by Elizabeth Hines | Apr 6, 2012 | Blog
The focus of my last post (from March 20th), was collecting customer data and how to use that data to drive higher levels of service, customer differentiation and profits for your organization. After posting, I got a lot of feedback both good and bad (that’s OK, I can take it). Most of the “constructive feedback” I received centered on my comment about knowing your best customers and treating them differently than others in your client portfolio. In a show of democratic sentiment, I was surprised at the feedback I received about treating all customers “equally”. As I stated in that post, I disagree. At the risk of creating more email traffic on the subject, here are a few more ideas I have learned that help keep your best customers happy, long-term, and profitable for your organization. Oh,
and keep the feedback coming….
• Don’t “nickel and dime” your best customers. Your most profitable customers have the most
reason to be dissatisfied. The complexity of their engagements and their frequent interactions
result in them having the most to lose. Go out of your way to make them feel that the value they get
exceeds what they pay. And be sure that during your quarterly vendor review cycle, you find a way
to point it out….customers have very short memories.
• Do away with the bureaucratic customer rules. Eliminate rules that are easy for customers to
violate and that are seen as nuisance rules. These rules are to keep the “casual” customer in line
and profitable. They are not for your best customers and actually make them feel taken advantage
of. Again, be sure to highlight the rules they do not have to follow because of the business trust
(read profit volume) they place in your company’s hands. And be sure to subtlety bring it to their
attention…because their memories are short.
• Rely on your good service, not “the contract”. If conversations with your customers begin
or end with “it is in the contract”, you are headed down a dangerous dead end path. I am a firm
believer that most customer engagement contracts are there for the day all hell breaks out in your
relationship. If you (or they) are quoting the contract terms regularly, it’s time to revisit the contract
and fix the problem, before your competitor does. Demonstrate confidence and value in your
solution. This will give your customers good reasons to stick around.
by Elizabeth Hines | Mar 20, 2012 | Blog, Strategy
I recently wrapped up a customer engagement that was centered on marketing effectiveness and sales force optimization. Two big words that represent the quality of a company’s message and the successfulness of their sales force.
I began the engagement like any other, by looking at the data. The company I was working with had really good data sets and measurement tools. It was easy to obtain various types of sales close rates, margin averages, product data and profitability metrics. This company managed these metrics and their sales teams well, but still delivered growth rates that were not consistent with their industry or other company’s in their space. This is a solid, respected, well run and long standing company. Why was it slogging along and lagging their industry growth rates?
Contrary to their executive’s thinking, the answer was in the data they DIDN’T have, not in the data they had collected. They spent all of their energy managing the heck out of their internal metrics, but paid little to no attention outward facing and collecting their customer data.
Here’s what I told them:
Use every customer interaction as an opportunity to collect data. Task your sales and marketing teams with systemically collecting the data. Make it part of their jobs and don’t rely on free form or note taking. This data is gold and forms the base of all your sales and marketing strategies (or it should anyways)
Don’t use broad categories, catch all segments or, my personal pet peeve, the “unknown category. Finely slice your customer data sets so you can understand in minute detail what each customer means to you and what you mean to them.
- Intimately know your best customers and treat them that way.
That’s right, I said it. Treat your customers differently. News flash…not all customers are good customers. Instead of using a transaction mentality, use a relationship mentality and use your customer data to improve customer profitability over time. This will help you determine true “core” customers whose business you want to earn and whose loyalty actually pays off in terms of growth.
In short, know your customers better than yourself (or at least as good as) and watch your growth rates consistently improve.
by Elizabeth Hines | Feb 24, 2012 | Blog, Strategy
Let’s face it, there’s a clear and distinct difference between selling traditional logistics and selling integrated logistics and supply chain solutions. The key difference is; one is a product offering and one is a solution. When you try and sell solutions like you are selling a product, it’s like bringing a gun to knife fight…usually with similar results…your sales cycle is DEAD.
