Marketing Transportation in China

Here is a question asked of our expert panel of interim marketing executives. If you have a question about marketing or sales, you can submit it here.

Question: I have a US-based company that is launching a product into china into the city transportation space. How would this marketing effort differ from a similar marketing effort in the US?

The fundamentals of defining & finding customers and marketing won’t differ significantly from a US approach. The most important differences in doing business in China will stem from culture, patterns of consumption, & channels.

For example, in promoting Intel Inside into China in the ’90’s media and channel outlets we’re accustomed to in the US at the time didn’t exist or were pretty fragmented or cluegy. In that period one of the most reliable & significant channel’s of mass communications was millions of bicycles and riders that commute each day. So millions of the familiar Intel Inside logo were handed out as stickers,reflectors and decals to put on the bikes. Lots of media impressions during ‘ride time’ morning, noon, and night!!!

-Peter Klinge, Interim Management Executive

Marketing is much less defined and fragmented than in US. If marketing into governmental channels culture will become a dominant factor. Commercial channels are much more multi-layered and fractured than in US. Most essential ingredients for success are trusted partners with management talent who understand and operate comfortably and effectively in the Chinese market. Although the quantity and quality of the human capital in china is very strong the country still lacks good middle and upper – level managerial expertise thus necessitating expensive expats to support operations. Think long term and cultivate relationships for the long haul. Skimming strategies may work in the very short term, but the Chinese learn quickly. Consequently, penetration strategies will reap optimum benefits. In the US companies are accustomed to competitors who are focused on profit. In china, there is a mix of private companies, state-owned companies and hybrid businesses. Government businesses exist to provide jobs, rather than to create profits.

-Joe Heaney, Interim Management Executive

Is it a product that will be sold to the city or sold through advertising on transportation?

One of the most significant differences compared to US is the amount of government involvement that will be required. Here we think about he government only when it gets in our way. There, you have to have a deliberate plan to deal with the government and officials that are involved. At the worst case the Company will have to anticipate requests for direct payoff and should be very knowledgeable of the Foreign Corrupt Practices Act. This applies to how they deal with people and how their contractors or employees deal with people that ask for payment for influence.

Another consideration is who they work with in China. A common mistake is picking a contact based on relationship, e.g. a brother of someone they know in the US. This person may not know the market or vertical. It’s important that you recruit for industry and market knowledge and do the background checks.

-Dave Parker, Interim Management Executive

Like peeling an onion, Developing personal long-term relationships has to be one of the primary objectives to develop a lasting market presence in the Far East. Although placed at a arms-length at the beginning, once the trust and personal connection is established will the benefits of the launch will be achieved.

-Rich Hennessey, Interim Management Executive

How the Seattle Sounders Built The Most Successful New Franchise in Sports

by Paul Travis, Interim Marketing Management Executive

Wow… I had sensed that the new Seattle Sounders soccer team was getting traction in its first season — but I had no clue just how well it’s really doing.

Listening to Gary Wright (Sr. VP Bus. Ops. for the organization) give the lunchtime keynote at the NW Growth Financing Conference today was inspiring. He said that 67,000 people watched the game with Barcelona last night, and another recent international team drew 66,000.

They’ve sold 22,000 season tickets, which was a first-year target unheard of in the sport.

Gary said it is being called the most successful new franchise, not in soccer but in major league sports!

To what did he attribute this success — a great logo, good funding, or another such secret?

He shared a completely different definition of “The Four P’s” (not those that form the foundation of marketing).

1. People
2. Process
3. Product
4. Profit

Interestingly, most of the business world is headed in exactly the opposite direction, valuing profit above everything else.

In closing, Gary was quite candid that he had always dismissed soccer until getting wrapped up in it, and convinced me I have to go see what it’s all about. No way will it displace my First Sport (hockey) but the Second is up for grabs.

Differentiation: A Tale of Two Companies

I love having insightful weekends like this — what a comparison/contrast in brand experiences!

