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Monday, 30 November 2009
Tuesday, 27 October 2009
Avoiding Greenwash with Real Green Value Propositions
With the global climate summit in Copenhagen just around the corner, I've been reading an increasing amount about eco-initiatives from organisations that you wouldn't normally associate with the green movement.
Fascinatingly, a number of organisations are moving away from just plastering their marketing material with their great intentions and instead are taking more direct action. I read today that Lush, the high street cosmetics company, is more or less setting itself up as an environmental activist company, with other companies taking a similar line to prove 'that you can do good through doing business', as one company director put it.
"We look at issues and we decide which ones are important to us and then we see how we can support them", explains Andrew Butler, Lush's director of campaigns. "We partnered with Sea Shepherd (a marine environmental organisation) - a direct action group best known for confronting Japanese whaling vessels, and we felt that shark finning was an issue we could help them with." To this end, Lush sold 'shark fin soap' (soap bars with a fake fin sticking out of the top) with proceeds going to the cause. Mr Butler argues it's about attracting attention to an issue that might otherwise have languished. "In all, we raised £25,000", he said.
I'm fascinated about this movement of environmental and sustainability issues into mainstream business.
How does a company's value proposition to its customers reflect corporate values? How does Lush translate its passionate, activist, environmental stance into a valuable customer experience? I'd love to hear your views.
Fascinatingly, a number of organisations are moving away from just plastering their marketing material with their great intentions and instead are taking more direct action. I read today that Lush, the high street cosmetics company, is more or less setting itself up as an environmental activist company, with other companies taking a similar line to prove 'that you can do good through doing business', as one company director put it.
"We look at issues and we decide which ones are important to us and then we see how we can support them", explains Andrew Butler, Lush's director of campaigns. "We partnered with Sea Shepherd (a marine environmental organisation) - a direct action group best known for confronting Japanese whaling vessels, and we felt that shark finning was an issue we could help them with." To this end, Lush sold 'shark fin soap' (soap bars with a fake fin sticking out of the top) with proceeds going to the cause. Mr Butler argues it's about attracting attention to an issue that might otherwise have languished. "In all, we raised £25,000", he said.
I'm fascinated about this movement of environmental and sustainability issues into mainstream business.
How does a company's value proposition to its customers reflect corporate values? How does Lush translate its passionate, activist, environmental stance into a valuable customer experience? I'd love to hear your views.
Tuesday, 20 October 2009
Dixons forget value and go for price
Well, I’ve been thoroughly enjoying the heat-and-light generated by Dixons’ latest advertising campaign. Media-luvvies have been falling over each other in their haste to write articles, arguing the toss over whether this is gutsy advertising or the desperate stance of a failing brand. And Selfridges, John Lewis and Harrods – the targets of the copy – are … let’s say… irritated.
For those of you who haven’t seen these adverts, here’s an example of one ad: "Step into middle England's best-loved department store, stroll through haberdashery to the audio visual department where an awfully well brought up young man will bend over backwards to find the right TV for you. Then go to Dixons.co.uk and buy it."
From a value proposition point of view, Dixons have obviously done their customer research, understood that the only ground upon which they can legitimately compete is price and so put this message front-and-centre of their campaign. This is, to say the least, a risky stance, not least because price competition is the most shifting of all grounds upon which to base your value proposition.
As we have always said, the value equation is Value = Benefits minus Cost (with cost including risk not just price). Dixons are clearly gambling that people will only consider price when buying their electronic goods. However, I suspect that many consumers are not only price-conscious but also increasingly risk-averse and are actively seeking the warranties, after-sales care and impartial sales advice offered by stores such as John Lewis.
Time will tell whether Dixons’ bold advertising will bring in the sales boost from the shoppers of ‘middle-England’. Some people may well be tempted but I suspect that, for many, the value equation won’t balance and the ‘best loved department store’ will therefore continue to do very well.
For those of you who haven’t seen these adverts, here’s an example of one ad: "Step into middle England's best-loved department store, stroll through haberdashery to the audio visual department where an awfully well brought up young man will bend over backwards to find the right TV for you. Then go to Dixons.co.uk and buy it."
From a value proposition point of view, Dixons have obviously done their customer research, understood that the only ground upon which they can legitimately compete is price and so put this message front-and-centre of their campaign. This is, to say the least, a risky stance, not least because price competition is the most shifting of all grounds upon which to base your value proposition.
As we have always said, the value equation is Value = Benefits minus Cost (with cost including risk not just price). Dixons are clearly gambling that people will only consider price when buying their electronic goods. However, I suspect that many consumers are not only price-conscious but also increasingly risk-averse and are actively seeking the warranties, after-sales care and impartial sales advice offered by stores such as John Lewis.
