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Want To Create Value? Change Your Focus!
I have two definitions of value that drive everything I do:
- The first is: You create value when you do something that people would be willing to pay for. This is the underlying definition that supports everything I’ve written about creating value in the business development process.
- The second is: Value is created when a problem that would not otherwise be solved is solved. This is the definition that supports the concept that by turning your offering into a ‘prescription drug’, you escape commoditization.
It is the second definition that I wish to highlight here. Too often, sellers make the mistake of looking at the problems their customers face from their own perspective rather than the buyer’s. They assume there is inherent value in their offering and all they have to do is make the prospect see it. This is communicating value, not creating it. They tend to focus on process or product problems. The problem is, buyers have results problems – either results they are failing to get or results they want to improve upon. They could care less about about having a better process or product. When the focus of a conversation with a prospect is strictly about communicating the value of a process or product, commoditization occurs. But when the conversation focuses on the results can be achieved once the process or product problem is solved, that’s when you begin to become valuable in a client’s eyes.
Companies big (such as IBM, GE, Honeywell) and small (Staffing Advisors, TPO, Capital Relocation Services) have realized that they merely delivering an excellent offering does not create value. These companies have discovered that they only create real value when their clients get results!
Remember, your offering is a commodity. It is the results your offering creates that differentiates you. It is your wisdom (your ability to apply the knowledge you have acquired to enable clients to achieve results) that makes people sit up and take notice.
So, stop focusing on your products and start focusing on applying your wisdom to a client’s problems.
What American Airlines Can Teach Us
The airline industry is one of the most commoditized industries in the world. From a marketing perspective, the airlines’ biggest challenge is that they are virtually unable to create demand.
This article by George Will highlights a challenge we should all be aware of and it is worth reading (while it does not deal with commoditzation directly).
Here’s what I found most interesting. Gerard Arpy, American Airlines’ CEO, says, two considerations determine the choices of most air travelers — schedule and price. The Internet has simplified comparing prices over every route, and, he says, a price difference of even $3 will drive people elsewhere, “no matter how strong your brand, or how good your product.”
If you fail to create value IN EVERYTHING YOU DO, the distance between you and an airline is shrinking.
Do You Know What Keeps Your Customers Up At Night?
How much time do you spend within your company talking about what the world looks through your customer’s eyes? Do you spend more time talking about the products or services you peddle than you do trying to discover what your customers worry about? And by worry, I don’t mean what they complain about. I mean what they worry about most. What wakes them up in the middle of the night? Remember, most of the things your customers truly worry about have little to nothing [to do with your offering]. Your job is to connect what you have to offer – legitimately — to what it is that your prospects are actually worried about. This is value creation.
I have written (here, here here, and here) many times about how difficult it is to get people’s attention. I believe it is the single biggest challenge facing every sales force today. How can we create value for people who will not even listen to what we have to say? How do you get a prospect’s attention?value
I’ve ranted in the past against ‘solution selling.’ It’s important to remember that your ‘solution’ is a commodity. There are more choices and alternatives out there than a buyer can handle that will ‘solve’ whatever the problem your offering claims to solve. The sad reality is that the vast majority of ‘solutions’ have far more to do with the seller’s world then the buyer’s.
Frankly, buyers are tired of listening to sellers babble about their solutions anyway. As more and more messages claim great benefits (that never seem to appear), buyers have shut down. ‘Thank you,’ they say to themselves, ‘I’ll figure out what I need without you.’ There are companies, however, that realized that this is not the life most buyers want. It’s just that most buyers feel as though they have no choice.
If, instead of bantering about what it is that you do, you demonstrate you understand what it is your clients worry about, you”ll get their attention and demonstrate your abilities – all at the same time.
Hertz – Not Exactly
I was recently on a business trip to Chicago to make a presentation. I am a member of Hertz’s #1 Club Gold program (a great creation). My flight got in a little late, but I was confident that my time would be made up with a seamless car rental experience.
I briefly stopped at the Hertz desk in the airport to confirm that I should proceed directly to the bus and to confirm where the bus stopped. The Hertz agent casually nodded, and I proceeded to the bus. Getting on the bus was a non-event and the driver announced that we would be shortly arriving at the rental area and that they first stop will be for #1 Club Gold.
The bus pulled over and the driver announced that if our name were not up on the board that we should stay on the bus and go the check-in center. Needless to say, my name was not on the board. Disappointed and a little frustrated, I asked the driver what the problem was. His response was, “Oh, nothing. It just means they haven’t printed your agreement yet.” Hungry and looking forward to getting on the road to my hotel, I entered the Hertz rental check-in center.
