Tag Archives: Needs

How Do You Expand into New Markets? Three Perspectives

Situation: A CEO is evaluating a horizontal market development opportunity to markets related to their current market. There may be branding implications. The new opportunity focused on a different sector and can add business unrelated to current customers. However, the new opportunity will stretch current resources and potentially impact current business and service delivery. How do you expand into new markets?

Advice from the CEOs:

  • Pros:
    • Because the new opportunity utilizes known capabilities the company should be able to segue into the new market relatively easily.
    • Because the company is already familiar with security and other issues relevant to the new market, compliance should present no challenge.
  • Cons:
    • Consider the impact on company time and resources. Building any new business will challenge current priorities and will require a careful balancing of efforts to assure that both current and new customers’ needs are being met.
    • Build workload and service schedules for both existing customers and the effort that it will take to develop the new opportunity including the time needed to create and build new customer relationships. Take your best estimate of resource utilization for the new effort and double it, then ask whether your current staff and capacity can handle both markets. If the answer is positive, then you can be more comfortable with the decision to expand into new markets.
  • As you evaluate the new market opportunity, look at both anticipated and unanticipated but predictable challenges that customers may face over the next five years.
    • For example, is there misalignment between future challenges likely to be faced and the current expertise and skill sets of managers who will be tasked with addressing these challenges? If so, tailor the sales pitch for new capacities to address these challenges.
    • Are there existing mismatches between products and services currently offered in the new markets, and do proposed solutions help to address these mismatches? If so, there may be significant opportunities in addressing these mismatches across multiple customers within the affected markets.

 

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Does It Make Sense to Promote a Relative? Four Perspectives

Situation: The CEO of a company has a niece working in the company on a project basis. The niece is has helped to develop a strategic plan and has performed well. She now wants to move from part-time to full-time and to receive a raise. Does it make sense to promote a relative?

Advice from the CEOs:

  • If you are pleased with the individual’s work, don’t worry about the family relationship – go ahead and hire her. This is especially true if she can play a significant role developing the strategic plan and help you to improve your sales organization.
  • Give this individual a set of responsibilities, a budget, and a time line to do the jobs you want done.
    Evaluate her performance just as you would any other employee. Don’t compromise your standards for a relative.
  • This may offer the opportunity to improve your sales. Have your niece work and travel with your sales people as a systems engineer. This will allow her the opportunity to learn your products, customers, and process – and will provide you with valuable input on how your sales team is performing.
  • You are really addressing two problems:
    • What is your niece’s passion? Don’t make work for her simply because she’s related and available. The work must serve your and the company’s needs.
    • Do you have holes in your business? Put your best people on these If your niece is one of these people, then give her a chance but don’t play favorites.

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How Do You Find Your Sweet Spot? Seven Suggestions

Situation: A company’s sales are bumpy. The CEO thinks that this may be due to a mismatch between products that they offer and their customers’ needs. They currently use online surveys to capture customer needs and input. How do you determine customer needs? How do you find your sweet spot?

Advice from the CEOs:

  • The most important first step for a smaller and growing company is to clearly identify the customer niche that they serve. This must be a niche where the company can out-serve their competition.
  • There are two types of niches to consider:
    • A product/service niche focused on a specific set of products and services – one where you can offer a differential advantage over your competition and become known for this, or
    • A customer niche – a specific set of customers that you dedicate yourself to serve in a way that provides a differential advantage.
  • An example of the product model is an individual who started an e-commerce site for lacrosse equipment – products not commonly stocked in sports stores. They offered a wide range of lacrosse products, built an online community, shared articles, etc. and became THE place for lacrosse players to get their equipment.
  • An example of the customer niche model is to focus on a population and build a concierge or member-only service. The niche here is the buying group. This can be employees of specific companies or government workers as examples. Costco grew using this model.
  • For an early-stage company, survival is about single pointed focus on that niche where you can provide better products/services or better serve your customers than anyone else. As you grow you can diversify based on the reputation and loyalty that you gained early on.
  • Look at competitors – how are they gathering customer preference information?
  • Look at your passion – is it products or people? Choose a niche that fits your passion.

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How Do You Deal with Management Infighting? Five Points

Situation: A company has two key managers who battle constantly. Recently these battles have escalated. Both people are valuable, but this has become a significant distraction. What’s the best way to handle this situation? How do you deal with management infighting?