Time will tell whether Dixons’ bold advertising will bring in the sales boost from the shoppers of ‘middle-England’. Some people may well be tempted but I suspect that, for many, the value equation won’t balance and the ‘best loved department store’ will therefore continue to do very well.
Wednesday, 30 September 2009
Does BA understand the concept of Value Proposition?
I am fascinated to note that British Airways appears to be moving away from the concept of delivering customer value and is focusing solely on the balance sheet. Over the last three months, BA has abolished meals on short flights, cut luggage allowances and has just introduced charging extra for the privilege of reserving your seat. At the same time, it has just launched a business-only service from London City to the US. Confused? You should be.
I don't think I'm alone in thinking that BA has lost its way and is increasingly devaluing its value proposition which hitherto has been based on providing an excellent customer experience and brand clarity. Competition with low-cost airlines will be increased, not decreased, by its recent moves as the competitive playing field is being levelled by BA itself.
BA may well boost flagging revenues in the short term but at the risk of alienating its loyal customer base and thus destroying its hard-won value proposition.
I don't think I'm alone in thinking that BA has lost its way and is increasingly devaluing its value proposition which hitherto has been based on providing an excellent customer experience and brand clarity. Competition with low-cost airlines will be increased, not decreased, by its recent moves as the competitive playing field is being levelled by BA itself.
BA may well boost flagging revenues in the short term but at the risk of alienating its loyal customer base and thus destroying its hard-won value proposition.
Thursday, 16 July 2009
"Our survey said…" - What are your thoughts on value propositions?
Through our work, writing and speaking etc we get lots of questions and comments about value propositions. Reading through research material and general information about value propositions it seems that there are many interpretations of what is a value proposition. As a consequence, we want to get a snapshot of what people think about value propositions.
Please would you help us by filling out this short questionnaire. Link to questionnaire. It should take 4 minutes and if you give us your contact details (which are only for our admin use and will not be displayed in the summary), we will send you the summary report in the Autumn. We will release this report to coincide with the launch of our book "Creating and Delivering Your Value Proposition: Managing Customer Experience for Profit" by Cindy Barnes, Helen Blake and David Pinder, Kogan Page 2009.
We'll let you know more about the book in the next newsletter; it's due out later this year.
Link to questionnaire.
Please would you help us by filling out this short questionnaire. Link to questionnaire. It should take 4 minutes and if you give us your contact details (which are only for our admin use and will not be displayed in the summary), we will send you the summary report in the Autumn. We will release this report to coincide with the launch of our book "Creating and Delivering Your Value Proposition: Managing Customer Experience for Profit" by Cindy Barnes, Helen Blake and David Pinder, Kogan Page 2009.
We'll let you know more about the book in the next newsletter; it's due out later this year.
Link to questionnaire.
Discounting Europeans
70% of world-class organisations say that if they do give price concessions to customers, they always ensure they get comparable value in return, such as an extended contract or an additional warranty. This compares with only 19% of European firms, according to the 2009 Sales Best Practices Study from Miller Heiman. In other words, European companies are too ready to discount without getting anything in return. I’m looking forward to the UK-specific breakdown of this report which is due out shortly. It will be interesting to see if Brits are more or less likely to offer discounts or if we understand value any better.
The study, based on input from European and global sales professionals, analyses complex B2B sales environments to reveal the best practices of world-class sales organisations.
It’s so important that you first understand and really believe your own value. If you don’t then you are much more likely to devalue yourself, your offering, your firm by offering some form of pricing reduction. The best way to really understand your value is to ask your customers, conduct a customer value experience exercise. This is the first step on the road to creating a value proposition – note the word value – it’s not there for decoration, it really does help you create, articulate, believe and substantiate your value!
A free copy of the executive summary is available by calling
01908 519 615.
The study, based on input from European and global sales professionals, analyses complex B2B sales environments to reveal the best practices of world-class sales organisations.
It’s so important that you first understand and really believe your own value. If you don’t then you are much more likely to devalue yourself, your offering, your firm by offering some form of pricing reduction. The best way to really understand your value is to ask your customers, conduct a customer value experience exercise. This is the first step on the road to creating a value proposition – note the word value – it’s not there for decoration, it really does help you create, articulate, believe and substantiate your value!
A free copy of the executive summary is available by calling
01908 519 615.
Left brain, right brain
When times are tough, you’ve had to lose good people and you can’t afford to hire more, the key to growth is innovation and the best way of achieving this is pairing a left-brain thinker with a right-brain thinker.
