Gone are the days when companies would simply create a product or service, market it and hope for a successful, profitable outcome. Products and services are now deeply commoditized and consumers are increasingly fickle and hard to please. People don’t just want something to spend their money on; they want solutions. They want something that can satisfy a specific need in a specific way. It is a must for companies and marketers to understand this basic consumer reality.

Innovative, Indispensible, Inspirational.

Innovative, Indispensible, Inspirational. These are the three I’s of an effective Value Proposition. If you want to make your brand work, you’ve got to cater to your target consumers’ needs. We’re not just talking about basic  needs here. A product or service can also satisfy emotional and perhaps even spiritual needs. It all depends on how you position your offering.

Is it innovative? Does your product bring something new to the table? Have you discovered a need nobody thought they had, or are you riding the bandwagon with a me-too offering? Is your offering truly useful/beneficial over time? That is, does it represent a continuous stream of goodness to its owner?  Does your your brand  inspire action or complacency? By answering these questions, among others, you can pinpoint the ideal way to market your product. The next step is to see if the target audience is going to be receptive to the messages you send.

Know thy customer. It is a crucial commandment that must be heeded, if you want your brand messages to come across positively. We  live in an age where information is easily accessible. Especially information about how your product is doing in multiple dimensions besides “unit sales”. Not too long ago, it wasn’t practical to do intensive consumer research, simply because by the time enough information has already been gathered, it  was already be obsolete and useless for brand-building.

The Internet is a great way to find out about your target market and its specific needs. The rise of social media has made it incredibly easy for companies to connect with consumers and find out their current needs. By becoming receptive to your followers or potential buyers, you can have a greater idea of what makes them tick and translate that into your brand. You can raise the power of I3 with the aid of Internet tools.

No brand is immune to competition. Even market leaders have their nemesis, and direct competitors keep a company from having the entire pie for itself. In many cases, competition can actually be mutually beneficial, as it keeps the competing parties from becoming complacent. In always trying to outdo each other, the companies push themselves to improve their brands and the products or services they carry. It is a welcome cycle that not many businesses want to admit (or enjoy).

Competitive analysis begins in much the same way a company would evaluate its own brand. You can examine your competitor’s value proposition in I³ terms based on their marketing claims. Find out exactly what they are saying that gives them an edge from their competition and compare that to your own unique selling points. If both of you are claiming the same thing, you end up canceling each other out on that factor, all other things remaining equal. I call this the overlapping value proposition: two companies making equally valid claims to a differentiator, neutralizing each other in the market on that attribute.

Take for example, Coca Cola and Pepsi. Both of these fizzy drinks are refreshing, affordable, and, for a time, they were actually marketed as health tonics. The Cola Wars are infamous in the marketing world. When it finally hit them that there is no use trying to convince consumers that one brand of soda tastes better than the other, they decided to go with more distinct (and emotional) approaches.

(image from Brand New )

Rather than win a consumer following with proof of taste superiority (a virtual unprovable), the beverage giants decided to woo the market by creating ‘personalities’ for their brand. It is evident in the evolution of their logos. Coca-Cola positions itself as a feel-good drink that encompasses all generations; thus, its logo has remained consistent over the years. Pepsi, on the other hand, keeps reinventing itself as the ‘cool drink.’ It mainly targets youth, which is why it also tends to get popular celebrities and artists to promote its brand.

Despite their difference in marketing approaches, Coke and Pepsi still enjoy a healthy rivalry. They were able to avoid the rut of the overlapping value proposition by re-thinking their challenge in other dimensions. They observed consumers more intently and creatively constructed brand personalities that resonate with their target market. Value proposition don’t have to be tangible or factual – they can simply be a matter of style.

Now and then, we see the Internet blow up with activity. A picture or video spreads across all the social networking sites. This sometimes leads to the creation of spin-offs – inspired pictures and videos which follow the same cycle of viral circulation. In today’s Internet parlance, this is called a ‘meme’. And while many “old horses” from more traditional marketing backgrounds can think of this as just another mind-boggling phenomenon of the Screen Age, others see a potential innovation.

