Marketing
Did the Global Economic Crisis Kill the Aspirational Leader In Us?
On December 30, 2008, the Long Term Future made a cameo appearance on the front page of the Wall Street Journal (WSJ) after a prolonged absence…
ROUND ROCK, Texas — Computer giant Dell Inc. said this summer that it has become “carbon neutral,” the latest step in its quest to be “the greenest technology company on the planet.” [full article]
The Dell article is remarkable not for its content, but that, as a story about a longer timeframe, it even made it to the front page. The bigger headline is that the recession of 2008 drove the discussion about the ramifications of the long-term future of the planet and its inhabitants off the table. Many in business and government dropped the environmental agenda in an instant. In its place, a worldwide, short-term focus on the immediate crises. Clean-energy firms watched their stocks fall and funding dry up. Two days later, in the WSJ 2008 markets and finance roundup, the environment’s chief competitor, oil, is mentioned 15 or so times; the environment, two times:
April 17, 2008: Changing course on global warming, President Bush calls for halting the growth of greenhouse-gas emissions by 2025 but provides few specifics.
November 26, 2008: Greenhouse gases in the atmosphere reach record highs and show no signs of leveling off, a U.N. agency says.
So here’s a question: How many trillions of dollars will it take to restore the economy, short-term, while glossing over issues of food, air, water, population, climate and peace, long-term? What happened to our leaders? What happened to their stated aspirations? What happened to the future?
Reaction vs. Aspiration:
In this turbulent last quarter of 2008, we have seen the leaders we observe and interact with sharply divided into two camps:
- Reactive: What are we going to do about the crisis at-hand? Get rid of the problem.
- Aspirational: What are our long-term goals? How do we pursue them? Create the future.
This is not to say that those focused on their long-term goals do not also address the short-term crises. It is simply that the driving force is long-term, and their short-term actions are aligned with the longer goal. We are pleased to report that most of our clients are doing well, and pursue their aspirations while quite sensibly dealing with the current reality.
But we are most concerned that the reactive orientation seems to be ruling much of leadership in big business, government and the general public. At conferences, in boardrooms, and across dinner tables, the discussion has collapsed from years and decades to days, months and quarters. The 3-year plan (does anyone recall the 5- or 10-year plan?) has been replaced by the emergency / bailout plan. Even many whose hope for change is invested in President-elect Obama are shaken by the enormity of the circumstances his administration faces as they take office.
When the reactive orientation rules the day, the way OUT of the crisis is not necessarily the way FORWARD to our desired future.
Head in the Clouds; Feet on the Ground:
Leaders practiced in organizing around their aspirations in less-than-ideal circumstances have developed certain disciplines around envisioning a goal, assessing the situation and taking innovative action. Following are a few tips in each of these categories.
Focusing on the future goal:
- Start with the End in Mind: When it comes to discussing situation (present) and goal (future), choice of sequence really matters to one’s ability to focus on true aspirations. This is doubly so when up to one’s hind-end in alligators. Talk about the present before the future, and we might as well launch the discussion saying, “Given the dire circumstances, what can we get away with, here??”. Start by talking about the future, and the tone is quite different: “What matters, here? Independent of circumstance, what do we truly want?”.
- Avoid Mixing: In a crisis, bringing up future goals can start a tennis match. The first speaker serves with: “We want to release a fully-electric car.” The second returns with: “But oil is $40 / barrel today, and the price fluctuates! That’ll never happen.”
