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Archive for the ‘Marketing’ Category

The Discipline of Market Leaders Updated with Some Caveats

Thursday, September 10th, 2009 by Brad

In the mid 1990’s I read a book that connected with me. It was The Discipline of Market Leaders authored by Michael Treacy and Fred Wiersema. In a nutshell it said that companies need to pick their marketing strategy from one of three choices, those choices are Operational Efficiency, Product Leadership, or Customer Intimacy. A company that believes they should do all three will fail.

 It goes like this:

  • Companies are most successful when they focus on only one marketing discipline
  • Companies are mediocre when they focus on two marketing disciplines
  • Companies will be run over when they think they can do all three

 

The table below summarizes the concepts of the book:

 

OPERATIONAL EFFICIENCY

PRODUCT LEADERSHIP

CUSTOMER INTIMACY

Core Business Process

Sharpen distribution systems and provide no-hassle service

 

Nurture ideas, translate them into products and market them skillfully

Provide solutions and help customers run their business

 

Structure

Strong central authority and a finite level of empowerment

Acts in an ad hoc. Organic loosely knit, and ever changing way

Pushes empowerment close to customer contact

 

Management Systems

Maintain standard operating procedures

 

Reward individuals’ innovative capacity and new product success

Measure the cost of providing service and of maintaining customer loyalty

Culture

Acts predictably and believes that “one size fits all”

Experiments and thinks “out of the box”

Flexible and thinks ” have it your way”

 

Company Examples

Wal-Mart - McDonalds

Intel - Nike - 3M

Nordstrom

Over the last few years I have heard nothing from these authors. I wondered are the concepts no longer valid, what has changed?

My feelings are they are as relevant today as they were 10 years ago, with two caveats.

First: it doesn’t matter what strategy you are pursuing, you need to continually look at ways to lower your costs and add more value (from the customers view not the companies) for lower costs. This is a fact in the world we live in today with no exceptions that I am aware of.

Second: adding more features and functions after a certain point where the customers aren’t demanding them will open up the possibilities of a disruptive product coming in and interrupting your strategy. This disruptive concept was originated in the book The Innovators Dilemma by Clayton M. Christensen, it is worth reading.

The Discipline of Market Leaders is still a relevant book today to help companies chart their path, but remember the two caveats.

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What Does the Customer Really Want?

Thursday, March 12th, 2009 by Clark

At Setpoint we follow the Mahan (Mahan Khalsa) culture of selling.  Following are some high level points we closely follow and practice in our daily business relationships with our clients.

Mahan selling is not a technique but rather a culture that establishes a partnership between Consultant and Client.  Too many times sales professionals spend an inappropriate amount of time advocating their products or service before even understanding what the client’s needs, issues and opportunities are.

Mahan selling focuses on understanding completely every aspect of the customer’s needs before trying to pitch a solution that may not be even close to what is needed.  By focusing efforts on the customers issues and opportunities, a sales professional can bring far more “value add” to the table and in the long run provide the solutions that exactly meet the customer’s needs.  Not kind of, or sort of…exactly.

The goal is to be in tune with the customer’s business issues and opportunities.  This can only be achieved by allowing the customer to express what these issues and opportunities are.  Too many times customers just want to know a number or be given a solution to what they perceive as “The” issue.

At closer examination, and with some sincere questioning by the sales professional, a complete, prioritized list of these issues and opportunities can be compiled.  The way to get to a solution that exactly meets your client’s needs is by a “No Guessing” approach to finding out what issues and opportunities your solution will solve or help the client take advantage of.

stoplight

Any time you feel the conversation or sales cycle may not be going in the right direction, Mahan calls this a yellow light.  Our typical reaction to yellow lights in sales is similar to how we drive on the road.  Most people speed up and zoom right through the yellow caution lights.  In the Mahan culture we are encouraged to slow down for these yellow lights and express your concerns to the customer.

