tag:blogger.com,1999:blog-83509428559590129882024-02-07T14:39:42.776-08:00Best Practices in Industrial Marketing and SalesPW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-8350942855959012988.post-82425244864687685662011-06-12T19:15:00.000-07:002011-06-12T19:29:12.318-07:00The Opportunity for Industrial Branding<div><div><span lang="EN"><p>Recently a group of industrial sales and marketing professionals met to review the product offerings of their competitors' products. One competitor stood out from all the others: It charged up to 40% more than other companies and seldom discounted. </p><p>Detailed analysis showed that the competitor did nothing special in terms of manufacturing, and was saddled with an inefficient distribution channel. In spite of its pricing policy and lackluster production and distribution, the competitor held a strong #2 position in the market, compared to our distant #6 position (the top 3 companies hold 70% of the market).</p><p>This success was attributed to "marketing ploy." Oddly, nobody spelled out what the ploy was, or why it worked so well. The implication was that customers had no right to be so satisfied: Any industrial buyer that pays premium prices for undifferentiated products must be either stupid, or misled.</p><p>Actually, there was no trick, just good marketing practice. It's called branding.</p><p>Branding explains why some products command higher prices and intense loyalty from customers. How else could you explain Harley Davidson motorcycles? Harley employs engine technology and styling from the 1940s, yet it outsell bikes that are faster, more comfortable, more efficient, and less expensive. In fact, there is currently a waitig list to buy one.</p><p>Industrial marketers tend to ignore or underplay the benefits of branding. To many industrial marketers, branding is something for consumer products. They simply donÕt understand how branding works for industrial products.</p><p><strong></strong> </p><p><strong>Brands vs Products</strong></p><p>Industrial organizations tend to be product focused. Look at your own organization and count how many "Product Manager," or purely product focused roles exist. "Brand Manager" roles generally do not exist in industrial companies, which may explain why there are so few brands and so many products.</p><p>But there is a world of difference between brands and products.</p><p>Products are defined by the physical properties of what they are and what they do. Products have prices, specifications, lead times, shipping containers and disposal requirements. Product attributes are communicated relatively easily in a variety of ways. Product marketing is all about understanding what people need, and aligning key attributes of products to meet these needs. </p><p>Brands are almost the opposite of products. Where a product has a physical presence, brands exist in the hearts and minds of people. Brands convey a character, a promise, and a vision that connects with consumers. Where product attributes can be communicated quickly, a brand's character requires takes time to mature. </p><p>Some industrial marketers believe that by creating a unique name and logo for a product that they are creating a brand. These symbols are virtually meaningless if they do not reach out to users with some kind of connecting force. At best, logos and trademarks make it easier for buyers to remember your product.</p><p><strong></strong> </p><p><strong>What Great Industrial Brands Do</strong></p><p>Unlike consumer brands, industrial brands may be household names in some industries and unknown in others. Some great brands on my list, like Fluke, Hewlett-Packard,, Fisher-Rosemount, DuPont, 3M, Caterpillar, and Millipore, may not be on yours. Regardless of the industry, consumer and industrial brands must succeed on several levels.</p><ol><li>Long-term perspective. Great brands are not trendy. They evoke unique values in users minds and remain there for decades. Companies that own great brands constantly work to build and maintain this sense of worth. Short-term decisions to cut cost or gain a few points of market share can hurt a brand if they conflict with the brandÕs character. Remaining relevant over the long term is based on a commitment to quality.<br /><br />For example, IBM's decisions to cut back on service in the 80s, to develop non-standard PCs in the late 80s, and its manufacturing problems with laptop computers in the 90s have diminished the faith that many industrial buyers invested in the IBM name. Still, there many corporate buyers who still pay a premium to do business with Big Blue, because the believe in IBM and trust its reputation. Harley Davidson nearly went bankrupt twice before a new group of managers changed course and committed the company to representing the biker lifestyle with high quality product.</li><li>Defined character. Great brands have a defined character, and the people who manage the brand are very aware of what it is. The process of defining brand character involves understanding what end-users like and dislike, and what values they associate with the core of the brand concept. Using this knowledge, smart managers decide what not to do. A well-known example is how McNeil Pharmaceutical handled the Tylenol scare several years ago. When the safety of Tylenol was suspect, the company recalled all the product at a huge cost. One of McNeil's managers described the decision to me as follows: The decision to recall was easy. There was nothing else we would have done. The hard part was figuring out how to get it done fast enough. More recently the company has stumbled becasue the current group of managers did not live up to the brand promise as well as their predecessors.</li><li>Invention. Great brands invent or reshape categories. Just as Procter and Gamble created the disposable diaper category with Pampers, DuPont created the man-made fibers category in the 1930s when it invented Nylon. As Apple reshaped the personal computer category, 3M created reshaped the engineered materials category and Cummins reshaped the OEM engine market.</li><li>Emotional wellspring. The common link between great industrial and consumer brands is the ability to tap into consumer emotions. Nike is a master at tapping into consumer emotions. Nike commercials are works of art, they inspire. The shoes are almost incidental. Industrial products sometimes achieve an emotional tie-in too. For instance, many professional truck drivers are passionate about Mack trucks. Many truckers also prefer Michelin tires, and will tell you they simply feel better riding on Michelins.</li><li>Never ending Story. One reason why logos and trade names fail to constitute a brand is because a brand is really a metaphor that is constantly evolving. Great brands employ metaphors that connect with people at very deep levels. The Harley Davidson example at the beginning of this article is an excellent example. People connect with Harley partly because the looks, feel and sound of the machine speaks of an earlier time. Harley owners feel part of a life style, and connected to an enduring philosophy.<br /><br />That's a lot to ask of any brand, let alone an industrial one. Lincoln Electric, the only American manufacturer of electric arc welders, has lived a story that includes beating back intense Japanese competition, a phenomenal workforce that understands customers, and standard of excellence that has not wavered for over two decades. Lincoln's customers are among the most intensely loyal in any industry.</li><li>Design consistency. Great consumer brands have a consistent look and feel. All Nike shoes, for example, have a distinctive look. Everything carrying the Tommy Hilfiger brand has a consistent design. Great industrial brands also maintain design consistency. For example, everything about Snap-On-Tools has a consistent design, including the trucks that call on customers. There is a consistency of design in General Electric's industrial products, even across divisions. For example, GE's industrial turbines carry design elements of its medical imaging magnets and aircraft engines.</li></ol><br /><br /><p><strong>"Even if I wanted to, I couldn't afford it"</strong></p><p>Branding takes time and dedication, not money. Some of the most respected brands, whether consumer or industrial, have been built with little or no advertising, and without complex market research. </p><p>Lincoln Electric spends next to nothing on advertising, and when I last checked, had no marketing department. But all of its employees spend time with customers as a matter of policy. In the past, when bad economic conditions have slowed sales, the company send its plant workers into the field.</p><p>Here is a four step process for building a brand:</p><p><strong>I. Build a community</strong><br /><br />Harley Davidson spends no money on advertising, and shut down its branding department in 1995. The company created the Harley Owners Group (HOG) to sponsor rallies, special promotions, and serve as an information clearing house for Harley owners. Today HOG has 365,000 members in 950 chapters around the world. Harley views HOG as so important that even the CEO attends rallies.</p><p>The key activity here is not the forming of a user group, but the Harley's focus on intimacy with its customers. The company could have done a half dozen other things that accomplished the same result.<br /><br /><br /><strong>II. Give them a reason to belong</strong><br /><br />Make membership in your community worthwhile by providing special benefits and greater access to your companyÕs leadership. For example, if you set up local user groups, always give your members something extra, like early releases of product improvements, access to prototype products, or access to your R&D facilities for work related to your products.</p><p><strong>III. Extend the brand</strong><br /><br />Using Harley Davidson as an example, the company began merchandising and licensing the Harley name and logo in 1986. Today the company sells $210 million a year on clothing, parts and accessories. By carefully choosing products that support the Harley image, the company has extended the brand profitably.<br /><br />In industrial markets, brand extension usually takes the form of alliances. For example, chemical companies are extending their brands by allying with chemical management companies. In another example, a manufacturer of fluorinated compounds allied with the leading recycling and recovery company for those compounds. Brand extension can also take the form of adding services to support the product. (See our workbook, "Value Added Services That Sell.")</p><p><strong>IV. Extend the enterprise</strong></p><p>Build up your distribution channel by supporting your distributors to the hilt, and adding new ways for customers to acquire your products that do not undermine your distributors' profits. (See our June 1997 issue for ideas about ways to improve your distributor network). </p><p>The basic approach to extending the enterprise is to pump more goods through your distribution channels. Give your sales force more products to sell, and lower your wholesale prices to your largest dealers.</p><p><strong>V. Add Value</strong></p><p>Marketing students are sometimes taught that industrial buyers don't buy for themselves. I remember being taught that industrial buyers generally employ a rational, systematic process to decision making, and that they only buy products that are needed.</p><p>Reality is different, as we all know. Personal choice does play a factor in industrial decisions, although the parameters are more narrowly defined. We also know that industrial decisions are influenced by many factors. There is no straight path in industrial buying choices. </p><p>That's why there are <em>always</em> opportunities to add value. </p><p>For industrial products, "value" has a different meaning. Price matters to industrial customers, especially in replacement and aftermarkets. Price alone could account for 50% or more of the value equation.</p><p>If your pricing is not competitive, you will have trouble with the value equatoin of branding. This is not to say you must have the lowest prices, but your perceived prices must be competitive. For industrial products, price premiums for leading brands average about 10%.</p><p>Other than price, should focus on building brand value in four specific areas. All of them may be fit into the structure of a brand's character.</p><p>Product related value stems from tangible factors such as the products' performance attributes. But intangibles count too, in areas such as good design, innovation and the overall fit of the products with their purpose. </p><p>Distribution related value stems from a function of tangibles such as product availability and intangibles such as delivery reliability. Short standard lead times (tangible) are important, but the ability to respond to emergency situations (intangible) is much more critical. </p><p>The availability of EDI is important, but intangibles such as the overall ease of ordering and the willingness to help the customer with inventory costs, are probably more important. Some companies will value a global supply network, depending on their sourcing policies.</p><p>Support related value includes tangibles such as technical support, design advice, and the amount of onsite support. What may matter more is the ability of your support staff to demonstrate empathetic knowledge of the customerÕs business and help out with troubleshooting. More companies are providing technical support earlier in the selling cycle.</p><p>Finally, the company itself contributes to brand value. Established companies with global presence and good regional coverage contribute to the support of all the products and brands offered. As with the other categories, however, it is the intangibles that offer special opportunity for branding. How well the company positions itself as a world class, leading organization makes a difference.</p><p><strong>5 Branding Home Runs you can do for Low or No cost</strong></p><ol><li>Create company sponsored user groups. Hold regional meetings where customers can meet manufacturing, R&D and customer service people. Allow enough unstructured time to allow customers to share their concerns at their own pace. After the meeting, spend at least two hours with your team debriefing what was learned and formulating action plans.</li><li>Start a "university" for users of your products. For example, suppose your company manufactures industrial cleaning compounds. You could sponsor a "cleaning college" where your customers can send employees for training in the proper way to use the chemicals.</li><li>Find out interesting ways your product is used and sponsor activities that support them. For example, if you manufacture flow meters, you could survey your customers to determine the most common types of systems, materials, and situations that involve your products. Contact the top suppliers of the other components and jointly sponsor an event that combines education, idea exchange, and fun. </li><li>If you know how your customers are using your products, you should be able to determine what types and brands of equipment are most often used with your products. Work with the market leaders of these companies to design-in features that will add value to both products.</li><li>Visit your customers. Put on small demonstrations of your products right on their premises. People will share information with you face to face that you will never learn otherwise. Over time, you will develop personal relationships with users. Many will take you into their workplace and show you how they use your products, and gradually reveal the information you need for branding.</li></ol>- Prentis Hall<br /><p> </p></span></div></div>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-68588019626848699072011-05-01T18:34:00.000-07:002011-05-01T18:53:55.338-07:00A Repositioning Case Study<div><div><div><span style="font-family:Times New Roman;"></span><p style="margin: 0in 0in 0.05in;" class="Bodytext"><i><span style="color:windowtext;"><span style="font-family:Times New Roman;"><span style="font-size:130%;">This article was adapted from a series of posts made in our online discussion group by Matt Haley—PWH<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p></span></span></span></i></p><span style="font-family:Times New Roman;"><br /></span><span style="font-size:130%;"> </span><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;font-size:130%;">I joined a company selling internet, and CD-ROM e-commerce solutions that used a common engine and had a service component to take paper and some electronic product data and create a customized solution that acted like a sales person <i>—</i> it would lead a customer to the right solution without the customer having to know squat about the internal naming conventions of product lines and the like.</span></p><span style="font-family:Times New Roman;"><br /></span><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;font-size:130%;">What was clear was that the technology was excellent: no large downloads!<span style="mso-spacerun: yes;"> </span>The problems included selling to the building product markets at $12K to $18K.<span style="mso-spacerun: yes;"> </span>It was profitable, but not as profitable as possible.</span></p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-size:130%;"></span> </p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;font-size:130%;">After looking at what we were doing, I did the standard review of needs and technology fit and we targeted raising the price to the current market while evaluating new markets. </span></p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-size:130%;"></span> </p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;font-size:130%;">To raise the price, we stopped calling on the web or sales support people charged with getting a “web catalog” going.<span style="mso-spacerun: yes;"> </span>We started talking to the VP of Sales first, then the President about using the Web as a channel, and how the Web needs to support your other channels issues. </span></p><span style="font-family:Times New Roman;"><br /></span><span style="font-family:Times New Roman;font-size:130%;">In companies with an indirect channel primarily, we talked to whoever owned the channel and the president. </span><span style="font-family:Times New Roman;"><br /><br /></span><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;"><span style="font-size:130%;">The VP of Sales, the partner manager, and the presidents all care about top line revenue. Mid-level marketers, anyone in Information Services, Marcom people, Web designers and the like care about cost containment.