Innovation is a messy process – hard to measure and hard to manage. Most people only recognise it when it generates a surge in growth. When revenues and earnings decline most executives conclude that their innovation efforts are just not worth it. Better to focus on what we know, they say, rather than the untested. Better to play safe and be risk averse.
Recently we worked with a technology company on one of their largest customer accounts. We analysed what was happening with the account in terms of value, processes and people and in the course of our work came across two sales professionals – we’ll call them Jim and Tom – who were totally dissimilar in pretty much every aspect of their approach to work. Jim was a total ‘left-brain’ thinker (logical, analytical, task-driven) and Tom a ‘right-brain’ (creative, relationship-orientated, door-opener) but they had figured out that together they could create a fantastic approach to innovative, consultative sales within their customer account. Individually, they were OK sales people but by working together they were incredibly successful.
Defining successful behaviours in successful sales professionals is something we have been working on for some considerable time. Come back to this Blog very soon and you’ll find more information on an exceptional way of identifying and defining successful people.
Innovation is a messy process – hard to measure and hard to manage. Most people only recognise it when it generates a surge in growth. When revenues and earnings decline most executives conclude that their innovation efforts are just not worth it. Better to focus on what we know, they say, rather than the untested. Better to play safe and be risk averse.
Recently we worked with a technology company on one of their largest customer accounts. We analysed what was happening with the account in terms of value, processes and people and in the course of our work came across two sales professionals – we’ll call them Jim and Tom – who were totally dissimilar in pretty much every aspect of their approach to work. Jim was a total ‘left-brain’ thinker (logical, analytical, task-driven) and Tom a ‘right-brain’ (creative, relationship-orientated, door-opener) but they had figured out that together they could create a fantastic approach to innovative, consultative sales within their customer account. Individually, they were OK sales people but by working together they were incredibly successful.
Defining successful behaviours in successful sales professionals is something we have been working on for some considerable time. Come back to this Blog very soon and you’ll find more information on an exceptional way of identifying and defining successful people.
Selling to the Post-recession Buyer
In the developed world, until last year we had 15 years of uninterrupted prosperity where growth was a permanent feature. Between 1995 and 2005 disposable incomes increased in the slower economies by 10% and in the highest growth economies by as much as 33%. That economic landscape has had a profound impact on our buying habits. We could afford to be curious about gadgets and new technology, indulge ourselves in premium products and just-for-fun experiences. In the latest Harvard Business Review(1) research shows how the recession has sobered us all up, moving some buying trends forward and slowing or reversing others.
The key dominant and advancing trends are:
1) Focus on how to help people realise the true value of your offering. It amazing what great and simple ideas can come out of doing this
2) Be honest. In a world of mistrust, 'spinning' your messages is turning people off fast.
3) Don't start by focusing on price! Price is relative and it's a bad place to start any sales and marketing efforts. Get your customers talking about what really matters to them and then you can reframe the whole 'price' discussion.
4) Network. As buyers are shopping around and using technology and networking as part of their decision-making process, then you need to be part of it. Linked In, Twitter, Blogs are proving to be powerful influencers. If you're not tweeting, then you need to start!
In what ways are you changing your sales and marketing efforts for this economy? What's working for you?
(1) Understanding the Post Recession Consumer, P Flatters and M Willmott, Harvard Business Review July-August 2009, pp 106-112
The key dominant and advancing trends are:
- A demand for simplicity
Even before the recession many people were feeling overwhelmed by the proliferation of choices (see the article More Jam Anyone? in this blog) coupled with 24/7 connectivity and were starting to simplify. The recession is accelerating this trend.
The authors say, "Consider the rise of edited retailing (consumers are offered limited collections of coordinated product choices), a growing demand for trusted brands and value, an increasing desire for advisors - ranging from social networks to product ranking web sites - that can simplify choice making, and enthusiasm for less complicated, more user-friendly technologies." - A focus on the boardroom
Like the simplicity trend, this issue has been building for years, spurred by major governance failures such as Enron and WorldCom. Misbehaviour in the boardroom is no longer acceptable. The huge tax payer bail-outs of badly managed businesses will accelerate this trend. This also builds on people's well established reflex to punish companies for unethical labour or customer practices, as Nike and Nestlé have learned the hard way. - Discretionary thrift
A desire to be more wholesome and less wasteful is prevalent, with people recycling more and buying more used goods. "People are imbuing their children with traditional values - behaviours that dovetail with the growing demand for simplicity and a solid, though currently slowing, interest in green consumerism." Many post recession purchases will be less extravagant versions of pre-recession ones. - Mercurial consumption
Buyers are more agile and more fickle due to technology and social networking. They are more likely to shop around and shift allegiances.
