PricewaterhouseCoopers 'faces auditing inquiry'...

PricewaterhouseCoopers (PwC) is facing a probe after it failed to identify a fraud worth 21 million euros (£16.6 million), according to a report. Read original article.

The accounting giant had audited the Scottish mineral water subsidiary of Greencore for two years without spotting the fraud, Independent.ie says.It states the inquiry is to be conducted behind closed doors by the Institute of Chartered Accountants of Ireland and notes the findings will not necessarily be made public.

According to the news provider, PwC charged Greencore more than 1.6 million euros for its auditing services.It suggests the firm is actively reviewing the auditing contract and is now likely to seek legal redress as well as a refund of a proportion of the fees.

Greencore released a statement last month in which it said that, as a result of the "deliberate concealment of costs", its operating profit would be reduced by four million euros for 2006 and by eight million euros for 2007.In addition, it reported that its predicted operating profit for this year will be reduced by nine million euros.

How are you handling increases in the cost of raw materials?

It is natural for the price of raw materials for a company’s products to fluctuate within the marketplace. However, it is estimated that during the next quarter, the market price per pound of steel has increased 75 to 80 percent and is predicted to remain strong in 2009.

According to our strategic procurement manager, the price of steel is sharply increasing for three reasons.

• A weak dollar leads to a reduction in imports and increase in exports.


• The United States uses more steel than it produces, so there is a short supply.


• In addition, international trends are causing high demand for steel.

In addition, international trends are causing high demand for steel. Steel is being exported to Europe and other regions, such as South America. In Asia, exports are down because individuals there are using internal resources to rebuild cities affected by the earthquake. Secondly, the cost of raw material and scrap has increased. According to the American Metal Market, scrap is now selling for more than $890 per ton in Chicago, Ill. This is a huge increase compared to January, when it was sold for $410 per ton. Like steel, scrap is also being exported to other regions of the world, causing shortages and price increases. Finally, the cost to produce steel, in terms of both utilities and transportation, has increased.

When the price of raw materials rises in such a way, it is difficult for manufacturers to maintain the price of the final product. However, there are ways to mitigate these price increases, and we are taking proactive measures to do so.

Global procurement organization reduces the cost of many components

Working with the physical security division, engineering and product management departments, the global procurement organization was able to reduce the price of many of our products by five percent. Our strategic sourcing manager, global procurement, said this accomplishment was possible thanks to a benchmarking effort that included product value stream maps, redesign and value-added supply chain resourcing to reduce production costs.

“These types of projects are continually in progress for almost all of our product lines. The strategy has already saved millions of dollars and has helped us avoid millions of dollars in increased costs that are not as obvious as others. If it were not for our efforts, the cost pressures of steel would be much higher.”

Raw material price increases and competitiveness

While we were able to reduce the cost of many of our components, we were not as fortunate with other products. In some cases, the price of these products increased as much as 15 percent.
But we aren’t giving up. Our procurement organization continues to work with our suppliers and their supply chain to mitigate these increases. And in some cases, our efforts have been fruitful. “For the sheet metal (raw material) we use, we were able to mitigate the impact of the price increases through early negotiations and supplier relations. We locked in first quarter numbers in November and second quarter numbers in January, and we are still significantly under market value in terms of our cost.”

In addition, we were able to achieve significant savings by working with a North American supplier to cut some components to size before they are exported.

Even though we cannot predict what our competitors are paying for raw materials, we are confident that they are being impacted by these increases as well, and that we will remain competitive in the marketplace.

Take proactive measures to mitigate future price increases

To mitigate these types of price increases in the future, our procurement organization will continue to negotiate and form strategic partnerships with suppliers. “Under these market conditions, we have been very successful, due to our strategic negotiations, supplier partnerships and process evaluation. We will continue to undertake these activities in the future to ensure that we are getting the best price for raw materials in every situation.”

Advice on How to Stop Shopping Cart Abandonment

Pamela Picard

Principal, Scarletts Closet Sample Sale

Scarlett's Closet Sample Sale tracks incomplete transactions. We contact the buyer to determine if they simply changed their minds or had a problem we can assist to solve. It doesn't stop abandonment, but it occasionally rescues a sale.

Joshua Dreller

Director, Media Technology at Fuor Digital

Great topic!

