Archive for February, 2008

New Products and Trusting Your Gut – Part 2, Volume X

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Dear Manager,
In last month’s issue we discussed developing a marketing advantage. An essential step in the development and introduction of any product is in the advantage of a competent marketing individual to insure your products have established their market. It is my belief that the most difficult position to hire in any organization is the individual asked to be your marketing guru.

The single greatest qualification for this individual is a very good gut. They must have a genuine feel for your product and its market. In the interview process how do you possibly test for a good gut? A misdirected marketing gut will absolutely take you faster in the wrong direction than in any other department in your organization. As an alternative to finding this individual, many companies assume a hit or miss mentality. I call this the seat of the pants approach to marketing.

Do not confuse these dramatically contrasting forms of marketing. Gut approaches business with a sense of awareness, feeling and passion that only a few around him will understand. It’s as if Gut has a sixth sense relating to the objective; they hear a voice that no one else can hear. By contrast, Pants hears no voice. In fact, this individual is convinced there is no voice, and has concluded that good fortune and timing are the makings of successful marketing.

At a recent trade show I had the opportunity to meet with two individuals who best illustrate this marketing dynamic. In my conversation with Pants, he suggested that there was no possible way to figure out the needs and wants of the consumer, let alone the whims of his retailers. “My only success has been to throw it on the wall and hope something sticks. Good fortune is the name of the game with relationship to new product.” As I suggested to him on that day, this is a cop out.

I have had the opportunity to work with a number of organizations who are certainly aware of the role fate can play, yet would never consider relying upon it! These organizations consistently hit the mark relating to what the market is asking for, creating their own success through innovation. These are the organizations where an annual sales growth of 30% to 50% is not uncommon. I have seen this reality occur time and time again, how can anyone suggest it doesn’t exist?

In my conversation with Gut, he told me he had just survived a difficult year in which the market had changed and, in hindsight, some bad decisions were made. He immediately went back into the field, working many shows to regain an accurate pulse on the market. I have to ask, how often do marketing people come to a trade show or work in the field to gain feel for the market? I rarely see them.

Gut has aligned himself with individuals who understand the nuances of product development. He is constantly thinking past the obvious and creating first and second generation ideas relating to his product. With every brainstorm he not only asks but listens. He relies upon his peers to provide him with current information and additional perspective. Once the analysis is complete, and the thought has stuck in his head, rather than on the wall, he goes with it. After a difficult year, Gut is not only back on track, he’s near the top.

Allow me to clarify. Who am I to suggest that Pants has no gut? My only criticism is that Pants denies the existence of a gut. Once again, we cannot fully understand what we have not personally experienced.

I recently saw a televised interview with Bill Gates who, along with Paul Allen, founded Microsoft. Is there any question that Bill Gates has a great gut? He not only hears a voice, but hears one that is decades and generations ahead of its time. Who has accomplished more in business and industry over the past twenty-five years?

In this interview, Gates referenced the need for business to constantly re-invent itself. He went on to suggest that every business needs to “obsolete itself as quickly as possible!” Obviously, he was suggesting that business not only stay with the times, but to reach ahead of them, re-inventing itself along the way. While the electronics industry is extremely fast paced, particularly in today’s market, has Bill Gates offered up new principals that would only apply to his industry and not to our own? Absolutely not.

If this is true, why are companies reluctant to re-invent themselves? Why do I see companies become more conservative, losing their entrepreneurial spirit and allowing their presentations to become dated? Are they simply waiting around to catch the next wave of good fortune?

It always has, and always will, come down to creativity, design and innovation. If you no longer have it, then find it. I often hear reference to a product as having reached a mature market. I genuinely believe this is a very kind way of suggesting that a product is stale or, in fact, the market would not be mature. The time to re-invent yourself is at the top of the curve rather than waiting for more desperate times. At the top of the curve, excitement is high, cash reserves are strong and you hold a significant role in the marketplace. New introductions will be looked upon with a level of enthusiasm similar to that for your current offering.