<span style="mso-spacerun: yes;"> </span>If you save $100K, the price has to be less than $100K.<span style="mso-spacerun: yes;"> </span></span></span></p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"> </p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;font-size:130%;">If you increase top line revenue and bottom line profit, then the price can be anything less than the risk rated increase in profit.</span><span style="font-family:Times New Roman;"><br /><br /></span></p><span style="font-family:Times New Roman;"></span><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;font-size:130%;">After doing this research, we found a price point of approximately $90K to $120K for the same product we had been selling at $12K to $18K.<span style="mso-spacerun: yes;"> </span>And our customers were happier.<span style="mso-spacerun: yes;"> </span>And the sales cycle dropped dramatically!</span></p><span style="font-family:Times New Roman;"><br /></span><span style="font-family:Times New Roman;"><span style="font-size:130%;">After doing a lot of competitive analysis and some secondary research, I changed the product description to be a software license at 50% of the price and Consulting for 50%. This served to help people understand why we had a standard maintenance contract and increased the acceptance of the 20% maintenance on both the service (consulting) and the license.<span style="mso-spacerun: yes;"> </span></span></span><span style="font-family:Times New Roman;"><br /><br /></span><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;"><span style="font-size:130%;">We then changed to Computer and Instrumentation as the target markets, and raised the price to $175K per channel used plus the Consulting Service at $70K per product line.</span><span style="mso-spacerun: yes;"><br /></span></span></p><span style="font-family:Times New Roman;"></span><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;"><span style="font-size:130%;">We sell this model to the business owners, the VP’s of Sales, the VP of sales operations and the president or as close as we can.<span style="mso-spacerun: yes;"> </span>Each channel can be bought separately, and therefore the total is less than most companies that are large need to take to the Board of Directors.<span style="mso-spacerun: yes;"> </span>VPs and Presidents make decisions quickly, so the sales cycle is shrinking.<span style="mso-spacerun: yes;"> </span></span></span></p><span style="font-family:Times New Roman;"></span><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;"><span style="font-size:130%;"></span></span> </p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;"><span style="font-size:130%;">By packaging what was a service into products that match the needs of the person best able to increase their income, we bypass the techno-squirrels until they are boxed in.<span style="mso-spacerun: yes;"> </span></span></span></p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"> </p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;"><span style="font-size:130%;">By doing fixed-price whole solution pricing, we remove the biggest risk factor to the IS manager. </span><span style="font-size:130%;">When IS (not if but when) the IS department and we get down to a couple of acceptance test quibbles, we let the funding party make the decision, and we give alternatives based on time, not cost. </span><span style="font-size:130%;">An extra $10K won’t sway the decision as effectively as two months on the schedule will.</span></span></p><span style="font-family:Times New Roman;"><br /></span><span style="font-family:Times New Roman;"><span style="font-size:130%;">We know the current price point is too high for many potential prospects. So we are packaging the tools we use in house and a set of standard templates and will be offering a lower cost solution that has less Consulting Service, removes some product features we find only large international companies care about and will be available at a much lower price.<span style="mso-spacerun: yes;"> </span></span></span><span style="font-family:Times New Roman;"><br /><br /></span><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;"><span style="font-size:130%;">The person who will increase their earnings or decrease their risk is always a good place to start. </span><span style="font-size:130%;">They have almost always delegated the problem to someone who does NOT see the business problem driving the request.</span><span style="mso-spacerun: yes;"><br /></span></span><span style="font-family:Times New Roman;"><br /></span></p><p style="margin: 0in 0in 0.05in;" class="Bodytexttight"><span style="font-family:Times New Roman;font-size:130%;">In our case they think they were charged with getting a configurator online, not increasing top line revenue.</span><span style="font-family:Times New Roman;"><br /><br /></span></p><p style="margin: 0in 0in 0pt;" class="MsoCaption"><em><span style="font-family:Times New Roman;font-size:130%;">Matthew Haley is VP of fast-growing software technology company. </span></em></p><span style="font-family:Times New Roman;"><br /><br /></span><p style="margin: 0in 0in 10pt;" class="MsoNormal"><b style="mso-bidi-font-weight: normal;"><o:p><span style="font-family:Calibri;"> </span></o:p></b></p><span style="font-family:Times New Roman;"><br /><br /></span></div></div></div>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com1tag:blogger.com,1999:blog-8350942855959012988.post-54611998029867983832011-03-13T20:36:00.000-07:002011-03-13T21:48:28.294-07:00Three Problems With Industrial Advertising That Hurt Sales<span style="font-family:Helvetica;font-size:100%;">This Weeks Contribution is by Philip Sawyer</span><br /><br /><div><blockquote><p><span style="font-size:100%;"><span style="WIDOWS: 2; TEXT-TRANSFORM: none; TEXT-INDENT: 0px; BORDER-COLLAPSE: separate; FONT: medium 'Times New Roman'; WHITE-SPACE: normal; ORPHANS: 2; LETTER-SPACING: normal; COLOR: rgb(0,0,0); WORD-SPACING: 0px; -webkit-text-size-adjust: auto; -webkit-border-horizontal-spacing: 0px; -webkit-border-vertical-spacing: 0px; -webkit-text-decorations-in-effect: none; -webkit-text-stroke-width: 0px" class="Apple-style-span"><span class="Apple-style-span" style="font-size:small;"><i>Philip Sawyer is a senior vice president at Harris Interactive, an international marketing, public opinion and advertising research firm. This article originally appeared in the monthly newsletter of Roper Starch, Worldwide, where Sawyer served as vice president and director of communciations. You can contact Mr. Sawyer on Twitter @pwsawyer.</i></span></span></span></p><p><span style="font-size:100%;">-------------------------------------------------------------</span></p><p><span style="font-size:100%;">Most marketing people who have thoughtfully looked at industrial advertising agree: Advertising targeted to business needs a lot of work. Industrial advertising need not be substantially different from consumer advertising in its makeup. Readership studies confirm that the same principles that govern effective advertising for consumers apply fully to industrial advertising.</p><p>Here are three common problems with business-to-business advertisements. </p><p></p><p></span><span style="font-family:Arial;font-size:100%;color:#000000;"><b></b></span></p><p><span style="font-family:Arial;font-size:100%;color:#000000;"><b></b></span></p><p><span style="font-family:Arial;font-size:100%;color:#000000;"><b>1. They Are Distinctly Anti-Visual</span><span style="font-size:100%;"></p></b><p>Business targeted ads, for understandable reasons, tend to be more about content than appearance. Many use several illustrations and concepts — as opposed to single powerful image and one "unique selling proposition" — to get key points across. </p><p>Business-to-business advertisers may expect their ads to be read by an audience hungry for information and, therefore, anticipate that the audience will work hard to get into the ads even if they are not pretty or simple.</p><p>That supposition, however, flies in the face of proven research findings. Magazine readers will read even copious amounts of copy in advertising, but they must be invited in. The best invitations use illustrations that delight the eye and headlines that that express one simple iea, usually in the form of a benefit.</span><span style="font-size:85%;"><span style="font-family:Garmond;font-size:100%;"></p><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioMOqUyJKBvhb1LcOSHsqmF_43XV2T8ShNfoVLutNgbUuD5dVQ01021xUrjm62H78K5fgv2jjZnjjdUWpKBBakhBAjlLxRY7LBJleuj6yrKcHyBJjV7OHjFp58NhawidWAURjfDuWT5j8Z/s1600/v3n12-4-11.jpg"><img style="WIDTH: 141px; HEIGHT: 188px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5583783723664697410" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioMOqUyJKBvhb1LcOSHsqmF_43XV2T8ShNfoVLutNgbUuD5dVQ01021xUrjm62H78K5fgv2jjZnjjdUWpKBBakhBAjlLxRY7LBJleuj6yrKcHyBJjV7OHjFp58NhawidWAURjfDuWT5j8Z/s200/v3n12-4-11.jpg" /></a> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjE3DrWCmVVtpWZuRHw_UU88G4h-swSxql64J3v1nBVfNn2iq1Jvqkcjo3B7oRVc8eUTiJC4cRL0RiYMt-F78EBP4zeiOTnoibSF5r0dEWPLqefJDla5QxgFnMEL6qUI8Mlj9HctwzW3Npp/s1600/v3n12-4-1.jpg"><img style="WIDTH: 136px; HEIGHT: 180px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5583784239773848706" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjE3DrWCmVVtpWZuRHw_UU88G4h-swSxql64J3v1nBVfNn2iq1Jvqkcjo3B7oRVc8eUTiJC4cRL0RiYMt-F78EBP4zeiOTnoibSF5r0dEWPLqefJDla5QxgFnMEL6qUI8Mlj9HctwzW3Npp/s200/v3n12-4-1.jpg" /></a> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_WjvzGol-lAFEO_TCmIYlIlZJT9BBa-YIuey-XPlMc61BIU9KdhMoAqLCxu0J2tRTqUY8D0f-eG_omXoHeY0NqhmjQw6l_vPBY5L1dpUyy2CWSISzoAYkpdHf_7CLz2dKu0Vn7lA23Eq2/s1600/v3n12-4-7.jpg"><img style="WIDTH: 134px; HEIGHT: 188px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5583785054573202274" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_WjvzGol-lAFEO_TCmIYlIlZJT9BBa-YIuey-XPlMc61BIU9KdhMoAqLCxu0J2tRTqUY8D0f-eG_omXoHeY0NqhmjQw6l_vPBY5L1dpUyy2CWSISzoAYkpdHf_7CLz2dKu0Vn7lA23Eq2/s200/v3n12-4-7.jpg" /></a><br /><p></p><i><span style="font-family:Garmond;font-size:85%;"><p align="center"></span></span><span style="font-size:85%;color:#0000ff;">Contrast the use of strong visual images in each of these three ads. Here we see three different levels of visual intensity — and three different levels of effectiveness. On the left we see one of a series of DuPont ads that combine excellent composition with a strong message. The middle image, although it employs a fairly strong visual, the crumpled paper borders on the abstract. The ad on the right is almost painful for us to look at. Bugs? Unless you’re an exterminator, would you want your product associated with bugs? </span></i><span style="font-family:Garmond;font-size:100%;"></p><p></span><span style="font-size:85%;"><span style="font-family:Helvetica;font-size:85%;"><b></p></b></span><br /><p></span><strong><span style="font-family:Arial;font-size:100%;">2. They Tend to Emphasize the Abstract, Rather Than The Human Element</span><span style="font-family:Arial;font-size:85%;"> </span></strong><span style="font-size:85%;"></p><p></span><span style="font-size:100%;">Business advertisers tend to overestimate the reader’s interest in their products. This translates into an assumption that your target audience will get the inside joke or hidden meaning in your ad. This may be a fair assumption, but industrial companies tend to skimp on costs and often skip pretesting that would reveal flawed assumptions.</p></span><p><span style="font-size:100%;"></span></p><span style="font-family:Garmond;font-size:85%;"><i><p align="center"></i></span></p><span style="font-size:85%;"><i><br /><br /><p align="center"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ-tBGTW7ZytvwwUDsC-B6wq33iqBFUJ33HNzW9JvnUgD-IHQPxisUe24nXZhveJQlvR_im6Dk3MC0krYIZZppye7Pxs-q939WcHqaKTBjI5bInOCLdS30Vpq2lR87veerDFVRSRMaNbhx/s1600/v3n12-4-8.jpg"><img style="WIDTH: 128px; HEIGHT: 188px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5583785683363542866" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ-tBGTW7ZytvwwUDsC-B6wq33iqBFUJ33HNzW9JvnUgD-IHQPxisUe24nXZhveJQlvR_im6Dk3MC0krYIZZppye7Pxs-q939WcHqaKTBjI5bInOCLdS30Vpq2lR87veerDFVRSRMaNbhx/s200/v3n12-4-8.jpg" /></a></p><p></i></span><span style="font-size:85%;color:#0000ff;"><i></i></span></p><br /><p align="center"><span style="font-size:85%;color:#0000ff;"><i>How do you know if an ad avoids<br />abstraction? If someone who doesn’t<br />know your business can understand<br />the gist of your message from the visual alone.</i></span><span style="font-size:130%;"><br /><br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPyQRwfKfJUPuFO3n_0-yliHyH1bG0Hzh7pQNekhDWoNkTT5Nbzjq5hMysRj7QJsa4hS9Iscey2V2PkWukhx_AhtN1vr0MLRP7AvXm5sHbKtjGxhNoZiiEaEeoXAGHmn1-AsQD8FtYHwW9/s1600/v3n12-4-4.jpg"><img style="WIDTH: 200px; HEIGHT: 134px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5583786237932532450" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPyQRwfKfJUPuFO3n_0-yliHyH1bG0Hzh7pQNekhDWoNkTT5Nbzjq5hMysRj7QJsa4hS9Iscey2V2PkWukhx_AhtN1vr0MLRP7AvXm5sHbKtjGxhNoZiiEaEeoXAGHmn1-AsQD8FtYHwW9/s200/v3n12-4-4.jpg" /></a><br /><br /></p><p><span style="font-size:85%;color:#0000ff;"><i></i></span></p><p align="center"></span><span style="font-size:85%;color:#0000ff;"><i>Compared to the previous<br />example, this ad manages<br />to take an abstract concept<br />and convey it in very human,<br />concrete terms.</i></span><span style="font-size:130%;"><br /><br /><br /></p><p><span style="font-family:Arial;">3. They Do Not Emphasize Benefits</span></p><p></span><span style="font-size:100%;">Advertisers would improve their advertising immeasurably if they simply, clearly, and powerfully told the reader what their product or service will do for them. The problem seems to be that industrial advertisers assume — along with a great number of consumer advertisers — that readers are as interested in the product as the advertiser is. That is rarely if ever the case.</span></p><p><span style="font-size:100%;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-mp34IVbL8kLZoAI_D1PkTNoQa-yIGJ3xv3AV1k_DjN5I8z6I6WporK9SLN6wxaYCuCjdIGwMfLqnToL2CLqBknzxJlh9FofvyumWd8l5Ca2s5eAOQdb58k1cNEuG1Qv62KNXiQN001Uj/s1600/v3n12-4-9.jpg"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 135px; FLOAT: left; HEIGHT: 188px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5583787208353430162" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-mp34IVbL8kLZoAI_D1PkTNoQa-yIGJ3xv3AV1k_DjN5I8z6I6WporK9SLN6wxaYCuCjdIGwMfLqnToL2CLqBknzxJlh9FofvyumWd8l5Ca2s5eAOQdb58k1cNEuG1Qv62KNXiQN001Uj/s320/v3n12-4-9.jpg" /></a><br />Business-to-business advertising has a tangible<br />advantage over consumer advertising: an audience<br />that is by its nature favorably disposed to the<br />advertising message. At the same time, b-to-b<br />advertisers in large part fail to take advantage<br />of the opportunity before them.</p><br /><br /><br /><p></span><span style="font-size:85%;"><i><span style="color:#0000ff;">We love ads like these because<br />they emphasize benefits. We also<br />chose these because they all do a<br />good job of avoiding abstraction.<br />These ads are telling us that<br />products are about people, and<br />people, after all, do the buying. In<br />this respect, industrial advertising<br />and consumer advertising address<br />identical issues.</span></p></i></span><span style="font-size:100%;"><br /><p>There is no great secret to effective industrial advertising. The key point to remember is that the best advertising is like a good conversation. In light of that, all advertisers should remember the words of Benjamin Disraeli: "The art of conversation consists of the exercise of two fine qualities; you must originate and you must sympathize; you must possess at the same time the habit of communicating and the habit of listening. The union is rare, but irresistible."</p></span><p align="center"><span style="font-size:85%;"><i><br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjC3lh-zjwyRq76u-Jv8pv-6kcEpBJKQGNYqNtBuGBVxhq7eA1hsyjPjDOaaLKAqbEMkXfSmqkyqLeMR9LvNCof0NHal6lqWZyYh7REUO-Lq9ZiQauDmWDnz4fJJd1OnxpOYzvh2HDPg_RI/s1600/v3n12-4-3.jpg"><img style="WIDTH: 140px; HEIGHT: 188px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5583791641257603426" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjC3lh-zjwyRq76u-Jv8pv-6kcEpBJKQGNYqNtBuGBVxhq7eA1hsyjPjDOaaLKAqbEMkXfSmqkyqLeMR9LvNCof0NHal6lqWZyYh7REUO-Lq9ZiQauDmWDnz4fJJd1OnxpOYzvh2HDPg_RI/s320/v3n12-4-3.jpg" /></a> <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd7R7HrZfP3NJjAI4RuCl-ZPrNcThibj2-VFwHzLWhmjj3H0ow14_0oVBWPkwsIW-nG9389rWr_Lcti_XtR4ZFL73jaBtigOnVgeXSIJfEDFOPpkZt3vpK18ORuwNOPEyHGwTd-M-RAJ97/s1600/v3n12-4-5.jpg"><img style="WIDTH: 141px; HEIGHT: 188px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5583790239567288994" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd7R7HrZfP3NJjAI4RuCl-ZPrNcThibj2-VFwHzLWhmjj3H0ow14_0oVBWPkwsIW-nG9389rWr_Lcti_XtR4ZFL73jaBtigOnVgeXSIJfEDFOPpkZt3vpK18ORuwNOPEyHGwTd-M-RAJ97/s320/v3n12-4-5.jpg" /></a><br /><br /><span style="color:#0000ff;"><em><i>One simple way to check your own advertising is to look at the picture. Does the picture tell you, at a glance, what is for sale? Contrast these two ads, and you start to see what we mean. The one on the left (our reproduction may be a bit difficult to make out) is clearly selling airplanes. What is the one on theright selling...piles of paper?</i></em></span></p><div><br /><span style="color:#0000ff;"><em><i>If the picture invites you in, the next step is to check the copy. Does it clearly state benefits in the first paragraph? The first sentence? Finally, does your copy go beyond the mere statement of benefits, and address at least one core issue that your target audience is deeply concerned about? Our next article, discusses this important consideration.