Post Office Prescriptives

Tuesday, March 9, 2010 by:David Zahn
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One of the perils of beng in business is that a perfectly good business idea that has proven to be sucessful over time can suddenly become irrelevant.  This point was brought home by the recent news that the U.S. Post Office was going to consider eliminating Saturday delivery of mail (http://www.nytimes.com/2010/03/03/us/03postal.html and for the most part, people yawned and acted with disinterest.

Reaction to news that Post Office would no longer deliver Saturday mail.

Business Lesson

However, there is a business lesson to be learned by how the decision was reached and what led to the necessity of even considering this decision.  There was a time when communication of any written sort required sending it through the U.S. Post Office.  In fact, it was so pervasive, that many businesses would receive multiple mail deliveries within the same day to keep up with all of the volume of mail that was being sent and received.

Now, with email being so firmly embedded in how we communicate, cell phones allowing us to be reached wherever we may be and able to provide text and graphic downloads remotely, the volume of post office handled mail has been altered.  However, the costs to maintain the locations and the labor required to staff them has not diminished.  Even if the services themselves could be accomplished more efficiently, the fixed costs are still going to compel the government to seek ways of reducing expenses through different delivery schedules.

With rare exceptions, the Post Office delivers mail in a timely fashion, reliably, and relatively speaking fairly inexpensively.  However, the cost of email, texting, and posting documents to a website are substantially cheaper and require less effort in many instances than using the Post Office.  In short, the service and value provided seemed almost impervious to competition – that is, until the internet became pervasive.  Suddenly, what was a solid business model became suspect. 

It begs the question for all business people, “How are you protecting your business from suffering the same fate as the Post Office?”  Where are the potential incursions or weaknesses in your business that may prevent the long-term success of your business?

Overlooking The Obvious

In fairness to the U. S. Post Office, they did try to respond as soon as they recognized that web-based delivery and cell phone technology had allowed competition to encroach upon the document delivery business that had been historically owned by the U.S. Post Office.  However, the political process of being part of a governmental agency has proven to get in the way of taking proactive steps to change as needed.  For example:

  1. Studies were done by McKinsey Consulting that pointed out that there were any number of post office locations that were under-utilized and could be closed with minimal disruption to service.  However, no local politician wanted their constituents to have to “lose” their local post office site, so any plan that suggested closing locations was met with political foot dragging.
  2. Rather than try to compete, many have suggested that emails, and other electronic means of communicating should be taxed so as to put those methods at a disadvantage and hopefully artificially bolster the use of the Post Office. Needless to say, that has not been a popular suggestion for most businesses or citizens.

Of course, every business must look to see how technology, changing consumer or customer tastes, and competition are evolving and changing.  After all, most buggy whip manufacturers never saw the automobile coming and demolishing their whole industry; manufacturers of floppy disks and 8-track tape players were slow to see the impact of CD-ROMs, downloadable music, and changing consumer expectations for increased portability of data or entertainment.

While we can all cluck our tongues at the fine mess the Post Office is in, maybe it is time to look at our own businesses and wonder if we are next and what we are doing now to anticipate and/or preventing it.

Categories: General

Timeshare Tensions

Friday, February 26, 2010 by:David Zahn
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Stamford Hilton participates in Hilton's Timeshare program

The Hilton hotel chain is most closely associated with short term stays for either business professionals or leisure travelers intent on using the hotel for visiting the local area near the hotel.  Generally, the traveling public views a hotel stay as a single transaction and is shopped for based on only one or two variables:

  • Closeness to a desired location (business meeting or leisure/vacation destination)
  • Cost compared to other properties that meet the location citerion

However, the Hilton chain also appeals to those vacationers seeking to choose a property with the ambience and amenities more commonly associated with living at home – albeit a rather plush and luxurious home.  The hotel chain offers a timeshare option that allows travelers to purchase time annually to be used or applied in any of the Hilton properties (which include both their Grand Vacation Properties
properties as well as their more conventional hotels and even affilaited properties not directly owned by the Hilton company.).

How It Is Sold

Unfortunately, while the idea is a good one for a number of reasons in that it:

  • Permits the timeshare owner to visit various properties in any number of locations, both domestically and internationally
  • Provides the timeshare owner with an asset that has a value to be sold, traded, or allowed to appreciate
  • Is a cost-effective way to vacation or have extended stays in destinations without having to incur additional costs very typically associated with travel (kitchen areas provide opportunity for cooking in the units rather than having to dine out)
  • Makes economic sense for the traveler or vacationer who finds themselves otherwise having to “rent” a hotel or other lodging without receiving any value for the transaction over 10-15 nights a year;

the sales techniques employed by the chain’s agents do not align with how people tend to want to purchase high ticket items.  In this age of internet research and price comparison across options when the shopper is better armed with data, and is less likely to be bullied into making a decision with less than complete understanding, a recent experience with a timeshare salesperson included the following:

