One thing I would be looking at if I was on the BoD or Senior Management is costs within the business, clearly they need a more sustainable model in place while the ramp up of the business continues. Staff costs appear to be the big one and they have acknowledged this in the last quarterly, but lets hope they have gone far enough.
Implementation of new platforms sounds relatively straight forward and quick now (eg: RBC was quick), so need a core team and the right business development people in the most appropriate location (ie: they can't all be based in NZ!).
The other area I would be looking closely at is the Social Media / Marketing spend. Thomas Power, one of the Directors of 9SP got paid $140k in the last half yearly ($280k if you annualise that) via his company Social Power Limited. The 9SP social accounts are as follows:
So overall, I would say that 9Spokes has generated a pretty limited following over the last 2 years, for a fairly significant investment (in consulting fees alone, not sure how much additional staff expense has gone into it) . While the content being posted is relevant, not sure we are getting value for money in terms of growing an engaged audience, not many of the posts have any level of engagement.
The strategy on Twitter also looks to be all over the shop, there are at least 4 different profiles, being the main one listed above, along with: https://twitter.com/team9spokes - 183,000 followers https://twitter.com/9SpokesPartners - 288 followers https://twitter.com/9SpokesCares - 5 followers
What purpose these accounts serve is beyond me. It seems Team9Spokes account has purchased most of its followers given it has over 180k and none of the other accounts are anywhere near that. The main thing this account appears to do is retweet content from either the 9Spokes account or Thomas Power's account, so it looks to be just about getting the stats up and not much more.
The other two accounts are relatively dormant, but have also been used for retweets in the past.
Also when you search 9Spokes on Twitter, we seem to have got drawn into some pointless tagging conversation which is probably an attempt to increase the 9Spokes klout score or some ridiculous reporting metric to help convince the Board and Management about our social media presence.
You can also see an influencer strategy in place among leaders in the small business space. It would be interesting to see the effectiveness of these campaigns, but also the commercials that sit behind them. When we have a free sign up in place, paying a third party for referrals could become a costly customer acquisition strategy over the long term if the customers don't generate significant revenue.
I think management went big in some areas where they don't need too and social is one where the marketing expenses need to be wound back, given it clearly isn't achieving much.
9SP Price at posting:
5.0¢ Sentiment: Buy Disclosure: Held
