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- It takes a minimum of 16 weeks to launch a new product successfully.
- Creating product configurations that focused on increasing reseller margins matter most.
- Cut the technical arrogance and sell more.
- Only the passionate leaders need apply. For change to be lasting, leaders must be passionate. Now is not the time to have apathetic leaders in charge, find a passionate champion of change.
- Nurture ownership to the process level with channel partners’ key employees and your own. Be sure to concentrate on giving those most impacted by the change a chance to re-define their jobs so they still “own” it. The worst practice is that many multichannel management strategies are rolled out assuming everyone will see the immediate benefits, when nothing could be further than the truth.
- Measure and Celebrate Even Small Improvements and advances to shared goals. Too often analytics are used to enforce control in channel management strategies; make them a reason to celebrate even small advances toward goals to reinforce positive change. Use metrics to motivate and inspire.
- Customers who rely on multiple channels are 70% more likely to purchase from dealers, or in the case of retailers, their stores and 110% more likely to purchase from a retailers’ catalog. The IBM study Integrated Multi-Channel Retailing (IMCR): A Roadmap to the Future quantifies how cross-channel shoppers are catalysts of increased sales growth over time.
- Cross-channel shoppers are the heavy spenders online, catalogs and in stores. Studies by AMR Research, DoubleClick and many others all support the fact that cross-channel shoppers consistently spend 50 percent or more than a single channel shopper. Another study showed that cross-channel shoppers spend 70% more than those that rely on just a single channel.
- The long-term effects of being more optimally aligned with cross-channel shoppers’ needs are most evident in the area of loyalty. Studies from McKinsey & Company state that only 15% of loyalty is gained from perceived product quality and promotional strategies, leaving 85% to the actual purchasing and post-sales purchasing experiences of customers.
- Cross-shopping consumables lead to selling workgroup printers for one printer manufacturer. Based on positive experiences with cross-channel shopping in consumables, one printer manufacturer is finding repeat printer customers now routinely purchase replacement printers online, and only visit channel partners to see the larger, more expensive workgroup models.
- Starbucks is a leader in this area with two popular social networking initiatives including MyStarBucksIdea.com and their very active participation on Twitter with @starbucks. Based on the data they have, they can easily define their value curve and takes steps to create more of an optimal mix for enabling cross-channel shopping.
- Dell has embraced Twitter and has the potential to understand how they could chart the feedback they are getting to define the value curve for their multi-channel efforts. You can find the Social brand Index compiled by Jonathan Kash on his blog Fluent Simplicity and a listing of Dell employees and departments on Twitter there as well.
- “Direction Sign” photo courtesy of Ivan Blague
- “Open Sign” photo courtesy of Mayhaps
- “Complexity” photo (#9 best practice) courtesy of iPlog
Making Sales Collateral and Lead Generation Stronger: Lessons Learned from Social Networking
February 26th, 2010Social networks are re-writing the rules of what best practices in marketing are. Listening is in, shouting is out. Targeting is in; carpet bombing via e-mail is out.
Responsiveness is the new black and trust is the new currency.
Brands are laid bare in front of millions daily. It doesn’t take long for just one customer to make a major statement about how they feel about a brand and make a major impact on sales too. Using Facebook, Twitter, Friendfeed, blogs or YouTube, customers can make their voice heard immediately. United Airlines’ wake-up call last year is a case in point as is the recent controversy Southwest Airlines faced.
So Many Social Networks and So Little Time
With so many powerful social networking platforms, applications and tools available why are marketers still not getting to their lead generation and sales goals?
Why do companies who have such a strong passion for their customers lose their way to delivering exceptional experiences?
Why does their sales collateral promise so much and at times fail to deliver?
Because product marketing, product management and marketing teams fall into the trap of believing you have to inundate the prospect with features, in-depth data and tons of documents to prove you know what you’re doing. Carpet bombing prospect’s in-boxes with e-mails to send the message you know what you are doing is ironically proving fatal.
Why? Because you and I respect people so much more when they listen to us and talk with us instead of talking at us. Too much technology marketing, specifically in software, talks at the prospect, instead of with them. That is the heart of the potential of social networks – to engage and talk with prospects instead of at them. And it takes hard work to make relationships count. You can’t earn sales through a deluge of content; it has to come from being genuinely interested in helping a prospect over a major problem.
The First Step: Find the Passion of your Company
There are dozens of excellent software applications out there for managing lead generation and follow-up but unless it reflects the soul – the passion of a company – it is meaningless. What makes all these lead generation apps really work? It amplifies, projects, makes more visible the passion a company has for owning a problem prospects and customers have.
No software application can compensate for a company that has not decided what it is passionate about.
But for those companies who have chosen a mission – a vision of what problem they will own for any prospect or customer – then lead generation becomes real for them. Companies struggling to produce leads may not have a software problem; they may have a passion problem. Defining that passion for service will go a long way to finding good leads, not those captured through attrition from lists. How much more powerful passion is for solving a problem over just endlessly listing off features and data. Passion puts all that intelligence into motion and makes it relevant.
