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Food prices down in December but up for the whole year

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FAO Food Price Index fell 3.3 percent in December but still averaged 8.2 percent higher in 2017 compared to 2016

Global food prices declined in December, led by sharp decreases for vegetable oils and dairy products, according to the latest FAO Food Price Index .

The index, a measure of the monthly change in international prices of a basket of food commodities, stood at 169.8 points in December 2017, down 3.3 percent from November.

Despite the late-year slide, the FAO Food Price Index averaged 174.6 points in 2017, up 8.2 percent from 2016 and reaching the highest annual average since 2014.

The FAO Dairy Price Index declined 9.7 percent in December, with high export supplies and subdued demand weighing on the international prices of skim and whole milk powders as well as cheese and butter. Still, the subindex was 31.5 percent higher over the whole of 2017 than the previous year.

The FAO Vegetable Oil Price Index declined by 5.6 percent from November, as palm oil prices tumbled amid swelling stocks in Malaysia and Indonesia. That in turn pressured down soy oil quotations. Over 2017, the subindex ran 3 percent higher than the prior year.

The FAO Sugar Price Index also declined, marking a 4.1 percent drop from November due to seasonal factors and expectations of a large surplus in the year ahead. Sugar prices were 11.2 percent lower, on average, in 2017 than in 2016, due largely to a bumper harvest in Brazil, the world’s leading producer.

The FAO Cereal Price Index remained broadly stable for the third consecutive month, with international wheat prices weakening while those of maize and rice firming up. The Index was 3.2 percent higher over 2017 than in 2016, while still 37 percent below its 2011 peak.

The FAO Meat Price Index slipped slightly in December, with strong supply pressuring international prices for bovine meat down. For the year, the subindex registered a 9 percent increase from its 2016 level.

 

GSA calls for strict enforcement of legislations on second-hand goods

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The Ghana Standards Authority (GSA), under the auspices of the Ministry of Trade and Industry, has called for strict enforcement of legislations on second-hand goods such as handkerchiefs, underpants, mattresses and sanitary-ware.

A statement from the GSA reminded all importers and the general public that Legislative Instruments (L.I. 1586) of 1994 and (L.I. 1693) of 2001 are still in force.

It said the reminder has become necessary following recent media reports on the illegal activities being undertaken at some entry points.

“By this announcement, the Customs Division of the Ghana Revenue Authority (GRA) is put on notice to strictly enforce the law at all the entry points,” it said.

LI 1586 covers the Imports and Exports (Prohibited Goods) (No. 2) Regulations, 1994, and states that “No person shall import for commercial purpose or in commercial quantities any of the following goods which are second-hand or which have been used – handkerchiefs; men and women and children’s underpants; mattresses and sanitary-ware.

“A person who imports any goods contrary to the regulation above commits an offence and is liable on conviction to a fine not exceeding GH¢500,000 or imprisonment for a term not exceeding one year or to both; and the goods in respect of which the offence was committed shall be liable to be seized and forfeited to the State.”

L.I. 1693 covers the Export and Import (Prohibition of Importation of used LPG cylinders) Instrument, 2001 says “In exercise of the powers conferred on the Minister responsible for Trade under sections 12 and 13 (a) of the Export and Import Act, 1995 (ACT 503) this instrument is made on this day of July, 2001.

“Prohibition on importation of used LPG cylinders. The importation of Used Liquefied Petroleum Gas (LPG) Cylinders is hereby prohibited.”

The public can contact the Public Relations Department of the Ghana Standards Authority for any further information, the statement added.

Married or single: how to thrive as a female entrepreneur

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Recent research suggests that married women are more likely to be successful entrepreneurs than single women.

The assumption is that, because married women – or women with partners – have more financial support and help with family and household responsibilities, the pressure and demands of starting a business are easier to manage.

Yet, married and single female entrepreneurs have different challenges and different advantages. How they manage and leverage these, respectively, will ultimately determine how successful they are in their careers, says Joanne van der Walt, Sage Foundation Programme Manager for Africa.

According to ‘The Hidden Factors: SA Women in Business’ research report, carried out by the Sage Foundation and Living Facts, 70% of those who had their own businesses are married or living with someone and this may provide support, financially or otherwise, while 28% of those without a business said their family commitments didn’t allow them to start their own companies.

 

Built-in infrastructure

“There are other possible reasons why women with partners may be more successful entrepreneurs. Juggling home and work life forces them to organise and prioritise and therefore achieve a better work-life balance. They’re also likely to be better at compromising and communication – two essential business skills,” says Van der Walt.

For Marylou Kneale, founder of Living Facts, women who have a supportive spouse or partner have a “built-in infrastructure” that they can rely on. “A supportive spouse or partner can provide emotional, financial, family, administrative and/or logistical support. Our research suggests that more women with partners/spouses are able to ride the ups and downs that come with having one’s own business than those who are single, because of this support network.”

 

A case for the single entrepreneur

Because of the massive demands that family places on their time and attention, married women might also feel guilty that they’re not devoting enough time to their businesses or their families – and that’s one area where single women have the upper hand (assuming, of course, that they’re not single mothers).

“With more time on their hands, single women can focus exclusively on marketing and growing their businesses. They also have more time for social activities, which means they’re often able to network more than married women or those with families. This allows them to make smart connections that could help to scale their businesses,” says Van der Walt.