At the bottom of the curve, when your product has been perceived as being dated, excitement will be low and cash reserves will have dwindled. Once again, your new introduction will be looked upon with a level of enthusiasm similar to that for your current offering: dated and of little relevance.

With bottoming-out comes a very clear resolution relating to your options: get your eye back on the ball, or kiss your ass good by. It is now time for a transfusion of new ideas providing energy and a spark to the organization. The need to find that marketing guru may become a bit more obvious, and accepted with a greater awareness and understanding than in the past.

Managers may have sold themselves on the conclusion that there are historic factors that inhibit sustained growth. They might even reason that for there to be a bottom, there must also be a top!

With time, challenges mount, expectations grow, and the price for success only multiplies. There may be a time when the price becomes too high. This is certainly acceptable, as long as in the same breath we have not placed responsibility and blame on the influence of outside factors.

There are no true limitations, only those that are self-imposed. Do not confuse limitations in ones own capacity with any inherent limitations of the marketplace or in that of your organization.

In the lifetime of ones business career there is only abundance.

Personal Regards,

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2008. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL and/or INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

The Success of New Products – Part 1, Volume IX

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Dear Manager,
As managers, we have observed, asked to be involved with, and participated in an abundance of products and services. As students of the marketplace, we have witnessed quality products that failed under their own weight, while other less promising products flourished and succeeded. How can this happen? This scenario is much more common than we are likely to acknowledge. While some individuals rely on timing and blind luck, there is no question that management can take control and react to these factors with effective marketing.

With this issue, and continuing with the next issue, I will discuss those aspects that ultimately determine a product’s success … or something less. No more excuses! If you are unwilling to properly market your product or service, send the investment to charity and leave your product on the drawing board.

I was at a recent trade show and, with some wonder, found myself uninspired by the majority of the exhibits and the products on display. If one of my objectives was to develop contacts with new manufacturers, why would I be interested in taking their products seriously if they obviously had not? Finding a product and an individual with a creative flair and sense of awareness of presentation was like finding an oasis in the desert.

One of the first tenants of marketing is exceeding your customers’ initial expectations. We all know the value of a first impression; nine times out of ten it will be your last. Without loosing touch with fiscal responsibility, I have always believed in establishing a perception that my product or service was bigger than life, or at least much larger than my competitor’s accountant or banker would be willing to testify.

I do not believe in putting the cart ahead of the horse, or in risking the financial future of your company. I do believe there are ways to direct resources where they will make the greatest impact. You must, first of all, give yourself a realistic opportunity to put your right foot forward or, like many others, you will be left at the gate. Let’s take a brief look at the five P’s that we, as students of marketing, will need to embrace.

PERCEPTION plays a much greater role than we can possibly realize. The perception of your product in the chain of players to the marketplace will need consistent review. Of the five P’s, this is the most difficult aspect to control. It requires some of the greatest input, and is, at some level, impacted by timing and pure dumb luck. Your only hope is to never underestimate its role! Since we will never fully understand its reality, for this reason alone we must always, always, (did I mention always) exceed what we believe to be another’s expectation. Bigger, better, faster, and aesthetics of design will need to play a major part in your initial planning. Anything less, and you are assured to fall short of your potential.

PRODUCT, unlike perception, is totally within your control. Pay close attention to your competition. Gain as much surface and inside knowledge as possible. Determine your competition’s strengths and weaknesses, their victories and their failures. Next, not only determine the features and benefits of your product, but relentlessly improve upon them prior to its launch. No one needs another me too product. The elements of creativity and innovation will drive your product and insure its profitability. Price takes a secondary role to these factors, margins of profit will soar, and competitors will be eating leftovers.

PRESENTATION of your product is critical. Have you analyzed the physical dimensions, colorations and packaging of your product? Are they eye-catching? Will they bring a smile and set you apart not only in some ways, but in as many ways as possible, from your competition? There can be a tendency to sell yourself on the obvious features of your product without fully understanding and appreciating the benefits of another.

