New Products must be launched with customer centricity

In many B2B businesses, the marketing and sales departments live in different worlds and this results into :    

• the "ball not being caught” by any of these two
• new products failing to reach their potential (not to speak about their targets)
• reduction in the morale of both the sales and marketing teams
• grass-root salespersons consider promoting new products a waste of their time

what can be done about to avoid all this ?

NEW PRODUCTS : ENGINES OF GROWTH

CEOs love the  new product program because these launches

• are visible events - inside and outside - to rally people together
• make functional silos to work as towards a common goal cross-functionally
• improve the technology quotient in the overall product line
• give something to talk about to the customers and employees
• may serve as preemptive technological obsolescence of one’s own line
• are seen as “new ammunition” to fight the competition

HOW MARKETING LAUNCHES NEW PRODUCTS

In most companies, the marketing department conducts road shows in various branches. During these road shows they dump a huge load of data and materials during the internal launch seminar

• Explanation of how it works
• What are the multiple configurations
• What are the various connectivity options
• How to demonstrate various features
• Feature-Price comparison with the competition
• What campaign has been planned in print, magazines, websites
• Glossy and nice brochures, fact sheets, tech specs, FAQs, gifts.

NEW PRODUCTS : WASTE OF SALES FORCE TIME

But no one really asks what do the front line salespersons REALLY NEED from the company. Because, unless your products are so outstanding and so well promoted that the customers will queue up for them on their own,  this way of launching will not work. And this statement is particularly true if you do “solution selling” (also called “consultative selling”) i.e. you sell your products as “solutions” to the customers’ “problem”.

So, although the marketing department has taken a lot of effort to launch the products, the entire effort has been product-centric.  It is not clear who will make the  salesperson effective in selling the new product in a consultative / solution mode. This requires a the salesperson to have a deep understanding of the following in the context of new products

• the customer’s pain points
• how the new product addresses these pains
• how the new products is a better solution than the competition to alleviate these pains
• who is a prospect and how to locate them
• how to find where is the prospect on his “buying journey”
• how to provide comfort to him in context of “business”, “stakeholders”, his “persona”
• what specific messages are relevant at what stage of the buying journey
• Generally how to increase the sales velocity.

After all, the sales department wants marketing to give it the ammunition to jump-start the acceptance and sale of new products, to shorten time to revenue, to improve the lifetime profitability of their offering compared to customer needs and competition and to keep major competitors out of key accounts.

THE RESULT IN THE MARKET

The way things are in most companies right now,  this important stage is really no one’s responsibility and, since it is so, ultimately the burden falls on the shoulders of the poor front line salesperson to learn it all by himself - through trial and error - with some help from their own direct first-line supervisor.  

But the front line salespersons are so busy in their day to day job of selling the whole product line - and achieving their monthly targets - that most sales people cannot give a focused attention to how the new products are to be put across to the prospects. As a result, many salespersons take a long time to internalize it many do not get it at all.

The outcome of all this is that the productivity remains low for a new product for a far longer time than it is planned.  The salespersons and the sales channel member get disillusioned and demoralized and their expectations from the new product become low. All sales and marketing people connected with the new product begin to feel small due to constant needling from the top management. The product becomes a victim of self fulfilling prophesy and never meets the potential had been launched properly and given proper attention by both the marketing and sales departments. 

WHOSE RESPONSIBILITY IS IT?

Is marketing responsible? Many would take a pragmatic view and say that the marketing department cannot be held responsible because they are situated at HO and do not deal with – and hence have no visibility of - individual customers. And therefore they cannot possibly craft an individual messaging strategy for an individual customer.

With this kind of mindset it is easy to understand that most marketing departments in B2B business are product-centric. When you generally do not get to meet individual customers, you really do not know what drives them to behave in the way they do. And therefore the marketing people cannot be anything but product centric! What an irony!

THE ANSWER  

The REAL answer is that Marketing need not customize messages but should develop training material (based on research and testing) to help the sales force to prepare themselves for customization.  

The Marketing should develop "Buyer Personas" and "Buying Journeys" for each such persona so that this can be used in the field to train the sales force. If the sales force are just given product knowledge, demo and print material; they flounder when they personally meet the customers. But when they are trained in dealing with the customers and how to create consultative conversations with them, their trial and error time reduces drastically, they become more productive, more confident. This  results into the sales curve of the new products go up faster resulting into all round feel good factor and this lays a solid ground work for the company to introduce new products.

THE HIDDEN BENEFIT  

When the sales force is well trained not only in what the products offer but also in how to sell them to the customers, the time spent in "Sales Support" after the new products is launched comes down sharply. I know that in some companies, the sales force is so untrained that they call the marketing managers to deal with many customers as if it is their job to close the sales.   

How to market professional services like consulting, degrees, hospitals, R&D firms?

You probably know that the marketing of Products and Services is different. In this article I am giving thoughts on how the marketing of professional service firms is different than that of other services. Please do write your comments at the end by clicking on the comment button.