When Old Spice and its advertising agency, Wieden + Kennedy, saw its latest campaign was becoming a viral success, they immediately capitalized on it. Now, not only has the Old Spice Guy, perpetually wrapped in a bath towel and flashing a debonair smile, become a household name; product sales are growing and the company is enjoying a breath of new life in its industry.

What Old Spice and Wieden + Kennedy did is a perfect example of making good use of the power of “I3″. They positioned the men’s grooming product line as inspirational; an exciting trend any man would be crazy not to get into. The creative execution was simple and novel – show a good-looking guy seamlessly weaved through women’s fantasy settings, all the while boasting how any man can be like him if they just used some Old Spice body wash. A “net new” (innovative)twist on an old product. Given that cats and dogs and men and women remain interested in each other, this also made the product seem indispensable. Innovative, Indispensable, Inspirational… an I3 Value Proposition.

Interestingly, the ad was first aired on television, often taken as a dying medium for marketing (which it surely isn’t – just changing in how it needs to be used). Soon, however, it started making its way into YouTube and the rest of the Internet. When the hype still wouldn’t die down months after its first showing, the agency decided to further feed the flame with exclusive YouTube videos of the Old Spice Guy, (actor Isaiah Mustafa), addressing various celebrities and online personalities. Not only did this succeed in ‘fleshing out’ the character endorser, the stunt ultimately led to a 107% sales increase. Wearing Old Spice is finally cool again – a seemingly impossible feat just a year or two ago. This is a huge feat for a men’s grooming line that has long been associated with middle-aged men (ahem!). This is all thanks to innovative execution of a globally thought-through marketing campaign.

Are you dismissive of the “new” marketing? Yes, there’s lots of hype and snake-oil… but if a medium can take Old Spice and make it a New Spice – then it IS powerful and must be included in the mix – at least considered.

While driving to a client meeting I looked at my dashboard and noticed the warning light again. I was about 2,000 miles “over” on getting an oil change.

Now, I have always made a habit of taking great care of my cars and 2,000 miles on an oil change on a well maintained car is not going to kill the car. Why haven’t I done it? It has a lot to do with scheduling and the fact that it is going to take an hour out of my life at a critical juncture when I am working on several key projects. And really I have just not been able to do it or maybe it’s that I have not made it a priority to get it done.

So Commerce Bank opened 7 days a week, with late hours all 7 days. Many banks have had to follow them and not close the teller window at 3pm because of some age old operational constraints that are just not true in our electronic age.

So the lesson here is that you need to really rethink – especially in older type industries- whether or not what you accept as a true limitation is a REAL limitation … or is it just an industry habit. 
Maybe, it was a limitation that was born from boundaries that your industry had from years ago that are no longer valid with newer technologies and processes?

Whether you run a bank or local car dealer or a donut shop – have you looked at your business from the perspective of your customers? And do you do it often?

Original Post From: Blogging Innovation

“I came across the following video of a BMW advertising installation thanks to a tweet from Blogging Innovation contributor @RowanGibson and I think it serves as a perfect case study of how one firm – in this case BMW – can succeed and fail in utilizing some of the modern incremental innovations in the traditional marketing methods (including social media) to bond itself to an emotion – in this case ‘joy’.” (more…)

My Quick Take…

An example of an excellent idea that has been poorly executed so far. Marketing is about reaching out to a specific audience who is or can be passionate about your brand. I think you gave a good list of reasons why this campaign is a current failure, and that companies like BMW should be reading this. It’s such a waste to see good ideas come to a stop when they aren’t carried out in a way that touches its intended market.

Big ideas lose their potential to become great when they don’t reach those who can pass them on, build momentum, and make that initial spark catch brilliant flame. Metaphors aside, companies and their agencies are responsible for translating their initial ideas into something their market can consume. Concepts should not stop at just being new and exciting. They should also be relatable, relevant, and useful as well.

I think BMW should pay attention, listen, and salvage this idea from being forgotten. Potential is nothing without opportunity. It’s every good marketer’s job to open doors for their brands and customers.