Remember, your product will need to be clearly superior to supplant the relationships established by your competitor. Does the product inspire enthusiasm and excitement, not only in your customer, but (and this is equally important) in the individuals being asked to sell them? Can you provide merchandising techniques that will insure multiple unit sales to the consumer or to those retailing your product? If the unit sale is $10.00, why not provide an innovative self-merchandiser containing twelve, providing a single decision for $120.00! Multiply this by variations in size, color and seasonality, and you have begun to create a complete concept.

Do you have a larger and more expensive version to establish as a cadillac or centerpiece, to give a focus to your over all presentation? A number of years ago, I represented a factory who had developed some of the first generation, highly authentic latex Halloween masks. This was at a time when the adult Halloween market was just beginning to expand.

The average retail price for these masks was in the $30.00 to $50.00 range, a substantial commitment in the early 70’s. I would always encourage my retailers to purchase at least one mask that would retail at $100.00 or more. The mask would not only draw attention to the more moderately priced masks, it would create the perception of a ridiculous extravagance for use on a single occasion. Many customers would scoff at $100.00 and feel they had been much more prudent and conservative having spent only $50.00. Bingo! Without the $100.00 mask, the $50.00 mask would have become the cadillac. Invariably, Mr. or Ms. Moneybags would come in and purchase that $100.00 mask.

PROMOTION of your product must make a statement for it to have any chance of success in the marketplace. To accomplish this, develop a package assortment to encourage and reward full participation. Once again, if you are not willing to take your product seriously, then why should anyone else? Consider free displays, freight allowance or extended terms to encourage a full commitment. This is also a great time to promote multiple levels of participation.

Remember our cadillac mask? While you may assume it will have limited participation, always establish an upper tier of partnership. This develops the foundation and acceptability for the mid-range tier that you absolutely believe in. In selling your product always begin with your premier program. I will never forget promoting one of my manufacturer’s top-of-the-line programs to a customer I had never been able to sell. The customer leaned across his desk and said, “I’ll take two.” I nearly lost my breath! It’s a matter of believing in your product, and translating that belief to your customer.

In certain controlled circumstances, you may also wish to provide a guarantee. This will certainly test how much you believe in your product! I recently developed a guarantee program for a product that had proven itself well beyond all expectations. It became time to put its placement into warp speed.

Arming a number of my sales associates with my personal guarantee, they were each asked to open ten new accounts. As the final option in their presentation, they could give the opportunity to provide a full guarantee. In a six week period, we opened over sixty new accounts. Now, months later, I have not had to fulfill a single guarantee. I believe this to be unusual, yet even with a 10% to 20% return, I would have gained eight to nine new accounts for each program accepted in return. In this instance, ten for ten is even better!

PERFORMANCE is the final step. There is absolutely nothing more frustrating than having a product that executes all of the previous elements, only to have a factory drop the ball by not performing with fulfillment. Late or ineffective sales materials, false starts on release dates, and promoting a product months, or even a year, prior to its launch will only compromise both anticipation and enthusiasm in the marketplace.

In the release of a new product, you are effectively selling more “sizzle than steak.” Think about how long your sizzle will last, and coordinate your release based upon it. Be as sure as humanly possible that all aspects of your launch are in order. Think about NASA without enough fuel or a last minute shortage of spare parts! It’s a scrub. If need be, be more conservative with your release calendar. Commit an additional thirty days to your release to insure against contingencies. At all costs, avoid shooting yourself in the foot!

Certainly timing and luck play a role, yet a much larger factor is determined by the marketing advantage developed by the management team. For this reason alone, we see less deserving products flourish and quality products fail.

Personal Regards,

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2008. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL and/or INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Developing that New Key Client, Volume VIII

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Dear Manager,
Over the past five years we have seen a very clear and obvious shift in the marketplace for most consumer products. Customers we once relied upon for growth and expansion may no longer exist, let alone be expanding. The question now becomes are we willing to accept the market for what it is and adjust our strategies to pursue product placement in channels we have not considered in the past? Or, are we convinced the former market will adjust itself, bringing back the good fortune of days gone by? At the very least, we must transition our products and marketing to meet the needs of these various markets, or accept all consequences.