1) Focus on how to help people realise the true value of your offering. It amazing what great and simple ideas can come out of doing this
2) Be honest. In a world of mistrust, 'spinning' your messages is turning people off fast.
3) Don't start by focusing on price! Price is relative and it's a bad place to start any sales and marketing efforts. Get your customers talking about what really matters to them and then you can reframe the whole 'price' discussion.
4) Network. As buyers are shopping around and using technology and networking as part of their decision-making process, then you need to be part of it. Linked In, Twitter, Blogs are proving to be powerful influencers. If you're not tweeting, then you need to start!
In what ways are you changing your sales and marketing efforts for this economy? What's working for you?
(1) Understanding the Post Recession Consumer, P Flatters and M Willmott, Harvard Business Review July-August 2009, pp 106-112
More jam, anyone?
Or, 'how does having more to choose from affect your choice'?
Have you ever felt so daunted by the amount of different things to choose from that you ended up not choosing anything at all? If so, you are not alone, as the results from the following experiment show. A stall was set up in a supermarket for jam tasting. On one day the stall had 24 jams, and on a different day only 6 jams. Although the stalls with more jams attracted more attention (60% of the people passing by stopped, compared with only 40% for the small-selection stall), of the people who stopped only 4% at the stall with the larger selection subsequently bought a pot, whereas 30% of the people who stopped at the small-selection stall went on to buy a pot(1).
Too much choice can make us feel overwhelmed and not know what to choose, thereby often not making any choice at all. Even when we do choose something, we are often dissatisfied, thinking we have probably made the wrong choice (2)(3).
So what does this mean for sales and marketing?
In our B2B world we often meet very clever, very technically brilliant people in great companies who want to tell the whole world all about how technically brilliant they are. Technically brilliant people are also most often very analytical people, so they are more left-brain dominant rather than right-brain dominant. This leads them to believe that telling all of their customers about all of the facts, about all of the features and benefits of all of their products or services will just demonstrate how brilliant they are and their customers will naturally fall at their feet and want to buy their offerings. This rarely happens. This approach just frightens or baffles customers and then they're just paralysed into doing nothing. The worst possible outcome for our technical company.
Rather than focusing on technical brilliance we believe it is much better to spend time on developing your corporate value proposition - determining exactly what your customers' value. Spend time defining your customer groups, what offerings you have, what benefits you generate. Then do the same for your separate offerings ensuring your offerings are in alignment with your corporate view. Then develop very clear communication around the few things you want to be famous for, so long as they fit in with the corporate position.
Just think about the best retailers. Does Harrods have everything that they sell crammed into their shop windows? No. They might have one window with nothing more than a beautiful, strategically placed coffee pot on a simple table. But this coffee pot says everything about Harrods, opulence, beauty, quality, precious objects, etc. Also, all the windows will be co-ordinated together into one main theme that reinforces the main message, the main brand. So Harrods signposting is very clear to their customers.
So stop giving customers too much choice, too much information, and you might sell more jam!
I'm very interested to hear about examples of B2B companies who do this very well and also those who fall into this trap, so please let me know your examples.
Footnotes:
(1)1 Iyengar S and Lepper M (2000) 'When choice is demotivating: Can one desire too much of a good thing?' Journal of Personality and Social Psychology, 79, pp. 995-1006
(2) Schwarz B (2004) 'The Paradox of Choice: Why more is less' New York, Harper Collins
(3) This article was inspired by Behavioural Economics, New Economics Foundation, London, July 2005
Have you ever felt so daunted by the amount of different things to choose from that you ended up not choosing anything at all? If so, you are not alone, as the results from the following experiment show. A stall was set up in a supermarket for jam tasting. On one day the stall had 24 jams, and on a different day only 6 jams. Although the stalls with more jams attracted more attention (60% of the people passing by stopped, compared with only 40% for the small-selection stall), of the people who stopped only 4% at the stall with the larger selection subsequently bought a pot, whereas 30% of the people who stopped at the small-selection stall went on to buy a pot(1).
Too much choice can make us feel overwhelmed and not know what to choose, thereby often not making any choice at all. Even when we do choose something, we are often dissatisfied, thinking we have probably made the wrong choice (2)(3).
So what does this mean for sales and marketing?
