Jun 11, 2009 | Demand chains, Management, Sales, Strategy
Most supply chains are driven by orders, someone reacts when an order is received.
The niggling question is always about demand, as most recognise it drives orders, inventories, innovation, competitive pressure, and so on, but is rarely measured.
Orders are at the end of the process, they arrive after making allowances for out of stocks, poor display, customers memory, competitive activity, the skill and interest of the sales person, and many other factors.
Demand is created by understanding the customer, and positioning your good or services in their minds as the best value solution available to address their need. This is longer term stuff, harder to measure, easy to ignore, but it is the foundation of commercial sustainability.
How much better would it be to have in place signals that reflect demand, they might give us an opportunity to reduce the incidence of lost opportunities, whilst better managing our investment in inventories, brands, customers, and the short term sales tactics used to stimulate an order.
Jun 8, 2009 | Marketing, Sales, Strategy
Yesterday I went to a free concert in Darling Harbour in Sydney, and saw Jeff Lang who plays “my music” the blues, and must be one of the best lap slide players in the world.
Point is, it was free, and he rocked the place, and judging by the reaction, he engaged with a lot of people who had never heard of him, and certainly had never seen him, and under normal circumstances, would never buy a CD of his, but they did yesterday, in truck-loads, and he hung around and signed stuff, smiled, laughed, and generally was nice to people.
Here was a world class player, engaging with people who were now avid fans of his, and who would remember the day, and continue to buy his albums long after the free sample. They may not have paid to be there, but will pay for a long time to come.
Free stuff sells, when it is good enough, different enough, and has a character and integrity people can relate to.
Jun 4, 2009 | Management, Sales, Strategy
Great, the big presentation nailed it, the sale is made, the goal achieved.
When the cheering is over, and the empties from the celebration cleared away, perhaps a reflection on what really made the sale would be useful.
The presentation did not make the sale, it was just the last piece in the jigsaw.
The lead-up work that made the sale possible was made by the researcher who realised that the potential customer had a challenge your product could solve, or the truck driver who told you the competitive lead times were 6 weeks, and you can deliver in 3 days, or the operations guy who suggested that by adding an ingredient in your factory, you could eliminate a whole process in theirs, the sales people who nutted out the strategies in a Key Account Plan, and so on, you get the picture.
Industrial sales are usually made by a myriad of small things that together add up to something you can leverage, the presentation is only the end game, and is useless without the graft at the front end.
The graft is an organised process of gathering collating and prioritising market and customer intelligence, and matching that to the competitive advantages you can deliver, so the presentation can be produced, and sales gathered.
The font end is the hard bit, the presentation is the glory bit.
Jun 3, 2009 | Management, Strategy
The current debate in Australia about executive remuneration, kept alive recently by the departure of Sol Trujillo from Telstra, about who gets what, and how much is enough, is essentially a spurious debate about supply and demand for executive “talent” colored by individuals successfully marketing themselves as the new messiah.
However, it forgets that human beings are essentially herd animals, generally we want to belong to something that reflects our own values and views much more than we want another luxury car or boat, after the initial “need” is satisfied.
Belonging is a basic motivation that has largely been forgotten, and legislation will only serve to push it further into the background of peoples thinking, but it will not reduce the impact on peoples psychology.
Boards that set out to build an organisation to which people want to belong, will attract better talent at a much cheaper price than one that relies on just money.
Telstra paid Sol a pile, and got little back of the effort beyond a demoralized and “values free” enterprise.
Adios Sol, you took the dough, and added little, but whose fault is that?
Jun 2, 2009 | Management, Strategy
Did we ever need a better illustration of the hubris caused by a concreted in status quo than the sight of General Motors, the former pin up of American manufacturing might going into chapter 11 yesterday?
Ironically, over the past 25 years as GM struggled, it bought a number of other businesses, Hughes Aircraft for one, paying substantially more than the pundits believed they were worth, then turning them into cash bonanzas.
The question of why they could achieve this in their associated businesses, but not in their core should keep academics arguing for some time.
However, it will not stop the chain saw being applied over the next 6 months, and the probability that a new, improved GM, free of the hubris of the past, will emerge, but it will not be without pain.
Here’s hoping the now most influential shareholder, the US taxpayer, is being managed by someone with sufficient cahunas to inflict the pain now, so that the patient may live.
May 31, 2009 | Management, Marketing, Strategy
In planning sessions, much time is usually spent defining target markets, reviewing sales histories and projections, new product schedules, what customers were doing with competitors, and so on. Sometimes there is discussion about what truly differentiates you from your competitors, what makes you unique, but not often enough.
Why not take it a step even further, and ask who amongst your customers would be in trouble if you suddenly closed up shop, why, and how long it would take them to find an appropriate substitute.
If you manage to answer those questions, you may have succeeded in defining what makes you truly different in the way that you add value to your customers.
In the event that you cannot identify a customer who would miss you for longer than it took to pick up the phone and call a competitor, you need to consider how you can change this before you disappear.