Lessons Learned
Social networks and the customer immediacy they provide make it imperative that marketing focus on what they have a passion for and what a company can deliver in terms of products and services. From that vantage point consider these lessons learned:
Sales collateral, both in-print and online, must have a very clear customer it is aimed at. Surprisingly so much is produced aimed at the “enterprise buyer of IT solutions”. I have never met anyone who called themselves that. Get real and if you can’t define the customer, consider cancelling the collateral.
Urgency to own the customer’s pain now and provide a proven solution. Marketers who are making social networks generate leads get this and get their company’s passion for owning the problem out loud and clear. Features matrices don’t come close; re-think that strategy and go own a problem to gain leads and sales.
What is the collateral’s goal and how does it fit into the marketing strategy? An excellent question to ask when there are many, many open projects in a marketing department and there seems to be little shared messaging. Collateral, both online and offline needs to resonate the passion a company has to serve. It has to be so strong that there is no doubt your company intends to be the global leader in solving the problems and pains you target.
Answers the question of how your products and services are different and proven. Differentiating at the benefits level, not at the speeds and feeds or features level is critical. What odes your company’s passion make it especially good at? That is the most powerful differentiator there is.
Does your collateral teach or preach?
Go after teaching, and share your insight and intelligence freely as a company to gain thought leadership over time. Your company will get what it gives when it comes to sharing insight, intelligence and knowledge. Blog regularly. Give away insights from studies free. Be open. All of these tie back to a passion to own a customers’ problem.
Is your collateral evangelist-compatible?
Consider that if you are selling a complex system or service that your sales cycles often involve dozens of people in a variety of roles.
Is your collateral designed to make it easy for those championing you inside a company to carry forward what makes you unique?
Can the online collateral move quickly through social networks?
These are all relevant questions to this point and to evaluate your collateral on.
Design to Inspire and Educate.
The simplicity and clean layouts of social networks are the result of years of usability testing in some cases. Make sure your offline and online collateral reflects these design criteria.
Bottom line:
Social networks are making companies confront what they really stand for and what they are the most passionate about. It’s best to start thinking about these issues and make your collateral all coordinate to what your company truly stands for. Owning a problem and being passionate about it will generate far more leads than any other strategy.
The Truth … It Works: Customers Expect a Perfect Order
February 7th, 2010
In the face of economic uncertainty, the inherently unquantifiable areas of a company get a higher level of attention than ever before. The center of attention for many companies today is the integration of marketing strategies and programs to supply chain planning, management and optimization. The extent to which marketing and supply chain management teams are synchronizing their plans together is directly proportional to the ROI both attain together to create a customer-driven supply chain. This has to go beyond Collaborative Forecasting Planning and Replenishment (CPFR) and encompass supply chain management as part of the New Product Development and Introduction (NPDI) process. Companies that take this approach and define dashboards and scorecards that get beyond just measuring their own activity and contributions to measure accuracy, speed and permanency of change they bring to each other through collaboration is what is of the greatest value.
Why Being Demand-Driven Matters More Than Ever
The Perfect Order as a Barometer of Customer Expectations
The Perfect Order Index (POI) is one metric that captures the effects of collaboration on supply chain execution and fulfillment. What’s needed are links to the four main components of the POI that measure how effective demand generation strategies are in general and marketing specifically are in ensuring on-time, complete, damage-free orders that have been accurately invoiced. At first glance, many would argue these four metrics that comprise the POI (on-time delivery percentage) x (percentage of orders shipped complete) x (damage-free order percentage) x (accurate invoicing) are only relevant within supply chains.
Defining the Perfect Order Index
In fact, all forms of demand generation strategies have a direct effect on these measures, because the initial market direction and expectations created by a company through its marketing and selling strategies define, in the customers’ mind, what the minimum level of performance of each of these measures are. Perceptions don’t lend themselves well to the metrics that drive POI calculations, yet they are just as if not more powerful.
Consider the launch of the Apple iPhone to see how the perception of perfect-order performance impacts the calculation of the POI for a new product that relies on a significantly different supply chain. Apple and its intensely loyal customer base have very high expectations of any new product being intuitively designed, cool in ergonomics and navigation and most of all, integrated. Apple has created this expectation over the years of having their products come out of the box and work immediately, and must have PhDs in the fields of ergonomics and user design on staff who study the out-of-box experience customers have with these products. All of these factors together set the POI bar very high for Apple, and having demand generation an integral part of supply chain planning, management and fulfillment was critical for the launch of the product.
Customers don’t think in terms of POI scores obviously, but they definitely can, given the chance, quantify their expectations of a company’s performance. At the intersection of customer expectations, demand generation strategies that create expectations, and supply chains and fulfillment delivering on them, is the customer’s perception of performance. All three-demand generation, supply chain performance, fulfillment and customers’ expectations-are interlinked. Given the pervasive adoption of Web 2.0 technologies, it’s possible to overlap POI data on a per-product basis to customers’ attitudinal scores, creating a barometer of how effectively a company is meeting or exceeding their customers’ expectations. In the vernacular of Web 2.0, this would be called a mash-up, combining structured financial data with unstructured attitudinal data captured through surveys or through comments from customers analyzed through text mining for example. Forward-thinking companies could actual trend line this and see the effects of bringing supply chain planning, management and fulfillment into the New Product Development and Introduction (NPDI) process over time. The goal of having a measurement of how collaboration and synchronization between demand-generation strategies and supply-chain performance would be achieved. Taking this one step further, publishing these measures of performance for customers to see would bring entirely new levels of accountability and collaboration into any company’s daily culture and no doubt bring collaborative efforts to the forefront of any project.
