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The Challenge of Staying True To Your Core
Om Malik has an interesting post on Starbucks.
I’ve always found Starbucks to be a fabulous case study for companies in the post-industrial world. Starbucks has clearly made mistakes and if Om’s experience is similar to others they may be making another one.
If Starbucks is disrupting the fundamental client experience and the trust they have built with their customers in an effort to add more immediate revenue to justify their growing stock price then they are in danger of killing their ‘golden goose.’
Om’s experience combined with John Moore’s, Brand Autopsy, observations of actions leaves open the question: Can a company sustain fast growth and stay true to its core?
I’m betting a company can. This would not be the first time Starbucks has taken an action that threaten violating the trust they’ve built. When they’ve made those mistakes they’ve paid a price and always come back to their core and reached even greater heights. I have to admit that it continues to be difficult to find good role models, though.
PS. Are you a role model? Tell me your story. Tell me what is your core and how to you plan to balance growth with that core. As good stories come in I’ll post them on my website in a new area I’ll build so that we can build a community of role models, thus making it easier for all of us to build something truly great? Just send me an e-mail.
Why Salespeople Have Such A Bad Name
Sometimes, I just can’t take it. As someone whose vocation and avocation is the professionalization of the sales process and salespeople, I get more upset than most by those salespeople who work so hard to earn the bad feelings salespeople have engendered. The story of what happened to me today is illustrative of precisely what you should not be doing.
I was on a call with a client of mine. As the call was winding down, my extension rang. I told my client that I had to run and picked up the waiting call. The caller was a telemarketer from HarrisInfo. Three weeks ago, I signed up for the free seven day trial because a client needed quick information with a citable source about how many businesses were in a market area. I found Selectory online, used the free offer and forgot about them. An ignored e-mail telling me how great the service is, was followed by the telemarketer.
I’m not the first say that interruption marketing is a bad idea. The salesperson went into his spiel, and I informed him that I did not have time to talk with him. I was then asked when a good time to talk would be. Valuing his, and my, time, I informed him that there was no point in talking.
In a scene that reminded me of the movie Glengarry Glen Ross, the salesperson responded by saying, “I don’t understand. Don’t you want to grow your business…”
GROW YOUR BUSINESS? Are you kidding me. Instead of a thank you for your time, I got an insult. Did the caller (whose name I will not reveal) really think that insulting me would motivate me to do business with him?
But wait, it doesn’t stop there. He sent me an e-mail. Here it is:
Doug, You must have been very busy today. If you are interested in growing your business and increasing your sales please feel free to give me a call. I’m sure I can point you in the right direction since you were obviously looking for information you didn’t have.Thanks,
name withheld
When will businesses learn? I don’t know whether to blame the salesperson, or (more likely) HarrisInfo who created an environment where an otherwise intelligent person felt the need to be obnoxious. I work with companies everyday that could use the service that was being sold to me. HarrisInfo had succeeded in making me aware them. Then they ruined it. They turned me into a detractor, and a vocal one at that.
To anyone who is reading this, please teach your salespeople and your executives to respect their clients, customers and potential customers. Act as if we may actually know what we are doing. Who knows, you may get the growth you seek.
The Trouble with Creatives
Spike Jones has an interesting post about awards season. I respect that as a creative, Spike willingly admits that awards don’t account for much.
I feel the need to take his comments a bit further. The problem with creative awards in the business world is that the awards (at least the ones that I am aware of) have nothing to do with the purpose of the work. There is an assumption that great creative leads to great results. It would be nice if that were true. It would also be nice if I didn’t have to lock my car in a parking garage.
Incentives drive behavior. If you incentivize creatives with awards, they will naturally work to win them. As Spike says in his post, “it’s nice to win – I won’t lie.”
As an executive in charge of growth a fast-growth business, you cannot afford to delegate your strategic approach to people incentivized by anything other than your interests. (Side note, I don’t know the work Brains on Fire does personally, and I don’t mean to say that they don’t have their client’s best interests in mind).
I am a big fan of good creative work and of good design. Creatives, well managed, are a tremendous advantage to a business – just make sure you are managing them, not the other way around.
Align Your Go-To-Market Model with Your Client’s Value Segment
A theme throughout everything that I write is the need to create value in every aspect of a company’s go-to-market strategy. Several comments that I’ve received to previous posts have made me realize I need to explain more what I mean when I say value. This is a brief version of an article I’ve written before.
People define value in many ways. One of the best ways companies can differentiate themselves is to hone in on the unique value definitions each customer has. However, before you can hone in on a unique value definition effectively, you must understand that there are two value-segments into which your customers fall: fundamental value and total value. Fundamental value focuses exclusively on the product/service itself. Total value focuses on the product/service and potential areas of value beyond the product/service.
