by Elizabeth Hines | May 7, 2012 | Blog
I have had the opportunity to sit on several boards as well as be part of some amazing management teams, both in the profit world as well as non-profit. I have enjoyed the opportunity to participate. One characteristic that is universal in what I would term “effective” boards or management teams is the ability to recognize a suffering initiative or project and take the appropriate action….cut it. That’s right, knowing when to fold ‘em is the hallmark of a good team not afraid to do the right things.
I have also seen “not-so-effective” teams refuse to end a failing initiative or project because of the time and effort that are already “sunk” into it. Not to mention the personal capital that may be expended or exposed. Hello….these sunk costs are in the past….throwing more resources at projects that are duds doesn’t raise the chances of winning, either personally or professionally. In fact, they may have the opposite effect. Here’s a good way to see which category you may fall into and then point you in a better direction:
Seek a neutral opinion: Talk to peers, colleagues, mentors, or advisors that are outside the decision circle. They won’t be as rooted on the past or future and will be more likely to tell you the straight skinny as it relates to next steps.
Take the noose off your neck: Everyone makes mistakes…and I mean everyone. What is the real skill and one that sets people apart is the courage and ability to reverse or change course when things are not adding up either financially or operationally. You will be more respected and trusted if you evaluate openly rather than ride the past decisions into the ground.
Fear of failure is real the enemy: Many great outcomes come from strategies that were altered along the way. That’s a healthy and successful process. Encourage this type of flexibility in your decision making. Don’t get me wrong, outcomes are important, but the process of strategic course correcting will insure your teams get better outcomes more frequently.
by Elizabeth Hines | Apr 30, 2012 | Blog
I think it is safe to say that with Avnet’s latest announcement regarding their introduction of Avnet Integrated Resources , that the aftermarket logistics business just got a little more crowded, a little more consolidated, and a lot more recognized.
The terms aftermarket services, integrated logistics, and product lifecycle managementare by no means new. They encompass the services commonly referred to as technical support, field support, service parts logistics, electronics repair, asset recovery, data destruction, and e-cycling. The “new” piece is what was once a fragmented industry of focused organizations servicing their niche in the aftermarket space is now regarded as a big business opportunity for companies like Avnet. And let’s not forget about Arrow Inc.’s interest in this “niche”. Almost two years ago, Arrow got into the aftermarket services space with their strategic acquisition of Converge and later branded the service offering ReSolve by Arrow.
What does all of this mean? For the marketplace, it means the recognition that profitability is not only about bringing a product forward; it’s about managing every phase of the product lifecycle from design to de-manufacture. For industry participants, it means that everyone needs to step up their game in terms of service strategy, competency and breadth as the “big-boys” have entered the game. And for customers, it means a qualified one-stop-shop for all of their life-cycle needs. Aftermarket services has come of age.
by Elizabeth Hines | Apr 6, 2012 | Blog
The focus of my last post (from March 20th), was collecting customer data and how to use that data to drive higher levels of service, customer differentiation and profits for your organization. After posting, I got a lot of feedback both good and bad (that’s OK, I can take it). Most of the “constructive feedback” I received centered on my comment about knowing your best customers and treating them differently than others in your client portfolio. In a show of democratic sentiment, I was surprised at the feedback I received about treating all customers “equally”. As I stated in that post, I disagree. At the risk of creating more email traffic on the subject, here are a few more ideas I have learned that help keep your best customers happy, long-term, and profitable for your organization. Oh,
and keep the feedback coming….
• Don’t “nickel and dime” your best customers. Your most profitable customers have the most
reason to be dissatisfied. The complexity of their engagements and their frequent interactions
result in them having the most to lose. Go out of your way to make them feel that the value they get
exceeds what they pay. And be sure that during your quarterly vendor review cycle, you find a way
to point it out….customers have very short memories.
• Do away with the bureaucratic customer rules. Eliminate rules that are easy for customers to
violate and that are seen as nuisance rules. These rules are to keep the “casual” customer in line
and profitable. They are not for your best customers and actually make them feel taken advantage
of. Again, be sure to highlight the rules they do not have to follow because of the business trust
(read profit volume) they place in your company’s hands. And be sure to subtlety bring it to their
attention…because their memories are short.
• Rely on your good service, not “the contract”. If conversations with your customers begin
or end with “it is in the contract”, you are headed down a dangerous dead end path. I am a firm
believer that most customer engagement contracts are there for the day all hell breaks out in your
relationship. If you (or they) are quoting the contract terms regularly, it’s time to revisit the contract
and fix the problem, before your competitor does. Demonstrate confidence and value in your
solution. This will give your customers good reasons to stick around.
by Elizabeth Hines | Mar 20, 2012 | Blog, Strategy
I recently wrapped up a customer engagement that was centered on marketing effectiveness and sales force optimization. Two big words that represent the quality of a company’s message and the successfulness of their sales force.