Instead, split the discussion into two short rounds. For the first couple of minutes, focus on the goal. If someone (or the devil’s advocate in our brain!) tries to counter the goal with details of the current situation, assure them (or ourselves!) that it will be up for discussion momentarily. - Be Concrete, and use Dates and Measures of Success: It won’t work be vague about goals that matter to us. What if we are moved to “do something about US residential carbon emissions”? That’s vague, and even smacks of problem-solving. Consider instead:Â “By 2050, all homes in the US are heated and cooled with renewable energy, and require 60% less energy, overall, than in 2009.”William O’Brien, former CEO of Hanover Insurance once said, “At the end of the day, you ask yourself, ‘How did our vision influence our actions?’ If the answer is ‘It didn’t,’ the vision is just words.” [pp331-332, The Necessary Revolution]
Choose Where to Focus: In good times, it’s easy to pursue what we want. In our minds, the outcome can seem virtually guaranteed. But when times are tough, and we remove the guarantee, we often learn where our focus has been – and that we now have a choice.If our senior motive was not reaching the goal, but instead achieving the Return on Investment if the goal is reached, but we now lack a guaranteed ROI, we are apt to abandon the goal. If, on the other hand, we find we are focused on realizing the goal for its own sake, we have a different relationship with the goal, and are more likely to follow through.Please don’t read a value judgment about pursuing ROI. The essential question is: which motive is dominant in driving our involvement with the goal? If our dominant focus and motivation is to realize the goal, rather than reap its benefits, the goal is more likely to be realized. It’s a key choice.
Focusing on the current situation:
Since we led with the goal, we now can take a different tack with our situation assessment:
- Keep it Relevant: Given a clear goal, one has a new, more efficient way of organizing the discussion about reality – facts relevant to achieving the goal, and facts that are irrelevant to the achievement of the goal (and now don’t need to be discussed past the test of relevance).
- Keep it Real: Separate fact from opinions and assumptions, and be vigilant for deeply-held assumptions and beliefs masquerading as fact. Identifying what we don’t know is every bit as useful as confirming what we do know. Brain expert, John J. Medina points out that the brain isn’t interested in reality. It is more interested in survival, and as a consequence, [unattended] memory is not reliable. The brain will change the perception of reality to stay in survival mode. The key to reliable memory is to consistently reexpose oneself to the information. [HBR May, 2008, reprint R0805B]. So stay grounded in the facts of reality.
- Don’t Navigate by Emotion: There is nothing wrong with emotions. They simply don’t happen to be a reliable indicator of the situation, or of progress toward long-term goals. As heretical as it might sound, you might well benefit from ignoring yourself in this department, and refocus on the goal and the situation.
Taking action in complex times:
- A Time for Learners: When presented with smooth trends, the human mind is good at guessing what will happen next. In times of great and rapid change such as these, it is not nearly so good at prediction. Experience and formulas and best practices fail us. Students of Complexity suggest a different strategy for effecting change where past performance has proven unreliable for predicting future outcomes: Probe, Sense, Respond. It is virtually the same process used to find one’s way across a dark bedroom without stubbing a toe.
- When At A Loss: When we don’t know what to do next – and it happens to all of us – what DO we do? Focus on the goal. Locate current reality. Study the difference between the two. Then invent a set of actions to move from reality to the goal. The result of any action can be evaluated and learned from, and our action plan adjusted.But when disruptive forces hit a company, all processes are up for re-evaluation. Why are we still executing this process? Is the goal still valid? Is the current situation different from the circumstances under which the process was created and refined? Given a clear goal and accurate current reality, we can determine what to keep of the process, and what to change.
Two points of light:
While we realize that times are truly challenging everywhere, we are inspired by the human capacity to transcend circumstance and envision a desired future. At its simplest, to organize around aspirations is to focus on not just one, but two pictures at once: current reality and the goal. Reconnect with what matters. Treat the current situation not as an adversary, but as a starting point on the journey. Continually test the actions in relation to the goal. By doing so, we improve the odds that the way out of the present crisis is also the way forward.
© 2008 Gary Ralston and the respective copyright holders.
WSJ.com: Does Being Ethical Pay?
Companies spend huge amounts of money to be ’socially responsible.’ Do consumers reward them for it? And how much?
We recommend this article, written by Remi Trudel and June Cotte of University of Western Ontario’s Ivey School of Business, and published in both the Wall Street Journal, and the MITSloan Management Review, and its related podcast.
In the study, the researchers set out to determine how much consumers were willing to pay for a commodity (in this case, coffee and t-shirts), when presented with the ethical track record of the company behind the product. They found that while consumers will pay a premium to a company with at least some socially responsible practices (25% organic cotton, for instance), they wouldn’t pay much more for a company using 100% organic cotton. On the flip side, researchers discovered that consumers punished clearly un-ethical companies (i.e. lacking ethnic diversity, hurting the environment, sweatshop labor), only buying their products at a steep discount.
