Tag Archives: Management

Creating Market Pull

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“Market Pull results in higher marketing and sales ROI than Market Push and makes everyone’s life a lot easier.  Ask B2B business owners which they would prefer, and you’re unlikely to find anyone that wouldn’t prefer to have customers lined up at the door asking to buy their products than having to coax them out of the brush to engage.”
 

Market Push

Market Push is exactly what it sounds like – aggressively pushing and promoting of your product to any and all that will listen.  After all, customers can’t buy your products if they don’t know they exist.  So, marketing must become obsessed with “getting your name out there”.

Right?

Well, not really.  That obsession makes Market Push programs expensive and many times ineffective.

An all-out “get-our-name-out-there” initiative can lead a B2B marketing team to commit a lot of cash, time and energy to a scattered range of unfocused activities: a new branding program, a revamped website, new logo and newly-minted tag line, a blitzkrieg of trade shows, radio ads, an SEO initiative, a blast of pop-up on-line advertising or an aggressive social media program.

Source: Douglas Wray on Instagram, via Daring Fireball

I have seen firms spend in excess of 7 figures on Market Push programs with virtually no measurable results.

It’s a fall back, non-strategic shotgun approach.  And, even if it works a bit, it typically generates a widely diverse range of customers.  The consequences are that the firm doesn’t know where to focus next.  They will likely be pulled in many directions by different special interests within this new, wide customer base.  They cannot decide how to evolve their product offering road-map or what specific message to promote to whom.  Debate can get heated.  Spread too thin, they can become vulnerable to more focused competitive initiatives.

There is a much better way.

 

Create Market Pull

Now, contrast Market Push with the phenomenon of Market Pull.

After initially trying and failing with a Market Push program, a B2B client shifted to a focused Market Pull program and grew their customer base by three orders of magnitude in just under three years.  The initial impact of the switch was seen in less than 120 days.  Another customer hit two orders of magnitude in six years.

The question is this:  How does one create market pull of these magnitudes?  The compound answer may seem counter-intuitive, at first look.

It’s: Focus and Leverage

 

Market Focus: Tapping into the Natural Leverage of the Market Ecosystem

Each target market is a community.  Each community has a natural architecture. We call this target market architecture the Target Market Ecosystem or TME.  While all TME architectures are virtually the same in basic structure, (see below), each is unique in what’s inside the nodes.

 

Creating market pull is about building a reputation for delivering outstanding value to Economic Decision Makers in a specific target market ecosystem, then fanning the flames of the communication of that value proposition between peers, referral sources and through the other network nodes.

Within any TME, the ultimate goal is reaching Economic Decision Makers with your compelling value proposition.

For economically impactful purchases in the B2B world, Economic Decision Makers commonly look to knowledgeable, experienced people they trust within the market ecosystem for advice and recommendations.  Filling those advisor roles are peers, technical specialists, lawyers, accountants, consultants and Board Members.  We classify this group of advisors as Key Referral Sources.

Within that same TME community, there are also Opinion Leaders – those few knowledgeable folks who seem to always be at the front edge of new ideas.  They might not hold a direct, open communication line to the Economic Decision Maker, nonetheless, they typically have significant indirect influence on them through their Key Referral Sources.

The most impactful Opinion Leaders are characterized by four traits.

  1. They are Fanatic Believers in your value proposition
  2. They are Well-Networked within the target market ecosystem
  3. They have High Credibility with Key Referral Sources and Economic Decision Makers
  4. They are Natural Sales People, anxious to communicate what they know and believe, to all willing to listen.

Also within this community infrastructure are a couple of non-people nodes – Venues and Vehicles.  Venues are the real and virtual places where people in this ecosystem meet and dialogue: society meetings, trade shows, on-line groups, peer-groups, conferences, industry events and seminars.

Vehicles are the means through which people discover new information: webinars, blogs, podcasts, talks, videos, articles, industry journals and whitepapers.

The arrows in the ecosystem diagram, represent the directions of influence of each node.

 

It’s A Universal Dynamic

The social influence dynamics of a target market ecosystem are at work for everything bought by anyone.  Its ubiquitous existence was clearly demonstrated in social research compiled by Professor Everett M. Rogers in his book “The Diffusion of Innovations” (Free Press, 1995).  From community adoption of health practices in villages in the Andes, to the fan-out of new techniques for educating children in math in Pittsburg, to the adoption of high-tech products, the TME is the engine that drives adoption.

 

It’s Underlying Structure is Ubiquitous

The market ecosystem architecture for Hospitals is the same structure as that for Fire Departments – and every other industry.  Yet, each individual TME is, for the most part, self-contained. Within it swirls the internal dynamics of market-specific issues, market-specific peer-to-peer communications, influencers, opinion leaders, venues, and industry journals spouting their own unique industry lexicon.

This insular characteristic means the Director of a Hospital, is not likely to hang out with, or seek the advice of, the Chief of the Boston Fire Department regarding how to select computer monitors for their delivery rooms.  She will most likely, ask a peer at another hospital or a hospital IT specialist first.

 

Leverage: Kick-Starting Your Value Proposition Communication Multiplier (VPCM)

Your VPCM is the fuel that powers growth in a TME.

Social science research shows that “node-based”, intra-community communications is 13 times more effective than mass media in getting a value proposition message to go viral within a TME.

Having one of your happiest customers communicate the exceptional value delivered by your approach to solving their problem in a venue talk to 25 or more of her peers is an example of your Value Proposition Communication Multiplier (VPCM) in action.

The VPCM is most powerful within an ecosystem and, occasionally can even jump from one ecosystem to another.  It drives market pull and sells for you when you are not in the room.

Opinion Leaders are important communication and influence nodes.  One Opinion Leader can influence dozens, or even hundreds of Economic Buyers or Referral Sources in a specific TME.

Key Referral Sources are influence and communication nodes for your VPCM.

Venues and Vehicles are also VPCM communication and influence nodes.

 

“Strategically injecting an ecosystem-validated value proposition message at the right communication nodes is the key to creating market pull.”

What You Can Do Immediately

Here are three actions to create market pull in your corner of B2B world.

1. Focus

Select a target market where your value proposition has been validated to deliver higher economic value to customers than any other segment.  Be sure the market has some economic momentum, lots of customers with a common problem your offering fixes and a well-established, easily identifiable TME.

2. Map that Market’s Ecosystem

Identify the Economic Decision Makers by title, Key Referral Sources by the same, Opinion Leaders, Venues and Vehicles.

3. Target your value proposition story at communication nodes within the TME

Build your story and marketing plan around your proven, delivered value proposition in that specific sector.  Then proceed to place that message through blogs, articles, talks, referrals and presentations at the Nodes of the TME to get the natural lift that each TME offers.

Don’t get antsy. If you do it right, and your value proposition is real, then you should begin to see results in no more than 160 days.  If you don’t see results something is amiss – and whatever it is, it’s not anything that could be fixed with an expensive Market Push Program.

*****

Jerry Vieira, CMC is the President & Founder of Jerry@qmpassociates.com.  Read more about Jerry on LinkedIn and follow him on Twitter at @JerryatQMP

 

6 Targets for Applying Lean in Marketing & Sales

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Boosting Customer Received Value Through Lean

In our previous blog post, “3 Guiding Principles for the Application of Lean in Marketing & Sales”, we offered a trio of overriding Lean commandments. In this post, we point to specific Marketing & Sales targets for Lean that will simultaneously increase customer received value and marketing and sales ROI.

Target #1: Lean Applied to Market Focus

Face the facts. Your product or service offerings do not deliver the same economic, emotional, political or physical value to all market segments equally. Lean means focusing your products on market segments where the total value received by customers is its highest. If that situation exists, the Law of Economic Value is satisfied.

The Law of Economic Value states:

“All economic value accruing to your firm has as its source, the customer’s perception that they will receive more economic, emotional, political or physical value from your product or service, than it costs them economically, emotionally, politically or physically to acquire and use.” ©

Research shows that the following benefits accrue to a firm if the Law of Economic Value is fulfilled:

  • the ability to garner price premiums
  • faster market penetration
  • higher customer satisfaction
  • more market peer-to-peer customer communication of that value proposition
  • higher interest in your product from channel partners
  • higher probability of achieving market share leadership in that segment
  • reduced marketing and sales expense
  • improved sales win rate and faster time to close
  • reduced product design costs and a clearer product evolution path
  • greater returns from focused on line marketing investments

Market Focus is Lean in Action.

