assuming that you're buying it for a dollar and selling it for $2 or somewhere in between, you're not buying it for a dollar and selling 50 cents.
I'm assuming that you're making a product margin on what you're doing. If it's a service that you've got a product margin on the service you're providing. Once you've got that, you can spin it up. It covers a multitude of sins. You can have poor operations, you can have, you know, bad cash collections, you know, all those things are there but, a growing sales business gives you the time to get those things right. And you must get those things right.
So I'll tell you just an anecdote and I won't name the guy. We had a problem with business. It was growing. Systems were poor. I tried for getting on for 18 months to get the systems in place and the systems were literally just putting in Xero - Xero accounting software, it's easy to use. There's many, but Xero's is the current global growth for SME businesses. Put in Xero, put in a piece of software to manage his projects so he could actually see where the money was in the business, regularly do his management accounts, so his P&L, his balance sheet, each month, get his accountant to do that. And his accountant wasn't doing that.
Anyway, I wasn't getting anywhere with him and over our annual review, which we do, which is usually done at a nice restaurant and this was done at a place called Icebergs in Bondi, at Bondi Beach, and I go through a review of all the guys, I save him to last and say, I'll call him Bobby, "Bobby, Bobby, this year, I'm going to retire you from the advisory group. I'm going to take you off the board". And this is done in front of his peers. He went ballistic. His language was unbelievable. I said, here's the thing, if I don't do this, you're like a beautiful small airplane, which is capable of flying around in eight eights blowing in clear sunshine, no bad weather around, but as soon as you get some bad weather, you're going to fly into the side of a hill. And I'm your co-pilot because I'm working with you, I'm your co-pilot. And I won't allow that to happen. So basically we spent four months, five months and we made some errors and we chose the wrong, my bad, I mean, I pushed him into a piece of software that wasn't right. He self corrected, used Xero, got his accountant into a rhythm and he chose another piece of software.
Anyway, went from losing, which he didn't even know, losing a third of a million dollars a year to making about $600,000 a year. And that took us less than 12 months. So they're not complicated things you just need people around you that have been on that journey and, and are honest with you that say these are the things that you need to change.
Nigel Miller: Yeah, I used to belong to the Entrepreneurs Organization and, um, one of the things we always focused on was targets that were achievable every month that you had to report back on and actually having a panel of people you were close to, to report back on did make you focus a bit more on your business rather than just doing your business. But also on the sales side, what I also found interesting is we had one member who ran a sort of cafe restaurant type business and even for them just training their people up to offer an extra cup of coffee or try and push the special or whatever it was and, and had a little internal game within the staff, raised the revenues.
So just simple things, simple levers you can pull if you plan them.
Kevin Moore: So the reason you're sort of taking me down this path of discussion is around that broader business thing. So all of those things, there are, I've used this phrase many, many times in presentations to large audiences, I think that there's one I was with you in Sydney some years ago, there's about 6,000 people in the audience. And I use the phrase which I've used within this room there are enough ideas to make every single person a millionaire, however, not to be confused, only a small number of people will put those into reality and make them a real business.
So for me, the key thing is once you've got the rhythm of the business, you can then start, once you've done it, once you've made the call that you're going to back yourself and go into business, get the sales, right and then we start to, to build the pillars behind making sure we understand where our margin is, making sure we understand our costs, getting into the rhythm of the business where we do management accounts using the right software, to be able to see what's going on. Then we can fine tune and finesse.
And you hear the phrase "key profit drivers", as you just described in the food service industry, deliver many to somebody every time they ask for a coffee if they're sitting in and bring thema glass of water and ask them, "will you be dining, today?" These are all unique special things that drive sales. And again, that's a sales, not a marketing, that's a sales thing.
So when you say to somebody, "would you like..." it's a sales thing. The marketing thing is you bringing them in. They're there in the first place, they expect the awareness and engagement engagement is you've said, "can I do something?" That's the sales part of it.
Nigel Miller: Run me through the pillars. What pillars are we talking about here? What are the key pillars that everyone should be focusing on about no matter if they're physical or online?
Kevin Moore: So, first of all, you've made the decision that you want to go into a business that you like. I'm going to assume that because most people go into businesses they don't like tend not to be successful. You go into business you like, you're passionate about it, you focus on making sure that you get the best, whatever it is, that you can find, that you believe is the best for you.