I thought I’d entered a Hertz commercial in the example of what Hertz isn’t. There were about 30 people in a line that didn’t appear to be moving. I went to the sign for #1 Club and was told to stand in the line. Apparently Hertz’s computers were down and they were unable to process rentals automatically. Every rental agreement had to be written from scratch using their old paper systems. More than an hour later, I was on the road.
Don’t get me wrong, I understand that everything doesn’t work all of the time. I am not upset at Hertz because their computers went down, nor am I upset at them because it took me more than an hour to do what should have taken less than five minutes. I’m upset because of how they handled the entire process. Remember, this is a company whose promise is ‘Exactly.’
Here’s how they could have improved the experience:
- The counter agent in the terminal could have explained that there was a computer outage and that the rental may take longer than normal. In the absence of that, she could have gone to the check-in center to add another hand.
- The bus driver could have alerted us to a problem and explained that what was about to happen was unusual.
- Had the counter agent or the bus driver alerted us to the problem, we could have chosen whether we wanted to make alternate arrangements.
- Upon arrival to the check-in center, Hertz could have had non-rental agent personnel keeping clients up-to-date with what was happening and how long the wait was going to be.
- They could have handed out #’s so that we wouldn’t have to wait arbitrarily in a line. They could have gone out and gotten coffee, provided snacks, ordered pizza – done anything to demonstrate that they knew this was a meaningful inconvenience and communicated that “we’re all in this together.”
- Most importantly, Hertz’s rental agents could have been less dismissive and far more empathetic to those (including, but not limited to, me) who asked what was going on. Hertz makes a promise, we assume they will keep it and when they don’t, we have a right to a reasonable and kindly explanation. While I understand how swamped these rental agents were, a smile goes a long way.
Hertz makes a compelling promise, and typically they keep it. However, I am a firm believer that you learn the truth about a company when something goes wrong. Hertz has failed to provide something to ensure that its employees live their promise, whether it’s adequate training, a supportive atmosphere, effective managers, I don’t know.
Take this opportunity to survey your business – how do you handle things when they go wrong. Does it demonstrate your commitment to your promise? Create a fire drill (simulate a problem) – see how your people respond. I know I will.
Most Messages Are Meaningless
Last year, I presented a proposal to a prospect, who is now one of my favorite clients. The conversation got around to messaging and my prospective client told me cynically that he did not believe that a ‘fresh message’ could be created in his industry. He told me that everything that could be promised had been promised. Today, his company has a message that he is very excited about.
The mistake my client made is a typical one people make in marketing circles. For a message to be effective, it must be fully integrated into every aspect of a company’s culture, processes and actions. Messaging is a strategic exercise that literally impacts every facet of an organization. The key to making your message work is to ensure that there is complete alignment behind it.
For example, if you tell people that you take an innovative approach to solving your customers’ problems; and the first interaction a potential client has with you is no different from any other company they’ve come in contact with – how likely is it that the customer will believe your message? If your Value Proposition Foundation is Customer Intimacy, yet your salespeople sell as if every prospect is the same, the reality is that your customers will not trust you or believe your message.
The challenge businesses face is that alignment is a fragile thing. A slight difference between your message, your actions and your processes thrusts you into the trap of commoditization. So, take a look at what you are telling people makes you so great and ask yourself – are we completely aligned behind it?
Putting Customers At The Center
Peter Drucker often talked about the fact that a customer is everyone’s boss. Enlightened companies have been finding new ways to engage their customers and to build relationships with them. Frederick Reichheld has written about the impact loyalty can have on your growth.
With that in mind, I encourage you to read True Believers in Business Week’s SmallBiz Magazine. It focuses on several companies that have put their customers at the center of their growth plans. I can’t promise the companies will directly relate to yours. I can promise it will give you some good thoughts.
To Attract The Right Prospects, Be Willing to Repel The Wrong Ones
I’ve just returned from a meeting with a group of other fast-growth entrepreneurs.
Many of these executives are struggling with a common problem. Each of them have an offering worthy of attention – but their message fails to grab the attention their offering deserves. As I see it, their problem is that they are only focusing on half of what it takes to develop a great message.
It seems these entrepreneurs have forgotten (or maybe they never knew) that a great message does two things equally well:
- it attracts the right prospects
- it repels the wrong ones
Most executives and their marketing teams focus only on attraction. Working on the theory that any attention they get is good, they attempt to cast as broad a net as possible in hopes of attracting more opportunities. While on the surface, this seems to make sense, but realistically, trying to “be all things to all people” only brings you problems (wasted resources, long sales cycles, and clients that aren’t a good fit, for example). What’s even worse, in today’s over-stimulated world, this unfocused approach results in a message that may not offend anybody, but doesn’t attract anybody either.
