Well, I hope this helps you in your decision process and remember in all marketing, segmentation if one of the first critical step in any successful marketing activity!
RHL 9/9/10

Recent data indicates that tradeshows have been on the decline for a number of years. Reasons for this vary but two are the economy and the newly emerging alternatives to tradeshows.

Now the downturn in the economy made corporations look at expense items and increase their cost cutting activities. Tradeshows were one of the areas that got hit very hard.   It is a very expensive activity when one considers the cost of the floor space, construction of the booth, staffing ( lodging and travel), entertainment, pre and post advertising, lead generation programs, professional hawkers, video production, specialized collateral, give a ways, etc., etc.  And let’s not forgot the potential attendees. They too work for corporations, and their management is doing the same cost cutting activities…getting approval to go to tradeshows is becoming very difficult.

Second, tradeshows in most cases (there are always the exceptions where certain industries, tradeshows are doing fairly well) have become alumni reunions or a chance to pass your resume on to your competitor.   At one recent tradeshow that I attended, I would conservatively estimate that the ratio of potential buyers to vendors was one to twenty! 

The economy probably put focus on the cost versus returns on investment metric for tradeshows, but I think the real negative impact on tradeshows is coming from the increasing alternatives now available.

Some of the byproducts of the Internet relative to tradeshows are seminars, webinars, podcasts, virtual tradeshows, web sites, blogging, user’s groups and live video demonstrations.

The first step for many corporations was to not withdraw from being at a tradeshow, but to cut back on the size and the amount spent, augmenting the shows with some of the above mentioned activities.

This way, there was presence at the show so no one would think they were going out of business and by physically participating some lead generation could be realized and/or a product/service introduction  could be made if it was appropriate.

As the stigma of not attending a tradeshow has decreased, corporations are shifting more to events like seminars, virtual tradeshows and other alternatives. 

So as I have always stated, there are choices and now, more than ever, there are numerous alternatives to tradeshows.

Here are some suggestions on selecting where you might spend your marketing dollars when it comes to tradeshows.

1-      Look at the tradeshows past attendance record, mix, and profile to see how closely it matches your customer profile.

2-      Which one of your competitors, partners or major clients are attending the shows you are considering?

3-      Are you planning on having a major announcement (product, service, technology or partnership) that would generate increased awareness or people to come to your booth?

4-      Will the blend of items like webinars and targeted email campaign deliver a better return on investment (leads/dollars spent) then one tradeshow?

5-      If a tradeshow does make sense, maybe consider “partial” involvement (fewer days, or smaller booth, etc.) and augment the show with a pre or post email campaign.

6-      Consider outsourcing the tradeshow activity to reduce some of the cost and time involvement.

7-      Consider attending the tradeshow as a speaker, with an “off-floor” presence to meet current and potential customers and partners.

8-      Do a complete ROI and potential sales impact on whatever marketing mix scenario you are considering.

See you at the next virtual trade show!

RHL 9/1/10

Note: this article is focused on business to business not business to consumer (spending on items like advertising and promotions are usually greater in the consumer market).

Sales People One primary communication method in the B2B world has been the sales person and their personnel selling efforts, but this method is not only very expensive but does not scale well. Suggest augmenting this with other communication tools.

Advertising’s primary contributions are to provide awareness and provide creditability for the vendor (if you do not believe me, seen all the Toyota ads lately!). It has been proven that sales and profits are better with advertising then no advertising at all. So make sure your advertising first supports the overall marketing strategy and is integrated with other marketing activities. Lastly, if you do use advertising, make sure it will pass the “threshold” of awareness. Too often marketing managers start an ad campaign and don’t run it long enough to create awareness and thus those dollars were completely wasted. So if you don’t have enough in the budget to be successful, utilize the money somewhere else.

Direct mail or email campaigns:  Direct mail is good for promotions, supporting sales activities, and communication to your various channels. Emails can address the same issues with the added benefit of having a quick response or the ability to receive a request or answer a question in a very timely manner.  Again like advertising, one shot will NOT accomplish your goals, you need to contact with your targeted audience via multiple mailings.

Trade shows: Good place for a product or service introduction, speaking engagements, leads, and face to face with potential buyers. But given that, I believe trades how are actually on the decline, so I would highly recommend analyzing the benefits of being at a trade show versus its overall costs.

Seminars/Webinars:  A relatively inexpensive tools, especially if your goal is awareness, thought leadership or demonstrating a customer application.  You can have a “captured” audience and have follow ups with them.

Catalogs:  Are basically dying if not already dead, mainly because of the web and its ability to show products and services in a more robust manner, Web catalogs are less expensive and they can reach a far greater audience.

Social Media (Blogging, twitter, etc.) The use of these media by enterprises is growing every day.  Their primary purposes are for awareness, thought leadership, lead generation and getting feedback from the community. I would recommend as a minimum that enterprises at least “listen” to what your customers are saying about you and your products.