Target #2: Lean Applied to Product Requirements

Feature creep is the antithesis of Lean. It can be particularly nefarious in high tech firms where brilliant and creative engineers, encouraged and abetted by marketing and sales folks, attempt to stuff all the capabilities they can into a product to make sales as easy as possible.

The truth is, feature-stuffing typically causes delays in new product launches, ingrains price and profitability pressures in the product and results in a general market positioning of “everything to everyone in just one package”. Everything-to-everyone products inevitably lose market share to focused, niche offerings.

Focused Product Requirements are Lean in Action.

Target #3: Lean Applied to Marketing Communications

The wisdom of Lean and focused market communications is the toughest principle to convey to marketing and sales teams. The common fallacy is that, “more marketing expenditure is better than less”. Marketing and sales teams typically will fight tooth and nail to avoid reductions in this sacred budget arena. They believe that more marketing dollars across more expansive markets means more customers. Not so.

Research shows that communications of a new idea is best accomplished through peer-to-peer opinion leaders in a specific target market. That research revealed that peer-to-peer communication is 13 times more effectively than mass communication. Focused marketing communications programs that reach those opinion leaders, supported by value propositions achieved through market-focused product design, is the most economically productive combination that can be achieved.

Focused marketing communications is Lean in action.

Target #4: Lean Applied to Channel to Market

Your market share will eventually erode if your channel-to-market provides value only to you and not your customers. Marketers must be vigilant to assure their channel delivers meaningful and relevant value to customers and clients first.

Marketers must also recognize that the customer value the channel must deliver changes with the maturity of the industry. In a fledgling market the channel may be required to supply training, installation, configuration and integration services. In a mature market, those expensive services must be replaced by the channel’s ability to quickly deliver spare parts or service.

Evolving Channel Value Delivered is Lean in Action

Target # 5: Lean Applied to the Sales Process

An oft-cited statistic claims that 30% to 50% of the opportunities in the average sales person’s pipeline won’t close because the customer makes a decision to notbuy anything. The sales person has, in effect, wasted time and money pursuing something that was destined to never result in a sale.

We suggest a set of 5 criteria that can improve a sales person’s ability to qualify an opportunity and save time.

  1. The intensity of the customer’s need or problem,
  2. The degree to which the customer believes your product can meet that need,
  3. The degree of the economic, emotional, political or physical value the customer will receive by buying the product or service,
  4. The customer’s perception of your product’s relative competitive advantages ,
  5. The existence of a customer champion for your solution

Good Sales Qualification Discipline is Lean in Action.

Target #6: Lean Applied to Market Intelligence Feedback

Sound strategy cannot be developed without current and accurate market intelligence. Rapid response to market intelligence feedback is critical to business success. That intelligence may comprise some or all: competitive moves, customer satisfaction, barriers the sales people keep running into, the health of the customers’ markets, usage idiosyncrasies and a host of other informational tidbits. The sales team must be at the forefront of gathering this market intelligence. The sales team is the one company asset that is in the most frequent communication with customers.

Here are some thoughts about making your market intelligence gathering Lean:

  • Create a market intelligence section as part of your sales person’s weekly or monthly sales report or presentations
  • Train your sales people how to question, listen and observe when they are in front of a customer – not just spew the benefits of your product
  • include providing market intelligence in the sales compensation plan and sales position descriptions
  • provide the ability to award spot bonuses for the most timely and important pieces of information that come your way
  • read the market intelligence reports; think about and acknowledge them by calling back the sales person who provided the information, thanking them and getting more information
  • Understand what pricing pressure means. Pricing is typically a symptom of a bigger strategic problem, centered on customer-perceived value. Make your actions value-delivery related, not pricing related.

Rapid Collection and Response to Market Intelligence is Lean in Action

Conclusion:

The application of Lean principles to marketing and sales requires no major cash investment. In fact it saves cash. A firm of any size and market can deploy Lean in marketing & sales and begin to reap the economic rewards quickly.

Lean principles assure that customers receive the best value possible – and in return, consistent with the law of economic value, your business optimizes its own economic performance.

*****

Copyright Jerry Vieira, CMC and The QMP Group, Inc. All Rights Reserved

For more information on the application of Lean principles to Marketing & Sales, call Jerry Vieira, CMC at 03.318.2696 or visit the QMP Group website atwww.TheQMPGroup.com

10 Observations on What Makes a Great Leader

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Many books have been written on Leadership. I haven’t read most of them. But that does not mean I haven’t worked for and with both good and bad leaders.

Based on my observations from a combination of working in both small private and Fortune 100 NYSE corporations, and as a consultant to industry executives over the last 20+ years, I would like to offer my readers, a profile of an outstanding leader.

Vision:

A great Leader must provide a simple, clear and optimistic picture of where the organization is headed, namely, its Vision. It must be succinct, clear and frequently communicated by the Leader both publically and privately. It must make sense, yet be emotionally charged and energizing. People must clearly recognize it as relevant to both their own and the group’s best interest.

Decisiveness:

Participative management notwithstanding, whether folks agree with a decision or not, a decisive Leader generates the most respect. In fact, research has shown that decisiveness is the single most admired characteristic of a Leader.

Rapid and Accurate Problem Solving:

There is little that can erode confidence in a Leader more than that Leader’s confusion as to what the problem is and how to work their way out of it. Followers appreciate rapid and accurate assessments and succinct repair plans.

Energizing:

Closely related to Rapid and Accurate Problem Solving is the ability of a Leader to get things moving when the organization has become lethargic or bogged down.

Relevant Experience:

Leaders who have come up through the ranks are more respected. The perception is that they have the ability to better relate and understand both the situations and people at the lower echelons in the organization. They recognize that these people are the “Drive Train” that keeps the organization moving forward. If a solution doesn’t work for them, it won’t work for anyone.

Insight:

The ability to cut through all the extraneous clutter and focus in on the one critical issue that needs to be addressed first. This is slightly different than the Rapid and Accurate Problem Solving factor, which is more related to crisis situations.

Clear Headed Thinking:

… particularly in a crisis.

Care:

A great Leader has to demonstrate to people she/he sincerely cares about them, their families and their future. Selfish motives are quickly recognized by followers. Hypocrisy is not as quickly revealed, but eventually shows its embarrassed and humiliated face.

Field-Proven, Sound Judgment:

Followers are more likely to respect someone who has been through a major struggle and survived based on their instincts, judgment, brains and resourcefulness.

Visibly Engaging and Listening:

Followers need to see their Leaders in real time and know those Leaders are not fearful of mingling, engaging and, most importantly, listening.

Final Thought:

Not all managers in your company are, or will be, great Leaders. Not all managers need to. But all managers must periodically lead to one degree or another and, in such a role, they must act as highly visible examples of your corporate values, its culture and expectations.

As a CEO you might consider asking yourself the degree to which each individual manager is managing, leading and setting the example you want – and if they are not, what you are going to do about it. A great Leader would not do nothing.

Remember, your followers are consciously measuring you against the same 10 factors listed here. If you fail to behave and model these Leadership characteristics you leave yourself strategically vulnerable to those of your industry competitors that do.

*****

Copyright The QMP Group, Inc. 2015   All Rights Reserved

Jerry Vieira, CMC is President and Founder of The QMP Group, a Portland, OR based management consulting firm specializing in Market Strategy and Marketing & Sales Organizational Transformations. Jerry can be reached at 503.318.2696 or Jerry@qmpassociates.com

The Big Squeeze

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I commiserate with the owners of privately-held, small to mid-sized, business enterprises.  They’re getting a raw deal.

Consider this. That classification of business firms accounted for 64 percent of the net new jobs created between 1993 and 2011.  In creating jobs, small firms make an invaluable contribution to the well-being of, not only their employees and their families, but also their suppliers, and the communities they live in.

So why have we, as a nation, squeezed small business into a vice?  Why are we making it so hard for them to succeed, thrive and fulfill their purpose?

 

A Generational Impact Too

Amongst the ranks of small business owners are a good number of Baby Boomers whose dreams of a comfortable retirement have foundered on the reef of The Great Recession.  For years they worked hard, looking forward to a reasonable reward for their risk, a return on their financial investments and justification for the family sacrifices that were part and parcel of starting and running a small business.