The product sale is really a commodity. Commodities come with an “each” price or a “per pound” pricing matrix, etc. It usually is a short or shortened sales cycle and negotiations revolve around the total price and your typical supplier performance metrics.
The solution sale is much different. This sale is one that requires client discovery, isolation of unique client pain points (that only your solution can address effectively), and being able to drive distinct value for the client, and in turn, for your organization. This sales effort is highly specialized and requires selling time (sales cycle) that is much more detailed than a product sale. That being the case, you need to be sure that your close rates are high enough to justify the work load and sales cycle needed. You also need to be sure that the deals you close have a deal size that reflect the sales effort and cycle time (said another way, is the deal worth winning?)
I have been involved with organizations that sell products and those that sell solutions. Both can be successful, as long as you sell products like products and solutions like solutions. Here are a few tips on how to sell solutions so that you are not the one bringing the knife to the gun fight!
- Prepare, prepare, prepare. So often I see sales teams go into client meetings with no sales plan, no call to action, and no deliverables for themselves or the client. These “feel good meetings” are better left to conference calls or not done at all. Every client interaction should be a detailed exchange of ideas that enable you to discover ways to position your service offering at its highest value within your client. If not, you are wasting your time.
- Does you solution fit? Sure, we would like to think that our company’s solution is the next best thing since sliced bread. Truth be told, that’s not the case. If there’s no solution fit, there’s no sale. Discovering that early will save your credibility with the client for the future and save you embarrassment internally as well.
- Can your company win? We have all been there. We have the best solution for the client, but we still don’t win. Yes. It happens. Internal competition, the deal politics, and incumbent vendors all play a part. That’s not to say you only engage when there’s no competition, not the case at all. But if the engagement odds are grossly out of line, walk away early. No one gets paid for working a deal hard and getting second place.
- Do you want to win? You remember this feeling. You win a deal that doesn’t qualify internally in terms of size (too small), or you take it so thin in terms of margin that the profit doesn’t add up (too lean), or worse, you’ve over sold your capabilities and now your organization needs to stand on its’ head to break even (too bold). In selling solutions, size does matter. Don’t compromise here.
- Can the customer pay? Sure we all would like to think that the customer will pay us. But there’s alot that goes into that piece that needs to be discovered early in order to make the whole deal come together. First, only target companies viable for the long term. Sounds simple, right? Do your financial homework here and involve your credit department early in the prospecting phase. Second, even billion dollar companies have budgets. Is your client’s RFP approved? For how much (relates to #4 above)? Over what time frame? What will the terms be? No one likes to talk money until the end. I always suggest an early talk about budget to get an answer to whether to engage or not (deal size) as well as parallel discussion of deal terms so that you can craft those along the way. No money surprises at the end.
These are five important areas to explore early in the cycle in order to maximize your success rates. All it takes is sales discipline… which is another hot topic and blog to come.
by Elizabeth Hines | Feb 22, 2012 | Blog, Strategy
Over time, we discovered that throwing electronics away is extremely damaging to the environment. With the increasing innovation of new and trendy electronic devices continually entering the marketplace, there is high turnover and greater demand than ever before. Manufacturers and retailers are seeking partnerships with third party logistics (3PL) providers that can decrease e-waste through reverse logistics for used and outdated devices. With consumers more concerned about their carbon footprint, manufacturers and retailers as well as their supply chain partners have a commitment to reducing negative impact on the environment.
Fortunately, profitable businesses that have capitalized on this emerging green and are known as “urban miners.” In general, there are now two primary methods for disposing of our personal e-waste supply.
- Trade in the device for the latest model. This is common with smartphones, since they’re small and easy to carry. The process is convenient for the providers and device manufacturers as well. It’s the proverbial “win-win.”
- “Take-back” events. Typically orchestrated and sponsored by your local municipality, school, or civic organization, these are a local recycle e-waste process. It’s best for devices that are not readily exchangeable in their current form. You’ve probably seen flyers or advertisements encouraging you to bring your dead electronics to a local school parking lot or municipal depot where they will be loaded on a truck, never to be seen again, all in the name of charity and ecology.
