Category Archives: Sales & Marketing

How Do You Attract the Talent to Build an International Presence? Seven Guidelines

Interview with E.J. Dieterle, President & CEO, YES Partners, Inc.

Situation: As corporate wallets start loosening up, companies are looking at market expansion opportunities. International expansion is one alternative. In the past this was done largely by sending Expats. In more recent years there has been a trend toward hiring locally. How do you find the right talent locally?

Advice:

  • Everything starts with the basics – a good job description.
  • Finding people is easier these days with social networks like MySpace, Facebook, LinkedIn, Xing, hi5, Spoke and Plaxo. However, finding the right people remains a challenge.
  • Invest time and effort to research your target market.
    • Which country is a market or has the most likely prospective clients?
    • What is your competitive advantage there?
  • For a hiring company without an existing presence in the local market it is also a challenge to convince good local candidates that yours is the right company to join. It is important to understand the local business culture and values, and also to offer career-paths to qualified candidates.
  • Don’t assume the need for multiple offices as you start. You can start with a highly mobile person working from home who knows the local language(s), customs, and who already has contacts in your target market.
  • It is often assumed that it takes one year or more for an Expat to be efficient locally, and that hiring locally often accelerates first years’ startup-time. However, the local person has to understand and “fit” into the corporate/head office culture.
  • Working with an international executive search firm to find qualified local talent with the right fit to your business and needs can greatly improve your odds of success.

You can contact E.J. Dieterle at ejdieterle@yespartners.com

Key Words: International, Market, Expansion, Ex-Pat, Job Description, LinkedIn, Research, Competition, Brand  [like]

How do you Create New Value in a Commodity Market? Six Suggestions

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?

Advice:

  • 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.

You can contact Dirk Boecker at dirkboecker@mac.com

Key Words: Commodity, Differentiation, Market Identification, Market Research, Competition, Product Advantage, Competitive Advantage, Unmet Need, Standards, Alliance, Process, Consultant  [like]

How Do You Manage Your To-Do List? Five Recommendations

Situation: The Company downsized during the recession. The CEO and sales staff are overburdened by administrative and business development tasks. What’s the best way to bring to add resources to support sales and infrastructure?

Advice from the CEOs:

  • Look at what hats you are wearing. Wear the hats that fit best and take off the others.
    • If an activity is not core to your success, off-load it. For example: bookkeeping, shipping and receiving, records and basic correspondence.
    • These are necessary, but don’t generate revenue.
  • If your core businesses are sales and service, is one more profitable than the other? Can you outsource pieces of the less profitable activity short-term?
  • Where do you want to be personally in the next 2 years? On what roles do you want to focus? Build a plan to transition you into these roles.
    • The E Myth Revisited by Michael Gerber is a quick read that outlines the process.
  • You may not need to bring in a high level operations manager. Consider hiring an office manager to help organize you and your business development staff. For a smaller operation this person can take care of phones, bookkeeping, shipping and receiving and routine correspondence. This will allow executive staff and sales to focus on growing and servicing customer demand.
  • During the summer months hire high school or college summer interns. They provide an inexpensive source of labor, high levels of energy and creativity, and are eager for work experience.

Key Words: Business Development, Core Business, Sales, Service, Outsource, Role, Office Manager, Intern  [like]

How Do You Improve Company Competency to Support Growth? Eight Thoughts

Interview with Scott Dodson, CEO, AirXpanders, Inc.

Situation: Both in the case of a start-up, and when an existing company adds a new business unit, one of the biggest challenges is supporting rapid expansion during market launch. Talent necessary during the product completion phase may not be sufficient to support this growth. What can you do to improve company competency?

Advice:

  • Bring in “been there, done that” expertise to support the current team. In particular, you want to add individuals who have experienced both success and failure in similar markets, and in both larger and similar sized companies.  You want people who can be transformational to a company and not someone who can simply occupy a box.  Give them a chance to do more, add to their toolbox and they will in turn help the company achieve its goals.
  • A wide range of past experience with multiple employers is now seen as a benefit, whereas in the past it may have been a liability. It brings more knowledge to bear.
  • Among people with highly diverse resumes, how do you tell performers from non-performers?
    • Focus on what they did to transform their past company. Did they build alliances, make change happen or improve the organization during their incumbency? Look at ‘how’ they did it.  Chances are, this is a very leverageable skill.
    • Look for doers.  People who aren’t afraid to roll up their sleeves will make the biggest impact in the organization.
  • Look for people who possess “strategic humility.” Don’t be afraid of mistakes and foster an environment where the boundaries are continuously pushed.  The enemy of ‘good’ is ‘perfect’, and the best companies consistently make ‘good’ decisions.  If you make a mistake, own up to it, learn from it and move on.
  • Look for the ability to assess, develop, plan and mobilize resources to execute the plan.
  • Use LinkedIn to identify people with whom an applicant worked in previous jobs to conduct independent reference checks.
  • You can also use LinkedIn to identify candidates for open positions.
  • By adding resources with these traits to your team, you markedly improve your likelihood of success.