The Baby-Boom owners I have spoken to also want to leave a legacy. They wish to pass on a vibrant firm that continues to provide employee and community value – beyond their own retirement.  And while the current state of economic affairs may be particularly hard on these BBBBs (Baby Boomer Business to Business) owners, the situation is largely the same for all owners – independent of age.

So, I stand with these men and women. We should appreciate them more – and give them a freakin’ break.

 

A break from what?

Small to midsize B2B business owners are currently trying to find the elbow room they need to achieve their goals. But they are gripped in a five-jawed vice – each jaw bringing its own unique and undeserved pressure from a completely different angle.

 

Jaw 1: The Economy

The economy is still underperforming.  A GDP growth projection of 2.7% for 2014 seems to be the best we can muster and low GDP growth has been chronic since 2009.  There is no coasting possible.  All progress must be self-generated by slogging through the economic swamp.  There is no tail wind and the swamp bed is mushy

The chart below shows the meager U.S. GDP growth from 2001 through 2013.

Year GDP Growth Historical and other mitigating events
2001 1.0% Bush 43 became President. Recession worsened by 9/11 attacks and War on Terror, but helped by Bush tax cuts. Fed started lowering rates.
2002 1.8% Bush calls for regime change in Iraq, creates Homeland Security.
2003 2.8% Unemployment at 6%. Fed lowered rate to 1%. Iraq War began.
2004 3.8% Fed started raising rates.
2005 3.4% Hurricane Katrina cost $250 billion in damage.
2006 2.7% Fed funds rate raised to 6.75%. Swine flu epidemic.
2007 1.8% Dow reached new high of 14,164.43. Inflation at 4.1%. Fed dropped rate 3 times, to 4.25%, to ease banking liquidity crisis. LIBOR rose to 5.6%.
2008 -0.3% Stock market crash of 2008 led to global financial crisisand $350 billion spent on bank bailout bill. Fed lowered rate 7 times to 0%.
2009 -2.8% Obama became President. Dow dropped to 6,594.44.Obama Stimulus Act spent $400 billion, reversed downward spiral.
2010 2.5% BP oil spill. Bush tax cuts extended. Obamacare and Dodd-Frank passed.
2011 1.8% Japan earthquake and Mississippi River floods. 10-year Treasury yield hit 200-year low. Iraq War ended.
2012 2.8% Presidential campaign and fiscal cliff created business uncertainty. Super storm Sandy hit East Coast. See U.S. Economy 2012
2013 1.9% Slow growth thanks to sequestration. Low nominal GDP growth thanks to low inflation.

 (Sources: Bureau of Economic Analysis and www.About.com for the historical notations and links)

The last year for which GDP growth exceeded 4% was 2000. Even our dual wars in Iraq and Afghanistan didn’t help much.  After fueling defense-related industries for the last 10 years, we are now watching that sector have to adjust to the ends of those conflicts – and simultaneously deal with sequestration.

And if these low growth figures weren’t enough, adding insecurity to the frustration of slow momentum these businesses continue to be susceptible to random bursting of economic “bubbles” – housing, mortgage-backed securities, banking regulation, stock prices, commodities and the occasional international crisis that threatens exports.

 

Jaw 2: Banks

In 1999 two key provisions of the 1933 Glass-Steagel Act were repealed leaving banks free to trade risky securities. Abetted by “bundling” and complicit rating agencies, they screwed up by investing too heavily in mortgages and mortgage based securities. The house of cards collapsed, the stock market crashed, financial institutions started to hemorrhage, retirement portfolios lost huge sums, and Congress was compelled to provide a $350 Billion bailout to keep the economic system functioning. The price to pay for the bailout? Bank regulations were tightened.

But, this crisis-based bailout gesture had the unintended side effect of turning the screws tighter on the most vulnerable of the banks’ commercial customers – small business owners.

Dodd-Frank attempted to fill the regulation vacuum.  But it still hasn’t come into full effect, and certainly hasn’t re-established the separation of commercial and investment banking. The banker-bonus drug is still too powerful to cut off cold turkey. The earth under the feet of banking is still quicksand and no one has, of yet, replaced the warning signs or chained off the path to that repeated trap.  Think about the repeated banking crises of 1890, 1927, the 1980s and 2008. It seems like small business is forced to go along for the ride.

Banks are tightening credit lines and covenants for small business, and often simply declining to lend – even when the business comes to the bank with purchase orders in hand needing cash to buy raw materials.  If you accuse the banks of being unreasonable, they blame the regulations and the regulators. The regulations may have been designed to avoid bubbles, but they didn’t prevent conspiratorial manipulation of the LIBOR rate or the potential to continue to risk banking crises from investment speculation. We still have banks too big to fail… and still have to catch them when they fall. No real accountability exists.

Feels like blackmail. No relief from the banking jaw any time soon for small business.

 

Jaw 3: Large Mega-Customers

Larger companies are in a merger and acquisition frenzy. This gives them more and more purchasing power – and their small-business suppliers less and less power. There is little negotiating in these relationships. Pricing must be bare bones. The information regarding manufacturing costs must be shared. Payables policy must be extended to 45 or 90 days. Small firms are basically financing their huge customers with these unreasonable payables policies. It’s brutal.

Jaw 4: The Government & Politics

Government and Politics are not the same thing – though, of course, they are co-dependent. Politics is the manipulation of power to achieve some legislative end, while government is the deployment and enforcement of that legislation.

In the last 10 years, our leaders saw fit to commit two trillion dollars on two wars, and another trillion dollars on tax breaks. Think about it. What could three trillion dollars have meant to infrastructure spending during the Great Recession? How many of those construction workers furloughed when the housing bubble burst might have been absorbed by infrastructure projects – railroads, highways, bridges, water systems?

Politics and government has conceived, designed and currently maintain the road we, as small business owners, must travel. Politics is the R&D group that can invent better, or more difficult, ways to help us travel that road by either removing the bumps and pot holes in our paths, straightening the curves and loops that delay us, widening the thoroughfare so more of us can get to where we wish to go and/or inventing better transportation machines.

Is there anyone reading this that thinks that in our current political environment, our congressmen are likely to collaborate and accomplish any of those goals? Let’s not hold our breath.

 

Jaw 5: The Clock

Baby Boomers are not getting any younger. That repetitive, faint clicking sound they hear is not the machinery in their factories – it’s the clocks on their walls.

 

What does it all mean?

In the bigger picture, as we continue to make life difficult for the most productive of our people, other nations of the world are blowing by us in quality of life, health outcomes, education, innovation, public transportation, high speed internet access and infrastructure.

Michael Porter, Harvard Business school professor and well-known business author, has developed and done research on a worldwide comparative model for Social Progress, as measured by a Social Progress Index. The United States ranks 16th in the world overall.

It just seems another example of us being are our own worst enemy.

The irony is that, in general, no matter your political leaning we usually agree on the outcomes we’d like to see; a higher GDP, a lower unemployment, healthier citizens, higher educated citizens and a higher quality of life.

Clearly, crunching one of the main contributors to those beneficial outcomes, the small business, is not the answer.

*****

Copyright 2014 The QMP Group, Inc.   All Rights Reserved

For more information about working with the QMP Group, call us 503.318.2696 of through our use our Contact Us page.

The Key Components of a Thorough Marketing & Sales Audit

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iStock_000009708062XSmall

The word audit can strike fear into the heart of almost any person or organization that is its target. “Audit” conjures up images of someone in a position of authority digging through paperwork and records looking for evidence of malfeasance, mistakes, incompetence or non-compliance.

However, when a business performs an audit on their marketing and sales function, they typically just want to answer two basic questions:

  1. What can we do to improve our sales results?
  2. What can we do to improve our marketing and sales ROI?

At its purest intent a marketing and sales functional audit should not conducted to uncover incompetence, to fix blame or to penalize, but rather to discover opportunities to make both marketing and sales more effective. If the motivation of an audit is solely to find a scapegoat or assign blame, the problem is not in the firm’s marketing and sales function, but rather in its culture and leadership.

Step 1: A Quick Starting Point – The Self-Audit

We, at QMP use an 8 dimension, quick 50-question self-audit or self-assessment approach to determine whether there is need for deeper investigation. The output is a simple spider graph which illustrates the impressions that the executive team has of its marketing and sales organizational capabilities and effectiveness.

