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 Multi-disciplinary customer committees have increasingly become prevalent in choosing the vendor in a strategic purchase. What type of committee is easiest to deal with?
A: There are generally two types of committees, standing (those that are permanent) and floating or ad hoc (brought together of a particular situation). Floating committees may be somewhat easier to deal with in the sense that the organization is more fluid, depending on what product is being considered. It is more difficult, however, in the sense that the membership is more difficult to determine and calibrate in the course of the strategic selling process.
November How do you maximize the payoff from your customer base?
A: The answer is concentrating your resources on those customers where potential profitability is highest and you have reasonable, or lower, support costs. Some customers provide high profitability, but correspondingly high support costs. The answer here is to improve efficiency of support to these customers to reduce the drag on your profits – there are almost always answers when you concentrate your creative energies on the challenge.

As tough as it may seem, you also need to move your resources away from customers where profitability is low and support costs are high. Your resources are finite and they can do a better job for you with the customers in the above paragraph. With these less profitable customers you walk away from them over time and you do it in a professional way. Begin to pull back in manner that doesn’t let them down. If your relationship permits, you may even tell them what you are going to do.

October Over the course of a supplier/customer relationship conflict is almost inevitable. To begin to resolve it what do you need to find and how should you go about it?
A: If you can’t find some “common ground,” or areas upon which you agree, then there is no possible honest solution to the conflict. Once that common place is found and surfaced, you can build a bridge to the conflicting areas. An example is a customer support, installation or service situation, where the customer wants the product to work so productive activities can begin or resume. Supplier personnel also want the problem solved so their reputation stays intact and the customer buys again in the future.

The ONLY way you can effectively uncover the “common ground” is to have a true understanding as to what is on the other person’s mind, consciously and sub-consciously, as well as the environmental forces that are at play. To find this out you need to ASK QUESTIONS and ACTIVELY listen to what is being said.

September The term "Account Penetration" is widely used. What does it mean and how is it achieved?
A: "Account Penetration" is not an end objective; it is a PROCESS. It begins with the sales force taking real ownership of the account. The sales force has ownership when nothing goes on in the account without their involvement and direction How does the sales force gain ownership? By taking control and executing well. Some of the tasks involved in this process are:

Developing a meaningful and real relationship with decision makers.

Developing a significant relationship with all significant decision influencers.

Making sure that both are aware that the sales force's goal is to obtain orders.

Understand the dynamics of the customer's business.

Become aware of every competitive supplier and why the customer likes or dislikes their product(s).

Develop an understanding of the customer's expansion plans and requirements to be the product of choice in that expansion.

Control all visits between the customer and your company.

Get customer's requirements straight and all communication clean before passing them on.

Leverage from your strengths.

Do not be intimidated by either the customer or your own company's personnel.

August We are living in a world where technological discoveries take less and less time to surface. How can the use of customer segmentation help you capitalize on this?
A: The significance of this time compression to high-technology companies is that new customer demands and opportunities are continually uncovering themselves. An analysis of those opportunities, in terms of existing or newly identified market segments, will often optimize your payoff. Market leader continually and aggressively pursue target markets and niches that exhibit unique needs and wants that can be served by differentiated value offered by the segmenter’s company. There is less competition from suppliers who approach the market as a whole, and greater margins available from products tailored to a specific segment.
July What is the most unappreciated question in marketing?
A: The most unappreciated question in marketing is “WHY”. Facts that may be gathered are not useful without a scenario that ties them together to form a picture. Asking customers “WHAT” elicits a recommended solution that may or may not be viable if implemented. Asking “WHY” defines the problem.
June The account team should have "many ears and few voices". What does this mean?
A: The account manager should be in control of what is said and transmitted to the customer. He or she should be the prime point of customer communication. However, the entire account team should be receptive to information about the account and provide that to the account manager.

Members of the account team, such as field application engineers, are generally more trusted by the customer in that they are viewed as problem solvers. Because of that role they are often privy to customer and competitive information that the account manager is not in a position to see. Let him or her know about these useful bits of data.

May What is meant by the term "Value-Based Pricing"?
A: It means people and companies pay for "value" and the surfacing of those values helps you increase your price.

If your product or process substitutes for another product or process, you can have a basis for pricing comparison. For example, if your new equipment is twice as productive as an older or competitive model you have one way of estimating a price point relative to the other model. The higher productivity is a benefit that may have value. Understand your product differentiation in the context of your customer�s needs. When demonstrated to a customer those benefits become the basis for higher prices.

April In the context of being on a customer/supplier team focused on cost reduction, what do you do when you are asked to disclose your product's gross profit numbers?
A: The answer is emphatically DO NOT DISCLOSE THEM! Such a request is part of an aggressive supply chain management process designed to grab the majority of your profits. Those should remain company confidential. Resist and turn the conversation back into Value of the product or service to the customer.
March Conflicts with customers often develop during product installations, acceptance and support. Why is "compromise" generally not a good resolution strategy and when is it useful?
A: Although compromise may look like a good approach; a win-win outcome, it often is not. The expectation to have both parties give something up to meet in the middle creates a lose-lose situation.

This resolution approach is useful, however, when the cost of conflict is higher than the cost of losing ground. This is also sometimes true when important deadlines are looming.
February For team members to respect a product marketing manager, that manager must have an articulated marketing strategy. What does that mean?
A: It defines the marketing approach to executing the overall corporate/division mission, and strategy. The marketing strategy defines the allocation and coordination of resources for a specific product or product line, or a particular market. In fact, it may be for the entire division of the company within which you are working.

The strategy includes a definition of the target market and the plan for development of that market, addressing product characteristics, price, promotion, distribution, and the timing of product introductions.

January Customer-Supplier conflicts are always a challenge. Some are devised to achieve an objective such as in supply chain management. Others, however, are real. Where should you start to resolve a real conflict?
A: Recognize that both the customer and supplier share some common ground in the conflict. If they don't, then there is no possible honest solution. In resolving a real conflict a good starting place is to identify common ground, or the areas in which you agree. Then use that common place to build a bridge to the conflicting areas. An example is a customer support or service situation, where the customer wants the product to work so he can resume productive activities. The supplier personnel also want his problem solved so his reputation stays intact and the customer buys again in the future. State, "We both want to get things up and operating as quickly as possible" and then delve into the problem.