Q and A Archives

Peruse a rich archive of questions and answers that ran from 1999 to 2017
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December As a marketing or account manager why should you not respond to what your customer says they want?
A: Simply because companies do not buy “wants;” which are often emotionally based or stated without crystalized thinking. To define a product for development, or focus in on a buying argument to present to your customer, you need to identify the true challenge that needs solving. So when “wants” are stated, you need to ask, “Why do you want that?” Then ask more “why” questions until you get down to the challenge they are actually trying to solve.
November What is the top competency a marketing professional can exhibit?
A: Based on a comprehensive study by Allen Stines in cooperation with Pennsylvania State University in 2007, “segmentation” was rated as the top B2B competency required out of a pool of 153 marketing issues. The study found that superior performing companies use innovative market segmentation criteria and processes to find customers with similar needs and behaviors. This allows for target products and promotions resulting in one thing . . . Profit . . . Profit . . . Profit.
October You have been asked by your customer to provide year over year price reductions as far out as six and seven years in the future. What is behind this and what is the danger in complying.
A: This is a main part of strategies that were developed in PICOS in 1988 and have evolved in many supply chain management programs through most major industries worldwide. The purpose of the many — not all —o f these programs is to make you believe your product is a commodity and the only thing you can negotiate is price. The customer then sets into play tactics, such as year over year price reductions, that grab more or more of your profit margin. See our classroom program Combating Aggressive Supply Chain Management.

You need to ask yourself the questions: Do I really know what my costs will be 1, 2 . . .6 years in the future? Can my company remain viable in 1, 2 . . . 6 years with continual price reductions?

September Is PICOS alive and well?
A: PICOS, born in 1988 at General Motors in Detroit, has grown up and produced an enormous amount of offspring . The offspring's last name is "Supply Chain Management". In some the Supply Chain Management organization has matured and approaches vendors with the intent on leaving them some part of the pie. In others, they operate under a sophisticated form of the original PICOS. The intent is to turn every product, no matter how technologically advanced, into a commodity -- there is no value or differentiation to discuss. The only thing negotiable is a lower price. The tactics are refined and the intimidation of the customer is significant. An anti-PICOS strategy is required in these cases.
August What does GAMING have to do with our company employees . . . with our customers?
A: It is a concept that has been developing for more than a decade and has reached a critical mass. It is placing your messages — teaching your employees about your sales process or products, or educating your customers about differentiated benefits — into an intriguing game on your website. People get engrossed and at the same time learn the messages you are pushing.
July How would Key Performance Indicators (KPI) help my sales team efforts?
A: They come in the form of "Leading Indicators" and "Trailing Indicators" of which the former is the most important. When properly done, the things (we'll call them "Sub-Goals") that need to come together for a major goal or target to become a reality are identified. Then the lower level activities/events that lead to a Sub-Goal are identified and tracked graphically. These graphs are updated regularly by the sales person and become a control panel for management. More importantly they stimulate the plotter (the sales person) to take the actions that make the chart look good. Hence, they get to the major goal faster and more consistently.
June What is the value of the Marketing/Sales Team Forecast approach?
A: In some companies the president tells sales how much they're going to sell, or sales tells management what they are going to sell. This then becomes the forecast, and either method is destined to produce surprises. The other option is a consensus between the sales and marketing teams about what is really going to happen.

If both sales and marketing have done their homework, you have the proper elements for a good factory demand forecast. Marketing has responsibility for knowing the factors that affect the market. They have knowledge about the new products. They have some knowledge of the competition. Sales, on the other hand, knows what is going on in terms of what customers are doing and what the competition is doing. Together, there should be the proper ingredients for determining what is going to be booked so the company can build a viable business plan and factory demand schedule.

May When is the appropriate time to solidify your negotiation strategy during a long-term process sale?
A: The appropriate time is the day before you step in the customer's door to begin the sales process. The issues likely to be negotiated should be identified. The words you say and the agreements you obtain with the customer during the sales process should mitigate the issues in the customer's mind and provide you with ammunition to lead him in the direction you desire during negotiations.

You might say, "But I don't really know the issues until we get well into the sale". That may be true, to a degree, but unless you are brand new selling the product or service, you have a good feel for the major issues. As you learn more inside a particular account you revise your plan and proceed to mitigate the new/modified issues before the negotiations.

April What do we mean when we say "all marketing is local"?
A: Today's customers expect to be addressed on a personal level. Broad-based marketing approaches in technology B2B is no longer as effective as it used to be. That means market research and a lot of field work to understand individual major customer needs, concerns, and expectations. Your messages likely need to be different . . . sometime significantly so . . . in different regions, market segments, and to different customers.
March In communication with customers it is important to surface their true needs. When probing for those needs, what is the best technique to use?
A: For you to get past their defenses, and for the customer to focus on what is important, you need to initially use Open-Ended questions. Those are questions that cannot be answered with a yes or no. It forces the customer to think and say what is on his mind in the area of inquiry. An example would be, "What are your feelings about this situation?.

Usually after a series of open-ended questions you will be able to identify an area of need. At that point you use Reflective questions. That is basically paraphrasing back to the customer what you thought he said. An example would be, It sounds like you feel that a pre-emptive solution would be better than reacting to the situation after it occurred. What do you feel should have been done?

When a specific need surfaces you ask a Directive question. An example would be, If you find that our equipment test results provide that solution, where would the first unit be installed?.

February Technical account team members are invaluable in conveying the detail aspects of your company's products, and in steering customer personnel away from pitfalls. However, sometimes they create pitfalls. In what way does that happen?
A: While there can be many situations where the technical account team member creates problems for the supplier team, the following are some of the most common.

1.) Providing suggestions or criticism related to what the non-technical team member said to the customer. This type of exchange is important and valuable, but should ALWAYS been done internally and AWAY FROM THE CUSTOMER.

2.) Discussing what an "under development" or soon to be released product will do for the customer. The decision to make this information available to the customer, and how it should be done, must be under the control of the account manager. The technical person does not have the knowledge of how that might be taken by the customer or what it might do to existing sales.

January When encountering an obviously risk-averse, reserved and conservative customer or prospect the supplier personnel are often stymied on how to move forward. This type of customer typically over-analyzes, rather than make decisions on, recommendations or requests for commitment. How do you best proceed to cause some positive action?
A: We would use Concurrence Commitments. This means going to other, more decisive individuals who are also impacted by what you are suggesting. Sell your case to them and gain their honest commitment that they would like to proceed.

Then go to the risk-averse decision maker and say person 1 has a need to take this action in order to achieve A. I also talked with person 2 and he or she would like to move forward with this action in order to accomplish B. Would you like me to make the arrangements with person A or B?

Interestingly, this approach tends to put the risk-averse person at ease. It takes the stress of the decision off his or her shoulders and, if the action causes a problem, they can point at persons 1 and 2 and say they wanted it.