by Paul Travis, Interim Marketing Executive
While the Big-3 auto makers continue spending their (same old same old) mass media dollars telling us that we can get the same pricing as their employees (same old, same old)… “second tier” companies are making more timely appeals:
Volkswagen is speaking to American families about “having it all” — high mileage, best safety, and green manufacturing, and clean diesel technology.
Hyundai is hitting breadwinners where their fears live… “What if I lose my job?” Their Assurance program lets customers bring their car back with no penalty they find themselves unemployed within 12 months of purchase.
Now that’s creative thinking. Unclear whether we can hand it to Hyundai for the innovation, as they merely partnered with a company called WalkAway USA whose raison d’etre is such financing plans. Nonetheless, Hyundai will undoubtedly receive credit in the mind of the consumer for respecting the tenuous economy.
And that brand halo — residing in the mind of the buying public — will pay off for Hyundai!
60-Second Takeaway: Where are your opportunities to let your customers know you understand their situation, and demonstrate that you care?
Paul Travis is an interim marketing executive at OneAccord. Mr. Travis is based out of Seattle with 25 years of experience in high technology, marketing, and consulting. He welcomes questions at Paul.Travis(at)oneaccordpartners.com and at 206-910-2222.
by Paul Travis, Interim Marketing Executive
The affluence, consumer culture, established distribution channels, and technology adoption of the U.S. market attract the interest of astute businesspersons worldwide. However it can be intimidating to consider such an expansion initiative when one already has a full day of problems to solve.
While there are no guaranteed success formulas to entering the North American marketplace, there are a number of key factors we have found to be important. You may be familiar with a number of them in the operation of your small- to mid-sized business. By going through this process, you can work consciously through critical decision points where competitors make implicit assumptions (they “don’t know what they don’t know”)!
1. Recognize the distinct distribution options you have in bringing products and services to this marketplace.
Each has its advantages and disadvantages, in terms of capital investment, profit margin, and ownership of the customer and any associated credit. Go direct to customers, by establishing a North American office or by outsourcing or contracting out North American sales/service. Or go indirectly, through distribution/reseller partners and/or OEM partners.
2. Target your offering at a specific industry “vertical”, rather than a horizontal approach.
This is the most effective way to bypass the competitive “noise” in the marketplace. It is easier to reach those buyers who you want to hear your story. For example, if you are in the CRM software business, you’ll be more effective with a “CRM for Real Estate” product than offering “CRM for small business”.
3. Make sure your value proposition is clear and concise.
The end customer of your product or service must be able to tell another person, so it has to be simple. Based on your distribution choice above (1) you are likely to have another important customer constituency — your prospective partner must be compelled by their own clear and concise value proposition. If they are any good, they will have other things competing for their attention!
4. Create a 12-24 month plan/timetable.
Go into detail, identifying specific persons with the right skills sets and the right connections and give them responsibility. Also identify specific activities to be accomplished in the marketing/sales/partnering/product development realm. You’ll find that specificity, early in the process, builds confidence internally and with your partners, and often illuminates hidden concerns. Don’t worry — change is inevitable and can be managed.
5. Determine criteria to measure the success of your plan.
You might set your benchmark based on number of new customers, revenue level, or a profitability target. Commit to regular monitoring and course-correction, so you don’t look up one day and wonder where things went wrong. What gets measured gets managed.
6. Prepare to make the appropriate investment to manifest your plan.
There is truth in the old saying, “it takes money to make money.” Having gone through the planning process, you now recognize that your expansion plan can never come into being with a couple lucky phone calls. Establishing a significant business in North America is possible, and will take a concerted effort.
7. Be conservative in your planning.
Things always take longer and cost more than you originally expect!
Paul Travis is an interim marketing executive at OneAccord. Mr. Travis is based out of Seattle with 25 years of experience in high technology, marketing, and consulting. He can be reached at Paul.Travis(at)oneaccordpartners.com and at 206-910-2222.
Photo by unfoldedorigami
by Jonathan Gilliam
Just returned from Houston with a new gig helping companies increase their revenue via innovative digital marketing. Having enjoyed a stint at another interactive firm recently, I’m excited about bringing companies a few leaps forward in their interactive efforts.