First, I encountered four pieces of disappointment with Hilton:

• Receiving double beds after requesting a king

• Being placed at the very farthest room (felt like walking half a mile) from the elevator

• $20 fee for parking when the dedicated lot immediately next door charges $13.95

• $14.95 internet (wi-fi or hardwire) when nearby coffee shops and restaurants provide it on a complimentary basis

My point about the latter two concerns service focus. The parking place has NO other offering. Hopefully Hilton would see that my main need for them is lodging, and they shouldn’t be charging ANY MORE than the next-door place. Between that and the internet access, my sense is that they feel they can “screw over” the captive customer.

Bad karma — anytime.
And especially in today’s competitive environment.

Then… I experienced the Virgin brand out of the UK, which I had heard of but had no particularly positive or negative expectations. I know you know what’s coming, but I have to mention it anyway… I’m no longer a virgin to Virgin American airlines).

At every point along the process, I was impressed with Richard Branson’s “human touch” — professional and anything but “me too”.

• Web site – bold red and clever “Brit-ish” sayings

• Customer service (called with a question about flight accommodations) – surprisingly friendly and welcoming to/acknowledging of “virgins”

• Boarding pass – bold red and non-standard size

• Cabin experience – entire plane has black lights emitting a purple glow instead of the traditional cold-white fluorescent lights (makes one feel “evening”, disco (first class even has news-announcer-like microphones emitting up and around the seats, what a feeling of control)

…and…
(the best for last) AC Adapters at every seat! (no more running out of laptop battery power in the air).

This has definitely ingrained positive associations in my gray matter for the brand. I’ll be intrigued to see what happens in my eval process next the next time I fly (better yet, what happens the next time I experience United, Northwest, et al).

A good place to begin is mapping all your touch points (email me if you’d like an example doc to work with) then look objectively (through the customer’s eyes) at how your actions at each either support or deflate your brand goals.

I shared with my young son Gabe how impressed I was with Virgin Air. No surprise that the son of The Columbo of Marketing would reply with, “What was so special about it?” After I described the photo in my last blog, he asked “Was there anything else?” Makes a dad proud.

Pictured is another example. Learning from the world of residential real estate: if the front door and surrounding area are shoddy, it affects the visitor’s view of the entire home. Conversely, checking in to the registration area at Virgin American emanates “pleasurable”. The hallmark red color is everywhere (without overkill) from the decor to the boarding passes. And I can’t tell you that I’ve EVER seen flowers when checking into United or Northwest!

That’s what prompted me to follow up with “more” — since this brand definitely deserves more than one post. There is a lot you can learn, regardless of what business you are in, and especially how other airlines better learn or have their lunch taken from the proverbial plate.

As I was drafting this post on Virgin Air, I sat next to Sera Cawanibuka from Tourism Fiji who said that after her first “Virgin” flight, she told all the people in her office about it. Now they all “fly Virgin” and haven’t used United, American, et al — in years!!

Paul Travis is an interim marketing executive and helps companies create a screaming value proposition and accelerate sales. He can be reached at paul.travis@oneaccordpartners.com. He also blogs at Marketing 2020.

The book, Leadership on Demand is available at http://leadership-on-demand.com/.

Photo by Binder Donedat

7 Costs of Misalignment of Sales and Marketing

The misalignment of sales and marketing can prevent an organization from reaching it’s sales potential. Interim marketing executive Chuck Besondy, explains the top 7 costs of misalignment of sales and marketing.

There’s a lot of talk about aligning sales and marketing. I’ve given speeches on the topic and have written numerous posts. Company executives know it’s an issue, but what are the costs associated with misalignment?

If our car is out of alignment we know that the tires are going to wear out faster; we are more in danger of the car wandering out of our lane into on-coming traffic; the ride isn’t as smooth; and the car is harder to steer. We know the cost of replacing tires and in our mind we can calculate the risk of an accident. That’s pretty easy.

But, what is the cost if a company’s revenue engine is out of alignment? Believe me, it’s costing you more than a set of new tires.