There’s Gold in ‘Urban Mining’
While the local organization that hosts the event gets a portion of the fees paid to dispose of the electronics, it’s the e-waste disposal companies that do especially well.
Known as “Urban Miners” in the disposal world, these e-waste disposal companies aggregate millions of pounds of commodities that are bought and sold in a secondary market every day and shipped all over the world. E-waste disposal companies are mining items like plastics, precious and non-precious metals, and rare earth minerals from our basements and closets. It’s one of the most profitable and reliable forms or reverse supply chain.
There is no better testament to the old adage, “One man’s trash is another man’s gold.” I’m not saying this is an easy process. You need to be able to aggregate tons of e-waste material (literally) in order to make money. You need to have the “right” e-waste material, meaning recyclable and not so much disposable, and you need to have your fixed costs low enough to be able to afford the high-touch breakdown process. That’s one reason you see these take-back events popping up more often. These aggregators need tonnage in order to make the model work.
Sometimes they win. Sometimes they lose. But they are providing a service by relieving us of our e-waste in a compliant manner; and they’re supporting the charity or organization with some sort of share of the day’s take, and keeping the green theme going… thus, a win-win-win.
Today’s modern-day gold rush is happening right in our neighborhoods and cities. Instead of a pick and shovel, urban miners’ tools are a truck, a forklift, and a well-placed flyer.
by Elizabeth Hines | Feb 16, 2012 | Blog
As a strategic advisor in the high-tech space, more often than not, at some point the conversation turns to technology and the use of technology to “solve” some particular set of short-comings or business process issues.
To these technology questions, I have a set of hard and fast rules that dictate the purchase and deployment of technology within a business segment or organization:
- When it comes to corporate IT strategy and IT platforms, be sure you are aligned with corporate strategy before you go down an evaluation path for a particular business segment level application. The corporate IT groups are the “keeper of the keys” in this area. They should have a road map that will either confirm your place or suggest an alternate path for you to follow. Either way, it will save you time and money if you gain alignment early on in the process.
- In that same area, if you are on the corporate IT strategy side, be sure that only IT projects that align with the corporate strategy are allowed to pass the first gate or check point on the path to approval and funding. This may sound simplistic, but, look around your organization. You will see may “pet” IT projects that are one-offs to solve a specific process issue and have nothing to do with the larger strategic IT agenda. Sure, they may have been cheap, but the maintenance, dependency and legacy baggage that come along with them suck vital IT resources in the long term.
- Any IT investment that is eventually made must lead to, enhance, and support the corporate objectives. Said another and simpler way, will you make more profit by making this IT investment. If the answer is not a clear and loud “yes”. Look for an alternative to the IT investment.
- Be determined to build one technology platform for your ENTIRE organization. Sure, it is easier said than done. Especially if you are growing by acquisition or on a limited IT budget. That said, in the case of acquisitions; always look to rationalize the IT platforms early in the process. It will pay off in the longer term in big, big, ways like ease of use, information analysis, budgeting, and the financial period end roll ups. If you are “boot-strapping” your IT platforms, discourage the “buy it now” mentality for the more disciplined road-map approach. Again, this will save time and money in the longer term.
- Whichever platform you choose, be sure to get the reporting module that goes along with it. So often I see companies’ cheap out in the reporting area when they purchase IT platforms. Sure, the users are adept at manipulating the software, but if the business folks can’t access the data to drive the business forward, it’s an orphaned platform. Business knowledge is business power…enough said.
- Lastly, don’t forget social media. Yeah, it’s for businesses too. I continue to learn this lesson the hard-way.
Most organizations waste time, money and miss profit opportunity by letting their IT platforms organically grow and develop. Having a well aligned IT plan with your corporate strategy pays dividends in the short and long term.