  • An assumption that two people viewing the property together must be married to each other (a dangerous assumption in this age, especially when the registration form listed two different last names), and even after it had been corrected; the salesperson continued to refer to us as husband and wife and ask how many children we had, how long we had been married, where we like to vacation together, etc.  Even though I was accompanied by a friend and not a spouse.
  • High pressure to act immediately or lose the option to purchase (again, upon initial contact, I had explained that I was doing research on options and was NOT a buyer on this trip).
  • When I reiterated my position as only a shopper collecting data and not as a buyer; I was passed off to a “supervisor” whose job appeared to be to browbeat me for not “thinking correctly” about the deal (the “deal” was spending $40,000 or more – something few people will do on a single  initial contact).
  • When I did not change my mind, I was then passed off to someone else who spoke softly, was less confrontational than the supervisor and suddenly started dropping the initial investment cost to less than $1500 to trial the service and sharing with me conspiratorially that it could be applied to the investment, so there was “no lose” in accepting the deal.
  • After all of the three hour ordeal, I did not purchase a timeshare and while the idea appealed to me, the sales approach of a “hard sell” and not sharing the complete range of options left me feeling that there was still a better deal that would be offered if I stalled, waited, or negotiated more strongly.

The tension did not galvanize me, or most of the prospective buyers around me to make a purchase and most left in an angry huff at what they felt was a less than honest portrayal of costs.  In this current economic environment, not selling in a way that allows the buyer to feel comfortable with the process is just bad business.  The dynamic has changed – and relying on tactics of 1950′s selling will not work in converting prospects to sales – especially in high-ticket purchases when the shopper is likely to put an even greater emphasis on being well informed.

 

 

Categories: General

Branding Vegas Style

Thursday, February 25, 2010 by:David Zahn
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Las Vegas

One of the largest trade shows in the country is orchestrated by a Newtown, CT based organization, the National Shooting Sports Foundation. Each year, they put together an industry conference that attracts over 60,000 attendees from backgrounds as diverse as military, law enforcement, people interested in self defense and protection, hunters, and competitive shooters. Their stated mission is to promote, protect, and preserve and they do that in a large way by reserving two floors of the Sands Hotel Conference Facility in Las Vegas right on the strip.
Of course, any time people congregate in Las Vegas, there is ample opportunity to observe human behavior and the impact of marketing, merchandising, and how companies can attract people to spend their money. The lessons to be learned are illuminating for any business person.

The Strip

When one takes a step back and honestly assesses what is happening along the Las Vegas Strip, it becomes clear that there is little difference between properties.. They all (or nearly all):

  • Offer gaming tables of different sorts.
  • Provide shopping opportunities from retailers familiar to hotel guests from their home state – often aspirational retailers selling luxury items that most guests would not ordinarily consider purchasing if they were not currently “on vacation.”
  • Have a plethora of dining options from the ubiqutous buffets to restaurants serving ethnic foods all the way to the more elegant and regal dining options.
  • Schedule shows from family entertainment and the latest headliners to burlesque options.
  • Maintain pools, health clubs/spas and opportunities for further pampering.<BR><BR>

Difference Makers

To better attract consumers, shoppers, and guests to spend their money with one hotel over another; the Las Vegas hotels offer various themes.  From the pseudo French architecture of a hotel named Paris , to the opulence of hotels that approximate riding gondolas in Italy or staying among Egyptian ruins.  Just as the hotels invest enormous sums in their hotels to differentiate themselves from each other, so too must local businesses work hard to create a point of difference from their competitors.<BR>
Whether it is the local pizzeria in your town trying to gain a greater share of the delivery business, or if it is the florist on the corner trying to ascertain how to compete against the supermarkets in town that can buy in bulk and get volume discounts from the suppliers; every business must confront what they offer the prospective customer that is not currently available elsewhere form competitors.<BR>

While competing on price or cost is one possibility, and providing a better product or service is often a useful and successful way to compete;  the hotels and casinos in Las Vegas do offer another option that is worth considering – the experience of the customer as the brand.  Playing the slots is possible in all of the hotels. However, being within earshot a replica roller coaster from Coney Island is only available at one property.  Seeing the water fountain show is possible only if one is staying at, or wanders by the Bellagio.  So, what is your brand’s point of difference versus your competition?  What is memorable to your customers about doing business with your company?  To not have an answer that truly distinguishes your business from others is to play roulette with your future!