First thing I did was go to Fry’s to get a printer for my home office, and after gathering product info about the printer I want, I walked out with nothing. Why? I needed to get to my computer to compare shop, of course.
We live and work (and importantly, shop) digitally. You should market and sell to match. Methods of reaching customers are changing radically (see my post ”Please Come Fire All My Salespeople“). A comprehensive digital marketing strategy is essential for our always-on connected world.
So what’s wrong with traditional marketing approaches? Nothing as part of the mix, but modern marketing should lean quite heavily toward Interactive and digital. All roads lead here. Print and top-down broadcast are simply too slow and static for today’s consumers, and analytics and measurement mean the right money is spent reaching the right audience.
Simply prettying-up your web site won’t cut it. Any real digital effort should involve a holistic strategy, experienced implementation, and disciplined measurement and refinement.
Free advice here so ping me!
Jonathan Gilliam is a interim sales executive for OneAccord and is based in the Austin area. Jonathan has a deep background in business development, market analysis, opportunity development, relationship management and C-level sales. He can be reached at 512.775.7566 or Jonathan.Gilliam(at)OneAccordCorp.com. Jonathan also blogs at Business Developments.
by Patrick Smyth
Question: In addition to understanding the cost of poor execution, how can companies assess the value of their brand?
The Service-Profit Chain developed by Heskett, Sasser and Schlesinger from Harvard Business School establishes relationships between profitability, customer loyalty, and employee satisfaction, loyalty, and productivity. The Service-Profit Chain is made up several key linkages: profit and growth are stimulated primarily by customer loyalty. Customer loyalty is a direct result of customer satisfaction. Satisfaction is greatly influenced by the value of service provided to customers. Satisfied, loyal, and productive employees create value. Employee satisfaction, in turn, results primarily from high quality support services and policies that enable employees to deliver results to customers. Let’s say that you have high quality support services and polices, and your employee satisfaction surveys suggest your employees are happy. Does that mean your customers are in fact experiencing results that match or exceed you brand promise? Do satisfactory results really help you accomplish your goals of being the leader in your industry? What if the predominant culture of your employee base demonstrates a set of values that are not consistent with the values of your brand promise? What if different parts of your employee population that come into contact with customers have quite different cultures and values? Does your sales force demonstrate the same behaviors and in the same manner and style as your customer service organization? Such inconsistent behaviors between employee groups, and between employees and the brand promise, create disjointed experiences for customers who will find that they are constantly adjusting to your company’s different styles, behaviors, standards of performance, and promises. The customer will quickly conclude they don’t know what you stand for, and they won’t know how to describe their experience with you – perhaps other than “clumsy”. This makes it very difficult to develop a sense of affinity and loyalty with your company. While the Service-Profit Chain model provides an essential foundation to assure that your employees are delivering results to customers, a focus simply on employee support services and policies will not result in employees delighting the customer and delivering on your brand promise. You need a defined employee culture, measurements, and reward and recognition system that aligns behaviors consistent with the brand promise of your business. This strong link and consistent behaviors will strengthen the bond of loyalty with your customers, lower the cost of support service, and accelerate brand efficiency and sustained profitability.
In financial terms, the value of a brand can be a significant component of the value of the company. The price paid for acquired businesses is frequently substantially higher than the appraised value determined from the tangible assets of the company.
Assessments of the actual brand value of a business to business services company should include the internal business processes and communications systems to determine how effectively the various functions and people are aligned to deliver performance consistent with the brand promise of the company. Unrealistic prices can be paid for brand value that may be more tied to market awareness and market share, than any real capability of the company to underpin its brand equity with real sustained performance. Brand value should be discounted by elements that fail to deliver effectively, or where significant inconsistencies exist between the company and its customers’ expectations for the future.