</i></em></span></div><br /><div><br /></span><span style="font-size:100%;">Those who wish to create irresistible ads need to bear in mind that when anyone confronts an ad, his primary purpose is to walk away with the feeling that he has been listened to or understood. For industrial advertisers, that means understanding that all readers — not just those who read consumer advertising, yearn to delight in what they see, to make a human connection with the product that is advertised, and to depart with a sense that they have benefited from the experience.</span></span></i></div></blockquote></div>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-59169744020786521942011-03-06T19:46:00.000-08:002011-03-06T19:48:15.417-08:00Effective Industrial Advertising: So simple, yet so elusive<p style="MARGIN: 0in 0in 0pt" class="MsoCaption"><em><span style="font-family:Arial;font-size:85%;">This Weeks post is written by Mitch Goozé.<span style="mso-spacerun: yes"> </span>Mitch Goozé is an experienced manager with operating experience in the high technology and consumer products industries. He is the author of <span style="FONT-VARIANT: small-caps">It’s Not Rocket Science: Using Marketing to Build a Sustainable Business.</span> Mitch was president of Teledyne Components, a division of Teledyne Inc. from 1985 through 1990. He is the president and founder of Customer Manufacturing Group. Email Mitch at :mgooze@customermfg.com.</span></em></p><h1 style="MARGIN: 12pt 0in 0pt"><?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p><span style="font-family:Helvetica;font-size:100%;"> </span></o:p></h1><p style="MARGIN: 9pt 0in 0.1in" class="Subhead2"><span style="font-family:Helvetica;">Setting Advertising Priorities</span></p><p style="LINE-HEIGHT: normal; MARGIN: 0in 0in 0.05in" class="Bodytext"><i><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: windowtext; FONT-SIZE: 10pt"><o:p> </o:p></span></i></p><div style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: medium none; PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: medium none; PADDING-TOP: 0in; mso-element: para-border-div; mso-border-top-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext .75pt"><p style="BORDER-BOTTOM: medium none; TEXT-ALIGN: center; BORDER-LEFT: medium none; PADDING-BOTTOM: 0in; LINE-HEIGHT: normal; MARGIN: 0in 0in 0.05in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; BORDER-TOP: medium none; BORDER-RIGHT: medium none; PADDING-TOP: 0in; mso-border-top-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext .75pt; mso-padding-alt: 0in 0in 0in 0in; mso-border-between: .75pt solid windowtext; mso-padding-between: 8.0pt" class="Bodytext" align="center"><i><span style="COLOR: windowtext; FONT-SIZE: 11pt"><span style="font-family:Arial;">Advertising is a highly effective method of spending money fast. Done well, it returns many times its cost in bottom-line benefit. Done poorly, advertising costs much more than money: at least, time and opportunities are lost forever; at the extreme, alienating customers can jeopardize the company’s entire future.<o:p></o:p></span></span></i></p></div><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><o:p><span style="font-family:Arial;"> </span></o:p></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Never forget: “Advertising is a highly effective method of spending money fast.” No matter the size of your company or the size of your budget, advertising is an expensive proposition. Done well, it returns many times its cost in bottom-line benefit. Done poorly, advertising costs much more than money. At the very least, time and opportunities can be lost forever. And at the extreme, alienating or offending customers can place the company’s entire future at risk.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">But advertising is not a black art, and it need not be mysterious or random in the way it works. In fact, you can control its performance to a considerable extent by properly setting your advertising priorities.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><o:p><span style="font-family:Arial;"> </span></o:p></span></p><p style="MARGIN: 9pt 0in 0.1in" class="Subhead3"><strong><span style="font-family:Helvetica;font-size:85%;">START WITH YOUR CUSTOMERS</span></strong></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Start with your customers and stay with your customers. They are the people who buy and use what you sell. They are the only reason you are in business, and the degree to which you understand them will determine, in large part, the success of your company.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Your first advertising priority is to know who your customers are: what their responsibilities, experiences, and priorities are. Then you can apply the same psychology to them as you do to the other people in your life to maximize your chances of success.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">To borrow money, you would make a very different appeal to your brother, say, than you would to a bank, <i>yet the objective is the same</i>. You simply customize the appeal according to the audience.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Apply the same process to your advertising program. First, find out who could buy your product, and what they have in common.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">If you don’t know, find out what factors<span style="mso-spacerun: yes"> </span>affect the way they make decisions. What is important to them at home or on the job? What contributions do they make to their communities or their companies? What are their ages, incomes, education, family styles? Purchase research, survey your own customers, check industry data, or all three. Do whatever it takes to find out enough about your customers to talk to them in their language.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">A word of caution: do not confuse competitors with customers. Those who advertise in “trade” magazines, whose readership is mainly other suppliers in their industry, or use ads to answer insults or challenges from competitors, commit a very expensive error in perception. Industry acknowledgement will come quickly enough when you start winning the customer’s business.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><o:p><span style="font-family:Arial;"> </span></o:p></span></p><p style="MARGIN: 9pt 0in 0.1in" class="Subhead3"><strong><span style="font-family:Helvetica;font-size:85%;">BE GREEDY</span></strong></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Yes, be greedy. It’s <i>your</i> advertising program. Decide just what results you want from it, and stick to your guns. And be more specific than “increased sales.” Unless you are in the direct response business, you’re highly unlikely to receive an avalanche of orders in the mail just because you ran a few ads.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">The purpose of advertising is to help the sales effort, which it can do in many ways. Advertising can create awareness. It can position products and services. It can identify probable new customers. It can encourage customers to take immediate action. Your second priority is to specify exactly why you are advertising.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">What do your customers need to know? That you exist? That you’ve changed? That you haven’t changed? That you’ve solved your problems? That you’ve solved their problems? And what do you want them to do about it?<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Whatever results you want, set them out clearly. If you are firm in measuring every advertising opportunity in terms of its probable contribution to their achievement, selecting between creative and media alternatives becomes fairly straightforward.<o:p></o:p></span></span></p><p style="MARGIN: 9pt 0in 0.1in" class="Subhead3"><span style="FONT-FAMILY: 'Garmond', 'sans-serif'; FONT-SIZE: 11.5pt; FONT-WEIGHT: normal; mso-bidi-font-family: Garmond"><br /></span><strong><span style="font-family:Helvetica;font-size:85%;">REALITY CHECK</span></strong></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Establish a realistic picture of where you stand, in the customer’s eyes, right now. Ask them, and <i>believe what they tell you</i>. No wishful thinking, no dismissal of criticism, no unchallenged acceptance of the sales manager’s rosy projections, and no patriotic dismissal of a competitor’s achievements.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Your third priority is to know where you are, so you can understand how far you have to travel to achieve your goals. Only with an accurate understanding of the distance involved can you effectively evaluate what you have to do to get there.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">A brand new company, unknown to its future customers, has so much distance to cover that its only effective choice may be a “high impact” campaign to achieve marketplace awareness: Aggressive messages and an aggressive media schedule dominate its program. An established firm, however, even with a brand new product, can count on its name drawing attention to whatever it publishes. This firm may find that incorporating its new message into its standing schedule achieves the same level of recognition as does “Brand New’s” greater expenditure.<o:p></o:p></span></span></p><p style="MARGIN: 9pt 0in 0.1in" class="Subhead3"><span style="FONT-FAMILY: 'Garmond', 'sans-serif'; FONT-SIZE: 11.5pt; FONT-WEIGHT: normal; mso-bidi-font-family: Garmond"><br /></span><strong><span style="font-family:Helvetica;font-size:85%;">CHECK YOUR RESOURCES</span></strong></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Know what you have to spend, both in terms of money and in staff time. Industry averages of advertising expenditure as a percent of sales are of questionable relevance in an era of rapidly changing techniques and technologies. Electronic production may reduce the costs of localizing an international campaign. In-house telesales resources change the cost of follow up. Customization of messages and materials can multiply costs.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Your marketplace position also has its demands. Established companies using advertising to reinforce existing customer ties have vastly different spending patterns than does the company introducing a new product, service or technology.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">With so many variables, a budget target is critical in assembling the right mix of creative, production, logistics, and media efforts. This is your fourth priority.<o:p></o:p></span></span></p><p style="MARGIN: 9pt 0in 0.1in" class="Subhead3"><br /><strong><span style="font-family:Helvetica;font-size:85%;">MESSAGES AND MEDIA</span></strong></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Your fifth priority is to decide just what it is you want the audience to conclude about your product. This is where it is most critical to remember that what they’re buying may not be the same as what you’re selling, and that <i>what they’re buying is the only thing that matters</i>.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Catchy slogans, famous directors, beautiful graphics, engaging soundtracks; these do not make successful advertising, unless they were directed by a clear understanding of customers, marketplace, and objectives. Even the most accurate rifle can’t hit the target if it’s aimed in the wrong direction.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Charles Revson said of Revlon, “We don’t sell cosmetics. We sell hope.” Car companies don’t sell cars, they sell transportation, social status, or safety. Xerox surveyed word processor users and found that while “reliability” ranked near the bottom of the list of desirable attributes, “it doesn’t break” was number one.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">What is it that purchasing <i>your</i> product will do for the customer? Will it improve their appearance, their finances, their job performance, or their social life? And how will it do that better than any other alternative? This is what you need them to know, and this is your advertising message.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Now, what do you use to deliver the message?<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">The mass media are just the ticket for sending your message to vast numbers of people at once. In print media, magazine and newspaper readers enter that environment when they choose to. Your advertising takes advantage of their receptive frame of mind. But if you need to involve sound and motion to make your point, then broadcast media — radio and television — may be the better delivery vehicle.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">As a more focused effort, direct marketing — literally delivering your advertising message to specific individuals who are likely prospects — can be exceedingly effective and should be considered for at least a<span style="mso-spacerun: yes"> </span>portion of your target customers.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Only when you know what you want to get across, and what vehicles you’ll need to use, can you commission creative product.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><o:p><span style="font-family:Arial;"> </span></o:p></span></p><p style="MARGIN: 9pt 0in 0.1in" class="Subhead3"><strong><span style="font-family:Helvetica;font-size:85%;">CHOOSE THE RIGHT PEOPLE, AND LET THEM DO THEIR JOBS</span></strong></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Your sixth priority is to entrust your advertising to the best people you can find. In-house or outside your agency people should be pros at hiring and managing creative talent and vendors, at analyzing media, and at project management.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Let them evaluate creative strategies to communicate the needed messages. Let them determine the most cost-and time-effective tactics to get that message through to the right people. Let them perform the cost-benefit analyses on print, broadcast, and other media alternatives. Let them establish the schedules and direct the budgets to most effectively complete the work. And keep your personal prejudices to yourself. You are not the target market.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><o:p><span style="font-family:Arial;"> </span></o:p></span></p><p style="MARGIN: 9pt 0in 0.1in" class="Subhead3"><strong><span style="font-family:Helvetica;font-size:85%;">CHOOSE THE RIGHT PEOPLE, AND MAKE THEM DO THEIR JOBS</span></strong></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Everyone working on your advertising program answers to the ultimate priorities of customers and results. Priority number seven is for you to make sure they know it.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">Don’t let them get off track due to a tangential “brilliant” idea, or prejudice a decision out of favoritism to a vendor, a talent, or a publication. Make them stick to the schedules and budgets you approved, and make sure that the final product says the right things, in the right manner, and in the right place to get the right reaction from the customers.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="COLOR: windowtext"><o:p><span style="font-family:Arial;"> </span></o:p></span></p><div style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: medium none; PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: medium none; PADDING-TOP: 0in; mso-element: para-border-div; mso-border-top-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext .75pt"><p style="BORDER-BOTTOM: medium none; BORDER-LEFT: medium none; PADDING-BOTTOM: 0in; MARGIN: 0in 0in 0.05in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; BORDER-TOP: medium none; BORDER-RIGHT: medium none; PADDING-TOP: 0in; mso-border-top-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext .75pt; mso-padding-alt: 0in 0in 0in 0in; mso-border-between: .75pt solid windowtext; mso-padding-between: 13.0pt" class="Bodytext"><span style="COLOR: windowtext"><span style="font-family:Arial;">If you follow these seven principles, the rest is fairly simple.<o:p></o:p></span></span></p></div><p style="MARGIN: 0in 0in 0pt" class="MsoCaption"><o:p><em><span style="font-family:Arial;font-size:85%;"> </span></em></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoCaption"><o:p><em><span style="font-family:Arial;font-size:85%;"> </span></em></o:p></p><p style="MARGIN: 0in 0in 10pt" class="MsoNormal"><o:p><span style="font-family:Calibri;"> </span></o:p></p>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-49011049288760226552011-02-13T18:26:00.000-08:002011-02-13T18:52:07.111-08:00Supply Chain Management: Is it Finally Taking Over?<p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><i style="mso-bidi-font-style: normal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">We chose this month’s topic because an increasing number industrial marketers must sell into markets that utilize supply chain management — or claim to do so.<span style="mso-spacerun: yes"> </span>I wrote this article in 1998, but the basic conclusions are still the same.—PWH<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p></span></i></p><p style="LINE-HEIGHT: 13pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><i style="mso-bidi-font-style: normal"><span style="font-family:'Times New Roman', 'serif';font-size:11;"><span style="mso-spacerun: yes"></span><o:p></o:p></span></i></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Supply chain management has become a market in its own right.<span style="mso-spacerun: yes"> </span>Companies that have implemented the principles of supply chain management behave differently, and acquire products in a manner that is different enough to justify special emphasis.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">But what is it?<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Supply Chain Management (SCM) is the process that manages the suppliers’ role in a company’s value creation process, from raw materials into its operations.<span style="mso-spacerun: yes"> </span>According to one VP of manufacturing, “it’s about figuring out who does which task best, letting them do it, and not duplicating efforts.” <o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">OK, but what is it?<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">To really appreciate SCM, one first must understand a more fundamental concept:<span style="mso-spacerun: yes"> </span>the Value Chain. <o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">The term “value chain” was invented by Michael Porter about 15 years ago.