Categories: General

Customer Complaint Handling

Friday, February 12, 2010 by:David Zahn
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The average business owner has a love/hate relationship with their customers. On the one hand, they recognize how vital the customer is to the sustaining, growing, and building of the business (or at least if the business owner is sane, that is self evident!). On the other hand, customers often want to receive the product or service in non-standard way that when not delivered as requested or demanded, can lead to a customer complaining. How to handle a complaining customer is a skill that few business owners have been taught; and therefore, causes many of them to feel less confident in their approach.

Complaint As Request

Attend any random collection of sales training sessions that take place in hotel ballrooms every day of the year in nearly every city; and you will likely hear that any customer complaint is actually a good thing. The thinking goes that the customer:

• Feels invested enough to share what they prefer, want, desire, will refuse, etc. with the company in the hope that the company will provide that customer with the additional reason to continue patronage (or remove a reason to shop elsewhere).
• Is making a request that they sincerely want the company to meet or fulfill.
• Is motivated enough to express or share that with the company and is therefore asking to be given a reason to be a loyal repeat customer.

Further, the pundits will share that it is the customer that becomes annoyed or feels dissatisfied and chooses NOT to share that with the company that is the more dangerous customer to the business. That person goes away and may not only refuse to frequent a business, but may also poison it for people in her or his network of contacts by sharing their perceived negative experience with those others. At least the customer voicing a complaint provides the business with a chance to make it right – and the business can hopefully convert the complaining customer into a staunch zealot for the business who will now share their enthusiasm for the business and how the business responded positively to the request with all of her or his network and thereby increase future business (or at least the potential for future business) with those in the network.

Donuts to Dollars

This issue around handling customer complaints recently received national attention when a customer of the Tim Horton’s chain of donut shops was barred from stores for having complained too many times about how the coffee tasted. While the details released may not be complete, and the PR efforts of both the chain and the customer may have skewed the accuracy of the reported facts to cast each in the best light, it did serve to bring the issue to the fore.

At the core of the issue is how to best handle a complaint received by a business. The worst thing for a business to do is to dismiss it out of hand. Using the Tim Horton’s example; it would be advisable for the chain to examine the following:

• What is the complaint (product, service, environment, etc.)?
• Is it only heard by one lone person, or has it been expressed before by others?
• Can it be resolved?
o easily
o At all
• Will additional training influence how the product is made/served/etc.?

The news reports maintain that the customer complained about the taste of the coffee. It is possible that the coffee has been allowed to sit in the pot for too long of a time that it has developed a bad taste due to evaporation (too strong), poor cleaning of the pots (so there may be a change to the taste based on residual product still being left in the pot, or perhaps it is not made according to the recommended standards or ratio of water to product. Lastly, the product just may have a taste that is not to the liking of the particular customer no matter what.

The news reports further stated that the same customer would return frequently to voice the same complaint over and over again and ask for some kind of recompense for having been served a product that was below expectations.

Customer Is Always Right?

Norwalk’s Stew Leonard’s store has a huge rock at the entryway that proudly exclaims two rules:

1. that the customer is always right
2. And if the customer is not right, refer to rule # 1.

While renowned for customer service and having a reputation for exemplarily training their employees; should the sign be taken as gospel? Surely, Stew Leonard’s can show proof that their taking it to heart has been successful.

However, a customer that repeatedly complains, even after attempts have been made to satisfy him or her just may not be a customer a business wishes to keep. While attempts to please should be made, and providing attention to the complainer in an effort to satisfy are appropriate – there are times when it is best to part ways.

If the time devoted to that customer negatively impacts the bottom line by becoming a time drain, too costly, or uses up too much of the human resources’ energy; then it is feasible that it is time to in essence “fire” the customer. At times, the customer may cease being worth attracting and may actually become a deficit for the business that should be removed from being allowed to continue to do that to the business.

There are also customers that will look to take advantage of efforts by certain businesses to retain customers and will try to leverage that to their benefit in ways that may call into question the sincerity of the original complaint. For example, complaining that a product failed to perform the intended purpose, but then asking for a replacement one – even though the product was not damaged or broken; just did not perform as expected; or claiming that one received food poisoning from a purchased box of food at a store, and then demanding that additional boxes be sent as compensation for getting the person sick cause one to question just how “right” the customer really is. If it does not pass the “sniff test” of what a reasonable person would do, it may require further consideration before handling the complaint as worthy of a company’s best efforts to please that customer. A dissatisfied customer who claims a product failed or caused them to become ill would not ordinarily want MORE of the same. In that instance, the issue is more likely an attempt by the customer to get something for nothing and should be treated with suspicion.

Handling customer complaints does require walking a fine line for business owners as they balance keeping customers happy and maintaining good will and at the same time preserving their bottom line and preventing others from taking advantage of them in an effort to essentially extort them. The Tim Horton example put a spotlight in the issue, but it is one that business owners have wrestled with for years.

