The New Reality is spawning all manner of changes in our world. Over the past thirty some years with the advent of the personal computer, for “data processing” and the internet, for “networking” and the smart phone, for “your wallet” the personal liberation revolution is in full bloom.
Since the Industrial Revolution the only manner in which a Company could “scale up productivity and profit” was by treating customers as populations instead of individuals. This has become magnified with CRM systems. Customer Relationship Management requires the use of market segmentation with became a serious exercise in the 1980’s and has become perfected since. The only way that this can be challenged is by empowering the individual.
From loyalty cards, started by service stations and oil companies in the fifties and sixties, to airline frequent flyer clubs the customer gives up their personal history every time they use a product or service. This is being turned on its head by the PC and tablets, the internet and the smart phones or PDA’s. Individuals are started to obtain the same power.
Now we see the arrival of a new thought VRM. Vendor Relationship Management where the customer truly does become “king.”
Imagine your “smart phone” where your network supplier AT&T, Sprint. T-Mobile or Verizon “lock” you up on two year contracts. That aberration in individual liberty will soon be extinct. Similarly marketeers will no longer be using words like “acquire” or “control” or manage” or “lock in” when they talk about customers. Are we the ultimate “round up?”
No with this new idea VRM the customer will regain control as if we were back to the butcher, the baker and the candlestick maker. You will shop with a PDA and be able to pass your information on to a Vendor only at your discretion. There will be implicit “contracts” of information and personal privacy. This will start more seriously as Microsoft requires the DNT (Do No Track) features will be turned on in the new Internet Explorer and that “Ad Blockers” become even more popular as with Chrome and Firefox. Ad blockers and more common in Europe today but that is fast changing.
The new marketers will have to find a new game won’t they? This new marketer will recognize the Service-Dominant aspect of their world. That relationships are a choice of a customer not the whim of a supplier. The time is now.
Service Statements v1.3
A number of years ago a dealer for whom I have a high degree of respect initiated a special service for their service customers. They called it “Rapid Wrench.”
This was a service that was aimed at the non-technical mechanical work needed by the customer. Changing batteries or bucket teeth, those jobs that required a laborer but not necessarily a technician. They qualified the work buy the amount of time it would take to complete. If it was four hours or less than it qualified as a Rapid Wrench job. This was also performed at a different labor rate, one that matched the degree of difficulty of the work to be done.
Most dealers, is discussed in earlier b logs, charge a “peanut butter “rate. They charge the same rate for highly skilled technicians and helpers, for diagnosticians and people removing and installing sheet metal. The same rate for these different functions and as would be expected the customer has chosen to give the easy work to someone other than the dealer at a lower price. This is partially what the Rapid Wrench service was aimed at proving to the customer, a good service from a qualified dealer employee at a fair price. I believe that this is a beginning of the solution of recapturing the service business from the competition. The time is now.
Parts Ponderings v1.3
I mentioned in the Management Musings blog a terrific book by Simon Sinek called “Start With Why” which is on TED.com as a short presentation which should interest each of you. He posits that your customers by from you not because of what you do or even how you do it but rather why you do it.
The “What” you do is supply parts. The “How” you do it is with skilled personnel and inventories and systems and other specialized tools. But the why you do it is what will keep them coming back to you time after time.
I want you to consider the “Why” as the sense of urgency you have to find the part for the customer, provide it out of your inventory quickly and conveniently and if you don’t have the parts they require you will work tirelessly to find the part for the customer on the same day that they ordered it. That is why the customer comes back to you – or not.
I am afraid that over the years we have not found the parts we didn’t have in stock fast enough or consistently enough and that is why the customer has gone shopping to find parts from other sources. We need to fix this. We need to convey to the customer both in discussions and in action that we will find the parts that they require on the same day that they request them. Notice I didn’t say that we would supply all the parts the same day. I said that we would find where the part is available when we don’t have it and then we will let the customer know and allow them to make the decision about what they want us to do. Consistently performing to this standard we will improve customer satisfaction, customer retention and employee satisfaction as well. The time is now.
A thought for your consideration
With the “why” not the “what” consideration from the Management Musing just posted perhaps the following is worth considering.
Is it possible that features and benefits don’t make the difference they once did? Perhaps the differentiation in machinery is not as prominent a consideration as it is the dealer network behind the machine. The time is now.
Management Musing v1.3
Leaders lead because people follow what they believe not what they do. That is because we have a process that we follow in life and another process where we live.
The Process is:-
We normally act or sell or communicate saying “what it is” and “how” we are better and asking for something in return. IMportantly everyone knows what they do and some even know how they do it. Sadly few people know why they do it.
We must reverse that process – we need to think, act and communicate from the inside out.
“People don’t buy what you do… they buy why you do it.” Simon Sinek
The brain follows this pattern – it is a biological fact not psychological.
“What” is in the newest part of the brain the neo cortex brain
“How” and “Why” are in the middle part fo the brain – the limbic brain.
An option to consider is that you should:- hire people who believe what you believe and money will never be the motivating condition. This, however as you all know, can also be a trap. You will all fail together.
Business Fails when it has the following conditions:-
The Law of Diffusion of Innovation shows a curve of people in the following way:-
This law tells us that if we want mass market success we need to pass the tipping point which is 15% to 18% of the market. The gap between your market capture rate and the tipping point is called – crossing the chasm by Jeffrey Moore.”
If you want to see more check out. The time is now.
https://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html?source=email#.T_Nuu6C0Os9.email
Change Mangement v1.3
The New Reality is spawning all manner of changes in our world. Over the past thirty some years with the advent of the personal computer, for “data processing” and the internet, for “networking” and the smart phone, for “your wallet” the personal liberation revolution is in full bloom.