<span style="mso-spacerun: yes"> </span>Like many fundamental concepts, when you see it, you say “gee, that’s obvious!<span style="mso-spacerun: yes"> </span>Anybody could have thought of that.”<span style="mso-spacerun: yes"> </span>The best ideas in business are usually very simple to understand.<span style="mso-spacerun: yes"> </span>Most are not obvious, however.<span style="mso-spacerun: yes"> </span>The value chain is one such concept.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">In a nutshell, it is extremely simple:<span style="mso-spacerun: yes"> </span>You make money when you transfer something you have to somebody else who values it more than you do.<span style="mso-spacerun: yes"> </span>That’s how people, companies, societies, and nations become wealthy.<span style="mso-spacerun: yes"> </span><o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">What are five activities, in order:<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: -20.25pt; MARGIN: 0in 0in 0.05in 20.25pt; tab-stops: 20.25pt; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">•<span style="mso-tab-count: 1"> </span>Bring materials into the business<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: -20.25pt; MARGIN: 0in 0in 0.05in 20.25pt; tab-stops: 20.25pt; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">•<span style="mso-tab-count: 1"> </span>Operate on themMichael Porter did was to look specifically at a business, and figure out what it must do to become wealthy.<span style="mso-spacerun: yes"> </span>There <o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: -20.25pt; MARGIN: 0in 0in 0.05in 20.25pt; tab-stops: 20.25pt; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">•<span style="mso-tab-count: 1"> </span>Send them out of the business<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: -20.25pt; MARGIN: 0in 0in 0.05in 20.25pt; tab-stops: 20.25pt; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">•<span style="mso-tab-count: 1"> </span>Market them<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: -20.25pt; MARGIN: 0in 0in 0.05in 20.25pt; tab-stops: 20.25pt; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">•<span style="mso-tab-count: 1"> </span>Service them<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">In addition, Porter defined four support activities that act as a lubricant to the big five.<span style="mso-spacerun: yes"> </span>They are:<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: -20.25pt; MARGIN: 0in 0in 0.05in 20.25pt; tab-stops: 20.25pt; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:12;">•<span style="mso-tab-count: 1"> </span></span><span style="font-family:'Times New Roman', 'serif';font-size:11;">Procurement<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: -20.25pt; MARGIN: 0in 0in 0.05in 20.25pt; tab-stops: 20.25pt; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:12;">•<span style="mso-tab-count: 1"> </span></span><span style="font-family:'Times New Roman', 'serif';font-size:11;">Technology development<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: -20.25pt; MARGIN: 0in 0in 0.05in 20.25pt; tab-stops: 20.25pt; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:12;">•<span style="mso-tab-count: 1"> </span></span><span style="font-family:'Times New Roman', 'serif';font-size:11;">Human resources management<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: -20.25pt; MARGIN: 0in 0in 0.05in 20.25pt; tab-stops: 20.25pt; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:12;">•<span style="mso-tab-count: 1"> </span></span><span style="font-family:'Times New Roman', 'serif';font-size:11;">Infrastructure<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;"><o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">The support activities are omnipresent.<span style="mso-spacerun: yes"> </span>Most companies have a procurement department, but it buys only a fraction of what the company buys as a whole.<span style="mso-spacerun: yes"> </span>Most companies also have an R&D function, but it conducts only a fraction of the technology development that the company actually performs.<span style="mso-spacerun: yes"> </span>And so on with the other support activities.<span style="mso-spacerun: yes"> </span></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Nice concept.<span style="mso-spacerun: yes"> </span>Everybody can understand that any business must do five activities to stay in business.<span style="mso-spacerun: yes"> </span>In practice, it is of limited use.<span style="mso-spacerun: yes"> </span>Mapping an entire value chain is a vast undertaking.<span style="mso-spacerun: yes"> </span>In an environments where markets are changing, it is nearly impossible.<span style="mso-spacerun: yes"> </span>Most companies that work on value chains start with their own supply chains, since they are easier to understand and control.<span style="mso-spacerun: yes"> </span>Most of them end there too.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Another reason your customers focus only on SCM is based on organizational politics.<span style="mso-spacerun: yes"> </span>A significant portion of supply chain management can be managed almost completely within the procurement department.<span style="mso-spacerun: yes"> </span>In order for a company to execute a true <i>value chain</i> strategy, many functional areas must cooperate.<span style="mso-spacerun: yes"> </span>That rarely happens, even in a crisis.</p></span><p style="MARGIN: 0in 0in 10pt" class="MsoNormal"><span style="mso-no-proof: yes;font-family:'Times New Roman', 'serif';" ><o:p><span style="font-size:100%;"></span></o:p></span></p><p style="MARGIN: 0in 0in 10pt" class="MsoNormal"><span style="mso-no-proof: yes;font-family:'Times New Roman', 'serif';" ><o:p><span style="font-size:100%;"></span></o:p></span></p><p style="MARGIN: 0in 0in 10pt" class="MsoNormal"><span style="mso-no-proof: yes;font-family:'Times New Roman', 'serif';" ><o:p><span style="font-size:100%;"></span></o:p></span></p><p style="LINE-HEIGHT: normal; MARGIN: 9pt 0in 0.1in; mso-layout-grid-align: none" class="MsoNormal"><b><span style="font-family:'Times New Roman', 'serif';font-size:12;"></span></b></p><p style="LINE-HEIGHT: normal; MARGIN: 9pt 0in 0.1in; mso-layout-grid-align: none" class="MsoNormal"><b><span style="font-family:'Times New Roman', 'serif';font-size:12;">The Essence of SCM</span></b><b><span style="font-family:'Times New Roman', 'serif';font-size:12;"><o:p></o:p></span></b></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Let’s examine more carefully what your customers are trying hard to do.<span style="mso-spacerun: yes"> </span>They are trying to become more competitive by being more cooperative.<span style="mso-spacerun: yes"> </span>That is to say, companies that have adopted SCM thinking are trying to discontinue the practice of viewing their suppliers as cost centers. In essence, they are trying to build a competitive advantage by developing a <i>network</i> of companies that, by sharing information, produce goods of market value faster and at lower cost.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">In theory, it would work like this:<span style="mso-spacerun: yes"> </span>Say your customer sells power tools to Sears, and you’re in the wire business.<span style="mso-spacerun: yes"> </span>Every night, Sears downloads the number of power tools sold, by model, by location.<span style="mso-spacerun: yes"> </span>Your customer then electronically orders more wire from you, in the appropriate gauge and composition.<span style="mso-spacerun: yes"> </span>In turn, you order more base metal from your supplier.</span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;"><br style="mso-special-character: line-break"><br style="mso-special-character: line-break"></span><span style="font-size:0;"><span style="LINE-HEIGHT: 115%; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA; mso-no-proof: yes; mso-fareast-: minor-latinfont-family:'Times New Roman', 'serif';font-size:11;" ><?xml:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" /><v:shapetype id="_x0000_t75" path="m@4@5l@4@11@9@11@9@5xe" stroked="f" coordsize="21600,21600" filled="f" spt="75" preferrelative="t"></v:shapetype></span></span><span style="font-family:times new roman;"><strong><span style="font-size:130%;">The Reality of SCM<o:p></o:p></span></strong></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:130%;"><strong></strong></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">In reality, industrial companies talk </span><span style="font-family:'Times New Roman', 'serif';font-size:11;">a good game, but are a long wayfrom implementing anything close to supply chain management.<span style="mso-spacerun: yes"> </span>In a recent survey conducted by <i>Purchasing</i> magazine, it was found that the majority of purchasing organizations are struggling with the basics.<span style="mso-spacerun: yes"> </span>For example, while 69% of companies have taken steps to automate basic purchasing transactions, 73% of companies reported that they have seen no significant shift in their day-to-day activities. <o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Automated transaction processing is a basic capability all companies in the supply chain must have, but the companies that stand to benefit most aren’t close to making it a reality.<span style="mso-spacerun: yes"> </span>When asked to rate their progress toward automation goals on a 1-10 scale (10 being “at goal”), buyers provided a weighted average score of only 4.<span style="mso-spacerun: yes"> </span>Nobody rated their progress higher than 8, and only 27% rated their progress greater than 5.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Simply put, they’re muddling their way through it. Many companies are jumping on automation without rethinking how they get things done.<span style="mso-spacerun: yes"> </span>To make matters worse, they are not involving other members of the supply chain.<span style="mso-spacerun: yes"> </span>Buyers rated supplier involvement as a 6 on a 1-10 scale (10 being “very important”) and supplier’s willingness to cooperate as a 7 (10 being “very cooperative”).<span style="mso-spacerun: yes"> </span>Yet, very few companies are doing anything at all with suppliers; they remain internally focused.<span style="mso-spacerun: yes"> </span><o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Yet, it is<span style="mso-spacerun: yes"> </span>not uncommon today to receive requests for quote (RFQs) full of language that suggests that buyers are considering a number of supply chain factors in their decision making process.<span style="mso-spacerun: yes"> </span><o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Let’s be nice and say that, although their hearts are in the right place, the typical buyer struggles with the most basic steps of supply chain management.<span style="mso-spacerun: yes"> </span>Even the ones who believe in the concept — and lots of “old school” buyers don’t — have trouble getting beyond simple comparing purchase prices.<br style="mso-special-character: line-break"><br style="mso-special-character: line-break"><o:p></o:p></span></p><p style="LINE-HEIGHT: normal; MARGIN: 9pt 0in 0.1in; mso-layout-grid-align: none" class="MsoNormal"><b><span style="font-family:'Times New Roman', 'serif';font-size:12;">How to Use SCM to Your Advantage</span></b><b><span style="font-family:'Times New Roman', 'serif';font-size:12;"><o:p></o:p></span></b></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Earlier in this article, we said that SCM companies are their own niche.<span style="mso-spacerun: yes"> </span>Given the low level of implementation, this statement may not seem to make sense.<span style="mso-spacerun: yes"> </span>We think it makes perfect sense, and here’s why.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Companies that are trying to change their thinking about how they buy things are most likely to buy from you for reasons other than low price.<span style="mso-spacerun: yes"> </span>In particular, they probably <i>already believe</i> that the goal is to design and manage a superior value delivery system for their customers.<span style="mso-spacerun: yes"> </span>If your company positions itself properly and expends the necessary effort to target the right senior-level managers in your customer’s organizations, you are likely to win more than your share of new business.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Two implications emerge here:<span style="mso-spacerun: yes"> </span>Simply responding to RFQs as they present themselves won’t work, and dealing with lower level purchasing managers won’t work either.<span style="mso-spacerun: yes"> </span>You must identify potential SCM companies in your marketplace in advance, and present yourselves to their senior buyers<i> before</i> any RFQs come down the pike.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">What you want to do is differentiate your company as the most capable partner for your customers to begin building a value chain.<span style="mso-spacerun: yes"> </span>To make this strategy work, you must call on general managers or above — a Very Important Top Officer, or VITO as Anthony Parinello terms it.<o:p></o:p></span></p><p style="LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; tab-stops: .25in; mso-layout-grid-align: none" class="MsoNormal"><b><span style="LETTER-SPACING: 0.75pt;font-family:'Times New Roman', 'serif';font-size:12;" ><o:p></o:p></span></b></p><p style="LINE-HEIGHT: normal; MARGIN: 9pt 0in 0.1in; mso-layout-grid-align: none" class="MsoNormal"><b><span style="font-family:'Times New Roman', 'serif';font-size:12;">How To Do It</span></b><b><span style="font-family:'Times New Roman', 'serif';font-size:12;"><o:p></o:p></span></b></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">The key to making this approach profitable is to first understand your customer’s current supply chain, and develop your own map of how your products impact your customers operation, with particular attention to the problems you generate for your customers.<span style="mso-spacerun: yes"> </span>The map is not only your way of understanding how to position your company, it’s your selling toll.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">To make the map effective, you must take two steps:<span style="mso-spacerun: yes"> </span>First, understand how your customers make money, and how they expect to make money in the future. Second, your team must take a critical view of how your company gets in the way of your customers achieving these goals.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Your company, not just your products.<span style="mso-spacerun: yes"> </span>Not just how you package, deliver, and sell, but also your contract terms, discount policies, distributor policies, your contract terms, and<span style="mso-spacerun: yes"> </span>your customer service.<span style="mso-spacerun: yes"> </span>Everything you can think of, from your customer’s perspective. Involve your sales force. They probably can tell you what you need to know in 20 minutes.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Next, you take this information and literally put together a picture for your customer — or a series of pictures, if you will.<span style="mso-spacerun: yes"> </span>The picture will explain what problems you cause your customer, and how you propose to solve them.<span style="mso-spacerun: yes"> </span>This will become your sales tool.<span style="mso-spacerun: yes"> </span>For it to be effective, you must make sure you’ve identified an important problem and a real solution for it.<span style="mso-spacerun: yes"> </span>And not just any solution — the ideal solution is one your competitors cannot easily copy.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">When you make your call, explain up front that you’re not trying to make a sale.<span style="mso-spacerun: yes"> </span>Instead, you’ve identified a problem that your company probably is creating in their organization, and you wanted to talk with them about making it go away.<span style="mso-spacerun: yes"> </span>If you’ve done your homework, you will be able to be specific about the problem.<span style="mso-spacerun: yes"> </span>Calling to say you’ve identified a “$2 million inventory problem” is an effective way of getting an audience with a top manager.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">That’s the bait.<span style="mso-spacerun: yes"> </span>Companies that are trying to implement SCM will bite hard and quickly.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">In the meeting, you simply go through the logic of your map.<span style="mso-spacerun: yes"> </span>Explain the situation from their perspective, and ask them to confirm your thinking at each step.<span style="mso-spacerun: yes"> </span>Start with your company, its policies, products and practices. Most buyers will be pleased that you begin your meeting in this way. Conclude your presentation with a numerical example of how the problem impacts VITO.<span style="mso-spacerun: yes"> </span>For instance, you might conclude by saying something like “and that’s how we concluded that the contract we’ve asked you to sign is causing you to carry $2 million in excess inventory.<span style="mso-spacerun: yes"> </span>We’ve realized that as long as our policies create problems for you, they will create problems for us as well.”<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">The hook is set, now all you do is jerk the line.<span style="mso-spacerun: yes"> </span>When you finish your presentation, VITO will realize that, finally, he has a vendor who really understands his problems.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">VITO will glare at you and say “you’re right!<span style="mso-spacerun: yes"> </span>So what do you plan to do about it?”<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Then they’re hooked.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">At this point you present the rest of your map, along with your vision for how your company can continue the process to address the core business issues your customer is trying to solve.