Unless you focus manically on attracting more of your Best Few clients to the exclusion of all others, you can’t hope to establish an identity. Think about it – we admire people who stand for something and are consistent in their beliefs even if we don’t agree with them. We tend to mistrust people who buddy up to us when we know they know we have nothing in common.
So, while developing a great message will never be as simple as 1-2-3, here are some basic steps to start improving yours.
- Determine who your message is supposed to attract. This means you must define your Best Few clients. What common attributes do your Best Few clients have?
- Determine who your message is supposed to repel. Who are the ‘prospects’ that exist in your market that you do not want to attract. What common attributes do these people share?
- What are the differences between your list from question #1 and from question 2?
- How can you deliver a message that demonstrates you clearly understand your Best Few markets?
Answer these four questions, then take a look at your current messaging materials. Are you deliberately pushing away people who are not potentially good clients? You better be. It will make your messaging more focused and build more of a bond with the prospects you really want.
Rapid Prototyping
I was talking with a client of mine this morning about my comments about embracing mistakes. In my conversation, I realized I left one glaring area of potential misunderstanding. While I reiterate my previous comments, I want to add that it is important to control how you make mistakes. I do this with a practice I call rapid prototyping.
When I have a new idea, or a new approach that I want to take to market, I choose a select group of potential buyers and test out the idea, offering or process on them. I only test the idea on people who have the ability to adopt what I am offering. This may be a select group of clients, prospects or a mix.
I go into the effort with certain assumptions and then I compare the results I get with the assumptions I had. After that, I’ll refine, change or scrap the effort. Assuming I don’t scrap it, I’ll choose another group to test the refined effort upon and repeat it until I feel it is ‘dialed-in’ and ready for a full implementation.
By taking this approach, I am able to get things going out quickly – thus I am able to quickly fix my mistakes. Because I am testing on small groups, I don’t risk blowing a big opportunity.
Want Fast Growth In 2007 – Don’t Push For Too Much Too Soon
The beauty of a new year is that we all begin at zero and anything is possible. Our revenue goals have been set, our planning is done (okay – almost done) and now it’s time to execute.
The danger for most fast-growth companies is that often we push too hard – too fast. Ala Veruka Salt – we want growth and we want it now.
Willy Wonka also teaches us that the only thing more valuable than a golden egg (your revenue or profits) is the goose that lays them (your organization). The push for too much, too soon, leads to decisions that can hurt, or even kill your goose.
This is not a call to reduce or eliminate aggressive goals – I am a HUGE proponent of Big, Hairy Audacious Goals (B-HAGs). This is a call to remember that your goals – no matter how important – are not the same things as your purpose, or your value proposition. It is a reminder that becoming a slave to your goals is not a formula for success, for even if you achieve the goal in the short-term, you may irreparably harm the long-term, and the real profits are in the long-term.
It was Peter Drucker who warned that most businesses don’t go out of business because of starvation (or a lack of growth), they go out of business because of indigestion (taking on too much).
Here’s to a year of fast-growth – and remember keep your goose healthy.
Why Warren Buffet Is Wrong
A client company recently hired a new salesperson. She’s got a ton of talent and she is very excited about her new opportunity. We had completed the first phase of Third Wave Selling training, and I was coaching her in preparation for her ‘going live.’
She was filled with questions (a good thing coming from a salesperson). Her questions all revolved around whether or not something would work. When I advised her that there was only one way to find out (which was to go out and do it), she was less than enthused. She replied, “Just tell me what to do and I’ll do it.”
This led to a lengthy conversation about mistakes. She agreed with me that she was trying to avoid making mistakes. I expressed to her that this was the wrong objective. At that point, she was perplexed, as I imagine many of you may be. Isn’t the whole point of our investment of time and money in training and knowledge for the purpose of making fewer mistakes? After all, it was the Oracle of Omaha himself (Warren Buffet) who is famous for having said, “I am suspicious of anyone who talks of learning from his (or her) own mistakes. The trick is to learn from other people’s mistakes.”
The short answer is ‘No!” While I agree with Mr. Buffet that is a good thing to learn from others’ mistakes, when it comes to fast-growth and going-to-market, I am suspicious of anyone who does not embrace mistakes. Mistakes are a part of growing. We all know we are going to make them, and we should all spend less time trying to avoid them. My greatest breakthroughs are as a result of grand mistakes that I or my company have made.
Whether it’s Thomas Watson, founder of IBM, who said that if you want to increase your level of success, fail more; or business consultant, coach and former President of Velcro, USA, Tom Potterfield who noted in a recent article – “Make mistakes. Make them fast. Fix them fast.”
As you go into the new year don’t fear mistakes. Embrace them. Remember, the company that is comfortable with mistakes, and fixes them fast, is out there competing in the market while the company uncomfortable with mistakes is back in the board room trying to ‘figure it out.’
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