I've done this many times so here's the basic framework:

1) Tag all pages/steps through the process so you can track visitor behavior.
2) Find any high drop points from step to step. Basically any click rate from step to step that is below 100% is an opportunity. Of course, 100% is an ideal and unreachable, but that's the goal.
3) Optimize those pages (see below for suggestions)

Three Analytics Suggestions
- look at the referrers of the traffic going to your shopping cart. Is one of your advertising channels sending you traffic but have high abandonment rates? If so, maybe you should put your ad dollars somewhere else.
- look at the types of products and sections on the website that users who reach your shopping cart visit. Are certain pages/products attributing to less or more abandonment. Maybe you need more videos of your products/services as users from those pages are not abandoning so high?
- Are users who abandon their carts coming back later and buying? Or buying offline? Or calling your 800 number for info? Maybe initial abandonment rates don't matter. Using Web Analytics you can track those returning visitors and find your average sales lag cycle.

There are many reasons why people may abandon their cart. The main one is that they are browsing so they want to see how much the product is in the cart including tax, shipping, extra fees, etc so they can truly compare pricing.

However, there are generally some basic usability steps you can take to decrease user abandonment such as:

- decreasing the number of steps needed to check out
- accepting a variety of payment options
- don't ask for anything you don't need (such as if they want to subscribe to your newsletter)
- don't ask for info you don't need (i.e. social security number, job title, etc)

The most important one is: MAKE IT EASY. Make it easy to add/remove, see shipping costs, ask questions, find phone numbers, etc. DON'T MAKE ME THINK by Steve Krug is a great usability book. My bible actually.

Last, a quote:

"A September 2006 MarketingSherpa.com article presented the results of a shopping cart abandonment survey study of 1,100 e-commerce marketers. The average reported cart abandonment rate was 59.8%. Roughly one out of every two visitors who adds an item to their shopping cart ultimately abandons it instead of completing their purchase."

from http://www.searchmarketingstandard.com/articles/2007/05/tackling-the-shopping-cart-abandonment-rate.html

Links:

• http://www.clickz.com/showPage.html?page=2245891
• http://www.clickz.com/showPage.html?page=2248551

Akshay Kumar

Marketing Consultant at Dell

E, I dont think that a lot of online companies do a good job defining abandonment in the first place. If companies know what constitutes an abandonment, they will be able to formulate strategies and metrics to counter it. I think of abandonment as an act during which a shopper may do two things: 1) Put something in the cart and not complete the sale before leaving the site 2) Put something in the cart and then throw it out
The first involves tracking a cart and follow up activities after the customer has left and the second involves tracking a cart and real time actions while the customer is shopping.

Aldo Timothy Daquioag

Search Engine Marketing Specialist at Zimplizity Solutions

Hello E.

After defining your abandonment. Get a good analytic tracking tool. There are several free web analytic tool like Google Analytics. This tool will help you identify where your shoppers are having a hard time or where are they abandoning your site. With this you will be able to find out what are the frictions on the certain page. Maybe its just a simple button or placement of call to action and several other details.

Why would you write something about a topic that you are not a 100% sure. I think the people who should write about this are the ones who had the first hand experience doing it. or you can get them to send some case studies for you which I what you are doing right now.

Reducing abandonment rate is more on the persuasion and usability of the cart. There are lots of book and articles about this on the web all you have to do is enhance it or study them carefully so you can use them as baseline for your ebook.

Im including some of the sites I found. Grok is from Futurenow Inc. they are really good persuasion engineers.

I hope I've been helpful. Send me a line if you need anything else.

Links:

• http://www.searchmarketingstandard.com/articles/2007/05/tackling-the-shoppi...
• http://www.grokdotcom.com/2008/04/24/shopping-cart-abandonment/

Claire Devereux Thompson

Owner, Sterling Advertising Company

Hello E

This is such a good subject - I am also interested in what has prompted you to write about it, although I believe that you are asking this question to get multiple viewpoints rather than because you don't know about it.

To use website analytics to understand abandonment of any path, you first need to map that path. What is the optimal path through your pages that a shopper should take? Is it landing page, cart, shipping, payment otpions, checkout? Is it landing page, suggested items, wishlist, cart, suggested items, cart, payment, shipping, checkout? Etc. This is your sales funnel.

Once you have that path you can use analytics to see where people are dropping out of your sales funnel. You can measure exactly how many people went from page 1 to the last page, and you can figure out where they fell out of the process and work on those pages.

