Archive for March, 2009

Renting is the New Selling

31.03.2009 No comments

for RentWhen”Cash is King”,  be a Kingmaker for your customers

In several other blogs, I have talked about the ethics of needing to bring value to your customer and discussed various components of what this value might be.  I have also discussed negotiation theory where we try to find out what value is most valuable to the customer.

In today’s financial crisis (Q1-2009), I can be reasonably certain that your customer values cash management.  You also are likely faced with the same financial reality and also value cash management; consequently, this is either a conflict/deal breaker or an opportunity to investigate how not all cash is equal.  If cash is not the same to everyone, then we have the perfect opportunity for great negotiations. Read more…

Profitable Support Revenue

30.03.2009 No comments

Cameras and Software Licenses after-sales


Yesterday, I was talking with a friend of mine who imports high-end Japanese consumer optical goods. He was telling me about how call volumes were increasing but sales were decreasing. Much of these calls were around service. I asked him if service was a big profit center for him. I was surprised to hear that it was not a profit center after 10+ years in the business. The following applies to someone reselling cameras as much as it applies to the creator of software licenses.

When product companies (factories, distributors, and retail) start, they often focus on initial product sales. As they mature (and their industry matures), the value of their customer base needs to be used and they focus more on services, support, accessories, etc. This is exactly the stage my friend is in– much of his product line is sold at zero margin because of intense market pressure. Read more…

Negotiating with a Clock

Patience is the key to favorable negotiationsimg_2904

In a business negotiation, the goal is not to defeat the other side.  Instead, we want to gain favorable conditions for ourselves and have the other side feel good about the final outcome.  If they feel that they in any way lost, then they will try to recover their dignity some time later by making you the loser.

The correct strategy is to ensure very good conditions for you, acceptable conditions for the other side, and then to give them a small gift at the end– like a small chocolate at the end of a nice meal to ensure that the last memory was positive. The difficult part, of course, is to gain the great conditions for yourself with enough buffer so that you will be able to give the ‘gift at the end’. The key is patience and understanding the clock. Read more…

Production vs Prototype Sales

weld“There are two kinds of welders in the world…” Tom Armfield

Tom Armfield was my manufacturing counterpart when I worked for Honeywell. Although Tom had little formal education and started his career as a welder, he moved through manufacturing positions, managed field service activities, and was ultimately put in charge of all manufacturing, test and field service for our division. One day, Tom explained to me how you hire and train welders. He said, “There are welders who can look at a new drawing and figure out the tools, techniques and sequences need to make what is described in that drawing.” Then he went on to explain, “There is another kind of welder who can produce the same piece over and over again while at the same time continuing  to perfect the operation by reducing cleanup, lowering waste, creating more efficient processing steps, etc.” And then the wisdom: “You can make any welder better, but you will never transform a prototype welder into a production welder and vice versa”.

As I look at my career, there are production engineers and prototype engineers. I also see prototype and production people in a wide variety of other professions. I especially see prototype and production salesmen who like welders, cannot be interchanged.  I believe that this is not an issue of training, but of basic and fundamental personality differences. Read more…