In recent years, I have seen manufacturers begin to address new markets by developing a much higher priority for field management to expand into what I will define as Key Accounts. For various reasons, there has been a reluctance for the field sales personnel to implement this strategy.

What is a Key Account?

  • Any potential customer within your industry that has the capacity to make a major impact with your product or service in the marketplace. In consumer products multi-store chains including Drug, Department Store, Grocery and any other groups of stores that currently handle your products, or have the ability to do so.
  • Single locations with regional or national distribution. This would include: large free standing independent retailers, mail order, catalog, distributors, shopping networks, major fund-raising organizations and the like. Think in terms of selling pencils to a local office supply versus the local school district.
  • One of the best Key Account descriptions relates to the “special needs” of this type of account. This reflects on the type of very specific approach, maintenance, and immediate information this account relies on.

Why are these accounts not being fully developed?

  • There is certainly a level of intimidation relating to this type of appointment and type of account. This is not the type of presentation that many of us make on a daily basis. For this reason, many of us fail to gain the confidence or the understanding to effectively meet their needs.
  • The instant gratification that we take for granted with our independent accounts seldom applies in the development of Key Accounts. Rarely will we patiently accept an independent account that requires six to ten calls for a single placement or the development of a single purchase order.
  • From the perspective of time, it can be very difficult to invest in areas that can be highly demanding yet, at times, hold limited rewards. It initially seems hard to justify these efforts, feeling that it comes at the expense of seeing our “regular” accounts. A relentless approach is required to establish these accounts. Are we willing and prepared to make the commitment?
  • Many of us continue to fear the potential effect this type of customer will have on our independent business. As the marketplace has defined, we must accept and adapt to many of the dramatic changes, or have a very clear vision of exactly who and what we are trying to protect.

How do we develop this type of relationship?
I believe the biggest challenge is to first accept the obvious differences in selling this type of customer. Trying to fit the “Key Account” approach to business into our current sense of “Independent” reality will only promote frustration and disappointment.

These types of customers have a tendency to work with a much more limited number of factory representatives. Surprisingly, while relationships drive all aspects of sales, these relationships become increasingly important with the size and potential of the customer. Confidence and trust are essential; the stakes are simply too high!

Consider the buyer for a large organization whose first priority is to bring success to the organization and security to his or her position. The buyer’s options are to play it safe with the known potential of current vendors, or step outside with his or her neck on the line with a vendor who has yet to perform. There are clear benefits in either scenario, and all qualified buyers will proceed with an acceptable balance of the two. Simply remember, almost all of the down-side risk is with the new vendor.

This is the thought process we must understand and accept if we are ever going to overcome it. As a Key Account buyer, would you be willing to risk your job on taking a major new direction when its success is determined by not only the unknown potential of the product, but in the ability of your (new) sales contact to perform their responsibilities to your specifications? And you wonder why it can be so difficult to get that first appointment!

How do we begin to sell these customers?
Now that you have a greater understanding of their reality and what you are up against, with each step you must accept the need to overcome these obstacles by exceeding expectations. Begin by developing a target list of customers who either currently need or should need your products. When possible, visit more than one of their facilities to gain as broad of an understanding as possible relating to their operation. Often there will be an opportunity to speak with personnel who can share vital information relating to the priorities of the organization. Befriend those you can, asking for their assistance in developing your plan to proceed.

Commit to making ten or more calls on this buyer in the hopes of establishing a relationship. Often, an assistant to the buyer can be of great assistance in developing this contact. Remember, at this point you may only represent risk to the buyer. Your tenacious attitude will often demonstrate to them how genuinely sincere and serious you are. Buyers will routinely not return first calls, allowing the less serious to drop away. Send catalogs, drop off samples, do whatever it takes to get their attention. Eventually they will see you, it is their job.