In our B2B world we often meet very clever, very technically brilliant people in great companies who want to tell the whole world all about how technically brilliant they are. Technically brilliant people are also most often very analytical people, so they are more left-brain dominant rather than right-brain dominant. This leads them to believe that telling all of their customers about all of the facts, about all of the features and benefits of all of their products or services will just demonstrate how brilliant they are and their customers will naturally fall at their feet and want to buy their offerings. This rarely happens. This approach just frightens or baffles customers and then they're just paralysed into doing nothing. The worst possible outcome for our technical company.
Rather than focusing on technical brilliance we believe it is much better to spend time on developing your corporate value proposition - determining exactly what your customers' value. Spend time defining your customer groups, what offerings you have, what benefits you generate. Then do the same for your separate offerings ensuring your offerings are in alignment with your corporate view. Then develop very clear communication around the few things you want to be famous for, so long as they fit in with the corporate position.
Just think about the best retailers. Does Harrods have everything that they sell crammed into their shop windows? No. They might have one window with nothing more than a beautiful, strategically placed coffee pot on a simple table. But this coffee pot says everything about Harrods, opulence, beauty, quality, precious objects, etc. Also, all the windows will be co-ordinated together into one main theme that reinforces the main message, the main brand. So Harrods signposting is very clear to their customers.
So stop giving customers too much choice, too much information, and you might sell more jam!
I'm very interested to hear about examples of B2B companies who do this very well and also those who fall into this trap, so please let me know your examples.
Footnotes:
(1)1 Iyengar S and Lepper M (2000) 'When choice is demotivating: Can one desire too much of a good thing?' Journal of Personality and Social Psychology, 79, pp. 995-1006
(2) Schwarz B (2004) 'The Paradox of Choice: Why more is less' New York, Harper Collins
(3) This article was inspired by Behavioural Economics, New Economics Foundation, London, July 2005
Thursday, 25 June 2009
The Economist - proof of a good value proposition
On Tuesday, the Economist announced that it was bucking the trend of steep declines shown by most magazine owners with a circulation increase of 6.4%, a 26% increase in operating profit, a turnover increase of 17% and an 18% increase in pre-tax profits.
The outgoing Chairman, Robert Wilson, attributed the growth in part to a 'flight to quality' among advertisers.
I believe he's right and I also believe the Economist is proof of what happens when you have a very strong value proposition for the right target audience.
The outgoing Chairman, Robert Wilson, attributed the growth in part to a 'flight to quality' among advertisers.
I believe he's right and I also believe the Economist is proof of what happens when you have a very strong value proposition for the right target audience.
Monday, 23 March 2009
Review your Offerings to stay Profitable
A travel industry client of a colleague recently reduced its offerings down to a narrow niche of cruises and then focused its marketing effort and management time on ensuring these were profitable and generated cash quickly. While there was a temporary fall in sales, the company returned to positive cash flow and profit within a matter of weeks.
The moral of the tale? Don't be scared to reduce and focus your offering portfolio for greater profit. Now is a great time to apply rigorous focus and do this. The first step in the process of reviewing and developing your offerings is to categorise what you’ve already got.
We tend to think that it is easy for manufacturing and product companies to categorize their products, but more difficult for service companies to do so. There is a tendency for those of us in the services sector – particularly in consulting – to think that, because our Offerings are less tangible, perhaps more complicated, that somehow they are superior to the manufacturing and product equivalents. There’s a certain intellectual snobbery about it. But it’s nonsense.
If you are a service provider, or provide a product-service amalgam, for a moment think of your Offerings as products. That way, you’ll likely find it a lot easier to define the components – the Bill of Materials, so to speak – that go to make up the whole. So think of building offerings like building products.
Only when this mapping has been completed – and it may be quite a lengthy exercise – will you be able to position your Components, Offers, Solutions, and Co-created Value onto a Value Pyramid, as explained next.
It is our experience that the whole of this exercise is best carried out using workshops: create hypotheses and workshop through with your offering managers or solutions leads.
Map to The Value Pyramid™
Having identified your Offering portfolio you need to map the offerings to The Value Pyramid™. The basic components are Component, Offer, Solution and Co-created Value, and that the nature of the sales processes around each of these categories changes profoundly, as indicated here:
The moral of the tale? Don't be scared to reduce and focus your offering portfolio for greater profit. Now is a great time to apply rigorous focus and do this. The first step in the process of reviewing and developing your offerings is to categorise what you’ve already got.
We tend to think that it is easy for manufacturing and product companies to categorize their products, but more difficult for service companies to do so. There is a tendency for those of us in the services sector – particularly in consulting – to think that, because our Offerings are less tangible, perhaps more complicated, that somehow they are superior to the manufacturing and product equivalents. There’s a certain intellectual snobbery about it. But it’s nonsense.