Driving Up Lifetime Customer Value in Tough Economic Times
The saying, “no one ever cost-reduced their way to market leadership,” takes on entirely new meaning given the current economic uncertainty that leads many companies to cut back on investments in integration demand generation and supply chains, production and fulfillment with each other. Arguably the level of sales a company attains is driven by the continual meeting and exceeding of customers’ expectations, and the cycle of supply chain and demand generation being synchronized is essential for a company to continue to grow. Since customers’ expectations are the future of any company, it’s critical to keep demand generation and supply chain, production and fulfillment integrated together. It’s extremely difficult, however, for companies in the middle of tough economic times to look at becoming demand-driven, or be committed to staying on the path to its fulfillment. Costs of integrating demand-driven strategies, including marketing programs to supply chain planning and production to fulfillment that together increase a company’s ability to attain higher POI levels, seem like a much lower priority versus pursuing aggressive cost-cutting. Measuring the Total Cost of Ownership (TCO) for supply chains that don’t invest in becoming demand-driven is like only measuring half of the factors that go into calculating perfect order performance. It simply does not make sense and is short-term as a result. Reduce the cost for any series of systems and processes long enough, and there will be a positive ROI and low TCO. Yet the far greater and quantifiable gains of exceeding customers’ expectations through exceptional performance have a far greater financial impact. When the ability to consistently meet or exceed customers’ expectations are taken into account as part of perfect order performance, ROI and TCO of demand-driven supply chains shift from cost reduction to top-line revenue growth. Instead of worrying about the pennies saved by not connecting one process or system to another, the concern needs to be on how to make more dollars using demand generation and fuel new business growth.
Taking Steps on the Demand-Driven Journey
With so much pressure within companies to reduce costs, it’s important to get started on a pilot project that quickly shows the positive impact of making supply chain planning and management more demand-driven. Product introductions, product-line extensions, the launch of a new service, channel management strategy or on-boarding a new channel partner all are events companies have used to rationalize making investments in being demand-driven. For manufacturers of complex products that have build-to-order strategies, being demand-driven is a necessity. Of all selling strategies, built-to-order most influences the POI score of a manufacturer because it directly influences both the percentage of Shipped Complete orders and the percentage that are shipped Damage Free. Optimizing order-capture systems to make sure a customized order is taken right the first time not only saves the time of production planners, it may surpass customers’ expectations as well. One truck manufacturer known globally for its customized industrial truck designs takes on average seven iterations of an order to get it accurately entered. It’s doubtful the customer expects several phone calls to get the order right, yet it’s a certainty they expect the truck to be configured to their requirements and delivered on the date promised on the quote. This example sets the foundation for the steps needed in making the demand- driven journey:
1. Get outside your company and see how your supply chain is changing customers’ expectations. It’s too easy to sit back and get complacent in a company and not notice how supply chains are out of sync with all aspects of being demand-driven, from the initial expectations of customers to fulfilling customized product orders. Get outside your company and experience how it sets expectations, and monitor how they fulfill them or not. There are many ways of doing this, but don’t outsource it to a research firm. Get out and experience it firsthand to see if customers’ expectations are getting fulfilled or not. The bottom line of this exercise is seeing whether or all of the expectations demand-driven strategies create are actually being fulfilled through supply chain, manufacturing and fulfillment integration. It’s a good idea to get a sense of your POI score at this point to see improvements over time as well to perfect order performance.
2. Take the lessons learned and start integrating people, processes and systems together to make supply chain planning and management more demand-driven. Get customer-facing processes-including order capture, quoting and pricing-and with channel partners or retailers, forecasting, integrated back to supply chain planning and management. Redefine processes as part of a pilot in this phase, and measure the impact on the specific area’s POI score. This is a great way to see how changing customer-facing processes impacts perfect order performance.
3. Take the lessons learned from the pilot and define a plan for integrating all customer-facing processes to supply chain planning and management systems. There are many aspects of this last step, the greatest being to get people to change how they do their jobs today in the demand-generation, supply chain planning, management, manufacturing, fulfillment and services areas of the company. There’s also the need to look at how to bridge the gap between demand-driven initiatives and strategies and supply chain planning, management and production. The Cincom Acquire Enterprise Sales Portal has been specifically designed to enable manufacturers to bridge the gap between demand generation strategies and supply chain, manufacturing, fulfillment and service operations areas.
3. Individual Responsibility and Accountability
The perfect order isn’t just for supply chains anymore. When one considers the impact it has on customer expectations and as a barometer of how well a company is fulfilling those expectations, it forces the issue of how demand-driven a supply chain really is. Since customers’ expectations are any company’s future, it’s also important to not try to cost reduce operations so that high ROI measures are achieved at the expense of being able to fulfill orders accurately, completely, on time with no damage. Creating pilot projects to see how becoming demand-driven in just a single area impacts perfect-order performance is the approach many companies are taking, gradually expanding into all customer-facing channels and processes over time. Even in tough economic times, investing in demand-driven has the potential of bringing in top-line revenue growth and permanently changing a company’s ability to compete for new business.