And then you start to communicate that as widely as you possibly can. Let as many people to know that that is there and then drive that consistently, every single day, every single day. How can I increase my sales? How can I increase my sales every single day? Behind you, every month, you're looking at a P&L. And people say, oh, I don't understand P&Ls. P&Ls to the simplest things in the world once you get into the rhythm of using them and enjoying them. It should be something that you want to look at. So you can look at your product knowledge and understand that every time I sell a cup of coffee for $3, I make $1.80. Wow, that's great. So I need to make sure I'm doing that. And any point where that ratio drops, I'm doing something wrong. So being aware of the numbers.
Then it's just consistent service, making sure that you're providing the best service you can, that people want to come back. You know, there's no point in winning new customers while other customers are leaving. One of the key things we look at online is the return customers. And we need our return customers to be growing every single month, every single month, because we know that when we get to key selling times, we will have new people come and try because the brand is getting stronger , it's better known, but the return people will come back and they will spend more and they'll tell people about it.
The phrase I'm using now within all the courses that we've done, they're no different to the mantra I've been chanting for 15 years. But each business got is different pillars, but the key pillars are, you've got to sell, make sure your revenue is going up, you gotta make sure your gross margin's, right, you gotta be aware of your cost to make sure there's something coming out the bottom.
So this is another point, I often get involved in people who are going through a change in life. So they are changing a partner, and it's sad it happens, and there's a business involved. I always joke that when you're in a stable relationship, your business is worth a million dollars. And when you're getting divorced, it's worth $10 million because a lawyer says as part of the asset carve out, all this business is worth much, much more. Anyway, when you get to that point, the key thing you gotta remember is that businesses provide an income to people from the costs as well.
So when you run a business, you're paying yourself a salary and you may be employing part-time members of your family. And when they're going through school or whatever, it may be, they're part of that. It doesn't have to make consistent profits sufficient to distribute dividends because yet you have a job and the business gives you flexibility.
We talked about time dividends, many time a business gives you time dividends. Nige, you've got a gorgeous young daughter and you get to see Tess because you have a time dividend from the business you have. If you worked for a major editing company or a major production company, they would have 60 hours of your life every single week and you wouldn't have the flexibility to see Tess. That's a time dividend. The value of that is unbelievable. So we must remember these things. And often at the, at the end of it, I people say, "oh, you know, I've put up with your business all my life and you know, it's never made any money."
"Hang on, the house we're living in, the cars we drive, the whatever, are all the function of the business and what it's been doing as well as what everybody else in your family community is bringing in. This is getting a bit deep Nige, but I think it's the key. For me, that's what makes businesses what they are.
Nigel Miller: There's a couple of interesting points there. I mean, from just my own personal perspective, I used to run a production company. I used to do the 60-100 hour weeks and that's probably why I've got an ex-wife as much as anything else, and didn't love the business at the end of the day, because it was just work. Turned into work and managing people and on, you know, doing the accounts and all the other bits and pieces.
Whereas now I make far less money, but as you say, I am a lot happier than I've ever been because I do get quality time for the things that are for me, far more important.
Kevin Moore: And going back and we've had this conversation many times your business, and your and my businesses, that were the ones that we share, at any point those can be amped up. And there's a point in time and this, again, the great flexibility of businesses, you can put them into a holding pattern to fly in that clear blue sky to support your lifestyle and things that you need at those moments in time.
Nigel Miller: Yeah. And I'm at that point now of needing to push forward because my daughter's getting more and more independent in a few time and won't be needing me!
Kevin Moore: Absolutely. And then what we do is all the things we talk about here. We start to do again, we bring them out, we dust them off because we've done them before we dust them off, we look at how we grow your business and that's what we do.
Nigel Miller: But the other thing that you touched on there that I've seen so often, because I used to do a small business TV programme for many years and used to deal with tons and tons of small businesses going through different phases and having different challenges. But the very common one was that people didn't factor in paying themselves.
Literally just focused on the business and didn't take anything out to actually justify the time. And, and you could very quickly see some businesses where the opportunity cost was too great. They would be much better off going to get employed again because they were never going to make the money that they thought they could.
How often have you seen that sort of thing?