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">It works even better if you are calling on a competitor’s account.<o:p></o:p></span></p><p style="LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; tab-stops: .25in; mso-layout-grid-align: none" class="MsoNormal"><b><span style="LETTER-SPACING: 0.75pt;font-family:'Times New Roman', 'serif';font-size:12;" ><o:p></o:p></span></b></p><p style="LINE-HEIGHT: normal; MARGIN: 9pt 0in 0.1in; mso-layout-grid-align: none" class="MsoNormal"><b><span style="font-family:'Times New Roman', 'serif';font-size:12;">What’s Driving VITO<br />Up the Wall</span></b><b><span style="font-family:'Times New Roman', 'serif';font-size:12;"><o:p></o:p></span></b></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">The reason you must focus your discussion on your customer’s top management is because at industrial companies, the P&L comes together only at the top.<span style="mso-spacerun: yes"> </span>What they see at the top is that 30-40% of their final costs are tied up in physical distribution — transportation (15%), inventory carrying costs (9%), warehousing (8%), and administrative overhead associated with distribution (8%).<span style="mso-spacerun: yes"> </span>Not only are these costs eating up VITO’s<span style="mso-spacerun: yes"> </span>profits, but competition is fierce in the areas of price, and delivery.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Vito knows that 30-40% of YOUR costs are also tied up in distribution.<span style="mso-spacerun: yes"> </span>If you show VITO how he can help you reduce that cost, he knows it will go straight to his bottom line. <o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">The other things driving VITO up the wall are related to the overall Value Chain Problem.<span style="mso-spacerun: yes"> </span>It’s so impossibly huge that it cannot be addressed economically or quickly.<span style="mso-spacerun: yes"> </span>It can only be taken on in sections.<span style="mso-spacerun: yes"> </span>Supply chain management is one section that is tied to material’s movement into the company.<span style="mso-spacerun: yes"> </span>The three other key problem areas include:<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><i><span style="font-family:'Times New Roman', 'serif';font-size:11;">New products.</span></i><span style="font-family:'Times New Roman', 'serif';font-size:11;"><span style="mso-spacerun: yes"> </span>All the activities associated with developing new products.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><i><span style="font-family:'Times New Roman', 'serif';font-size:11;">Order-to-remittance process</span></i><span style="font-family:'Times New Roman', 'serif';font-size:11;">.<span style="mso-spacerun: yes"> </span>All the activities that occur between receiving an order and receiving payment for it.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><i><span style="font-family:'Times New Roman', 'serif';font-size:11;">Customer service.</span></i><span style="font-family:'Times New Roman', 'serif';font-size:11;"><span style="mso-spacerun: yes"> </span>All the activities associated with making it easy for customers to reach the right people to get satisfactory answers and resolutions to their problems.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">To the extent that your solution map can address these other core issues, you will differentiate your company better than your competition.<span style="mso-spacerun: yes"> </span>Once this relationship is established, it becomes the basis of your response to future RFQs.<span style="mso-spacerun: yes"> </span>Your objective is to position yourself as an advisor to your customers as they write their RFQs.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">Here’s an actual example of how a company did that.<span style="mso-spacerun: yes"> </span>For many years a container company saw itself as being in the “box business.”<span style="mso-spacerun: yes"> </span>They would produce corrugated containers to their customer’s specifications, and ship them to their customers’ plants on a JIT basis.<span style="mso-spacerun: yes"> </span>The customers would put their manufactured goods in the boxes, and ship them to stores, where the goods would be removed and the boxes discarded.<span style="mso-spacerun: yes"> </span>No matter how the container company tried to improve its products, its competitors always were able to match its performance and pricing.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">After careful analysis, the company decided to bypass its traditional customer base and develop a strategy targeted specifically at Wal-Mart.<span style="mso-spacerun: yes"> </span>The company built a state-of-the-art “package solution center” next door to Wal-Mart’s headquarters.<span style="mso-spacerun: yes"> </span>Next, they invited about 20 executives, including Wal-Mart’s head of purchasing for a tour of the new facility.<o:p></o:p></span></p><p style="LINE-HEIGHT: 13pt; TEXT-INDENT: 9pt; MARGIN: 0in 0in 0.05in; mso-layout-grid-align: none" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';font-size:11;">As part of the tour, they presented Wal-Mart with their solution to one of Wal-Mart’s core problems:<span style="mso-spacerun: yes"> </span>How to reduce merchandizing costs and <span style="mso-spacerun: yes"></span>get products on the shelves faster. The package solution center was capable of producing a full-color prototype package in a single day, beginning with a round-table discussion with the customer, rather than the usual 7-14 working days imposed upon Wal-Mart by other companies.<span style="mso-spacerun: yes"> </span>It wasn’t long before the company was nabbing lots of new orders at premium pricing, and taking share from its competitors.<span style="mso-spacerun: yes"> </span>The idea worked so well, they have put an executive in charge of the operation and expanded it into a “global package solutions center.”<o:p></o:p></span></p><p style="MARGIN: 0in 0in 10pt" class="MsoNormal"><span style="LINE-HEIGHT: 115%;font-family:'Times New Roman', 'serif';font-size:11;" >As it turns out, Wal-Mart is one of those SCM-focused companies that we suggested you focus on in the beginning of this article.<span style="mso-spacerun: yes"> </span>Supply chain management, although poorly implemented by most industrial companies, can be a powerful concept if utilized in a manner that positions your company to better solve your customer’s problems.—<i>Prentis Hall</i></span><span style="font-family:'Times New Roman', 'serif';"><o:p></o:p></span></p><p style="MARGIN: 0in 0in 10pt" class="MsoNormal"><span style="font-family:'Times New Roman', 'serif';"><o:p></o:p></span></p>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-15976180331771396522011-01-09T20:09:00.000-08:002011-01-09T20:20:45.890-08:00MARKETING EXPERT VS INDUSTRY EXPERT<p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;"><em>Note:</em></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;"><em>This week's post is contributed by marketing consultant John A. Murphy. -- PWH</em></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;"></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">A serious mistake managers often make when planning to engage the services of a marketing consultant is to insist upon previous industry-specific experience. This article will explain why such experience is of minimal value to the client (as well as the consultant) and often, even DANGEROUS for the client.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">At the outset, an important distinction needs to be made between “industry specific experience” and “industry specific knowledge.” It might be a valuable exercise to ask: “What is it I expect a marketing consultant with “industry specific experience” to bring to the equation besides marketing capabilities?”<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">You should expect such a person to be familiar with the “key players” (competitors, customers and distribution chains-where applicable).<span style="mso-spacerun: yes"> </span>She should also have a handle on industry trends (e.g. technological developments/innovations through trade associations, government contacts, industry “gurus” and trade press) and she should have an historical knowledge of how the macro environment (e.g. inflation, trade policy, etc.) affects the industry.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">The truth is, after you meet with a consultant and she endeavors to understand your problems and expectations, she should return not only ready to make an “abstract” marketing proposal as to how she can meet your expectations, but she must do so in the context of such “industry specific” knowledge. Note, I said KNOWLEDGE, not experience.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">How does the consultant come by such knowledge without corresponding experience? This is part of the “stock-in-trade” of the consultant. Secondary marketing research is a basic skill of everyone in the marketing profession. We all know how to check with the Commerce Department, trade associations, trade press and the basic library business indices, or turn on our computers and enter an electronic data base. We also know enough to call a few competitors and customers to get an even better feel for what is going on.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">What we do not try to do is become a technical expert on the design or application of the devices a given company may manufacture. Odd as it may seem, the actual device that a company makes is not the first concern of a marketing expert. Remember, R&D, engineering and production are concerned with making devices; marketing, however, makes the product, and it is the product, not the device, that customers purchase.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">Furthermore, one of the major reasons to engage someone from outside the company and industry is for their OBJECTIVITY. A “marketing consultant” with prior industry-specific experience runs a DANGEROUS RISK for the client in two ways:<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">First, the consultant’s previous “pertinent experience” may have dulled his/her objectivity. She may often have the tendency to shoot from the hip using a gun loaded with “instant answers.” Familiarity may breed not only contempt but also marketing myopia. Second, years of “industry specific experience” often comes at the expense of a depth in MARKETING experience. The trade-off is usually in the form of “doing the right thing” for “doing things right”. Of course, in marketing no room exists for such a trade-off. Yet such<span style="mso-spacerun: yes"> </span>trade-offs are often made when one is focused on the present and not the future (in terms of profitability performance).<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">A case in point should illustrate this clearly: When Apple Computer needed to replace Steve Jobs, they did not tap IBM, HP, TI or even Tandy. They did not even go to industry-allied companies like Intel or NEC. In fact, they went to a company not even considered to be part of the “high-tech” culture. They took John Sculley from Pepsi! Mr. Sculley knew little about computers going in, but he was quite an accomplished MARKETING expert. <o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0pt" class="MsoCaption"><em><span style="font-family:times new roman;font-size:85%;">[Note:<span style="mso-spacerun: yes"> </span>In the opinion of many Apple fans, Scully took Apple down the wrong path.<span style="mso-spacerun: yes"> </span>Nevertheless, John’s point is well taken.<span style="mso-spacerun: yes"> </span>Under Scully, Apple was more profitable than it is now. –PH]</span></em></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">Another, perhaps more down-to-earth, reason why a marketing consultant avoids “industry-specific experience” can be illustrated by the following scenario: A marketing consultant is engaged by company “A” in the “XYZ” industry, completes the assignment and then is engaged by company “B” a direct competitor of company “A”. (The consultant now has full knowledge of financial and trade secrets.) Company “B” might think it is about to get one up on its competitor until it realizes that it will be in the same position should the consultant return to company “A” or be engaged by yet another competitor. <o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">The marketing consultant is aware of this dilemma and assiduously avoids it (nondisclosure contracts notwithstanding). The marketing consultant thus realizes that too much experience in any given industry could be the “kiss of death” for his own business.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">A final word about Industrial Marketing Consultants and marketing expertise. All marketing consultants develop their expertise by specializing in certain areas of marketing — industrial, consumer, or the service<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">industry. Sometimes their field may be quite narrow; e.g., mergers/acquisitions, personnel, marketing information systems, etc. Within all areas of specialties there is, however, a shared expertise. All need to know certain fundamentals, on the one hand: how to conduct the market audit, fully understand the fine points of “OBJECTIVE/STRATEGY/TACTIC” – the dialectical nature of the marketing process. On the other hand they also need to have such expertise in operational activities as when to use tools like conjoint analysis or multi-dimensional scaling, even which algorithm within these “tools” will yield the best results. Moreover, the Marketing expertise of the consultant should be revealed by his membership in such professional associations as the certifying body called “The Institute of Management Consultants” as well as the “American Marketing Association” and the “American Management Association.”<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:times new roman;">What I am saying, essentially, is this: a truly professional marketing consultant would never, by definition, also be an expert in a specific industry.—<i>John A. Murphy</i><o:p></o:p></span></span></p>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-90325426589383903542010-12-12T20:42:00.000-08:002011-01-09T20:02:46.272-08:00Proposals that Win Business -- Some Best PracticesNearly every industrial requirement of any size is awarded through competitive bidding. If you’re marketing to business, chances are a sizeable portion of your business is obtained in this manner.<br /><br />Marketing as a function makes a contribution to profits by coordinating the submission of proposals. Any improvement you make in your effectiveness in this area will be reflected on the bottom line. The best way to learn is by doing it, and by winning against the competition. Books and seminars on proposal writing are useful primers.<br /><br />This post is about several failures I experienced early in my proposal writing career. A few years ago, I found myself thrust into a new job where ALL of the business is won by submitting formal proposals. I found out that I was the “point person” for this activity about one week after I was in the job.<br />There I am, sitting in my first team meeting, flush with the eagerness that comes with being new and without blemish. We were discussing a major RFQ that had just hit our desks. I was calm, because I was obviously too new in the job to be given a big project so soon. I knew I’d have a chance to learn by watching someone else handle this one.<br /><br />Gradually, however, I noticed that everyone was looking at me, nodding their heads and smiling. I heard, as if from another world, my boss’ voice finishing a sentence, “… so then you’ll pull it all together, right, Prentis? It will be good training for you.”<br /><br />“Yes, I’d love to,” came my own voice.<br /><br />Thus began my journey to discovery.<br /><br /><span style="font-family:arial;"><strong>What I Learned From My First Proposal</strong><br /><br /></span>I remember my first proposal fondly. It was mush. Nice colors. We didn’t get the business.<br />The feedback from the customer went something like “your document looked real good and was full of interesting information, but your competitors just gave us a simple clear offer that we could understand.”<br /><br />I was embarrassed, because this should have been a lay up. The incumbent had lost the account by providing lousy service and inept account management. Only two other companies were capable of serving this customer, and we clearly had the best capability.<br /><br />One little problem, though. The customer didn’t know we were so good. All they knew was what we told them in our proposal.<br /><br />Naturally, I felt horrible because I let everybody down. I was angry with myself, and probably not very good company for several weeks. But I vowed to never repeat the same mistakes again. I developed a list of Basic Rules that apply to every proposal I write. These rules are basic common sense, but I find that many marketers I talk to do not find them immediately obvious.<br /><br />You should follow these rules for every competitive bid.<br /><br /><strong>Keep it simple.</strong> Follow the outline of the Request for Quote (RFQ) or Request for Proposal (RFP). Don’t get creative by making up your own format. If the customer needs a roadmap to find the answers to their questions, you’ve hurt your chances. Try to use as few words as possible, because people hate to read proposals. Use tables to summarize relationships between data. Use graphs to show trends. Use checklists or bulleted lists to guide the reader’s eye to key points.<br /><br /><strong>Don’t ask for an extension.</strong> Being late only helps your competitors, and makes your company seem inept. Barring some disaster, you should never be late with a response.<br /><br /><strong>Don’t ask questions</strong>. If they don’t know how to buy what they want, it’s not your fault. More importantly, you run the risk of getting addition information that may not be shared with your competitors. You could end up bidding on a different scope, and have prices that are higher than the others. When in doubt, bid the cheapest solution, and explain why in the proposal.<br /><br /><strong>Write an executive summary.