I want to open this discussion up and let the ideas flow. I have a thesis. I think most companies have been driving in a misaligned state for so long they are settling for sub-par results and resigned to trying to solve the problem. Misalignment is the default situation in most B2B companies.

Here is an excellent reason why an outside executive serving in an interim manager capacity at your firm, or as a consultant is best able to get you out of the rut. They bring objectivity and the knowledge that there is indeed gold at the end of the rainbow.

What is the cost of misalignment? If, as business managers, we can’t put a number to the cost we’ll hesitate to invest in a solution, and that is the way it should be.

Here are a few areas in which misalignment is costing your company.

1. Low conversion rates – your proposal to close ratio is static or falling. Research has shown that misaligned companies have a lower conversion rate. What would be the impact if you reduced your cost of customer acquisition by 10% , 20% or more?

2. Missed revenue forecasts – unpleasant budget surprises at quarter end when actual sales are significantly below budget.

3. Lost customers – research has shown that misaligned companies are not as good at keeping and growing profitable customers. What is the lifetime value of a customer? If you lost 10% or 20% fewer customers each year what would than mean to the top line and bottom line?

4. Slow reaction to market dynamics – when marketing and sales have difficulty agreeing on direction and tactics there are delays in action; opportunities are missed. What is the value to you in beating the competition to a market opportunity?

5. Internal strife – It’s not fun or productive to work in a company in which marketing and sales are at odds (or at war). Soon egos and politics rule the decision making rather than a focus on progressing buyers through the sales funnel. The cost here, besides low productivity, is employee turnover. What are your recruitment and training costs in sales and marketing?

6. Do-overs – programs are often created and never implemented because there is disagreement about what should be done and how. What is the cost of programs that never see the light of day, or what is the cost of do-overs?

7. Loss of momentum – the most effective revenue generation plans are those that have coordinated strategies and tactics where sales and marketing are pulling forward together. A dog-sled team is a good metaphor. When the dogs are running out of step or in different directions the sled is not going to progress at optimum speed.

Those areas will give you a start. I’m sure I’ve overlooked a few. Once you’ve identified the cost areas you’re ready to get out your calculator and compute what the chaos is costing you.

Give it a shot. Bring out the calculator, look at your current financial statements and budget. Don’t be shocked if the total cost is 5% or more of your total sales and marketing budget.

Think small if you like. What would a 5% improvement in any area look like? Think big. What would a 20% improvement in any area look like? What would a 5% improvement in all areas look like?

I look forward to reading your comments and sharing more on this topic soon.

Chuck Besondy is a principal at One Accord Partners and is co-author of Leadership on Demand: How Smart CEO’s Tap Interim Management to Drive Revenue. You can read more about Interim Sales and Marketing Management by Chuck Besondy at his blog The Sales Funnel Fanatic.

Photo by woodsy

The Sales Funnel Pipeline: Grow Revenue From Funnel Leaks

Interim marketing executive, Chuck Besondy, explains how to take advantage of the opportunity of leads that leak from the sales funnel pipeline. This simple sales funnel step can significantly improve sales.

I was speaking with an executive the other day who repeated the concerns of her management team that their existing market was too small to sustain their growth.

Expanding into new markets may look enticing, but there are large risks and costs associated with this strategy. As it turned out in this case I was able to show the company that their market was large enough to provide growth opportunities for the next 3 years.

A little back of the envelope math indicated a bleak picture at first. Considering the size of their available market and their current conversion metrics for demand generation they simply couldn’t reach their revenue target. They were burning through too many prospective buyers and before long every prospective customer in the market will have been contacted and perhaps even placed into their sales funnel.

Their conversion rates were respectable, too. Only incremental improvement could be expected. It was when I asked about buyer recycling (lead recycling) that the answer started to emerge.

Many marketers and salespeople put all their energies into generating leads and working to progress these buyers through the funnel. But, a percentage of buyers always leak from the funnel at every stage. If your conversion rate at one stage in the funnel is 40%, this means 60% have leaked–they haven’t progressed. For whatever reason they weren’t willing or able to move to the next stage in the funnel at that time. Later a portion of these leaked buyers will be ready to re-engage with you (if you let them).