Categories: General

Results or Activities?

Tuesday, February 9, 2010 by:David Zahn
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One of the mantras that many business executives, consultants, coaches, and academics use when trying to motivate clients, executives and employees is, “Only results count.” What they are intending to communicate is the importance of focusing on the outputs of efforts and that outcomes are what determines success or failure of a business. At first blush, it seems to be relatively intuitive to think that rather than focus on procedural steps and actions; it is the generation of a sale, collection of revenue, creation of profit, etc. that allows a business to thrive. However, that may not in fact be the recommended approach to managing one’s business. As counter-intuitive as it seems, focusing on the results may lead to less success than one might have presumed.
You Can’t Manage Results
Business results are the scorecard used to determine how well a business is functioning and how well it is meeting obligations. While the metrics or measurements applied to assessing business performance make sense in determining how well the business is performing; results are beyond our ability to manage. What a manager can; direct, lead, model, evaluate, train, etc. are the activities, procedures, and tactics or techniques applied. If the activities are performed as needed, the results will occur as expected.
Holding someone accountable for a result is really beyond their ability to completely control and may not at all be a reflection of how well they perform the job. It introduces a layer of frustration in that simply telling an employee to:
• Sell more
• Gain more customers
• Generate better profit
• Be more creative

Without providing the “how-to” aspect or activities required and then measuring how well those things are performed, it is no more likely to occur than the impact of random chance. Results are the goals, but no one can work on results directly. Only the behaviors and actions required to generate those results.

Manager Expectations
Most managers were expert and excellent at performing the roles and tasks that they are now asked to manage in others. Those managers are rarely given any training on how to perform the role of manager (versus super-performer). Therefore, their expertise at performing the task actually prohibits them from doing their job as a manager as well. By virtue of having risen to the rank of executive, manager, or supervisor, the assumption is that they need to create replicas of themselves within their direct reports. But the reality is that the role of super-performer and manager are two very distinctly different assignments. Being able to do something well is not an indicator of how well one can teach another to do it. Unfortunately, when one is especially good at doing something, it is often at least in part because they are a “natural” at it or do things unconsciously. Because they cannot articulate what they do and how they do it, it makes it hard for them to then help others to perform at their level. In essence, they are like the baseball hitting coach that counsels batters to do as he did, “I see the ball, I hit the ball.” Most managers are capable of defining what their peoples need to do better, improve upon, or stop doing; but there is a wide chasm between knowing what needs to be done and being able to train or teach others how to perform without your intervention.
Few managers and nearly all employees would think it is a worthwhile developmental exercise to tell an employee that they need to improve their prospecting skills, or should focus on their handling objections abilities, if they are not then shown how. Without a demonstration, an example of an approved technique, or some other way to recognize the desired performance, the employee is ill equipped to change their behavior and certainly will struggle to change results in a positive manner.
What often happens is that the manager is called upon to step in and solve the most complex problems or issues, often under a time pressure or when there are other hurdles or obstacles to be overcome that are beyond the current ability of the employees. However, rather than devoting the time to developing the skills of their employees so that those employees could perform at a higher level in the future; the manager acts more like the technician of last resort or the salesperson to close the deal that eludes the other employees.
Role of Manager
Using the Sales Manager role as an example, it quickly becomes evident that there is a tension in the job title. Sales is a specific function within a company that is tasked with prospecting, lead conversion, turning prospects into customers, and existing customers into repeat customers. The measurement for a sales effort is likely to be: number of accounts, size of orders, profitability of sales, etc. However, the role of a manager is to guide or intervene in a positive way to ensure that a process is followed to allow for the mission of the function to occur (in this case, for sales to occur so that prospects are sourced, converted to customers, and repeat purchases all at profitable margins). It is therefore the role of the manager to be evaluated on how well direct reports perform their activities or tasks in pursuit of a result. If the activities are well chosen and proven to lead to the desired results, the function will perform admirably. However, to merely demand that results be achieved without offering assistance in the skills or behaviors leading to that result will fall short of desired performance. It is akin to focusing on the scoreboard and not the game. You can’t influence the score without playing the game itself. The skills required to play the game are what leads to a better performance. The result cannot be managed – only the activities needed to drive results.
So, the sales manager is best served by performing his or her role to allow employees or direct reports to learn, experience, and demonstrate their competencies at performing the sales role and not by jumping in to close the business or assist in the prospecting calls to raise the likelihood of success. Surely, there are many business roles where the manager’s expertise can be directly applied and she or he can be integrally involved in the execution of the task – but in the role as manager; it is incumbent to maintain focus on the development of others’ to perform the actions necessary to complete the task and not solely measuring some result or output.