Kevin Moore: Only every day. I mean only every day. So Aesop's fables with the old man and the sun and the donkey and again, I've used this comment for businesses, the donkey, the donkey is your business and the donkey has to carry your weight. So that's why it's okay not to make a profit at the bottom if you're paying yourself the rate for the job you're doing in that industry. Time is all the other things that you get in flexibility and the pride of running a business and the roller coaster and scariness of doing it, but it must pay you a salary. And I was taught that at an early age by my chairman, he's still my chairman's chairman.
Pete celebrated his 70th birthday last week. At one point he was the top 30th wealthiest man in Australia. Because it's private now, I don't know, he might be number 22. But, wealthy man, his second generation of businesses is family involved in it. They're amazing and he's still my mentor. And he taught me, when we were building a business together, which he owned part of, this business must pay market rates.
So if that means at the end of the year, you haven't made any money,
"Okay, have you grown?"
"Yes, we grew by 20% again."
So investing the profits back in the business, but you're paying yourself the rate that you would expect. If you're paying yourself the rate you expect in the market, and you're consistently losing money with no endgame then you got to question why you're there. And I've advised guys to do that, to say, look at the you're at the point where your business doesn't look to be kicking. If you continue doing what you're doing, then you need to decide whether or not you go back to working for the man, working for the lady, and give up your business.
I have a situation at the moment with a guy that I've known a long time, and I said to him, he's got a phenomenal property portfolio. He's the kind of guy who builds a great business, got it to ten million dollars a year, makes a million every year, year in year out for 12 years. Doesn't want to grow, has got into a rhythm. Because of that, he distributes the money from his business and has the most magnificent property portfolio in Sydney, beautiful properties. And I said to him, "listen, the core of the business is going nowhere. COVID's changed all of that issue. How are you doing?" He said "I'm able to make a little bit of money from it."
And I said, "so where are you making most of your money?"
"Oh, I've pivoted. And my social media arm is now significantly greater."
I said "Cool, then I suggest what you do is you put a bullet in the old business. Shut it down. Take out whatever retained profits are in there, stick it in the other business, because if you cannot see genuine growth on the other side of COVID for the industry you're in, go and do something else. Go do something else because things have changed and all you're going to be doing is treading water. The million dollars isn't going to be coming out the bottom because that sector won't support that any more."
Nigel Miller: I must have seen this more than anything else where you're seeing businesses that person has invested so much in, but it's not working. And maybe they've tried pulling the variety of levers that could be pulled fairly easily and it's still not working, but they're so invested, they can't, and there's pride as well, they can't quite see that that bullet is necessary. It is putting the animal out of its misery.
Kevin Moore: Hmm. So you asked me a question. I use this phrase " I'm a capitalist with a socialist heart". I believe in business. I believe that money needs to flow to places, to allow people to grow businesses, to employ more people, to pay more tax, earn the money, pay the tax which I'm doing. I've just got my tax returns from different businesses in the last few days and beautiful.
Earn the money, pay the tax. So I believe that, but I also believe that as a socialist, that society must be improved by the things that we do. So, and Australia, Canada, New Zealand, they tend to be these funny capitalist markets wrapped in a socialist country and they work pretty well in the U.S. there's a far better support, and the theme I'm going to go on to with this one, has a far better support for people to fail in business. So in many countries failing in business is a terrible thing, and, oh my God, isn't it awful! In the U.S. It isn't. And the fact that they have a place called Merryland and they have Chapter 11 and they have these different laws and different corporate structures and since the 1700s they've made sure that the business owner has as much right as the people lending the money, allows people to do that. So they don't get worried. If it doesn't work, start another one. As the person putting in the money as the capitalist, you get that. Okay, I'm putting in a hundred grand, I'm going to get back 200 or nothing.
Nigel Miller: Yeah, it's interesting because I don't think there's a single successful entrepreneur story that doesn't tell you about his failure beforehand.
Kevin Moore: Oh, her failure.
Nigel Miller: Or her failure!
Kevin Moore: Yeah. So, I see that as a difference. So I'd love to see them and we're seeing it, the Safe Harbour Laws are coming in, that will give people more comfort. It's interesting, a lot of people that I talk to, a great guy I know, and we worked together in many different countries and I said to him at one point in his career change, I said, "Hey, why don't you start a business?"
And he was aghast. He said, "look, I just want to go to work." He's earns a lot of money. "I just want to go to work and do a good job." The idea of running a business was petrifying. And it took me a few years later to ask him, "Hey, do you remember we had that conversation and your reaction?" He goes, "yeah, kinda." "So what's your aversion to businesses?" He said "I could lose everything."