</strong> In the first or second paragraph, summarize what you are proposing in one sentence. On the last page, include a simple cost-benefit table that spells out in financial terms what the customer will spend, and what they will receive in return. Don’t harp too much on intangibles, unless you can express them in financial or operational terms. If the customer doesn’t already know the intangible reasons to make the purchase, it’s not your fault.<br />If possible, know the customer’s scorecard. Are purchasing managers paid a bonus? Is it based on cutting prices or reducing total costs? Will headcount reduction targets be impacted by your proposal? The more you know about the customer’s scorecard, the better.<br /><br /><strong><span style="font-family:arial;">My next failure – playing to an empty house<br /></span></strong><br />Things went just dandy for a while. I began to get the knack of responding to RFQ’s. Salesman began to call. They wanted my help. What higher endorsement could a marketing manager get!<br /><br />Then one day, I got a call from Ralph.<br /><br />Ralph needed my help in the most desperate way. A major prospect had issued an RFP and had somehow left our company off the list. The responses were due in a week, and Ralph didn’t want to be late. Although Ralph was a seasoned salesman, he had been recently assigned to the account and had called on them thee times in eight months.<br /><br />“Sure, Ralph,” I said. “I’ll be glad to help. How deep is your relationship with this account?”<br /><br />“Well, I’ve met with the buyer a few times, but really don’t know anyone else.”<br /><br />“No problem. What do you know about what they’re really looking for?”<br /><br />“Um, lower prices, I guess.”<br /><br />“Well, they’ve already got low prices. Why are they going though all this trouble with a RFP and the whole nine yards? There must be some other issue driving this. Did the buyer give you any clue?”<br /><br />“Well, I can call him and try to find out,” said Ralph, trying to be helpful<br /><br />“Um, there’s no time for that Ralph. Tell me about the competition. Who’s in there, and who’s bidding against us?”<br /><br />“Well, they’ve bought from Dirt-Ball, Inc., for about 10 years now, but I really think they’re going to switch because they sent this RFP to everybody, even distributors. In fact, that’s how I found about it, when one of our distributors called me for help.”<br /><br />This one was doomed from the beginning, and I knew it. Ralph knew it too, although he didn’t want to admit it for fear I would refuse to work with him. He was right.<br /><br />We had been left off the bidders list because the customer didn’t know who we were. The salesman didn’t have a relationship, and didn’t know enough about the account to understand their needs. Plus, an entrenched incumbent was doing a fairly decent job.<br /><br />But that was not the problem. These situations occur every day in business. The problem was that I didn’t have the common sense to walk away. I liked Ralph and wanted to be a nice guy.<br />Knowing when to no-bid is the second rule of proposals. If you aren’t certain you stand a good chance to win, you’re wasting your time. If you’re a typical industrial company, your marketing and sales resources are already thin. Time is your enemy. If I really wanted to be nice to Ralph, I would have declined to work with him on this RFP, but instead flown out to his territory to help him drum up some really good business.<br /><br />Then there’s this one: “If we don’t bid we’ll be sending them a message that we don’t want their business.”<br /><br />Well, of course not! But there’s another way to look at this, too. Not being able to win in a bidding situation is different than not wanting to do business with a customer. What the salesman means to say is “They may want to buy something from us later, either on a spot basis or some other non-competitive situation, and I’m not willing to risk closing that door just because we can’t open this one.”<br /><br />If you work with good salespeople, they aren’t interested in chasing bad business. When they say you need to submit a bid, sometimes you just trust them and do it. A lousy salesman will want to bid everything, and you must make a distinction.<br /><br />I call this a “forced bid,” because you’re forcing yourself to bid when you’re 100% sure you can’t win. For forced bids, use a very simple standard proposal you can modify in a couple of hours. Usually list prices are sufficient for quoting. But be careful — I’m not saying you should cater to the fears sales. I’m saying you should never bid on bad business, unless you’re working with a top salesman who, after careful consideration, thinks it is worth the trouble.<br /><br /><strong><span style="font-family:arial;">My next failure – One Man Band<br /></span></strong><br />In a short time my success rate improved. Yet, I learned a tough lesson when I got too cocky and thought I could win a piece of business all my own. “Just show me the document,” I said, “I’ve done this so often, I know what to do.” Well, I didn’t know enough, and quickly discovered I was over my head. By then it was too late. Fortunately, it was a fairly small account.<br /><br />To raise your chances of winning a major piece of business, you must have the right team working on the bid. For small bids, a few people can usually handle all of the tasks. For a large proposal, you will need more people. One way to organize the tasks is break people up into teams for different sections of the proposal. The teams leaders stay in touch daily. This system really works!<br /><br /><em>Green Team: Sales and Finance</em>. This team makes sure that the offer is priced competitively while also providing sufficient return over the contract. The Green team collects all cost for products and services offered, and prepares the price schedule for the proposal as well as the financial summary for the “Green Sheet” explained later on.<br /><br /><em>Blue Team: Commercial, engineering, operational scope:</em> The Blue Team is assigned to assemble the bricks and mortar of the proposal. To what extent do you propose do business? What equipment and apparatus must be build or installed, and at what cost? What do you propose to perform in terms of day-to-day service? The Blue Team addresses these questions.<br /><br /><em>White Team: Assembly.</em> The White Team’s role is taking everyone’s input and assembling it into a single proposal that follows the required format. This team checks to make sure everything meshes together into something the customer will buy. Often the White Team has little to do until the last few days before the proposal is due, then there is a mad flurry of activity and lots of overtime!<br /><br /><em>Red Team: Final critique and approvals</em>. The Red Team can be a single person—usually a general manager or higher—who reviews the Green Sheet, the executive summary, and any other sections of the document that may be relevant. Final executive approval is usually not required on small bids, but major proposals may require capital investment on your part, and management approval is a must. Setting up a Red Team at the beginning enables you to get the approvals you need in time to meet the deadline. If your team is on the edge of profitability, early involvement by the Red Team is very important.<br /><br /><strong><span style="font-family:arial;">My next failure — The other shoe, on my head </span></strong><br /><br />Sometimes, winning some business can have negative consequences. That happened to me when a large account took 2½ years to make a decision on a proposal. When they eventually selected our company, it was a year later when we looked at the P&L. Apparently, nobody had updated the pricing that was originally submitted, and the customer decided—after the fact—to retain the incumbent at about 40% of its original volume. So, our actual unit sales were about 40% less than projected, and our pricing was about 10% less than market.<br /><br />The combined effect of these two changes had a devastating impact on the bottom line. When we submitted our results for annual review, management ate our lunch. Why? Because these problems could have been avoided, had we been vigilant.<br /><br />Which brings us to the internal proposal summary, or what Don Wilson of Allied Signal calls a “Green Sheet.” A Green Sheet is more than a financial review. It’s a request for approval that includes a complete business plan distilled down to its most essential elements. These include the following:<br /><ul><li>Project description </li><li>Customer profile </li><li>Competition for this bid </li><li>Proposal description </li><li>Bid strategy </li><li>Risk assessment </li><li>Financial summary </li></ul><p align="left"><strong><span style="font-family:arial;">Key issues and recommendations</span></strong><br /><br />The Green Sheet can be an indispensable management tool after the deal is inked as well as before. It contains all of the elements that permit you to “make good” on your promise to deliver profits to the company.<br /><br /><strong><span style="font-family:arial;">Making your “make good” early</span></strong><br /></p><p align="left">You can exceed your promise to management and be a hero if you: </p><ul><li><div align="left">Generate more cash than projected by increasing volume or price while holding the other constant. </div></li><li><div align="left">Earn cash faster than expected </div></li><li><div align="left">Earn what you projected but consume less capital in doing so </div></li><li><div align="left">Reduce operating expenses below projection </div></li><li><div align="left">Reduce WIP and/or finished goods inventory below projected levels</div></li></ul><p align="left"><br />The Green Sheet is a basic information tool that everyone involved with the customer can refer to. Collective focus is what it takes to beat your “make good.”<br /><br /><strong><span style="font-family:arial;">Whispering In The Wrong Ear<br /></span></strong><br />The best time to start working on a proposal is well before the formal request is issued. The more you understand about what the customer really wants, and what they are willing to pay, the more likely your formal proposal will address the core issues the customer wants to solve. If you do this effectively, the customer will ask you to help them write the RFQ.<br />Put another way, the key to winning a competitive bid is responding to the customer’s problem in the customer’s language.<br /></p><p align="left">Understanding the customer’s language has two elements. </p><ol><li><div align="left">Relationship </div></li><li><div align="left">Positioning<br /></div></li></ol><p align="left">Sales is the “Keeper of The Relationship.” A good relationship enables the salesman to ask tough, probing questions, and garner important contacts inside the company. For example, a salesman can find out the customer’s scorecard only if she has a good relationship. Relationship is itself built upon three elements: </p><ul><li><div align="left">The demeanor of the salesman in conducting business. </div></li><li><div align="left">The degree of mutual trust and respect between the salesman and people in the account. </div></li><li><div align="left">The track record of the salesman, as a representative of your company, in delivering on its promises and bringing value to the customer’s business.<br /><br /></div></li></ul><p align="left">Marketers play a crucial role in enabling sales to deliver on item #3, and can make a tremendous impact on sales effectiveness. But that’s another article. </p><p align="left"><br />Positioning, the second element, means aligning your offer with the customer’s buying needs.<br />The alignment that matters for your proposal goes beyond the products and services you offer. It has nothing to do with the customer’s industry grouping, location, or size. It has to do with buying behavior. </p><p align="left">Tyler Jeffrey, a marketing manager with Dow Chemical does this exceedingly well. I call his positioning approach “The Dow Method.” Jeffrey has two simple premises: </p><p align="left"><br />#1: If you can’t treat a group of customers differently, you don’t have a segment.<br />#2: A customer’s buying behavior is the most important distinction when you’re trying to sell them something.<br /></p><p align="left">The Dow Method groups customer behavior into four categories: </p><p align="left"><br /><strong>Loyal/Security.</strong> These companies sign contracts to assure supply. They view changing suppliers as risky, and will reward good suppliers with volume and price. Manufacturing has a strong influence on purchasing decisions. Incumbents usually win. The scorecard is based on total cost. </p><p align="left"><strong>Price.</strong> These companies sign contracts to manage prices. They view changing suppliers as relatively low risk. They often split their requirement among many suppliers. They reward good suppliers (that is, low priced) with volume. The scorecard is price reduction.<br /><br /><strong>Technology.</strong> These companies sign contracts to assure supply. Manufacturing and R&D have a strong influence on purchasing decisions. They view change as relative low risk. Although they reward good suppliers with volume and price, incumbents can lose on product performance issues relatively easily.<br /><br /><strong>Value.</strong> These companies can drive you nuts. They want low prices and good product performance. They will pay a small premium for a differentiated product, provided it delivers a measurable value. They may or may not split requirements. They place a high value on relationships, and will reward good suppliers with more volume, last looks, and occasionally, a little bump in price.<br /><br /><strong><span style="font-family:arial;">The Way to Win With the Dow Method<br /></span></strong><br />First, position your proposal with the behavior segment of the company. For example, if your customer is a price buyer, don’t offer bundled services. Unbundle everything, and present the lowest price offer that meets the minimum requirement. Price additional services separately, as options. If your customer is loyal, and you’re not the incumbent, provide copious amounts of performance data, references, and guarantee your service level.<br /><br />Second, offer services that match the segment. Technology buyers want to know about your R&D support. Value buyers want to know how you can help them reduce their cost of ownership. Price buyers want to know about your pricing mechanisms. Loyal/security buyers want to see services in the areas of logistics, emergency delivery, 24/7 customer service, and so forth.—PH</p>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-39637909963392693482010-12-05T19:39:00.000-08:002010-12-05T19:41:33.356-08:00What is a Product?<h2><span style="font-family:arial;">What is a Product? </span></h2><p><small><span style="font-family:arial;">Source: Jacques Chevron, </span><a href="http://www.jrcanda.com/"><span style="font-family:arial;">Jacques Chevron and Associates</span></a></small><br /></p><p><span style="font-family:arial;color:#004080;"><em>Boy! Talk about taking something for granted! I mean, who doesn't think they know what a product is? I used to think I knew what a product was, until someone accused me (quite correctly) of being a "product marketer". What's a product marketer, I asked? My friend said, "It's someone who is so infatuated with his own products he can't begin to see what he's really selling." I was hurt, because I thought I was really hot stuff (can you believe it? Humble me?). I later came to understand what my friend was saying, which can be summarized in a very simple way as follows. --Prentis Hall </em></span></p><h3><span style="font-size:130%;"><br /><span style="font-family:arial;">A Product Has Three Parts:</span></span></h3><h4><span style="font-family:arial;color:#800080;">The Product Itself </span></h4><p><small><span style="font-family:arial;">What is the physical product itself like? How big is it? How much does it cost? How does the package look? Unfortunately, this is the happy hunting ground of your typical industrial marketing type. Many, particularly those at higher levels, don't see enough customers and tend to underplay issues which they feel are out of their control. One of the side effects of product infatuation is lower prices, since there tends to be a belief among these types that customers are also infatuated with the product.</span></small></p><h4><br /><span style="font-family:arial;color:#800080;">The Image</span></h4><p><small><span style="font-family:arial;">The classic example is the Mercedes Benz. Most people know, deep in their hearts, that a Mercedes isn't worth all that much money. Yet, people feel good when they own one. Owning a Mercedes is a symbol of having "arrived," and of being able to afford a certain standard of luxury. The physical attributes of the car aren't really important to Mercedes buyers. Another example is Tiffany's. People line up and pay top dollar just to buy something at Tiffany's, so they can take it home in one of those blue boxes. When you give someone a gift from Tiffany's, even if it's something you could buy anywhere, it says"I really care about you enough to buy the very best." </span></small></p><h4><span style="font-family:arial;color:#800080;">The Service</span></h4><p><small><span style="font-family:arial;">Have you ever dreaded buying a new car because you didn't want to deal with the salesman? Or have you ever bought something and paid a little extra for it becaue you liked the people who sold it to you? Have you ever bought a service contract for a product that was still under warranty? All of these examples show how people make decisions on whether or not to buy, where to buy, or how much to pay based on things that have nothing to do with the physical or the image, but something else entirely. </span></small></p>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-22790057086499149292010-11-14T20:16:00.000-08:002010-11-14T20:23:43.874-08:00Industrial Marketing is Not a Department<p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:arial;">A recurring theme in this blog centers around two ideas:<span style="mso-spacerun: yes"> </span>(1) that the practice of industrial marketing cannot be taught in an academic setting, and (2) in industrial most so-called “marketing” decisions are made by general management.