If we let the customer turn the so called yellow lights to green, rather than trying to hurry through the issues and do it ourselves, we will be more successful in finding a way to serve their needs.  In fact, if done correctly, having the customer solve the issues or yellow lights can usually create a more positive impression of you and your company’s ability to serve their needs.

 One of the main reasons we try to get an upfront list of issues and opportunities is because there is always a direct correlation between the customers likelihood of buying our solutions at a certain price and the number of issues and or opportunities we and the clients feel our solutions can solve or capitalize on.

So remember, never guess what the client’s needs are.  Ask clarifying questions on what their needs are.  Get out all the issues and opportunities they hope your solution will solve.  And always slow down for yellow lights in the sales cycle and allow the customer to turn any yellow lights to green.

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Posted in Creative Thinking, Lean Automation, Lean Systems, Marketing, Process Improvement | No Comments »

The Financial Crisis: Events Leading up to it and Who is to Blame

Thursday, October 23rd, 2008 by ksmith

Joe did a great set of videos explaining the financial crisis including what led up to it and who is to blame.  We filmed this one before but I hear it was pretty boring and had bad lighting.  So we refilmed it and here it is.  We got some professional lights thanks to Steph!  Joe also went to a thrift store and got some props.  My personal favorite is the Napoleon bobble head - I love Joe’s smile when he uses it it’s like he’s ready to start laughing.

Joe talks about the savings & loan crisis and the bailout that the government did back in the 1980’s, about the creation of Freddie Mac & Fannie Mae, what a subprime mortgage is, a bank’s balance sheet and how they become insolvent or bankrupt.  That’s in the first video Financial Crisis: Freddie, Fannie & Subprime.

Let me know what you think, do you like this one better?  Are there other questions that you would like to have answered?

 

The second video is about Who is to Blame, Joe walks through the entire process of a loan and what happens and then lists out who he feels is to blame…and there’s plenty of that to go around.

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Rich Internet Applications (RIA)

Thursday, October 23rd, 2008 by ksmith

Recently I was asked what Rich Internet Applications (RIA) were and whether they were good or bad, useful or something that we might be able to see in the future. Rich Internet Applications have been used on the web for many years. They are great for engaging the customer and drawing them deeper into your site. One of the earliest ways I remember using a RIA is dreaming about buying a new car and having all of those extra’s added on. So since my dream car is the new Dodge Charger I’m going to use that as my example.

RIA’s allow you to go in and select a product and then choose all the features that you want all the while seeing the price of the product so that you can see how your selections affect the price. So if I want the Charger R/T All Wheel Drive P package in the dark titanium metallic, I’m looking at a starting base price of $36,135. However, who wants a base model when you’re dreaming? After adding the “essential” extra’s like the power sunroof you’re looking at $39,785. Then I can go through and look at the Daytona R/T in Stone White starting at $37,035 add in the same extra’s and the price is $40,320. So within a few minutes I can see it is better pricewise to go with the R/T AWD and save or for less than $1000 go for the cool paint job of the Daytona R/T.

That is what is so great about RIA’s, they allow you to go through the selection of something you are looking at and pick and choose what you want to get the solution that is right for you. You could see if you added a feature if you could still afford it or if by adding another one you couldn’t. Another website I have seen where the RIA is great is on the Sony Ericsson site. Their site lets you go through the options of cell phones and it narrows down which phone would work the best for you (of course it has to be one they make). Verizon tried to use it but they still need to work on it. You can go in and select options but then you have to select view phones and if you select options that are not all included in a phone you get an error of “no match found, please modify selection and search again.” What I like about the Sony site is once you select an option it changes the features and phone selection to only have the options that are truly available shown. If you choose a phone that doesn’t have and option, it grays it out so you can’t select it.

One of the things I really like about a Rich Internet Application is that it doesn’t require me to download anything onto my computer in order to use it. It’s all a part of their site and doesn’t require me to spend 3 minutes allowing something to be added to my computer.  Allow - hey I said allow already! I can see the use of RIA’s growing and more websites that offer a lot of features or options to use them to help customers narrow down what they are looking for.

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