Does This Sound Like Sales & Marketing Pixie Dust To You?

B-Thru-B - Sell Thru Not ToHow well do you know your customers business?

When you understand your customer’s customers – and the frustrations they face in delivering solutions – you can change the conversation. You can move from selling to problem-solving.

Which, in turn, will make you a partner and member of your customer’s sales team. You become important to their success and not just a vendor.

Does this sound like sales & marketing pixie dust to you?

Mark Mitchell, who you know as the chief strategist of Whizard Strategy, has identified that too many building materials companies are focused on B2B marketing.

The problem with B2B is that most companies don’t do it correctly. They abbreviate the rules of successful B-to-B marketing and focus on the (to) part. Their goal is to sell a product (to) a customer. Their job is done when the sale is made to the customer.”

If the customer orders too much product and it doesn’t sell, it’s not your problem

Yes, there are some companies who don’t make this mistake and are excellent B-to-B marketers.  I find that those companies are the exception.  Most companies are too focused on their own success.  They forget that the success of their customers determines their success in the long run.

Thru is a much better word

B2B-PosterWhen you approach selling with a B-Thru-B approach instead of B-To-B, you are forced to think about how to make your customer more successful with your products. You have to look beyond them to their customers.

You have to know your customer’s business. You have to know their customers.  Many companies say they want to partner with their customers.

When you take a Thru your customer approach, you have a much better chance of becoming a partner.

Be sure to read Mark’s complete article, Selling Building Materials – A Better Way or request his free poster.

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.

Are You Investing in the Right Customers?

re You Investing With the Right Customers?You’re funding the activities that support your biggest customers. But do you have a plan that allocates those funds based on other metrics besides just sales volume to determine budgets? Do you have a process other than your instincts or past budgets?

In other words, are you underfunding accounts that – with resources – might be able to grow and contribute to your sales and profitability?

Here’s a customer ranking tool that will provide you with facts to make tough calls and hard choices around who to fund for growth – and who it’s time to cut back with.

Using a 9 Box Approach for Evaluating Customers

sales-forecast-meeting1What’s necessary is a tool that puts all of your customers on a level playing field. To do that, we modified the 9 box grid approach commonly used in strategic planning.

The 9 box approach usually speaks in terms of invest, selectively invest and divest. These aren’t business units being evaluated, they’re customers. Every customer is important and needs to feel special. What we want to do is evaluate our investment in that customer – especially where it comes to driving profitability.

To avoid internal misunderstandings, you may find it useful to rename the customer groups as Tier I, Tier II and Tier III. It defuses the sales team’s concerns around they accounts.

The downside to this approach is that customers are always ranked against each other, so there will always be a top, middle and bottom tier.

Building the Customer Ranking Tool

How to Factually Evaluate Customer Ranking & InvestmentTo effectively place each customer in the appropriate 9 box grid, we needed to find a way to factually plot the performance of each customer.  The best way to do that we felt was to use concrete financial measures over a multi-year period.

First, take a 4 year snapshot of each customer’s:

  • Average Net Rev
  • Average Gross Margin Revenue
  • Average Gross Margin %
  • CAGR
  • % of Net Sales based on your current full year forecast

Now rank each customer by each separate measure.  These ranking are going to be added together in different ways to build the tool.

On the LEFT axis we evaluated:

   Ranking of Average Net Revenue

+ Ranking of Average GM$

+ Ranking of Average GM%

= Sum of rankings

On the BOTTOM axis we evaluated:

   Ranking of CAGR

+ Ranking of % of Net Revenue

= Sum of rankings

Each customer was ranked highest to lowest. Meaning your top customer has the largest rank. Said another way, if you rank 20 customers against a measure, your best customer is a 20 and your worst performing customer is assigned a 1.

Now calculate and plot where each customer lands on the grid. Each axis is ranked low to high.

What Does This Customer Ranking System Mean?

What Does This Customer Ranking System Mean?Some customers will get more investment and resources than they have historically. Others will not.

There will ALWAYS be customers in the TOP, MIDDLE and BOTTOM 1/3 (because they are ranked against each other). Never forget this critical fact.