Part 3 of 3 of a Conversation with B.J. Orsi, Regional Manager, Bed Bath & Beyond

B.J. Orsi is one of twelve Bed Bath & Beyond Regional Managers, each overseeing about 40-50 Store Managers, who, in turn, each manage about four Department Managers. B.J. has been at the company for over twenty years. I recently had the pleasure of talking with him about how his company operates and what sets it apart in the marketplace. I am sharing some key ideas from that conversation in three blog posts, of which this is the third.

My last two blog posts have shared ideas from my recent conversation with Bed Bath & Beyond Regional Manager B. J. Orsi. They focused on adapting to local consumers and on creating a teaching culture. Today, I’m focusing on his comments regarding how his company learns from observing other organizations.

B.J.: I guess growing up with our company culture we look at every retailer and we try to find what everyone

does well and try to incorporate what we do and what we can do better. We are really self critical and we are always looking at ourselves as if we do not do well enough.  If we can’t do it ourselves internally then we think, Who is doing it and who can we emulate? We are always trying to improve. This way people will walk around the store saying, Wow! This is a great and beautiful store and great company! We look at it and go, Wow, if we can keep figuring things out we will be really good. We do not know yet how good we can be, I guess.

I do not know if there is any one retailer we look to. I think there are bits and pieces we get from every retailer and say, Hey, these guys merchandises this category well but maybe we can do it better. Or maybe a company is great at customer service, an area in which we strive to be the best. So, I think we have always taken bits and pieces from as many organizations as we can and incorporated these into what we do.

There was a restaurant chain out in Ohio that I went to for lunch one day and the manager walked around to each table and asked if everyone one was okay and if there was anything he could do for me he would. It was the way he did it that impressed me. I left that lunch with a feeling of a high level of service, quality and follow-up. So I implemented that policy in my store. I said, You know what we are going to do from now on? I want our assistant managers to walk around all day today and talk to all the customers and ask if there was anything that you could do for them and how was their experience. So, we started implementing that into our store service program, which exists to today.

Jose: You know what is interesting, we are going to take a family vacation and we are going to do Disney and Universal. I’ve found when you go to Disney and then you go to any other amusement park – you can’t help but say, Why aren’t these guys just walking through Disney with a clip-board and copy their queuing techniques, to make you never feel like you’re on a long line? And probably a lot of other easy-to-observe traits of a market leader’s success formula.

You have to wonder why people just aren’t more observant. Other people have figured out good things, and like you did, you appropriate, you borrow, you adapt – because you cannot have every good idea coming from your own organization but there are a lot of good ideas out there. We can all learn from other people’s mistakes and other people’s trials.

B.J.: Exactly!

Jose: Well B.J. thank you! You have been very gracious with your time and insights. It is all very helpful.

Part 2 of 3 of a Conversation with B.J. Orsi, Regional Manager, Bed Bath & Beyond.

B.J. Orsi is one of twelve Bed Bath & Beyond Regional Managers, each overseeing about 40-50 Store Managers, who, in turn, each manage about four Department Managers. B.J. has been at the company for over twenty years. I recently had the pleasure of talking with him about how his company operates and what sets it apart in the marketplace. I am sharing some key ideas from that conversation in three blog posts, of which this is the second.

Today, I continue with that conversation – with what B.J. said about how his company promotes a teaching culture that allows managers to earn their promotions by training those below them.

Jose: How do managers know what customers want?

B.J.: To do that effectively you must be on the sales floor all the time and get to know who they are. In return, you are developing an understanding of how to get to know each individual and how to motivate them and teach them leadership skills and learning the merchandise. Our systems tell us what sells, and so forth, but computers don’t tell you everything. So you have to be on the floor to really identify what the customer is looking for and ask them, what didn’t they find? What is it they want? and to do that I need to spend a lot of time on the floor.

Jose: How does this tie into leadership development?

B.J.: Since there are planograms and schematics to manage, you can’t sit in the office and delegate. You cannot have the merchandising executed at the level you want without a lot of involvement. Because that store manager has been through all of these areas, he or she has to spend a lot of time on the floor and will have lots of hands-on training, talking through development, and demonstrating to get to what they want to see happening. So, it is company culture that they are on the floor much more often than with other retailers because we are not looking through books for schematics and planograms.

