Tag Archives: sales strategy

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

 

Overcoming the Fear of Market Focus

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“Not every customer receives the same level of value from your product or service.  It makes sense that those who receive the greatest value are more likely to buy it, pay more for it, be happier with it, tell others like themselves about it and return when they need more. So, if you’re launching a new product, why not start there?”

 

I love this photo. It precisely captures the reaction of many clients struggling with stalled sales when they first hear the suggestion that a narrower market focus might be the best way to overcome their problem.

Their faces, and sometime their mouths, say, “Are you nuts!? We don’t have enough business now, and you want us to NARROW our efforts? We should be EXPANDING, not focusing.”

The truth is, many times broadening a company’s marketing and sales efforts is not the best cure for a stalled-sales situation.

Focus is.

The “Everybody Can Use It” Fallacy: The Emotional Fuel Driving the Desire to Expand vs. Focus

Quite often when I ask clients who their product is targeted to, they reply with a vague, “Well, just about everyone can use it”. The false corollary is then, “So, we ought to make everyone aware of it and try to sell it to anyone and everyone. Right?”

No, not really.

Why?

Because not everyone receives the same level of value from your product – and it makes sense that those who receive the greatest value are more likely to buy it, pay more for it, be happier with it, tell others like them about it and return when they need more.

So, while there may be some truth in the statement “Everyone can use it”, it doesn’t mean that you will be successful selling to everyone. You will be most successful, and get the greatest lift, from those segments in which the value proposition has the highest significance.

So why not focus on those high-value-received markets first, reduce your wasted energy and money and increase your success rate?

How do you focus like that? And what’s the risk?

First, pick the best market to focus on.

That market must have the following attractiveness characteristics for it to be worthy of your focus:

  • economic momentum,
  • a common problem that you can fix with your offering,
  • lots of people with that or a similar problem that haven’t solved it yet,
  • a strong economic (or other) benefit that accrues to the customer from fixing that problem,
  • a lot of peer customers they can tell about it, and
  • a well-developed peer-to-peer communications network

For new or innovative products, it is important to have a real customer to which you have already delivered that incredible value – a verifiable case study, testimonial and reference account.

Sometimes it only takes one or two.

I was once asked to help a Product Manager that had refused to focus and whose product’s sales were so bad it was about to be shut down. She spent all of her time increasing distributors across the country – because, “everyone could use it”.

With just a little customer analysis we found just two current customers within one market, that had, unbeknownst to the manager, received enormous benefit from the product – and with just a few phone calls and visits confirmed that the market they represented had all the characteristics of attractiveness discussed above.

We refocused efforts by tailoring the story for that market, reduced spending, increased sales focus and greatly increased penetration as a result. The largest single order from that market prior to focus was $20,000. After focus, within a year, the largest single order was over a million $. In addition, the number of large customers in that segment purchasing product went from just the original 2 to over 150. Finally, the average selling prices increased by anywhere from 2 to 4X, as customers in that market requested further market-specific product features.

This is only one of a number of similar situations in our archives.

Won’t We Miss a Lot by Focusing?

Focus just means your primary effort, targeting, messaging and resource allocations are aimed and tailored to your highest-value-received segment of the market. It does not mean you ignore other customers that unexpectedly come knocking. It just means that your primary attention is elsewhere.

So, service well the customers from outside your primary focus that unexpectedly arrive at your doorstep. Just don’t get too distracted by them. But, quickly analyze why they bought. A few may well represent yet another high-value-received segment to approach after you have developed a strong and comfortably defensible foothold in the first.

You must constantly be on the lookout for what Peter Drucker has called “The Unexpected Success”. An unexpected success is a customer buying your product from some crazy, unexpected market that seems, well, weird.

No, I am not talking about Portland, rather from a market segment that you can’t imagine why in the world they bought.  As weird as it may appear at first, it could be an early indicator of high value received.

Constant vigilance will assure you don’t miss something big by focusing.

*****

 

Jerry Vieira, CMC is a Certified Management Consultant and President & Founder of the QMP Group.  QMP is a Portland-based management consulting firm specializing in market strategy, marketing & sales organizational transformations and training & coaching. Read more about Jerry on LinkedIn and follow on Twitter at @JerryatQMP

Selecting the Best Market Strategy

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Strategy (noun): “A plan of action intended to accomplish a specific goal”

The 33 Strategies:

 

Robert Greene wrote a great book about military strategy entitled “The 33 Strategies of War” (Viking Press). Fascinating reading. In it, Greene analyzes the 33 strategies in great detail, citing numerous historical examples over the course of history from the ancient Greeks to the 21st century.

Along with the more well know strategies like “The Divide and Conquer Strategy”, several had intriguing titles, like: “The Guerilla War-of-the-Mind Strategy”, “The Controlled Chaos Strategy”, “The Strategy of the Void”, “The Death Ground Strategy” (not my favorite) and the “Ripening for the Sickle Strategy” .

Small-to-midsize business could learn a lot from that book.

But, with 33 strategies to choose from, few executive teams are able to dedicate the time and resource necessary to gather and analyze enough field intelligence, and then grind through the decision making and selection process, to pick the precise best strategy to execute. More typically the strategic planning process is done in a short time window each year, commonly facilitated by a non-strategic expert.

 

The six basic strategy alternatives – 3 F’s and 3 D’s:

 

Barring the existence of a proven tool or affordable expert to assist small to midsize firms in the selection of the best of “The 33” strategies, we suggest 6 basic strategic alternatives that executives might find easier to understand and select from.

 

The Frontal Assault Strategy:

 

A frontal strategy is a tempting, and typically, poorly thought out alternative that is too common in business. It is, many times, the default strategy. It can be paraphrased as, “Here is our product. It’s the best. Go out and sell it.”

New companies often have that strategy, and inventors and entrepreneurs are notorious for it when they say, in one form or another, “Everyone can use this”.

Frontal assaults typically fail.

Examples of famous failed frontal assaults in business were IBM in their assault on the PC market, Coca-Cola with their New Coke debacle and Segway with their assault on the personal transportation market. As an aside, neither Coke nor IBM’s powerful brand recognition helped them avoid failure.

