Are You Delivering Real Value to Your Customers?

price_is_what_you_pay_value_is_what_you_getMany business experts have hailed the arrival of a changing marketplace, one with a great emphasis on value and even a new value-conscious consumer.

But more than a little debate surrounds the questions of what really constitutes value and whether the so-called value-driven consumer actually exists.

Over the years, some have argued that today’s consumer is no more value driven than Cro-Magnon man was or space colonists are likely to be. In other words, the erosion of brand equity is nothing more or less than bad marketing.

Does value equal price?

Cost-vs-ValueMuch of today’s ineffective marketing stems from confusion between the words “value” and “price.”

Every consumer purchase can be seen as an equation in which value equals what you get divided by what you pay – and too many people mistakenly use “value” to describe the denominator of the equation rather than the result. This leads to tactics like price reductions and promotional discounts, “value” strategies that can actually erode a brand’s value.

On the other hand, by building up the “what you get” part of the equation rather than reducing the “what you pay” portion, smart marketers know they can get a stronger response over time.

How does prestige factor in?

Value Driven ConsumersAdmittedly it has become fashionable to consumers to demonstrate smart buying.

Yet prestige remains an important part of the value equation.  In marketing terms, it’s senseless to cut price and quality in order to maintain margins. Smart marketers maintain prestige imagery as part of their brand equity, while shifting their marketing emphasis to communicate the quality of their brand in more tangible terms.

Economists who think value equals price miss the point. In many cases, price is a secondary, sometimes limiting factor rather than the essence of value.

For example, while builders are notoriously price conscious, this does not keep a high-priced entry-door supplier from being the market leaders. A builder may actually consider the line low-priced because its decorative glass enhances the look of a home so much that its selling price is boosted far beyond the extra cost of the door.

Who defines quality?

Value-as-shown-in-dictionaryThen there is the manufacturer’s mistake: defining value as quality. Wrong again.

In a nutshell, value to a consumer is the satisfaction of a desire, not quality as defined by the manufacturer. What manufacturers consider a quality product may be irrelevant to the consumer, nothing but waste and useless expense.

Manufacturers may see this as irrational, but business common sense says there are no irrational consumers; they all behave rationally in terms of their own priorities.

There is nothing esoteric about this concept. Value merely means different things to different people at different times.

For more posts on value from Channel Instincts, see Are You Ready For A Dog Eat Dog World? and Are You Your Customer’s Biggest Fan?

Good Selling!

Active Search Results (ASR) is an independent Internet Search Engine using a proprietary page ranking technology with Millions of popular Web sites indexed.

Photo credit: StuartPilbrow via Flickr

Advertisements

Does Marketing “Sell Dreams” and Sales Need to Make that “Dream” Happen, No Matter How Crazy the Dream?

Marketing DreamsIt’s been said to me that marketing writes the script but sales makes the movie.  Conceptually both sales and marketing should complement each another.  However, in reality both do not always meet eye to eye.  In other words, bad script…bad movie. An organization with maverick salespeople all off doing their own thing being managed four different ways will ruin even an exceptional Marketing Plan.

Looking at Marketing Through the Sales Lens

Looking at Marketing Through the Sales LensA sales rep needs to know how to position a product, set and manage customer expectations and be motivated to sell the product.  Sounds easy but does hard.

Why is this?

Most marketers, especially product managers,  understand their products inside and out. What they don’t understand is how this interacts with the sale rep’s role in getting it sold.

Sales Need to Make that Dream HappenSo, here are the “Questions You Must Answer for Sales” (in no particular order) for you to be successful as a marketer working with your sales team.  My thanks to David Shoaf for sharing these with me originally.

  1. What is the customer problem that your product is solving?  Listen up PM’s, this is not the laundry list of technical whiz-bangers you built into the product.  This is getting to the heart of the benefits (the value proposition) the product solves for the user.
  2. What are the critical qualifying questions I can use to confirm if my customer has this problem your product solves?  If I don’t know how to identify my customers buying criteria, I can’t effectively sell your product.
  3. What assumptions are you making about my customer’s business situation? What would drive the customer to adopt and use this product over any other solution that’s available to them?
  4. Who are the key competitors in this product segment? Who’s got the low price? Who’s got a unique solution? It is important to understand how you will position yourself in the market – and just as critical to understand how you will de-position the competition.
  5. What are the assumed customer buying criteria for the product? You should be able to be able to articulate the customer’s reasons to be looking at the market.
  6. Can you prove your claims? Coming to the selling situation with references, testing and other data points about the market, competitors or users adds significant credibility to me a sales person.  Kudos to many product managers for getting this one right more often than not!
  7. What drives the pricing in this segment? Which is likely to be the constraint – price, margin or inventory? What are the expected metrics: ROI, POS, etc.? Can my customer understand the pricing and ROI discussion in less than a minute?

Let’s be honest….I’m a sales person and I get measured on sales

knowing your competition better than they know themselves

So I have a few questions about how this new product will affect my metrics.

  1. What’s my plan? Are you giving me an unrealistic goal simply because you think this is a great product?
  2. What is the typical sales cycle for this product? How much time am I expected to spend selling it? Do I have exclusivity in my territory?
  3. Will this product cannibalize any products I sell now? If so, please explain to me how this is going to be handled.

The key here is alignment.  Sales & marketing executives should sign off on each other’s plan. The sales plan and the marketing plan should roll up hand and glove. Then you have accountability for performance.

4 Steps to Building an Internal Communication Plan

Effective internal communication is critical to your manufacturing successCommunication is critical within any business setting, but most importantly within a manufacturing facilities − where the right communication can really impact change and translate into business success.