We are on the floor and we are analyzing, Hey, does this look right or make sense? How do we merchandise to this buyer by look, by function, by price point? What do you think? What does the customer think? Or maybe, Try it this way or next week let’s experiment by putting it in a different way. So it really takes a lot of hands-on involvement with the customers and the employees to really execute the standards we are looking for as a company.

Jose: So, you have created a teaching organization which is really interesting the way you described it. In a lot of corporate cultures, the way you advance is by killing the person in front of you. You know what I mean? You have to undermine the guy in front of you. Of course, you’d get a toxic environment as a result (but lots of companies have them). To have a teaching organization which says, No, the way you advance is by advancing those under your charge is a huge, and not a subtle, difference.

B.J.: Other centralized, more cookie-cutter, retailers can take on someone with a little bit of retail experience. Most retailers today are operators for lack of a better term. These organizations are looking for good soldiers and they operate a business from the top down. We operate from the bottom-up. Those good soldiers could walk into some retailer in 4-6 weeks and be a store manager and operate that business because they are following their planograms, schematics, while most of the critical decisions are made up in the corporate office and they are simply executing.

Our company is different and that’s why it doesn’t take 4-6 weeks to be a store manager. It could take 12-18 months or even 2 years to become a store manager because you have to learn everything. We are working from the ground up and are really training them to think and be autonomous so that they can run that business on their own and really be very successful. They can continue to drive the business by developing their people, finding out what the customers want and then giving it to them.

Jose: I’ve always felt that Bed Bath & Beyond is a good store to walk into and have a pleasant experience. But this explains how you get there.

B.J.: I think I am an ideal example of this because I started as an hourly employee in college and did not expect to work at Bed, Bath & Beyond forever. I just wanted a quick buck through school and was promoted through department manager to assistant store manager and also moved throughout the country. I have been with the company for over 22 years now! So I have started at the very ground level as an hourly and then moved to where I am today.

Jose: Wow! That is a great story.

========
My third and final blog post based on this conversation will discuss the idea of learning from other organizations in the industry.

Part 1 of 3 of a Conversation with B.J. Orsi, Regional Manager, Bed Bath & Beyond.

B.J. Orsi is one of twelve Bed Bath & Beyond Regional Managers, each overseeing about 40-50 Store Managers, who, in turn, each manage about four Department Managers. B.J. has been at the company for over twenty years. I recently had the pleasure of talking with him about how his company operates and what sets it apart in the marketplace.  I am sharing some key ideas from that conversation in three blogposts, of which this is the first.

B.J. believes passionately that Bed Bath & Beyond is a teaching organization with a strong culture and a commitment to customer-centric merchandising (adapting to what matters most to customers).  The company is quite decentralized compared to most other large retailers and is much more autonomous at a local level.

Management encourages independent thinking and an entrepreneurial spirit.  There is a real desire to avoid a cookie-cutter approach or mentality. Bed Bath & Beyond merchandises to the local customer and believes each store should feel different. The stores all have access to the same product categories but each store has a unique local flavor and some may have a distinct product category that other stores don’t have, like a luggage shop.

According to Orsi, managers have to work their way up the ladder. So, it is a very diverse working group. He states that everyone starts at the same level and earns his or her way up from a department manager to a store manager, and that may take up to a year and a half.

One of the key dynamics is that employees get promoted by teaching the people below them so that in time they can take their place. So you get bumped up as opposed to bumping someone off. You have to be hands on; you cannot delegate everything.

Here is part of my recent conversation. We began by discussing how his company gives each of its stores flexibility in what it sells:

B.J.:  My office negotiates the price and the shipping and so forth from each vendor, but the product ships directly to our stores so it allows our store managers some flexibility.  So, Newtown, PA can order a $200 toaster oven or 20 of them, or 60 of them and then maybe in another market they can order two or three and maybe in another market they might not carry it at all. The store managers have the ability to local-manage their assortment.

Jose: So, could they decide to source a product that is not in the master catalog, for example?

B.J. : They could and we have plenty of examples of that, as well. A really unique thing about our company is that there is a core assortment but above and beyond that there is a protocol and process to go through. The store managers can find a local company who has something they want to carry and negotiate carrying that item into their one store, or a district manager can put it into the whole district—we can do that as well. So, we really want the store to reflect the community and feel like the neighborhood store and not feel like that national chain.