Complex Selling Cycles and Basketball: Both Need Values to Succeed:
February 5th, 2010Lessons from Coach John Wooden
Recently Cincom Founder and CEO Tim Nies published an article titled “Rhythm and Tempo Must Be Orchestrated by the Maestro.” He draws the parallels to Maestros controlling the rhythm, metre and tempo of a symphonic performance to that of an excellent selling professional who seeks to excel at value-based selling in complex selling cycles. He points out that for sales cycles to be successful, each person and department contributing to their success needs to be synchronized with each other. Knowing when to jump at an opportunity with total intensity and passion versus when to pull back and use time wisely is a key point of the article.
His many points made me stop and think of the best examples of leaders controlling the rhythm, metre and pace of their teams to their goals. Coach John Wooden of UCLA immediately came to mind.
With a career record of 664-162 (.804), 10 NCAA National Championships, 13 trips to the Final Four and a member of the inaugural class of inductees for the College Basketball Hall of Fame in 2006, Coach Wooden exemplifies what being a Maestro is all about.
No other collegiate coach has won this many national champions in the history of NCAA basketball. Consider the players he orchestrated through their collegiate careers, including Bill Walton, Gail Goodrich, Kareem Abdul-Jabbar, Kevin Grevey and many others.
Complex Selling Cycles and Basketball Seasons: Both Need Values to Succeed
Sales professionals who sell on value are a lot like Coach Wooden. They orchestrate their teams to align with the most urgent needs of prospects, capitalize on opportunities to excel and compete more often against themselves than letting a sales cycle degenerate into a price war. When entire companies choose to sell on value, just as when entire basketball programs do, they improve over a season. The same dynamic happens in complex selling cycles. Being more focused on using time competitively is what also differentiates winning sales cycles and winning basketball teams.
Respect and value for time must anchor any long-term selling effort, the same way a coach will look to the hours invested in practice to make their team the strongest, fastest, and smartest it can be. Being a Maestro or coach also requires that a new perception of time be communicated to everyone involved in a sales cycle or team, and it is this: competitive strength comes from how time is used and invested, not in the size or financial might of a competitor. Coach Wooden could attest to this.
Managing Time Is the Greatest Competitive Strength
UCLA’s first national championship under Coach Wooden came 1964 against Duke, a basketball powerhouse and a financially stronger school than UCLA at the time. Coach Wooden came into that national championship with a perfect 30-0 record. How? From exceptional recruiting? UCLA was relatively unknown for basketball to this point. Exceptional alumni donations? The UCLA basketball budget in 1964 was less than many pay for a new car in 2010. It was valuing time and making the most of it, time used well was the great equalizer, the competitive strength UCLA used to win their first national championship and nine more.
Just as any sales professional knows who has managed and won complex selling cycles, the competitor who manages their time the most effectively has a greater chance of winning. Everyone competing in a complex sales cycles has to wake up every day and resolve to be more efficient, more focused, stronger with solutions for the prospect than their competitor – and when this mindset is achieved complex selling cycles are won.
Seeing Time as a Competitive Asset First, Constraint Second
A great coach can control the rhythm, metre and pace of a game their team is competing in. The same holds true for sales professionals who sell on value when they are managing complex selling cycles. A common trait both have – and it is essential to control rhythm, metre and pace – is seeing time not in fear but as a competitive strength to be gained by using it well. Coach Wooden at times quoted verses to his players including Ecclesiastes 9:11, The race is not to the swift or the battle to the strong, nor does food come to the wise or wealth to the brilliant or favor to the learned; but time and chance happen to them all. In other words, everyone has the same amount of time; it’s up to each of us – selling or supporting the selling cycle – how we’re going to use it.
Wooden’s Competitive Secret: Strong Values Lead to Championships
Just as a Maestro conducts a symphony comprised of widely varying instruments, so too a sales professional orchestrates selling teams that each have their unique strengths used in the service of customers. What unifies an orchestra or symphony and the highest performing sales teams are their shared values.
Coach John Wooden began work on the Wooden Pyramid of Success, shown below and downloadable in PDF format here, over his years of coaching first at Indiana State and through the years at UCLA. Take a moment and read over the Pyramid of Success and reflect on the highest performing sales teams you’ve ever worked with. If your experiences are like mine, you can readily attest to a very large overlap. The best salespeople who sell on value are teachers; they genuinely love to serve their customers. Indeed some see it as a calling to be of service to customers and have a passion for it. Best of all, the Wooden Pyramid of Success succinctly communicates what great teams exemplify and that is a selflessness of service and a willingness to give complete intensity and focus to winning.
Click to enlarge image
Bottom line:
Complex selling cycles are as long or longer than a basketball season.
Anchoring the coordinated efforts of teams in shared values and treating time not with fear but with an opportunistic mindset makes all the difference. From the Maestro who delivers an excellent performance to Coach Wooden winning 10 NCAA National Championships, to the sales professionals who sell on value and orchestrate their teams to winning new business, all must be anchored in solid, strong values to succeed.