Notable military frontal assault failures were Pickett’s charge at the Battle of Gettysburg during the U.S. Civil War, Napoleon’s assault on Russia in 1812 and Hitler’s assault on Russia (Operation Barbarossa) in 1941. Even Napoleon’s and Hitler’s huge, powerful and highly capable armies could not overcome the fallacy of the frontal assault on Russia with its immense land mass, winter weather and dedicated and committed army.

Frontal assaults are extremely costly, and research suggests that it takes anywhere between and 3 to 5 times the resources of the enemy (competition) is required to overcome a defended position in business or war.

 

The Fragmentation Strategy:

 

Fragmentation in business is the same as segmentation. Fragmentation allows a firm to focus their energy and their value proposition in a much narrower arena, increasing significantly their ability to develop a meaningful value proposition and establish a defensible foothold. Both development and marketing expenses are reduced and the outcome of product design focus is typically a much more relevant value proposition for the market, which ultimately makes selling easier.

 

The Flanking Strategy:

 

Flanking, in military terms, is differentiation in business terms. Differentiation allows firms to create a unique brand presence in the mind of the customer.

Flanking and Fragmentation go hand in hand.

 

The Defend Strategy:

 

Just as a frontal assault requires 3 to 5 times more resource to succeed, a defend strategy requires 3 to 5 times less resource to succeed. In business, overcoming a defended position is challenging for many reasons; the defender’s customer relationships and channel are already established, their brand name is already known, their customers’ buying processes and contracts are already established and all the support and service mechanics are in place. That’s a lot of bonds for the attacking competitor to break.

On the other hand, the defend strategy is extremely vulnerable to a Fragment and Flank strategy.

The best example I can think of is the Japanese success in the US auto industry. The Big 3 (GM, Ford and Chrysler) had become complacent in their market share. Together they owned 90% of the US auto market. GM had the highest share at roughly 50%.

The Japanese fragmented out and targeted the small car market where the US automakers had a poorly defended position, and quite frankly, had little interest in defending. Small cars simply didn’t contribute enough margin to the Big 3’s bottom line.

The demographics of the times (baby boomer new-household growth) were promising, as was the economic value proposition of the small 2nd car. Fragmenting and Flanking, based on quality and economics, were all that was required. GM now has roughly 20% market share.

That foothold was the first in a series of sequential fragment and flanking moves that took the Asian automakers from economy compact cars to luxury sedans and SUVs.

 

The Depart Strategy:

 

Sometimes it’s simply better to decide not to fight. Also called the “Cut-Your-Losses” strategy, it is better labeled as the “Reallocate-Your-Resources-to-a-More-Lucrative –Market-Opportunity” strategy. That more lucrative alternative would likely be a fragment and flank opportunity.

The Depart strategy comprises overlooking the battle field and simply deciding not to engage at all. The biggest enemy to overcome in accepting the wisdom of this strategy is pride. Executives must allow reason to triumph. The depart strategy is best utilized when it becomes apparent, that the enemy is well dug in, having a strong defensible position.

 

The Develop Strategy:

 

The Develop strategy is the common follow on to the Depart strategy. If the market opportunity is judged intuitively attractive, but temporarily impenetrable, after departing the field the develop strategy suggests that you remain engaged through intelligence gathering, looking for just the right opportunity to find a poorly defended fragment of the competitor’s market to attack.

 

The Best Strategy:

The point of all this that the only strategy that produces consistently good results is the combined Fragment-Flank strategy aka Market Focus and Differentiation. Whether your products and markets are mature or new, Fragment and Flank, or Segmentation and Differentiation is key.

*****

Copyright Jerry Vieira, CMC and The QMP Group, Inc. 2014 All Rights Reserved

For more information about formulating winning market strategies contact Jerry Vieira, CMC at Jerry@qmpassociates.com , call to 503.318.2696 or visit the QMP Website at www.TheQMPGroup.com  or connect with us through our Contact Us page.

Navigating Price-Driven Markets

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Negotiations with procurement specialists in large organizations can really be brutal.

More than ever they seem to be driven by a sadistic combination of corporate edicts. These might include: sourcing overseas, reducing commodity costs by some per cent annually, reducing the number of suppliers by 20% and driving to 60-day payable policies – all while achieving the lowest piece-price possible.

These selling conditions define a prototypical “price-driven” market – though I have heard it called other things NSFW.

Sadly, some small B2B firms never actually do anything meaningful about these challenges. Year after year they eke out marginal success by squeezing their prices and margins, repeatedly trying to sell to the same hard-nosed customers, continually targeting the same markets and agreeing to be victimized by abusive procurement conditions.

There are ways to reduce the effects of these challenges. Some of the solutions are quick and some take time to develop. But, one thing is certain, if there is no action taken, there is no improvement likely.

Self-Diagnosis: A Reality Look in the Mirror

Step 1 is understanding what has brought you to this situation. If you are struggling with price-driven markets, one or more of the following statements are likely contributing:

  • Your product offerings and your company actually have no meaningful differentiation
  • You are aimed at the wrong markets and customers
  • You are unable to quantify the economic value you can deliver
  • You are doing a poor job of communicating your economically quantifiable value
  • You have not established true strategic partnerships with your customers

The first step to freedom, is identifying which statement, or combination, is true.

Doing something about it.

Salvation can actually be easier than you might imagine. Here are some paths to consider.

Path 1: Market Refocus

You must focus on markets where your unique product and corporate capabilities have real meaning to customers.

A client of ours had a new product that was significantly price disadvantaged in the general market. Despite this reality, the new business development team was hustling to set up distributors across the country for that general market, betting on corporate approval of a major price reduction to spur sales – when, in fact, corporate was quietly considering shutting the product line down.

Surprisingly, some handful of customers had actually bought this grossly overpriced product – a certain hint that someone was seeing value that others were not. When asked “Why they bought?” those customers explained that the product, even at that exaggerated price, solved a unique set of problems for their situation.

By quickly shifting their sales focus to this market, the business was saved without any change in selling price. In fact, customers in that market requested additional features which eventually lifted the selling price to 4X its original.