Jose: So, towels with seashells on them might be locally sourced because it is unique to that need, at the Jersey Shore, for example?

B.J. : Exactly.

Jose: Well, that also implies a certain level of autonomy for every store. As long as they hit he numbers then everyone is happy. That’s the whole point -managers know what is happening at ground level with local customers. So what kind of training culture or measureable protocols are there to ensure that managers are actually engaging with customers and not just in the corner office studying spreadsheets? How are they getting close to the people?

B.J. : They are held to a lot of different standards and criteria. They are all home-grown and they have been brought up in these stores. The people training them have a vested interest in training them well because those who are doing the training want to get promoted. That is the way you get promoted in this company. It does not matter if you’re the department manager; your goal is to develop the next manager. So the only way to get to the next level is to really teach, train, develop, and mentor the people who are below you.
____________________

I’ll share more of B.J. ’s comments on how Bed Bath & Beyond fosters a teaching organization, in my next blog.

I’ve been asked at times to describe the I3 Principles (innovation, indispensability, and inspiration) for the value propositions for companies that have been in the lead for a long time. That is to say, how can they still be innovative after all these years? How are companies like Southwest or Nordstroms still innovative today? How are some of these other companies innovative in the context of – or in consideration of – the fact that their value proposition has been around for so long?

And so I started thinking about the different structures for mature companies that are clear leaders in their field and who maintain their leadership. I thought about things like  reputation and reliability and the basic continued return on investment for their buyers as possible principles around those value propositions that seem to be perennial. As I thought about it, I realized that innovation maintains its freshness in contrast to the lack of innovation from competitors.

To put it in another way, Apple’s iPod and iPhones were themselves major innovations when they came out. In fact, they were hyper-innovative. Yet in many ways they have been duplicated by competitors (ie: Microsoft Zune and some of the other smaller MP3 devices). But in reality they have not been outclassed or transcended by any other development.

At Southwest (as I have opined in prior blogposts) has dialed into its customer value proposition that makes regular travelers into raving fans. [The Real Thing... The Heart Thing] Yet in spite of the fact that they practically offer a cookie cutter template that competitors can observe – those who have tried to imitate them have failed [see the aforementioned TED and SONG]. So, the reality is that for the market of consumers who fly, or those who buy a musical device, innovation really means a distinct value. Distinct and separate from the rest of the pack. Southwest manitains their distinction, partly because others have failed to duplicate or exceed it – even 20 years later.

Starbucks has myriad imitators, from Seatles Best to Saxby’s to Dunkin Donuts and so on. Starbucks’ own recent growth issues have more to do with pushing growth beyond the saturation point in the marketplace. I mean, even in the middle of a recession they still maintain their first-place position – no one has done better or better enough that they stand out as superior to Starbucks in a way worth switching too. (See Consumerist Post)

So here we have it, if you are a true innovator you help to develop or refine, or define, how a category functions in a new way to your consumers. If your competitors can only come up to a ‘matching you’ perspective you can maintain your first ‘ I ‘ of the I3 Value Proposition. Still, you need to innovate a strong defining point about why your value to your target market still stands out and is still worthy of their continued consideration and patronage. So, another way of saying this is that the innovative portion of I3 is directly supported by the Indespensible nature or your offering. That is, the persistent “goodness” that your value proposition delivers over time to your target market.

The inspirational component may actually wain before the newness or the distinct fact that you stand alone wears off. In that, it is a shorter term, an ‘emotional hit’. Perhaps, inspiration is the weakest of the I3 dimensions for creating a persistent offering. However, one could say that (referring to the previous example) that Apple competes against itself and continues to innovate. So you go from iPod to iPhone and from iPhone to iPad with raving fans more and more excited for each subsequent deliverable from the company.

With Southwest, they responded to competitors charging for luggage and specifically say that they do not charge for luggage. But they do charge for priority queuing. I happily pay for priority queuing because it is reasonably priced and adds value. Although it means a lot to me, it may not mean anything to anyone else. However everybody has to bring luggage, so you can’t help but feel ripped off for that expense. Not everybody needs to board the plane first and ten dollars is a small price to pay for that [Southwest Priority Boarding].

