Sunday, October 31, 2010

Never Leave 'Em Alone on Hold

Time is money. According to facts listed on the *Never Alone on Hold* web site, 94% of all marketing budgets are spent to induce a customer to call and yet only 6% to handle the call once it is received.

Frank Pival, owner of Seattle-based Never Alone on Hold, creators of telephone on-hold messaging systems, tells more:

According to AT&T, the average business receives 128 calls a day. 7 out of 10 callers are placed on hold for an average of 43 seconds. That's one hour per day or over 30 days per year. That's a lot of marketing time. For every 10 callers who hang up, 3 will not call back. And what people don't realize is that nearly 1 out of every 5 callers have bought based on an on-hold ad.

Visit Frank's site to find out more:

Sunday, October 24, 2010

Leveraging Your Intangibles

Despite the problems, tangibles still represent an opportunity to leverage profit, provided they are designed and delivered correctly. The table below illustrates the key imperatives marketers must address when marketing the intangible components of their products.

All of the activities are critical to success. Failing to cover one of the components can have the effect of reducing profit leverage, rather than improving it.

Getting Customers

Keeping Customers

Create Surrogates or Metaphors

· How you present yourself

· How your proposal looks

· Appearance of offices

· Testimonials

· Comparative data

· How you present claims

· How well you understand the prospect’s business

· How service providers present themselves

· Appearance of offices

· Data relating service performance to costs or problems avoided

Tie the Intangible to Something Tangible

· Comparative data

· Data relating service performance to customer’s actual cost savings or profit improvement

Educate the Customer About What They’re Getting

· Head-to-Head comparisons with other providers

· Workshops, training

· Educate customers in the elements of their cost stack

· Regularly remind them of the services you provide

· Regularly reinstate promises

· Demonstrate (with data) that you are keeping your promises, and relate this to the customer’s objectives

· Keep the occasional failure in perspective – prepare customers for a possible failure.

“Productize” The Service

· Develop procedures that ensure consistent delivery

· Manage costs of providing the service

Continuously Improve the Value of Your Intangibles

· Educate prospects about your continuous improvement approach

· Joint process improvement initiatives with your customers – customer led

· Add services that drive you deeper into the customer’s internal value chain

· Face-to-face visits

Sunday, October 17, 2010

Getting Customers vs. Keeping Customers

When it comes to the initial sale, the issue of intangibles can be difficult to manage. In terms of keeping customers, however, intangibles play a different, and far more important role.

For many industrial products, it is the service provided after the sale that enables customers to use the products efficiently. On-time delivery, technical support, troubleshooting, training, and customer service are simple examples of services that are provided after the sales transaction.

Industrial marketers often struggle with services because either (a) they don’t understand the fundamental difficulties of marketing intangibles, or (b) their organizations are not designed to support a services model. Both problems are different manifestations of the same problem.

Industrial products are mass produced in controlled condition. The products are created by engineers who have relatively little contact with customers. Services, on the other hand, are custom manufactured by people who are in frequent contact with customers. The design/creation of the service is also the manufacturing/delivery process.

Problem #1: If the delivery is poor, the customer assumes that the design of the service is also poor. This can alienate customers, and cause them to question the value of the products as well. Industrial companies tend to view the service components of their business as cost centers, rather than revenue centers. Many industrial marketers take the intangible component of their product/service offerings for granted, and focus the overwhelming share of their attention on products.

Problem #2: With products, customers know what they will get before they buy. With services, it’s the opposite. Customers usually don’t know what they’re getting until they don’t get it. This can lead to customer alienation too, because your industrial customer, like the consumer, become aware of your intangibles when you screw something up. This makes it easier for competitors to sell against you (at least for a short time). Industrial companies emphasize product quality improvements, but often ignore service excellence. Metrics related to services are almost always focused on cost containment, rather than the profit contribution of service excellence

Monday, October 11, 2010

All Products (Even Industrial Products) Are Intangible

Intangible products can seldom be tried before purchase. Intangible consumer products include travel, medical care, financial planning services, or even a simple haircut. Tangible products, such as a new suit, a car, or new watch can usually, to some degree, be tried before purchase.

In our world, the industrial sector, most of the products sold have a significant tangible component. Industrial marketers commonly assume that only the tangible component matters to their customers. I can prove this. Pick up a copy of your favorite trade publication and scan through the ads. The vast majority of the copy is about tangible products and/or product tangibles.

In reality, every product is both tangible and intangible. A watch is tangible, but the ability to be on time for appointments in intangible. A haircut is intangible, but the barbershop is tangible.

Industrial products are the same. A steam boiler is tangible, the reliability of the boiler is intangible. A railcar of polyethylene resin is tangible, but the technical service that helps you use the resin in intangible.

Industrial buyers buy differently from consumers, however. Professional buyers tell suppliers that intangibles are irrelevant, that only tangible features and selling prices really matter. Sometimes they’re being honest, and sometimes they, shall we say, spin the truth to their best advantage.

Commoditization is a problem for both consumer and industrial manufacturers. In many product categories, such as paper products, the biggest selling brand is the store brand, not the national brand.

But most techniques that work in consumer markets simply won’t work for industrial products. If you’re marketing pickles, you can package the pickles in an attractive glass jar, so people can see how fresh they look (and hopefully assume that they taste good). If you’re marketing, say, machine parts, you need a different approach.

To the extent that you can’t truly experience using any product before you buy it, all products are intangible, no matter how tangible they appear in nature.