What Guided Selling Strategies Can Learn From Social Networking
January 22nd, 2010
Flickr photo courtesy of Brian Solis
How to Build a Product Nobody Wants
November 22nd, 2009
How to Make Every Dollar Count in Your Channel Management Strategies
October 26th, 2009
Doing more with less is the new mantra.
Walk through any marketing, sales, channel management or customer services office and you’ll see the results of how companies strive to get more accomplished with less. From the packed wall calendars of projects and programs to Outlook calendars of sales and channel reps working as hard as they can to keep resellers productive and profitable, there’s definitely a new intensity alive.
Quotas are up and budgets are down, and channel programs are often caught in the middle. Instead of seeing this as an excuse the best companies view it as a crucible that tests their true skills of making channel programs work.
PARTNERSHIPS: PRODUCE OR BE GONE
The days of trading logos and partnerships that don’t produce a dime in revenue are over. In their place, this new intensity of selling and true partnerships is all about getting real results, not pumped up measures of meetings, conference calls or sales calls that don’t deliver results.
THE SUCCESSFUL ARE DIFFERENT: THEWY ONLY REWARD RESULTS
Whether it is as simple as a marketing campaign to as complex as a new product introduction, companies getting results today are doing several things differently than the rest.
Instead of being lulled into a false sense of security, these top performing companies only track metrics that lead to results. One distributor of high-tech electronics has a real-time dashboard of channel sales reps and the percentage of calls that lead to a sale, average sales size, time of call, gross margin contribution (dollars and %), and call frequency of account. This helps channel managers to see trending in profitability throughout the month and they know at any point in time where they are against their quota.
EMBRACE COMPETITION
Embrace competition and nurture it to get the best from your channels. One manufacturer of networking components uses their Partner Intranet site to post the daily results of sales on the hottest-selling products in units (as pricing is confidential across their partner base). This has lead to exceptional levels of competition. Sales reps, being the introverts they are, like to attach their names to the deals that push them ahead of other resellers. This is part of the new intensity that is out there.
PRICING: HOW TO TO KILL YOUR COMPANY
Realizing pricing is the last weapon of choice to win deals but the best one to automate. Tempting as it may be when sales activity hits a wall, dropping price can kill your company. From the simulations I’ve participated in and run for my graduate students in an MBA program I teach in, without exception every semester a team will decide to becoming the low price leader with no investment in lean manufacturing, supply chain or aggressive R&D. They purely go after price. Result: the longest one team last was seven quarters and they were out of business. Instead consider how Epson, Seagate, and others in high tech, and how Putnam Investments, TR Rowe Price and Fidelity manage financial services transactions. Both of these industries rely on price exception management and in the case of Seagate, they have an exceptional special pricing request process. Managing pricing intelligently and aggressively is key to making every channel management dollar count.
SALES PROGRAMS ARE THE NEW KING OF MARKETING SPEND
Of the manufacturers spoken with including those producing and selling home networking, components and computer systems products, many are diverting their advertising dollars into sales for recruitment, sales effectiveness and sales tools. This is easy to track the ROI of and many manufacturers are using a phased “pay as you go” approach to make sure the dollars invested pay off. Sales is the new king of marketing spend now, and advertising spend is way down as a result.
ONLINE AND SOCIAL NETWORK SPEND DOUBLING
Online media and social network spend is doubling in many manufacturers. A VP of Channel Programs with a local manufacturer of networking products told me that online media and social networks received a 34% increase in budget while spending on print media was completely cut. He explained that they get more sales leads from Facebook and Twitter and they can track it more effectively than they ever got from print media.
The catalyst of this new selling intensity in channels is all about doing whatever it takes to save existing customers. When I asked a student of mine, who is a Sales & Marketing VP for a local manufacturer what the top priority was in this area, specifically going after new accounts of saving existing ones, he told me they dedicate nearly 40% of their marketing budget to attracting existing customers to existing products. “It is the heart of our retrench strategy” he said in class last week. Sales get a bonus multiplier for getting an existing customer to source three new product lines, he said.
BONUSES=HAPPY CUSTOMERS
Bonuses only get paid when customers are delighted and show it in survey results. One services company that specializes in CRM implementations and outsourcing business process improvement projects only pays their consultants if the customer satisfaction surveys come back with a 95% score or higher. With work done in New York, Los Angeles, Atlanta, Bangalore, and Chennai this metric has made global collaboration work. It has brought intensity to the process of making the customers’ problems their own. The result is that this small outsourcer who has revenues just over $100 million has over 70 referenceable clients.
BOTTOM LINE:
Making every dollar count in your channel management strategies has to be anchored in nothing but results, and there must be an intensity to achieve despite higher quotas and shrinking budgets. Looking at these constraints as a crucible and not a crutch pervades those companies getting to their channel selling goals.
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Flickr attribution
Money: http://www.flickr.com/photos/79434558@N00/751221191/
Gold bars: http://www.flickr.com/photos/curtisperry/56998544/sizes/m/
How to Make New Product Introductions Pay with Product Configuration
October 4th, 2009
Photo courtesy of Mike Beauchamp
In this recession, product introductions are the lifeblood many companies are relying on for future revenue.
It’s the single biggest sales-producing event that many of them have.