This will provide you with a tracking tool to use for customer movement over time. For example, after your annual planning and budgeting process is complete, you can evaluate the plan and budgets to show customer movement.

What Does This Customer Ranking Tool NOT Mean?

What Does This Customer Ranking Tool NOT Mean?That you are going to walk away from lower tier customers or that that you are not going to support your customers because they are in a lower tier.

It’s also important to look at different channels or segments by customer and not simply your largest customers overall.

This tool is to help you discover insights about your customer base that sheer revenue can’t. It will ultimately lead to better budgeting decisions that will build your sales and profitability.

Good Selling!

Are You Great At Product Development and Lousy At Product Commercialization?

InventionHow often have you heard that innovation and new products are the life blood of a company? Too many times to count.

And who can disagree? Not us. But we also know that the product development process is often woefully inadequate when it comes to product commercialization.

The truth is that companies spend so much time on developing products that they forget that the sales force – and the customer – don’t know what the product is or why they need it. The customer mantra is “if it ain’t broke, don’t fix it.” No one wants to be a pioneer, take up valuable shelf space or add inventory.

What good are new products if your commercialization handicaps success?

Slow-SignProduct managers are often focused on the product development process and not the commercialization of their new products. This can leave the sales team out in the cold when it comes to knowing and understanding how to position the new product with customers.

A simple way to overcome this is to create a New Product Introduction—Field Communications Template. This tool will help you develop a robust communication to the field sales team. And not miss any critical details or facts in the process.

What’s In a New Product Introduction—Field Communications Template?

Driving sales New Product Introduction—Field Communications TemplateThis tool is a fact-builder. It is a reminder of what’s necessary to think through all the critical elements a sales person will need to help successfully commercialize your new product. It will help you build a story that will highlight how your new product fits into the marketplace and delivers solutions that your customer is looking for.

A note of caution: It is only part of the commercialization process and not the end of the work you need to do to launch a new product. For more on how to better communicate new products to the sales team, take a look our post “How to Get Knowledge Out of Your Product Manager’s Head and Into the Hands of the Sales Team”.

The template breaks into multiple sections.  Think through each one and put down all the information you can.  Ask yourself, what’s missing – what more do I need to find out to make this a flawless launch.

  1. Product name
    • Trademark
    • Generic name
  2. Product definition – what is the product and what problem does it solve better than anything else in the market today?
  3. Audiences
    • First buyer
    • Second buyer
    • End user
  4. Features/Benefits
    • Features – list the top 5
    • Benefits – list the top 5
  5. Differentiation – outline what sets this product apart in the market
  6. Positioning -=- how have you positioned the product in your offering and for the customer?
  7. Competitive environment – List the top competitors and what their strengths and weaknesses are in this product segment.
    • Competitor A
    • Competitor B
    • Competitor C
  8. Pricing / Value Proposition – Answer the question of “How are you the best economic value?” not just put in your pricing structure
  9. Market/marketing research – What third party insights help support your product
  10. Market size – Know not just the size but what drives the market, too
  11. Social/economic/business environment—market dynamics
  12. Marketing strategies
    • Strategy 1
    • Strategy 2
    • Strategy 3
  13. Packaging
  14. Technical support – 3rd party testing and documentation
  15. Brand identity
  16. Other factors specific to your product or market (regional issues, health & safety, etc.)
  17. Communications elements – pick the tools that drive your marketing strategies and fit you budget
    • Advertising
    • Co-op/Ad elements
    • Distributor/Channel programs
    • Incentives
    • Industry relations
    • Literature
    • Packaging
    • Point-of-sale/Merchandising
    • Presentations
    • Public relations
    • Sales support
    • Samples
    • Social media /website
    • Trade shows
    • Training – and don’t forget the customer service team
    • Trade advertising

CommentsWhat else would you add to make this template even more robust?  Share your thoughts in the comments area so we can all benefit from your perspective.

For more insights on successful product commercialization, see the Channel Instincts posts “Are You Using This Simple Product Commercialization Checklist?” and “8 Steps to Building a Customer-Focused Commercialization Strategy”.

Good Selling!