Strategy ⁽¹⁹⁾

Business in an era when 1+1 = 2 (not 3)

Most articles that discuss a company's mission, vision, strategy, or even marketing often cite Nike and their tag line "just do it". It is also well known that during an earlier time Nike had a different internal slogan of a completely different sort:  "beat Adidas". About the same time Nike had their aggressive slogan, the company I worked for had a similarly aggressive internal slogan of "kill Weston-Loral" (our geographically closest direct competitor).

Why is it that these old style, aggressive slogans, that target a competitor are now so rare? Why are aspirational slogans like "just do it" all the rage? What can we learn about the effectiveness of these slogans in their time? My thesis is that such slogans were the products of their market environments and that much of the same market environment has returned leading to the conclusion that slogans and their consequential real action need to change back to the old again. Continue reading...

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. Continue reading...

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. Continue reading...

As you expand your business beyond your initial territory, anticipate an expensive launch.

I believe that sales in always best when done locally, but not for the reasons you might expect.  I am forever hearing customers and salesmen explain that "this market is completely different within our market"; however, I usually discover that the real differences are minor and few.  Yet, knowing these subtle differences is almost as important as knowing the industry/technology in general and therefore local sales is a necessity.  Why?  My theory is that people like to know that others cannot do their job better than they do it.  There is comfort in knowing that only "special" people can work in this market.  If they could use outside products/services, then they might also be replaceable.  They form a 'club' of insiders and create special terminology that exclude others.  (any organization that loves acronyms and otherwise naming things is likely this type) By understanding and highlighting these "special" features of their industry/market, you demonstrate that you are an insider that understands and respects their daily struggle.

Whenever I expand markets with an existing product(or service offering), I often think about the Silicon Valley cliche that "every problem is an opportunity"'.  The problem is that you are walking into this new market without any credentials and  that everyone will view your first approach with suspicion.  Until you can get a few reference customers, it is going to be an expensive, slow battle.  You will need to exhibit at lots of events, employ lots of lead creation techniques (like cold calling) and be very patient.  Most recognize, but underestimate, this problem and nearly all miss the opportunity of a new market entry. So there is a problem with entering a new market, but is there an opportunity associated with being "undereducated and unknown"?  Answer-- yes, you are a threat to no one.