The conventional wisdom:
“Build it and they will come. In other words, the right product will sell itself.”
The reality:
“Even the best product in the world will fail if customers don’t understand and appreciate the value it can provide.”
If you’re a baseball fan, “Field of Dreams” is probably one of your favorite movies. Starring Kevin Costner, it’s a moving story about the beauty of redemption - how some people, most notably the disgraced ballplayer, Shoeless Joe Jackson, can be given a second chance in life. But the movie’s iconic line – “If you build it, he will come” (“it” being a baseball field and “he” being Jackson) – has become the mantra of many salespeople who mistakenly believe that all they need to be successful is for their company to build the right products. If only business were that simple! Even the best offerings never sell themselves. In fact, the failure rate for new products is notoriously high, often topping 50 percent.
Lessons for Managers Understanding what customers value is far easier said than done. But without a good grasp on what customers truly want, new products can flop in the marketplace. Miller Heiman believes sales organizations must incorporate a process that allows reps to figure out what the customer is trying to fix, do better, or avoid.
1. Listen to Those on the Front-Line. To gain a deeper understanding of what customers want, managers should regularly tap into the collective knowledge of their front-line sales force. Omron, a Japanese manufacturer of control equipment, factory automation systems, and other electronics learned that an Asian manufacturer of printed circuit boards (PCBs) was having trouble determining whether solder paste was too old to be used. Traditionally, that assessment made based on workers’ discretion, resulting in costly false negatives. Omron began developing an automatic sensor for determining the age of solder paste. According to Omron founder Kazuma Tateisi, “Selling products is not enough. I want representatives to bring back needs from the customers – as many as possible, as quickly as possible. That is the other half of a salesperson’s job.”
2. Walk In Your Customers Shoes. Market research and customer surveys reveal only so much. To truly understand your market, you need to walk in your customer’s shoes, literally. Workers from one Weyerhaeuser’s sawmills in Cottage Grove, Oregon, took turns spending a week working at their customers’ sites (i.e. customer-service reps became sales associates at Home Depot stores). The insights gained were invaluable in improving Weyerhaeuser’s products and services. Based on such information the company wrapped lumber in plastic and stacked it onto railway cars in a way that was easier for customers to unload, increasing the operating efficiency of those businesses. Moreover, the service reps gained a deeper understanding of customers and could handle problems more effectively. Weyerhaeuser became a valued partner in its customers’ operations.4. Help Your Customers Succeed – Even When Your Products Aren’t Directly Involved. Every customer values success –something sales organizations can capitalize on by going out of their way to increase their customers’ competitiveness.
2. Walk In Your Customers Shoes. Market research and customer surveys reveal only so much. To truly understand your market, you need to walk in your customer’s shoes, literally. Workers from one Weyerhaeuser’s sawmills in Cottage Grove, Oregon, took turns spending a week working at their customers’ sites (i.e. customer-service reps became sales associates at Home Depot stores). The insights gained were invaluable in improving Weyerhaeuser’s products and services. Based on such information the company wrapped lumber in plastic and stacked it onto railway cars in a way that was easier for customers to unload, increasing the operating efficiency of those businesses. Moreover, the service reps gained a deeper understanding of customers and could handle problems more effectively. Weyerhaeuser became a valued partner in its customers’ operations.4. Help Your Customers Succeed – Even When Your Products Aren’t Directly Involved. Every customer values success –something sales organizations can capitalize on by going out of their way to increase their customers’ competitiveness.
General Electric (GE) has various initiatives in place to help its customers improve their businesses. It shares its expertise in Six Sigma and other management methodologies free of charge, often by conducting workshops at the customer site. GE even provides services in areas outside of those that directly involve its products. The aircraft engines division helps airlines become more profitable by providing management expertise in flight scheduling and finance. The company doesn't do this out of some altruistic or magnanimous sense of noblesse oblige. Rather, it’s done out of pure self-interest: the healthier the airlines are, the more they’ll buy aircrafts with GE engines. GE rightly realizes that,over the long run, it can win only if its customers win.
3. Look Beyond the Obvious. Far too many companies fall back on the obvious instead of doing the hard work of figuring out the real customer value of that offering. One chain of scuba diving shops wanted to advertise diving classes. The obvious course of action would have been to target subscribers of scuba-diving magazines who lived in areas near the stores. But the retail chain did its homework and found that many people who took the classes were engaged couples preparing for honeymoons in the Caribbean, Hawaii, or other tropical locations. For them, the true value of the classes wasn’t simply learning how to dive. What they really wanted was to enjoy their honeymoons doing something fun together. That insight suggested that a better use of the company’s marketing budget might be ads in Brides magazine rather than Dive magazine.
4. Free Customers from Work They Dislike. Sometimes, providing customer value means taking over a job they’d prefer not doing themselves. That’s what happened with Nalco Chemical, which manufactures industrial chemicals for clients such as steel mills and paper plants. Years ago, Nalco realized its customers disliked dealing with water-treatment problems. They wanted to focus on their core businesses: steel manufacturing, paper production or oil refining. Consequently, Nalco decided to take over that onerous but all-important part of their customers’ operations, and today the company has built a substantial business in providing water-treatment services. It is important to note that Nalco learned of that business opportunity because its sales reps and managers were regularly spending considerable time in the field talking with customers.
Unfortunately, far too many companies still don’t understand what selling is all about, and require salespeople to push volume instead of value. In doing so, they are frequently forced to slash prices to keep products moving. Such discounts are a copout. When salespeople can’t prove value, they resort to price cuts. In my book, product discounts are nothing more than a euphemism for bribes, and pushing volume by lowering prices ultimately means a race to become the cheapest supplier of a commodity. Few companies can survive that precarious existence. Research by McKinsey & Co. found that, to offset a price cut of just 5 percent, the typical S&P 1500 company would need to increase sales by 19 percent. Few businesses can pull that off.18 Instead, the smarter strategy is to sell value, not volume, by proving to customers how your products will improve their businesses.
The real motto sales organizations should follow is this: “If you prove value, they will come.”
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