Although single women don’t have the security of a second household income – and therefore have to be more frugal with their money and settle for beans on toast some nights – they do have more flexibility when it comes to taking risks because they don’t have to worry about the impact that risk will have on loved ones if it doesn’t go according to plan.

 

Help for hire

But there likely will come a time when the single entrepreneur will need support – especially if she’s a single mother.

“Single women have to work to build the ‘infrastructure’ that married women are able to rely on,” says Kneale. “This could be a financial advisor or financially astute colleague they can trust; an administration assistant and an au pair or family member to help with the family. These ‘supporters’ could be permanent or only called on when needed. There could even be trade exchanges made – your services for someone else’s specialities. Not only will it spread the load the entrepreneur carries, but it also provides an emotional network of support when times are hard.”

Ultimately, married and single entrepreneurs are both after the same thing: to make a success of their new business ventures – and both might feel that there aren’t enough hours in the day or enough money in the bank to make it happen fast enough.

Kneale and Van der Walt offer a few ideas to help you free up some hours and cash:

  • Outsource the areas which are not your strengths or administrative and time consuming.You can get just about everything as a service these days and it often works out cheaper to let someone else do the heavy lifting. Remember: build your own support network.
  • Automate as much as possible. Smart, cloud-based software solutions streamline and automate many business processes, including accounting, bookkeeping and payroll. Let some things take care of themselves and get more time back.
  • Set goals and plan how you’ll achieve them. It sounds clichéd but failing to plan really does set you up for failure. When you have a clear idea of what you’re working towards, you’re less likely to waste time on things that don’t take you closer to those goals.

Women – married or not – often don’t realise how much time and energy goes into starting and growing a business. It’s one of the reasons why many return to corporate life after giving entrepreneurship a shot. But if they know what to expect, they can plan ahead and lean on their support systems – or create them – for a better chance of success.

ENDS

 

For media queries:

 

Idea Engineers (PR agency for Sage)

–       Ashmika Panday

Tel:       +27 (0)11 803 0030

Mobile: +27 (0)83 296 1680

[email protected]

 

–       Del-Mari Roberts

Tel:       +27 (0)11 803 0030

Mobile: +27 (0)72 5958 053

[email protected]

 

 

About Sage

Sage (FTSE: SGE) is the global market leader for technology that helps businesses of all sizes manage everything from money to people – whether they’re a start-up, scale-up or enterprise. We do this through Sage Business Cloud – the one and only business management solution that customers will ever need, comprising Accounting, Financials, Enterprise Management, People & Payroll and Payments & Banking.

 

Our mission is to free business builders from the burden of admin, so they can spend more time doing what they love – and we do that every day for three million customers across 23 countries, through our 13000 colleagues and a network of accountants and partners. We are committed to doing business the right way, and giving back to our communities through Sage Foundation.

 

Find out more: www.sage.com/za

Guinness Osagyefo Campaign earns Vizeum two leader awards 

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 The Guinness Osagyefo Campaign earned Vizeum Ghana, together with the Dentsu Aegis Network Sub-Saharan Africa Hub team and Guinness Ghana, two Leader Awards.  An African media first, the teams were awarded the Leader Awards in the Mobile Marketing and Social Media categories at the Assegai Integrated Marketing Awards which took place in Johannesburg, South Africa.

 

Why the Guinness Osagyefo Campaign was a success 

Ghana celebrated 60 years of independence in 2017. To celebrate this, Guinness created a limited-edition bottle featuring iconic Ghanaian figures and landmarks. Guinness ran promotions to mark the celebration with free Wi-Fi, discounts and prizes. To drive footfall to these events, the team used geo-targetted Facebook ads – an African Media First. This was the first time that a beer-brand in Africa has run a geo-targetted Facebook campaign.

Urban Ghanaians are very social online and in bars; but it can be difficult to coordinate plans with friends. The team saw an opportunity to help consumers to make the most of their evening by presenting Guinness experiences close to them, and sharing directions to the party.

The main objective was to drive Reach; allowing the team to spread awareness in proximity to bars which were running promotions and drive footfall, leading to increased sales.

 

The Results:

  • 3 million people over 18 years old were reached.
  • Brand equity, spontaneous awareness and dynamism scores all increased during the campaign.
  • The uplift in sales during the promotion was 46% higher in bars that were geo-targetted with Facebook ads.
  • The campaign contributed to an increase in sales of 103% YoY for April compared to 2016.

“Our media-first thinking approach to strategy implementation requires a greater understanding of media connections in a communication plan across an ecosystem that incorporates all media touch-points, and this contributed greatly to the success of the campaign,” says Emmanuel Odoom, General Manager of Vizeum Ghana.

“As an iconic brand in Ghana, the Guinness team wanted to celebrate Ghana’s culture, heritage and history with the rest of the nation as part of the GH@60 celebrations.  Our special Osagyefo bottle was designed to recognise all the incredible individuals across the country who have demonstrated their Made of Black spirit over the last 60 years. We joined forces with the teams to find innovative ways to engage with consumers throughout the celebrations, and it is great to have been recognised for the hard work by all of the tea,” says Lebogang Babe, Marketing Manager for Guinness.

African billionaire fortunes rise on Forbes 2018 list

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Aliko Dangote of Nigeria, the richest person in Africa for the seventh year in a row.