So, if you work in a corporation, if you work for a government department, you're not going to lose everything. But there is a chance, certainly where the laws of the old world are very much against the people lending the money, not the people who borrowed the money, you can run the risk of losing everything. You lose your home and that's, that's what stops a lot of people doing it.
Nigel Miller: Just brighten this up a little bit.
Kevin Moore: No, no, it's those great because that's the burning platform or the burning desire. So the only two successful things that get people to be great at their businesses is they've got a burning platform, "Oh my God, I've lost my job. I've got to do something" or it's a burning desire. "I really want to do this."
Nigel Miller: And with COVID there's probably more burning platform than burning desire?
Kevin Moore: I think there was to begin with Nige, but I think the change in the world, as you casually discussed the fact that you can look after your daughter and work flexibly that was available to you as a business owner, and it's become available to more people because of COVID. So I think what we're seeing is people are saying there's a wake-up call, I don't want to get back on the tube in London underground, I don't want to go on the A train in New York again, you know, I don't want to schlep my way on a tram back in the middle of Melbourne. I don't want to do that anymore. I don't want to get to sit in bumper to bumper traffic, you know, 10 hours, 10 hours a week, 10 hours a week.
They're saying, I'm not going to do that. So they're either sayings to the companies they work for, I'll come in three days a week, two. So homework has been normal. Or, you know what? This has given me a taste of something that I want to do, and I want to go and do it. And the democratization of business has been driven by COVID, the accelerated adoption of online. It can be done. You can do it from no matter where you are.
Nigel Miller: Yeah. I mean, I have to say for my experience last year, I, I did a job where the CEO of this company was over in Perth and we needed to do a really jazzy little video to open up this big event. So I was going to shoot him green screen, but you know, can't get to WA from the rest of Australia because they're shut! And we actually had a two camera shoot in a green screen studio in Perth. I was on a comms channel and I could direct him and see everything going on and basically directed a session as if I'd been there from sitting in my office in Central Coast. And I thought, crikey, I would never in a million years have thought you could do that. And also the time I saved, and the money the company saved.
Kevin Moore: And the footprint. I mean, the other thing that we're seeing, so the events business I got in, NowComms G roup in Asia in Singapore, a number of things out of COVID have come to the fore and CFOs are now in control of the travel budgets. I mean, look at the money that Microsoft and Apple and the tech companies have made in the last 24 months because they've stopped travel.
They stopped travel, the big drug companies, they've stopped travel, not flying across the Atlantic every five minutes. And CFOs have got control of it and are going to be saying your travelling's got to be a really good reason for it. On top of that, when we're serious about the planet, whether you're a believer or a disbeliever, we need to improve, you know, how we live in our home. Cause it's a little round one, that spins around and we haven't got many other homes to go to. So people are saying, if you got an airplane, why? It's gotta be a good reason, tell me the reason you get on an airplane, because forget the cost of it, the impact on the planet, and if you get in a private jet, please tell me why, there's an impact on the planet, so that isn't changing.
What you described, so the Singapore business, the software view does exactly that. We can have people in different stages and on different countries and they're blended together to appear on the screen, to be sitting along side each other on exactly the same stage anywhere.
Nigel Miller: Let's go back to our pillars. So we talked about sales being the first pillar, understanding your P and L, where'd you go after that?
Kevin Moore: So we used to use data in an old fashioned way, but now the data is so fast. You need to be looking at saying what is happening, what's the rhythm of the business, and then affecting some change. So there's a great publication that's come out in Australia, which is called The Squiz (http://thesquiz.com.au). It's a funny little online news service, for want of a better description. It's done lightheartedly, but it takes three or four key, five or six key areas of the news around the world and locally and delivers it to your phone at five o'clock in the morning. It's great. They keep trying things.
So I've watched this business for some time. They keep trying things and there's a great one they've just done where they said, "listen, just touch this button on the screen and to let us know, you've read, we know you've opened it, but have you read it? Cause it's right at the bottom to say, you've read it. And we're going to put you in a draw to, you know, to reward you for reading. We're going to try it.
A lot of the fintechs try things and look at the data all the time. We do online with Toys R Us, we will pull a lever in a category, and it's not just about price, it's about bundling. It's about new offers. It's about different way of communicating and we're look at the data.