A fundamental-value customer would not be interested in the wisdom a salesperson, advisor, or company has developed. Fundamental-value buyers are only interested in the product or service; there is no additional value that can be offered to them. Moreover, fundamental-value buyers often feel they are qualified to discern the differences between options and to understand the implications of their decisions. They are not necessarily qualified to make those decisions, but that does not matter.
Total-value customers are different. They may be open to a company’s wisdom or insights. They may want to hear how they can apply solutions in a different manner. In addition to the value that lies within the product or service, total-value customers are interested in value-added offerings.
You must structure your sales effort so that it matches your customer’s value segment. In other words, you must align your sales model with your customer’s definition of value. When selling to fundamental-value customers, your focus should be on reducing the costs associated with buying. As I said, the maximum value you can provide to this customer is limited to the value that lies within the product or service. The only way to improve the cost/reward equation is to reduce the total cost of purchasing. This does not mean that you need to sell your product at the lowest price. It does mean you need to pay extra special attention to all the costs associated with purchases: hard and soft, direct and indirect. This can impact your sales process by reducing the interaction between salespeople and customers. Sometimes, it may mean eliminating your sales force altogether. Dell is perhaps the greatest practitioner of this concept in manufacturing. Travelocity applies this principle well in the services sector through their sale of airline tickets and vacations.
When dealing with total-value customers the focus should be on maximizing the reward, as well as controlling costs. With these customers you’ll want to focus on a value-added process; you can increase value independent of the product, enabling you to work on both the reward and cost side of the value equation.
No matter how hard you work or how much money you spend on marketing, a misaligned sales model will not work. When a sales organization emerges applies a sales model that does not align with the customer’s value segment failure awaits.
Geoffrey Moore Nails It – Again
I just started reading Geoffrey Moore’s new book Dealing with Darwin and he nailed a point I’ve been preaching for years. It’s so valuable, I had to share it. Here it is:
To succeed with [innovation] you must take your value proposition to such an extreme that competitors either cannot or will not follow.
What promise is your company making that no one else in your industry would have the guts to match?
Thoughts On “The Ice Cream Maker”
Every now and then, several people tell me about a book at the same time. When this happens, I find that it’s a good thing to read it. This happened recently with The Ice Cream Maker, by Subir Chowdhury.
The book was a simple read and contained many pithy quotes and thoughts – nothing new in a parable (even my own). I don’t disagree with the need to pay attention to quality, empower your workforce, or to listen to our customers (with some exceptions).
The danger of this book is that if you follow its simple advice, you throw yourself smack in the middle of the commoditization trap. The book treats multiple situations with the same medicine. As I’ve mentioned in a previous article there are two value segments that people fall into: fundamental value or total value. Following this book’s recommendation would force you to implement a fundamental value proposition — whether that is right for you or not. Once you find yourself working with that value proposition, commoditization awaits.
The book also goes far a field in stating its argument. One of its main points is that “Quality is not part of [America’s] DNA.” The author claims that America is an innovator, but “As a result [of our lack of quality DNA] we’re constantly creating new products, and new markets, only to lose them to other companies. American companies find themselves on a treadmill, constantly having to come up with new innovations in order to stay ahead of our competition.”
This argument is insane. Certainly, the world is stepping up in the competitive landscape. Certainly, America cannot rest on its laurels as it has at times (and does today). The treadmill Chowdhury refers to has nothing to do with quality – the treadmill is staying ahead of commoditization. What America has in its DNA is demand creation. America focuses on high-margin activities and out sources low-margin activities to other countries. It’s a natural result of business evolution. Any business that forgets the power of commoditization, and the need to stay ahead of it, has only itself to blame for failing.
That’s my read, feel free to e-mail me your comments.
Until next time, Doug
A Follow Up On My Coffee Shop Experience
Regarding my Dec 22, 2005, posting – “Never Forget The Core Reason Why People Buy From You” — Over the last couple of weeks, I’ve received several e-mails asking two questions about the problem I had at my favorite local coffee shop:
1. How did it turn out, and
2. Did I share my observations with the new owner.
I did share my observations with the new owner and my favorite barista. I gave them some advice on systems they could create to make sure they don’t run out of coffee.
The new systems have improved the situation somewhat, but they have not solved the problem yet. In an effort to ‘be customer focused’, they have introduced far too much complexity and they haven’t trained the staff adequately to manage it. I’m sticking with them though.
Until next time, Doug
As always, feel free to e-mail your comments.
How’s This For a Dating Strategy?
Scene: first date dinner, nice restaurant
Hi, my name is Doug, before we start let me tell you a little bit about me and my dating philosophy. I graduated from college in 1989 and since that time I’ve worked in a variety of businesses, mostly as an owner, but at times as an employee. You’ll find that I’m different from most guys out there in three ways…
How am I doing? Has my date left already? It’s silly, isn’t it? No one in his or her right mind would ever use a strategy like this when trying to build a relationship.