What’s the best way to communicate?  How much should you communicate?  How do you make sure your messages are heard?  This guide will take you step-by-step through the communication process.  It has simple, practical, easy-to-follow information you can put to use immediately.

This post also discusses strategic planning − why it’s done, how it’s done, and why it’s important.  But it’s not all strategy.  You will also find information about developing and implementing your communications plan, assigning responsibilities and mapping out your tactics.

Why strategic communication planning?

If you are to succeed and prosper in your industry, then you must contribute significantly and measurably to strategic management.  You must think, act, and manage communication programs strategically, recording measurable results that contribute to the accomplishment of the organization’s mission.  Remember, the only reason organizational communication programs exist is to achieve measurable results that help the organization realize its mission.

What is a communication plan?

A communication plan should be closely linked with the mission, goals, objectives, strategies and tactics of the organization in a measurable wayA communication plan should be closely linked with the mission, goals, objectives, strategies and tactics of the organization in a measurable way.  A communication plan is a written statement of what communication actions you will engage in to support the accomplishment of specific organizational goals, the time frame for carrying out the plan, the budget and measurable results.

A suggested model for a communication plan has the following elements:

  1. Background
  2. Situation analysis
  3. Key Messages
  4. Target Audience
  5. Objectives
  6. Tactics/Implementation
  7. Evaluation and assessment

How long a time period should the plan cover?

The period your plan should cover depends on several variables, such as the issues your plant is dealing with.  It is suggested that your plan be updated on an annual basis.

How to begin building your internal communication plan

1. Form a plant communications committee

How to begin building your internal communication planThis team will be responsible for creating the plant-specific strategic communication plan and then executing the tactics. Your plant team should consist of the following:

1 Plant leader
1 Salaried employee
2 Primary employees (senior employee and newer employee)
1 union leadership member, if plant is unionized
1 communications employee (person currently responsible for plant communications)

Your team should be representative of the plant workforce. It’s important to involve all levels of the organization in the planning process. Employees must feel a part of the process to take ownership in the plan and execute it enthusiastically.

Team members should be chosen based on the following:

  • Willingness to take part
  • Show an interest in improving plant-wide communication
  • Willingness to take responsibility for executing parts of the plan
  • Have a good understanding of plant dynamics. Pick employees who tend to know the latest hot issues in the plant and who have insight on how their peers prefer to receive information
  • Enjoy working as part of a team

Purpose of the team:

  • Improve communications throughout the plant.
  • Serve as an advisory counsel for the plant manager, union leaders or others who wish to share information within the plant.
  • Develop new vehicles for communicating.
  • Improve existing plant communication vehicles.
  • Be a liaison between organizational levels to relay information both upwards and downwards.
  • Improve two-way communication between management and primary workers.
  • Serve as a resource for all plant personnel to use when needing to share information.

Choose a communications committee team leader. It will be the responsibility of this person to delegate assignments, schedule meetings and basically, keep the team on track. Often, it will be this team leader who will serve a direct liaison between the committee and plant management.

Finally, once your committee has assembled and a leader is chosen, a team charter needs to be drafted. Clearly define on paper the purpose of your team. What do you want to accomplish and by when? It is then imperative that plant management supports this charter and agreement is reached on the expectations of the committee.

2. Review the business plan

Analysis is the first step to communication planning.What business are you in? What’s the plant’s mission? Who are your customers and markets? What’s the current outlook and forecast for the plant? Who’s the competition and what do you know about them?

Analysis is the first step to communication planning. You must know where you are now before deciding which way to go next. It is important to understand all factors of the business that impact communication. In addition, it will often be the business objectives and forecasts that will need communicated throughout your location.

It will be important not only to review your plant’s mission and goals, but also the business unit in which you work. Next, identify communication themes based on business goals you will choose to be communicated at your site. For example, you may feel it is important to stress the company’s core values, but also drive messages on operational excellence, customer intimacy or product leadership.

3. Gather data

It’s important to have the right information before beginning your plan. There are several things to identify in the data gathering part of communication planning that require information from your audience–the employees at your location.

Information to be gathered:

  • Effectiveness of existing communications
  • How employees prefer to receive information
  • Current “hot issues” in the plant
  • Things that impede communication
  • Suggestions for improving communication

How to gather data:

  • Surveys—Give employees a list of questions to be answered, either written or verbally.  Survey participation is usually greatest when it is anonymous and confidential.  If it is a written survey, include a self-addressed stamped envelope.  However, response rates tend to increase dramatically when you allow employees to complete the survey during working hours in a confidential environment.  Phone surveys are also an option.
  • Focus Groups—Focus groups work best if they contain between 10 to 12 people and the groups consist of employees at relatively the same organizational level. Focus groups are an easy way to involve a large number of employees over a short time. Holding a focus group prior to issuing a survey is also a good way to make sure your survey addresses the right issues.
  • One-on-one interviews—allow employees to share their views quickly and candidly. Interviews are more time-consuming, but produce instant feedback.

4. Analyze the data

Review the data gathered and understand the attitude and concerns of the employees. Look for recurring themes or issues – your communication plan should address them.

Use a SWOT analysis to look at the data. SWOT focuses on the Strengths, Weaknesses, Opportunities and Threats of a given situation.  Perform this exercise using your current communication system, plugging in the data gathered.

Performance Area Now Future
Strengths—what communication practices are working?
Weaknesses—what weaknesses need to be overcome to improve communication?
Opportunities—what communication opportunities exist that haven’t previously been recognized?
Threats—what threats must be overcome?

That’s it for the pre-work.  My next post will focus on the 7 steps to writing an internal communications plan. What ideas and examples do you have?