For example, your shopping cart might be being abandoned at the shipping page. If so, you can use analytics to understand that this is where one of your issues is, as that's a high exit page. Perhaps your shipping options are not clear, or are too expensive, too restrictive, too many options that require research to understand. Whatever the problem, analytics can only show you where the problem is. So, for our example of the shipping page being a high abandonment area, we now have a baseline to measure improvement against and can begin to work on the problem and track it.

Let's say that we decide that we need to explain why our crystal goblets need special packaging that drives shipping rates up - we write a paragraph of text that really promotes the fact that we care deeply about the consumer and that they get what they expect when it arrives, in good condition. We then add this to a shipping page, with 50% of shoppers getting this version with the shipping description and 50% getting the old version, and then we use website analytics to compare the two.

Did it make a difference? If so, did it solve the problem? If it did, then you're in great shape. If it didn't, go back and try something else. Keep testing and reading your anaytics against your benchmark, and you'll get there eventually.

Hope this helps. Good luck with the book.

Claire

James Curcuruto

Marketing and Advertising Professional

Hello E,

Here's what I do; I take the visitors that browsed the longest or put an item in the shopping cart and then send them a "Special Offer" email (ie 10% off or Free Shipping). Obviously the offer code is unique on the special offer so I can track results and I have had a 1.05% conversion from the special offer. Not a huge response but sometimes you have to pay big $ to get a 1% return so for free, it's great!
Good luck with your book.
Jim C -
Owner
www.FrameThatMoment.com

Links:

• http://www.FrameThatMoment.com

Erik Small

Online Marketing Manager at Ipswitch, Inc.

First and foremost, tag all pages of the shopping flow using an analytics package like Omniture, so you have metrics of how many visitors are hitting your cart. You'll see data on each page of the flow and determine which pages are causing the biggest drop-off. And, determine the overall shopping cart conversion to set a baseline to try and improve. Typically, the page that asks for the most personal information or credit card number will lose the most visitors. Optimize the poor performing pages by running an A/B split test. Example: If initial overall conversion is 30% (70% abandonment), some simple changes through testing and improving page navigation can increase conversion +5% or more. Sometimes it's an ongoing process -- Read data, setup a test, analyze results, repeat.

Marina Mann

eCommerce | Digital Marketing | Mobile Professional

Although I would love to see you "...stop shopping cart abandonment", it may be an optimistic goal. There are a number of best practices in terms of persuading your customers to complete the buy online, however assuming all customers intend to buy when they put items in the cart is not a fair assumption. In my opinion, the Web checkout is a complicated emotional experience conjuring up need, desire, anxiety and most importantly happiness. Increasing conversion doesn't start at the shopping cart, it starts at the power page (or entry page) and can be qualified in the context of cross-channel visitor engagement, brand relationship and lead generation.

Clearly, Analytics tools won't give you info on your customers' emotional state, but it's important to pick the right analytics tool that will help you understand the data in context. You'll also need to design your site for analytics for help in understanding visitor volume trends, conversion funnels, clickstreams forward and reverse path analysis, page popularity and so on. Keep in mind that, if you're a cross-channel eCommerce site vs. a pure play, the same shopping cart abandonment data will glean different insights.

The best case study is Amason's one-click-buy and Apple's licensing and adaptation of the same.

Feras Alhlou

Senior Online Marketing/Analytics Consultant;Google Adwords Qualified Professional;Google Analytics Authorized Consulant

Hi E,

There are several analytics books, by established analytics experts that touch on the subject, you might want to check out these books as you write your ebook.

The authors/books that come to mind are:
- Eric Petersons' Web Analytics Demystified
- Avinash's Kaushik's Web Analytics - An Hour a Day
- Brian Clifton's Advanced Web Metrics with Google Analytics
- The articles and blog posts by the folks at FutureNow

While these books are not specific to shopping cart abandonment, they do have chapters on eCommerce, conversion rates, funnels and metrics to measure abandonment rates and improve conversion rates.

Hope this helps,
Feras

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Geneva - The eighth most popular (expensive) city in the world

Moscow is the world’s most expensive city for expatriates for the third consecutive year, according to the latest Cost of Living Survey from Mercer. Tokyo is in second position climbing two places since last year, whereas London drops one place to rank third. Oslo climbs six places to 4th place, Geneva is in 8th place beating Zurich into 9th Place by three clear points. New York has slid down to 22nd place.