Yet this is exactly what industrial-age sales and marketing strategies tell us to do. Whether it’s called a marketing statement, a reference story, credibility building, or anything else — it’s crap.
Developing a long-term, profitable relationship with a customer is like building any other long-term, profitable relationship. Getting customers today is too difficult for the relationship to be short-term. Many of my clients spend as much as 12-18 months worth of projected client revenue in total costs to acquire new clients. They understand that the lifetime value of a client is more important that any single transaction. They also know that getting the right clients is as important as getting clients.
Marketers and salespeople need to stop trying to get their prospects to understand their company – they need to start making their clients feel understood.
The foundation of any relationship is trust. Trust is created when the person you are dealing with feels that you understand them better than they understand themselves. Transform your go-to-market (dating) strategy from getting them to understand you to one that demonstrates you understand them.
Then again, there’s always the divorce court…
Until next time,
Doug
PS. If you’d like a copy of a workbook I use with clients to help them reorient their ‘dating’ strategy, just e-mail me and tell me what it is you do.
Building The Bridge: A Story About How to Cut Your Sales Cycle In Half
Imagine Media, the publishing arm of The Imagine Companies, has released a new book titled, “Building The Bridge,” the first in a new series of business education novellas written for entrepreneurs building fast-growth businesses.
The novella tells the story of Eddie, a successful financial advisor who is stuck in the trap of commoditization. The story follows Eddie as he discovers how to reignite his career by becoming an expert in the solving the problems his clients face instead of using the traditional strategy of only being an expert on the solutions he offers.
The series is written as a guide for entrepreneurs and sales professionals and is based on Doug’s decades of success in overly commoditized markets. Copies are available at www.imaginellc.com/resources/knowledge-products.htm.
Davidoff is the founder of the Imaging Companies, a Maryland-based international business consulting firm and author of three previous books and co-author of “Parenting the Office.” His “Intelligent Growth” programs have helped hundreds of companies transform their sales process into one that creates value for customers.
Great Stuff on Carnival of Marketing
Noah Kagan’s creation, carnival of marketing, is being hosted this week by Louis Gudema at Magic Hour Communicaations. We’ve been honored again to have one of my posts selected. Louis has picked out some very interesting posts covering a wide variety of interests. We’ll be hosting The Carnival the week of May 7th. I encourage you to check it out.
Saving Customers Money Is Good. Creating Value For Them Is Better.
I received an insightful comment on my posting, “The Hidden Truth About Creating Value.” The reader took issue with my definition that value, in business, can only be defined as creating something that customers are willing to pay a premium for. Here is what he said:
I am currently in the process of building my own company and I will be not only providing a greater value for my American customers [he is international], but I’ll be doing it at a lower price. What I’m doing is truly creative destruction, so perhaps that should be added as the ‘exception to the rule’ of your value ‘definition’. Otherwise, I’d be inclined to agree with it.
His comment brought to my attention a clarification I need to make in my definition of value. For more details on this, read this article. ‘Paying more’ is more about margins more than it is about price. For example, Wal-Mart sells things for more (even though their customers pay less there than at many of their competitors). Wal-Mart is capturing more profit per transaction than their competitors. Therefore they are creating value.
There is a critical point for any business to understand about this issue. The comment and clarification deal with fundamental value buyers. Fundamental value buyers only see value from within the offering. A company selling to these buyers would not call itself a ‘value-added’ provider. The focus is on removing costs and passing a portion of the savings to its customers (the rest of the savings is left to add to the margins).
The definition of value from my previous post is directed toward company’s that sell to total value buyers; for companies who claim to ‘create value’ for their customers. The advantage of this approach is that the upside is unlimited and it allows for more innovation. As Thomas Freidman, noted New York Times columnist likes to say:
“A commodity is any good, service or process that can be produced by any number of firms and the only distinguishing feature between these firms is who can do it cheapest. Having your product or service turned into a commodity is no fun, because it means your profit margins will become razor thin, you will have dozens of competitors and all you can do is every day make that product or service cheaper and sell more of it than the next guy, or die.”
Thanks for pointing out the inconsistency. As always, please feel free to e-mail me your comments.
Until next time, Doug
Rules to Live By
I was cleaning my office this past weekend and came across these rules. I felt they were worth sharing. I forget who gave them to me. Whoever it was, thank you.
Thirteen rules for life – Thirteen New Rules for Living By Frederic M. Hudson, Ph.D. and Pamela McLean, Ph.D.
