Q and A Archives

Peruse a rich archive of questions and answers that ran from 1999 to 2017
2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999


December It is often said that the supplier should control the specifications, rather than let the customer do it. What do we mean by this?
A: Product Marketing should be responsible for the specifications and handle them through the “proposal”. Customers have a tendency to ask for much tighter specifications than they need and sometimes they will list specifications that are just unnecessary. Hence, the need for supplier control.

Include the minimum specifications that will meet your customer's needs. For example, include the product name, objective product data and the production performance. Along with that, give your customer a guarantee. Be prepared to guarantee that your product will do what you have claimed it would or you will fix it or take it back. Above all, resist the temptation to give your customer more data than they need.

November How do you get above the “noise level” of messages in your customer’s environment so your message resonates?
A: You must have a clear, simple message that puts you in a position of attention. An ad, brochure or data sheet filled with feature after feature, benefit after benefit, confuses. The prospect walks away overwhelmed with information and may not have any idea of the message you were trying to get across. Present the message simply, and make sure it is understood. Two strong words in the middle of an 8 ½ by 11 page are much stronger than a page filled with information.
October As part of “partnering” program, your customer may ask for your “gross profit” numbers and to see your costs of producing individual products. What should you do?
A: There are a number of different approaches that can be taken, but giving this information to the customer is a bad idea. Here are a couple of ideas:

Politely refuse, i.e. “Company policy doesn’t allow us to share confidential information. Our annual report provides our target margins. We don’t break out margins by product and region”. Say, “I don’t know”. Send them a link to your company website. Stick to these statements.

Provide account team training on the danger of disclosing company information and how to control it.

Redirect conversation from your profit to the customer’s profit. Focus on your differentiated value that increases the customer’s profitability.

September What should I do if I have insufficient resources to support all designated key accounts?
A: The Pareto (80-20) rule comes into play here. You need to evaluate all current account relationships and decide which ones are worthy of the substantial effort you'll need to expend on a key account. This means looking at an account relative to the support required, your capabilities to provide that support, and the likely profitability.

An account with high support costs and low profitability, is not a key account, and is one you want to walk-away from over time. You dis-integrate the relationship gradually and in a professional manner.

An account may have low support costs and low profitability. This is not a key account and other than taking orders when the customer requests it, forget the account. Unless . . .you think you can substantially increase the profitability by investing more support.

An account with high profitability and high support costs may likely be one of your key accounts. Look for ways to increase the efficiency of the support activities.

An account with high profits and low support costs is a prime key account. Pull your resources from the first two described above and apply them here if you feel you can increase profitability even more.

August When speaking of pricing models, what is a "Market Penetration Model" and why would you use it?
A: This pricing model is used to artificially stimulate demand by having a price that is lower than the market will legitimately bear. You use it early in the product's life cycle when you are trying increase the rate of product adoption in the market place, hopefully to get you more rapidly to the high growth rate of your life cycle in a shorter amount of time.
July How should you position your product if you are not number one in the market?
A: When you are not first, you want to position your product or company relative to the leader, rather than in place of the leader. An example of this is the classic Avis/Hertz competition. Avis created a position of #2 in the auto rental business. They made "We try harder" an institution that the public loved.
June A salesperson’s object language often makes the initial and most lasting impression upon customer personnel. What is it?
A: Object Language is what we surround ourselves with—clothes, jewelry, automobile, etc. They all send a message that others read. Make sure it is the right one. Understand your customer’s environment and dress accordingly. What are the norms and expectations of the company you are calling upon at that particular location? The right object language says you are “one of us”. The wrong object language can make you a complete outsider who is never going to get the business.
May Having a good Strategic Marketing Plan may not result in the execution of good marketing strategy. What is essential to link the two?
A: A written Strategic Marketing Plan is not going to be successful unless it is marketed and sold within your own organization. This is true for two reasons that are obvious but often overlooked. First, everybody needs to know it exists. Second, it is just a plan unless everybody has bought into it and they are ready to execute against it. Others may respect it, but they will not be committed to it unless they feel part of it.
April When, as part of a supply chain management program, your customer sets cost reduction goals for you to meet as you progress into the future what should you do?
A: Strongly resist long-term price commitments. If they refuse to go forward without it, change the discussion word from “cost” to “price.” Make future price reductions contingent (and back-end loaded) on volume purchased and reciprocal value to you. If the volumes are not met, then the price commitment is void.
March It is often said that post-exposition or tradeshow activity is most important. What should sales do after the show is over?
A: The post-show activity is absolutely critical! Every person who visited the booth during the show should be contacted soon after.

If they requested literature, the company should send it. But, the smart sales person will give them a call to make sure they received it. Or, better still, set up an appointment to stop by and personally drop it off. This gives another opportunity to be in front of the client—perhaps finding more information that will ultimately lead to a sale.

Sure, some of the people are clerical or maintenance people that may be out of the decision-making loop. But, in a few years when they are in that loop, they will remember the salesperson that treated them well, even when they were not a potential customer.

The other follow-up that is critical is to keep promises made during the show. For example, if a customer interrupts a demo in the booth to ask a question that you can't answer—and you have told them that you don't know the answer, but will find out—make sure that you follow-up. Find-out the information and call or write to the person, telling them how much you appreciate their raising the question. Give them the response or put them in touch with the technical person who can respond to their need. Then thank them for the chance to learn more about your own product.

February What is the purpose of a technical product brochure what should it contain?
A: The brochure is to help establish credibility and to create some interest so the salesperson can uncover real customer needs. It should be persuasive but not conclusive.

Create a product brochure that is esthetically pleasing and establishes your product position in the market. It should use generalities to be persuasive and only be specific in its guarantee of results—this is your market value proposition. Augment this with product specification descriptions, warranties etc. as part of your package.

You can never overestimate the desire of some customer personnel for detail and technical content in a technical industry. The people you are selling to are very technical people. Most customers want low entertainment and high technical content which will come from your supplemental documents. In combination, your brochure and other literature should anticipate 90% of the customer's questions. When asked, the sales person can refer to a paragraph that deals with a particular question.

January As the seller in a negotiation what should you do when you hit an impasse, an issue that cannot be solved because the two parties are so far apart?
A: If you stay on an issue where an agreement in principle cannot be reached, the negotiation cannot move forward. It is best, therefore, to move on to other issues that can be resolved. This buys time and allows you to get the negotiation moving again on a more positive basis. Take up the impasse at the end. By then feelings may have changed and a solution may be at hand.