Figure 1

 

 

Copyright The QMP Group, Inc. 2012 All Rights Reserved

The shape of this figure provides a general idea of where performance gaps are perceived to exist. However, this is a chart which reflects executive impressions and personal observations – not a formal, detailed analysis of processes and capabilities. If the chart reveals high capabilities, but sales performance is actually poor, there is strong misperception among the executive team. But if both the chart output and the firm’s performance are satisfactory, the need for a detailed audit is probably not compelling.

(Click here to request this free self-assessment tool)

Step 2: The Detailed Audit:

If a detailed audit is indicated, the model in Figure 2 provides a framework for conducting that audit. Each of the 8 dimensions of the spider graph will be evaluated within that model.

Figure 2

he Marketing & Sales Engine™

Copyright The QMP Group, Inc 2002 All Rights Reserved

All gears must turn efficiently and together for optimum revenue generation. If any gear is broken or stuck, the engine stalls – and it can only turn as fast as its slowest gear. If a marketing and sales audit is going to identify opportunities for breakthrough or discover where things are malfunctioning, an audit must assess the systemic working of all the gears – even the little ones. One must even include in the audit the oil in the oil pan – which we call Performance Excellence, or the Culture of the firm. A healthy corporate culture can grease, or an unhealthy corporate culture grind to a halt, the firm’s marketing and sales engine.

Auditing the Gold Gear: Market Strategy:

“Even the best soldier becomes a casualty when engaged in unwise battle strategy.”

Audits of Market Strategy often lead to the greatest sales breakthroughs. It is common that a strategy audit reveals a lack of market focus. And though it may seem counter-intuitive to consider narrowing rather than expanding one’s market range, a redeployment of resources to a more tightly-defined, more economically lucrative market segment, almost always results in accelerated growth and less cost.

In one case, prior to a strategy analysis, a rather smug marketing and sales executive said, boasting “I don’t care who buys them (his products) or for what reason. All I care is that they buy a lot.” His attitude reflected itself in the highly unfocused efforts of his sales team. This manager did not expect significant impact, nor did he believe much would be revealed, from a strategy audit. In actuality, the audit triggered a strategic market re-focus which triggered strong double-digit growth for a handful of years while enabling price premiums along the way.

Opportunities for sales breakthroughs are available by looking into other aspects of the firm’s strategy as well, not just its strategic focus. Breakthroughs can be found in analysis of the channel-to-market, pricing policy and the alignment (or rather misalignment) of all the components of the strategy together.

Auditing the Blue Gear: New Business Development

The Business Development gear comprises what most people consider to be classic, tactical marketing. It includes the firm’s e-commerce process, web presence, advertising, sales tool kit, lead generation process, print collateral, trade shows, branding, press relations, publicity and social media. Contrary to the intuition of many – more emphasis on this gear is not always better. Conflicts arise when the strategic intent is to focus while the tactical marketing team is hell bent on “getting our name out there” to as many people as possible.

A Business Development audit can reveal such things as: a) misaligned messages and focus, b) opportunities for shifting resources from expensive promotional efforts (trade shows, advertising) to more effective and less expensive targeted publicity and press relations, or c) a poorly conceived sales tool kit.

One of the most common gaps in a firm’s Business Development program is the lack of a “Thought Leadership” program. In general, thought leadership is the process of building a highly visible industry presence and reputation for your firm and your people, as industry experts. When people look for a solution, they often seek out the experts first – most of the time these days, with an internet search. Thought Leadership is typically the role of technical specialists, marketing spokespeople or senior executives of your firm – the people with enough technical or industry knowledge to be considered experts. “Thought Leadership” involves public speaking, writing and publishing articles, writing blogs, participating in industry association panels, conferences and committees and even involvement in community issues. That activity is heavily reflected in internet presence.

Auditing the Red Gear: Sales Process Disciplines

Within the sales function, the audit checklist is long. Here’s a sampling:

  • the reality, quality and current value of the sales pipeline
  • the usefulness of the sales tool kit
  • the relevance, effectiveness and currency of the sales training program
  • overall sales process effectiveness
  • the discipline of providing, and quality of, market intelligence feedback
  • the sales person’s understanding of the value proposition, differentiation and ideal customer profile, particularly for new products
  • the alignment of the compensation plan to the strategy

Something as simple as re-establishing focus on the Ideal Customer Profile can achieve rapid and significant results. While running a mini-audit, one of our clients discovered their sales people did not have a clear idea of the types of opportunities they should be pursuing. Sales sent in everything they dug up for a bid, swamping the quote department.

We took the client through a focus exercise and profiled the ideal opportunity. It took only a couple of hours to formulate. Within 9 months of this re-focus, their win rate had increased by more than 15% while the number of quotes generated decreased by nearly 33%. They won more of the right kinds of profitable opportunities. It was that simple. Less waste. More success. No blame.

Low-to-no-cost adjustments to issues discovered in an audit are common and can significantly increase sales productivity.

For example, research has shown that 35% to 50% of the customer opportunities in a sales person’s pipeline will never reach a “buy” decision. These are costly, unproductive investments of sales and support resource that have ended up in the “No Decision” bucket.

The likelihood of an opportunity ending in a “No-Decision” is inversely proportional to the degree of the “Compelling Need” a customer feels about solving their business problem. If a customer is not faced with a compelling need to fix their problem they will not buy any solution – yours or your competitor’s. A quick audit of the sales opportunities in the “No Decision” bucket brings cold reality to bear on the need to do a better job of qualifying customers.

Auditing the Soil: Performance Excellence, aka the Culture:

Think of a company’s culture as its soil. At its best, it is nutrient rich and encourages growth. Think of strategy as the seed. Even a genetically perfect seed will not grow in nutrient starved soil. On the other hand, a genetically inferior seed, planted in nutrient rich soil, will at least yield some crop. Culture is everything.

The nutrients in a firm’s culture are its values and its behavioral norms. In our experience, the best cultures exhibit the following characteristics:

  • the setting of clear expectations
  • individual and organization accountability
  • clarity of ownership of initiatives and results
  • measurements and metrics
  • rewards and consequences tied to performance
  • honesty and openness in communications
  • periodic progress checkpoints (at minimum, monthly)
  • a sense of urgency to deal with barriers and challenges to progress
  • teamwork
  • a creative problem-solving orientation focused on solutions not blame

 In our engine model the culture is the oil in the oil plan pan in which the gears move. The culture lubricates and sustains a healthy engine. Without oil the engine seizes up. Without a solid culture of performance excellence, your business seizes up.

Conclusion:

A marketing and sales audit is simply a periodic analysis of what’s working and what’s not. It is a discipline that requires digging into the marketing and sales process to look for opportunities, barriers, bottlenecks and trends. We know from experience, that initiating an audit and analysis, with the discovery of root cause as its objective can spark sales breakthroughs and improve marketing & sales ROI.

A Final Note: A Marketing & Sales Organizational Self-Assessment is not the same as a Marketing & Sales Audit

A Self-Assessment is an organized compilation and scoring of your perceptions about the capabilities of your marketing and sales organization and processes. An Audit is a validation or invalidation of those perceptions from a deep dive into weaknesses and root causes of performance gaps. Self-Assessments record perceptions. Audits discover reality.

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Copyright 2010 The QMP Group, Inc. All Rights Reserved

Learn more about what kinds of growth opportunities a QMP Marketing and Sales Effectiveness Audit can reveal. Or, request a free QMP Marketing and Sales Organizational Capabilities Self-Assessment through our Contact Us Page. We’re here to help.

PinPoint Change: Reducing the Frustration of Slow Process Improvement

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What is Pin-Point change?

Pin-Point change is a simplified, three-step approach for affecting high-leverage, rapid business process improvement.

A pinpoint change comprises; 1) the identification of the single most critical and ineffective business process preventing the firm from achieving its objectives, 2) the identification of the specific process change needed, and 3) focusing, laser-like executive attention and decision-making on the few key people in the organization that must quickly change their behaviors to fix those ineffective processes. This does not necessarily mean removing or replacing them – unless, of course, they simply cannot or refuse to quickly learn and adjust behaviors.iStock_000005918667XSmall

What’s different about this approach to change is that to achieve the most rapid positive result, change is only required of a few strategically positioned people in the organization that are key links in the ineffective process – not the whole organization. Focus permits rapid change. Once the success of the change is proven, the rest of the organization typically falls in line, encouraged by both the initial success and the management intensity applied to the execution of the change. As a result all organizational change is faster.