If you are a service provider, or provide a product-service amalgam, for a moment think of your Offerings as products. That way, you’ll likely find it a lot easier to define the components – the Bill of Materials, so to speak – that go to make up the whole. So think of building offerings like building products.
Only when this mapping has been completed – and it may be quite a lengthy exercise – will you be able to position your Components, Offers, Solutions, and Co-created Value onto a Value Pyramid, as explained next.
It is our experience that the whole of this exercise is best carried out using workshops: create hypotheses and workshop through with your offering managers or solutions leads.
Map to The Value Pyramid™
Having identified your Offering portfolio you need to map the offerings to The Value Pyramid™. The basic components are Component, Offer, Solution and Co-created Value, and that the nature of the sales processes around each of these categories changes profoundly, as indicated here:
By way of example, we set out below an Offering Portfolio Map for a hypothetical market intelligence consultancy. We have envisaged an organisation that offers a range of research and analysis services to its clients. The map might work out as follows:
Once this mapping is complete, it is far easier to see the way forward because you are able to identify:
- What offers can be grouped together to form new Solutions or higher value offerings?
- What offerings in one part of the business can be combined with other offerings from other areas (sectors or technical lines) to create new offerings?
- What pricing needs to be used with which offerings and what level of required profitability?
- How should each type or group of offerings be sold? That is, which lend themselves to low-cost of sale, automated or transactional selling, and which to high-touch, problem solving, high value-add consultative selling?
- To whom should each offering be sold? Offerings suited to transactional selling will be targeted to expert buyers (e.g. procurement experts) whereas Solutions and high-value offerings will normally involve consultative selling with more senior management (e.g. CEO and other senior executives) who, although they may know generally what they want to achieve, will need value-creation support to help them shape the solution.
- How long will it take to sell the respective offerings? Offerings lower down The Value Pyramid™ generally have a shorter sales cycle than those nearer the top.
Profitability
We also recommended a radical review of the profitability of your products and services, which we will explore in another article.
Having identified your best Offerings, you should then examine whether (and how) your sales and marketing approach needs to be refined.
Strategy and the Fat Smoker
I had a conversation with a journalist the other day who asked me if the best way of weathering the recession was to put strategic plans on hold in favour of more tactical actions that produce more immediate results. I resisted the temptation to snarl and politely told him that if I see yet another email coming out from Business Link and the like telling me how to “cut costs and save money during the recession” I’ll scream!
These articles and related ideas focus purely on tactics in the absence of a strategy. Yes, I agree that it’s sensible practice to, for example, reduce traditional marketing communication costs and do more e-marketing because it’s generally cheaper. But are we throwing the baby out with the bath water? Have we stopped to think about how our existing customers and prospects want to be communicated with? Have we linked this back to our strategic objectives of communicating with our existing clients 6 times a year and reaching 100 new prospects? I doubt it.
Having been through three downturns in the economy (let’s not call them recessions), I’ve seen how senior management in tough times often forget how to think. We all need to take the time to think things through. The trouble is that often the action is an immediate response to an immediate stimulus; the knee-jerk reaction of a rabbit caught in the headlights (forgive my tirade of mixed metaphors). Why do we do this? As David Maister says,” As human beings, we are not good at delayed gratification. We start self-improvement programs with good intentions, but if they don’t pay off immediately, or if a temptation to depart from the program arises, we abandon our efforts completely—until the next time we pretend to be on the program.”
We don’t focus on the long term good health of our business (or ourselves) because the rewards (and pleasure) are in the future. The disruption, discomfort and discipline needed to get there are immediate. So it’s easier and less painful to go for the quick fix, the immediate hit of “I’ve taken action now”. Think about it and that’s exactly what alcoholics and drug addicts do, or fat smokers for that matter. [The title ‘Strategy and the Fat Smoker’ is taken from David Maister’s excellent new book, available here.]
Let’s explore how individuals, managers and organisations can overcome the temptations of the short-term and actually do what they already know is good for them.
I am clinically trained in Transactional Analysis (TA) and so my professional suggestion would be to stop and hold back the impulse to act. Revisit the desire to act in 24 hours, by which time hopefully you will have decided if it’s a sensible course of action linked to your strategy or maybe it was just the need for an instant quick fix.