Ask yourself:
1. Does your company have a specific, documented process that you teach and review, and practice, on a regular basis?
2. Do you have a specific set of behaviors and activities that your team is expected to perform in a consistent manner?
3. Do you measure the effectiveness and the efficiency of those activities?
4. Are there core competencies that each member of your team is taught and held accountable for maintaining?
5. Do you review with your sales people activity performance (not outputs or results) and jointly create a remedial plan of action into place?

Categories: General

Trade Show Selling

Thursday, January 28, 2010 by:David Zahn
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It is the dream of almost every executive purchasing a booth at a trade show. The doors to the exhibition hall open and prospects start streaming in with checkbooks in hand, questions about products bubbling from their lips, and their excitement and desire to make a purchase at the trade show practically visible from two aisles away. For most companies that struggle to source prospects, the idea of having hundreds or even thousands of self-identified prospects under one roof and eager to actively engage with salespeople is a fantasy that can only occur at a trade show. But converting prospects into customers at a trade show is not automatic and far too many companies fail to take advantage of the opportunity presented to them at trade shows.
Ahead of Time
The successes associated with trade show selling begin well before the booth is set up and the products are displayed or signage is hung. Just a partial list of the things that need to be considered:
1. What trade show to attend as an exhibitor. While trade shows attract customers, if the attendees are not the right customers for a company’s products or services; the trade show is not likely to be a fertile ground for future sales. Trade shows are marketed to and appeal to different buyers. Some trade shows are geared towards consumers directly and others are positioned to appeal to business customers. Failure to consider the target attendee of the trade show can lead to frustration and expenses to participate in a non-productive trade show.
2. Prior to a trade show, it is strongly suggested that the exhibiting company contact key prospects attending the show and arrange for meetings, either at the booth or at other meeting places associated with the trade show (suites, restaurants, bars, etc.). Relying on happenstance to “run into each other” at the show often causes disappointment when people’s time, availability, and ability to meet each other does not allow for a meeting to occur.
3. If the booth is to be shared or split between two companies; or if one company’s products are to be displayed in another company’s booth it is essential that the agreement between how the two companies will represent each other’s products be spelled out. In many instances one company’s product may integrate another company’s product within a proposed solution. Or, there may be some cooperative agreement between companies that share an alliance to display each other’s products in each of their booths. It is critical that booth personnel at each booth be knowledgeable on the other company’s products, agree to display, identify, or refer to the other company’s products as specified according to a prior agreement.
4. Determine who will be responsible for being in the booth. Depending on the likely customers and prospects attending the trade show, it may be advisable to staff the booth with marketing personnel to talk about product features, market research, or other marketing issues. In other situations having engineers available to speak to product specifications, and of course, having sales people and senior executives in the booth is always appropriate. In terms of scheduling people in the booth, most trade shows are 8 hours long per day or even longer and therefore it is often appropriate to have at least two shifts of booth personnel so that the level of enthusiasm and excitement can be maintained throughout a shift. Additionally, that also permits company employees not currently assigned to be in the booth to visit other booths and glean insights about competitors, interact with other trade show attendees, and attend meetings, conferences, presentations, etc.
5. Give thought to what the booth will include (graphics, products available, marketing materials, etc.).
6. Choose a booth location wisely. Look to see where entrances and exits are, where competitors will be situated, where food will be served or lavatories are located. Consider traffic flow (middle of the show floor, end of an aisle, in a corner, etc.), where are the companies that are likely to attract large numbers of people congregating and which areas of the show floor will be less heavily trafficked.
7. Lastly and perhaps most importantly is to ensure that there is a strategy to attending the trade show. What is the key message the company wishes to communicate? What is the objective of attending the trade show? How will success be measured?
Of course, planning is extremely important and must be given proper consideration in order to succeed at a trade show. However, what most people will see and what will be most memorable is what happens while at the show.
At The Show
The interaction once at the show is what most attendees will remember about a company if done well, and what they will never even notice if poorly executed.