The findings set up an interesting tension between the economics of the business (invest only enough in ethical practice to change perception and benefit from higher margins), and the values and principles of the company (operate in a socially-responsible manner in every way we can, within our business model). Nonetheless, the conclusion is that the consumer will reward socially responsible behavior and punish unethical behavior through their buying choices.
How do your customers rate your company?
- illustration: Rob Shepperson, wsj.com
SkyBus Business Model Asks Too Much Of Customers
Aren’t those automated reminders great? A gentle nudge to check-in for my upcoming flight to Bellingham, WA. I was scrambling to wrap up my Midwest Christmas and travel to visit more family, and departure was a little under 8 hours away. That might have explained why I missed an unassuming email that arrived 5 hours prior:
“We’re sorry, your flight – Wednesday, December 26 – has been cancelled. Would you like to choose a different flight – no charge, or request a refund?”
In the past, this kind of note indicated a 10-minute adjustment in departure time – a non-event. I’ve flown SkyBus to Bellingham (BLI)Â since it’s first flight. At 4.5 hours direct to the Pacific Northwest from Columbus, Ohio, I have saved SO much time compared to any other route to Vancouver, BC. My bags have never been lost. On occasion, I’ve flown for $10 – 30 per leg. SkyBus was my hero. As an aside, I was CRUSHED to hear service to BLI would end January 5, 2008 because it was unprofitable – I even planned to send the friendly, overworked team at SkyBus BLI a thank-you note. I felt a strange sense of pride that I had been on the first flight to BLI, and I would be aboard the last scheduled flight out. Did you know that when a new airline begins service at an airport, the fire trucks traditionally ‘baptize’ the first flight with a water cannon arch as it taxis? It’s really something to be part of. I was a raving fan.
But this was different. The delay was until the following Sunday – 5 (five) days!
This is NOT cool. And I soon find I’m not alone. I quickly rescheduled on my old faithful, Southwest Airlines, scrambled for a rental car at SeaTac, and but for 4 hours lost to a longer commute and net $50, I was back on plan. SkyBus received a refund request, and off to the airport I go…
…where I meet up with families on ski trips and other holiday travel trying to piece together itineraries, and grappling with radical, last-minute budget-busting fee increases because SkyBus has no ticket reciprocity agreements. One family of 5 WAS flying for $30 per seat. Now, on Southwest last-minute, plus a shuttle to Bellingham to pick up the one remaining SUV for rent in the area, I’d guess their bill jumped almost $1700 overnight. In their case, they missed the cancel notification and only discovered the bad news at the airport. Ouch.
Some business insights:
- SkyBus was on a great track to building a loyal customer base, excited to promote the new low-cost carrier.
- The SkyBus business model counted on high use (13 hours / day / /plane) of a 7-plane fleet, with the schedule extremely vulnerable to maintenance issues. They lost 18 flights by grounding only 2 planes.
- The SkyBus model has no reciprocity with other carriers, and limited trip cancellation insurance, meaning that beyond a refund, the traveler carries the full burden of finding alternate transport.
- The audience for low fares are often unprepared to handle drastic jumps in fares ($150 to $1850 for a family of 5).
- When we used SkyBus for business, last-minute changes could escalate a $20 fare to $450 instantly, but we gladly paid because we saved so much time. Except for a lucky few, SkyBus actually isn’t that much cheaper.
- From a PR standpoint, rescheduling the same or the next day is not such a big deal. Rescheduling five days later, is. It’s big the way contaminated Tylenol was big – if the event, itself, destroys consumer trust in the product or service, ONLY the company’s response and message will rebuild it. For any PR department, this ought to kick off a significant response.
Bottom line, I have seen little that indicates SkyBus is interested in making a service recovery, or is truly interested in the plight of its passengers. On the contrary, the message seems to be: “Grow up! You want low fares? Plan way ahead, change nothing, and accept the fact that we might well leave you stranded with no recourse from us.”
Can you feel the love?