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Generally the term “Professional Services” covers 5 types of firms

1. Law and Accounting firms characterized by high knowledge intensity, professionalized workforce, and low capital intensity
2. Hospitals and Universities (Campuses of experts and teaching ) characterized by high knowledge intensity,  professional workforce and high capital intensity
3. IT service firms (Campuses of getting process done) characterized by high knowledge intensity,  professional workforce and high capital intensity
4. Consulting Firms characterized by high knowledge intensity and a low capital intensity
5. R&D and Biotech firms characterized by a high knowledge intensity and a high capital intensity.

Do not be embarrassed to do marketing!  

1. They would secretly like to market in order to expand their revenues and yet, for the sake of maintaining their “professional stature”, they would not like to be seen marketing!  
2. As a result most firms ignore marketing in the belief that "our work speaks for itself" or "Marketing does not go with the dignity of the profession". Of course there are few professional service firms that hire ‘marketing people’ but leave them to their own devices and essentially expect them to be busy with developing websites and brochures and designs.
3. And yet, the very same people secretly admit they are worried what is happening behind their back. They know there are competitors out there who are soliciting their clients and undercutting their fees. They know that there are competitors out there doing well even in depressed markets because they “market”. There are competitors who have the right relationships with their clients and have good referral sources.

Do not market as if it is a product

1. They often use a “Product Marketing” model and express their expectations from marketing as “getting the name out”, “put the information into the hands of the buyers”, “build company reputation” etc.  When people buy products, they do so because of what they can see, see, hear, feel, taste and smell in the item. The item!
2. But in professional services, there nothing to see or taste or feel. It is not an item! Howsoever well known your firm may be,  you will get hired (or not hired) only  after they meet you – in person ! The fact is that people buy other people, not firms.
3. Professional marketing is about the trust that the clients have in the people, their expertise and their network.

Do not forget your existing clients

1. Sometimes the professional service firms consider their existing clients as “annuities” on which they can live without measuring their satisfaction, communicating with them, seeing if they can mine them for more business and to exploit their reference potential. Ideal mix of business should be :   
• 50% “existing clients” and their referrals
• 25% “referral sources" like alumni, people in the field
• 25% from "strangers"  seminars, articles, speaking, ads, direct mail
2. Unfortunately, most firms don't even know what other services their customers buy and from whom. You must be wary of others who may be providing a different service to your existing client because there is a scope for infection. The relationship is now at risk because they themselves– or can bring their buddies into your client relationship - can compete with you. It secures their position and pays back referrals received.
3. It's also important to continue to market to your clients to let them know how valuable they are and why using you is such a good idea.

 Do not ignore your own employees

1. Successful professional service firms know that their marketing -  no matter how great – will be useless if the employees back at the firm who will need to deliver it – are not on board. They must involve everyone at the firm in marketing of the firm's services.
2. They must know that everyone is conveying a message all of the time to the outside world? How is your phone answered? What do your finished reports look like? What does your office look like? How do your people dress and talk? How do they come across to your clients?
3. If your firm and your people aren't in alignment with the kind of client you're trying to attract, marketing can't work. Everyone in the firm needs their own "personal marketing plan" . Even the receptionist. Everyone needs to know what's expected of him or her as his or her part of the marketing effort.

Do not aim for too many different customer types

1. Most professional service firms want everything! They say; “You want it? We got it!”. But in reality, if you cannot be good at everything for everyone. You need to be good at “vital few” things  which people really want. That is where you must invest and focus on. And for this you must know your market very well. 

Do not forget : Marketing is a process, not an event

1. Marketing  process is slow to start. Do not let there be a gap. It needs to be done not only when you need new business but when you are doing your existing business. If you do it sporadically, you will need to restart the process all over again - almost start from scratch – and that reduces the morale.
2. That is why successful professional service firms set aside a percentage of gross revenues for marketing.  
3. Most professional service firms (and individuals too) don't take the skills of personal marketing and selling seriously enough nor are willing to spend enough on making them bring in more business.
4. There is time in everyone's day to go to market: it's called lunch (or breakfast, or dinner). Most people eat lunch, even when busy. However, we usually eat lunch by ourselves or at our desks or with our friends at the firm. We suggest not less than two lunches or breakfasts or after-work meetings a week with clients, referral sources, prospective clients, etc. even during busy season.

Do not rely only on the marketing people

1. Many professional service firms  allocate someone to the marketing function (sometimes a clerical person with no real knowledge or background in marketing) and expect him or her to be the ones to bring in business. This does not normally work.
2. Everyone must be involved in the marketing effort! The partners can't pass it on to the staff and to the marketing person.  All that a marketing can do is to provide the bigger and more frequent opportunity. Somebody still has to show up and get the work done. The biggest complaint of the marketing people in professional service firms is "I can't get our people to do anything."

Do Not Forget to use leads generated by marketing

1. Good leads are hard to come by for most of us. So you must jump on referrals and hot leads immediately before they cool off. The longer one waits, the colder that lead gets and the harder to convert into business. 

Running a business of selling services is different from that of selling products

You need to be a fundamentally different manager and you need to very different approach and priorities and assets to run a service business. Click here to understand major differences. And do write comments on the blog !!