Path 2: Understand, Quantify and Communicate Your Unique Economic Value

Everyone in your organization that deals with customers must be able to understand and communicate the economic value of your products.

A client was puzzled by the slowness with which their new product, designed specifically to help customers save substantial amounts of money, was not selling better. The choke point was discovered to be the distributor sales manager who simply did not believe the economic argument. He had quietly avoided promoting that benefit to his distributors, in spite of customer testimonials validating the savings.

A rapid individual re-education was required, followed by a re-training of the distribution sales force. Product sales turned up significantly shortly afterwards.

You cannot assume that your benefits are being accurately communicated. Check the communication choke points.

Path 3: Tell the Whole Story

Your customer cannot make a decision based on anything other than price if that is all she sees. There is much more than price that is critical to the success of a supply relationship. A single-page quote sheet cannot communicate that larger story.

Here are some items to consider. Each can create additional value around the price.

  • Who is on the team you will dedicate to this supply relationship – their names, experience and roles? This information builds trust.
  • What is the detailed schedule, timeline and check points? This information builds credibility.
  • What approach will be used to assure success? What examples of this approach have been successful in the past? This information reduces perceived risk.
  • What is the quality story? This information also reduces perceived risk.

A client of ours increased their bookings by 20% in just one deal using this “whole story” approach.

Path 4: Build a true partnership

A one-salesperson-to-one-procurement specialist link does not define a strong and defensible relationship – even if they play golf once a week and belong to the same ski club. Multiple connection points must be developed: engineering to engineering, quality to quality, customer service to planning, shipping to receiving, manufacturing to manufacturing. The trust that is built up by these multiple open communications channels has real value in terms of problem solving, getting things done and creating a strong tough-to-break bond.

Path 5: Challenge the Chief

I once asked a group of 12 B2B CEOs, during a talk to take out a blank sheet of paper and write down what they perceived as their best product offering – the product that they thought customers should appreciate the most.

I then asked them to identify the value factors delivered by that product. and calculate what economic benefit that ideal customer was likely to receive from that product. Remarkably, they stumbled. None of them could do it in the 15 minutes allotted.

If the CEO can’t do it, how can they expect it of the rest of their team? That kind of understanding and expectation sets the tone for the whole organization from engineering through shipping.

Final Words:

We have offered 5 diagnostic questions and five paths out of the briarpatch of a price-driven market. It will take some serious self-examination and require some analysis and thought, but it is definitely achievable.

*****

Copyright Jerry Vieira, CMC and The QMP Group, Inc. 2015 All Rights Reserved

If you’d like to learn more about dealing with price-based competition call Jerry Vieira, CMC at 503.318.2696 or email to Jerry@qmpassociates.com. The QMP Website is at www.TheQMPGroup.com and more insights can be found on the subjects of Market Strategy, Business Business Development and Sales at Jerry Vieira’s QMP Insights Blog. If you have an immediate challenge, please communicate it through our Contact Us page.

Reaching the CEO

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Here is a reprint of a recent interview Jerry did with Kevin Price, author, publisher and radio host for the “Price of Business”.  Kevin is a syndicated columnist, both writing for the Huffington Post and appearing on Fox News. The interview explored professional approaches to reaching the CEO of small to midsized firms.

 

Price: Tell me about your firm (number of employees, location, type of companies you work with, etc.).

The QMP Group, Inc. is a Portland-OR-based management consulting firm whose mission it is to help small to mid-size, Business-to Business firms increase their market valuation. We accomplish this by helping them adopt the rigor and disciplines of the QMP (Quality Marketing Process) methodology. That methodology is embodied in our  Marketing & Sales Engine model. We install, repair, replace, align or supercharge whichever of the gears need attention.MarketingandSalesEngine

While The QMP Group itself operates periodically with only one or two employees, we service a wide range of our clients’ needs through close collaboration with highly qualified and experienced consultants of other complementary specialties: Finance, Organizational Development, IT, Operations, Supply Chain Management and Manufacturing.

Price: Tell us your story about reaching C-Level executives to do business?

I started reaching C-Level executives through Thought Leadership, that is, sharing my insights on market strategy through public speaking and writing for business journals. Basically, I was driven to passionately share my beliefs on the subject of the overriding importance or market strategy. I believed then, as I do now, that there is no more important management function than formulating a good market strategy, for the well-being of all stakeholders in a firm: the employees and their families, owners, shareholders, suppliers, customers and the community in which the business resides.

In the early days of my consulting practice I would give a talk at venues where CEOs convened to hear about specific topics of interest. I would give my talk and folks would walk up to me afterward, hand me a business card, and say, “That’s real interesting stuff. I think it might be able to help us. Please give me a call to arrange a time to get together and talk.”

Those introductions led to client engagements. Engagements led to client successes, and successes led to CEO-to-CEO referrals. QMP’s business is still largely maintained through talks and referrals.

One more point about talks. I call talks “Networking from the front of the room”. How else can you get 20 to 80 CEOs and Executives to give you their undivided attention for 45 minutes (with 15 minutes for questions afterwards). Not only that, whoever is sponsoring the venue does all the prep work: food, invitations, scheduling, room set up, etc. There is no more efficient way to reach Executives and CEOs en masse.

Of course, we are not talking about a 45-minute sales pitch here. There is no quicker way to destroy your reputation and credibility as a Thought Leader than trying the hard sell in a talk about insightful business practice. We are talking about a sincere exchange of insights that will help the listener.

Price: Do you know of other examples of businesses being creative in this endeavor?

Let me answer with a story. Several years ago our local chapter of the Institute of Management Consultants convened a members-only working session for the purpose of sharing our personal stories about what we attributed out personal consulting success to. Most of us in the chapter work with the CEOs or high level execs in our client firms.

Naively, I thought that all would say the same thing that I said, namely Thought Leadership – leading to CEO-to-CEO or advisor-to-CEO referrals.

As we went around the room giving each member a chance to tell their own story, I was amazed at the variety of “secret ingredients” of success in reaching CEO’s. Some said their personal network, some said referrals, some said their coaches driving them, some said, believe it or not, cold-calling! Being an engineer I became fixated with finding what could possibly be the common thread in such a diverse set of paths-to-success – and here’s the conclusion I arrived at.