Getting it right requires an inordinate amount of coordination, communication, and planning from a product transition standpoint.
As a member of a study team that was funded by a Japanese electronics manufacturer with McKinsey & Company several excellent take-aways emerged on how re-defining built-to-order strategies online can increase the likelihood of success of the launch of entire new products and product line extensions.
KEY TAKEWAYS
An aggressive timeline for new product introductions like this assumes that a senior manager, in the case of this Japanese manufacturer, their General Manager, take the lead and prioritize work across the entire division. This served to remove many of the roadblocks to getting the launch done. It also did something far more valuable: it started changing the culture of the division to see the launch process not as a long, drawn-out cross-functional effort but more of a quickly and aggressively completed distribution strategy against competitors trying to take their market share.
Everyone likes to talk about mass customization at the consumer level, yet this product launch used these powerful principles to create a stronger reseller base. This Japanese manufacturer had done their homework, spending hours of face-time with both large and small resellers to understand how to use the combination of product catalogs, product configuration, pricing and service offerings online to actually strengthen their channels. In the battle for reseller mindshare, this was a strategic weapon that worked.
At the time of the study less than 10% of the entire reseller base was using the online product configurator. During one of many conference calls to understand why the adoption rate was so low one reseller said “get product configurators out of the ivory tower and do what you did with catalogs – make it intuitive!” The other resellers agreed that the navigation in the product configurators were way too complex – and when they asked for assistance they were told how it worked, not how to use it. Frustrated, they had given up. The entire graphical interface needed to be re-defined. The project manager for product configuration was then turned over to Sales, not IT, and adoption, over time improved. Serving the channel with product configuration mattered more than telling them how technically awesome it was.
BOTTOM LINE:
In this recession every product launch counts. Get online catalogs, pricing, product configuration all aligned to your channels’ needs way beforehand and let them own it.
Social Networking’s Credibility Gap – Some Hard Questions
October 4th, 2009EUPHORIA vs. ACTUALITY
Photo courtesy of Oberazi
Much praise has been heaped on social networks for their ability to streamline customer connections, making it possible to hear the voice of customers much clearer, and serve as a means for everyone from CIOs and CEOs to interns to better listen to customers. Read the rest of this entry “
The Impact of Web 2.0 on Product Mass Customization and Configuration?
September 10th, 2009
Quit Paying Lip Service to Quality – Four Ways to Make it a Passion!
September 8th, 2009
There’s much irony in the fact that many engineering-driven organizations have a pronounced lack of commitment to making quality a lasting competitive advantage. The fact is that engineering dominates the product development and introduction processes, yet quality management becomes the orphaned process, with often no champion. Yet quality is the footprint a product leaves in the market, it is the first and lasting impression that an entire company leaves in the market.
With so much at stake with a product’s first impression and the statement it makes of what a company stands for, the paradox of quality management not being aggressively pursued is a fascinating one. Companies who nail this process and get it that their products are in fact their reputation have engrained quality deep into their companies.
To change cultures take leaders who are willing to bet it all and push people, process and products into an entirely new zone of performance and accountability that is painful at first but gives these bold organizations a renewed strength to survive. It’s more than just putting up SPC charts or looking at non-conformance/corrective action processes, it’s about finding the passion in your organization to change.
The following top ways of turning quality into a competitive weapon are meant to get you thinking about why letting this strategy be only done half-way right is worth re-examining.
1. Find a passion for quality any way you can and get someone at the C-level to own it.
Let’s face it; the only change that sticks in any organization comes from the top down. Don’t wait for a “Mattel moment” where the toy maker first blames China for its quality problems and then admits it was their own lack of processes around quality and sourcing that caused a massive series of recalls. China’s trade ministries asked for an apology and got it, yet the message was clear to any parent with kids in Mattel’s target markets: Mattel products aren’t nearly as trustworthy as they once were, and this is supported by survey after survey. Averting a melt-down is one motivation but considering the upside is far more valuable; having your quality management act together when a competitor stumbles could lead to one of your best quarters ever.
2. Leave behind marketing exaggeration and make your product’s quality real.
It’s time to quit turning a blind eye to quality management and decide that if your company is ever going to stand a chance of turning customers into raving fans it must start with product and process quality; get over using marketing to exaggerate your products and their benefits. Really deliver what you promise and then some, and that is the path to lifetime customer loyalty. If you don’t your competitors will and it must start with quality.
3. Listen to customers’ complaints like you’d listen to a focus group or advisory council.
There’s a perception in some companies that quality is a necessary cost, yet there are enlightened market leaders that concentrate on tracking complaints and getting them routed throughout their organizations to influence both product designs, product marketing, service, even channel management. Complaints are the urgent voices of your customers that need to be gathered with the same precision and focus as surveys; think of using a complaint management system to capture these and look for trends and analyze them for how to improve. Think of complaints as the advisory council your organization may have never pulled the trigger on due to costs or cultural biases or just plain inertia.
4. Certify that learning is really happening to keep quality levels up and set high goals consistently to make knowledge a core value.