Buoyed by rising stock markets and commodity prices, Africa’s billionaires are collectively wealthier than a year ago. The 23 billionaires that Forbes found in Africa – up from 21 billionaires last year — are worth a combined $75.4 billion, compared to $70 billion in January 2017.

The richest African, for the seventh year in a row, is Nigerian cement and commodities tycoon Aliko Dangote, with a net worth that Forbes pegs at $12.2 billion. That’s up $100 million from a year ago. Dangote is looking beyond cement –his most valuable asset – and has been investing in a fertilizer production company and a large oil refinery. Dangote Fertilizer is expected to start operations in the second quarter this year.

Number two on the list is diamond mining heir Nicky Oppenheimer of South Africa, with a net worth of $7.7 billion, up $700 million from last year. Oppenheimer is one of 8 South Africans on the list, making it the African country with the most billionaires.

Last year, South Africa and Egypt tied with 6 billionaires each. Boosting the South African ranks this year: newcomer Michiel Le Roux, the founder and former chairman of Johannesburg-listed Capitec Bank Holdings, whose stock has climbed more than 50% in the past year, making Le Roux a new billionaire worth $1.2 billion. South African mining tycoon Desmond Sacco, chairman of listed Assore Group, returns to the list following a stock price surge of some 60% in the past 12 months. Sacco last appeared as a billionaire on the Africa’s Richest list in 2012 with a $1.4 billion fortune. (He also appeared on the 2014 Forbes list of the World’s Billionaires, worth $1.3 billion.)

One South African list member wouldn’t have made the cut a month ago. In December 2017, the share price of retailer Steinhoff International plunged after the company divulged accounting irregularities. That pushed the net worth of Steinhoff’s then-chairman Christoffel Wiese below $1 billion on December 7. (Wiese resigned as chairman in December.) In early January the company said it would restate its financial results as far back as 2015 and the share price rebounded enough to put Wiese back in billionaire territory, at least for the moment. Forbes calculated his net worth on January 5 (the day we measured all the billionaires fortunes) at $1.1 billion, down substantially from $5.5 billion a year ago. (As of Jan. 10, Steinhoff stock dropped again, knocking Wiese’s net worth below $1 billion.)

Jemal Countess/Getty Images International Rescue Committee

Strive Masiyiwa: Newcomer is a citizen of Zimbabwe but lives in London.

Zimbabwe gets its first billionaire this year: telecom magnate Strive Masiyiwa, who chairs the Econet Group. Shares of Zimbabwe-listed mobile phone network Econet Wireless Zimbabwe have surged in value over the past year; Masiyiwa owns more than half of that company. He also has a majority stake in fiber optic firm Liquid Telecom, which raised $700 million in a bond offering in July 2017. Forbes estimates Masiyiwa’s net worth at $1.7 billion.

Just 2 of the 23 list members are women, unchanged from last year. Isabel dos Santos, the daughter of Angola’s longtime former president, Jose Eduardo dos Santos, is worth an estimated $2.7 billion this year, down from $3.2 billion a year ago. Her net worth dropped in part due to a lower value for Banco BCI, an Angolan bank; its book value plunged in 2016 amid a tough year for the oil producing country.  The other woman is Nigeria’s Folorunsho Alakija, whose estimated $1.6 billion fortune lies in oil exploration firm Famfa Oil, which is partnered with Chevron and Petrobras on a lucrative offshore oil field.

Mohammed Dewji of Tanzania is the youngest on the list, at age 42. He inherited a textile and edible oils group from his father and has expanded its operations. Forbes puts his net worth at $1.5 billion. The oldest list member is Onsi Sawiris of Egypt, age 88; he started Orascom Construction in 1950. It was nationalized by the government of Abdel Nasser and Sawiris created another construction firm from scratch. Two of his three sons are also billionaires, including Nassef Sawiris, who at $6.8 billion is Egypt’s richest man. That’s an increase from $5.3 billion a year ago thanks to upticks in the share price of several of his holdings: shoemaker Adidas, cement giant LaFargeHolcim, and fertilizer maker OCI.

One person dropped off since last year’s list: Anas Sefrioui of Morocco. The share price of his homebuilder, Douja Promotion Groupe Addoha, fell about 30% in the past year, pushing his net worth down to $950 million.

Fortunes rose since last year for 13 of the 23 list members, fell for 4 people and stayed the same for 3 people. The list members hail from a total of 8 countries: 8 from South Africa, 6 from Egypt, 3 from Nigeria, 2 from Morocco and one list member each from Algeria, Angola, Tanzania and Zimbabwe.

METHODOLOGY

Our list tracks the wealth of African billionaires who reside in Africa or have their primary businesses there, thus excluding Sudanese-born billionaire Mo Ibrahim, who is a U.K. citizen, and billionaire London resident Mohamed Al-Fayed, an Egyptian citizen. (Strive Masiyiwa, a citizen of Zimbabwe and a London resident, appears on the list due to his expansive telecom holdings in Africa.) We calculated net worths using stock prices and currency exchange rates from the close of business on Friday, January 5, 2018.  To value privately-held businesses, we couple estimates of revenues or profits with prevailing price-to-sales or price-to-earnings ratios for similar public companies. Some list members grow richer or poorer within weeks –or days — of our measurement date.