1. The way the booth is designed has a tremendous influence on how successful a company’s performance will be at the trade show. An ideal booth should be inviting and open. Many smaller booths fail to take advantage of the trade show selling opportunity by placing a table at the edge of the booth closest to where people walk, and then sitting behind products displayed on the table. In essence, they put up a barrier between the seller and the buyer and do what they can to keep the buyer from “penetrating” into the booth. The result is often a buyer that browses quickly, but does not actively engage with the seller.
2. Use graphics advantageously. While some trade shows have restrictions on how high signs can be placed, be sure that the identity of the company in the booth is clearly seen and identified from as far away as possible. Additionally, be certain that graphics enhance the message the company intends to communicate. Simple product photos do not usually help the buyer envision how the product will be used as much as a photo demonstrating the product in action. If the product has multiple uses or can be used in multiple environments, highlight that through different graphics.
3. Graphics must be easily and quickly seen and interpreted. Far too many trade show booths hang a wall graphic on the back of a booth and then sit directly in front of it in a chair that blocks the view or obstructs either the name of the company, a photo, or other important information about the product. Be sure that the “sight lines” of the graphic are not blocked.
4. If a booth is placed on a corner of an aisle, it is best to allow access to the booth from all directions of how traffic will flow. Having walls up from one direction may lead to people approaching from one of the other directions to miss that booth as they quickly scan ahead to see where they wish to visit next.
5. Even in booths that have an open floor plan and allow prospects to approach easily from all directions, it is common to see booth personnel buried deep into the booth and standing near product displays either handling the products or absent-mindedly fiddling with demonstration units. It is far better to have booth personnel talking and initiating conversation on the perimeter of the booth and standing where they can interact with prospects as they approach the booth. By being friendly and taking note of what people are doing or saying as they approach the booth, the chances of having someone step into the booth increase.
6. Once someone enters the booth, it is a sales opportunity. Qualify booth attendees by following a simple approach to identifying needs, scoping out appropriate solutions, determining criteria used to make decisions, and responding to questions to steer the prospect toward the company’s offerings.
7. Having said that, also be aware that a booth is not a place to engage in an extended conversation with someone who is merely information seeking or may not be a true buyer at all. Provide information to engage the person and then appropriately suggest a follow up meeting or call when a more detailed discussion can occur. Confirm that the person is a legitimate lead before getting stuck talking about products or the company and missing a chance to talk to a prospect representing a more qualified business opportunity who passes by the booth because it is too busy (though not productively).
8. Unless it is to ask a quick question or clarify a point, booth personnel should not engage in social conversations with each other or turn their back to the trade show attendees to have a chat between themselves. Booth personnel should focus on engaging with customers and prospects. If the booth is “dead” and there is no one entering the booth as they walk by, then it is especially important for booth personnel to become more actively involved in reaching out to engage trade show attendees in discussions.
9. Many companies will hire celebrities to show up at their booth for autograph signings or photo opportunities in an effort to bring people into the booth area. If this is a strategy, be certain that the celebrity chosen is consistent with the image that the company wishes to portray to attendees. Also, while attendees may flock to see the famous person or interact with the actress, athlete, or musician – that does not always translate into sales or even interest in the products within the booth. Be certain that there is a synergy that makes sense to pursue before spending money to have a celebrity.
10. Above all other hints, the appropriateness of having demonstration units, opportunities for trade show attendees to interact with products (handle them, “try them out,” see how they work under different conditions, etc.) goes much further than simply referring to capabilities or pointing to a brochure and trying to describe how a product works, how durable it is, how simple or intuitive it is, etc.
Of course, there is more to do once the show has ended. Far too often, the potential sale that was initiated at a trade show does not happen because of the lack of follow up post trade show.
Post Trade Show
The follow up after a trade show is equally as important as the work done up to that point. While at the trade show, the following likely occurred:
• Badges were scanned
• Business cards were exchanged
• Notes were taken about a prospect with the intent to follow up.