Contrary to the trend observed last year the gap between the world’s most and least expensive cities now seems to be widening.

• Moscow is still the most expensive city


• European and Asian cities dominate the top 10


• The weak US dollar has caused a significant shift in the rankings

Mercer’s Cost of Living survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. Order reports

Website of the Week

BetterManagement provides articles, webcasts and conferencesaddressing performance management, business intelligence, ITmanagement and other critical business management issues.

Two year forecast for the UK economy

The scale of the oil-price shock now hitting the British economy is clearly similar to that of the 1970s. Indeed the prices paid by manufacturers for their fuel and materials soared by 30.3% in the year to June, the biggest jump since November 1974. This suggests that the prices those firms in turn charge retailers will rise even higher than the 10% annual increase in June, which was the highest rate of factory-gate inflation since early 1982. Read original article.

Unless retailers absorb the cost increases coming down their supply chain by cutting their margins, this will bring more pain for already hard-pressed households. Consumer-price inflation is moving even farther away from the government’s 2% target. In just two months, it has climbed almost a percentage point, from 3.0% in the year to April, to 3.3% in May and then 3.8% in June—the highest for 16 years.

As far as most shoppers are concerned, the consumer-prices index (CPI) is merely starting to catch up with their daily experience. The CPI may be used for the inflation target, but it commands little confidence because it excludes owner-occupier housing costs. The broader and longer-established retail-prices index (RPI) increased by 4.6% in the year to June. RPI inflation excluding mortgage interest payments—the measure used for the target from 1992 until the end of 2003—rose by 4.8%, also the highest for 16 years.

Whatever index is used tends to understate people’s inflationary alarm, which is coloured by the fact that the prices of everyday essentials are rising so fast. Road-fuel costs, for example, leapt by 24% in the year to June. Annual food-price inflation accelerated from 8.7% in May to 10.6% in June, according to the CPI; on the RPI measure, which stretches back much longer, it is a little lower (9.7%) but still the highest since 1982. Shoppers are keenly aware of these increases and pay little attention to the fact that less frequent purchases like cameras are getting much cheaper.

The labour market has remained one bright spot amid the enveloping gloom, but this is now clouding over. Figures based on the labour-force survey released on July 16th showed that employment continued to grow and that the jobless rate remained steady at 5.2%. Little comfort can be drawn from this, however, not least since the data extend only to May. The more timely figures for people claiming unemployment benefit showed a rise of 15,500 in June, the biggest monthly increase since 1992. Since then a number of homebuilders have announced big lay-offs. In the months ahead unemployment, which lags the economic cycle, looks set to rise, although this may be tempered by migrants returning to eastern Europe as jobs in Britain become scarce.
The return of stagflation has put the Bank of England in a bind. On the one hand, the fierce upsurge in inflation threatens to rekindle an inflationary mentality, in which both firms and workers expect prices to carry on rising rapidly. Although the annual growth of average earnings remains subdued, rising by only 3.8%, unions are flexing their muscles (see article). That calls for a pre-emptive rise in interest rates to show that the central bank means business about restoring price stability. On the other hand, a rapidly weakening economy should bring down inflation in due course. There is an increasing risk that the downturn could be severe, not least because of the fragility of Britain’s mortgage lenders as the housing market subsides. That calls for lower interest rates.

Caught in this quandary, the central bank’s rate-setters decided for the third consecutive month to keep interest rates on hold at 5.0% when they met on July 10th. They seem likely to maintain this do-nothing stance for some time. As long as inflation is accelerating, the monetary-policy committee will be loth to lower the base rate for fear that this may undermine the Bank of England’s credibility.

What this suggests is that the economic malaise will stretch well into next year, and maybe into 2010. This should not come as a surprise. Banking and housing crises tend to drag economies down in their wake for several years. And if there was one lesson that policymakers learnt in the 1970s, it is that there is no easy cure for stagflation. After the nice years, a hard slog lies ahead.
That casts a long shadow over Gordon Brown’s chances at the next election, which must be held by June 2010. Labour swept into office in 1997 with the catchy slogan “Things can only get better”. During the “nice” years, that turned out to be the case. Voters rewarded economic success at the polls in 2001 and 2005. They are unlikely to forgive more recent failure when they next have the opportunity to pass judgment on Labour’s record.