So the message here is to really understand if your offering -or the offering you are thinking about or working on- really does have freshness in the market, long term value, and if you are doing it in any way with grace and “style notes” that make it stand out just on the elegance of how you put it together. This is true, whatever the value chain you’ve strung together to service the needs that you are meeting in your market.

A recent letter from a long time client of mine (in the chemical distribution business) opined that many of his competitors have actually disappeared. For them this means that they have been disintermediated by the manufacturers selling directly through the internet. However, his firm remains stronger than ever because, in his terms, “they want what we got, which is a level of customer service that was new to the market when it was introduced 25 years ago and remains fresh to this day.”

Is your value proposition delivering a Persistent Value?

In a recent MSNBC.com article, James McQuivey, principal analyst for Forrester Research, says, “I don’t believe for a second that we’re ‘meh’ on new technology. Instead, we’re very sophisticated in what is going to get our attention. A fancy new device that doesn’t improve on the devices we already have, or a promised service that we can’t go out and buy yet, won’t be able to get our attention.”
[ipad, google buzz, 3D-TV: 'meh'? (Feb. 12th, 2010) by Suzanne Choney]

I couldn’t agree more. In fact, McQuivey is saying that new things entering a market have to be truly new – and not just new, but very useful – and not just very useful, but exciting.

Of course, that’s another way of describing an “I3 value proposition”. I3 means not just clever words spinning a tale, but meaningful words describing a true-truth about your product or service. In increasingly crowded, hyper competitive, and fast-moving markets, you have to think in terms of how your target customer will process your offering in a sea of similar (or similar enough) offerings. Your consumer is probably not as much a student of your market as you are (or should be).

They may see the nuances that excite you as relatively minor feature changes.
Wow! 10% more efficient! – let’s have a parade! >>> your engineers. Ho hum – whatever >>> your customers.

Are there other ways to compete? Certainly there are! Being the low cost provider and having a radically different approach to a problem are competitive levers that companies must consider as they go to the market.

But, the bottom line is, if these distinctions are buried in minutia and are things that mean your customer has to study, or get a new degree, in order to understand the significance of it all – then you’re missing the real opportunity. And that opportunity is to think of something that is not being addressed in some way or something that is not being addressed in the mind, the eye, or the heart of your target customer.

This is true, whether that target customer is a housewife in Peoria, a college student in New York or a corporate executive at the top of the Sears Tower in Chicago.

Find the sweet-spot of frustration – address it – and gain fans, not just customers.

Get the new e-Book – Free!

Knowing who is your ideal target customer focuses all your energies on higher probability prospects and also has the added benefit of optimizing your messaging to that audience.

The alternative has the false attraction of a bigger (and therefore, more bountiful) market.

This, however, is “fool’s gold” for all but the largest companies.

Most organizations simply cannot develop the capabilities to meet the expectations of many markets. Consider the cost of spreading yourself too thin over too many demands and requirements.

The Bottom Line: Really Know Thy Customer… because you are making major investments of time, staff and money to reach them.

Know Thy Customer

1. Know Thy Market
2. Don’t Inside-Out Your Assumptions
3. Know Thy Customers Are… People
4. Know Thy Customers’ Internal Motivations
5. Know Thy Customer’s Requirements
6. Know When to Switch Gears
7. Know Thy Real and Best Customer
8. Know Thy Strengths
9. Sharply Define Your Customer “Starting Block” for Your Go-to-Market Race

Sharply defining your customer is a “starting block” for your go-to-market race.

• How many of them are there?
• What size?
• What is the published market research?
• Are there demographic and market research reports written on your target market?

In today’s sophisticated marketing world, you can’t go after a market without being armed with data – fortunately there’s lots of it.

At this stage of the game, you’re not necessarily looking at the way the market works, but simply defining the kind of company that your product or service most fits. Ultimately, it’s about knowing your customer. In every market segment, there are cultures, commonalities, unspoken rules of the game that exist in enclaves of the high tech, business and manufacturing worlds.

You need to know what these are. If you don’t have a feel for the people you’re selling to, you’re already at risk of falling further behind your competition.