Consider the case of Philip Morris: “In 1989, Philip Morris paid $12.9 billion for Kraft, six times its net asset value. According to Philip Morris CEO Hamish Maxwell, his company needed a portfolio of brands that had strong brand loyalty [i.e., customer relationships] that could be leveraged to enable the tobacco company to diversify [i.e., financial relationships], especially in the retail food industry [i.e., trade relationships].”2 Philip Morris paid billions for a set of relationships and the expectations that those relationships would enable Philip Morris to conduct business in entirely new ways in the future.
In addition to significantly affecting the purchase price of a company, the value of the brand and brand equity directly affects stock price of the company. A Cap Gemini Ernst & Young report issued in 2000 concluded “brand power can account for 5 to 7 percent of the change in a company’s stock price.” 2 A study of 220 companies identified that corporate brand image could be quantified with the following components:
Advertising spending 30%
Size of company 23%
Low dividend 10%
Earnings volatility 7%
Stock price growth 8%
Other factors* 22%
*(including [other marketing components such as] events and publicity, industry affiliation, product categories, message quality, etc.)3 Thus 52% of the factors influencing the brand image are those associated with ensuring that your brand message and promise are effectively defined and articulated through all the transmission systems in your company.
Through this brief analysis we can easily conclude that effectively developing and executing a comprehensive company-wide brand strategy will contribute directly to the value of the company. The steps that can be taken to accomplish this are defined and uniquely adaptable to any business. The results will be measured in the improved performance of every function of the company, leading to improved sustained profitable growth and continuing growth in stock equity.
1 Tom Duncan, Driving Brand Value, pg. 4.
2 “Name Brand Calculus or Imaginary Numbers?” US Banker, Volume 113, Number 6, Page 26, June 2003.
3 Ad Value, Leslie Butterfield, ed., Butterworth Heinemann, Oxford, 2003, “How advertising impacts on share price,” James Gregory, pgs. 17-25.
Photo by Scelera
When working with company‘s that have sales revenue and profit challenges one of the first places to look and diagnose the root cause is within their sales numbers, specifically the sales pipeline. The sales pipeline typically reveals the symptoms associated with the revenue and profit challenges a company is currently experiencing or will experience. One key metric to examine is the win rate, which is the total revenue sold divided by the total revenue sold, lost and disengaged. The win rate percentage provides a factored view and insight into predicting a company‘s future sales performance. Conversely, it also reveals areas of deficiency that are impacting or will impact sales performance. Another key area is looking at how opportunities enter the pipeline. Do they enter from demand creation (the proactive pursuit of sales revenue) or demand management (reactive pursuit or sales revenue from leads, referrals and bluebirds).
Experience has shown that revenue challenged companies rely much more on demand management than on demand creation to generate sales revenue typically resulting in an unbalanced 80/20 split.
Companies with an unbalanced and unpredictable revenue stream need to ask themselves the following question: Where do we want our sales revenue to come from? When applying conventional wisdom, the answer to the question can be found by identifying your company‘s —ideal client profile“ or those clients most likely to receive significant value purchasing your product and/or service based on the alignment of qualifying characteristics and attributes between your company and the prospective client. However, going a step beyond conventional wisdom and applying biblical wisdom can help you identify not only your most profitable clients but also your most sustainable clients. The biblical wisdom referenced is found in the book —Beyond Babel“ by Gerald R. Chester, Ph.D. regarding the biblical principle of equal yoking specifically related to C4 to identify your —ideal C4 client.“
Since most companies typically do not select their clients, it is even more difficult to find C4 clients. The components of C4 include a company‘s:
1. Calling
2. Character
3. Capabilities
4.Commissioning
Calling Speaks to the heart of the company.
Will your value proposition bring lasting value to the prospective client?
Character Is the accepted worldview of a company.
Does the prospective client‘s company values and operating principles align with your company?
Capabilities A company‘s ability to assess the value proposition.
Do your services and/or products facilitate the successful completion of tasks or business challenges that can‘t be effectively addressed by your prospective client?
Commissioning The external invitation and permission to speak into a client.
Do you have the affirmation and confidence to fulfill your client‘s needs?