Sadly these buyers who leak for whatever reason are frequently forgotten by marketing and sales.

The company I was speaking to wasn’t actually ignoring their leaked buyers, but had a procedure in place to follow up with leaked buyers every 6 months. Ah-ha!

Using a sales funnel calculator from MathMarketing (click for lite version of this calculator) I was able to show the company that by recycling their leaked buyers at every stage after 4 weeks rather and after 24 weeks they’d need 7,000 fewer fresh names over a three year period.

This meant the market was large enough if they could execute effective marketing and sales strategies for recycling the leaked buyers back into the funnel–certainly a much easier and less risky proposition than expanding into new markets.

This article can also be viewed at Chuck Besondy’s blog, The Sales Funnel Fanatic.

Photo by steved

How Much to Spend on Lead Generation

How much of your marketing budget should you spend on lead generation? According to marketing executive Chuck Besondy, the magic number is 42%. See the following article to find out why.

One of the first duties of an interim marketing executive starting a new engagement is to assess the marketing budget. How much is being spent on what activities and what is the expected result?

Within the marketing programs budget there should be three categories of investment: Environmental, Lead Generation and Channel Readiness. Research has shown clearly that B2B companies that invest at least 42% of their budget on Lead Generation grow revenue faster than companies in their industry that spend less than that level.

The definitions are straight-forward.

Environmental programs are for branding and letting the market know your company is in a particular category.

Lead Generation are programs that place buyers into the funnel.

Channel Readiness programs are those that make the direct and in-direct sales channel effective.

The research (1400 companies around the world) didn’t reveal any patterns in the sample for spending in the Environmental and Channel Readiness categories, but it was clear that spending too much in Environmental or Channel Readiness at the expense of Lead Generation was harmful to revenue growth.

Before making changes to a marketing budget the smart interim marketing executive will first assess for each product the stage of the market (per Geoffrey Moore), what the appropriate go-to-market strategy is for each market, and then what percentage of budget should be allocated to environmental, channel readiness, or lead generation activities to support that go-to-market strategy.

Take a look. Are you spending less than 42% of your marketing programs budget on lead generation? If so, this is probably restricting your revenue growth.

This article can also be viewed at Chuck Besondy’s blog, One Riot One Ranger.

Photo by malamantra

Interim Sales and Marketing VP: Richard Brune

I help transform companies and sales process and methodology and help with sales metrics and profit and loss. I have over 25 years of experience building and managing consumer brands and products selling to all retail channels: department stores, mass merchants, clubs, specialty stores internet and broadcast media. As a OneAccord partner I can fill a position for an emerging or SMB company as interim VP of sales or I can come along side the leadership on a project to develop the sales and revenue generating growth of an organization. The value that OneAccord brings is that we have the experience having walked in the shoes of the client. We’ve held the executive leadership positions and are willing to come into your organization to not only strategize but execute the deliverables. We are scaled nationwide so we have the resources and expertise that is needed and can work collaboratively providing our clients with a wide range of revenue focused expertise. In addition OneAccord partners tell the truth about where a company is and where it needs to go.

Richard Brune is a interim sales and marketing VP for OneAccord with a strong track record managing some of America’s most recognizable consumer brands. Mr. Brune has an unbroken record of substantial sales and market share increases with such brands as Stanley Tools, Hartmann Luggage, REI Inc., Swiss Army Brands and licensed products with Eddie Bauer and Disney. Richard has a proven ability to develop new markets and expand existing ones. He is an effective leader with the ability to build highly productive and motivated sales teams. A bottom line executive with the ability to reduce operating expenses while continuing to enjoy growth and profitability.

Richard Brune can be contacted at richard.brune@oneaccordpartners.com

Gambling With Your Marketing

by Paul Travis, Interim Marketing Executive

This post has been bubbling in my head for some time, but 2 events today broke the camel’s back…

First was my colleague, Max Clough, mentioning a client potentially dragging out an opportunity to seize a market, because of the “national (and worldwide) poker game” that we’re experiencing.