So the data all the time, all the time, all the time. You cannot run businesses now without data. You and I did a lot of filming of physical retailers many years ago, and we talked about counters. So you could count the number of people came into the store. Count the number of transactions in the store, so we know how many people came in, how many bought, and then you could work out the average per shopper. Now we're way beyond that now. We can dissect the basket, dwell time, the way we navigated from one category to another. So data, data, data, and spend the time looking at it.
Nigel Miller: And I guess that then leads on to, particularly if you're in physical retail, I guess both like the other levers you can pull of: h ow do you attract people in? Where do you spend your marketing budget? Et cetera, et cetera. You're doing it from a point of knowledge, rather than just finger in the air hoping the wind blows on it.
Kevin Moore: Yes and no. So we have these things about data and we say, oh, we've got all this AI, we've got all this analysis. Generally speaking the data will support a hypothesis. So as a business owner, you're good at what you do, because you're doing that one thing. You're creating the best services or products that you can, you've got a real eye for things and you're looking to attract people who are like-minded, they're like you. Smaller businesses. And they come and they like the fact that the candles you buy smell that way or they're that coloured, and more people come to you. But generally speaking, what you do is, it isn't the data says, Hey, do this. What happens is you have a hypothesis and you go, you know what, I think, each time I do this, this happens. Then you look at the data and the data supports the hypothesis, or it doesn't. The data is not going to pop up on your screen and say, "Hey, Nige, do this." "Hey Kev, go and do this."
What'll happen is your mind will go, there's a pattern here. There's a cause effect going on here. Let's see what the data says. And then you'll go, yeah, let's try it. Let's do more of that.
Nigel Miller: So So that's back to your patterns. So let's get a little bit, well as specific as you can, so when you first started working with what is now Toys R Us, what was it and what did you see and what did you see as a potential? And then how did you make that leap to actually buy a brand?
Kevin Moore: So it's a technology distribution company. So it had been in the tech distribution sector for a long time. It wholesaled technology products, it wholesaled screens and PCs with a gaming focus. So things like Thrustmaster, so if you have a game where you fly A10s and you fly jets with Thrustmaster joysticks and NZXT and lots of technology gaming but, wholesaling. So buying it in bulk, breaking the bulk down and selling it into resellers and retailers in Australia.
But Louis Mittoni, who was the founder of it, brain the size of a planet, fantastic values, and I'll come back to values, fantastic values, had been online, oh, in the late nineties and one of the first online retailers and hadn't gotten into that rhythm. That's why I said you can pivot. Hadn't gotten that rhythm. He came back to it and founded Hobby Warehouse and we worked together to bring Hobby Warehouse to the point where it became more profitable and faster growing than his technology business. And his technology business has survived. When he started, there were probably a hundred companies doing it by the time today and the Mittoni Technology brand is still owned in Australia by Toys R Us and still a profitable, sensible little business. There's probably about 30. So he'd been able to understand very low margin, using productivity, to make sure that you kept the cost down and then applying that to online retailing of hobby products, because he'd come from a gaming background, hobby products in technology.
Nigel Miller: But, but that change was from wholesale to direct.
Kevin Moore: Didn't change kept it. So it came alongside. So I've got warehousing, I've got an understanding of the gaming sector, I'm selling into resellers, so I understand how people are consuming and I'm going to do more around hobbies. So not just around electronic gaming, I'm going to do remote control cars, remote control yachts. I'm going to start to do painting and things that are people's hobbies, their passion, and.
Nigel Miller: Because that was his passion?
Kevin Moore: Yeah. So that was his passion, he loved it. He loved the fact that hobbies and play grows people's minds. It entertains them. It's something they do outside of work. So he grew that and we would just work together.
So he was very left-brained fantastic, logical, great technologist. I'm right brain, all about experience. And we got together and said, let's see how we can transfer all those soft things from physical retail into online. Let's not just be about price. You know, you can't hold price forever, so let's make the experience amazing.
So that's why we, from the get go, we defined high quality video. We put in high quality video, high quality imagery, it came from there. And that's what Toys R Us saw when we pitched for the license, they said we've seen what you've been able to do with that and you understand brands and you understand experience and you deliver it with great technology.
