Situation: A company that provides personnel services wants to adjust their business model to make it more appealing to employers. They are unique in that they focus on social issues, rather than purely on business services. From the perspective of a hiring Manager, what would you want to see? What’s the next version of our business solution?
Advice from the CEOs:
The idea of a social issues-based brand is unique. To some employers this may have appeal.
Your obvious differentiator is the tie between existing communities and social networking. Emphasize this.
As an employer, the focus is on finding quality employees for the right price. This will always take precedence over other factors for most businesses. In fact, over-emphasis on social issue-based hiring could subject an employer to discrimination issues. It also will not appeal to everyone. How can you address quality employee for the right price through your service? Here are some things to consider:
The employers’ challenge is finding good candidates. How do you solve this problem?
Employers have specific needs to fill. Help them by identifying and screening candidates so that it makes their job easier.
The question for the employer is whether your helper audience can crowd source the screening function. Screening is the challenge of the employer. Solve this and I as an employer want to talk to you!
Within your model, instead of asking for monetary contributions from your helper audience ask them to donate time to screen candidates. Not being a recruiter is a plus.
Pitch your new ideas to your company insiders – see what they say.
Situation: A company targets mid-sized clients with pricing that is similar to its competitors. They believe that their principal differentiation is their relationship with their clients. The problem is that this is also what all of their competitors claim. They are considering testing a new pricing concept – a monthly fixed fee that will provide a pre-negotiated set of services at a favorable discount, with a weekly presence in their clients’ offices. How to you test a new service delivery model?
Advice from the CEOs:
This looks like an appealing concept. With this arrangement there is no clock ticking and the client may view your various services as a more open menu of options available to them.
Another company has a similar relationship with their CPA firm and have both enjoyed this and are using more services from this firm.
Just a regular presence in the office is worth the retainer.
Another appeal is that this allows regular participation in management and Board meetings.
Another CEO offers a similar program for her professional service company’s clients and have found it successful.
Since there appears to be strong support for this model within the group, what is the best way to implement this new offer?
Negotiate an initial monthly rate for a set level of services as a retainer without a clock.
Agree to a periodic review and adjustment of services and pricing – perhaps quarterly – based on the time and services that have been provided during the preceding period.
How do you sell this program to those within your own company who are skeptical?
Try the program with three clients on a limited trial basis and measure it.
Situation: A company’s sales process is currently ad hoc with a 20% close rate and an unpredictable pipeline. The CEO wants to develop an organized sales effort. How do you mature from an ad hoc to an organized sales effort?
Advice from the CEOs:
Use the same discipline that you use to develop and bring new products to market to develop and engineer an organized sales effort. Start with a clean slate. Develop a full business plan and process to support your sales. Set projections and milestones, assign responsibility and accountability, and hold regular meetings to monitor progress and adjust your tactics.
Utilize the company’s knowledge of the market and your customer base to better understand your sales efforts to date. For example:
Look at your sales history, and look at the cases where you have closed business. Are there commonalities or patterns among clients with whom you have won new business?
Similarly, look for patterns in situations where you did not close new business.
Look for a sweet spot which characterizes business deals that you’ve won. If you find that in past efforts there is a segment where your close rate is higher – perhaps among clients of a particular size or in a particular industry – hire a sales executive who has a history of success in this segment of the market. This will improve your close rate and provide a base from which you can expand your sales efforts in a planned and orderly way.
Determine your most important market differentiation – what makes you special – and validate this with current and past customers. Make sure that your differentiation is as important to clients as it is to you. If it isn’t find out why clients chose you rather and your competition.
Is your sales process reactive or proactive? Until you truly understand your market, it is reactive. Once you understand where your sales efforts are most effective, improve your knowledge of this segment of the market and focus both your sales and marketing efforts here to boost your results.
Interview with Keith Merron, CEO, Avista Consulting Group
Situation: Ongoing uncertainty makes it difficult to clarify strategies going forward. What are the bases for these uncertainties and how do you manage opportunities in this economy?
The world is moving so rapidly that they key to success is differentiation. There is so much information about how to do this that companies start to look similar very quickly. The ability to stand out as different is critical. Ask yourself:
What is my target market?
What are the needs that my offer will satisfy?
What is my unique approach that is distinct from other solutions which meet these needs?
Once you identify the answers, you need to back these up.
One has the opportunity to write the future. If you can get one step ahead of the curve this is a huge advantage.
Products that died were often two steps ahead.
Successful visionaries see patterns that are emerging, sense what is next, and speak to that.
Because information is at your fingertips through the Internet anyone can set up a business. The Challenges are viability and sustainability. If these are present the opportunities are huge.
The web is a place where you can share information. How to monetize this is unclear.
Once you have a following you can offer things for sale that are valued by your following. When this happens, the potential for fast growth is more available than ever. So is the flip side. If a restaurant gets trashed on Yelp this can kill it!
In a recession, M&A activity is faster. This enables one to establish a presence much more easily.
There are many virtual companies. You no longer have to be in the same place to work together! There are also many ways to partner or co-brand via the Internet.