<span style="mso-spacerun: yes"> </span><?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:arial;">Industrial marketers have a tough job because most learning is obtained on the job.<span style="mso-spacerun: yes"> </span>Since the key decisions are often made at higher levels, industrial marketers must constantly strive for consensus and coordination among other functional groups. What industrial companies need, therefore, are not strong marketing departments, but a strong sense of <u>market oriented thinking</u> at all levels.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:arial;">But thinking has to turn into doing, and most non-marketing people don’t really know what to do.<span style="mso-spacerun: yes"> </span>The concepts are easy to understand, but when it comes to every day marketing tactics and marketing-oriented behaviors, it’s difficult for most people to make it happen.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:arial;">Why?<span style="mso-spacerun: yes"> </span>Because effective industrial marketing takes place across functional boundaries.<span style="mso-spacerun: yes"> </span>It’s difficult – or impossible – for effective tactics to occur unless top managers are committed to making it work, and simultaneously have the savvy to know what types of activities need to occur.<span style="mso-spacerun: yes"> </span>In the day-to-day chaos of running a businesses, it can be extremely difficult for any one manager, let alone a core team of managers, to attain the type of focus needed to sustain this effort.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:arial;">Yet, lots of companies do it, and so can you.<span style="mso-spacerun: yes"> </span>Dr. Jim Hlavacek, educator, consultant and author (his most recent book, <i>Profitable Top-Line Growth for Industrial Companies</i>, American Book Company will be reviewed in a future issue) offers numerous examples of how a company can develop market-oriented thinking.<span style="mso-spacerun: yes"> </span>Hlavacek says that industrial marketing, as such, cannot be taught.<span style="mso-spacerun: yes"> </span>It has to be learned on the job, in real-time, with real problems.<span style="mso-spacerun: yes"> </span>Small to medium-sized companies are generally the most successful.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="font-family:arial;color:windowtext;"><o:p></o:p></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="color:windowtext;"><span style="font-family:arial;">When we observe what these companies do, what we see are lots and lots of “little things” going on that don’t usually happen in other companies.<span style="mso-spacerun: yes"> </span>Market-oriented thinking isn’t a massive restructuring of a company’s culture.<span style="mso-spacerun: yes"> </span>It’s more like a dawning of awareness that manifests itself in a series of small changes, that develop over time.<o:p></o:p></span></span></p><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="font-family:arial;color:windowtext;"><o:p></o:p></span></p><p style="MARGIN: 0in 0in 9pt" class="Subhead3"><span style="font-family:arial;">Tips for Improving Market-Oriented Thinking</span></p><ul><li><div style="MARGIN: 0in 0in 0pt 12pt" class="Hangingindent"><span style="font-family:arial;">Double the number of marketing presentations you make internally.<span style="mso-spacerun: yes"> </span>Engage more people in a continuing dialogue about customers and the marketplace.</span></div></li><li><div style="MARGIN: 0in 0in 0pt 12pt" class="Hangingindent"><span style="font-family:arial;">Distribute feedback from customers across the organization.<span style="mso-spacerun: yes"> </span>Don’t just talk about your own products, but share what customers say about competitor’s products as well.</span></div></li><li><div style="MARGIN: 0in 0in 0pt 12pt" class="Hangingindent"><span style="font-family:arial;">As soon as possible, find at least one ally in another organization, and begin implanting your own list of “little things.”<span style="mso-spacerun: yes"> </span>As you achieve success, document what you have done.</span></div></li><li><div style="MARGIN: 0in 0in 0pt 12pt" class="Hangingindent"><span style="font-family:arial;">Set up a cross-functional team to address these issues</span></div></li><li><div style="MARGIN: 0in 0in 0pt 12pt" class="Hangingindent"><span style="font-family:arial;">Set up a benchmarking visit to another company for your top managers. </span></div></li><li><div style="MARGIN: 0in 0in 0pt 12pt" class="Hangingindent"><span style="font-family:arial;">Send your team to Dr. Jim Hlavacek’s course, “The Best and Worst Industrial Marketing Practices.”</span></div></li></ul><p style="MARGIN: 0in 0in 0.05in" class="Bodytext"><span style="font-family:arial;color:windowtext;"><o:p></o:p></span></p><p style="MARGIN: 0in 0in 9pt" class="Subhead3"><span style="font-family:arial;">Little things</span></p><ul><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Top management talks to customers regularly</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">R&D people talk to customers </span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Conduct regular competitor quality panels</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Conduct “competitor game playing,” especially with new entrants</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Customers called back after purchase</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Strip one layer our of hierarchy</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Establish market-focused measures of customer service level performance</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Formal and informal awards for service personnel based on market-focused measures, not just internal measures like cost, yields and headcount</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Focus groups to determine key service dimensions of customer service</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Training of service personnel focused on how to deliver value dimensions, not just how to handle the machinery of the job</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Hire retirees to read and interpret articles in trade journals, then write up the implications of the articles and distribute to front-line personnel</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Customer research to understand financial impact of good customer service</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Require front-line service experience for rotating functional groups</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Establish a “core curriculum” of roles new manager must rotate through to eligible for promotion, that includes sales, customer service, manufacturing, and engineering</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Phantom buyers report on customer service levels</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Top management commitment/involvement to change typical shared values on service</span></div></li><li><span style="mso-tab-count: 1"></span><span style="font-family:arial;">Key functional managers spend 2 hours per month conducting customer telephone surveys</span></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Non-sales people sell for at least 3 months in the field</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Functional personnel spend one day/month telemarketing</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Pay salespeople’s spouses to check competitor products & prices</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Conduct customer satisfaction surveys</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Tear down and analyze competitor’s products</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Benchmark performance against competitors</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Survey competitor’s customers</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Top managers spend ½ day per month on the complaint desk</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Production people meet customers</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Marketing and sales people work 3 months for a customer or distributor</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Salespeople spend 1 year in the factory, and must implement a cost reduction or quality improvement idea</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Interview your supplier about your competition</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Give away product in trade for feedback</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Tour competitor’s factories</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Customers design or name product</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Educate customers, distributors</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Calculate your customer’s true costs to purchase, use, and dispose of your products.<span style="mso-spacerun: yes"> </span>Compare this cost with the cost of using alternative solutions and competitor’s products.</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><o:p></o:p><span style="font-family:arial;">Conduct a monthly informal training/feedback session using Internet web conferencing tools.</span></div></li><li><div style="MARGIN: 0in 0in 0.1in 12pt" class="Hangingindent"><span style="font-family:arial;">Understand the features and benefits of your competitors products well enough to sell them — if you had to.</span></div></li></ul>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-51526068658912628542010-11-07T17:36:00.000-08:002010-11-07T17:42:15.583-08:00A Customer Needs Model<p><em><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 7.5pt"><span style="font-size:100%;">This post is provided courtesy of Chuck Sander, president of Underdog Consultants, specialists in Six Sigma implementation at industrial companies. Underdog's website is </span><a href="http://www.underdogconsulting.com/" target="_blank"><span style="font-size:100%;color:#003366;">http://www.underdogconsulting.com</span></a></span></em></p><p><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 7.5pt"><br /></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt"><span style="font-size:100%;">Several years ago I attended the Worldwide Lessons in Leadership (Wyncom, Inc. </span><a href="http://www.wyn.com/" target="_blank"><span style="font-size:100%;color:#003366;">www.wyn.com</span></a><span style="font-size:100%;">) simulcast. My main reason for attending was to listen to one of my favorite motivational speakers, Stephen Covey.<br /><br />Covey spoke about the leader’s need to “feed” the core elements of human nature: the Mind, Heart, Body, and Spirit. These are also the four basic human survival requirements. Covey maintains that the role of leadership is to ensure that these survival needs are satisfied. The leader must develop the Vision (Mind), Passion (Heart), and Alignment (Body) for the organization. These three items are then centered by the group's Conscience (Spirit). The Conscience is the compass needle that keeps everything on track. With today’s pace of change, a leader cannot tell his employees how to respond to every new situation. They must have the internal core principles to guide them (the Conscience).<br /><br />I liked this leadership model so much that I wanted to take a moment to see if I could extend it to customers. Let’s call it a type of customer leadership model for the moment.<br /><br />Today, unprecedented numbers of people have the freedom of choice. Through competition, technology and information, your customers have real choices. Like Covey, I maintain that your customers will base their behavior on the drive to satisfy these four basic human needs. It is your job as a supplier to fulfill these needs since an unmet need provides an opening for your competition. Let’s start again with the four basic human needs as Covey describes them: the Mind, Heart, Body, and Spirit.<br /><br />The Mind represents the requirements or problems your customers are experiencing. Your ability to satisfy these requirements completes the customer’s need for alignment (Body). The degree of satisfaction your customer’s have with your products addresses their need for loyalty (Heart). All of these factors impact the customer’s inner compass (Spirit) or freedom of choice. I’ll call these the Customer (Survival) Needs: Customer Requirements (Mind), Performance (Body), Satisfaction (Heart), and Freedom of Choice (Spirit).<br /><br />Covey believes that ignoring any of the four basic employee needs will be disastrous for a leader. If trust is not developed, employees begin to act in their own interest. They try to survive. Likewise for the customer. Ignore any of the components of the Customer Needs profile and the organization creates an unfulfilled customer. The customer will seek to fill this void, and may look to your competition to do so.<br /><br />But how does you know if this is happening and how do you prevent it from happening?<br /><br />Knowledge is power. Six Sigma provides the means of knowing when a customer’s needs are unmet and also helps determine how to correct this situation. Six Sigma focuses on three things: Customer, Process, and Performance. This focus aligns with the Customer Needs model extremely well.<br /><br />The table below summarizes how Covey’s Leadership Model maps to the Customer Needs model and the Six Sigma methodology. </span></span></p><table style="WIDTH: 256.5pt; mso-cellspacing: 1.5pt; mso-yfti-tbllook: 1184; mso-padding-alt: 2.25pt 2.25pt 2.25pt 2.25pt" class="MsoNormalTable" border="0" cellpadding="0" width="342"><tbody><tr style="mso-yfti-irow: 0; mso-yfti-firstrow: yes"><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 27.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: black; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="37"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><strong><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Covey</span></strong><span style="mso-fareast-font-family: 'Times New Roman'"><?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 96pt; PADDING-RIGHT: 2.25pt; BACKGROUND: black; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="128"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><strong><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Customer Needs</span></strong><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 114.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: black; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="153"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><strong><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Six Sigma Methodology</span></strong><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td></tr><tr style="mso-yfti-irow: 1"><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 27.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="37"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Mind</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 96pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="128"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Customer Requirements </span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 114.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="153"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Voice of the Customer</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td></tr><tr style="mso-yfti-irow: 2"><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 27.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="37"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Body</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 96pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="128"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Performance</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 114.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="153"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Process Indicator</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td></tr><tr style="mso-yfti-irow: 3"><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 27.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="37"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Heart</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 96pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="128"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Satisfaction</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 114.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="153"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Process Sigma</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td></tr><tr style="mso-yfti-irow: 4; mso-yfti-lastrow: yes"><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 27.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="37"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Spirit</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 96pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="128"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">Freedom of Choice</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td><td style="BORDER-BOTTOM: #f0f0f0; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 2.25pt; PADDING-LEFT: 2.25pt; WIDTH: 114.75pt; PADDING-RIGHT: 2.25pt; BACKGROUND: maroon; BORDER-TOP: #f0f0f0; BORDER-RIGHT: #f0f0f0; PADDING-TOP: 2.25pt" width="153"><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-size:100%;"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; COLOR: white; FONT-SIZE: 7.5pt; mso-fareast-font-family: 'Times New Roman'">High-level indicators (market share, retention, etc.)</span><span style="mso-fareast-font-family: 'Times New Roman'"><o:p></o:p></span></span></p></td></tr></tbody></table><br /><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-fareast-font-family: 'Times New Roman'; mso-fareast-theme-font: minor-fareast; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"><span style="font-size:100%;"></span></span><br /><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-fareast-font-family: 'Times New Roman'; mso-fareast-theme-font: minor-fareast; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"><span style="font-size:100%;">Through the application of the Voice of the Customer you develop an understanding of the Customer Requirements (Mind). Application of customer focused In-Process Indicators (Body) and calculations of Process Sigmas (Heart) determine the performance against both the customer requirements and estimates of customer satisfaction. This can be used to determine how and why a customer expresses their Freedom of Choice (Spirit). </span></span>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-29869975630419588882010-10-31T18:21:00.000-07:002010-10-31T18:25:56.414-07:00Never Leave 'Em Alone on Hold<p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;font-size:130%;">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.