How to prepare for this meeting
By now you will have a specific list of ideas and products for your presentation. Be realistic about the scope and potential of your initial presentation. Give them the ability to test you and your performance with limited risk. Your initial objective is a foot hold, not a full body take down!

Contact your factories, asking about similar relationships and success stories that may be effective in your presentation. Develop a full understanding of their competitive departments. In most instances, you will find that your buyer will have a very broad understanding of their business, yet because of their vast responsibilities, will have minimal ongoing knowledge of the specifics of the entire operation. Become an authority on their operation and its relationship to your product. Consider the value of strength in numbers. A qualified and “titled” factory representative can enhance your efforts.

Prepare both a formal and informal presentation. The formal presentation will reflect your knowledge of both their operation and your industry in a very professional manner. It will reflect on the ideas and proposals established from your knowledge of their business, and of similar operations that either you or your company have established. While this approach is effectively a shot in the dark, it will certainly establish you as a professional.

To get out of the dark, you must also prepare for an informal presentation. You can do so by asking questions and formulating, during your meeting, the answers to as many as possible. I tend to call this developing my lobby prepack. If your buyer suggests a current interest in a specific product or direction, immediately develop a program or prepack around it. Pay very close attention to their current priorities and dive head long into what would be perceived as an established program that, by coincidence, is tailor made to meet their needs. It’s amazing! From my experience, this is the most fun and creative aspect of sales.

Finally, address your understanding of the perceived risk in doing business with an unknown individual and product. Suggest examples of how you have assisted others in the past and how you will absolutely stand behind the commitments you have made in your presentation. While this may sound a bit overstated, causing the buyer to smile and downplay his concerns, you have just effectively lowered your single greatest hurdle to a mutually beneficial relationship.

As managers, we cannot be all things to all people in the marketplace. There is certainly the opportunity, however, to step outside our comfort zones to test, challenge and expand upon our current markets. While our best judgment will need to be used, our greatest opportunities should never be misunderstood.

Personal Regards,

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2008. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL and/or INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Sales Training Principals, Volume VII

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Dear Manager,
Many of us have gained a lot of experience as sales trainers. Out of curiosity, I sometimes ask new associates what type of training they received in their previous position. I am surprised that many have received very little sales training at all. More often than not, I hear stories of individuals who receive a few hours of introduction, some kind words, a pat on the back, and as many order forms as they can haul to their car.

As managers, the vast majority of our investment in our sales staff must come on the front end. Natural ability and prior experience should not be expected to replace solid training. With this issue I want to pass along some very basic training tips – the “need to know” lessons for establishing a new sales region. Even the veteran sales associate may want to take a look!

RELATIONSHIPS are your future. And, if you are a new sales associate, relationships are exactly what you don’t have with your customers. This is the single greatest loss in the transition of a sales region. Relationships can neither be formed overnight, nor formed over the phone. The first few weeks should be devoted to face to face meetings at the very fastest pace one can muster. You need to resolve the unknown in your customers’ minds. If there is any “damage control” needed in the region, this effort will stop it in its tracks. This aspect is clearly more important than initial sales success.

PRIORITIES are always a challenge for a new sales associate. Where do you begin your relationship building? Become relentless in your introductions to your key accounts. Your top twenty customers will often represent 50% or more of your total volume. These customers deserve your full and focused attention. In fact, these customers deserve much more. You should provide a level of service and attention over and above that provided to your other customers. As the “movers and shakers” in your region they hold the key to your success. Think in creative terms of how best to gain and sustain their attention.

ORGANIZATION should become the first feel-good aspect of a new sales position. There is so much to learn, so much you don’t know. Only when you feel organized can you even begin to make those first steps on your own. Being unknowing is certainly acceptable, being unprepared suggests you simply don’t care. Review all sales materials, prepare a mock presentation, organize your files and brief case … at the very least, look professional.