Values. Let me tell you about values. So, 10 times a year, eight times a year, 12 times a year, it doesn't matter, I get approached by somebody who says, look, can you help with my business? And the first thing I do is sit with them and work through them and talk to them. And it's all about values. And if I can't click with them and I don't have that, that connection then I can't work with them. It's not about the money. I just can't work with them. So it is important that you understand that your values and what you do will flow through everything that you do.
Nigel Miller: Tell me about that though, because I think most people don't even consider values early on in a business because they're just doing something cause they had an idea or they've got a passion. What do you mean and why do you think it's important?
Kevin Moore: So the majority of people on the planet do good things every day. We try not to shoot each other, blow each other up, steal from each other, all those bad things. The vast majority. When you have those values, you're swimming in the same pool as the people buying things from you. When you don't have those values, eventually you get caught out.
You make a decision or you make a series of decisions that are nothing to do with your shoppers, nothing to do with your stakeholders, they're only to do with you and that tends to be the selfishness. You can't be profoundly selfish. Certain industries are and I struggle with them. Certain sectors are and I struggle with them.
But generally speaking, if you're in a business, you need to have good values because it is what the majority of people have. And you need to be able to make sure that they keep going back to you and that your behavior evidences those values. That's why values sit in everything that we do in any of the businesses. So what's your values and what's the values of the business?
Nigel Miller: Give me an example. What do you mean by values?
Kevin Moore: So if you're in the wine industry, your value should be around providing phenomenally high quality grapes, carefully thought and blended, beautifully bottled and delivered. There's a high value there. What you're not doing is saying, "I'll tell you what, I'll see if I can pick up some tankers of wine that I can do something with and I'll slap a label on it." Cause that won't last and we've seen that.
Nigel Miller: No adding antifreeze!
Kevin Moore: Exactly. So again, we kind of talk about this, but the food sector, that's why Paco Underhill's just written his new book and the whole food sector is around values. We serve up to people and we package people, consumer packaged goods industry packages things up, which we then ingest and we take inside our bodies.
So it really matters. So values across everything. So you can trade with poor values for a short time, but then people just don't sell to you.
Nigel Miller: Yeah, but you can damage an industry in the process. In fact, I was recently working with a whisky distiller down in Tasmania, and they're talking about the growth of the industry and getting to a stage where they really need to have some set in stone guidelines that everyone has to follow in order to be categorised as a Tasmanian genuine whisky.
One of the things that was mentioned is in, I think Japan, someone was buying in just sort of cheek scotch and putting it in the Japanese bottle and selling it as their own for a much higher markup. And obviously when you get caught, it damages the whole industry.
Kevin Moore: That's the same with fake brands across vast tracks of the world. It's interesting, at some point, Nige, we're going to do that. Been many to this rage as the consumer packaged goods industry has been around for 70, 80 years, 90 years, and basically takes things, processes and puts them in boxes, packaging, and we buy them from them and they give us ease and convenience and they give us consistency.
So we can go and buy our veggies and we can buy our meat from anywhere we like, and they'll have on different days have different quality and different tastes. But the concept of this consumer packaged goods business is that they will package it, it will be consistent. We don't need to worry about it, for that, and we're going to charge a premium.
Some of the packaging is appalling. So at some point, what you and I are going to do is we're going to take a whole lot of packaging and we're going to video opening it. And it is it's comedic. It is comedic. So, but we'll do the separate thing to do, but it's, it will be a lot of fun. Consumer packaged goods companies, a lot of shoppers deserve better from them than they get.
Nigel Miller: Yeah. I do a lot of work with Nestlé and they've got a global initiative, I think by 2024 or 2025, that everything they package has to be either recyclable or reusable and the amount of effort that is going in to making that happen is unbelievable. But the interesting thing I found was that they actually work quite collegiately with other packaging people because they will that value to be passed along to people further down the chain. It's less cutthroat than you think some of that.
Kevin Moore: Oh, but that goes back to values and people are attracted to those values and they want to be part of that.
Absolutely. Absolutely. So values matter. They're a differentiator
Nigel Miller: So go back to our levers then. So we've done sales. We focused on our P and L, we've assessed our values to make sure that they're good...
Kevin Moore: and communicated them.
Nigel Miller: and communicated them. And tell me why that's important?