While with a consulting firm focused on smaller business services firms, we worked with a small regional web design company with heavy specialization in user experience and interface design. As is typical for companies this size, they defined their customers primarily by geography – any business in their area needing help with larger web projects. Over a two-year period we helped them refocus on one particular market segment they had past success with – large, socially focused non-for-profit organizations.

While this was a positioning move, it was much deeper than just looking a certain way to a particular market – or choosing which mailing list to use. By focusing on the specific non-for-profit sector, they were able to start understanding the target customer’s culture, eventually adopting the language, pace and unspoken “feel” of the non-for-profit world.

They’re back on track, growing revenues and profits with a dedicated core of clients who view them as their specialist firm for web design and deployment in the non-for-profit field. In the same way, your understanding of your target customer will influence your marketing and the direct sales communication you have with them and the way you interact and serve them.

Adapted from the forthcoming eBook, “Know Thy Customer” by Jose Palomino

What level decision maker can you access?

If you want to sell to a specific type of company, you need to have access to call, talk and meet with the appropriate level of decision maker at that customer – whatever it takes to sell your product to them. Maybe you need to have access to CFOs of financial services organizations to sell your compliance solution.

While you may have many years and dollars worth of experience selling to financial services firms, you might find that you have no way to get your foot in the door of the C-suite, if your company never worked at that level before. That’s not to say that this marketing and sales capability cannot be acquired or developed – just that you need to know where you’re starting from and identify the gap as quickly as possible.

The “access” issue can go the other way, too. In the product development process, larger software developers often end up creating simpler versions that they try to sell “down market” to smaller customers. Yet, they don’t know the smaller customers (SMB) – the way they function, and what’s important to them. They often do not really know how to access this smaller customer (as in the Cisco example above).

It isn’t primarily a product issue – it is simply that a company that has been selling to Fortune 500 companies will face the same challenge connecting with decision makers in a $50 million dollar manufacturing company that a SMB focused company would have calling on GE. Movement – both up or down market – is possible and many companies manage to do it successfully. However, many more have failed or have had to make many learning runs till they got it right (e.g., Microsoft moving up-market in corporate IT with server software).

Access challenges run both ways: smaller companies face challenges selling to bigger ones, but oftentimes, bigger players can’t get small enough to sell to smaller companies or individual buyers.

Adapted from the forthcoming eBook, “Know Thy Customer” by Jose Palomino

Whether you developed your product with a specific customer need in mind, or happened upon a product and want to sell it to someone, you have to start by knowing your customer.

Before the Internet boom, I assembled a group of friends and raised angel capital to start a company to develop a commodity chemical trading system, based on the notion that a hundred pounds of a specific chemical powder was the same as any other hundred pounds of the same chemical powder. It would be a trading system for chemicals – a brilliant idea – or so it seemed.

Along the way, the web “happened”, and it was gaining traction all around us.

Our company’s Chief Technologist developed a side-project to create dynamic websites for small businesses. Back then, things like Facebook and MySpace didn’t exist. It wasn’t easy to create a web presence or an identity on the Internet.

So, the idea was born – instant websites for smaller businesses.

We completely switched gears. While we started with what we thought was a brilliant idea, we came across something in development that we thought was even more valuable. Before we sold the company, we grew to several thousand customers – small change by today’s standards, but an interesting illustration of adaptation.

Adapted from the forthcoming eBook, “Know Thy Customer” by Jose Palomino

You might want to look at the point in your launch cycle in which your company actually asks customers their opinion.

For example, a few years ago, BusinessWeek cited Xerox as typically developing products fully and then asking customers what they thought. Xerox has since refocused on customers from the onset in their product development timeline.

Stephen Hoover, vice-president of Xerox’s research and development hub commented, “The team had had a certain idea of what customers wanted. Going out and actually talking to them really changed that.”

The lesson here is not that Xerox experienced a “blinding flash of the obvious”, i.e., talk to customers before building new products. No, it is instructive in that it is easy for companies of all sizes and in all industries to approach markets from an “inside-out” mindset.

While customers are actually not the only influence on a marketplace, they are certainly the “hub of the wheel”. We forget this at our own peril.

Adapted from the forthcoming eBook, “Know Thy Customer” by Jose Palomino