It is amazing to see how many companies get their machine operators into a room, throw a DVD in the presentation system, serve pizza and then do the certification exams for their equipment and processes. This is such a waste of time. Instead there needs to be a thorough training program developed with certified instructors who have a passion for teaching and ones that welcome being measured both from their students’ learning results and also from students’ satisfaction. Make training count and make the pursuit of knowledge of new techniques with machining systems, quality management techniques, programs and concepts a critical part of your company culture. Going through the motions of certifications is worthless and will eventually come out right in front of your customers with shoddy product quality.
Thanks to social networking, consumer-generated media sites including blogs, the world is a much more transparent place than ever before. Customers are getting so much smarter, so much faster, that there is no choice but to make products and services really deliver what they promise. The shortest path to that goal is making quality a passion, not just an afterthought, in your company.
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Flickr photo courtesy of SerenaDraws
Best Channel Partner Practices: How to Exceed Customer Expectations:
August 21st, 2009NO ONE MAKES IT ALONE ANYMORE
The myth of being able to grow a product, division or entire company without first enriching others is gone.
The truth is that only by overbalancing the scales of service to channel partners including distributors, dealers and resellers can a company hope to keep growing. This article concentrates on those best practices that give companies the competitive edge when it comes to managing their multiple channels efficiently, profitably and with a perspective that goes beyond just the next quarters’ financial results.
Best practices in multichannel management has a lot more to do with designing trust and shared risk into each process, system and role first. Add in the impact of social networking and the lightning-quick proliferation of information through Twitter, FriendFeed, Facebook and other social networking platforms and channel relationships aren’t just ruled by Market Development Funds or incentives anymore – they are dominated by trust.
Best Practice 1: Kill Hype Before it Kills Your Channel Programs
Earning the chance to compete using the new currency – trust – is so much more important than just relying on hype or difficult-to-understand and implement channel programs.
The days of hyping yourself and your company, measuring how many PowerPoint decks and PDFs you blast out to the world are gone.
Hype is worst practices in channel management!
To hype yourself in the brave new world of social networking is to kill credibility too. Better to seek how to serve your channels partners, customers, suppliers and prospects with insights of how to solve problems – not tell them how great your company or you are. You only become great by how many problems you solve.
Best Practice #2: Trust Is More Important In Managing Channels than Margin
Creating trust with channel partners and setting a solid foundation for shared risks and rewards is critical.
Consider the competitors you know about and then stop and think about they ones you may not have run into yet in sales cycles, in distributor, reseller or dealer visits, or Google searches of your products or services. Your channel partners know them even if you don’t.
So what keeps your channel loyal?
Trust, transparency, and your ability to get them to your financial goals is all that matters.
Best Practice #3: Make Your Channels’ Complex Problems Your Own
Anyone who has ever done a new product introduction, pricing strategy change, discontinued an obsolete product , or had to face a product retrofit or recall realizes how intricate, complex and challenging it is to make these strategies work in a multichannel environment. For G.E. for example, their specific systems in the Lighting Division concentrate on pricing accuracy and support for price exceptions. For ViewSonic, the issues are inventory balancing of their flat screen monitors, and for Ingram Micro, the need for Vendor Managed Inventory (VMI) with their approximately 3,800 suppliers who form the basis of their core inventory positions. For Greenheck Fan, the challenge is taking one-of-a-kind customer orders and transforming them quickly into Bill of Materials their manufacturing systems can build.
What do all these examples have in common is that they show how any company using multichannel management strategies has to take on the most perplexing and challenging problems if they are to do what matters most – and that is help their channel partners grow.
Best Practice #4: Share Strategies, Results and Direction with Channel Partners Often
Getting people to change spells the difference between success or failure of any multichannel management program. Sharing strategies, results and future direction is crucial if any change is to be lasting.
To be clear, you can’t buy your way into best practices of channel management, it’s got to be a shared vision of what needs to be accomplished between your channel partners and your company.
Making change is dependent on how clear your direction is with channel partners. The most elusive of best practices yet the most essential, getting buy-in from channel partners is crucial. How are companies attaining this most difficult aspect of best practices? By taking these following steps:
Best Practice #5: Simplify Integration to Your Manufacturing and Fulfillment Systems for Your Channels’ Benefit.
To be clear, this isn’t just about populating a portal with order capture, order status, pricing and many other applications. It is about being able to give channel partners real-time status of their orders, project requests, and status of Return Material Authorizations (RMA). Speed and accuracy are the competitive advantages today, not the portal. Combined with the 4th best practice, companies across manufacturing and services industries are seeing higher levels of loyalty and multichannel management success when they infuse integration with effective and well-coordinated change management programs. Those companies attaining best practices in this area are concentrating on making Special Pricing Requests (SPRs), pricing exception management, and pricing optimization available to their channel partners on a 24/7 basis.
Best Practice #6: Give Your Channel Partners A Chance to Win More With Accurate Sales Quotes.
At Cincom we’re finding companies that are attaining the highest win rates on new sales have invested the time to create quoting system that deliver pricing, delivery dates and the unique requirements of customers to manufacturing centers in one, integrated step.
Greenheck Fan’s Field-to-Factory initiative, where customized fan and air movement products are designed to the specific preferences and specifications of customers is a case in point.
Delivering quotes that are on target is one of the best uses of a multichannel management system to earn more sales.
Best Practice #7: Open New Selling Opportunities for Channel Partners with To-Order Products.