For more on this story, The Columbus Dispatch has an excellent article on the cancellation and its implications.
The Art of the Start
The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything
Sure, that’s a bold tag line, but Guy Kawasaki is the one to pull it off. A brilliant thinker and communicator, old dogs (mice?) in the Apple Computer community know Guy as one of the catalysts behind the success of the Apple Macintosh.
There is SO much good stuff in this book that it is hard to know where to start telling you about it. Starting, Positioning, Pitching, Writing a Business Plan, Boostrapping, Recruiting, Raising Capital, Partnering, Branding, Rainmaking… and being a Mensch! (Yiddish for “ethical, decent and honorable person”.)
Did I also mention that it is short, sweet, funny to read, extremely well presented and memorable?
An example: One of the many valuable distinctions Guy makes is between Mission Statements, Tag Lines and what he calls an “Organizational Mantra“.
Nike has many Tag Lines. Perhaps the most famous is: Just Do It. That’s fine for marketing, but it doesn’t help focus internal business decisions.
Nike has a Mission Statement: To bring inspiration and innovation to every athlete* in the world. The statement actually includes the asterisk: “*If you have a body, you’re an athlete”. (from the 2007 Annual Report). This is a high-concept and inclusive statement, and is better, but still awkward for decision-making.
Now according to Guy, Nike’s Mantra is “Authentic Athletic Performance“. In Nike, with it’s culture of innovation, I think this is a phenomenally useful tool. Anyone, from the designer to the marketer to the supply chain manager can ask the question: “Will what I’m doing, right now, deliver increased ‘Authentic Athletic Performance’ for our customers when they use our products?” if the answer is ‘No’, they can immediately ask if they should be doing it. That’s the basis of focus.
My question for you: What’s your mantra? (Write or call, and let’s see if we can help you come up with it!)
If you are in charge of starting and growing something significant, in a business startup, a large corporation, or a Rotary Club, you should be reading this gem, and taking heed of far more of its advice than is normally wise in a business book. This one’s a keeper.
PhoneSpam and the awesome power of the Do Not Call Registry…
SOMEONE must be profiting from these brute force attacks on our time, and our every communication channel – just don’t let it be your company.
Like you, we get E-mail Spam, Fax Spam, Snail-mail Spam, and, yes, Phone Spam. And like you, we tried to fight back – at first. Remember “unsubscribe links” that did??? (There’s one to tell your disbelieving grandchildren!)
Then came the fall from innocence: “So wait… when I click on ‘unsubscribe’, most of the time a spammer is overjoyed because they now know my e-mail is valid, and it will  (*sob*) INCREASE my volume of spam???”
Then there was the National Do Not Call Registry, with its promise of quiet phones. We registered in 2003, and for a while, it helped. Lately, though, we’ve been inundated by waves of pre-recorded, auto-dialing sales pitches thinly disguised as surveys or contests. Â We have 4 lines here, and sometimes ALL of them will ring at once. It would follow that Phone Spammers now use the registry as a ready-made whom to call list.
It happened again today – all lines ringing – and I snapped.
I answered 2 of the lines (sure enough, from the same company), triggered their recorded messages, pushed the conference button on my phone connecting the two cyber-salesmen – and went for a coffee.
Once I calmed down, I went to the Do Not Call Registry and registered a complaint. I used the Caller ID number to report them, but since they, too, are faked all the time (I’m sorry, Virginia, but it is true…), I really have no idea if the perp will be brought to justice, or if a legitimate company has been framed by some offshore phone spammer.
The business moral of the story – one we practice, ourselves, and drum into all our clients – is to never, never contact a prospect who hasn’t explicitly invited marketing or sales contact. That goes double for any automated, mechanical means of contact. If you do, be prepared to become a lightning rod for all the pent-up frustration the spammed hold for their hidden antagonists.
A word to the wise…
Apple iPhone disrupts yet another product category…
Steve Jobs, one of the great showmen of our time, has done it again. Following on the heels of the Apple II, Macintosh, iPod, iTunes and OS X, Jobs demoed the new iPhone at the keynote presentation for MacWorld Expo San Francisco.