Since the Industrial Revolution the only manner in which a Company could “scale up productivity and profit” was by treating customers as populations instead of individuals. This has become magnified with CRM systems. Customer Relationship Management requires the use of market segmentation with became a serious exercise in the 1980’s and has become perfected since. The only way that this can be challenged is by empowering the individual.
From loyalty cards, started by service stations and oil companies in the fifties and sixties, to airline frequent flyer clubs the customer gives up their personal history every time they use a product or service. This is being turned on its head by the PC and tablets, the internet and the smart phones or PDA’s. Individuals are started to obtain the same power.
Now we see the arrival of a new thought VRM. Vendor Relationship Management where the customer truly does become “king.”
Imagine your “smart phone” where your network supplier AT&T, Sprint. T-Mobile or Verizon “lock” you up on two year contracts. That aberration in individual liberty will soon be extinct. Similarly marketeers will no longer be using words like “acquire” or “control” or manage” or “lock in” when they talk about customers. Are we the ultimate “round up?”
No with this new idea VRM the customer will regain control as if we were back to the butcher, the baker and the candlestick maker. You will shop with a PDA and be able to pass your information on to a Vendor only at your discretion. There will be implicit “contracts” of information and personal privacy. This will start more seriously as Microsoft requires the DNT (Do No Track) features will be turned on in the new Internet Explorer and that “Ad Blockers” become even more popular as with Chrome and Firefox. Ad blockers and more common in Europe today but that is fast changing.
The new marketers will have to find a new game won’t they? This new marketer will recognize the Service-Dominant aspect of their world. That relationships are a choice of a customer not the whim of a supplier. The time is now.
WH Filosophy v1.2 Thanks Bill
Those who do not move do not notice their chains.
Rosa Luxemburg, Russian-German political theorist, economist and revolutionary
Worry about being better; bigger will take care of itself.
Gary Comer (1929–2006) American entrepreneur founder of Lands’ End
Most people … discover when it is too late that the only things one never regrets are one’s mistakes.
Oscar Wilde, Irish writer
Book of the Week
For interested people there is a wonderful little book written by Roger W. Babson in 1920 which should be required reading for everyone in High School and every politician in the land. It is called “Fundamentals of Prosperity What They Are And Whence They Come”
In 47 pages you will understand everything you need to “understand” about work, life and results. That is the first step in my progression in life. Then there is “acceptance” of what it is that you “understand” as true and necessary and finally your “commitment” to make it happen. Enjoy it. The time is now
Marketing Missiles v1.2
Service-Dominant Marketing has a series of interesting position papers in it each of which poses thought provoking concepts both past and present. Let’s look at market coverage.
We started in the equipment world with salesmen; there were rarely any women, each of whom was given a geographic territory – “These are your counties.” The salesmen then went dutifully about their work and called on customers and sold machines. The problem with this method of market coverage is that it is the salesman that determines who will be covered and who won’t. The employer doesn’t even factor into it. I know many of you will be saying that the sales manager will have something to say about that but you also know that I am right.
Pioneer Hybrid Seeds, before they were sold, radically altered the market coverage approach when they went to a customer list for market coverage. This was covered in a Harvard Business School case study in the 1990’s. They found terrific success when they focused on relationships of the salesmen and the farmers. Sales increased dramatically and the company ultimately was sold for a hefty premium as a result of their market penetration and sales results.
For some time now we have had product support salesmen as well; people selling parts and service programs and supporting the customer in their needs and wants. Unfortunately the same pattern was followed as with equipment salesmen with a small kink in the approach. The salesman was required to bring back a quotation to prove to the Company that in fact they had influenced the purchase. As you can imagine this led to all manner of tricky behavior to get paid, rewarding the Company with exactly what they were trying to avoid.
Over time the market was segmented, more on that in a future blog, and the salesmen were given specifically named customer accounts to cover. Finally we got to the point where the salesmen could concentrate on developing a relationship with their customers. The number of customers assigned was rarely more than 150 although there are exceptions with a smaller urban territory. The other factor that was taken into consideration was the number of machines. The number of machines was limited to 500 but this too had to be made smaller depending on the type of machine and the application. After all in the parts and service world the machine is the customer. Many dealers who have followed this approach, assigning customers to salesmen with limits placed on the numbers of accounts and machines are reaping terrific results. Market capture rates are higher as is customer retention. We will continue this dialogue in the next blog. The time is now.
Friday Filosophy #21
People of accomplishment rarely sat back and let things happen to them. They went out and happened to things.
Michelangelo
Ninety-nine percent of the failures come from people who have the habit of making excuses
George W. Carve
Any man may easily do harm, but not every man can do good to another
Plato
Management Musing v1.2
In the last Musing we touched on Leadership. This subject is worth pursuing a bit further. Leaders rarely are born. People become a leader – they are given the role of a leader by their team members. This is not something that is commonly believed. Many feel there is a “royal jelly” that is on some people. Well perhaps that is true sometime but in my experience it is rare. For example – some people are wonderful conversationalists in the eyes of other people at a party but typically this is the person that have listened the most. This is also true with leaders. Leaders rarely have to show off their position… they live it. They enjoy the success of their team members in fact they set the team members up to succeed.
They also become expert in their Industry. They are students of their Industry and are constantly learning. Who is growing sales and who is not? What new developments are there and where are the threats. They are constantly on the lookout for the new and the unexpected.
They are also constantly growing. They read obsessively. They are also involved in other activities from charities to schools and churches. They believe that the moment they stop growing will be the end of their leadership. You can see examples of these people in all walks of life. Are you a leader? The time is now.