We have purposely excluded dispersed family fortunes such as the Chandaria family of Kenya and the Madhvanis of Uganda, because the wealth is believed to be held by dozens of family members. We do include wealth belonging to a member’s immediate relatives if the wealth can be traced to one living individual; in that case, you’ll see “& family” on our list as an indication.

CREDIT FORBES

Do not put all your eggs in one basket

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Do not put all your eggs in one basket is an idiomatic phrase, meaning that one should not focus all his or her resources on one hope, possibility or avenue of success. If you put all your eggs in one basket, you risk everything on a single opportunity which, like eggs breaking, could go wrong.

In Finance, this problem is alleviated through diversification. Diversification is a technique that reduces risk by allocating investments among various financial instruments, industries and other categories. It aims to maximise return by investing in different areas that would each react differently to the same event. Most investment professionals agree that, although it does not guarantee against loss, diversification is the most important component of reaching long-range financial goals while minimising risk. Here, we look at why this is true, and how to accomplish diversification in your portfolio.

Different Types of Risk
Investors confront two main types of risk when investing:

  • Undiversifiable– Also known as ‘systematic’ or ‘market risk’, undiversifiable risk is associated with every company. Causes are things like inflation rates, exchange rates, political instability and interest rates. This type of risk is not specific to a particular company or industry, and it cannot be eliminated, or reduced, through diversification; it is just a risk that investors must accept.
  • Diversifiable– This risk is also known as ‘unsystematic risk’, and it is specific to a company, industry, market, economy or country; it can be reduced through diversification. The most common sources of unsystematic risk are business risk and financial risk. Thus, the aim is to invest in various assets so that they will not all be affected the same way by market events.

    Why You Should Diversify
    Let’s say you have a portfolio of only airline stocks. If it is publicly announced that airline pilots are going on an indefinite strike, and that all flights are cancelled – share prices of airline stocks will drop. Your portfolio will experience a noticeable drop in value. If, however, you counterbalanced the airline industry stocks with a couple of railway stocks, only part of your portfolio would be affected. In fact, there is a good chance that the railway stock prices would climb as passengers turn to trains as an alternative form of transportation.

    But you could diversify even further, because there are many risks that affect both rail and air since each is involved in transportation. An event that reduces any form of travel hurts both types of company – statisticians would say that rail and air stocks have a strong  Therefore, to achieve superior diversification, you would want to diversify across the board; not only different types of companies, but also different types of industries. The more uncorrelated your stocks are, the better.

    It’s also important that you diversify among different asset classes. Different assets – such as bonds and stocks – will not react in the same way to adverse events. A combination of asset classes will reduce your portfolio’s sensitivity to market swings. Generally, the bond and equity markets move in opposite directions; so, if your portfolio is diversified across both areas, unpleasant movements in one will be offset by positive results in another.

Some investors dismiss diversification, saying you’ll make the most money if you hold only the most lucrative asset. Obviously, that’s true. The trouble is you can’t be sure what that asset will be in advance, particular over the short-term. Also, the highest returning asset is usually the most-risky one; so the chances of loss are greater, too. There are also time-factors to consider when deciding what assets to hold.

Shares are the best performing asset over the long-term, but not always in the short term. A bear market in shares can savage your returns and your net worth.  For this reason, even investors with a long investment horizon will often hold a portion of their portfolio in less volatile assets. There is no point putting all your savings into shares for a prosperous retirement, only for market gyrations to cause your hair to prematurely fall out!

Do remember a portfolio changes over time. As some assets do well while others do badly or simply hold their value, the inherent diversification of your portfolio will change.

A common example is an investor who puts 25% of their wealth into the stock market and sees it double over a few years. If nothing changes, they now have 40-50% of their wealth exposed to one asset class, instead of the 25% they were initially comfortable with.

Conclusion
Diversification can help an investor manage risk and reduce the volatility of an asset’s price movements. Remember, though, that no matter how diversified your portfolio is, risk can never be eliminated completely. You can reduce risk associated with individual stocks, but general market risks affect nearly every stock, so it is important to diversify also among different asset classes. The key is to find a medium between risk and return; this ensures that you achieve your financial goals while still getting a good night’s rest.
 

ABOUT OMEGA CAPITAL

Omega Capital Limited is an Investment management, private equity and   investment advisory firm. The Company is authorised and regulated by the Securities and Exchange Commission of Ghana.

Contact Us

Analysts:

Nana

Kumapremereh Nketiah (JP)

Sophia Obeng-Aboagye

 

Omega Capital Research

The Alberts, 1st Floor

No. 23 Sunyani Avenue

Kanda Estate

Accra.

 

Phone: +233 302 201538

Fax: +233 302 734 745

Email: [email protected]

Website: www.omegacapital.com.gh

 

Disclaimer

Additional information is available upon request. Information has been obtained from sources believed to be reliable but Omega Capital Limited (“Omega Capital” or “The Firm”) does not warrant its completeness, accuracy or veracity. The firm is licenced and regulated by the Securities and Exchange Commission of Ghana (SEC). This material is for information purposes only and it is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and estimates herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients. Periodic updates may be provided on companies/industries based on company specific developments or announcements, market conditions or any other publicly available information.