You can contact Scott Dodson at scottadodson@yahoo.com

Key Words: Ramp-up, Growth, Talent, Competency, Interviewing, LinkedIn, Reference Checks  [like]

What is the Best Response to a Price Cut Request? Eight Thoughts

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.

Key Words: Price Reduction, Margin, Costs, Commodity, Differentiation, Counter-Offer, Resources, Terms, Delivery  [like]

Can You Accelerate Market Acceptance of a New Product?

Interview with Kenneth Purfey, CFO, Identification Solutions

Situation: At the January Consumer Electronics Show, it was evident that a hot market for 2011 will be low cost enabling devices to monitor patient medical conditions via smartphone. These devices can improve early detection of disease and lower medical costs. However, the bureaucratic inertia of major medical providers can inhibit the adoption of disruptive technologies. What can you do to accelerate consumer acceptance of a new device?

Advice:

  • Let’s take a particular device as an example – an inexpensive ultrasound device that can both provide the results of a breast scan for cancer and transmit the results to your physician.
  • A device like this can be emotional for some women, and they may be reluctant to use a product not recommended by their doctor. It is therefore important to gain physician acceptance of the device. You can achieve this by:
    • Publishing medical studies demonstrating the efficacy of the device.
    • Building and leveraging relationships with medical societies and groups through while papers, and presentations at meetings by champions for the device.
    • Participating in high profile events such as American Cancer Society events or the Susan G. Komen Race for the Cure.
  • Consumer awareness of the device can be built through:
    • Targeted advertisements in women’s magazines.
    • Gaining the support of high profile women spokespersons who have experienced and recovered from breast cancer. This can generate radio and television talk show appearances.
    • Infomercials via television and the Internet.
    • Generating discussion about the device on disease-specific web sites to generate viral marketing.
  • Do not be afraid of researching non-traditional activities. Recently, it was discovered that there is significant potential for a device like this in portions of the Muslim world, where women won’t see a male doctor, and unfortunately few female doctors are available. This results in breast cancer death rates three times higher than those seen in the West.

You can contact Ken Purfey at kpurfey@msn.com

Key Words: Medical Device, Smartphone, Early Detection, Medical Costs, Consumer Awareness, Ultrasound, Breast Cancer, Physician, Doctor, Advertisement, Infomercial  [like]

How do you Research the Brutal Facts of a Business? Seven Options

Situation: The Company wants to enter a new market, but does not know much about it. Jim Collins advises understanding the brutal facts of any business as an essential part of strategy. How do you research the brutal facts of a business or market?

Advice from the CEOs:

  • Determine the key players in the market, and closely observe them – their mistakes and successes. Identify and interview clients and look for gaps in products and services offered. Use this research to develop a differential advantage for your product/service.
  • Use allied resources. For a general contractor this includes real estate professionals and other allied professionals who know the marketplace and the performance/reputation of other contractors.
  • Business consulting firms conduct surveys of markets. Look for and purchase published surveys. If you participate in their surveys you can get the results at a reduced cost.
  • Trade magazines and business journals like the San Jose/Silicon Valley Business Journal publishes surveys of the “Top 25” local businesses by industry. These help to assess local competition and gather information about revenues, principals, etc.
  • Leverage industry associations. Attend conventions and learn the lay of the land from the attending sales people.
  • Leverage Internet resources: Hoovers.com, Dunn & Bradstreet, HarrisInfo.com, and IndustryBuildingBlocks.com. 
  • Have your best sales reps talk to customers in the new market about their needs and desires, and their current suppliers. Ask them to gather information and present to marketing and sales competitive reviews of the market based on what they learn.