In each case, what the consultant was really saying is, “This is what has worked for me, because this is who I am – naturally.” The individual who said networking is well known in the organization for having and staying connected to a personal and professional network that rivals God’s. The individual that said cold-calling teaches sales and cold-calling techniques for a living.

What I am saying here is that, a person’s path to connecting with a CEO inevitably follows the path of, and leverages, who they naturally are. It builds on what their natural affinity is and how they have channeled it.

A final note on this point: Once you have made your first CEO contacts and built first level successes – the referral machine (CEO-to-CEO or advisor-to-CEO referrals) takes over a fair share of the burden of CEO introductions.

Price: What lessons, if any, do you derive from these stories?

Great Question! Find out who you really are. Discover the thread in your life that is constant, and I believe you will find that it has consistently driven your past successes. Find it then extrapolate it. If that all sounds too esoteric, talk about it with a personal or business coach about your search for the thread. Strengths Finders (the book and the self-assessment) are very helpful. Here’s a link http://strengths.gallup.com/default.aspx.

Remember, your first CEO success can create a flywheel of CEO referrals. So give it all you’ve got. Leave nothing on the field.

Price: Tell us why it is important to for you to pitch to the CEO.

The owner of a privately-held firm is typically its CEO. The firm’s market value is connected directly to that owner’s wallet and net worth – and that individual’s personal wealth (short and long term), and the future of his or her family, are tied to market valuation of the business. Decisions about how to invest to increase that valuation are exclusively the realm of the CEO.

In addition, we are typically executing business process and organizational transformations in our engagements. These process changes have broader and longer term implications on employees, customers and owners, than say, paving the parking lot. The CEO must be involved and actively participate.

Price: What are some unique things you have done to get the attention of CEOs?

CEO’s trust their peers and their advisors. As a consultant, a CEO is not likely to quickly trust you, because they don’t know you. So, getting to CEO’s usually requires a bank shot of trust. A referral from a CEO’s advisor or respected peer is that bank shot of trust.

In turn, for a referral to be made to a CEO by an advisor or peer, that advisor or peer needs to: a) trust you and, b) believe in your expertise, either through personal experience or reputation.

Consultants accomplish this transfer of trust by either; a) demonstrating a track record of success that the CEO’s peer or advisor has witnessed firsthand, or b) building their reputation as substantive Thought Leaders, i.e. speaking and writing on topics germane to the CEO’s circumstance. Those written opinions, talks and successes need to be insightful and substantive.

Your track record and reputation as a Thought Leader, in the minds of a CEOs peer or advisor, is your CEO magnetism.

Price: Tell us about the type of companies with which you like to do business.

We prefer to do business with firms with CEO leaders that are,

1) open-minded,

2) decisive,

3) foster a company culture of accountability and expectations and

4) actively participate in the business.

Formulating an improved market strategy takes knowledge, expertise, analysis and creativity, but more importantly, execution takes real leadership. So, I guess, I am saying the type of leader is more important than the type of company.

Price: What suggestions do you have for others trying to reach CEOs.

Become a Thought Leader. Write, blog and speak to CEOs and CEO advisors.

Build Your Trusted-Advisor Referral Network: Research into how ideas and innovations diffuse into a market place indicates that intra-market network communications (peer-to-peer, or trusted-advisor-to-peer communication) is 13 times more effective in the spread of that idea than mass communications.

Make sure your network knows how to recognize clients you can help:… and, don’t be shy to ask for referrals

Treasure, Preserve, Respect and Thank that Network: Stay in communication, acknowledge and appreciate former clients, advisers and referrers.

Always Act in the Best Interest of Clients: Trusted advisors are trusted because they are transparent and the CEO believes that they are acting in his best interest. Sublimate your needs to the client’s best interest in all that you do. That reputation will me your badge of behavioral honor.

Document your Successes: Measure and record the indicators of your success – and assure they can be validated by references from that engagement

 

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Diagnosing Stalled Sales

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Just Ignoring or Pushing Through the Pain is Not the Answer 

As an entrepreneurial CEO or owner of a small or start-up company, you probably don’t have the economic safety net to tolerate long term losses or less than adequate speed and growth in the adoption of your new products.  You also may not feel you have the time or cash to stop everything, pull the team together, and completely re-visit your base assumptions and offering design. This is where panic sets in. What do you do?

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Typically, if you ask your marketing, sales and engineering team what should be done, they will come to you with a laundry list of quick fixes: requests for price reductions, funding approval for new marketing initiatives or even more complex and higher performance product features which, they claim, are certain to turn around the problem. As CEO how do you know what to bet on? How do you know if you’re throwing good investment dollars after bad? How do you avoid having to seek out more funding and perhaps dilute ownership?

A number of years ago, I was asked to assess the viability of a new product that was struggling to gain traction in the marketplace. The CEO of this high-tech, pre-IPO firm wanted to know whether the product line could be saved. Sales were almost non-existent – profits negative. There was no breakthrough in sight.

The product manager of this line was convinced that if the psychological price barrier of $1,000 could be broken, customers would flock. The current selling price was $1,100. In the meantime, while price reductions were being considered (not seriously), the product manager was spending his time and budget setting up new distributors around the country, building promotional materials, stocking shelves with minimum quantities, training sales reps on how to demo the product and, in general, “flogging” (his word, not mine) and constantly “badgering” (my word)  the distributors to produce more sales.

Two weeks of field investigation revealed a strategic opportunity to re-focus the market strategy.  Twenty four months after that refocus:

–          the selling price had increased from a $1,100 to more than $4,000. (Yes, it went up, not down!)

–          the largest single customer order went from $20,000 to more than a $1,000,000

–          the number of customers (hospitals) grew from 2 to more than 150

–          the product-line, and the people, were saved

–          the story added to the attractiveness of the IPO

And all this was accomplished while spending less in marketing, not more.

 

How was this accomplished?