Websites

• consumer-prices index
• labour market statistics
• Bank of England.
• Britain
• Britain's economy

The Business of Business Schools

A test used by business schools to help choose students is at the centre of a controversy

IT WOULD make great material for a business ethics course. In late June ScoreTop.com, a website that helped users prepare for the Graduate Management Admission Test (GMAT), was shut down following allegations that it had published questions being used in current GMAT exam papers. The Graduate Management Admissions Council (GMAC), the business-school body that created the test, intimated that test-takers’ scores might be cancelled if they had abused access to “live” questions (though the council later said it was concentrating on users who may have posted the offending material).

Ominous rumblings from GMAC sparked a flurry of virtual hand-wringing on websites and in the blogosphere. “As the site always maintained that all the questions are its own material there is not much a student can do”, complained one ScoreTop customer posting on BusinessWeek.com. Students are not the only ones fretting. A multi-million dollar industry of test-preparation publishers and training schools has grown up to help aspiring business moguls prepare for the GMAT and the ScoreTop scandal has caused consternation among its ranks. “These threats put users [of test-preparation materials] in a strange position,” wrote a GMAT trainer. “What do you do when sites tell you they have great practice material but you have no clue if its [sic] legal or not?”

Read More in the Economist



Websites

ScoreTop.com has been shut down by a US District Court in a copyright infringement case brought by GMAC. The council has published FAQs about ScoreTop. BusinessWeek has a comprehensive business-school forum. See also the Economist Intelligence Unit's Which MBA? blog.

From The Economist
News from the schools, July 2008

Information is Power

A great article which really shows the power and value of information.

Barack Obama's super marketing machine
He knows your neighborhood, your favorite products and even when you open your e-mail. How Obama is betting on vast, corporate-style voter outreach to win the White House.
By Mike Madden

CIMA Switzerland

CIMA Switzerland (CIMA CH) is a not-for-profit Swiss association, founded in 1997 by CIMA members and students, who were resident in Switzerland. CIMA CH's goal is to increase the number of professional CIMA-qualified management accountants in Switzerland.
Download the CIMA CH newsletter:

• Spring 2008 (PDF 2MB)
  
• Summer 2007 (PDF 177KB)
  
• Autumn 2006 (PDF 13KB)
  
• Spring 2005 (PDF 155KB)
  
• Winter 2004/2005 (PDF 559KB)
  
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CIMA equivalent to Masters degree

The CIMA (Chartered Institute of Management Accountants) professional qualification is equivalent to a Master Degree, the independent UK agency responsible for government scoring of immigrants’ qualifications has said.

A point score of 35, the same as an MSc, has been awarded to the CIMA professional qualification by UK NARIC, the independent body that assesses and scores qualifications from around the world. The UK government uses this information on its official database to benchmark qualifications held by potential immigrants to the UK under its highly skilled worker programmes.

Robert Jelly, CIMA’s Director of Education, commented, ‘CIMA is delighted to be awarded this rating by an independent body that objectively ranks the value of various qualifications. This shows the prestige the CIMA professional qualification holds in the UK and throughout the world and demonstrates the portability of the qualification, enabling individuals to work and study wherever they wish.

‘It is further proof of the relevance of the CIMA qualification to business and the strategic value our members add to organisations. We are pleased to see CIMA achieve this further recognition from an authoritative UK government agency.’

The National Recognition Information Centre for the United Kingdom (UK NARIC) is the national agency providing the sole British official source of comparison information and advice on international education and training systems and overseas skills and qualifications.

It is part of a wider network of information centres (ENICs) across Europe and also including Australia, Canada, New Zealand and the USA. It helps individuals and organisations understand qualifications and skills from across the globe enabling pursuit of employment and education opportunities in the UK.

Former accountant named top media power...

A former accountant turned venture capitalist has been named as one of the most powerful people in the UK's media industry by a newspaper.Patrick McKenna was ranked ninth by the Guardian newspaper in its annual assessment of the most powerful people in the media sector.It judges candidates on factors such as their economic, political and cultural influence on Britain.

Mr McKenna has previously worked for financial services firm Touche Ross, having been made a senior accountant at the age of 28, the newspaper noted. The publication described him as "the financial svengali to much of the UK media and entertainment industry, the deal-maker with the Midas touch".

Touche Ross merged with Deloitte in 1990, creating Deloitte & Touche. In 1993, the international firm became Deloitte Touche Tohmatsu.It has now seen 14 consecutive years of growth and last year was the fifth in a row when it enjoyed double-digit increases in revenue.