Now it is incumbent upon the company to do the following:
1. Qualify the leads – determine how likely the prospect is to make a purchase, identify what their interest level in any particular product is, if there is a timing associated with when the purchase will occur.
2. Distribute the leads to the appropriate sales person by either geography, industry verticals, or sales channel
3. Do not allow too much time to pass. Contacting within a month of the trade show should be the standard. Anything longer than that is going to lead to loss of interest or the opportunity for other competitors to secure a deal with the trade show attendees before the company even gets to responding.
4. Sending materials to a prospect (brochure, corporate capabilities presentation, product data sheets, etc.) is not sufficient as follow up. While follow up may include those things, it is greater than that. Follow up must be more tailored and customized and should be an extension of the conversations started in the booth.
Trade shows are excellent opportunities for companies to sell to prospects and can be rather cost-effective. However, if not properly managed, trade show selling opportunities can lead to large expenses with little return. Looking at trade shows as an easy sales conversion activity is possible, but only if approached with care and consideration and as a managed process.

Categories: General

Customer Is King

Tuesday, January 26, 2010 by:David Zahn
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If there is one truth that has been proven over and over again in retailing, it is that the customer is king. Suppliers and retailers alike, worship at the altar of the ultimate decision-maker in the hopes of securing a purchase. If that is so evident and obvious – then why won’t suppliers and retailers collaborate better with each other to ensure that the person shopping for a product is able to locate it and purchase it with confidence content that it will fulfill the role or complete the task it is intended to provide?
The Shopper
While mass production has a proud tradition going back to Eli Whitney and his standardization or interchangeability of parts; the mistake that far too many retailers and suppliers make is to assume that shoppers are akin to machined parts. The truth is that not only are shoppers different from each other, the same shopper’s behavior will vary widely and be influenced by very different concerns on consecutive shopping trips. Yet, far too often, the supplier and the retailer will attempt to market to the shopper in exactly the same way and expect a consistent response both across different shoppers and from the same shopper at different times.
The business reality is that there are likely multiple shopper types that are frequenting your stores and buying your products. The other reality is that you may not know what those types are and why they chose to purchase from you (or perhaps more importantly, why they chose NOT to buy with you and purchased with a competitor). The suppliers do a tremendous amount of consumer research in designing and developing new products, marketing campaigns, and identifying trends related to performance, convenience, or other features. As a retailer, what research are you collecting to identify (some examples):
1. Shopper Types
a. Gender/Age/Demographics, etc.
b. Psychographics – the motivations for why the shopper is even in the market, attitudes, values, etc.
c. Product interest
d. Product Knowledge levels
e. Buying for self vs. buying for other
2. Purchase Occasions
a. Birthday or special occasion
b. Replacement purchase
c. Stock up for future use
d. Convenience/Quick fill in for immediate use
e. Use
3. Purchase Variables
a. Budget
b. Brand name of product
c. Expertise of store personnel in recommending appropriate product
d. Ambience or store environment
Failure to recognize the differences between and among shoppers, shopping occasions, and influencing variables that impact whether the customer chooses to make a purchase is going to lead to the business equivalent of the children’s party game; “Pin the tail on the Donkey” where a blindfolded person attempts to place the tail on an exact spot without any benefit of context or clue.
Shopper Experience
Every retailer has heard of the importance of shopping their own store as if they were a customer. The lessons one can learn are illuminating as it relates to learning about one’s business from the perspective on the other side of the counter. But, few independent retailers actually know what to look for and how to do it.
Pre-Store Visit
1. What shopper type/shopper target is most likely to respond favorably to advertisements?
2. Does the website appeal equally to all shopper targets or does it presume that one kind of shopper exists?
3. How does the store attract the desired shopper target(s) as s/he approaches the store (signage, illumination, ability to see inside from the outside, what is visible from the parking lot, etc.?
Inside The Store
1. Is the shopper greeted upon entry?
2. Is the store set up in a way that all product categories are easily located upon entry?
3. What signage exists to direct, explain product benefits, educate, etc.?
4. What training do store personnel have to:
a. Help guide shoppers to appropriate product choices
b. Suggest complementary products
c. Inform or educate shoppers on proper product usage
5. Does the store encourage handling of products by having samples or demos out?
6. Are products merchandised in a way that helps the shopper discern?
a. Good/better best
b. Pricing ladders
c. Performance differences
7. Are categories cross-merchandised with other products likely to be purchased together?
The store often merchandises products in a way that makes it easier for store personnel to; keep track of inventory, re-order, stock product, and otherwise suit their needs operationally or logistically. It is the progressive store that correctly assumes that the store should be designed from the shopper’s perspective. The more shopper-centric the store can be so that the shopper is able to make a purchase decision in a way that is aligned with how they wish to purchase; the more successful that the store will be and the more return visits the store will receive.
Returning to the shopper target discussion, the point was made about how different shoppers, or even the same shopper, may shop very differently on different occasions. Knowing that, the store would be well served to create “Store within a store” areas that can serve the disparate needs of the shopper on each of the different shopping occasions. Practically speaking, that may mean:
1. Putting hats with gloves/Dressings near salads/lemon near fish counter
2. Placing bottled water cases, snacks, flashlights, etc. next to signage suggesting that the hunter consider adding that to their purchase before heading out.
It may also mean dividing the store into sections that appeal to different shoppers and even replicating some products, but merchandising them differently based on use and need.

Through The Looking Glass
Our industry is in a state of flux and it will continue for the foreseeable future. Unless we are able to actually see ourselves as our customers see us and do the work necessary to identify which shoppers we want to appeal to, and what it takes for them to feel comfortable in our stores; we will be destined to smelling our own gun powder and recycling the same efforts and getting the same results. The retail world is moving too quickly to remain standing still. The eagles will soar high, and the turkeys will wind up being served up on a platter to those that recognize the importance of differentiation and evolving to meet a changing shopper’s needs.

Categories: General

Business, 20/20 Hindsight and NBC

Thursday, January 14, 2010 by:David Zahn
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There has been much written, discussed, and joked about the recent debacle occurring at NBC’s late night programming. For those not keeping track, the prized jewel of late night television for half of a century has been the Tonight Show property. The most recent steward of that show is Conan O’Brien,who inherited it from Jay Leno, who was hand picked by Johnny Carson, who had assumed command from Jack Paar, who had it passed on to him from Steve Allen. As iconic as it is; and as much of a legacy as it has; NBC was faced with a series of business decisions a few years back about what to do to ensure relevance of the product in the coming years.