1. No one owes you anything – not the government, your employer, your family, although the world around you is less and less definite and predictable, it is no less valuable and mysterious. To rejoice in living, you must invent your own future, entrepreneur your life, and expect surprises.
2. Global change is the major force in your life, and in the lives of everyone on earth. We are all in training for a new era for all humanity. Don’t whine about it. Take advantage of the expanding possibilities now available to you in our world of constant flow.
3. You have no ultimate safety, security or guarantees, so don’t expect any. What you have are endless opportunities to rearrange your priorities for work, play, and life. Choose wisely, and expect more choices to follow.
4. Your life is an adventure, a journey through time. There are no lasting arrival points and no lasting endings. Learn how to say “hello” and “goodbye” with grace and style. Everything is flow–you just keep moving. Prepare now for the long haul of ninety years or more. But live in the present, day by day.
5. Know how to recycle yourself. Live each chapter of your life fully, then invest in a transition and begin the next chapter. Weave, unravel, and reweave your life, over and over. No matter what your age or situation, design your future as your manifest destiny.
6. You are your career, a portfolio of ever-changing talents, skills and preferences. Design your own work, over and over again, connected to the futures you prefer.
7. Refuse to be defined and consumed by your career/work. It’s an important part of the whole journey, but it’s not the journey itself. Your deepest agenda is your soul’s work, your holistic callings to create success and caring in all the parts of your life.
8. There are two prerequisites for taking this journey through life: Continuous care for your body and your finances. You don’t have to be perfectly fit or wealthy to have a great life, but you need a body that supports your dreams, and funding to make your dreams happen. Master nutrition, exercise, and financial planning.
9. The best way to guide your life through infinite change is to follow your own values and vision. Like a rudder, your values will keep you on a course your integrity prefers. Like a sail, your vision will pull you ahead into legitimate expectations.
10. Your best future happens when you have the courage to be: reach, learn, risk, dare, leap. Embrace the unknown ahead. Live on the outer edge of your possibilities, not on the inner edge of your security. Be active, not passive.
11. Here is how to conduct your journey: Have a long-term purpose with short-term goals. Be definite and flexible. Trust the ocean but stay in charge of your boat. Ride the waves.
12. Everyone on earth is linked to the same destiny. We share the same air, water, food, and capacities for total destruction. We are in each other’s hands, one for all and all for one.
13. Learn how to grow older and better. Achieve mastery as a human being– model wholeness, wisdom, and caring. Be grateful. Leave a legacy that makes a difference.
Until next time, Doug
Let me know the rules you live by. Just e-mail me.
The Opposite of a Remarkable Experience
Seth Godin got’s a great example of how the little things kill a client experience – the opposite of a Four Seasons experience from a Four Season’s competitor. It’s two posts so click here and here.
Congrats Steelers & A Riff on Super Bowl Advertising
It is no secret to anyone who reads The Fast Growth Blog or anything else I write that I am no fan of traditional advertising. Previously, I riffed on the fact that Madison Avenue doesn’t get it. I talked about the fact that advertisers need to stop manipulating viewers and wasting our time with meaningless noise.
In honor of yesterday’s Super Bowl, I’d like to point out two things:
1 – People will watch advertising if you make it worth watching. At Super Bowl parties all the around the country, the unusual ritual of people paying more attention to the ads than the program was in evidence, yet again.
2 – Even if they watch, meaningless entertainment is still meaningless. Companies could have taken their $2.5 million per ad and invested it in making their offerings worth buying. Sure, the advertising may have (and I repeat may have) created some awareness. Unless you’re looking for a one-night stand with your customers, who cares? Today, neither great companies nor growth are created because of advertising. The Super Bowl proves that people will watch advertising, but how did that work out for the dot-coms?
I’d rant on, but there are two takes on this that I think are right on, no need for me to add to. I encourage you to look at Spike Jones’ recent post about The Little Things, on the Brains on Fire Blog and John Moore’s audio blog about the Super Bowl singles club on Brand Autopsy’s Blog.
Until next time, Doug
Imagine Business Development & Clients Featured In SmartCEO Magazine
Imagine Business Development and two of its clients were featured in Washington SmartCEO’s February issue. In the article, What Color Is Your Ocean, Doug Davidoff, founder and President, is quoted on his experience helping companies create new markets that allowed them to accelerate their growth in highly competitive markets.
In addition to Doug, two of Imagine’s clients, Bob Corlett of Staffing Advisors and Mike MacNair of MacNair Travel Management, were focused. Timothy Burn, editor of Washington SmartCEO, focused on the actions that each business took to create new markets within existing, highly commoditzed ones.
The article is instructional to any business that is trying to accelerate its growth, differentiate itself from the competition or learn new ways to compete. It can be downloaded from Washington SmartCEO’s website or by clicking here.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