AfDB achieves 100% investment in green energy Projects in 2017

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….Commits to 100% climate screening for all Bank financed projects

The African Development Bank achieved a 100% investment in renewable energy in 2017, a major landmark in its commitment to clean energy and efficiency.

Power generation projects with a cumulative 1,400 megawatts exclusively from renewables were approved during the year, with plans to increase support for renewable energy projects in 2018 under the New Deal on Energy for Africa.

According to Bank President, Akinwumi Adesina, ‘’We are clearly leading on renewable energy. We will help Africa unlock its full energy potential, while developing a balanced energy mix to support industrialization. Our commitment is to ensure 100% climate screening for all Bank financed projects.’’

The share of renewable energy projects as a portion of the Bank’s portfolio of power generation investments increased from 14% in 2007-2011, to 64% in 2012-2016.

The Africa Renewable Energy Initiative (AREI) whose goal is to deliver 300 Gigawatts (GW) of renewable energy in 2030 and 10 GW by 2020, is now based within the Bank, as requested by African Heads of State and Government. The G7 has promised to commit US$10 billion to support the initiative, which came out of COP21 and subsequently approved by the African Union.

On November 8, 2017, the African Bank Group approved its Second Climate Change Action Plan, 2016-2020 (CCAP2) as a clear message of its commitment to helping African countries mobilize resources to support the implementation of the Intended Nationally Determined Contributions of Regional Member Countries, in ways that will not hinder development.

The approval of the action plan echoes discussions at COP23 in Bonn, Germany to strengthen the global response to the threat of climate change and achieve the Paris Agreement’s goal of keeping global temperature rises to 1.5C.

The CCAP2 is designed to incorporate the Bank’s High 5 priorities in the Paris Agreement, the 2030 development agenda, the Bank’s Green Growth Framework and the lessons learned in the implementation of the first climate change action plan (CCAP1), 2011-2015

As part of its wider mandate under the New Deal on Energy for Africa, the Board of Directors of the African Development Bank on December 15, 2017, approved an investment of US $20 million in the Evolution II Fund −a Pan-African clean and sustainable energy private equity fund.

The Bank’s investment in Evolution II Fund reflects the High 5 development priorities of the Bank, the agenda to light up and Power Africa, and the Bank’s commitment to promote renewable energy and efficiency in Africa.

The Evolution II Fund is expected to contribute to green and sustainable growth by creating 2,750 jobs and building on the track record of the Evolution One Fund (which created 1,495 jobs, of which 20% were for women, and generated 838 MW of wind energy and 87MW Solar PV energy). It is estimated that the Evolution One Fund achieved 1,190,469 of Carbon dioxide (CO2) emission savings annually

In line with its commitment to renewable energy and ongoing institutional reforms, in the first quarter of 2017, the Bank appointed Ousseynou Nakoulima as the Director for Renewable Energy and Energy Efficiency. He brings global experience in developing and managing programs and partnerships for driving renewable energy, from his work at the Green Climate Fund.

Are you measuring your business’ Customer Effort Score (CES)?

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A few weeks ago – in our December 21st article (https://thebftonline.com/business/the-net-promoter-score-nps-what-is-it), we have talked about NPS (Net Promoter Score) as the de facto standard for measuring Customer Loyalty.

In 2008, the CCC (Customer Contact Leadership Council) a division of the Corporate Executive Board (CEB is now part of Gartner) created the Customer Effort Score (CES), as a better alternative to NPS. CCC believes their CES metric to be both a better and more predictive method of surveying customers.

CCC made a quite extended study of 75,000+ customers who have had an interaction with customer service via all possible communication / contact channels (e.g. phone, email, chat, etc.), and they performed literally hundreds of structured interviews with customer service leaders worldwide.

FYI, this study of the 75.000+ customers, was based in getting answers to the following 3 questions:

  1. How does customer service affect loyalty?
  2. Which customer service activities increase loyalty and which do not?
  3. Can companies increase loyalty without raising their operating costs?

 

What is CES?
The idea behind CES is to ask your customer how much effort s/he put into a certain interaction with your company; for example, during a technical support call or during a visit at a Customer Service Department that s/he needs to do in order to resolve a billing problem or simply exchange a merchandise.

 

CCC/ CEB research showed that “Service organizations create loyal customers primarily by reducing customer effort – i.e. helping them solve their problems quickly and easily – not by delighting them in service interactions”.

According to CCC/ CEB’s findings:

  • if customers are forced to put forth high effort, they are 96% more likely to be disloyal,
  • only 9% of customers with low effort are more disloyal.

So, the original CES single question in 2010 was: “How much effort did you personally have to put forth to handle your request?”, with an answer- rating scale starting from 1 (very small effort) and going all the way up to 5 (very big effort).

Due to problems with interpretation consistency, universal applicability, and cross-industry benchmarking capabilities, in 2013, CCC/ CEB came out with an improved CES version. CES version 2.0 is based on the statement: “[Name of the organization] made it easy for me to handle my issue”; customers are asked to express their level of agreement / disagreement with this statement on an enhanced seven-step scale from 1 (Strongly disagree) to 7 (Strongly agree).

For course in practice, different businesses use their own variation of the CES- scale (e.g. from 1 to 3 or from 1 to 7 or even to 9) and rephrasing of the question/ statement.

NPS and CES are complementary measures

When comparing the NPS and CES score, research does show that indeed these scores correlate with each other:

  • customers that indicate they had to make little efforts to fix a problem, also tend to give a high NPS.