Kevin Moore: Because people need to know. They'll hold you to account. If you say that you believe that the planet should be better and you gonna improve your packaging, they'll hold you to account and they'll stay with you on that journey. And they'll forgive you when you say, look, we're not getting there fast enough, but these are things we've done.
Oh, okay. Yeah. I'm still with you.
Nigel Miller: Okay. So what's another lever I should be pulling?
Kevin Moore: So then it's about your customers, making sure that everything is around your customers and your shoppers and that you're growing the number of shoppers that are being exposed to your brand. That's the marketing, the awareness, that they have great experiences that we're now at the point where the business is growing so the sales which have covered a multitude of sins, now we can't put those at risk.
So early in the piece, we put them at risk. If we're growing by a hundred percent a year, we're doubling every year, and we're annoying 10% of our customers, letting them down, we've still got growth. When you get to a certain point and that's no longer acceptable. You can upset 2%, 1%, 3% of your customers, but not anymore. So at that point, sales has got to be protected. The, you have to provide a great service, a great offering so that people are coming back and that more people are coming in. So that's your marketing, awareness, engagement, finding new sectors, broadening your offerings. Shoppers, buy things, lots of things, from other people and not you, and if you had them, they would buy them from you. So you've got to clearly look at the categories, how you can put in a parallel category or an adjacent category, and allow people to have that choice. And you'll know in 90 days, if you list another 30 lines and tumbleweed blows through them for 90 days, then take them down or clear them out. Don't buy them again.
But if people like them, then your product guys should be leading that, which is a great segue into people.
Nigel Miller: Before we get to people though, cause the other key word that we have in our Road to Retail is shopper experience. And I know in our first course we put together talking about sort of theatre of retail and even for online how you can get the theatre in there. So that's the thing that people should probably look at as well.
How do they lift their game in the shopper experience?
Kevin Moore: Yeah. So there, there are mandatories that you put in and they never go away. The quality of the work that you do, the quality of the imagery that you use, the quality of the copywriting that you do, the quality of the thought that goes into promotions, the quality of the communication, the timing of it, it matters. Nabokov wrote God is in the detail, good things are in the detail. And if you do that, then you have a solid business. If you get slapdash and it's "Yeah, close enough is good enough!" It shows through so, so don't do it!
Nigel Miller: Right. So now let's move on to...
Kevin Moore: "People!"
When you triggered my mind about growth companies, the greatest growth I've ever experienced and have been involved in assisting create has been when I can, we can get, I can get people around us can get the leaders to bring in more people who do things better than they do. And it is the game-changer. And once you do that, once people have the humility and confidence to do that, their businesses change and good people want to be around entrepreneurs. Good people want to be around business owners because it allows them to do things they couldn't do in big corporations. You have far more autonomy.
One of my daughters-in-law works for a great business and she has come in as a tech background and it's interesting, a lot of young women go into technology and they're very, very good at it. They don't immerse themselves in it in the way some of the male developers do, but they're really good at it. And then 10 years later, they leave and they go and do something else because it's not something that absolutely consumes them. They're just good at it.
They're technically adept, they can multitask, they get attention to detail and often they come out of that and they go into marcomms. They go to marketing communications, or they go into operations, or they go into logistics because they understand that, "I hear you've got an issue. I can solve that with four lines of code."
And she's working with this company and what she's been able to do has just changed this company and they're accelerating the growth because they've realised that she's way beyond, her capabilities are way beyond what they hired her for. And when you bring those people in it changes everything. Bringing in a good cost-estimator to a construction company changes everything. Bringing in a good Cellardoor manager when you want retain and grow the number of people who come to your Cellardoor. You bring them in, it changes everything, changes everything.
Nigel Miller: Yes. I totally agree with you. However, the downside of people is it can be bloody hard work.
Kevin Moore: I love working with people. I love working with people. My greatest pleasure is watching people grow no matter where they are in their career, and so many people I know in my career who have gone into something it's not worked out, oh, the confidence gets knocked and somebody comes on and says, "Don't worry about that. Try this. Cause again, you seem to have an affinity for that." And then they just blossom, but bringing people in, good people in, and mea culpa
I remember my business partner in the early days when we were only just making money, said we need this person to come in. I said, "we can't afford them", he said "we can't afford not to have them."
I said, "What do you mean? He said, "well, you can't do that. We've gone from 50 people to 250 people and you can't look after HR, I'll bring them in."