This turnaround was made possible by discovering what, up to that time, was an ignored sector of the current customer base, where the product’s value proposition was significantly greater than for other customers.  The business was then refocused on that smaller, yet more lucrative, group of customers. Focus allowed a reduced marketing budget. The result was greatly accelerated adoption, revenue growth and profitability.

Peter Drucker in his book, “Innovation and Entrepreneurship” calls this, leveraging “the unexpected success”. It’s accomplished by digging through the customer lists, examining the motivations of a customer that bought (that you didn’t expect to buy), and discovering that the value proposition they received was well beyond both what you imagined and/or what other customers receive. If you then discover that there are a lot more customers out there like that one, with the same problem to solve, you have a great place to begin your refocus efforts.

There are basically two phases to these kinds of turnarounds. The first is a high level diagnostic exercise and the second is a process for assessing and selecting a lucrative alternative target market.

 

Phase I: The Diagnostic Exercise:

In this phase we encourage a simple hierarchy of 5 diagnostic questions to start.

Question 1:  Does The Target Market Have Momentum?

A dead man in a canoe will make forward progress if the stream is flowing fast – and a strong current makes up for a lot of inefficiencies in rowing, and can even compensate for inexperienced rowers rowing backward.  Momentum covers a lot of sins. Inherent market momentum arises from fundamentals in the marketplace – demographics, economics or regulations.

Question 2: Is the Economic Value Proposition Valid?

In B2B, both new and mature products must provide meaningful and calculable economic value from the perspective of the customer. Customers buy for their reasons, not yours – and even though you may be convinced that your product’s value proposition is universally meaningful, it does not mean your customers see it the same way. And not all customers in all markets receive that value to the same degree. So it’s important to get your team to honestly validate the economic value proposition through visits to target market customers in specific and different market segments.

Question 3: Is the Competitive Position strong?

The fundamental value proposition may be provided equally by any number of competitive offerings or alternatives in the market place. Unless target market customers can easily see your competitive advantage and recognize it as meaningful to them – you will not be able to break through the competitive noise.

Question 4: How effective is the channel in Communicating both the Value Proposition and Competitive Differentiation to the target market?

If you want a quick way to assess this, simply ask any of the team (marketing, sales, or engineering or channel partners) to calculate the economic value proposition (benefit) of the product or service offering to a typical target customer. Ask them to do it on the spot… back of the envelope. I am continually amazed how major product development and marketing initiatives are embarked upon without the slightest consideration to this critical success factor.

It is the natural instinct of marketing teams to spend a lot of money at this level and they typically believe that a magic combination of branding, promotion, websites, trade shows, collateral, promotions et al will somehow turn around a troubled product line. If there is any indication of a fundamental problem in the three primary diagnostic levels that come before this one – spending on level four will be fruitless.

We’ll take the canoe-and-stream metaphor one step further. A dead man in a canoe floating down a stream with strong momentum will actually make more progress than a live man in another canoe rowing backwards.  So not only do you need a solid market to support a valid economic value proposition, and a competitive advantage to communicate, you have to have people trained in how to communicate it… and do it well.

Question 5: Can You Consistently Deliver the Value Proposition?

Production and quality problems may be the cause of stalled success, but we rarely find that we have to go this low in the diagnostic hierarchy before we find the real cause of a market adoption problem.

 

Phase II: Evaluating and Selecting a More Lucrative Target Market

In each of the major turnarounds we have experienced in the last 10 years, the real key was not so much the lack of a meaningful economic value proposition, but rather a lack of focus on the segments of the market that would receive the highest economic, emotional or physical value from using the product.

All economic value transfer to your company starts with a customer believing that there is sufficient reason (economic, emotional or physical) to write a check to buy your offering. Different market segments will perceive and receive different levels of benefit from the same product. Markets with the highest value received will yield the highest selling prices.

The 12 basic evaluation criteria for assessing and selecting the most lucrative markets to focus on:

 1. Market Momentum: By this we mean the degree to which the market has fundamental demographic, economic or regulatory factors driving its primary demand. Here’s a caution: many firms and marketing teams get seduced by this factor alone – mesmerized by the lure of big numbers. Even large companies fall prey to this lure. But remember, the largest markets always attract the largest and highest number of competitors. Most of the time, it’s a better strategy to focus on a secondary market. It usually less competitive, less risky, less painful and penetration is quicker.

2. A Common Compelling and Significant Problem: It’s common that if one customer in a market segment has a problem, many others, to varying degrees, will be facing the same problem. If the economic benefit of solving that problem is significant, it’s likely that the willingness to pay a premium for solving it will be present.

3. Economic Benefit to the Customer: Calculate the economic benefit for a typical customer in each market segment. The likelihood is that you’ll get the highest selling prices in those segments where the economic benefit-received by the customer is the highest.

4. Financial Wherewithal of the Customer: Do potential customers in this market have the flexibility to buy and capture funding should the economic value proposition be significant? For example, the University market segment is typically characterized by hand-to-mouth funding availability and long research approval cycles.

5. Profitability of the Transaction: This factor assesses whether transactions in this market segment can be inherently profitable. Factors affecting profitability might be geographic, customization required and willingness to pay for economic value received.

6. Match of Company Assets and Capabilities: The annals of failure are replete with stories about companies who were seduced into attempting to penetrate large emerging markets for which their basic capabilities, assets, culture and structure were mismatched.

7. Accessibility: To what extent are the market, the channel and the key decisions makers readily accessible to your channel and sales process? You can’t communicate a value proposition to someone you can’t get to.

8. Lots of Unfilled or Under-Satisfied Sockets: A socket is a potential customer with the problem and the possibility of receiving economic benefit form solving it. Customers may have one or multiple “sockets”. In assessing market attractiveness we want lots of sockets – most of them still unfilled – or filled with a less-than-satisfactory solution.

9. A Well-Established, Vibrant Intra-Market Network: Studies of the diffusion of innovation reveal that the communication through the intra-market network is 13 times more significant in the adoption of an innovation than mass media.

10. Level of Competitive Turmoil: This factor gets rated opposite to the others. If there is a lot of competitive turmoil, rate this low. If not much, rate it high.