How B2B marketing differs from B2C marketing

In fact see the comparison between Cummins which makes engines (B2B) vs P&G which makes soaps. Please click to see more

How to increase your sale - Prof Palekar's MVG Formula

Click this link

Who does not want to increase the sale? 

Here are 71680 marketing strategies - which is yours?

A marketing strategy has 7 elements as follows

1. Target Customers : 8 ways of defining target customers
2. Value proposition : 7 ways of defining your value proposition
3. Locating target customers : 5 ways of locating them
4. Accessing these target customers : 4 ways of accessing them
5. Persuading these target customers : 4 ways of persuading them
6. Transacting with them : 4 ways of transacting with them
7. Servicing these customers : 4 ways of servicing them

By picking one from each of these 7 elements, you will get 71680 combinations. Each of them is a POSSIBLE STRATEGY. Which of this is THE RIGHT STRATEGY FOR YOU ? That is THE KEY QUESTION and the answer is not easy. The question cannot be answered unless you do the most important part of formulating marketing strategy - the situation analysis - Remember 5 Cs ? Company, Customer, Competitors, Context and Collaborators. 

Nevertheless you will feel amply rewarded even if you went through each factor and write down your position against it. It will jog your mind and bring many useful points to the surface of your mind. Spending 30 minutes will be highly useful.  

I am also giving an example for a simple object. A screwdriver. How many different ways can I formulate a strategy ? See at the end of this post.  

TARGET MARKET : This is the most important part of marketing

1. Number of customers 
2. What application they are using the product for
3. What are they doing now for the same application
4. What price point will appeal to them if any
5. Where are they on their "Buying Journey"
6. What are their expectations
7. What is their Decision Making Unit, who are members, roles
8. What are their buying habits 

VALUE PROPOSITION : What value do you plan to create?

1. all applications :
    better marketing mix at a slightly higher price
2. all applications :
   slightly less attractive marketing mix at a lower price
3. Specific application :
   better marketing mix at a slightly higher price 
4. Specific application :
   Slightly less attractive marketing mix at a lower price
5. Specific Customer segment :
   To wean upper end customers away from all competitors
6. Specific Customer segment :
   Slightly less attractive marketing mix at a lower price
7. Which of this value will be created by you
   and the rest by your business partners and channel members

GO TO MARKET :  How to locate, access, pursuade and transact?

Locating target customers :

1. By generating walk-ins at the outlets
2. By prospecting and lead generation
3. By taking appointments
4. By cold calling
5. By channel members

Accessing them

1. through e mails or net
2. through personal contact
3. through mass media
4. through channel members

Persuading them

1. through e mails or net
2. through personal contact
3. through mass media
4. through channel members

Transacting with them

1. through outlets
2. through channel members
3. through direct sales force
4. through portals

Servicing them

1. through outlets
2. through channel members
3. through direct service force
4. through portals

Formulating a marketing strategy for a screwdriver. 

TARGET MARKET : 

1. Number of customers : Almost every household needs a screwdriver. In urban India alone there are 30 million concrete houses and can benefit from a screwdriver. 
2. The application we are targeting is giving a useful gift to males in these houses. The product we have in mind is a screwdriver packed in a box as a gift. It will be priced at under Rs 100. 
3. Currently people give clothes, ties, belts, pens as gifts to males. Our product at Rs 99 will be cheaper than all these items and will be attractive.
4. Since the idea of giving a screwdriver as a gift is new, we will need to make people aware. Currently our product may not be on the "Buying Journey"of our target customers.
5. The expectation of the customer will be a showy and good looking gift box and the screwdriver should look polished and attractive. 
6. A Rs 99 product will be purchased by an individual on his own but since the idea is new the person may cross-check the decision with others. 
7. The buying habit will be from a gift store or department store.  

VALUE PROPOSITION : 

We want our screwdriver to look polished and good. We shall therefore use high quality stainless steel and will make special arrangements to ensure that the product will not have finger marks.  The handle of the screwdriver will be transparent and molded in high grade plastic and will be avialable in different colors. We will design a gift box with a see through window. The box will be very attractive.

LOCATING TARGET CUSTOMERS

We shall rely on our channel members ( gift shops and departmental stores ) to stock, display and recommend our product to all customers who come in to buy gifts for male friends.

ACCESSING TARGET CUSTOMERS

The counter sales persons at the outlets will access the walk-in customers. Attractive displays will be put up on sales counters.

PERSUADING TARGET CUSTOMERS 

Since the pursuation will be done by the counter sales personnel of the retailers, we shall organize a special training program of an hour for such personnel. There also will be an incentive plan for them.

TRANSACTING WITH THE TARGET CUSTOMERS

The outlets have adequate facilities to undertake transactions.

SERVICING THE TARGET CUSTOMERS

There is no need for any servicing arrangements.

What really is the real difference between marketing and sales in practice ?

The textbooks say that sales is a part of marketing. But that is only on paper. As Philip Kotler himself says, the economics and culture of the marketing and sales departments is very different and it is very difficult to get a person to head and lead both the departments at the same time! Actually it gets much more complex than that because the exact job description of marketing and sales varies significantly from company to company and industry to industry. 

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