I began the engagement like any other, by looking at the data. The company I was working with had really good data sets and measurement tools. It was easy to obtain various types of sales close rates, margin averages, product data and profitability metrics. This company managed these metrics and their sales teams well, but still delivered growth rates that were not consistent with their industry or other company’s in their space. This is a solid, respected, well run and long standing company. Why was it slogging along and lagging their industry growth rates?
Contrary to their executive’s thinking, the answer was in the data they DIDN’T have, not in the data they had collected. They spent all of their energy managing the heck out of their internal metrics, but paid little to no attention outward facing and collecting their customer data.
Here’s what I told them:
Use every customer interaction as an opportunity to collect data. Task your sales and marketing teams with systemically collecting the data. Make it part of their jobs and don’t rely on free form or note taking. This data is gold and forms the base of all your sales and marketing strategies (or it should anyways)
Don’t use broad categories, catch all segments or, my personal pet peeve, the “unknown category. Finely slice your customer data sets so you can understand in minute detail what each customer means to you and what you mean to them.
- Intimately know your best customers and treat them that way.
That’s right, I said it. Treat your customers differently. News flash…not all customers are good customers. Instead of using a transaction mentality, use a relationship mentality and use your customer data to improve customer profitability over time. This will help you determine true “core” customers whose business you want to earn and whose loyalty actually pays off in terms of growth.
In short, know your customers better than yourself (or at least as good as) and watch your growth rates consistently improve.
by Elizabeth Hines | Feb 24, 2012 | Blog, Strategy
Let’s face it, there’s a clear and distinct difference between selling traditional logistics and selling integrated logistics and supply chain solutions. The key difference is; one is a product offering and one is a solution. When you try and sell solutions like you are selling a product, it’s like bringing a gun to knife fight…usually with similar results…your sales cycle is DEAD.
The product sale is really a commodity. Commodities come with an “each” price or a “per pound” pricing matrix, etc. It usually is a short or shortened sales cycle and negotiations revolve around the total price and your typical supplier performance metrics.
The solution sale is much different. This sale is one that requires client discovery, isolation of unique client pain points (that only your solution can address effectively), and being able to drive distinct value for the client, and in turn, for your organization. This sales effort is highly specialized and requires selling time (sales cycle) that is much more detailed than a product sale. That being the case, you need to be sure that your close rates are high enough to justify the work load and sales cycle needed. You also need to be sure that the deals you close have a deal size that reflect the sales effort and cycle time (said another way, is the deal worth winning?)
I have been involved with organizations that sell products and those that sell solutions. Both can be successful, as long as you sell products like products and solutions like solutions. Here are a few tips on how to sell solutions so that you are not the one bringing the knife to the gun fight!
- Prepare, prepare, prepare. So often I see sales teams go into client meetings with no sales plan, no call to action, and no deliverables for themselves or the client. These “feel good meetings” are better left to conference calls or not done at all. Every client interaction should be a detailed exchange of ideas that enable you to discover ways to position your service offering at its highest value within your client. If not, you are wasting your time.
- Does you solution fit? Sure, we would like to think that our company’s solution is the next best thing since sliced bread. Truth be told, that’s not the case. If there’s no solution fit, there’s no sale. Discovering that early will save your credibility with the client for the future and save you embarrassment internally as well.
- Can your company win? We have all been there. We have the best solution for the client, but we still don’t win. Yes. It happens. Internal competition, the deal politics, and incumbent vendors all play a part. That’s not to say you only engage when there’s no competition, not the case at all. But if the engagement odds are grossly out of line, walk away early. No one gets paid for working a deal hard and getting second place.
- Do you want to win? You remember this feeling. You win a deal that doesn’t qualify internally in terms of size (too small), or you take it so thin in terms of margin that the profit doesn’t add up (too lean), or worse, you’ve over sold your capabilities and now your organization needs to stand on its’ head to break even (too bold). In selling solutions, size does matter. Don’t compromise here.
- Can the customer pay? Sure we all would like to think that the customer will pay us. But there’s alot that goes into that piece that needs to be discovered early in order to make the whole deal come together. First, only target companies viable for the long term. Sounds simple, right? Do your financial homework here and involve your credit department early in the prospecting phase. Second, even billion dollar companies have budgets. Is your client’s RFP approved? For how much (relates to #4 above)? Over what time frame? What will the terms be? No one likes to talk money until the end. I always suggest an early talk about budget to get an answer to whether to engage or not (deal size) as well as parallel discussion of deal terms so that you can craft those along the way. No money surprises at the end.
These are five important areas to explore early in the cycle in order to maximize your success rates. All it takes is sales discipline… which is another hot topic and blog to come.