11. Experience and Reputation Match: If the market you are assessing already knows who you are, and your value proposition is consistent with whom you are, your brand name and your differentiators – then you can give this segment a high rating. This is the factor that many marketing people believe that “Branding Programs” can fix. But even the best branding program can’t make up for a poor economic value proposition or poor market momentum – and branding programs are typically very expensive

12: The Availability of a Relative Perceived Quality Leadership (RPQL) Position:Research from the Strategic Planning Institute, concludes that the single most significant factor affecting a business unit’s performance is the quality of its offerings relative to its competitors. The degree to which an RPQL-position available, unclaimed, or vulnerable (if someone already owns it), is a key factor in the selection of a segment on which to refocus.

 

Conclusions and Recommendations:

If you happen to find yourself in a situation of a stalled product line or business – our experience tells us that the last thing you need to do is spend more on marketing. In general, a business refocus is a much quicker and less expensive road to success.

A quick assessment of the customers that have already bought usually reveals those for whom the value proposition is significantly higher. Assessing the attractiveness of the market segment that they represent can reveal your opportunity to break out to success.

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Learn more about strategically improving low sales performance here, call us at 503.318.2696, email to qmp1@qmpassociates.com or connect through our Contact Us page

The Key Components of a Thorough Marketing & Sales Audit

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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.

The 8 Client Personality Types

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Aristotle, (though some attribute it to Mary Poppins), is purported to have said, “Well begun, is half done”. We’ll stipulate that neither Ari or Mary were talking to a group of consultants, or consultative sales folks, but consultant types quickly learn that early preparation can make a big difference in their ability to achieve a client success.

Beginning well requires quickly determining whether all the key ingredients of a “complete” success even exist. These ingredients include; 1) a client executive that has the personality to affect organizational change, 2) the potential of a major economic benefit for the client, 3) a style match of the consultant to the culture of the client organization and 4) solid gains beyond just your fee, for you, the consultant.

The Executive Personality Factor:

Early in their careers consultants learn that project success is rarely generated solely from their own catalytic, outside-in efforts. Every success needs internal collaboration with a client executive to affect change, assure Facial expressionsexecution and sustain the economic benefit of a project beyond the engagement.

Recognizing the critical role the lead executive plays in client success, we conducted an analysis of the last ten years of QMP engagements. We wanted to discover the earliest predictors of success from personality-reads on the lead executive. Why did we do this? Because, not all engagements are “complete” successes, and we recognized that achieving a complete success significantly multiplied the economic benefits for both us and our clients.

That analysis brought us to this conclusion:

“The personality type of the highest client executive involved in a specific consulting engagement, not simply his title or position, is the best predictor of an engagement’s ultimate success and the longevity of economic benefit received by both the client and the consultancy practice”

In your career, you may have participated in any of the myriad of commonly practiced personality profiling exercises. Myers-Briggs may have awarded you the distinction of an ENTJ or ISFP. Another test may have designated you a color personality, such as an Orange, or in the DISC profiling system, labeled you an “S”.

While self-knowledge is valuable, it’s not likely you will be able to ask your clients to subject themselves to a battery of personality tests before you provide them a proposal or start an assignment. So the problem remains. How can one identify client types and predict success from the earliest discussions? How can one know when to stay and when to run?

Sorting through hundreds of transactions resulted in our Approach-to-Business (ATB) scale for classifying executives. Admittedly, it wasn’t the most scientific of studies. We don’t have a research psychologist on staff. We simply sorted and grouped like-client individuals, named the groups and then regrouped by project success.

The grouping resulted in eight categories. Only three of the types seemed to have the key success gene, which we identified as the ability and courage to drive change.

So that this last point is not lost, it deserves mentioning again. The key factor in the successful types is their ability to manage and execute organizational change. In our experience, all types will say they are prepared to affect change but only three types actually do.

It’s Not the Title, It’s the Type

It is common to hear among consultants that “executive buy-in” is essential for engagement success. Our data refuted the generality of that claim. We restate it this way, “buy-in from executives at the right level and of the right ATB types is essential for success”. To truly be valuable in generating success, executives must be both the right ATB type and high enough in the organization to marshal resources and get attention when needed.

We have tested our ATB classification with consultants from around the country. They almost universally and immediately, recognize their own current and prospective clients among the types – as well as their project and proposal successes and failures. Once the patterns of these ATB personality types are recognized, one can adjust tactics, refocus resources appropriately and save an enormous amount of time while increasing the probability of “complete” success.

The 8 Client ATB Personality Types:

STUMPs: STUck in the Mud People will never change, they will never buy. They have a limited point of view and don’t move very far from it. Even if you are convinced, beyond any doubt, that they need your help and could reap enormous benefit, it is irrelevant. They are simply disinclined to buy professional services. Don’t try to convince or educate them, because they really don’t care. Politely walk away. Don’t persist. Unsolicited proposals will simply frustrate you, while bemusing them. It’s futile.

Takers: Takers know how to take. They take great notes, your time, your materials, your ideas, your concepts, and turn them into their own. They use your materials surreptitiously, under the radar. Credit or compensation for your ideas? What ideas?

Imagine having your third meeting with a client who appears to be interested, has taken a lot of notes but little or no action. Now, imagine the time and frustration you could have saved had you known from the outset that this potential client was a Taker. These prospects are experts at appropriating concepts and ideas, often asking during preliminary discussions if they can have copies of some of your key documents “to review with their people”. Don’t go there.

Opportunists: Opportunists want to purchase the minimum, bare bones package of services. Their hope is that purchasing the minimum will generate great results. Their expectation is first class results for the “economy” investment. Follow-through to success is rare, since they don’t have the expertise required to execute. Quite often the Opportunist will start many small projects. They will lose interest quickly if results are not immediate or if it seems like too much effort.

Boss-Made-Me-Do-Its: BMMDI’s (pronounced “Bim-Me-Dees”) are the political hangers-on of the corporate world. They provide lip service and public support for an improvement initiative but usually have little sincere enthusiasm—particularly if the consulting assignment has the likelihood of revealing and correcting weaknesses in their own department or function. They will engage, but only long enough to satisfy the boss. If the boss’ attention goes elsewhere, the engagement will die on the vine – as will success.