What’s hard is to create tensile strength in the relationship. Because it is so quick and easy to cobble together relationships, the biggest challenges are creating loyalty and commitment.
The needs are communications, motivation, commitment and follow-through – just like in a traditional company but in a virtual space. This creates a true bond.
Interview with Sanjay Sathe, President & CEO, RiseSmart.com
Situation: RiseSmart’s top opportunities are to increase visibility and gain market share. What are the most important strategic components of an effective marketing program?
The best marketing plans don’t start with your company, product or service, They start with a focus on your customers, and the benefits you can deliver to them.
That means your first step should be to identify who your customers are.
This can be challenging in B2B businesses. For example, with RiseSmart’s outplacement solution, Transition Concierge, we have several possible customers: the HR department at the company seeking outplacement services; the CFO at these companies; the HR department at companies seeking good candidates; and the individuals who are going through outplacement and seeking new positions.
Each of these audiences has different objectives, priorities and approaches. To succeed, we need to connect to each of them where they are.
After you have identified your target customers, the next step is to develop messaging and message delivery systems that capture and maintain their attention.
Your messaging must express a differentiation that is easy to grasp – something that clearly sets you apart from your competition. In technology marketing, Apple’s 1984 Super Bowl commercial, with its man-versus-machine contrast, is one of the most famous examples of this.
Your campaign must consistently touch your potential customer base. Research suggests that this requires a minimum of 4-5 touches to effectively gain customer attention and communicate your message.
Accompanying the messaging and the increased visibility that you seek, you must have an effective way to respond promptly and directly to customer interest or inquiries. Rapid and responsive follow-up are critical to success.
Interview with Dirk Boecker, President, Toto Consulting
Situation: Through the technology revolution in medical diagnostics, products in some markets have become commoditized. For example, a proliferation of low cost blood glucose monitoring products has driven down price while increasing incidence and prevalence of diabetes has driven up demand. How do you create new value in a commodity market?
Taking a broader view of the market is key. Analyze the entire customer experience, not just your segment. Assess markets and industries surrounding your primary offering and look for un-served interfaces and gaps.
Where you find opportunity, elevate your offering to the next level by integrating your product as component. Create a compelling advantage but avoid unnecessary adaptation of your existing product or service.
Blood glucose monitoring is used to support insulin and diet adjustment in diabetics, a disease which is accompanied by a number of complications and complex to manage. Can your monitoring technology become part of a broader service offering, or even part of a personalized solution? Can you move higher up in the value chain?
Begin your transformation at the first signs of commoditization. Being first brings a huge advantage.
Once you identify an unmet need, consider working with related industry groups to create new standards addressing these gaps. Implementing the resulting standards will give you a new competitive advantage against your competitors.
Find other applications for your product or service. Consider new applications for the components used in your current offering. Find new customers outside of your historic customer base. Consider alliances with other companies experienced with the new opportunities you find.
Within your own organization begin a process that routinely analyzes the customer experience and general needs beyond your current offering. Working with an outside consultant can help by adding a new perspective.
Situation: A key customer just asked for a price reduction. Our raw materials costs have increased and eroded our margins. What is the best way to respond?
Advice from the CEOs:
Are you selling a commodity or a unique and differentiated product?
Commodities rarely command a premium above market unless you can bundle with differentiated delivery.
Unique or differentiated products justify a premium because the customer has only two choices: purchase at your price or try to develop an alternate source.
The customer may have valid reasons to request a lower price.
Counter with a combination lower price and lower level product to retain your margins.
If the sale involves service, assign less expensive resources in return for a lower price to preserve margins.
Define the trade-off to the customer so that it becomes their decision, not yours.
Adjust your terminology. Use “run rate” vs. “price,” and speak of balancing resources assigned. Avoid cheapening or commoditizing your offering to meet the customer’s price demand.
Don’t assume that there is such a thing as a “fair price” or “fair margin.” The price is whatever the customer is willing to pay for your offering. The price increases the more unique it is, and the more critical to the customer’s needs.
Do NOT share your cost and margin information – as company policy.
Consider combinations of pricing, terms and delivery that keep you whole while offering the customer different price points.
Situation: The Company has had success with a few large clients but wants to expand their customer base for long-term growth. How do they differentiate their products in what is perceived as a commodity market?
Advice of the CEOs:
One company created differentiation by getting to know everyone in the business – building long term relationships, based on reputation and trust.
They spent time up front understanding the needs of customers that they wanted to develop.
As opportunities arose, they built relationships and asked questions to clearly define client needs.
While it takes time and patience, the objective is to be able to say “We know your business” – with credibility.
Study the business, sector, and customers that you wish to serve.
Leverage the success that you have had with large customers. Talk about how you helped subunits within your large customers. This makes a big customer seem more like a collection of small customers similar to your prospects and makes your experience relevant.
Let prospective customers know, when appropriate to the situation, that you are hungry and will go the extra mile for their business. Simply out-serve your competition.
Learn who currently serves your prospective clientele. Study these competitors, their strengths and weaknesses. Talk to their customers – learn what they love about competitors’ service, and what they would like to see changed. Find the holes in what they provide and fill these holes with a better offer.
Look for and encourage repeat business and references to new business.