Key Words: Market Assessment, Customer Needs, Customer Survey, Differential Advantage, Consulting Reports, Trade Associations  [like]

How do you Respond Strategically to Market Uncertainty?

Interview with Kevin Moser, CEO, Dfine, inc.

Situation: The medical device industry faces uncertainty due to potential changes in reimbursement, increased regulation accompanying health care reform, longer FDA approval timelines and the economy. How does this impact strategy for an early stage medical device company?

Advice:

  • First and foremost it puts a premium on focus. We compete in a market dominated by large incumbents. When introducing new products in the past we would have blanketed the market to maximize early market share. Now we are being much more selective in terms of where we compete and putting more effort into targeted geographies.
  • This focus is accompanied by more caution and control of spending. We will only hire a new sales rep, for example, if we are assured that there is a significant customer base in the market that rep will serve.
  • Similarly, we are being much more cautious in our capital equipment decisions, and if an employee leaves we do not automatically replace that individual.
  • In terms of price planning, where in the past we would have counted on annual price increases, we now plan for the potential of prices decreasing over time to reflect new pressure on reimbursement and cost containment. As another example, in 2012 there will be a new tax on medical device companies. We assume that this will reduce our margins where in the past we might have passed it on to the buyer. Reduced margins will also impact our new product investment strategy.
  • The big change in long-range planning is that we are focused on slow, sustainable growth – maintaining both gross and net margins and profitability. This is a major change from five years ago when our focus was on maximizing rapid market penetration for new products. We want to be self-sufficient financially and thus avoid having to rely upon future fund-raising rounds.

You can contact Kevin at kevinm@dfineinc.com

Key Words: Medical, Device, Reimbursement, Regulation, Health Care Reform, FDA, Focus, Product Introduction, Spending Control, Hiring, Pricing, Growth  [like]

Can you Justify Differential Pricing for the Same Services? Three Approaches

Situation:  The Company struggles with differential pricing. They want to be fair to clients but feel that a one-price policy limits growth. What tiered pricing models work, and how are they rationalized?

Advice from the CEOs:

  • Differential pricing by client demand.
    • For high value services, you must have a compelling value proposition.
      • Research comparative premium pricing for similar value propositions and set prices accordingly.
    • For price sensitive clients, offer two alternatives:
      • Senior staff services at one price or associate services under supervision for a lower price. Let the client choose between price and quality.
  • Differential pricing by market risk.
    • Early stage clients want high service but may not be able to pay bills. This justifies a premium price, as you are not assured of collecting for services. The differential is a risk premium that covers non-payment risk.
    • Well-established clients are less risky, and support lower pricing due to a lower risk of non-payment and are assigned a lower risk premium.
  • Differential pricing for bundled vs. non- bundled services.
    • If a client purchases individual services, then there is a set cost for each service.
    • However, if a client wants to purchase a bundle of services, then it is reasonable to discount the bundle. You are not necessarily charging less for the bundle, because you have now received additional business at a lower acquisition cost. Your “discount” reflects the savings that you have enjoyed in reduced marketing and sales cost.

Key Words: Pricing, Pricing Models, Fairness, Value Proposition, Service Pricing, Market Risk, Bundled Services, Risk Premium  [like]

Opening a Branch Office – Five Preparatory Analyses

Situation: The Company plans to open their first branch office. There are considering several possible locations. What are the most important considerations as they prepare?

Advice from the CEOs:

  • Perform an ROI analysis for the planned office. How is the ROI for the branch office different from your primary office? Look for potential economies of scale in your business model. This may prompt a rethinking of how you generate your products or services.
  • Simultaneously, look at your potential costs per location and the level of business required to (1) break even and (2) to match/exceed home office return in the new location. As you consider different geographical locations, compare costs and potential contribution of each against the others.
  • Decide whether you need to build full operations in your branch offices, or whether you can use a distributed services model, working from a central hub that performs some operations that need not be replicated in the branch offices.
  • Once you have completed these three analyses, perform a make/buy analysis to determine whether you get a better return from setting up your own office or purchasing a local company, if one exists.
  • Lower risk by starting with a relatively low cost operation – essentially a satellite office with minimal staff. As the new office develops initial business, they can be supported by your home office operations. They will serve as local feet on the street to evaluate the true potential and local barriers to entry within the new market.

Key Words: Branch Office, Location, ROI, Economies of Scale, Make/Buy, Barriers to Entry       [like]