Advice from the CEOs:

  • Talk to the two people individually. Acknowledge company awareness of the situation and ask what’s going on.
    • Listen – make sure you understand what’s going on.
    • After you listen, coach. The message: I need you to step up. The company counts on you.
  • Both parties must feel empowered by the conversation.
    • Focus on behavior only, not the person.
    • Make sure that each feels validated but with clear direction to change behavior.
      • Acknowledge each individual’s value. Point out the problem, but make it clear that nobody is indispensable.
      • At the same time, be firm as to what is expected of individual behavior as well as individual performance. Set the expectation: either you act in a way which does not harm the company environment, or I will take your notice in 30 days.
      • If either individual can’t agree to this, then that individual is the problem.
    • Revert to guiding principles and values of the company. Raise the conversation to a higher level.
    • Establish what the individual wants from the company. Are their needs currently being met? What can be changed to better meet their needs?
    • An important end point of the conversation – because both are key players – is for each of them to value the other.
    • If, after providing time for the two to resolve their difference, they still can’t make peace with each other, you may have to make a hard decision.
  • Be careful – it may be necessary to take a different approach with each individual.
  • It may turn out that one individual is the instigator and the other is simply reacting to the first’s provocation. In this case, get a 3rd party to coach each of them.
  • Another company recently had this same problem.
    • The CEO sat each person down – talked about impact, big picture and what this does to their image in company.
    • This worked!

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How Do You Recruit an Outside Director? Five Suggestions

Situation: A company’s current directors are all insiders. The CEO wants to bring in an outside director for greater perspective, someone who can help the company grow to the next level. What should they look for?  How do you recruit an outside director?

Advice from the CEOs:

  • Look for an individual at a company in a similar market segment that is the revenue size that you want to be and which is selling to the same customers that you do. You want their sales process to be similar in type and complexity of sale but non-competitive with your company.
    • This can be an inactive founder or past employee who has been in GM role with P&L responsibility.
  • Write a list of the needs that you want this person to fulfill. Use this to evaluate prospective candidates.
  • Is it OK to hire a stranger?
    • Before you speak with a candidate, research their background and reputation.
    • You want someone who can provide information and a perspective that you don’t have now. During the selection process you will get to know the person.
  • Consider a high level individual from a company that has been a top customer. This individual can help you understand how you are viewed in the market, and how you can enhance your positioning and competitiveness.
  • Have lunch with a local recruiter who regularly recruits directors for companies. Get their perspective on how to select an outside director and what to look for in a candidate.

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How Do You Optimize Your Buy/Sell Funnels? Three Strategies

Situation: A CEO is concerned that his company’s sales and marketing efforts are not effective. Too often the sales team finds a good prospect, but fails to convert them to the company’s offering. How can the company improve its sales conversion rate? How do you optimize your buy/sell funnels?

Advice from the CEOs:

  • To improve both your marketing and sales functions, it is essential to move the company’s perspective from the Sales side of the Seller’s Funnel to the Marketing side of the Buyer’s Funnel. Only by understanding your customers can you:
    • Create awareness of their needs,
    • Acknowledge interest in a solution to their needs,
    • Consider options and develop preferences among the possible solutions, and
    • Determine how to effectively communicate with them through your marketing and sales efforts.
  • In today’s world, a quality web site is essential to your business. The objective of the web site is to convince the customer that they want to talk to or do business with you. Your web site must tell them:
    • Who you are.
    • What your values are.
    • Why you are special.
    • And it must include a “call to action” – a convincing reason for them to call you.
  • To better qualify your prospective clients:
    • Develop a scripted telephone interview that can be conducted by your sales people or less expensive inside sales/marketing people to qualify prospects before you spend the time and effort for an in-person sales call.
    • Use targeted marketing programs to leverage references to prospective customers.
    • Have lots of conversations with potential customers to understand their needs. Tailor your value creation process to address these needs.

Special Thanks to Craig Olson of MXL Partners for his contribution to this discussion.

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How Do You Optimize a Promotion? Four Recommendations

Situation: A company has a long-term employee who has been growing in responsibility as Customer Service Supervisor. The CEO is considering giving this employee the new title of Production Manager at the same time that the employee receives an annual wage increase. How do you optimize a promotion?

Advice from the CEOs:

  • Any promotion or increase in responsibility must be consistent with the strategic direction of the company. What are the company’s current and future needs and, based on past performance, can this individual satisfy those needs? If so, this may be a good match.
  • In addition, it is important to consider the needs and career path of the individual. Does the new position involve an increased time commitment, additional skills and training, or other important factors, and is the individual prepared for this increased commitment? Will a higher level of commitment be rewarded financially? The only way to answer these questions is to have a conversation with the individual.
  • If as the first two questions are considered there is any doubt, a longer-term transition may be appropriate. Meet with the Customer Service Supervisor and set a series of goals and objectives that will demonstrate their ability to assume the new role over a 6 month time frame. The concept here is that you must work at the level of the new job before you get it.
  • Before embarking on the above recommendations, draft a job description and list of responsibilities for the new Production Manager position, consistent with the company’s needs as it grows. This will involve input from employees who currently handle these responsibilities. Also look at the reporting structure as it currently exists and as it may change.