Now on the one hand, I like that phraseology better than “The Economy”. As in, “we can’t make a decision because of The Economy.”

Let’s call a spade a spade. You’re afraid you don’t know what’s going to happen and you’re not confident that your business can survive.

Why?

Because you’ve been conditioned by the media for over half a year that the sky is falling! Now to be clear, I am not saying that there haven’t been huge increases in the jobless. I’m not saying that institutions Fannie Mae and Lehman Brothers aren’t failing and having huge repercussions.

What I’m saying is that people are still putting on their pants, and driving to work, and going to the movies, and.. and.. and..

* The movie industry is up 14%.
* Fast food companies are up.
* Low priced toys/games are booming.
* Almost anything “green” is selling.

Unfortunately telling the positive side of the story isn’t as lucrative as the fear cycle: it’s really bad so come back tomorrow and we’ll tell you how much worse it got!

Now before I go off the deep end, I know you’re wondering — what was the second event?

It was this SmartBrief: 73% of marketers predict more spending.

More than seven in 10 marketers hope to boost spending three to six months before the end of the downturn, while 16% said they would increase their budgets “as soon as it ends,” according to an online survey from the Association of National Advertisers. — Adweek (05/28)

What this means is that people are conserving cash, just like banks are. Too many are just playing the “timing” game, when to put the chips back on the table. Am I upset about the 16% who said that they would come back to the table when they could afford it?

No — I look at the 73% (almost five-fold!) who hope to play “time the market”, coming back “just in time”, before everyone else knows that the situation has gotten better.

If there is anything I hope we learn/remember from this, it is that the tortoise wins the race. Not the rabbit who wastes time chowing down, then runs fast, and then relaxes some more.

Plotting business strategy, developing process, and executing against plan is worth gold!

I was saying to my kids the other day, “there comes a point in growing up that you learn you can speak up and break with the crowd when they’re doing something you know is wrong”.

At the risk of over-repeating Steven Covey’s great line: “The environment you fashion out of your thoughts, your beliefs, your ideals, and your philosophy is the only climate you will ever live in.”

So think hard next time you catch yourself uttering a pessimistic remark… Let’s all be seeking to create success!

Paul Travis is an interim marketing executive and helps companies create a screaming value proposition and accelerate sales. He can be reached at paul.travis@oneaccordpartners.com. He also blogs at Marketing 2020.

The book, Leadership on Demand is available at http://leadership-on-demand.com/.

Photo by jamadams

Best Buy CMO on the Future of Marketing

I think a company that really understands the new digital marketing landscape is Best Buy. The CMO has a blog and twitter (@bestbuycmo) where he talks and learns from customers. Greg Verdino discusses engaging consumers with digital media and how Best Buy is building credibility for social media marketing.

The importance of listening, and engaging with customers directly in an open and honest way. The growing importance of the mobile web and the ways it can empower consumers throughout the buying process. The fact that everything is going digital and what this means for the products and services companies offer. The realizations that a great customer experience is the best marketing money can’t buy, and that brands are inherently social.

Heard it all before? Of course. But somehow it sounds more credible when spoken by the CMO of a large corporation, even more so when that CMO works for a company that actually practices what he preaches.

Check out this video of Best Buy CMO Barry Judge, talking about the future of marketing. Judge offers a nice overview of how Best Buy’s marketing approach has evolved from old school tell-n-sell, where it is now, and where it’s headed tomorrow.

This article was originally posted at Greg Verdino’s Blog, and is licensed under the Creative Commons 3.0 license.

Become an Exceptional Marketing Organization in 9 Simple Steps

by Scott Philips, Interim Management Executive, OneAccord

We frequently hear the statement ‘what was successful last year isn’t working anymore, so what can we do to find the magic again?’ There really is no easy answer, but there is a process that will enable you to find success with your marketing initiatives.

1. Analyze the market
The better you know your industry, your customers, your competitors and yourself, the better you will make good decisions that give you leverage in your marketplace.