So, again, it is not how much one has, we are all painfully aware of that, but what the appropriate mix is.  You need to balance your marketing communication methods to optimize your returns.   This mix selection will vary depending on what phase your enterprise is current in and your overall goals.  A start-up might use the social media tools to generate awareness and creditability, while an established enterprise might rely on its sales team along with some direct/emails and seminars.

In any case I would suggest testing your mix on a selected sub segment and analyze the results and make any adjustments before going with the full programs.

RHL 8/24/10

The more popular forms of sales structures are:

1-Product sales orientation: here sales people are well versed in the products that the enterprise has to offer.  This can be a specific product or a suite of products or a series of solutions that the sales person is the “expert” in.  One major advantage to this structure is having product experts, but a major disadvantage is potentially high costs to support.

2-Market orientation: here the sales team is orientated towards certain industries. Examples could be government, financial or transportation segments where the sales person sells solutions that are appropriate for each segment. One major advantage to this structure is having industry/solutions experts, but a major disadvantage is potentially duplication of function per areas.

Further sub divisions within market orientation are structures such as major/ named or national account management (NAM) or global (GAM) account management, where large of important accounts have assigned people.

3-Geographic structure: here sales people are assigned and are responsible for all accounts in their territory and for knowing all products. One major advantage to this structure is having low costs, but a major disadvantage is limited or few real experts in the field.

4- Sales function orientation: here sales people perform certain sales functions such as order entry, selling, or managing sales events.  One major advantage to this structure is having an efficient sales operation, but a major disadvantage is duplication of costs to support.

Complicating the different options is when a re-seller is added to the mix.  For example, a firm may have a direct sales force to sell to everyone except Federal and State Governments.  For these customers they use a specialized reseller.

Regardless of structure one selects consider the following guidelines.

-What selling efforts will be needed to meet the organizational goals?

 -What skills and how many sales people are required to meet these goals

 -What structure (from above) is best suited to handle the type of products or solutions for the types of accounts and/or industries.

-How should the selling effort be allocated/deployed to meet these goals

-How will the sales force be managed and compensated

-What will the workload be per sales person to achieve the targeted goals?

Most importantly, know your customers and make sure they will receive the best in class services!

RHL 8/10/10

Before you answer the question, have you done and do you understand the following issues in determining your selling price?

1-      Are your current product price objectives in line with the corporate objectives (profit oriented, gain market share, etc)?

2-      Do you understand the values (quality, serviceability, ease of use, etc.) customers put on your product/service?

3-      How is your cost method derived (sell price minus margin to arrive at cost or is it a combination of fixed and variable cost)?

4-      Do you understand the competitor’s strategy (gain market share or market entry) and their cost structure (initially a loss leader or penetration)?

5-      Are there any legal issues regarding price reductions( some cases like market monopoly/oligopoly)

6-      Does this price reduction impact other products in your portfolio?

For more details on pricing, see our Pricing Guide.

Given the above, here are some considerations you should consider before you react.

A-     If you react with a price reduction will it be less then preventable sales losses?

B-      If you react will the competitor just reduce their price again

C-      Where will multiple reductions lead you ( margin issues or sales loss impact)

D-     If you react, how will it impact other products/service?

If you have good product/service differentiations, then I would suggest stressing your benefits and value proposition via marketing messages to your customers in some form of a campaign.  Also look at the competitor’s pricing strategy, cost structure and past record regarding price changes.

Third, look at the market with regards to new potential technologies, customer’s experiences with your competitor’s product and any past or present technical issues.  Use the results to combat the price changes.

In most cases responding to a price reduction by matching it results in disaster.

George Cressman Jr. & Thomas Nagle of the Strategic Pricing Group state “Pricing is like playing chess: players who fail to envision a few moves ahead will almost always be beaten by those who do.”

Cressman and Nagle recommend the following:

1-      Never participate in a competitive engagement you cannot win.  Fight from strength NOT your weaknesses.

2-      Compete from an advantage position ( example, value differentiation), do not compete by using the competitor’s rules

In summary,

** Know your overall pricing objectives and know your competitor’s objectives and position.

** Project the possible next steps (what if scenarios).

**Engage from a competitive advantage.

**Consider actions such as improved warranties or including some form of service.

** Use price reduction as a very last resort!

RHL 8/3/10

Before I answer the question, let’s look at what functions each perform and then draw a conclusion.

Assuming your enterprise has a direct sales force, it performs many functions such as; relationships, promoting your company, finding customers, closing orders, etc. An additional function that is performed by sales people is creating a personalized awareness with their customers.  Two major issues a sales team cannot do effectively is create wide-spread awareness and be the most cost effective.