 

An example:

The sales manager of a small, innovative health care products firm was convinced that the fastest road to sales growth was quickly setting up as many distributors as possible. He had charged his independent reps with the task of finding those distributors and directed the whole customer service team to respond quickly in setting up these new distributors when they called – credit checks, registration, setting them up in the system, getting them sales materials and servicing their other needs.

The number of distributors exploded – rapidly jumping into the hundreds. The customer service folks were overwhelmed servicing distributor requests, responding to inquiries and processing extremely small orders. In spite of this intense effort, sales results, as measured by sales per distributor, were poor.

The channel strategy and channel management process was broken – running wildly, un-steered and developing no traction.

Reversing this strategy by creating a single, national master distributor to which to send smaller distributors and distributor wannabe’s allowed the sales and customer service team to focus on the most important larger distributors, large end-user sales, lucrative growing market segments and most profitable products. After the channel strategy and process change, customer service productivity improved and revenue quickly turned upwards.

Changing the mind of just one person in this critical distributor management process was the key. The sales manager had to be convinced that his direction, process and behavior needed to change.

The ineffective process was channel strategy. The single person that needed to change behavior was the sales manager. One process, one behavioral change and one strategically positioned individual made the difference between success and failure.

 

The “Drive-Train” of any business:

A drive-train is the series of mechanical parts of an automobile that actually make it move. It starts with the engine, which in turn is connected to the transmission, which in turn is connected to the drive shaft, which in turn is connected to the read-end differential, which in turn is connected to the wheels through the rear axle. All this energy transfer goes on, beneath the visibility of the driver. All the parts of the drive train have to work together for the car to move. If any one of those segments of the drive train breaks, the car can’t move. The energy produced by the engine is lost before it gets to the wheels.

In most business units, the drive-train is the sequence of processes and people that makes the business run. In small to mid-size businesses, process-specific drive-trains typically operate two levels below the visibility of the business owner or executive in charge – yet these people-process drive-trains are the connections through which most business activity takes place.

The majority of day-to-day activity goes on beneath the awareness and visibility of executives. That’s actually good news – for the most part. It means the executive can get the flu on Sunday, stay home for the week, play golf on the weekend and return to work on Monday and notice the business hasn’t collapsed. The bad news is that processes in this chain, when broken or inefficient, continually produce weak or bad results. The executive sees less than optimum results in her business dashboard, but doesn’t know where the process is broken. It’s like the driver of a car, not understanding, when she presses down harder on the accelerator, why the car doesn’t seem to be move any faster.

 

A Typical Business Drive Train:

A typical business drive train might look like this. A sales person finds an opportunity. That sales person links to the inside sales and/or estimating team that produces a quote. That part of the drive-train, in turn, connects with the order entry people, who, once the customer decides to order, accepts the order and enters it into “the system”. The system then informs the production planner, the materials person, purchasing and the final link, operations – which in-turn builds and delivers that order. Then the “system” takes over and spits out an invoice. When the invoice is paid, accounts receivable enters the receipt into the “system” and deposits the check in the bank.

Each step is a mini-segment of the larger business process. But, because these drive-train links are more-or-less serial, one persistently ineffective segment will continually plague and corrupt the whole business.

In a small to mid-size business, at its most fundamental level, each drive-train segment comprises, the combination of a basic process and a key person.

 

Fast Change – Rapid Improvement:

The fastest three-step route to positive change comprises 1) the rapid identification of the inefficient or broken process in the business drive-train, 2) the identification of the specific process change needed and 3) the focus of management attention on the one individual through which behavioral change will be crucial.

I am continually amazed at how effective “the one process-one change-one individual” approach to improvement can be.

The steps of PinPoint change are straightforward:

1. Discover the broken process,

2. Identify the behavioral change needed,

3. Find the key individual whose behavior must be the first to change

 

One final consideration:

The one person that is critical to initiating all rapid behavioral change in a small-to-mid-size firm is the executive in charge. The speed of a drive-train change is only as fast as the decision on the part of the executive-in-charge to direct that change. A much higher probability of success exists, when the executive in charge, knowing what process is broken and what change is required, quickly identifies the key individual in the process and clearly communicates the expectation of what needs to be adjusted. An uncompromising insistence on the three-step approach is essential. Executive indecisiveness can hold it all back.

My advice to executives: Do not let the discomfort of insisting and confronting the need for behavioral change of a few key people in a critical drive train process jeopardize the well-being of all other employees and stakeholders.

It’s that fundamental.

Copyright The QMP Group, Inc. 2013    All Rights Reserved

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Click here to learn more about Marketing & Sales Organizational Tranformations led by Jerry Vieira and The QMP Group

Why Employees Don’t Always Do What You Ask

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Are you pleased?

Pulling Out HairIf you are consistently thrilled with the responsiveness and results of important tasks you assign to your direct reports, there is no need to read on. On the other hand, if you are like the majority of business owners and executives we have worked with, you are probably frustrated at times by the lack of understanding, speed of response and quality of the results of those requests.

There are two major ingredients to getting what you request done well. The first is Motivation and the second is, what I will call the Assignment Dynamic – which of the two is much more complex but, actually, easier to manage.

 

Motivation: The Vroom Expectancy Theory

Many books have been written on the subject of motivation, but my favorite model was created by Professor Victor Vroom*, called the Expectancy Theory. It states that people are motivated by the product of three considerations: a) if they attempt something they will accomplish it, b) if they accomplish it there will be a reward and 3) the reward will be relevant to them. If any of these are “zero” there is no motivation. Before giving an assignment, particularly if the assignment is a major challenge, 10 minutes of thought on this motivational model might help,

 

The Assignment Dynamic:

The Assignment Dynamic takes over from the point at which the assignment is given. This Assignment Dynamic is shown in Figure 1. It has 3 major steps. The 3rd step delineates the 9 common barriers to progress.

Figure 1.

The_Assignment_Dynamic

1.   Clarity:  Be clear about what you are asking for. Describe clearly the acceptable form the answer or solution must take. Clarify the timing for the completion, the importance/urgency of the assignment and the priority of the request. If the result is numerical, collaboratively set the number.  Just this first step goes a long way in improving outcomes.

2.  Checkpoints:  Let the individual assigned to the task know you will be checking on progress on a scheduled basis. Set the schedule.

3.  Confronting Delays and Diagnosing Barriers:  During a checkpoint, if satisfactory progress hasn’t been made, don’t be afraid to confront it. I know, “confront” is such a hash word. In this case, however, “confront” simply means addressing the delay directly and professionally to discover the barrier-to-progress as quickly as possible, rather than simply letting it go with an “OK. I’ll check with you next week.”

The root causes of the lack of progress can almost always be found in the list below. When confronting a delay, discuss directly with the employee the potential barriers to progress. The following 9 items can be used as a barrier identification checklist.

  • Communication:  Stalls and delays can occur simply because someone failed, or forgot, to tell someone that something had to be done. All of the components mentioned in the section on clarity apply throughout the chain of all the people required to fulfill the request and achieve the goal and an objective is communicated.

Just hours before the attack at Pearl Harbor a small crew manning a newly installed radar site on a mountain near the harbor noticed a large swarm of blips. They did their job by discovering them and thought they had communicated it to headquarters. In actuality, due to breaks, oversights and inefficiencies in the communication chain, the note was not received by the harbor until the day after the attack.

  • Capacity: “I’m too busy,” is often the cry for why something is not getting done. In this case, managers must be clear about the priority of the task requested, and if the employee is simply at capacity, be specific about what needs to fall off the tailgate and be delayed in order to make time for this task. Capacity, more often than not, typically means unclear priority.
  • Capability: Occasionally an assignment isn’t completed as hoped because employees simply do not know how to accomplish it.
  • Criticality: “I just didn’t know it was that important,” is the response to a delay caused by this item. This can be avoided if the first step, “Clarity” is done well.
  • Courage: Some people, who have been asked to do something they have never done before, simply do not have the courage to attempt it. Fear of failure, and its consequences, is typically the reason.
  • Cooperation: If the employee is unable to elicit cooperation from other employees, departments or customers the manager can assist in breaking free that logjam.
  • Capital: Occasionally, funding is needed to enable the completion of a task. If this is the reason for delay, management simply approves the funding or the original task yields its first position to the enabling task of developing the economic justification for the investment.
  • Cognition: I don’t understand what you are asking me to do.
  • Credibility: Credibility means the person assigned the task doesn’t believe that the task is worthwhile, meaningful or will have the desired outcome.

Here’s a real example:  When asked how the economic benefit story for the firm’s new product was being received by customers and the distribution channel, Bill, a lead sales person, said he wasn’t telling the story, because he didn’t believe the numbers. This new product had a compelling economic benefit to customers and the company had collected customer testimonials confirming it. The management was perplexed by this lack of willingness and compliance to tell the economic story to prospects when selling this new product. A little bit of sales person re-education, coaching, clarification and re-explanation of the economic benefit was required to change his belief.

It changed. The result was a 28% increase in sales, in a year when the general economic activity in that sector declined 15%.

Conclusion:

To some, this organized approach to doling out assignments might appear a bit formal and cumbersome. However if the task is truly important, something that really needs to get done, the approach and checklist can prove a very useful tool.

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Jerry Vieira, CMC is the President and founder of the QMP Group, a Portland, based management consulting firm specializing in marketing & sales organizational transformations. For more information on how to use this Assignment Dynamic model call him at 503-318-696 or email to Jerry@qmpassociates.com.

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* In 1964, Victor Vroom developed the Expectancy theory through his study of the motivations behind decision making. His theory is relevant to the study of management. Currently, Vroom is a John G. Searle Professor of Organization and Management at the Yale University School of Management.[4] Source Wikipedia

Accelerating the Market Adoption of an Innovation

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The Product Development and Management Association Glossary of Terms defines failure rate as the percentage of a firm’s new products that make it to full market commercialization, but which fail to achieve the objectives set for them. By that measure, it is not surprising that a quick internet search on the subject of product failure rate yields studies that claim anywhere between 50% (commercial) and 90% (retail food) of new product or service offerings fail.

iStock_000009333210XSmallFailure can mean some or all of lost time, wasted money, missed opportunity, damaged credibility, tainted brand reputation, enhanced competitive vulnerability, lost jobs, truncated careers and a host of other unpleasant outcomes. So, whether the real failure rate is closer to the lower (50%) or higher (90%) end of the estimate is not as important as recognizing that discovering ways to improve it is essential.

For the past 15 years a good part of our work at QMP has centered around helping business-to-business clients turn around under-performing businesses and products. Many of them were struggling with getting new offerings off the ground or gaining traction in the marketplace. We’d like to share with you a bit about what we have learned, in hopes that it may improve your probability of success and help you avoid the myriad consequences of failure.

 

The Empirical Science Basis of the Adoption of Innovation:

In 1962, Everett M. Rogers wrote a breakthrough work entitled, “The Diffusion of Innovation” (republished in its fourth edition in 1995 by The Free Press). In it he compiled a number of studies documenting adoption successes and failures of all types of innovations over the past 100 years — from sociological to scientific. He included varied research findings, such as the struggles of the Chilean health department with getting Andes mountain villagers to adopt the habit of boiling water for health reasons, Iowa farmers adopting hybrid seed corn and Pittsburg school system principals adopting new math.

While the lessons learned from reading such a remarkable book are many, two items stand out above all others; 1) the adoption or diffusion of an innovation is not a linear phenomenon (meaning it does not gain its energy and momentum just one isolated customer at a time across a wide range of groups), and 2) adoption is significantly accelerated by the dynamics of the intramarket communication network (how buyers in a market or group meet, discuss and communicate ideas).

In fact, one of the most amazing conclusions coming from the research is that communication through the intramarket network is roughly 13 times more effective than mass communication in the adoption of an innovation. This interesting research conclusion predates the emergence of social media, blogging and Tweeting which, by now, are well recognized as an effective internet-powered intramarket communication vehicles.

 

Mass Communication and Struggles with Adoption

One of the most common problems we find with innovations struggling to gain a foothold in the marketplace is the parent firm’s unwillingness to focus. Rather than taking a chance on a focused launch initiative, they believe it’s better to try a broad one and see what sticks. In addition, the management team and product people are typically so convinced of the universal applicability of the innovation, that it leads the firm to believe that “getting our name out there” quickly, to masses of potential buyers, will be all that is required for success. This is rarely the case.

In pursuing such a course of action, it is not uncommon for a firm to find they have spent valuable economic resources on grand branding schemes and exposure initiatives with a minimal real impact on market penetration. Applying for a second round of dilutive funding to finance a second run at that same holy grail is an option—and some select it – with the same results.

 

Fragmenting the market to gain a profitable foothold

Buyers, particularly commercial and business-to-business buyers, invest in an innovation because they believe the economic value they will receive from that innovation will exceed the amount they have to pay for it. The market success of an innovation requires that the market which you’ve targeted has a significant enough proportion of customers with a big enough common problem to create a compelling argument for an investment to solve it. The key is, not all market segments have the same problem to the same degree. Focusing your launch on a particular sub-segment of the market where the economic value proposition of the innovation is compelling, creates a much higher probability of success than a broad approach.

 

If it’s that simple, why don’t more businesses focus?

There are many reasons: First, investors prefer firms that are moving after big markets with big payoffs. The bigger the market envisioned, the bigger the potential payout. Secondly, the inventors have a sincere belief that “everyone” can eventually use their innovation—and eventually they may be correct. Third, innovators and marketers alike get caught in the excitement, glitz and hype of launching a major market initiative launch. It can be a very heady experience. And, fourth, they simply have too much marketing money in the budget and don’t know how to manage it well.

Trying to stand in front of the innovation-launch train as a voice of reason, as it barrels down the track of a well-funded general market launch is fruitless. It’s best to wait till the train burns out its fuel and then catch up to it further down the track when it has stalled.

Not withstanding the previous explanations, there is a more fundamental reason why people don’t focus for success, they simply don’t know how to select the best markets to focus on.

 

Criteria for Target Market Attractiveness:

Over the years of working the challenge of assessing and selecting the target market segment that will yield the highest probability of success for an innovation, we have developed a series of criteria that seem to work effectively.

Market Momentum: Different market segments have different economic, demographic and regulatory factors which affect its basic momentum. When selecting a market, we want our investments to be lifted and propelled downstream as much as possible by inherent momentum factors in our favor.

Compelling Need: This factor refers to the extent the problem the innovation is designed to resolve is compelling from an economic, safety or regulatory standpoint. Take the Segway for example, the innovative two-wheeled, gyroscopically-balanced personal transport scooter. It’s general market launch, after much early hype, has been less than hoped for by investors and its inventors alike. It is, however, finding its way to higher success rates in mobile security markets, on campuses, malls, large commercial complexes, inner city tourism, and in a slightly modified version, golf courses.

Match: The extent to which the innovation matches and completely resolves the compelling need it was designed to fix. A perfect match will increase customer satisfaction and improve the ability of potential customers to rapidly make the innovation-to-problem-fix mental link.

In the early days of flat panel monitors, when they were expensive compared to bulky CRTs, one of our clients attempted to penetrate the general desktop market with this own version of a flat panel monitor. At a $1,000 selling price, compared to a $249 monitor price, the effort failed. However, when the effort was refocused on hospital rooms (a much smaller segment of the market but with a more compelling set of needs), the monitor was wildly successful. In hospital rooms, space is constrained, electromagnetic interference from CRTs cannot be tolerated around sensitive medical monitoring equipment and sparks from high static CRTs can’t be permitted in oxygen rich environments. The client’s initial adoption failure was turned to success simply by redirecting the market focus—and there were no changes required to either the average selling price or inherent product features. In fact, the selling price increased as, over time, hospitals requested additional features to increase the basic capabilities of an already good solution.

Socket Count: A socket is a potential place where the innovation can be installed. For example, a first estimate of the potential sockets for the microwave oven at its inception would have been the number of households without one. Today, the number of sockets available for new microwave oven innovations is going to be limited to those sockets that either don’t have a microwave already installed (very few) or those for which the innovation solves a compelling need or significant shortcoming with their existing solution.We want to find a market to target our innovation at that not only has a compelling need and positive momentum factors , but also a lot of unfilled or under-satisfied sockets.

Value Quotient: Closely related to the magnitude of the compelling need is the balance of the value quotient from the customer’s perspective. This relates to the value of the benefit to the customer of solving their problem with your innovation, divided by the cost of acquiring, installing, learning and using it. There may be a significant compelling need, but if the cost of the innovation needed to repair the compelling need is prohibitive, adoption will be slow. A rule of thumb is that within three years of purchase the innovation should pay back at least 5 to 1 in bottom line cash flow for the customer. A further note on this point: Value received is not completely economic. Value comprises the complete suite of benefits encompassed in the Economic, Emotional, Political and Physical realms of what your product/service delivers.

RPQL Position Availability: RPQL stands for Relative Perceived Quality Leadership. Forty plus years of research in the Strategic Planning Institute PIMS data base (Profit Impact of Market Strategy) indicates that the single most important factor affecting a business unit’s success is the market’s perception of the relative perceived quality of its goods and services compared to its competitors. One important point to remember—perceived quality is related to the segment of the market. Not all segments perceive quality in the same way. Charging after a market that already has an RPQL leader is equivalent of a military frontal assault on an entrenched position. Not a wise decision.

IntraMarket Network: As mentioned earlier, innovations diffuse more rapidly if there is a strong intra-market network through which the value proposition of the innovation can be communicated—person-to-person, customer-to-customer. The intra-market network comprises two parts a) its venues (events, forums) and vehicles (journals, publications, websites) and b) its intra-market opinion leaders.

Opinion leaders are the real geometric multipliers of the value proposition message. For opinion leaders to be most effective they need to have four important characteristics. First, they need to be rabid believers in the innovation and its value proposition. Secondly, they need to be well-networked. Third, they need to be highly credible in the network of interest and finally, they need to be natural sales people—anxious and completely un-shy about communicating new ideas to friends and colleagues alike.

The next five target market attractiveness assessment criteria are important as well, but if the market isn’t attractive after an analysis of the first seven the second five are not worth working through.

Profitability: Selling the innovation must be inherently profitable. If you feel you have to reduce price to gain traction, it may simply be that you have a questionable value proposition or your perception of the customer’s compelling need is misunderstood. It certainly should bring into question your thoughts about the economic equation factor. Sometimes simply changing the target market can change the profitability by allowing pricing in proportion to unique benefit—as in the flat panel terminal example stated earlier.

Competitive Turmoil: The higher the competitive turmoil the more expensive it will be to create a successful presence. The exercise of focusing down to a smaller, less competitive market segment, will provide a higher probability of surviving any inevitable market shakeout.

Brand Leverage: It’s easier to gain market attention for your innovation if your brand speaks innovation. Apple will easily get media and intra-market opinion leader attention for a new consumer, music or creative computing idea. Volvo will get attention for an innovative auto safety related product—like a car seat or anti-roll stabilizer for an SUV. Neither will get brand traction if they introduce a pillow or dinner ware.

Accessibility: Sometimes markets may be attractive but relatively inaccessible because of sales channel limitations, aggressive competition for limited shelf-space, import/export restrictions, licensing requirements or other considerations.

Perceived Value of Differentiators: This last factor comes into play when the competitive turmoil factor is less than optimum. It assesses the degree to which your differentiated position for the innovation, compared with your competitors’ approaches, has meaning and economic value in the target segment under assessment.

 

Conclusions:

What we have learned in years of helping our clients with the market introduction of their innovations is this: Focusing on those markets that exhibit the best composite results on the listed assessment factors results in:

  • More rapid adoption
  • Higher average selling prices
  • Higher profitability
  • Higher degree of customer satisfaction
  • Lower market launch expenses
  • More defensible positions
  • Higher probability of surviving shakeout
  • Learning how to do it consistently in the future
  • Less ownership dilution

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Copyright 2006 The QMP Group, Inc.   All Rights Reserved

 

For more information about how to accelerate the market adoption of your innovative product, contact QMP at qmp1@qmpassociates.com or 503-318-2696

 

The Basics of Foundational Marketing

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“You can’t build a durable building on a weak foundation.”

 

We’d like to share an insight that has helped executives and business owners sort through all the hype and claims over the last several years about an ever growing list of “gotta-do” new marketing and sales techniques.

If you’re a General Manager, business owner or C-level executive, your marketing team probably approaches you annually with a laundry list of funding requests to support their critical marketing and sales programs for the coming year. Those requests may include any or all of; a website upgrade, a branding program, a social media expansion program, a blog, a publicity and PR program or maybe even a new six-figure trade show booth – not to mention the additional staff to help manage it all. How do you decide what to approve? How do you sort through all the hype and enthusiasm about each program and decide what will truly give you the best return for your investment?

The graphic below illustrates an alternative approach to selecting marketing initiatives.

Foundational-Marketing-JMost people think of marketing as one or more of the items listed on the right side of the graphic — in the grey, typical-marketing circle. Stop a moment and consider the list. Is this what you think of when you think of marketing? If yes, join the majority club. If not, join the other group. It has fewer members – but they are the ones who have found the secret to getting greater return on their marketing buck.

Before those of you in the smaller, enlightened group get smug, remember “typical marketing” programs aren’t completely useless. Let’s be realistic. These days, unless you operate a lemonade stand that will only be open for two weeks in August, everyone needs a website. So let’s agree that, to some degree, typical-marketing expenditures are necessary – and in fact, required, once the foundational marketing base is laid.

But, back to the point – the hidden secret about marketing and what the people in the smaller group know that others may not is this; Rarely will any typical marketing initiatives produce truly breakthrough results — and they can tie up a lot of money! What really sets up top and bottom-line breakthroughs is Foundational Marketing. Foundational Marketing is the stuff in the oval on the left. Foundational Marketing is inexpensive and the primary, required ingredient in every major success.

For any typical marketing expenditure to be productive, Foundational Marketing must be done well. In our experience, foundational marketing tools and techniques have produced remarkable results. For example:

  • A software firm earned 1,000 new clients in just a little more than two years
  • A fledgling medical product landed 150 hospital placements in its first two years, with some orders exceeding $1M. Prior to using Foundational Marketing techniques, this product was in only two hospitals, with the largest single order only $20,000.
  • An electronics firm achieved a 50%+ growth rate for six years straight
  • A components firm increased their win rate by 15% while investing 33% less quoting time
  • A wholesale distributor generated a 47% increase in regional sales in 1½ years

None of these breakthroughs required a significant investment in typical marketing.

To contrast the effectiveness of the two types of marketing even further, in one of those cases above, after the success had been achieved using Foundational Marketing techniques a new management team invested in a mid six-figure re-branding typical-marketing program that didn’t move the needle a bit – losing the discipline of Foundational Marketing along the way.

Why don’t more firms adhere to Foundational Marketing disciplines?

They don’t know what they are: B-school educators are fantastic at teaching principles and concepts, but in general, weak at delivering a practical approach to moving those principles and concepts into practice. I speak from experience as, at different times, both an MBA student and MBA-level university instructor. Concepts and principles education does not equate to skills, tools and process disciplines. Most B-school graduates do not come out newly-minted with a honed skill set and tool kit.

They haven’t developed a standard tool kit: You are more likely to find a dozen carpenters that use the same field-proven tools and processes for their trade, than a dozen top B-school graduates that use the same tool kit and process for strategy development. Coming to the job site, most marketing practitioners have to create their own tools and processes, convince the executive team to learn, trust and use them and support the execution discipline to see the resultant strategies through to success. Not to place all the blame on the practitioner, many firms simply haven’t developed a Foundational Marketing process and tool kit.

It’s tougher to do: Typical marketing programs are an easy way out – particularly if everyone in the industry is “doing something”. They can be delegated and the deliverables are easy to see: a new web site, a new logo, a bigger show booth.

They don’t have the discipline to do the Foundational work first: Unless the top-dog insists that Foundational Marketing receives first priority and is the right way to do marketing, it won’t get done. Foundational Marketing is a “think-before-doing” approach.

They think it takes too much time: Building a good foundation doesn’t take long if you have the right tools. We have witnessed strategic decisions made in a few days with execution and success in as little as 90 days.

They don’t believe in it because they’ve never seen it work: Using and trusting Foundational Marketing principles does take some faith and practice, but the track record is proven.

Under the Hood of Foundational Marketing:

Practicing Foundational Marketing is really not difficult if you have the right tools. Good and sound foundational marketing tools are based on empirical marketing science. Even non-marketing people can learn and succeed using them. In a way, a good Foundational Marketing tool is like a cell phone. You don’t need to be an electrical engineer with an understanding of electromagnetic field and communications theory to use a cell phone. All of that has been done for you and integrated into the cell phone. Good Foundational Marketing tools have already integrated sound empirical marketing science into them.

Success with Foundational Marketing does require – and this is the difficult part – transforming the way your organization thinks and the way your team executes marketing and sales. It really comes down to a battle of the mind – more than a battle of the wallet. When your organization understands Foundational Marketing – and begins to use its tools and techniques, both the probability of success and the return on investment of your marketing programs skyrocket.

A complete Foundational Marketing approach has four components:

· Market Strategy: A proven and steadfast way to decide what market segments to focus on and what differentiated position to carve out for your firm and each of its products.

· Business Development Initiatives: These are about how you will approach the segment(s) of the market you have decided to target. While components of tactical (typical marketing) are included, emphasis here is on specific customers to target, specific messages to communicate, the customer’s buying process, channel-to-market decisions and leveraging the intra-market customer-to-customer communication network in the target markets of choice.

· Sales Disciplines: There are two parts of the sales disciplines component of Foundational Marketing. Both require training and consistency. First, an effective, consistent sales process is a must – one which qualifies, discovers needs, proposes good solutions, and wins/sustains long-term clients. The second part is a differentiated sales story that is meaningful to customers – one which assures that your unique benefits story is told consistently through all channels to all target customers. It’s a story that emphasizes the economic, emotional and physical benefits in the right priority, for the right customers, in the right market. Sounds obvious, but many clients actually fail in these two fundamental requirements.

· A Performance Driven Culture: Think of the components of Foundational Marketing as the gears of an engine, the culture of a firm is the oil in the oil pan. (See the figure below). To consistently achieve your goals, the organization’s culture must encourage teams to communicate, execute, adjust, think, make decisions and lead in an honest way. A culture of performance excellence is defined by: accountability, clarity of expectations, measurements and metrics, ownership, open and honest communication, fact-oriented, sense of urgency, rewards and consequences, frequent checkpoints and the ability to quickly and constructively confront barriers and problems. With a culture of performance excellence lubricating Foundational Marketing, the engine hums. Without the oil of a culture of performance excellence, the gears seize.

Can Foundational Marketing fail?

Foundational Marketing programs do fail – for one of three reasons: First, if an organization does not have the discipline to execute and follow through, any program will fail. Foundational Marketing programs are no exception. Secondly, it is possible that some firms are too far gone to be saved by a Foundational Marketing program. However, in 20 years of consulting, we have witnessed only one firm in the second category. They required a complete change of their business model to survive. They did survive, but at a much lower revenue level.

Finally, we have witnessed firms that have relapsed. Relapse is characterized by success with Foundational Marketing, followed by a reversion back to sole dependence on those items in the typical marketing list. Relapse is very costly in money, time and lost opportunity. A relapse typically occurs when a new, uniformed marketing and sales or C-level executive enters the picture.

A Final Word:

A good example of the need for foundational discipline is in the weight loss arena. The basis of all weight loss programs is discipline: discipline to eat better, discipline to exercise more and discipline to adhere to a healthy lifestyle. The latest exercise machine does not obviate the need for discipline.

So it is with Foundational Marketing. Good tools and processes are needed – but organizational discipline fuels the best results. Foundational Marketing, supported by a culture of performance excellence has proven again and again to lower marketing and sales costs, increase market share, achieve more rapid adoption of new products and increase significantly the firm’s return on investment.

To learn more about Foundational Marketing call the QMP Group at 503.318.2696, email us at qmp1@qmpassociates.com or connect with us through our Contact Us page where you can detail your challenges.

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Common Sales Myth #1 – A Sales Person’s Job is Just to Sell

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After many years of both conducting sales training workshops and personally selling, I have come to recognize six popular misconceptions about selling. And, I must say, every time I broach those myths during a sales training session I get push-back, disbelief, the wagging of heads and several audible “No Way!’s”. So I am braced for your blog comments.

I have chosen to address each myth as a separate blog post, to make it more convenient to get through in the smaller and smaller free time chunks we all seem to be experiencing these days. Here’s the first.

Myth 1: A Sales Person’s Job is Just to Sell

We understand that sales people are under a lot of pressure to spend time face-to-face with customers and on the road – rather than behind a desk.  But pushing, or allowing, a sales person to only sell is counterproductive. That approach would be the equivalent of saying, “A soldier’s job is just to shoot and kill the enemy.” Good soldiers do a lot more than simply shoot. They are part of a team that sometimes requires them to play different roles and take on different duties. Here are some examples, along with their contrasting business function.

They collect and report field intelligence: Good soldiers are trained, not only to shoot, but also to observe and report on the enemy (competitors), their armaments (competitive advantages and value propositions), their location (markets and customers) and their strong points (where they have impenetrable positions – be it markets or accounts). Soldiers also report on the enemy’s weaknesses and gaps in their lines (under-serviced customers and under-served markets).

Any General, coming onto the battlefield needs, first and foremost, intel – to be able to formulate a strategy. Business managers need intel as well, for the same reason.

They report on the effectiveness of their own, and the enemy’s, weapons: The business equivalent is reporting on customer receptivity to the sales tools in use, the sales approaches, product capabilities, product reliability, product effectiveness, installation problems, quality, training problems and a host of other relevant experiential aspects of selling, delivering and using the product.

They dig in and defend the ground already captured: In business terms they defend their current accounts through disciplined customer service and make sure they are secure.

They exploit a victory, charging after a retreating enemy, or pouring through a breach: When something works in the field they use it again and again, winning repeatedly over weak competitors and landing new customers until the territory is “owned” and they move into a temporary “hold and defend” mode – until the next opportunity for an offensive.

BocageBuster

They share techniques and victories: In World War II, shortly after the Normandy invasion, the allies, having driven off the beaches into western France found themselves in bocage country . Bocage country is best described as countryside spotted with crop and grazing fields that are edged on all sides by 6 foot earthen walls entangled with scrub brush, vines and trees. These barriers have been built up over hundreds of years, a result of field-tending by farmers. From the air, bocage resembles a bunch of egg-cartons set side by side as far as the eye can see – each carton with deep, rectangular recesses. (Though at the time of the invasion, aerial observers did not recognize the impenetrable nature and height of the actual barriers.)

Capturing each field required soldiers to climb up one side of the barrier wall, scramble through the brush, trees and tangled vines, enter the field and charge across it to the bocage wall on the opposite side of the field. Tanks could not climb and penetrate these natural walls. The soldiers had no cover when entering the field. Casualties were high. The enemy simply placed machine guns at the opposite side of the field and mowed down any soldiers coming over the opposite wall. Progress in liberating France, ground to a halt.

That was, until some innovative engineer found that welding a fork-like scoop on the front end of a tank allowed it to tear through the walls, enter the fields ahead of the Allied soldiers and place heavy covering fire on the enemy gun emplacements on the opposite bocage wall. The success of that technique quickly spread to other infantry units. The casualty rate dropped. Progress accelerated. Eventually France was liberated.

When a sales person finds, discovers or invents something that succeeds and creates breakthroughs – it must be shared with all.

They train: To think that basic training is all that soldiers go through is a myth. Soldiers constantly repeat their training and hone their skills to a razor’s edge. They train on new techniques, new weapons, new systems and capturing obstacles and enemy positions in different terrains. Then they re-train on what they learned in their first training. Sales people, sadly, might train once a year. New sales people joining the team, may have to wait as long as 11 months before undergoing their basic training. Lack of training puts the team, the company and the product reputation at risk.

One more point: Training has two parts: basic physical conditioning (sales skills and disciplines) and weapons training (product and sales tool training).

Yes, there is more …

We could go on with the “good soldier” analogy, but by now, if you are a salesperson, you’ve probably reached your reading time-limit and need to run to do something else.

Have a good day.

Read the complete set of  The 6 Common Sales Myths.

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Click to learn more about the QMP Sales Process and Skills Training, call us 503-318-2696 or connect through our Contact Us page