Some of the basics include knowing your S.W.O.T. – Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses are internal to your organization and Opportunities and Threats are external to your organization. Find places and ways to leverage strengths and to minimize weaknesses.

Another key is understanding where you earn your the greatest profits, as a percentage and in total dollars.

2.Target the best prospects
You have hundreds if not thousands of different target options for finding new prospects. The most important step in finding the right prospects is to ask the question ‘Which prospects are easy to acquire, difficult to steal, provide significant margins, in sufficient quantities and that will be loyal to you over the long run?’ These are your best prospects. And, they really do exist.

Identify them by industry segment, size, commodity, geographic region and any other means to clarify where you will spend your sales time and effort. For example, one of our transportation clients targets the shipping of eggs throughout the mid-west. They have found a market where they can be highly targeted, very profitable and in a space where they can be ‘the best’. And, their results are exceptional.

3. Focus your strategies for best leverage
The three key strategies commonly identified are a) market focus, b) pricing and c) differentiation. Unless you are the very biggest of companies where economies allow you to dramatically lower your operating costs, we recommend focusing on specific markets (market focus) or differentiation as your primary strategy.

Make your company strategy to be your defining mark and match your special capabilities to those prospective companies most needing those capabilities. Maybe you are ‘experts’ at designing special engineered solutions for your customers, concentrate on making that be the focus of your business.

4.Match the marketing elements to your strategy
Most everyone has heard of the four P’s of Marketing – Product/Service, Price, Place and Promotion. We don’t have space to go into detail here, but suffice it to say that these four marketing elements need to be consistent with your overall marketing strategy. If you are following a differentiation strategy then your marketing elements must match that strategy.

5.Develop a Unique Selling Proposition
This fifth step is simply developing a more refined definition of your primary strategy. The Unique Selling Proposition is the identification of one or two key things that make your company stand out in your customers’ minds. What makes you ‘unique’ to your targeted prospects? Examples of these include things like exceptional communications, simplified ordering process, ability to deliver products more quickly, or any number of other ‘special’ or ‘unique’ capabilities.

One key thing to note, your Unique Selling Proposition must be something your prospects really want from you. If not, they will look right past you to someone else.

Once identified, make sure that everything you do supports your unique selling proposition and let everyone you serve know what it is.

6.Create actions to deliver results
The next step is to list key initiatives and actions you need to take to make your marketing initiatives work for you. For example, maybe you need to review your pricing to see if your ‘extra services’ justify a price increase. The key to successful marketing is clearly identifying those actions that enhance your impact with customers.

7. Execute your plans relentlessly
The saying ‘a mediocre plan executed relentlessly will always outperform a perfect plan imperfectly implemented’ is absolutely true. More times than not, we find one of the key differences between a good company and a great company lies in their ability to execute on their plans.

8. Evaluate results
If you have executed your plans well, it is time to measure your progress. Evaluation of results is imperative if you are to improve. And, don’t just look at the numbers, also look at qualitative results. Talk to customers, vendors, prospects and even employees to see how well your plans are working with them. They will tell you.

9.Make adjustments to your plans
Finally, don’t just sit on your successes. Continue to refine and adjust your plans and actions in a continuous effort of improvement. The marketplace is in constant flux which means that today’s solutions won’t necessarily work tomorrow. Keeping a constant vigilance on your customer reactions and your competitor adjustments will help you win in the face of competition.

Nine simple steps will make all the difference in being an exceptional marketing organization with a consistent flow of new customers.

Interim management executive, Scott Philips, is a C-level executive based in Portland with over 30 years of diversified experience in enterprise wide leadership. He is recognized as an action-oriented leader with strengths in strategic management, business assessments, global brand building, business development and enterprise selling. Scott’s experience in analyzing market data, developing solutions and effectively executing plans have resulted in significant revenue growth in a number of companies in a wide variety of industries. He can be reached at 503.913.2705 or scott.philips(at)oneaccordpartners.com

Photo by Yourdon

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