Brief History

It was not all that long ago that Johnny Carson was still sitting behind the desk of the Tonight Show and easily engaging guests, Ed McMahon, and members of the band and studio audience each night to entertain millions of people watching on TV. As it became clear that he wanted to step aside and move away from the rigors of hosting a nightly show, he and NBC tried a series of guest hosts. Joan Rivers, David Letterman, and Jay Leno emerged as the leading candidates to assume the mantle of the Tonight Show host.

In effect, NBC had strategically approached succession planning and provided a series of opportunities for each of the candidates to demonstrate their ability to do the job. As a result of the decisions made and the assessments given at that time, it was determined that Joan Rivers was eliminated from further consideration. While the move to eliminate her was met with some anger and harsh words (mostly from Ms. Rivers) – it proved to be a good decision when Rivers was unable to sustain her own talk show that was attempted shortly after the decision to pass over her for the Tonight Show. Leno was ultimately chosen and that subsequently led to the competition with Letterman for ratings with Letterman when Letterman moved to CBS.

As a result of Letterman being initially more successful than Leno at the 11:30pm EST time slot; NBC decided to again consider some succession planning opportunities and provided Conan O’Brien with a promise that he would ascend to the Tonight Show desk to replace Jay Leno at a future date. Fully expecting that Jay Leno would begin to slow down and lose relevance with the bulk of TV watching audiences as he approached his 60′s, NBC believed that the younger O’Brien would be better suited to secure the demographics and audience size that Letterman seemed to be winning. When the deal was made, few could have projected that Leno would actually not only compete with; but actually exceed Letterman’s ratings in the time slot. Of course, by promising O’Brien the prospect of the Tonight Show at a given time, they were able to prevent him from leaving the network and retained his services for those years.

Decisions

So, NBC chose to transition the Tonight Show franchise to O’Brien as had been agreed upon – though there was little market reason to do so – other than the prior agreement being in place. In essence, they pushed Leno aside when he was at the top of his ability to draw viewers and handed the show over to O’Brien. However, NBC was fearful that Leno would ultimately compete with O’Brien in a talk show format, so they decided to create a variety show to be hosted by Leno and precede the Tonight Show with Conan O’Brien with that show.

However, the 10pm EST time slot has been a key time slot for adult directed drama shows. It falls at a time when most children have been put to bed and the parent or adult in the household can now watch shows that appeal to them. A Leno-hosted variety show was a poor substitute for what the marketplace wanted, was willing to watch, and would accept.

Economics

The cost to produce a variety show is significantly less than what it costs to produce a drama on TV. So, while the Accountants kept an eye on the expense side of the business, the people who should have countered that the revenue generation ability of a variety show was also much less than a well scripted and acted drama.

So, although the plan was to give the shows a year to prove their ability to secure the audience’s attention; as a result of local affiliates complaining that the 10pm EST show (Leno’s) was tanking and it was harming the shows it was designed to lead into (Local News, Tonight Show, etc.) – NBC recognized that they were losing advertsing revenue on their now lower watched shows. They then panicked. Fearful that they were losing the market as a result of the ill-advised variety show concept that was cobbled together to hold onto the talent of a Jay Leno, they reversed course and are trying to reinstate Leno into the 11:30 EST timeslot.

Only now, O’Brien is balking at being pushed back to midnight and may be threatening to leave for a competing network. While there are other shows that will be impacted as a result of this domino effect; NBC’s poorly thought out plan and tactical focus over strategic thinking has come back to embarass them.

Lessons

The lessons are easy to spot in this mess with the benefit of hindsight:

1) Strategically, NBC had put a plan in place, but did not also include likely scenarios or other options. It went forward as if the ratings were not going to change and the competitive balance would remain the same in 2009 as they were in 2004.
2) There was no real understanding of what the market wanted – when the deal was struck, the internet, DVR, and alternative entertainment options were not factored into how late night television would change.
3) The failure to secure the buy-in from the affiliates to the plan PRIOR to execution led to distrust, conflict, and no real support for the tactics or strategy.
4) The reliance on cost savings over quality programming led to decisions being made in a vacuum that were not inclusive of market realities.
5) A failure to understand the willingness of the parties to willingly support the strategy (Leno appears to publically support the company position; but O’Brien has been quoted as being unwilling to cooperate with what he perceives to be a poor plan.

While it may appear to be on the surface all jokes and good times – there is much to be learned in running a business by looking at how NBC is handling or mishandling their late night shows.

Categories: General
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