Meanwhile, nearly 2500 miles away, in Columbus, Ohio, a group of geeks young and ol… uh, seasoned, were hungrily pushing the refresh button on their browser to get the latest word from Ryan Block, a reporter from Engadget.com covering the closed keynote and posting transcripts and photos to the website in near real time, thanks to the wonders of wireless. (Does anyone remember the press corps running to the phone booth after an announcement to file their breaking news???) Between the four of us, we have owned countless phones from Motorola carphones and handhelds of the 80’s to the latest Treo and Razr and Q, and used almost every cellular service in the region. Any cellular company would be privileged to have us as a focus group.
And we were in awe of what we saw.
Apple has not taken an incremental approach to improving the cellphone. Instead, as they so often have, they have rewritten the rules of interaction with the device in ways that seem so patently obvious and intuitive that it makes you think: ‘That’s how it should have been done from the start!’ This phone is ALL touchscreen. No stylus. One button on the front. Use one or more fingers at a time to operate it. Beautiful scrolling. Turn it sideways and it automatically goes into widescreen mode. Simple. Except here is Apple, clearly thinking so far ahead of the pack, and already to market – shipping in June from Cingular / AT&T. Explore Apple’s new iPhone, here. See the full presentation, here.
One anonymous quote we saw on the blogs: “Today, it would suck to be any other cellphone manufacturer.” We would agree.
If you haven’t seen Steve Jobs in action, watch Apple’s previously-recorded Keynote presentation, here. Oh – one more thing: they also released a box that plays your digital content on your TV. And changed their name from Apple Computer to Apple, Inc. And had Yahoo and Google onstage at the same event. And ended the presentation with a mini concert from John Mayer. Busy bees…
Now here’s the big business strategy question coming out of Apple’s example: Does your organization see itself as an innovator? Is it putting up the resources and doing the head-hurting thinking, planning and execution required to redefine your product category? If not, what will it REALLY take to rewrite your organization’s destiny?
Photos appropriated, with appreciation, from Engadget.com.
Web 2.0: Strategies And Lessons For Business Leaders is a must-read for Accelerating Business Growth
When did I realize that Web 2.0 was a part of accelerating business growth? When it reached out and touched our own business last year…
Let me disclaim – while I am a contributor to this worthy executive summary, the credit truly belongs to my colleague and friend, our lead author, Troy Angrignon, for creating a timely, readable introduction for the rest of us. I recommend it to all boards and CEOs.
Web 2.0: Strategies and Lessons for Business Leaders begins this way:
As you read this, industries are being disrupted.
Yours May Be Next.
You need to understand what is happening so that you can lead your
organization successfully in these times of turbulence. The classified advertising industry is collapsing; the public relations industry is undergoing a radical make-over; the newspaper and media landscape is being turned upside down by the social media movement; the hundred year old telephone business is facing its largest threat ever…and losing; the global auctions industry has already been up-ended.This is Just For Starters.
The purpose of this manifesto is to introduce you to Web 2.0 principles and concepts so that you may help your organization formulate a Web 2.0 strategy to address this next “sea change”.“ We believe the first ten years of commercial Internet were a warm up act for what is about to happen.”
- Morgan Stanley/Mary Meeker October 2005“ …we must act quickly and decisively… The next sea change is upon us.”
- Bill Gates
Web 2.0, Strategies and Lessons is published at ChangeThis.com, a site born from an idea conceived by marketing guru, Seth Godin. ChangeThis.com, and our contribution to Troy’s briefing are themselves, expressions of Web 2.0. While discussing the difficulties and expense of conventional marketing with Troy, he asked us why, instead of laboriously building articles into our website and publishing e-zines, we didn’t blog, instead?
It has been through venturing into this emerging medium that we have created both a resource center and a relationship tool – a way for prospective clients who have heard of us from their colleagues and advisors to learn more – no pressure. I purposely call it a relationship tool, rather than a marketing tool, because prospective clients rarely find us through our web presence. Google “Business Strategy”, and you won’t find us in the first 20 pages, let alone lines, of the search results.
Now if you have heard of Ann and Gary Ralston, or Ralston Consulting Inc.,you will find us in the top few slots of page one, leading a surprising number of other consultants by the name of “Ralston”. (I wonder if there is a gene for consulting? And if there is, why hasn’t it died out???)
This high ranking is due directly to our activity over the past six months in the blogosphere – a cornerstone of the Web 2.0 phenomenon – and it costs us only our time to write and post, plus $5 per month. That is a heckuva marketing ROI!
Want to accelerate your business growth? Read Web 2.0: Strategies and Lessons for Business Leaders, then give us a call (614-761-1841) – we’ll discuss how Web 2.0 applies to your business strategy.
Surf’s up!
Update: 2006-9-25 – There has been good feedback regarding the publication, gathered here.
To Blog or Not to Blog… That is the question
Not one more thing to write!! Articles, e-mails, proposals – and now, blogs!!! Remember the days when you spent so much time on the phone, that when you came home the LAST thing you wanted to do was to talk to someone on the phone!!!
My computer is fast becoming my friend and my nemesis. I’m not a great writer. I make lots of spelling errors and my brain runs way faster than my fingers! So when Gary, my husband and business partner asked that I write 2 blog entries each week on top of a self-imposed article each month AND the plethora of e-mails that I pen each day, my fingers cried for relief. What’s the value, who cares what I have to say, and why oh why would I want this stuff on the web for eternity?!?!
What’s the value? Increased visibility. As a consultant and coach, our business thrives on being seen! Being seen in a positive light. Being seen as the company that we are, a great company that helps people accelerate their business growth, while maintaining perspective on life. Can I nail down a monetary value of a $1000 or $100,000? Nope – for me, Blogging is too young to know exactly where it will go.
Who cares? Not sure yet. Again, I think Blogging is too young, but perhaps people who are looking for some great feedback and advice on their business/life will. Most of the stuff on Blogs is relevant to a few people. Much of it is opinion, assumption and assertions. Certainly, I would be wary of believing that much of it is fact. Like everything else on the web, be aware of the source of the data!
And Why Would I want this Stuff on the Web for Eternity?? Now there you have me. I don’t. I’m sure it will make for interesting political campaigns 5 years from now, when the new media searches archive.com’s wayback machine and dredges old blogs from today for candidates, their positions, or what others said about them. Imagine all the wonderful things you did in high school and college, when the logical/rational part of your brain wasn’t totally developed and you did stupid stuff… Imagine that, immortalized in bits and bytes!!! Today, e-mail is searched, subpoenaed, owned by your company, requested by newspapers and then taken out of context, blown out of proportion or used in court! The going advice for e-mail is … Don't send ANYTHING in an e-mail that you wouldn’t want on the front page of the New York Times!!! I think the same goes for blog content – a little discretion here could go a looonnnnggg way.
So for now… I’ll blog… But I’ll blog with a bit of care!
Customer Service in the Afterlife
Anyone who has lost a loved one knows that while grieving can be filled with sadness, it can also have blessed moments of silliness and irony that help us cope with the details of putting the deceased’s estate in order despite our grief.
The company in this true story, like so many others, had attempted to cut customer service costs by hiring cheap labor and keeping them working at capacity while keeping quality high and retaining customers through automation. But something went wrong for us…
Days after my father died, my 80-year-old mom and I were trying to cancel his paid Internet fax service. The company, which we shall call “iFaxForAFee”, provided no customer service phone number, so I helped her use the instant text message feature on the company’s website.
Here is the essence of the instant message session. As you read along, keep in mind that most of the rep’s responses were actually 3 beautifully worded paragraphs long, appearing 5 seconds after I sent my reply.
iFaxForAFee’s strategy had backfired in this instance. How could this have happened?
- By heavily scripting their responses to a cancellation request?
- By providing no latitude to override the script when called for?
- By keeping them so busy that they could not register and react to exceptional circumstances?
It was fortunate for Mom and me that we were in one of those silly from stress moments of good humor, and took in stride the impersonal
automation in the face of our recent loss. On the other hand, I really wonder what the customer service person was going through, and how often that demeaning scenario played itself out in his day.