Advertising can be used for different objectives. The primary objectives of advertising are creating awareness, branding, and providing information about your company and /or products.  It has been proven that advertising increases sales efficiency by providing awareness or helping turn a cold call into a warm sales call.  On the other side of the equation, advertising is not a substitute for personal selling or creating product preference.  These require a sales person to be “real time” and demonstrate or explain the value propositions to a potential customer.

So which is best?  The answer is not which channel is the best but that advertising and personal selling support each other and thus, picking the correct mix and integrating from a marketing communication strategy is really the key.  Of course the mix will contain more than just personal selling and advertising but other marketing tools as well.  The real challenge is developing a complete marketing plan that maximizes the  communication tools, supports the overall goals and falls within the marketing budget.

So the keys are: 

-Develop an overall marketing strategy and implementation plan

-Structure the mix to include your sales team

-Make sure things like messaging and value propositions are in sync between advertising and the sales force.

-Establish the budget that supports the overall game plan

RHL 7/27/10

The following are five areas that one should consider in either upgrading or enhancing your call center.

1-      Multiple media support:    In today’s environment people have a choice of how they prefer to communicate and if one does not meet these needs  you are not only going to lose customers but will also be viewed as laggers not an  innovators or a leading- edge company.  With the growing acceptance of technologies like VOIP, mobile phones and the Internet in general, your call center should be supporting multiple communication channels.  While the good old telephone is important, it is being replaced with the following methods:  Mobile/cellular phones, Web interfaces, email, and chat (SMS), twitter and VOIP communications.  So is your call center capable of supporting these diverse media and if so, have you surveyed your customers to find out what they prefer?  If your call center currently does not support these media, what is required to upgrade it?

2-      Web Base Self Service is practically a necessity given that the consumer is now in control. What I mean by that is the consumer wants to be able to access information about the product or service they are thinking about buying or information about the product or service they currently own.  From the enterprise point of view, self service contributes to reducing costs and therefore resources can be applied to other services or applications. A question we often get relates to the management of this function and content…Customer Service or Marketing. Bob has written in the past about how Customer Service is moving more under the Marketing organization.

3-      Reporting and Analytics: the world is evolving from mass merchandising to one on one merchandising.  In order to get to one- on- one connections, analytics and reporting are needed.  It makes no sense to gather data and then just let it “sit” in a data base. Reporting and analytics are required to turn data into information.   Analytics not only help convert data into information but give you guidance on potential trends, consumer preferences, geographic buying and insight on potential features.  As for reporting it is very beneficial to continuously run customer surveys for inputs into your customer satisfaction programs.

4-      Integration with other application platforms: to have a universal view or what others call a 360 degree view, your call center needs to be fully integrated with other service and or communication applications. Applications such as ACD, CRM, IVR, call routing, customer satisfaction data and escalation reporting provide this full view and therefore unique value propositions which will differentiate you from the competition.

5-      Survivability/security: considering the call center is the critical interface between the customer and your enterprise, you need to make sure it is available 7 X24 and if there is a glitch, the call center can recover seamlessly.  If access by the customer is difficult or time consuming, you are several clicks or phone calls away from losing them. As for security, we all have heard incredible stories about stolen information.  If this happens to your enterprise, the number one factor that will be destroyed is goodwill, which could be gone forever.

To summarize, you first must have an overall strategy and then make sure that you match your customer needs and habits with the type of products or service you are offering.  Part of the equation to accomplish this is a call center. So make sure you have the correct capabilities within your call center and the major factors of multiple media, self service, reporting and analytics, survivability/security and integration with other customer facing applications.  

One last thing, make a call yourself to your own call center and see what kind of experience you have!

RHL 6/08/10

The morning sessions consisted of CIO panels, with the discussions centering on how they addressed the growth and results within today’s environment, and their perceived roles and responsibilities.

The consensus was the following:

A-    Cost cutting activities, while on-going, seem to have run their course. While this is always on everyone’s agenda and reviewed with senior management, the focus has changed.  The change that is being demanded now by senior management and the stakeholders is “we need growth!”  As stated, cost-cutting has gone so far and to maintain or become profitable enterprises have to either start growing or continue growing.

B-    Successful or smart companies are making key investments during these troubled times.  Instead of pulling back and waiting for a sunny day, they are investing, mainly for growth and to stay ahead of their competition.

C-    Outsourcing:  CIOs and their partners are taking a very hard look at all functions within the enterprises and deciding, from a business point of view, which functions can be outsourced.   They claim this addresses three issues, internal cost savings, improved efficiencies and the ability to deploy resources into core capabilities.

D-    New ideas for growth are not always coming from technology. Changing workflows or processes or working with partners and vendors are producing positive results.

As for the evolving role and responsibilities of a CIO, again while they all agreed it is challenging, the evolution seems to be causing a “split personality.” The key characteristics for the future CIOs are the following:

• They have to be an “enabler” versus a “driver.”  A driver does not always get buy-in and thus projects might not meet their goals and objectives versus an enabler who gets everyone involved and the CIO is seen as making things happen.
• CIO must be in a collaborative role NOT “here-it-is” stance.  So the challenge is to foster change but in a supportive and collaborative way.
• Provide innovative contributions to the enterprise.  CIOs are being asked to drive growth and thus chartered to find new and hopefully unique ways to move the company forward.  The challenge here is that fundamental activities like infrastructure and mail systems must be rock solid and efficient before a CIO can look at making innovative activities. Thus the balance of tactical activities versus developing new functions or methods.
•  Is a CIO also the CTO?  There was no right or wrong answer here but everyone agreed that the functions were needed and it was more of a company philosophy then a hard and fast rule.  Some thought the CTO should report to the CIO, while others thought that you needed an “independent” group looking at technologies
• The key characteristic, and this was unanimous, is that CIO must have business acumen.  Some even went so far to say that in their search for CIOs that they considered technical expertise secondary (one CIO was not from an IT environment at all!).  The point being is that to help drive the company forward one has to understand the lines of businesses and support the success from a business point of view, not just a technological vision.

In summary the CIO of the future (actually today) is literally in the middle!  He or she must be tactical but innovative, an enabler but is able drive things to completion, collaborative but lead in certain areas and most important have solid business knowledge/ understanding with great collaborative skills.

So if you are a CIO, how prepared are you for the next challenges or if you are a member of management is you CIO prepared for these challenges?

RHL 05/25/10

The most common response I hear when I ask a sales person how he or she did for the quarter or the year; is something about their quota. i.e., “I made quota” or “I’m at 70% of quota, but with two big deals hanging fire.”  While quota should always be part of a performance evaluation, I would suggest a good appraisal should include other considerations.

In a previous posting we talked about Marketing Metric, Sales, needs Performance Metrics. Good performance criteria should have quantitative and qualitative measurements. The following are some of the major categories for both areas.

Quantitative measurements for a salesperson (note: appropriateness will depend on the salesperson’s role or title).

1-Sales quota for the year, for the region/territory, percentage as compared to others and other regions/territories.

Looking at just one person’s sales quota does really tell you anything about that person’s performance. You need to see how each person in doing relative his/her surround, the regional performance and others.

2-Accounts managed, number of account calls

You need to measure sales personnel on how they handle and manage accounts. You may have one person having a good quota but with just one account versus another person with equally good quota but with numerous accounts. Who is actually performing better?

3-Handling of expenses

It is great to have good people exceeding quotas but you want them to be profitable at the same time. Individuals should be goaled on managing and controlling expenses as related to their job (examples: marketing programs, travel, demos, and sales venues)

4-Geographic coverage, account “density”

Similar to criteria # 1, account coverage should be factored in to get a quota per account ratio. This will recognize individuals who not only strive for revenue, but also strive to develop accounts for future rewards.

5-Products and services sold per goals

A well balance of portfolio to revenues not only benefits a sales person but provides a nice competitive advantage in the overall market place

6-New accounts/ new opportunities

It always great to get re-occurring revenues, but a good salesperson always needs to develop the “next” group of customers. This is important for many reasons; two of them are increasing your base and opening up new markets.

Qualitative measurements for a salesperson

     1-Innovation- creative ways to “sell” to various accounts

Companies always need to differentiate themselves and what better resource then your sales person who is the front line with the customers. You can write great brochures, wonderful case studies, but the best promotion is a high energy sales person who exudes enthusiasm.

     2-Recuiting and training of others

People in sales are the most critical resource and usually ones of higher salary; therefore bringing on and training these individuals is a key component for sales success.

     3-Motivation and motivation of others

Sales people’s attitude is a reflection of the company they work for, thus if you want your image to be positive, can do, and confident looking then make sure part of sales appraisal has this factor.

     4-Role modeling/leadership for others

Related to recruiting and motivation, sales are a focal point from a customer’s point of view.  Thus performance should include how a sales person is viewed by the customer, follow sales people and sales management

     5- Managing accounts, tasks and personnel

Sales people have to be good business people also. How one manages and cares for accounts is equally important as acquiring accounts.

     6-Efficiency in tasks, meeting goals

Good sales people (actually all employees) need to be efficient because we all contribute to the success of the enterprise and therefore how we get things done has an impact on both customer satisfaction and economic factors.

In summary a salesperson’s performance appraisal should be multi- dimensional.  The two major sub- categories of qualitative and quantitative provide a good balance for each salesperson.   Second, by having a mix of criteria, you normalize sales people, territories and goals for apples- to- apples comparison. Third, you will have your sales force working towards all goals and objective and thus a win – win for all.

So once you have your sales strategy in place, one of the major tasks is to develop territory goals and eventually goals, measurements and performance criteria for each member of the sales team.

RHL 5/4/10