BMMDI’s have no personal commitment or belief. They may even engage in “lipotage” – public lip service, followed by indifference, or worse, sabotage. (The word “lipotage” was coined by my colleague Bob Phillips and co-author Larry Johnson in their book “Absolute Honesty” published by AMACOM Press).

A particularly hopeless combination is a BMMDI with an Opportunist boss.

Terribly Troubled: TT’s really need help and are willing to invest in serious solutions. Their level of pain is high, as is their motivation to fix the problem. They may research alternatives, but will make a decision quickly. They are typically in a rush to get started and consequently may miss some alternatives – but they will move forward. Spend quality time with these prospects to ensure they understand what will be done (deliverables), what’s required for success (commitment) and how you will fix the problem (approach).

Frustrated Drivers: FD’s can be very intense and quick in studying alternatives. Many times these are executives that inherited a family business or took over after a long oppressive or “old-fashioned” leader – perhaps a StuMP.

They have been waiting a long time for the opportunity to straighten things out. Their drive and motivation is high. They usually understand the weak points, the resources and commitment needed and, upon decision, will drive for quick, visible results.

Establishing well-defined goals, benchmarks, checkpoints and progress measurements will help FDs satiate their sense of urgency. Communicate frequently, clearly and succinctly. Emphasize speed, drive for quick traction and show results.

Sincerely Growth-Oriented (SGO): SGOs are there for the long term. These are clients that readily recognize they have issues and challenges, and demonstrate a sincere and strong desire to improve. An ideal type of client, they understand performance excellence and are motivated by it. They thrive on achieving goals and are constantly improving basic business processes. They are the best-of-the-best clients, intellectually, emotionally and financially. If you consistently provide high value to them in your engagements, SGOs will remain loyal for a long time and continue to award you new projects and referrals.

Dreamers: Imagine Don Quixote, the idealist and self-imagined white-knight savior. Dreamers are lofty in their vision and motivation, perhaps even charismatic, yet impulsive and occasionally misdirected. They are typically challenged at getting organizational buy-in and support, based on a history of failed past initiatives. Their grandiose visions of the corporate future are rarely realized. They talk enthusiastically but show little interest in getting deeply involved in the details of execution .

According to our research, Terribly Troubled (TT’s), Frustrated Drivers (FD’s) and Sincerely Growth Oriented (SGO’s) generate the most meaningful successes by an order of magnitude, in terms of the highest long-term value for all concerned.

But wait! Good ATB genes are required, but not sufficient.

ATB considerations create opportunities for complete success only if the three other raw ingredients exist as well.

Ingredient #1: Strong Economic Benefit:

Business-to-business executives buy consulting services because of a basic belief that the money invested in those services will return significantly greater economic value than the cost. If there isn’t a meaningful economic benefit to be achieved for the client, com “complete” success may end up a ‘Pyrrhic” success.

Ingredient #2: Consultant Style, Capabilities and Personality

These ingredients must Blend with the Client’s Culture: Clients want a consultant whose expertise is well-matched to their specific needs. Furthermore, the ideal client relationship must be based on mutual trust and open communication. But even with these factors covered, execution remains the biggest challenge, because the people in the organization must change the way they do things.

The ability to affect change is enhanced with good communication – and communication is most effective when the consultant’s personality and style match the personality, style and culture of the client organization.

Ingredient #3: Wins for the consultant:

Beyond the economic payoff, other rewards await a complete success: case studies, new tools and techniques, raw material for articles, referrals, follow-on business and new networking connections. If you are going to invest the next six months in a major client engagement, it’s better to find one of that holds the promise of the multiple rewards of a “complete” success.

Personality to Profit

A consistent challenge in selling consulting services to a new client is getting an audience at the right executive level. It is a coup. But when the actual discussion starts, it is common to get so focused on the problem at hand that one can easily forget to look for all the key ingredients of success.

We started this article with a quote from Aristotle, so it’s only fitting to end with a quote from the great American philosopher, Yogi Berra. Berra is purported to have said, “You can observe a lot, just by watching”. Let me add this, “..but you must remember to observe.”

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Learn more about the QMP process for reading people and creating winning sales strategies in our one-day Sales Skills and Process Training Workshop, 60/90 minute on-line Sales Webinars or, for consultants, our Consultancy Navigator program.  If you have special need let us know of them through our Contact Us page, or call us at 503.318.2696.

Finding New Markets

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Where does one begin the search to find new markets?

The good news is: new high-potential market opportunities are typically discovered closer-in than you would imagine. Some await discovery hidden in the clutter of your current customer list. Others find you, not the other way around.  In either case, your task is to recognize and quickly assess their viability.

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The biggest barrier is not that opportunities do not exist, but rather that firms have not dedicated a resource, and put in place the discipline to continually explore, vet and test their viability. New market opportunities can quickly and positively impact the bottom line. So, the key to growth is learning a) how to consistently be on the lookout, b) how to recognize possibilities and c) how to test their reality and viability.

Places for discovery:

Here are six places that have created the biggest up-sides for our clients.

  • Current customer list: it’s the small customers, not the big ones
  • Fulfilling customers’ unrecognized needs: the iPad and the SUV are good examples
  • Your competitors’ current markets: they are not as homogeneous or impenetrable as you might believe
  • Channel-to-market: is your channel providing more or less value to your customers than your customers need?
  • The sales pipeline: most sales people are poor at assessing an opportunity for its real, bigger-picture potential
  • International: some international demographics and economics are compelling

If you think you’ve already looked in these places, you might want to check again after reading this blog post.

Your small customers:

Some of the most significant growth opportunities we have seen have come from analysis of small, unexpected customers that have, under the radar, slipped into a firm’s customer list.  They are typically considered insignificant and/or outliers for two reasons: 1) the revenue amount represented was relatively low and 2) they came from outside the primary market targets of the firm. However, a quick analysis in several cases revealed that these customers were actually representative of much larger markets – markets with large numbers of customers with the same significant unmet needs that were already being satisfied by the firms’ product lines better than any other offering available.