And it was the best thing I ever did. Our systems, our processes, our recruitment, our talent just boomed.
Nigel Miller: Yeah, it's an interesting thing that I learned as well, that the idea of people is actually they make you more money.
Kevin Moore: Yeah. Yeah. They have to be led and we have to do all the right things. But that's the point. And once you're making that decision, you have a robust business because the processes are then in more people's minds. There's a sharing, there's a different analysis, there's a wider range.
And once you get that point, it's then just recycling all those things and staying into that rhythm. The noise comes out of the business, things are being shared and you will continue to grow. And you'll grow for 2, 3, 4, 5 years until you hit another mountain or hill that needs to be climbed.
Nigel Miller: And I guess the other thing with the way things have changed, it's the great joy of online is that you don't actually have to employ people necessarily. You can contract them in for whatever it is you need.
Kevin Moore: Yeah, but here's the thing. So if you held up some of the best companies we're seeing around the world, they are employing, but they're not employing in a binary sense. I mean that in terms of both the hours people work, their remuneration, where they're located.
We're opening in the UK. We have a number of people in the UK and in Australia and in Korea and in China and in...
... my Singapore business has got people all over the place. And so it should do, it's an events business. It's got people based in Bellingen, New South Wales, Singapore, Kuala Lumpur, you know, everywhere. And that's how it should be.
So it doesn't matter where they are, and some of them work 10 hours a week. Some of them work more, but you have to open your mind to those things.
Nigel Miller: Okay, anything else we should be pulling lever-wise?
Kevin Moore: You've quite surprised me with this one, cause generally speaking, we're talking about the bigger picture stuff, but you kind of triggered this yesterday when we, uh, we were chatting about things. And you said, "Hey, we tend to focus on the road to retail and online and retail, but you actually advise businesses across a broader range."
"Yeah, I do."
So those are just some of the things that are there and none of them are new. You can read them all in Verne Harnish's books, you can read them in a lot of people's books to support your businesses.
Nigel Miller: Yeah, Vern was one of the founders of EO, so I met him a couple times and very fascinating man.
Kevin Moorre: Brilliant guy, yeah, I met him a few times.
Nigel Miller: So just to recap then, so...
Kevin Moore: Sales is the most important thing. Make sure you get it right. Make sure you understand your product margins, then make sure you're in the rhythm of looking at your P & L / balance sheet every single month. Then as the business grows, make sure you're getting underneath the data. Throw hypothesis and get the data to support your hypothesis.
And then, make sure you're bringing your customers back because service matters.
So, once you get to a certain age, it's no longer acceptable that sales will cover all your multitude of sins. You have to really look after your customers and bring in new customers. And then finally, when you get that point where you're bringing in people who are better than you, then you know you're away and that's the final kicker.
Once you get that point, the business just takes off.
Nigel Miller: Yeah. Okay. Well, I think that should give anyone food for thought, because you can dive into any one of those pillars and start focusing on it and seeing what levers you can pull to make them grow.
Kevin Moore: And for the avoidance of doubt, that's just my humble opinion! Wharton will have a different view, and Harvard and INSEAD and Henley will have different views, but you asked me as a small business advisor/owner/director/investor. Those are the things that I tend to keep front of mind.
They were things that were taught to me and they tend to work.
Nigel Miller: Well, thank you for that, Kevin. So basically if you want to learn more, check out our courses: there's stuff on sales into retail; there's stuff on shopper experience. There's lots there. There's online shopper experience. There's lots to look at. And we're gonna have a new website very soon, too.
Kevin Moore: The other thing, you and I did a review yesterday on the Udemy site, which is the backbone of our distribution. And it is amazing the feedback. The ratings have improved - now this course is four years old - the ratings improve every year, every month. We're getting better ratings as people have got more to benchmark against. So, well done to you Nige, you shoot quality, you direct quality or you edit quality and you produce quality and it shows, so well done to you.
Nigel Miller: If you're into the online side, the online shopper experience is a fairly new course that we would highly recommend anyone in the world of online to have a look at. So check out the website:
And music, Kevin, have we got anything else to play this week?
Kevin Moore: Yes, we're going out with a beautiful song called "Fire and Rain". As we sit in Australia at the moment, we have fires in Western Australia and so much rain, it's washing away the centre of the country and the railway tracks. That is what this crazy country is about. So this is a song called "Fire and Rain"...