However, it might be a great idea to utilize/ use both of these 2 measurements in every single survey, since:

  • NPS gives you a picture of your customer satisfaction on an overall level, and
  • CES specifically indicates how you perform in handling customer issues.

 

The Business Case with CES
Case studies of companies using CES (e.g. British Telecom) have found that “it has helped to:

  1. Demonstrate project success – Decreasing effort scores highlight the effectiveness and success of certain changes.
  2. Influence rep behaviours – As reps understand the importance of effort, they focus more on experience engineering.
  3. Detect process fixes – Identifying specific call types with unusually high effort scores can indicate potential areas for process improvements.”

 

Studies have also shown that customers who exert “high” effort (4 or 5 on the CES scale) are:

  • 61% less likely to repurchase and
  • 23% less likely to increase spend with an organization – as compared to the average customer.

We suggest that you use existing data regarding the percentage of customers who renew contracts annually or your general customer churn- rate to get an average repurchase rate, and then figure out the expected loss in repurchase from high effort customers specifically

Another equally quite interesting and surprising field- study result is that:

à89% of the interviewed customer service managers bet on “exceeding customers’ expectations” and very disturbing that

à84% of customers felt their recent interactions “did not exceed their expectations.” Simply put: there is little correlation between satisfaction and loyalty.

“With BT in particular, we found that the rate of customer loss or easy scores was found to be significantly less than others and showed a 40% reduction in the propensity to churn. If you’re easier to do business with your much more likely to stay, essentially. We also found that in B2B companies, too. Being easy to do business with prevented customer defections and they’re more likely to stay.”

Finally, according to published studies, CES 2.0 should be 1.8 x better at predicting customer loyalty than Customer satisfaction (CSAT)and 2 x finer than Net Promoter Score (NPS).

Suggested CES Success KPIs

  • Total # of requested CES feedback
  • Total # of collected CES feedback
  • % of collected feedback from total feedback requests
  • Percentage- distribution of feedback on CES scale (1-7)
  • …..

 

CES Criticism
There is plenty of criticism and it’s all about the fact that CES is solely focused on the effort or effortless customer experience during the resolution of an issue. Sure, it is great if you are benchmarking the efficiency of your Customer Service. But, it does not tell you absolutely nothing about the customer who had no problem or who decided not to contact your Customer Service.

Also, you cannot get any type of ‘customer segmentation’ data / information when using CES.

 

What is the Best Customer Effort Score / Value?

We hear / get this question a lot from our clients.  CES is not an absolute ‘value’/ metric like NPS.

Also, everybody has the freedom to implement their own version of CES in their organization, so there is no Universal Benchmarking.

What is important, is that you define the CES zero-line for your own organization and that you start measuring (hopefully) improvement in your Customer Service areas and you manage to correlate that to specific actions taken to for improvement.

In Conclusion
Implementation of Customer Effort Score will definitely help you improve Customer Loyalty, by knowing how much effort your customers must put into resolving their problems.

Basically, you will have your customers pinpointing your attention right to the shortcomings of your service or product.

CCC/ CEB believes that a low effort customer experience is the cornerstone of customer loyalty. Do you believe that too?

Still, keep in mind that in the 75.000+ customers’ study, 89% of the Customer Service Manages felt/ bet on exceeding expectations, while 84% of those 75.000+ customers felt they their expectations were not met!!

Thank you and Good Luck w/ your CES implementation. Remember, it can also be a simple binary question like ‘was it easy for you to resolve your problem today?’ (you don’t have to use ‘verbatim’ that very expression/ sentence)

 

About the authors:

 Both Kwaku Abedi and Spiros Tsaltas are associated with a unique Customer Loyalty Startup :  HireLoyalty (www.HireLoyalty.com)- based in Accra, which is coming out of stealth mode in the next few weeks offering both Consulting and Training in anything relating to Customer Loyalty.

 They welcome all your comments/ remarks/ feedback /suggestions at Press [at] HireLoyalty.com. HireLoyalty can be reached at +233 20 741 3060 or +233 26 835 2026

 As a NED (Non-Executive Director), Spiros is also associated with HIREghana ( www.HIREgh.com ) and  he can be hired via them (+233 50 228 5155)

 

© 2018 Kweku Abedi & Spiros Tsaltas and © 2018 HireLoyalty

Business expectations for 2018

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Daniel Adjei

Notwithstanding our best intentions, it’s almost the end of the year and most of us haven’t run a marathon or fixed those uncanny challenges of businesses. 2017 is on its way out, and while much remains the same a lot has changed for the better. What has changed in your personal and corporate life so far?

According to Paul A. Laudicina and Erik R. Peterson, in today’s increasingly volatile world, it is difficult to speculate about what might happen next week; predicting the course of events over the next year is even more challenging. Shifting attitudes and heightened tensions in society, rising populism and nationalism in politics, and rapid technological change are all contributing to significant uncertainty in the external environment. There are, therefore, some domains for which one cannot make predictions for the year ahead with any reasonable degree of certainty. Despite this mounting volatility and complexity, there is a compelling case for the ongoing need to scan for future developments. Let us look at some areas to consider for 2018:

Leadership

One of the most important challenges of management development concerns the transition from leading a particular function or single specialty to leading a business in 2018: successful business leadership that is leading an organization with multiple functions and profit responsibility calls for strong leadership skills in 2018 – interpersonal effectiveness, communication, and influence – as well as business skills – understanding strategy, designing organizations and driving execution. All forms of business leadership in 2018 will necessitate the above traits and skills for not only ascending movement in the corporate hierarchy, but also progress and success. We should all remember leadership is all about people, getting the job done, relationships and character.