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How Do You Optimize Supply Agreements? Seven Guidelines

Situation: A company wants to add off-shore manufactures to its supply chain. This is a new experience and the CEO seeks guidance on how to negotiate supply agreements. They want win-win agreements with their new suppliers. How do you optimize supply agreements?

Advice from the CEOs:

  • No supplier relationship is risk-free, especially if you are a small company. Be sure to cover ownership of new IP developed during the relationship. For example, assure that the supplier adds no new developments without communicating these to you in writing. You may want to fund new developments selectively to assure protection of your IP. This is essential if you need to switch or add suppliers rapidly to maintain adequate supply.
  • A service agreement is not always about cost. It’s about deliverables, and quid pro quo is important.
  • Manage your key supplier relationships as diligently as you manage your key client relationships. They are equally critical.
  • In a contract negotiation between supplier and OEM or customer, both sides need to clarify customer needs and supplier capabilities. The greater the transparency on expectations, deliverables, and contingencies, the better the agreement and contract.
  • In negotiating an agreement with a Chinese company, make the enforcement jurisdiction either Hong Kong or Macao. Why? So that courts can enforce terms of the agreement on the Chinese party in the case of a dispute.
  • Post-termination obligations are a key to any negotiation – you want this clarified in advance.
  • Contracts serve two purposes: a legal tool, and a way to drive behavior. They provide an opportunity to assure that both parties are on the same page and, under the best circumstances, serve as process documents.

Special thanks to Bijan Dastmalchi of Symphony Consulting for his contribution to this discussion.

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How Do You Succeed in Turbulent Markets? Seven Suggestions

A CEO is concerned about a possible downturn in the company’s market. They have survived the Great Recession and want to assure that they continue to survive future downturns. How do you succeed in turbulent markets?

Advice from the CEOs:

  • In turbulent markets, companies do everything that they can to reduce costs. This includes just-in-time ordering – regardless of lead times which they view as the supplier’s problem, delaying orders until they have confidence that they can sell what they order and produce, being miserly with cash, and demanding lower prices – even if supplier costs are rising. Dealing with each of these requires a steady head and creative solutions.
  • Spend as much time as possible meeting with important vendors and clients. Maintain the dialogue. They need you as much as you need them – without your products and services, their business is compromised, too. Spend time finding and cultivating the right relationships in client companies. Most of the time, this will NOT be the purchasing departments, but higher ups within the business units who are being pressed by their superiors to generate sales and revenue.
  • Pushing harder does not work in turbulent markets. Too many others are doing this.
  • Change your message – what used to work does not work now. Adjust your message to the times and adapt your message to your customer’s needs.
    • People want choice, and to do business with those whom they can trust to deliver.
    • Develop good case studies and testimonials – stories that your customer can share with others in their company.
  • Adjust your sales approach – look at SPIN Selling (Status, Pain, Implication, Needs-Payoff).
  • Don’t cut sales and marketing – focus it on the sectors that have cash and who are using the current market to grow. These people will continue to buy.
  • Look at what worked for you in the last five years – this situation is similar.
  • Look at your communications through the eChannels – if your competition is there, you should be too. For example, explore LinkedIn.

Special thanks to Jennifer Vessels of NextStep for her contribution to this discussion.

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How Do You Respond to a New Competitor? Six Options

Situation: A company performs service that is primarily locally-based.  A competitor is establishing a new site less than two miles from the company’s location, offers a broader array of services and is larger than the company. How can the company protect its business by responding to this new competition?

Advice from the CEOs:

  • Your most important asset is understanding what you are doing right, and what is most important to your customers.  Remember that business is more than just a product or service. It’s a relationship. Your customers depend upon your for more than just what you offer for sale. Reach out to your customers for these answers. Make sure that you respond to their needs. As a benefit you may also find new growth opportunities.
  • Ask current customers whether you need to expand your service offering, or whether your current offering and lead time is acceptable to them. Ask how their needs are changing and how you can better serve them.
  • Reestablish the connection to your customer and listen. Preempt new competition by contacting your customer base before the competitor gains a stronghold.
  • Study your options and avoid knee-jerk reactions.  You may be in better shape that you think.
  • Major retailers and service companies have moved into many locations. Local businesses who survive their presence do so because they are focused on their customers’ needs and are better at serving the customers that the big companies are.
  • Invest in key components of your business relationships:  services, payment terms, responsiveness, your facilities, and so forth.

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