In one case, the small “insignificant” customer was representative of 20,000 similar organizations nationwide, none-of which had as good a solution to their problem as was being delivered by the firm’s software. This new market opportunity was tested and validated within 90 days. Growth over the next two years in that market more than doubled the company’s revenue

Well-known business thought-leader, Peter Drucker, in his book “Innovation and Entrepreneurship”, named this phenomenon “the unexpected success”. “Unexpected successes” are characterized by customers buying your product from markets you had not considered, getting benefits you had not conceived because your solution was inherently better than alternatives they had to consider.

This common dynamic means that someone in your firm should always be asking your “unexpected-success” customers these four questions:

  • Why did you buy our solution?
  • How many more people like you are there, out there?
  • How many of those other people have a good solution now?
  • Where do these people hang out?

The lack of a consistent asset dedicated to this analysis, delays the discovery of breakthrough new opportunities.

Your customers’ unmet needs:

The iPad, the SUV and the microwave oven are examples of new product ideas that were formulated to meet customer needs that were “subconscious” or simmering just below the surface of a customer’s “experience” with current solutions. The key words in this sentence are “subconscious” and “experience”.

Typically, in smaller companies, not enough time is dedicated to thinking about the subconscious needs of customers and the customer use experience.  Most product development roadmaps we have seen are driven by; a) urgent responses to competitive moves, b) the drive to reduce product costs, and c) evolutionary feature extensions to current offerings. None of these create new market breakthroughs.

New market breakthroughs come from insights into customer behaviors, problems and product usage.

Your competitors’ current markets:

In the 1970’s GM (50%), Ford (25%) and Chrysler (15%) collectively owned 90% or more of the United States automobile market. Now some 40 years later, imports represent a huge portion of that same market. The lesson learned is that if you do not fragment your own market, a competitor will do it for you.  The caveat: In each segment of the competitor’s market you target, you must have a relatively advantaged solution.

Imports won their initial US auto market share by fragmenting the US automaker’s markets and offering a value proposition that represented a significant value proposition improvement in one specific segment – the industry’s most vulnerable – small, economic compact cars. After establishing that foothold and clinching their quality reputation in the compact segment, they then stepping-stoned through the other segments – leveraging that quality reputation.

Your new market opportunity may simply be created through a focused initiative at a segment of your competitor’s markets that is most vulnerable due to that competitor’s neglect of the segment. This is particularly effective if the competitor is much larger.  You should never attack a competitor on all fronts at once.  However, all competitors are vulnerable to fragmentation and differentiation aimed at dissatisfied or under-satisfied customers in some sub-segment of their business.

Your channel to market:

Most firms decide on their channel-to-market based on what benefits it provides in market coverage. The market (customers) really only care about the services the channel provides to them – not the exposure it provides to the firm. If the channel is under-satisfying the needs of the customers’ this represents an opportunity for a) increasing value delivered and compensation received, or b) increasing market share based on service.

Amazon was launched as a channel alternative to brick and mortar book stores.  It didn’t capture all book customers – but it did exploit a vulnerability and weakness of the then current book stores by offering convenience and in-home browsing. It created the on-line-bookstore market.

Your sales pipeline:

A sales person’s effort in pursuing an opportunity is typically influenced by three factors: a) the anticipated initial purchase amount, b) the magnitude of the long-term opportunity as communicated to the sales person by the customer’s purchasing department and c) the commission rate associated with the opportunity.

The first thing to recognize is that customer predictions of ultimate volume activity (part b above) are typically overstated – many times to hold up a carrot in order to exact the best pricing for whatever it is you are going to quote. More important than the volume prediction, is its logic. It should never be accepted at face value. Discovering the logic is what separates pursuit of a typical opportunity from discovery of a breakthrough market.

To test the validity and logic of a large prediction the savvy sales organization pursues a revealing question chain:

  • What ultimate economic, regulatory or demographic market factors will drive such high demand for your customer’s product?
  • Is this product introducing a whole new revolutionary value concept that no one has offered before (like the first microwave oven) or is it an evolutionary product (like current microwave oven offerings) – just bouncing along an incremental improvement curve?

Purchasing managers almost always over-predict the anticipated adoption of their new products. However, the answers to the two questions above may reveal a truly large and compelling market opportunity. For example, a firm that makes metal fabricated parts for military and aerospace customers may find in its pipeline an opportunity for a part for a medical device.  That opportunity may represent a number of situations: a) someone looking for a competitive quote to replace their current supplier, b) the need for a part for an evolutionary incremental product or c) a breakthrough new product.  Looking at the face value of the opportunity may not reveal the truth behind the opportunity.  Only by delving deeper can the truth of new market opportunities be discerned.

International:

The demographics and economics of India and China are intriguing. The average age of the population is much lower than in the United States, their educational levels are growing, their income per capita is growing and their middle class is also growing.  Indra Nooyi, the current CEO of PepsiCo, when asked where her company will be investing in the near future stated those facts – along with two population statistics that clinched the answer.  India has a population of 1.1 Billion people and China a population of 1.5 Billion people. (Current stats are 1.2 Billion and 1.3 Billion people respectively).  For PepsiCo the investment decision is made.

Those investments will require infrastructure and support – a “demand-halo” – from smaller companies, creating an opportunity for international expansion.  Navigating the local laws, regulations, cash repatriation and other idiosyncrasies of international expansion is a bit of a challenge but it can be done.  If you don’t do it, someone else will – likely some competitor.

Conclusion:

Given the incredible amounts of money spent today on branding, websites, Search Engine Optimization, sales promotions and tradeshows it is sad that a small portion of those funds do not find their way to support a “market opportunity sleuth” (MOS).  Even if your firm has only 10 people in it – assigning the job of MOS to even one-half a person would be wise.  That person should be responsible for scouring the areas listed above and reporting monthly on findings. After all, even if only one breakthrough opportunity is discovered in the course of a year – the investment would be worth it.

Read our related posts “Diagnosing Stalled Sales” and “Foundational Marketing – and please send us your comments.

For more information about Finding New Markets and Assessing their Viability call QMP at 503.318.2696 or eMail Jerry Vieira at jgv@qmpassociates.com

Copyright Jerry Vieira and the QMP Group, Inc., 2012

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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