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p><span style="font-family:Times New Roman;font-size:130%;"></span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;font-size:130%;"></span> </p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;font-size:130%;">Frank Pival, owner of Seattle-based <strong>Never Alone on Hold</strong>, creators of telephone on-hold messaging systems, tells more:</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;font-size:130%;"></span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;font-size:130%;"></span> </p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;font-size:130%;">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.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;font-size:130%;"></span> </p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;font-size:130%;"></span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;font-size:130%;">Visit Frank's site to find out more: </span><span style="font-family:Times New Roman;font-size:130%;"><a href="http://www.neveraloneonhold.com/">http://www.neveraloneonhold.com/</a></span></p>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-77901967223105176032010-10-24T19:49:00.001-07:002010-10-24T19:49:52.668-07:00Leveraging Your Intangibles<p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">Despite the problems, tangibles still represent an opportunity to leverage profit, provided they are designed and delivered correctly.<span style="mso-spacerun: yes"> </span>The table below illustrates the key imperatives marketers must address when marketing the intangible components of their products.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p><span style="font-family:Times New Roman;"> </span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">All of the activities are critical to success.<span style="mso-spacerun: yes"> </span>Failing to cover one of the components can have the effect of reducing profit leverage, rather than improving it.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"> </span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"> </span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"> </span></o:p></p><table style="BORDER-BOTTOM: medium none; BORDER-LEFT: medium none; BORDER-COLLAPSE: collapse; BORDER-TOP: medium none; BORDER-RIGHT: medium none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-border-insideh: .5pt solid windowtext; mso-border-insidev: .5pt solid windowtext" class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0"><tbody><tr><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: windowtext 1pt solid; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 95.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt" valign="top" width="127"><p style="MARGIN: 6pt 0in" class="MsoNormal"><span style="FONT-SIZE: 14pt; mso-bidi-font-size: 12.0pt"><o:p><span style="font-family:Times New Roman;"> </span></o:p></span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 2.5in; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt" valign="top" width="240"><h2 style="MARGIN: 6pt 0in"><span style="FONT-SIZE: 14pt; mso-bidi-font-size: 12.0pt"><span style="font-family:Arial;">Getting Customers<o:p></o:p></span></span></h2></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 167.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt" valign="top" width="223"><p style="MARGIN: 6pt 0in" class="MsoNormal"><b><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 14pt; mso-bidi-font-size: 12.0pt">Keeping Customers<o:p></o:p></span></b></p></td></tr><tr><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: windowtext 1pt solid; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 95.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="127"><p style="MARGIN: 6pt 0in" class="MsoNormal"><span style="font-family:Times New Roman;">Create Surrogates or Metaphors</span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 2.5in; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="240"><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">How you present yourself<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">How your proposal looks<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Appearance of offices<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Testimonials<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Comparative data<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">How you present claims<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">How well you understand the prospect’s business<o:p></o:p></span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 167.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="223"><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">How service providers present themselves<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Appearance of offices<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Data relating service performance to costs or problems<span style="mso-spacerun: yes"> </span>avoided<o:p></o:p></span></p></td></tr><tr><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: windowtext 1pt solid; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 95.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="127"><p style="MARGIN: 6pt 0in" class="MsoNormal"><span style="font-family:Times New Roman;">Tie the Intangible to Something Tangible</span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 2.5in; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="240"><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Comparative data<o:p></o:p></span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 167.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="223"><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Data relating service performance to customer’s actual cost savings or profit improvement<o:p></o:p></span></p></td></tr><tr><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: windowtext 1pt solid; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 95.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="127"><p style="MARGIN: 6pt 0in" class="MsoNormal"><span style="font-family:Times New Roman;">Educate the Customer About What They’re Getting</span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 2.5in; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="240"><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Head-to-Head comparisons with other providers<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Workshops, training<o:p></o:p></span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 167.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="223"><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Educate customers in the elements of their cost stack<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Regularly remind them of the services you provide<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Regularly reinstate promises<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Demonstrate (with data) that you are keeping your promises, and relate this to the customer’s objectives<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Keep the occasional failure in perspective – prepare customers for a possible failure.<o:p></o:p></span></p></td></tr><tr><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: windowtext 1pt solid; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 95.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="127"><p style="MARGIN: 6pt 0in" class="MsoNormal"><span style="font-family:Times New Roman;">“Productize” The Service</span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 2.5in; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="240"><p style="MARGIN: 0in 0in 2pt; tab-stops: .2in .25in" class="MsoNormal"><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt"><o:p> </o:p></span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 167.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="223"><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Develop procedures that ensure consistent delivery<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Manage costs of providing the service<o:p></o:p></span></p></td></tr><tr style="mso-yfti-lastrow: yes"><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: windowtext 1pt solid; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 95.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="127"><p style="MARGIN: 6pt 0in" class="MsoNormal"><span style="font-family:Times New Roman;">Continuously Improve the Value of Your Intangibles</span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 2.5in; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="240"><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Educate prospects about your continuous improvement approach<o:p></o:p></span></p></td><td style="BORDER-BOTTOM: windowtext 1pt solid; BORDER-LEFT: #f0f0f0; PADDING-BOTTOM: 0in; BACKGROUND-COLOR: transparent; PADDING-LEFT: 5.4pt; WIDTH: 167.4pt; PADDING-RIGHT: 5.4pt; BORDER-TOP: #f0f0f0; BORDER-RIGHT: windowtext 1pt solid; PADDING-TOP: 0in; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt" valign="top" width="223"><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Joint process improvement initiatives with your customers – customer led<o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Add services that drive you deeper into the customer’s internal value chain <o:p></o:p></span></p><p style="TEXT-INDENT: -0.2in; MARGIN: 0in 0in 2pt 0.2in; mso-list: l0 level1 lfo1; tab-stops: .2in .25in list .5in" class="MsoNormal"><span style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt; mso-fareast-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt 'Times New Roman'"> </span></span></span><span style="FONT-FAMILY: 'Arial', 'sans-serif'; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Face-to-face visits<o:p></o:p></span></p></td></tr></tbody></table><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"> </span></o:p></p>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-568549952551647972010-10-17T19:26:00.000-07:002010-10-17T19:28:01.241-07:00Getting Customers vs. Keeping Customers<p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">When it comes to the initial sale, the issue of intangibles can be difficult to manage.<span style="mso-spacerun: yes"> </span>In terms of <i style="mso-bidi-font-style: normal">keeping</i> customers, however, intangibles play a different, and far more important role.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p><span style="font-family:Times New Roman;"> </span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">For many industrial products, it is the service provided <i style="mso-bidi-font-style: normal">after</i> 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.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"> </span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">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.<span style="mso-spacerun: yes"> </span>Both problems are different manifestations of the same problem.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"> </span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">Industrial products are mass produced in controlled condition.<span style="mso-spacerun: yes"> </span>The products are created by engineers who have relatively little contact with customers.<span style="mso-spacerun: yes"> </span>Services, on the other hand, are custom manufactured by people who are in frequent contact with customers.<span style="mso-spacerun: yes"> </span>The design/creation of the service is also the manufacturing/delivery process.<span style="mso-spacerun: yes"> </span></span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"> </span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">Problem #1:<span style="mso-spacerun: yes"> </span>If the delivery is poor, the customer assumes that the design of the service is also poor.<span style="mso-spacerun: yes"> </span>This can alienate customers, and cause them to question the value of the products as well.<span style="mso-spacerun: yes"> </span>Industrial companies tend to view the service components of their business as cost centers, rather than revenue centers.<span style="mso-spacerun: yes"> </span>Many industrial marketers take the intangible component of their product/service offerings for granted, and focus the overwhelming share of their attention on products.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"> </span></o:p></p><span style="FONT-FAMILY: 'Times New Roman', 'serif'; FONT-SIZE: 12pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA">Problem #2:<span style="mso-spacerun: yes"> </span>With products, customers know what they will get before they buy.<span style="mso-spacerun: yes"> </span>With services, it’s the opposite.<span style="mso-spacerun: yes"> </span>Customers usually don’t know what they’re getting until they don’t get it.<span style="mso-spacerun: yes"> </span>This can lead to customer alienation too, because your industrial customer, like the consumer, become aware of your intangibles when you screw something up.<span style="mso-spacerun: yes"> </span>This makes it easier for competitors to sell against you (at least for a short time).<span style="mso-spacerun: yes"> </span>Industrial companies emphasize product quality improvements, but often ignore service excellence.<span style="mso-spacerun: yes"> </span>Metrics related to services are almost always focused on cost containment, rather than the profit contribution of service excellence</span>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0tag:blogger.com,1999:blog-8350942855959012988.post-82229902350014900692010-10-11T18:32:00.000-07:002010-10-11T18:35:43.582-07:00All Products (Even Industrial Products) Are Intangible<p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">Intangible products can seldom be tried before purchase.<span style="mso-spacerun: yes"> </span>Intangible consumer products include travel, medical care, financial planning services, or even a simple haircut.<span style="mso-spacerun: yes"> </span>Tangible products, such as a new suit, a car, or new watch can usually, to some degree, be tried before purchase.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;"></span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p><span style="font-family:Times New Roman;"></span></o:p></p><br /><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">In our world, the industrial sector, most of the products sold have a significant tangible component.<span style="mso-spacerun: yes"> </span>Industrial marketers commonly assume that only the tangible component matters to their customers.<span style="mso-spacerun: yes"> </span>I can prove this.<span style="mso-spacerun: yes"> </span>Pick up a copy of your favorite trade publication and scan through the ads.<span style="mso-spacerun: yes"> </span>The vast majority of the copy is about tangible products and/or product tangibles.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"></span></o:p></p><br /><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;"></span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">In reality, every product is both tangible and intangible.<span style="mso-spacerun: yes"> </span>A watch is tangible, but the ability to be on time for appointments in intangible.<span style="mso-spacerun: yes"> </span>A haircut is intangible, but the barbershop is tangible.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"></span></o:p></p><br /><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">Industrial products are the same.<span style="mso-spacerun: yes"> </span>A steam boiler is tangible, the reliability of the boiler is intangible.<span style="mso-spacerun: yes"> </span>A railcar of polyethylene resin is tangible, but the technical service that helps you use the resin in intangible.</span></p><br /><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"></span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">Industrial buyers buy differently from consumers, however.<span style="mso-spacerun: yes"> </span>Professional buyers tell suppliers that intangibles are irrelevant, that only tangible features and selling prices really matter.<span style="mso-spacerun: yes"> </span>Sometimes they’re being honest, and sometimes they, shall we say, spin the truth to their best advantage.</span></p><br /><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"></span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;"></span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">Commoditization is a problem for both consumer and industrial manufacturers.<span style="mso-spacerun: yes"> </span>In many product categories, such as paper products, the biggest selling brand is the store brand, not the national brand.</span></p><br /><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"></span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">But most techniques that work in consumer markets simply won’t work for industrial products.<span style="mso-spacerun: yes"> </span>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).<span style="mso-spacerun: yes"> </span>If you’re marketing, say, machine parts, you need a different approach.</span></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><o:p><span style="font-family:Times New Roman;"></span></o:p></p><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;"></span></p><br /><p style="MARGIN: 0in 0in 0pt" class="MsoNormal"><span style="font-family:Times New Roman;">To the extent that you can’t <i style="mso-bidi-font-style: normal">truly</i> experience using any product before you buy it, all products <i style="mso-bidi-font-style: normal">are</i> intangible, no matter how tangible they appear in nature.</span></p>PW Hallhttp://www.blogger.com/profile/01372732596042571865noreply@blogger.com0