A lay person who arrives at the scene of a traffic accident may rush in to help by pulling a person out of a car, or tying up a bleeding arm; those actions could make a condition even more serious. The ambulance crew, by contrast, who suspend immediate action by performing a triage; assessing each individual, using first the eyes and then touch, to determine the full extent and seriousness of the injuries. Only then will they perform first aid to one, rush another to hospital, and so on. This is professionalism and leadership. If the desire for action is suspended then all sorts of warning signals begin to show that the adrenalin of the immediate action would have masked.
So slow down a bit to allow proper thinking rather than just doing. Strategy means saying no, taking a leadership position and ensuring that you as the leader are right there with your people. Not directing them via email or an ivory tower. You are with them, communicating directly on a regular basis.
Written by Cindy Barnes
These articles and related ideas focus purely on tactics in the absence of a strategy. Yes, I agree that it’s sensible practice to, for example, reduce traditional marketing communication costs and do more e-marketing because it’s generally cheaper. But are we throwing the baby out with the bath water? Have we stopped to think about how our existing customers and prospects want to be communicated with? Have we linked this back to our strategic objectives of communicating with our existing clients 6 times a year and reaching 100 new prospects? I doubt it.
Having been through three downturns in the economy (let’s not call them recessions), I’ve seen how senior management in tough times often forget how to think. We all need to take the time to think things through. The trouble is that often the action is an immediate response to an immediate stimulus; the knee-jerk reaction of a rabbit caught in the headlights (forgive my tirade of mixed metaphors). Why do we do this? As David Maister says,” As human beings, we are not good at delayed gratification. We start self-improvement programs with good intentions, but if they don’t pay off immediately, or if a temptation to depart from the program arises, we abandon our efforts completely—until the next time we pretend to be on the program.”
We don’t focus on the long term good health of our business (or ourselves) because the rewards (and pleasure) are in the future. The disruption, discomfort and discipline needed to get there are immediate. So it’s easier and less painful to go for the quick fix, the immediate hit of “I’ve taken action now”. Think about it and that’s exactly what alcoholics and drug addicts do, or fat smokers for that matter. [The title ‘Strategy and the Fat Smoker’ is taken from David Maister’s excellent new book, available here.]
Let’s explore how individuals, managers and organisations can overcome the temptations of the short-term and actually do what they already know is good for them.
I am clinically trained in Transactional Analysis (TA) and so my professional suggestion would be to stop and hold back the impulse to act. Revisit the desire to act in 24 hours, by which time hopefully you will have decided if it’s a sensible course of action linked to your strategy or maybe it was just the need for an instant quick fix.
A lay person who arrives at the scene of a traffic accident may rush in to help by pulling a person out of a car, or tying up a bleeding arm; those actions could make a condition even more serious. The ambulance crew, by contrast, who suspend immediate action by performing a triage; assessing each individual, using first the eyes and then touch, to determine the full extent and seriousness of the injuries. Only then will they perform first aid to one, rush another to hospital, and so on. This is professionalism and leadership. If the desire for action is suspended then all sorts of warning signals begin to show that the adrenalin of the immediate action would have masked.
So slow down a bit to allow proper thinking rather than just doing. Strategy means saying no, taking a leadership position and ensuring that you as the leader are right there with your people. Not directing them via email or an ivory tower. You are with them, communicating directly on a regular basis.
Written by Cindy Barnes
What do the following have in common…?
Customer experience, voice of the customer, market selection, client selection, client benefits, ROI measurement, no price erosion, not discounting, reducing risk of purchase, case studies, substitutes, alternatives, Total Cost of Ownership, benefits realisation, product or service management, solution development…
Answer: They all link and work together to create your value proposition.
The chances are that you have probably looked at each one of these things in isolation, but again, let’s apply some strategy here (see posting titled: Strategy and the Fat Smoker). Let’s plan a bit further forward, outside the immediate horizon of, “s**t, I’ve got to do something”. If you pull all of these areas together and use a framework and process such as Futurecurve’s Value Proposition Builder™, you can create a value proposition that stops price erosion and aligns your value with what your client needs and will pay for.
To stay in business and not only survive but thrive during this recession, you only have one sensible option: focus and hone your value. If clients complain that you are too expensive, then you are simply not demonstrating your superior value to them. You can, of course, keep offering the same product or service and cut your prices, if you want to go down the discounting route. But doing this means you are losing value during the sale - value that you won’t be able to regain in the future. So don’t do it! Building and developing your value proposition means proving to clients your superior value in bottom line terms, not making unsupported marketing claims about your value.
Our new book “Creating and Delivering your Value Proposition: Managing Customer Experience for Profit” (published by Kogan Page and available from September 2009), answers many of the ‘so what’ questions. “OK, I’ve done my customer satisfaction surveys, I’ve got my benefits worked out, I’ve even got my ROI or TCO calculated, but how do I pull all of that together to demonstrate superior value and make money?” Our new book shows you how.
Immediate Actions
1. To get a flavour: download our new Value Propositions white paper.
2. Attend our 1 day workshop: learn how to stop price erosion now and sell on value Link to workshop details
Written by Cindy Barnes
Answer: They all link and work together to create your value proposition.
The chances are that you have probably looked at each one of these things in isolation, but again, let’s apply some strategy here (see posting titled: Strategy and the Fat Smoker). Let’s plan a bit further forward, outside the immediate horizon of, “s**t, I’ve got to do something”. If you pull all of these areas together and use a framework and process such as Futurecurve’s Value Proposition Builder™, you can create a value proposition that stops price erosion and aligns your value with what your client needs and will pay for.
To stay in business and not only survive but thrive during this recession, you only have one sensible option: focus and hone your value. If clients complain that you are too expensive, then you are simply not demonstrating your superior value to them. You can, of course, keep offering the same product or service and cut your prices, if you want to go down the discounting route. But doing this means you are losing value during the sale - value that you won’t be able to regain in the future. So don’t do it! Building and developing your value proposition means proving to clients your superior value in bottom line terms, not making unsupported marketing claims about your value.
Our new book “Creating and Delivering your Value Proposition: Managing Customer Experience for Profit” (published by Kogan Page and available from September 2009), answers many of the ‘so what’ questions. “OK, I’ve done my customer satisfaction surveys, I’ve got my benefits worked out, I’ve even got my ROI or TCO calculated, but how do I pull all of that together to demonstrate superior value and make money?” Our new book shows you how.
Immediate Actions
1. To get a flavour: download our new Value Propositions white paper.
2. Attend our 1 day workshop: learn how to stop price erosion now and sell on value Link to workshop details
Written by Cindy Barnes
The New Normal
Most leading business writers, economists and social scientists are saying we are experiencing not another downturn but a fundamental restructuring of our economic and social order. Tomorrow’s possibilities will be different and better for those who are prepared.
For a lot of us, near-term survival will be the only agenda item, but once we are past the panic stage, it’s time to think strategy again (see post titled: Strategy and the Fat Smoker). The economist Dr David Fleming wisely said at a recent conference, “Large-scale problems do not require large-scale solutions – they require small-scale solutions within a large scale framework.” This time we are in shouts for strategy rather than knee jerk responses, if ever I heard it.
There will be less financial leverage and more government involvement. The price for risk will be much higher but innovation will abound. We are a creative species and investors looking for opportunities will start to shift away from financial services[1] and towards areas such as renewable energy, software, genetics and agriculture opportunities.
There is also a shift in consciousness happening. A desire to move away from pure profit-induced materialism towards an appreciation that the whole world matters and a new type of altruism. We’ll see less power-over behaviour and much more power-with. Long may this continue, I say.
We have selected some of the best articles and books for you to read…
Articles to link to:
The New Normal
A Less Selfish Capitalism (May require registration to read full article)
The Green New Deal
The Great Turning: from Empire to Earth Community
“To those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world’s resources without regard to effect. For the world has changed, and we must change with it.”
From the inaugural address of US President Barack Hussein Obama, on 20th January 2009
[1] Although the ethical banks are booming, Triodos just posted huge growth.
For a lot of us, near-term survival will be the only agenda item, but once we are past the panic stage, it’s time to think strategy again (see post titled: Strategy and the Fat Smoker). The economist Dr David Fleming wisely said at a recent conference, “Large-scale problems do not require large-scale solutions – they require small-scale solutions within a large scale framework.” This time we are in shouts for strategy rather than knee jerk responses, if ever I heard it.
There will be less financial leverage and more government involvement. The price for risk will be much higher but innovation will abound. We are a creative species and investors looking for opportunities will start to shift away from financial services[1] and towards areas such as renewable energy, software, genetics and agriculture opportunities.
There is also a shift in consciousness happening. A desire to move away from pure profit-induced materialism towards an appreciation that the whole world matters and a new type of altruism. We’ll see less power-over behaviour and much more power-with. Long may this continue, I say.
We have selected some of the best articles and books for you to read…
Articles to link to:
The New Normal
A Less Selfish Capitalism (May require registration to read full article)
The Green New Deal
The Great Turning: from Empire to Earth Community
“To those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world’s resources without regard to effect. For the world has changed, and we must change with it.”
From the inaugural address of US President Barack Hussein Obama, on 20th January 2009
[1] Although the ethical banks are booming, Triodos just posted huge growth.
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