Giving channel partners the flexibility of tailoring specific products to the unique needs of their customers is revolutionizing both manufacturing and reseller’s selling and service strategies.
This is especially true for resellers and channel partners competing in the Commercial HVAC (heating, ventilation and air conditioning), electrical equipment, industrial and plant equipment, marine equipment, petrochemical systems and equipment and power generation, transmission and distribution businesses.
The challenges that specialty vehicle manufacturers and value, pump and compressor manufacturers face in tailoring their products and services to the unique needs of their customers makes product and sales configuration strategies crucial to their success.
Best Practice #8: Reaping the Rewards of Compliance with Contract Management.
Managing contracts with channel partners and suppliers is a delicate balancing act, yet critical for earning incremental sales. Companies attaining best practices in this area are integrating pricing, invoicing and sales history into their contract management systems so contracts don’t need to be manually dealt with anymore.
The use of Alerts and exception management give companies attaining best practices in this area more control over complex contract billing, while also compensating for long-term revenue recognition. The benefits of automating contract management are that legal and regulatory compliance stays balanced instead of dominating channel partner relationships. In addition, manufacturers report being able to increase how often they are able to deliver a perfect order.
All of this is possible when a contract management system keeps accounting, finance, production, logistics and fulfillment systems in balance.
Best Practice #9: Cross-Channel Shoppers Critical for Making Multichannel Management Pay
With so much at stake in selling to cross-shoppers, companies need to get beyond trial-and-error and define a framework that will make optimizing them possible. There’s just not enough time anymore to wait and see if your mix of applications, content, catalogs, pricing and service is optimal every ninety days. It needs to be a daily take on performance, and with social networking, that’s possible without being obnoxious or intruding to your customers.
Several studies have highlighted how much more profitable it is to attract cross-channel shoppers that being only focused on just a single channel for a given type of customer:
Getting the optimal mix of guided selling, content and catalogs is critical.
It’s imperative to be able to quickly attract and retain cross-channel shoppers making the need for optimizing content, applications, pricing and product selection is crucial. Consider the following approaches companies are using social networking to gain insights into how they can achieve higher levels of cross-channel optimization:
Bottom line: Striving to get real-time feedback on how cross-channel shoppers’ expectation versus experiences measure up is one of the most valuable insights any company can get. Optimizing cross-channel experiences can now be done with real-time data based on listening to customers using social networking.
Best Practice #10: Tight Coordination of Service and Maintenance with Channel Partners.
Those companies attained best practices balance the need for providing maintenance and support with the need to also be profitable. Using multichannel management systems to support their channel partners give them the ability to streamline Returns Material Authorizations (RMA) on a 24/7 basis, regardless of where their channel partners or located.
In addition, Service Parts Management, automated replenishment based on Economic order Quantity (EOQ) levels, demand management for spares, and content management systems to provide installation and preventative maintenance are all strategies companies attaining best practices in this area are concentrating on.
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Channel Management: A Lot Like Marriage?
July 21st, 2009
Often created through years of effort, refined by a continual pursuit of looking for ways to make shared tasks, processes and systems more effective while dealing with occasional conflict, channel strategies have much in common with marriages.
The best marriages have exceptionally high levels of trust and a resilient strength that only comes with much time invested. It is the same with any strong channel management program.
So what can be learned about the staying power of channel programs in the context of marriages?
Plenty.
Consider these factors and for those of you married you could add many more. One disclaimer, as a politician I make a pretty good baseball player, so I leave it up to you for defining the term.
Channel partners need continual support to succeed.
The best performing channel management programs have continual support, either through lead generation, escalation, training, automated pricing requests and spares stock balancing.
Without trust, chaos ensues.
We’ve all seen those ambitious channel management programs that look to introduce every last application or Web-based utility their channel partners have asked for. The problem is many have not slowed down enough to create trust first and understand how at the process level these new apps will change the daily routines of potentially thousands of employees. Better to build trust, overcome resistance to change than relying on launching massive channel management programs all at once.
Conflicts that never get resolved leads to both sides losing.
Like any marriage, channel partner and vendor relationships have inherently within them the potential to generate conflict. From pricing to service, product strategy to promotional programs, channel partners have strong opinions about all these areas. Creating a Dealer Advisory Council to routinely get their feedback and give them a chance to own strategies is critical. Using social networking applications including Facebook protected groups can also help. Making communication happen is critical for resellers to also own channel strategies as well.
An attitude of service over superiority, collaboration over competition.
How many times have you been out with another couple and it is clear there is major competition in their marriage? At one point last weekend I felt like calling “jump ball!” in the middle of the restaurant as a couple argued as to who was the best at basketball (In reality the wife is a former college player who after two kids can still dunk). Yet how many times do channel management strategies seek superiority and competition? Lots do. Quit competing and start serving channel partners.
Economic challenges tell you more about channel partners than years of prosperity.
You get a good sense of how your channel partners react to difficulty during the tougher economic times.
Bottom line:
In both channel partnerships and marriages, whether financially successful or just getting by the most critical catalyst is trust. Building it takes more than a reliance on analytics or metrics; it has to do with coaching to strengths first. Setting up channel partners to win means more today than ever before.