My definition for character is what will be said about you when you are no longer at the same position at the end of 2018 and beyond. Be mindful of all the organizational politicians and sycophants – they have killed many business leaders this year.

A microscope is being used to examine men’s behaviour in the workplace during the latter half of 2017: sex desire or “chemistry of the mind” is the most powerful of human desires; control it before it controls you and your leadership career.

Facial recognition technology will become ubiquitous

Paul A. Laudicina and Erik R. Peterson point out that facial recognition software is already used more than most people realize. Early forms of the technology have been in existence since as far back as the 1960s, and there has been a notable uptick in its application over the past year. For example, it is now used to verify ride-hailing app drivers’ identities in China and the Middle East. And scientists at the National Human Genome Research Institute, part of the US National Institutes of Health, have used facial recognition software to diagnose a rare genetic disease in minority populations.

Some churches in the United States have used 3D facial recognition software to track membership and solicit donations from regular attendees. And, as if scripted from the pages of the 1956 sci-fi novella The Minority Report, facial recognition is now used in some brick-and-mortar stores and urban billboards to personalize marketing and pricing to passersby. Perhaps more disconcerting, researchers at Stanford University recently published a study in which they argue that the technology can be used for physiognomic purposes, including determining an individual’s sexual orientation. And finally, the September launch of the iPhone X, which includes a facial recognition feature to unlock the home screen, has catapulted facial recognition technology into the global zeitgeist in a big way.

The awareness and use of facial recognition technology will grow dramatically in 2018, building on the significant progress that has already been made. In the next year, the technology will spread rapidly, affecting many aspects of our daily lives. Few of us will even be aware that we are being “recognized” by facial recognition technology. This will raise privacy and security concerns, which will lead governments and civil liberty advocates to clash over the extent to which facial recognition can be used for surveillance and national security purposes. This debate may be brought more squarely in front of policymakers and the general public in the event of a terrorist attack—or the threat of one—for which facial recognition technology could be invaluable for finding suspects.

Meanwhile, many businesses and consumers will be drawn to the technology because of its power and simplicity of use, and the potential to capitalize on untapped markets. As a result, the producers of OLED panels, an essential component of facial recognition devices, will enjoy increasing demand for their product while also coming under pressure to reduce the high cost of these panels.

Firas Jaber – International Personal Development Coach, writes the following advice to individuals as we look ahead for 2018: “There is no doubt in my mind that, in this age we live in, one can do business on a global scale just from the touchscreen of his/her smartphone device. Truly, this is the age of mobility and infinite possibilities.

The mobility that the smartphone gives has opened our way and results in freedom to transact from wherever we are, and at whatever time, with very little limitation as compared to other computing and communication devices of our age.

The smartphone power and its potential is forever going to grow, so we’d better harness it now and avoid wasting time on trivial matters that one can do on such a device.

Let’s prepare to look at this device as one of enormous power, to transact business, virtually initiate and develop relationships with business partners; look for apps or create apps that can do more for us in terms of creativity, productivity and efficiency.

Harness the potential and possibilities that come with your smartphone device: when it comes to business investing, this device is one with exponential returns and we should be glad that competition is controlling its price tag this much.

Predicting the future depends on your own interest in designing your life. Design your own life today if you have not done so already. Take advantage of this exponential power you hold in the palm of your hand to make it materialize in reality.

The world is full of opportunities unprecedented in human history. Being in a certain country doesn’t limit you to that country anymore. Predict your own future, by using your God-given right to think and create your own future and results. What better way to write down your thoughts and materialize them is there than with and through your mobile phone? What an asset you possess!!! Of course, the best investment of all in predicting your future is, and will always be, your mind.

Open up your mind to the truth of it being your creative power to be, do and have whatever it is that you really want. Cherish and hold onto your ideas. Believe in them. Learn as much as you possibly can about the mind. A great start is Think and Grow Rich by Napoleon Hill.

Predictions of the future begin with you. May you never be the same. To your success in 2018”

Marketing and advertising

The personalization of marketing: “Marketing is becoming increasingly personal, and this trend will keep going as we move into the new year. No longer will stock images, generic nurturing campaigns, or impersonal calls to action convince consumers. In order to succeed, you’ll have to provide high-value and personalized content every step of the way”. – Harrison Doan, director of analytics at Saatva.

Modern marketing tools make personalization possible: “While email marketing has traditionally been a one-to-many medium, it’s a great example of this trend being brought to life as we continue to see an increased focus on more customized messaging heading into 2018. A major catalyst behind this shift toward one-to-one has been advances in personalization technology, especially click segmentation. Personalizing email marketing is especially valuable because small businesses often have a variety of products, yet not every offering will necessarily appeal to every customer on an email list.” – Dave Charest, director of content marketing at Constant Contact, an Endurance International Group company

AI will emerge as a critical marketing tool: “In the past executives may have tinkered with AI to schedule their calendars, but 2018 will see an end of the experimental phase and the beginning of applying artificial intelligence to solve the most soul-crushing marketing problems. For example, conversational AI companies like Conversica will make it possible for PR companies to harness conversational AI for lead-nurturing and finding new clients. CRM companies like Helpshift will streamline customer service.  AI, however, won’t replace traditional media relations.  Journalism deserves a human touch that AI is not yet able to mimic.” – Curtis Sparrer, principal at Bospar PR.

Social advertising will become more competitive: “For paid social ads in Facebook, the 2018 landscape will continue to get far more competitive. Facebook advertising is still in its ‘Golden Age’, but the company is growing the number of advertisers at a very rapid pace. While large companies jumped on the Facebook ad bandwagon some time ago, there is significant long-tail growth among SMBs which still have not embraced Facebook ads fully, and the vast majority are not advertising there. The end result of this is Facebook will continue to accelerate the number of advertisers it has with SMBs, and CPM and CPC cost will rise for all Facebook advertisers.” – Toby Danylchuk, co-founder of 39 Celsius Web Marketing

There will be growth in small business cross-channel marketing: ” Very few small businesses today do any sort of cross-channel strategic advertising. Many owners even have separate vendors for Facebook, Google, web content, web maintenance, etc. Large brands do this rather well, and I believe in 2018 we will see small businesses utilizing integrated strategies – and these small businesses will outperform their competitors.” – Bill Gaines, digital marketing director of Custom Creatives.

Machine-learning will become more responsive in customer service: “Machine learning will play a bigger role in sales and customer support in 2018. Lower costs and increased availability of speech analytics tools mean more businesses will record and monitor calls within their contact centres. Instead of simply guiding callers through prompts, speech analytics will help to categorize them and analyze responses in terms of what you say and how you say it. Insights like these will be used to guide agents, in real time, to get the best results from each interaction.” – Chad Hart, head of strategic products at Voxbone.

The modern workplace

The evolution of the workplace: “The physical workspace as we know it today is going to significantly change next year, as businesses start to get smart about how they use space to drive productivity and adapt to new employee behaviours and tech tools. Large companies will also look to reduce their real estate commitments and move more to flexi-desk options as more employees work away from the office, while being connected to it by making use of better tools that help them do their work more effectively.” – Craig Walker

Expect the number of remote workers to continue increasing: “Only 32 percent of employees spent all their time working in/at their office this year; the flexibility to work remotely has evolved beyond an occasional perk, with 43 percent of employees saying it’s a must-have.” – Staples Business Advantage’s Annual Workplace Survey

Workplaces will unveil bolstered anti-harassment policies: “With such a magnifying glass being put on men’s behavior in the workplace in the latter half of 2017, 2018 is going to see a lot of anti-sexual harassment training in workplaces, as well as anti-harassment policies being beefed-up.” – Rob Swystun, business communication specialist.

How do these business and personal expectations get you thinking about changes in your business? What trends do you think should have made the list? The power is yours. Happy New Year!

The writer is a| Management Consultant | Spint Consult Limited | [email protected] |+233-302-915421

First National Bank appoints Hannah Annobil-Acquah as Head, Retail Banking

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First National Bank has appointed Hannah Annobil-Acquah as Head of Retail Banking. Hannah brings on board a wealth of experience in retail banking, having worked in various functions in the sector for over a decade.

Until her appointment, Mrs. Annobil-Acquah was Head, Personal Markets at Stanbic Bank Ghana Limited, where she played a key role in building the retail business of the bank and is credited with significant achievements.

She holds an MPhil Finance and Investment Analysis from the University of Cambridge, UK, and BSc. Land Economy from the Kwame Nkrumah University of Science and Technology (KNUST), Ghana. She is a fellow of the Cambridge Commonwealth Trust.

“We are excited to have Hannah join the Executive Management team of our bank. Hannah will oversee building FNB’s retail functions to be a market leader while serving the needs of our customers. In her new role as Head, Retail banking, Hannah will leverage her 15-year banking experience within the Ghanaian banking sector to grow First National Bank’s retail capabilities,” said Richard Hudson, Chief Executive Officer of First National Bank.

“Her experience will assist in unlocking further value in our suite of retail offerings, and strategise to give our clients the FNB experience as we expand our operations to other parts of Ghana,” Mr. Hudson explained.

“Leading the Retail Banking business at First National Bank Ghana is a new and exciting challenge for me. First National Bank is very well-known for its unique and innovative approach to banking. There’s a lot of potential to significantly improve the customer experience in this market, and I am looking forward to the opportunities this role brings,” adds Hannah Annobil-Acquah.

An athlete in her secondary and tertiary schooldays at Wesley Girls High School and KNUST, Hannah is an ardent Kotoko and Manchester United fan and loves to watch tennis and athletics.

Hannah Annobil-Acquah’s appointment is effective January 2, 2018.

First National Bank Ghana is a subsidiary of South Africa’s FirstRand Group, which is the largest bank by market capitalisation listed on the Johannesburg Stock Exchange – Africa’s largest bourse. First National Bank is leveraging off the experience and financial muscle of its parent company to excel in Ghana.

The bank is headquartered in South Africa and also has a presence in Namibia, Botswana, Swaziland, Lesotho, Mozambique, Zambia, Kenya, Angola and Tanzania.  

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