In conclusion, the alignment of C4 between your company and your prospective client(s) will not only help establish your most profitable C4 relationships but will also build a sustainable and predictable revenue stream
Need help growing revenues? Contact an interim marketing executive today at info@oneaccordpartners.com or visit www.oneaccordpartners.com.
Photo via flickr
by Charles Sipe
Apple’s Mac vs PC ads seems to be moving the needle on perceptions of the PC as evidenced by their significant growth in market share.
An article in Computer World states “According to Gartner Inc.’s preliminary estimates, Apple sold 1.64 million machines during the period, a 29% increase year-to-year over the same period in 2007, to put it in third place behind Dell Inc. and Hewlett-Packard Co. For the quarter, Apple accounted for 9.5% of all the machines sold in the U.S, up from 8.1% a year ago and 8.5% last quarter.”
Let’s look at how Apple has been able to execute a strategy that effectively attacks the competition.
Firstly, Apple actually attacks the category they are in, since an Apple computer is technically a personal computer. Apple has positioned themselves as being so different than other PCs that they should be in their own separate category. When Apple attacks their competition, they attack the whole category which is quite rare in marketing. Usually we see the smaller brands singling out the leader and attacking them, but not one brand positioning themselves against the whole category. I can only think of one other example of this, in which 7-Up successfully differentiated themselves against the other carbonated soft drinks by proclaiming themselves the “Uncola”.
Additionally, Apple attacks the PC in a humorous way, often making fun of the PC’s vulnerabilities to viruses, the difficulty of use, and so on. The audience views these ads very favorably, while they are associating a lot of negative attributes to the public perception of PCs. Recently when Microsoft tried to counter the attacks by showing various people saying they are a PC, Apple responded by directly attacking Microsoft’s disappointing Vista.
This is classic brand warfare and Apple’s superior marketing strategy is key to its growth in sales. While it would be difficult to duplicate the campaign’s success, there are valuable lessons that marketers can learn from Apple’s success. Instead of directly attacking a specific brand, attack the whole category to differentiate your brand from the rest of the category. When attacking others, do so in a light-hearted way, as it can preserve a favorable image while still undermining your competition. But when a competitor fires a counter shot, respond immediately with equal or greater force.
Photo by Joi
Marketing executives are currently facing a sales climate that is tougher than ever. Competition comes from areas until recently unseen – offshore/international suppliers, internet “virtual suppliers”, ”knock –off” manufacturers, etc. Yesterday, when I called technical support for a well known US computer manufacturer, the call was routed seamlessly to New Delhi (toll free, no hold time, and an accurate solution)!
So, what differentiates your company and the products or services that you provide? It’s a given that you must provide value, high quality, and on-time delivery. Companies define Value as cost effective solutions to their needs. Your buyer or decision maker will define Value as whatever creates a personal “win” for him/her. This may not always be lowest price and shortest lead time. It may be favorable payment terms, or improved product performance, or consigned hardware. The key to knowing what buyers want and creating long term sales is the relationships that you build with your clients. Companies don’t buy from companies, people buy from people. Even the most process-regulated purchasing decisions are determined in part by personal experience and preference.
Relationships offer an opportunity for you to be proactive rather than reactive. If your first knowledge of a selling opportunity is the RFQ, you’ve had no time to influence the specifications, fine tune your product offering, or generate internal buy-in for the project. The buying decision has been all but made by the client, and you’re not in the driver’s seat. Relationships with decision makers invite early participation in the solution phase of the project. You are considered more of a strategic team member, creating a collaborative solution to the clients needs.
So how do marketing executives ensure these relationships are created? Positive relationships with your clients don’t necessarily require late night cigar parties, all day golf outings, or junkets to Hawaii, although genuine friendships never hurt! Relationships take time to build and are based on trust. Trust means you don’t sell what you can’t produce; you provide true Value Propositions and solutions which may not always directly benefit your company; you follow through on commitments. A client will respect the answer “we don’t make that product, but I can tell you who does” much more than “we are experts for all your needs”. Remember, you can only lose your credibility once. Protect your integrity and trust as if your business depends on it!
Photo by Naystin
by Bryan Ong
Today I finally truly understand why salespeople in the sales department are always in conflict with the marketers within the marketing department. It’s because one is out in the market and the latter is not. Sales people are the voice of the market, they are the one that truly understands what the market wants and needs. They are actively listening and have a full understanding of the market. It is this understanding that allows them to sell. In contrast, marketers are not out there. In many cases, they base their understanding from information gathered by their sales guys or from their market research team. When marketers truly think that they know the market inside out; no! often they are wrong. They only know from the outside. Put it this way, salespeople are the insiders and the marketing guys are the outsiders so to speak. Of course, I am not saying that marketers do not understand. All I am saying is that the really good marketers are the ones that listens and work together with their salespeople. It is those bad ones that will always have ever conflict because both do not think alike. Sales guys, don’t get too cocky just because you can sell. You still need the marketers to provide you the marketing ammunitions to help you do your job. At the end of the day, its about integration and collaboration of both expertise.
This work is licensed under the Creative Commons 2.5 license. The original post can be found at marketingjournal.blogspot.com.
Photo by matt
The marketing approach of Japanese companies contrasts starkly with the common practices in the US. We can learn a lot of valuable lessons from studying how the Japanese market their products, especially since companies like Toyota are crushing the competition. The last time I checked, the market cap of Toyota was around $600 billion while GM is losing billions each quarter. The book Relentless describes some of the major differences in marketing strategy in Japan and how this approach can be extremely effective.
Intuition versus Market Research
Many companies in Japan rely on common sense and intuition when developing products for launch rather than lengthy and expensive market research. They will often follow their intuition and launch a new product on a small scale and then incrementally scale and improve it based on the feedback they get from actual customers. This makes a lot of sense when you consider the high percentage of new products that flop despite extensive market testing and research. It is extremely difficult to accurately predict consumer behavior as even the best executed research can be dead wrong. Many internet companies take this approach by releasing a beta version of their site and continuously improving upon it.
Imitation and Churning
The authors of Relentless observe that Japanese companies are very adept at quickly imitating innovations. When one company launches a unique product, the competition is quick to go to market with similar versions. Churning refers to the fast cycle of innovation and imitation. Churning makes it difficult for anyone to maintain a first mover advantage but the positive is that consumers are less afraid to be early adapters since several companies have created a similar product. This helps the whole category to grow and this inherently helps the leader although there is less of a first mover advantage. This also creates an environment that encourages fast adoption of new technology.
The Buyer is the Master
There are obviously many differences in the culture in Japan, and one that can be striking is the relationship between buyer and seller. Too often in the US, the buyer is at the mercy of the seller, take auto mechanics or cell phone carriers for instance. Also, buyers in the US often have a confrontational approach with sellers who may try to push things they don’t need or charge the highest price possible. In Japan the buyer is the master and the seller is like a servant. This changes the whole dynamic of how products are sold and marketed. The seller is concerned with what the buyer wants, rather than what they want to sell. When the customer’s interest is put before the profit of the company, this can lead to strong and lasting relationships between the buyer and seller.
Many Japanese Companies do not have “Marketers”
In Japan, often marketing is part of everyone’s job in the company rather than a specialized department with specialized professionals in marketing. As a result many companies do not have marketing managers. While I don’t necessarily think US companies should get rid of their marketing departments, a lot of successful companies do little or no formal marketing. In Japan, the quality of their products speak louder than any commercial.
Image source luckygun
Republished with permission from Cool Marketing Stuff
Here are five fundamental questions that too few B2B sales or marketing execs can answer and as a result they are flying blind.
- What is your average (or mean) deal size expected to be in 2009?
- How many deals-contracts-orders do you need to win to achieve your revenue objective?
- How many weeks does it take to convert a name into a deal?
- What percentage of your names leave the sales funnel during this period (leakage)?
- How many names do you need to put into the funnel, at what time, in order to achieve your revenue objective?
I’d say 80% of the companies I speak with cannot answer more than one of these questions. Such room for improvement.
Chuck Besondy, Principal, OneAccord
512.692.9642
chuck.besondy(at)oneaccordpartners.com
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