The best customer service interactions and recoveries I’ve experienced always feature a person who took time to really understand what I was
going through, and was empowered by their company to do everything they could to make it right. THOSE are the companies I’ll give my loyalty and my money to.
As for iFaxForAFee and their scripted, outsourced, cost-effective customer service?
Perhaps I’ll consider them in the afterlife…
© 2005 Gary Ralston. all rights reserved
About the author: Gary Ralston founded Ralston Consulting Inc. with his wife, Ann, to help accelerate business growth for their clients – from startups to global corporations – across North America. Based in Columbus, Ohio, Ann and Gary can be reached at 877-724-4099, 614-761-1841, or through www.ralstonconsulting.com.
Fighting the Commodity Trap – Value-Based Proposals
Competition is the basis of our economy. It can also be a major force eroding your profits. To avoid being reduced to a commodity where the low bid always wins, the buyer must see a difference between your offering and that of your competitor. That difference must improve the buyer’s situation in a way that is meaningful to them. There is a method for success, however, that simply involves identifying the right players, their motivation, your own strengths and weaknesses and presenting your findings.
Talk to ALL the right people
In a larger sale, there are three groups of buyers you must work with. While the economic buyer can write the check, the technical buyers and end users have the power to veto your bid if they’re not satisfied with it. The most common error is thinking that your strong relationship with the economic buyer will be enough. Your competitors are counting on you to overlook or alienate someone with veto power.
Why and how they buy
Not everyone buys for the same reason. You must discover the objectives, standards of measure, value and current situation from the mindset of each buyer – in their own words, wherever possible.
The objectives identify what must be accomplished and the most important outcome driving the project. Is it net project cost, deadline or long-term maintenance cost? In addition, it is crucial to gain a perspective on the standards of measure – the means by which they will track progress and achievement of the objective. Examples include budget, delays to schedule, materials waste, rework or even flatness of the pour.
Understanding the personal and organizational value of achieving success is the next key component. If the objective is achieved, what profit will the company reap and how will operating costs be affected? How will success impact the buyer’s career? Finally, it is crucial to thoroughly understand the current situation with regard to achieving the objective. What resources do they currently have? What are the top factors putting the project at risk?
What do you bring to the table?
Where most fail in this assessment phase is in adhering to your own marketing copy and sales pitch without candid examination of the facts. The first step in assessment is to review your track record. Review your flagship successes to discover your strengths. Then assess the strengths and weaknesses of your competition and compare them to yours. Look for the differences that can give you the edge. Next, try to shoot down your own marketing claims. Keep only the claims that are backed up by facts. If you are not a strong candidate for this type of job, you might spend your time more profitably by focusing on your strengths.
Present your findings, with options
The final step is preparing a proposal that lays out what you’ve learned, your solution, and the investment required. A logical outline for the proposal starts with the current situation and then identifies the objectives, standards of measure, value, methods and options (to include your solution and unique strengths), joint accountabilities, timing, terms, acceptance and appendix (the perfect place for the detail that must be included in the contract but not material to the buying decision). If you have done your job, the various buyers (economic, technical and end-user) will work through the document, nodding in agreement as they go. Note that the pricing information should be included in the terms, after the reader has witnessed the full picture. At this point, the price should seem reasonable, given the expected return on investment laid out in the document.
Putting it into profitable practice
If taking a value-based approach to proposals appeals to you, and you really do have a unique strength in your marketplace, start small and try the method on a deal where the economic buyer, technical buyer and the end-user are all one person. On the other hand, if you are hard-pressed to find what makes your company unique in your market, and profits are stagnant, it might be time to rejuvenate it with a business strategy and plan to turn your company into the profitable success machine it can be.
Note: This article has also been published in the January, 2005 issue of Concrete Monthly,
and in Tilt-Up TODAY vol. 13 no. 4, 2005 pp 48-49, magazine of the Tilt-Up Concrete Association
About the author: Gary Ralston is a senior partner in Ralston Consulting Inc., where he helps clients across North America accelerate business growth, achieving industry award-winning results. Gary can be reached at 614-761-1841, at gary@ralstonconsulting.com, or on the web at www.ralstonconsulting.com.