AVOID CONCLUSIONS. It is only human nature to try to form conclusions after one day, one week, one month. At this early stage you have no foundation or global understanding from which to form an analysis. Friends and relatives will ask for your conclusions. Don’t fall into this trap. Your future success is determined by your ability to put your best foot forward, each and every hour, five days a week. It is not determined by conclusions drawn after week one.

ACCEPTANCE and a quiet confidence are essential in the beginning. The words, “there is always more to the story,” should ring in your ears on a daily basis. Change allows partial truth to go unsubstantiated. Your lack of background will set you up as a foil on occasion – there is no getting around it. What seems to be a crisis may, in fact, be a test of your resolve. Accept that you will encounter problems … three tomorrow, and at least three next week. Don’t get thrown off balance, simply solve them one at a time as professionally as you can. The greatest advantage a veteran associate enjoys is a more balanced perspective on solving day-to-day issues. Keep in mind that yours is not the first problem your customer has endured. Remember, they are only asking for an acceptable conclusion.

DECISION making must become a way of life. A sales organization must give the tools and confidence to its associates to make strong business decisions. I have always rewarded initiative, regardless of the decision. No one intends to make poor decisions. When they occur, learn from them and move on quickly. Most decisions can be resolved with common sense. Sales associates need the power to proceed through their day.

NEW BUSINESS is your life line. With territory transition comes at least some ebb and flow in one’s established territory. Accept that your predecessor enjoyed a few relationships that you may not be able to maintain. In fact, they may have only purchased the products you now represent to support a dear friend or distant relative. There will also be customers who simply did not like working with the previous representative. Your goal is to minimize the former and maximize the latter! Approach all customers with a fresh outlook, regardless of their sales history. Commonly, there is much more to a sales history than what is printed on the page. You must read between the lines and assess your opportunities first hand.

Don’t wait for new business to fall in your lap. If you are not prepared to schedule specific time in your day for new account development, you might as well consider yourself a glorified service person! New business is the backbone of each and every sales territory, whether an individual is willing to respond to it or not.

LOOKING BEYOND THE SURFACE in all aspects of sales is essential. It is the creative and often the most fulfilling aspect of what we do. Looking “outside the box” is the difference between the average associate and the extraordinary. Rules were established to protect the whole from the lowest common denominator. I have consistently noticed that a “special few” receive advantages by simply asking the right questions. No manufacturer will walk away from a good business decision, but the question must be asked! Regardless of stated terms, the right approach and preparation will insure success a majority of the time. Thinking in “what if” terms will reward you beyond your wildest dreams. You must be prepared to accept “no” upon occasion, but at the very least you will have primed the pump for future considerations.

TIME MANAGEMENT is the single greatest challenge of any sales associate. Every decision we make pertaining to time is at the expense of a better decision that might have been made. Our productive and revenue producing hours should be considered golden. Distractions, idle conversations and paper work should be held to a minimum and or banished to a less critical time. Yes, each productive hour should be considered critical to our individual success. Just how much more productive can we become? It can become a game that’s a lot of fun to execute! As each step in our day is planned, needed adjustments are made, and each of these strategies will reward us daily.

PATIENCE breeds confidence. Each day will present you with a new hurdle, challenge, and personal victory. There will be days that seem to have been wasted, while others will effortlessly fall into place. Each case is simply a part of the process. Balancing out the highs and lows in your week and month demands a solid dose of patience. Don’t confuse satisfaction with patience. In twenty-five years I have never found complete satisfaction, be it in sales or in this management letter. I will not allow myself the feeling of “having arrived.” We can certainly feel fulfillment, pleasure and gratitude, but satisfaction can be saved for our retirement.

Beyond these basic training fundamentals, insure that the very best product knowledge is presented to your new associates. Insist that they work with your very best veteran associates to gain a proper foundation for growth. On many occasions I have hired current or former sales associates to assist on a consulting basis. As managers, our single greatest responsibility is to “create an environment for success.” Beyond that, it is simply up to the those with whom we are associated to perform.

Personal Regards,

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2008. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL and/or INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM