LIVERPOOL FC: A MASTER CLASS IN BRANDING

Last week Liverpool Football Club was finally crowned Champions of the English Premier league at the end of their last home match of this season.

It was a particularly emotional event because this is the first time they lifted the cup in 30 years. 

"For the younger ones among us, before Manchester United under Sir Alex Ferguson was Liverpool. In the 1970s and 1980s they won 11 of their 19 league titles...

Despite their long wandering in the wilderness, they continue to be one of the most supported sports teams world wide and last year, as a result they were among the highest earning teams in soccer. Last year Liverpool earned Euros600m (sh2.6trillion) and is valued at $2.2b (sh8.1 trillion). 

Winning the premiership has added $182m( sh670b) to their coffers and you can be sure the managers are going to maximise the commercial potential of their winning the premiership.

However

even in the dry times Liverpool has been a high earning team and this is because of a deliberate and systematic brand building strategy, which all businessmen would do well to learn from...

Having a company emblem with a clever design and flashy colours is not all branding is about. 

A brand is built though creating awareness, managing associations, ensuring positive experience, which, if all done well, will lead to loyalty to your business.

Here is a quick and dirty list of how Liverpool has done this over the 128 years of its existence.

1. CREATING AWARENESS

It helps that Liverpool plays in the Premier  League, the most popular league in the world. So on every given weekend during the season, in more than 100 countries around the world, Liverpool is being watched.

"You have no brand if no one knows about you...

One of the quickest ways to create awareness for a business is to link up with existing networks, these could be physical, as in having a business on Kampala road or soft networks like social media. 

The days of the Indian duka where all the businessman had to do was open his shop for business, seat at the counter and wait for clients to flock to him are all over.

Creating awareness may not create sales immediately but over time will begin to help ring the till. 

2. MANAGING ASSOCIATIONS

What are you associated with, good things or bad things? 

Liverpool has worked hard to create the association that the team plays exciting, attacking football, never gives up  and is a large community --- they never walk alone, that everyone wants to be a part of.

When you think of a Mercedes Benz you associate it with luxury, good workmanship and reliability. Those associations have been promoted by Daimler Benz, the company that makes the Mercedes, for years to the point that the association is seared into our collective consciousness.

"Every business, beyond creating awareness should be actively creating positive associations in the mind of its clients, current and potential...

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Is reliability a good association, in the case of a delivery services for instance or durability in the case of household appliances or outstanding service in the case of the hospitality industry? What associations are you promoting for your business.   

3. ENSURING POSITIVE EXPERIENCE

You can talk all you want in creating awareness and associations but the tasting  of the pudding is in the eating.

When you go to watch a Liverpool match you are guaranteed to see first flowing football, not the ponderous, passing games of some lesser names. You can expect that even when they are down they will fight to the end – their Champions’ League victory against AC Milan in Istanbul in 2005 cemented that reputation .

This is important because it means the

branding of your company or product is not the business of the marketing department alone but of every worker in the company....

It doesn’t help that you are trying to promote a welcoming and happy association for your hotel and yet you have a grumpy waiter or surly housekeeper; It doesn’t help that your trying to promote your garage as reliable operator but you can't fix the cars on time or as promised.

You rather under promise and over deliver than the inverse. 

4. LOYALTY

The loyalty to your brand will determine whether you have done well with awareness, conjuring associations and creating positive experiences.

The Liverpool faithful have suffered heartbreak and doubt – they have even been branded Looserpool, during the last 30 years, but the fans have remained steadfast. 

The club has remained true to its brand of soccer, continued to promote their sense of community and maintained the hope in their fans that winning ways are just around the corner.

"Even if it takes Liverpool another 30 years to win the premiership again, you can guarantee that their fans will still be there a testament to the building of a great brand....

Will your clients be with you 30 years from now?

SAVING THE EKIBBO

It used to be that one of the highlights of the kwanjula ceremony was the groom’s escorts sashayed in bearing gifts in baskets (Ebibbo) on their heads.

Now increasingly the Ekibbo is being replaced by wrapped gift packs, which while they serve the purpose are taking away an important part of the experience and killing a long held tradition.

Enter Ann Kalanzi, a retired civil servant  determined to reverse the trend.

A few years ago she got into her head that producing the shallow baskets would make for a good opportunity.

But the more she investigated its prospects the more she realised there were  larger  issues at play.

The Ekibbo is made by coiling banana leaf stems, wrapped in fibre from the Yoruba soft cane (Ekijulu).

However

supply of the Yoruba Soft Cane is dwindling. The plant which grows wild in wetlands and forest, maybe going extinct as people clear bush and reclaim wetlands for farming and settlement...

“So as part of a long term plan to continue with production we have been forced to consider growing our own crop,” Kalanzi explained. She is currently working an acre to produce the plant which is propagated through its root tubers and lobbying other and owners to commit land to the plant.

So just like that she finds herself concerned with environmental issues and conservation.

"The skill of making these baskets too, is falling away as young girls and ladies who were the main producers are going to school, finding more gainful employment and the tradition is not being passed down the generations...

The “Taasa Ekibbo” ( Save the Kibbo basket initiative) is still in its early stages, she has identified two women groups in  Kiboga and Masaka districts, to make the products.

Nevertheless she has a spare room full of baskets in her house to show for the groups’ effort.

“They can do up to 100 baskets a week… it doesn’t take much of their time, its part time work for them after they have finished their daily chores. The volume is function of their skill levels not the amount of time they dedicate to the craft currently,” said Kalanzi.

In the meantime she looks for market.

In 2005 the Uganda Export Promotion Board (UEPB) did a survey which showed that the most marketable handcrafts from Uganda were mats and baskets.

Along with training from the International Trade Center (ITC) she is looking to diversify the project offerings to add table mats, costas, lidded baskets, desktop baskets for storing jewelry or stationary.

“We are still in prototype stage and the ladies can adapt their skills to whatever design,” Kalanzi said.

While she places as a major goal, the saving of the Ekibbo and the traditions around it, she has worked out other products are more marketable and have greater utility in everyday living.

She had an array of her products laid before her when I visited and to my untrained eye the quality is consistent and good.

“Quality control is not a major challenge. The quality of the Ekibbo was and is a mark of pride for the maker…. Remember traditionally a girl would leave home laden with these baskets, she couldn’t turn up at her groom’s place with poor quality baskets. The quality is kind of inbuilt in the tradition,” she explained.

But will happen when she has to mass produce the baskets to satisfy a growing market?

“The women are supervised by the more experienced basket makers so we are counting on that.”

She has been exploring markets, a combination of lower production and demand for the baskets means there has to be a concerted effort to resuscitate their use in current times.

“I have toyed with Mengo (The seat of the Buganda Kingdom) getting involved in this project as a way to preserve a useful skill and conserve an important tradition…. Covid-19 got in the way but that is the plan,” she said. 

Looking further afield while tourists have shown some interest they have been pulled towards the smaller items in her portfolio – the jewelry/stationary baskets, which are small and easy to carry in their luggage.

The traditional craft shops she has found have a greater taste for the more colourful rafia woven baskets.

She is counting on the history and tradition of the Ekibbo however, to win her a niche in the market.

She says the customers are too are moving away from the utility value to seeing them as decorative pieces.

“For example the Oliugali (winnowing basket) is now being used as wall pieces and table mats. So there is hope.”

It is an interesting project and one to watch, an examaple of how, maybe,  markets can rescue tradition when all the well wishers are content to give only lip service or shake their heads at the demise of yet another tradition, swept aside by modern culture.

WHERE ARE WE ALL GOING

The relief was palpable when the lockdown was partially lifted last month, until we found ourselves in traffic jams, consistent and enduring like never before.

This came as a surprise, since the pesky boda bodas and their more nefarious cousins the taxis were off the road. We blame everything on those two, even our inability to keep time.

Explanations came fast and thick – people are being forced out of the city all at once (the dusk-to-dawn curfew was not lifted), people are using their cars since there are no taxis, people are so glad to be out and about they are just driving around and it went on an and on.

In September 1996 the city traders went on strike to protest the introduction of Value Added Tax (VAT). The tax which was introduced following the budget that year was too complicated to implement, they complained. Uganda Revenue Authority (URA) on their part believed people were complaining because was because VAT was much harder to evade than the ineffectual Sales Tax that it replaced.

But the immediate impact of the strike was that the roads were clear of traffic for the week that it happened. Suddenly we knew who drive the cars in Kampala....

This time around the arcades, which replaced the lockups that lined downtown Kampala are shut, but there is still traffic.

Schools and learning institutions another source of our snarl-ups too, are closed.

Many businesses and offices are not firing at full capacity – I can tell by how much easier it is to get parking in town.

So what then is causing all this traffic, I wonder.

It is obvious that

the rush to beat the curfew, coupled with our propensity to always do things last minute is fueling the evening traffic.

Observers say that we will be lucky this year if Uganda can manage half the 6 percent growth it showed last year.

And the evidence before our eyes – closed shops, silent factories and rotting matooke are proof enough.

The text books say that economic activity is the production, distribution and consumption of goods and services. In a vibrant economy people are on the move to do their part in that equation.

So you can see why our best economists are scratching their balding pates.

In these depressed economic times where is everybody going?

Maybe the key is in the arcades. Many of the traders locked out of their shops have found a way to start delivery services. Now without passing through the more established delivery services, with a call or whatsapp you can everything from charcoal to refrigerators and everything in between delivered to your house.

 This would make sense. These cars were previously parked outside the arcades or at home – for use only on the weekend maybe, but now are criss crossing the city delivering stuff...

I was told a story oncec of how a low level security informant went AWOL because his office planned to transfer him to Moroto.

“I make sh100,000 a day in Kampala by kuyiyaring, how much would I make in Moroto,” was the thought process that sealed his decision to abscond from duty.

Pressed against the wall with no job or lower pay,

people are investing in a few liters of fuel to come into town, hoping proximity to the economic machine that is Kampala – last I checked it accounted for seven in every ten shillings generated in this economy, could lead to a few crumbs falling over the steering wheel into their laps.... 

If the above is true, the unrelenting traffic through out the day suggests that we have a lot of cars that don’t make it to town during ordinary days. We are parking our cars at home in the hope of dodging Kampala’s growing traffic, but now with few public transport options we are pulling them out to join in the melee.

But I think the traffic is indicative of a  bigger issue.

In all the experts’ projections they have put a premium on closed shops, mothballed factories and the quiet at our airport as a measure of how badly the economy will be hit.

Clearly we did not factor in that in the face of hardship Ugandans are not going to just rollover and die. They are going to hustle. They are going to push. They are going to scrap and scratch....

There is hope for us. Clearly most Ugandans are not moaners and groaners.

HIGH LENDING RATES A SYMPTOM OF BIGGER PROBLEMS

Last week central bank governor Emmanuel Tumusiime Mutebile in sharpest remarks yet directed bankers to lower their lending rates further.

He complained that despite bring the Central Bank Rate(CBR) down to seven percent he has not seen a commiserate drop in lending rates by the bank.

CBR is the rate at which banks borrow money from the central bank.

Banks prime lending rates now range from 16.5% to 20-plus percent.

A study by the central bank pointed out that beyond the cost of money the high lending rates were high overhead costs that come with banking.

"If this is true then Mutebile’s admonishment will have little real effect on lending rates soon....

It has been reported severally that in conjunction with the Bank of Uganda the industry has been making some serious inroads into cutting those costs. 

Two years ago Central bank finally gave the greenlight for agency banking, which has saved banks the cost of opening more branches, while delivering their service for a fraction of their normal costs.

There are also moves to consolidate the transfer of money, with banks sharing bullion vans and collection centers, there are also plans to share ATMs  and other initiatives that will help lower industry overheads.

I am also aware that there are discussions to increase the minimum capital of banks and annual license fees. These two initiatives it is expected, will increase innovation in the industry – banks will look for more things to finance and lower lending rates. If the shareholders put up more money in order to show a return, managers would have to be more nimble and aggressive in the market to stay in a job.

"Key to note here is that lowering the cost of doing business is a collaborative effort between the government in making laws, the central bank in regulating and the industry in executing....

Basically banks take money from people who don’t need the money immediately and lend it to others who have a current need for it.

We charge them for keeping our money and they charge us to borrow the money, their cut is the difference between how much we pay to borrow minus how much they pay us to deposit with them.

Among other things the supply of money in their vaults determines how much they quote for their lending rates. If they have little money they will charge high interest and if they are awash with cash they will ask for lower interest.

"In the given circumstances where people are withdrawing more than depositing you can see how the cost of money goes up....

I think that while the industry is working to lower overhead costs, government should be planning and legislating on how to increase savings in the economy as a means to lowering lending rates.

In more advanced economies as much as 80% of the money in circulation is in the formal financial sector, in Uganda the reverse is true.

  

The net effect of this is that there are lower lending rates in those industries.

Increased financial literacy from its current dismal levels will go some way to increasing savings, but I favour a more direct approach, in addition.

National Social Security Fund (NSSF) was created by an act of parliament in 1985, in which government compelled workers to save five percent of t heir incomes and for their employers to save an additional 10% on behalf of their employees.

Were it not for that fact, most of Uganda’s workers would barely have two shillings to rub together.

The evidence is there for all to see. Easily nine in ten NSSF members have nothing but their NSSF savings to look forward to at retirement, despite the years they have worked.

Assuming pure rationality, one would expect that workers would have saved more of the 95% left over from their income to have at hand multiples of what they have  at NSSF.

"We could wait for savings to grow organically as the economy grows or government through the law can compel us to save more....

Say we increase mandatory savings by just two percentage points, the effect will be felt across the industry.

If the banks have more money to lend, by the laws of supply and demand, the lending rates will fall.

"I think appealing to the banks sense of fair play is a losing strategy, in as far as the rates will not come down as fast as we wish. But if by understanding their business and pushing the appropriate levers we can create a situation where they have no choice but to bring rates down, that would be a more sustainable formula....

There are other issues to consider, like governments huge appetite for borrowing to finance its budget, the relatively low revenue collections too, play a part.

The least of our worries is that the banking industry is dominated by foreign interests. If this was a major problem then the  government owned Housing Finance Bank, Post Office and Pride Microfinance, would be leading players with lower than industry average, lending rates.

 Japan and South Korea government owned banks are not the dominant players in those respective industries, if at all. But their government’s know how to leverage the banks there to support their development agendas, without disrupting the industry or markets.

"Mutebile walks a fine line between letting the banks do what is necessary to remain viable and pandering to populist short term interests....

Bringing lending rates down is not a job for  Mutebile alone but for the Uganda government as a whole. 

The sooner we appreciate that, the sooner that the central bank would not be forced into embarassing, even ineffectual.

THIS ISN’T A NEW FIGHT, WE JUST DIDN’T KNOW IT

Last month New Zealand announced it was corona virus free after it had not recorded any new cases in the previous two weeks to June 8th.

Reporters went ahead to report that the island nation had beaten off the virus.

I wondered at the time, how anyone could claim victory over the virus when it was still raging around the world.

Note too, that since then they have reported no community infections but about 24 new cases from New Zealanders returning from abroad have been recorded. The borders still remain closed to non-citizens.

This is not to discount New Zealand’s achievement, who with full disclosure not only flattened the curved but collapsed it completely.

There are interesting parallels between New Zealand and Uganda. While other countries eased into the lockdown, New Zealand like Uganda wasted no time in going into total lockdown.

As a result about 1500 infections have been recorded and 22 people have died due to the disease.

"No one can declare victory against the disease until there is no victim in the world. Realistically that can only happen with discovery of a vaccine and mass vaccination around the world...

Until then announcements of victory against the virus are mere  political grandstanding and can’t stand the test of time.

But this is a fight we have been in before. The difference is that its effects are felt within a fortnight and its infection rate means victims pile up very quickly.

The other fight, not unlike the corona crisis, is that against climate change.

"The effects of climate change however take years or even generations to be felt, so allows for a lot of casualness and worse, outright denial of the phenomenon...

In Uganda for instance our forest cover, the last I saw, had been depleted to eight percent of the land mass last year compared to 24% in 1990.

The wild fluctuations of weather patterns is a testament to this loss.

And like the corona crisis, climate change is being denied by the wealthier people as it gets in the way of their making money. The biggest losers are the poorer people, more reliant on the natural environment for their living.

In the case of the Corona virus the lock down, while it has shut down the economy and people have lost livelihoods, has saved hundreds, maybe thousands from contracting Covid-19, the disease caused by the corona virus.

This unfortunately has led to a growth in the denial industry. The narrative goes something like, “This Corona virus is a hoax and the extended lock down is a means by which the NRM is looking to make political gains at the expense of its rivals”.

If you look closely

the argument is being made more forcefully by those who think, that even if they contracted the disease they have access to the health care required to beat it....

The lemmings in their wake are more like, ”If we die, we die.” Desperation too has set in and that is understandable.

But before you die there is the disease. While it is indiscriminate in who it attacks the medical care for various sections of the society is not the same.

 CNN presenter Richard Quest this week testified how he had contracted the disease two months ago, but is still feeling the after effects of the disease – a persistent cough, mental haziness and uncharacteristic clumsiness, all of which are hampering his productivity and standard of living. This from a man who has access to the best medical facilities and is in relatively good shape.

And the other day a medical report came out saying how contracting covid-19 has far reaching effects on the brain too.

The silver lining with the disease – if you may call it that, unlike climate change, is that it soon catches up with the denialists as we have seen in the UK and Brazil and dare we say, Burundi.

The Uganda government’s pointed looking away as our lands are denuded of their forests and wetlands are drained, will be felt when few will remember how it happened. The same goes to all other countries.

 So its not as we have not been in a fight like this before, its just the covid-19 has been quicker in how it has swept around the world. 

"But it still goes to show that there will always be people willing to put their interests ahead of the general good, to deny its existence when the proof is as clear as exhuming graves to fill them with new bodies....

BUILDING A VISION GREATER THAN YOURSELF

Last week I saw a notice about Dr Ian Clark stepping down as chairman of the business, International Medical Group (IMG), he helped found.

Dr Clark who has been in Uganda since 1988 begun the clinic, International Medical Center (IMC) on KPC building on Bombo road in 1996 that would eventual grow into the health services conglomerate. IMG has a hospital, clinics and a medical insurance provider.

According to the advert Dr Clarke remains a director and still holds ten percent share in the multi-million dollar enterprise, with the rest of the business owned by a private equity firm out of Mauritius, Ciel Healthcare Ltd.

For people who know

, its an amazing feat building  an enterprise to the size of IMG but even more amazing is to get high caliber foreign partners to invest in your business...

There are four broad reasons we start a business. The first is to feed ourselves, the second is to pass it on to future generations, the third is to eventually sell it and the fourth is for philosophical reasons.

This is important because why you decide to start a  business, the vision you have for it will determine its chances of success in the future..

 

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Of course you can start at the bottom of the ladder and out of necessity, experience or luck find your vision growing.

If you build a business to feed yourself, when you are well fed, housed and clothed then what? Chances are your business collapses soon after or beguns the inexorable slide into oblivion, because your ambition is very short term. Examples abound around us.

You build to pass down the generations, the Asians seem particularly adept at this, then your business has a better chance of success or at least longevity. 

And if you build to sell, whether in part or its entirety, you further enhance your chances of success. You structure the business better, you make it more systematic and your value proposition is crystal clear to people beyond yourself.

And if you build out for philosophical reasons, like Microsoft which aimed to put a computer in every home because it believed in the progress this would generate for all users, the size and success of your company is infinite.

Knowing part of Dr Clarke’s story through his book, “The man with the key has gone” one can assume the good missionary’s ambition was prompted by more than subsistence. If it were limited by his basic needs, his business would not have grown beyond the little clinic at KPC building, like many other clinics around town whose owners are making a good living.

To give better service, its clear the clinic had to grow in size and complexity and its now safe to say the enormity of the vision seems to have out grown the founder’s capacity, hence bringing in new partners who have eventually taken control of the business....

In our patriarchal, parochial society there are people shaking their heads and feeling pity for Dr Clarke for “losing” his business. We would rather own 100 percent of a small, ineffectual enterprise than own 10 percent of much bigger enterprise.

When you have a big vision you recognise you would be content to see others further the vision if you have carried it to the limit of your capacity; but when you are building just to feed yourself and threaten little brown girls, your ambition stops at driving  around saying I own that and that and that...

In a country where much needs to be done with few resources available to local investors it makes sense to attract partners – internal and external into our businesses to further the vision.

There is nothing new under the sun. Our businessmen are not doing anything original. Someone, somewhere is doing the very same thing to a larger scale and has access to more resources.

Foreign Direct Investment (FDI) is not the end all or be all, but one of the major challenges of attracting it, is the lack of businessmen who have achieved big enough scale here to attract bigger money... 

We are content to be big fish in our small pond. From purely selfish perspective this puts a ceiling on our wealth but to take a broader view, it denies our people better quality goods, services and jobs.

I hope Dr Clarke got paid a fair value for the “sweat” he has spilled over the last two decades or so, but ten years from now he maybe even more gratified when the house he helped build is providing quality service to thousands and thousands more people in his adopted country.