The (Internal) Marketing Plan: Bridging the Gap Between Product Development & Sales

Written by Dora Cheatham, Program Manager, Emerging Enterprise Center

 

How often has a new product been launched and the Sales Team been tasked with the “simple” directive to “go sell” it, armed with little more than a data sheet and price list? One year later, everyone wonders why the sales figures never quite match the numbers projected by Marketing.

An ideal product launch should not only focus on marketing the product to the customer, but also on “marketing” the product internally to assist the Sales Team optimize its sales efforts. Too often, focus is placed on selling to the customer, without effectively training the sales team in the nuances of a product that requires more than just the presentation of features and benefits.

As technologies develop and products become more complex, the more information the Sales Team has on the product, the better they will be able to answer questions knowledgeably and overcome obstacles when working with their customers. Similarly, data gathered by the Sales Team should be cycled back to Marketing to ensure that product is being received and is performing as expected, and any potential issues or improvements can immediately be fed back to the Product Development Team.

 

 

Remember that the sales team is on the front line, so a Marketing Plan or Commercialization Plan should include an element that arms the sales team with as many preemptive answers as possible so that he or she can present the company’s expertise effectively and deliver a consistent product message. So what should be included in this Plan?

Product Positioning

Make sure your sales team understands how and why your product is positioned the way it is. If the product was developed as the result of a recurring problem expressed by several customers, make sure the whole team is aware of it. Just because a customer hasn’t expressed the particular problem, doesn’t mean they haven’t experienced it! If it was developed as the result of a new technology that makes the customer’s job easier, make sure they know it.

If you want your sales team to sell on value rather than price, then you need to make sure they understand the intrinsic value of the product and its benefit to the customer, not just its features and price. What problem does it solve? Will it make the customer more effective? Will it save time or labor?

Target Market

Make sure everyone is on board with precisely which customer segment(s) constitutes the target market, and that the sales team understands the criteria on which the potential market size was developed. If the numbers were developed based on a specific application, and a particular customer ends up using the product differently (it has been known to happen), this is critical information that should be fed back to Marketing and Product Development for further evaluation. Was the original data based on a false premise (hopefully this is never the case), or is this a viable alternative application? If so, can this application be extended across the entire market in which case the potential market has just increased and the information should be distributed to the entire sales team!

Competitive Landscape

What competitive products is your sales team likely to come up against? How does the product perform against these products? How are competitive products used versus pricing? Having spent many years in the chemical industry, I have learned that one of the first things to check for is the dilution rates of chemicals: if a product costs $10.00/litre and needs to be diluted at 1:2, it is NOT cheaper than a $50.00/litre product that can be diluted at 1:12 and offers comparable performance!

Sales Tools

 

 

Don’t just send the sales team off with a data sheet and price list. Testimonials, value calculators, editable presentations, how-to’s and trial protocols (if applicable) all help the sales team present a professional, polished image of a company that understands its market and is working with their customer to help them make an informed purchase.

Product Availability

If the product or service you are offering has customization options, make sure your sales team is fully aware of the criteria for customization: options, minimums, lead times and other requirements. As Carla O’Dell once said, “If you don’t give people information, they’ll make something up to fill the void”, and too often it’s something along the lines of “Of course you can have that in 2 weeks!” This not only creates chaos for the Product Development and Operations teams but can set unrealistic expectations as far as the customer is concerned. Most customers would rather have a realistic 6 week lead time, than constantly be given reasons why an unrealistic 2 week lead time could not be met!

As a final note, while many companies focus on training upon recruitment, they fail to continue this training as products and markets evolve, yet studies have shown that proper training can boost a salesperson’s productivity by 20% and profit margins by much more!

How does Your Business Grow?

Written by Dora Cheatham, Program Manager, Emerging Enterprise Center

 

INNOVATE OR DIE has become a 21st century mantra, and rightly so. Today’s globe is smaller than ever, communications are instantaneous, competition is fierce and market expectations are high and ever-changing. Innovation is therefore a prerequisite for survival.

But what is this seeming “answer to all ills” that we call innovation? How do we make it succeed? And how do we do so while simultaneously meeting various business and ROI criteria that may be imposed upon us and are often at odds with a long term innovation strategy?

When we speak of innovation, many people immediately think of breakthrough developments that changed the course of the marketplace, industry or even history: the automobile, the telephone, the microchip, iTunes. However, innovation can be as simple as changing packaging, repositioning a product, or moving into an adjacent business space. Just yesterday, we saw the release of the 6th version of the iPhone together with the Apple watch: earth shattering? Maybe not, but people were standing in line for the new version of the phone and analysts are expecting a bullish next few months for Apple.

Some may think that this dilutes the concept of innovation, but a successful – and cost-effective – innovation strategy should incorporate a range of development projects that not only works towards breakthrough products and technologies, but also allocates resources to the improvement of existing products, the expansion of existing products into new markets, and the development of existing technologies into new products.

One of the best illustrations of this concept is Bansi Nagji and Geoff Tuff’s “Innovation Ambition Matrix”. Following a review of a number of high performing firms, Nagji and Tuff noted that on average, these firms allocated investments in similar ratios: 70% on the improvement of existing products or core, 20% on the expansion or existing products into new areas, 10% on breakthrough innovation. Their findings also showed that the return ratios were the direct inverse to the investment percentages. While breakthrough innovations yielded a greater return, core innovations required less time and money to develop, and as a rule were more readily accepted by the end user.

By understanding and defining innovation in terms of all of these elements – and not just breakthrough products – creating a growth strategy and implementing a new product development process that fits in with a firm’s core competences makes the entire concept of innovation, while no less daunting, certainly far more manageable and sustainable.

This also makes the concept of innovation far easier to disseminate throughout the organization so that it becomes a part of the organizational culture. When employees understand that innovation need not necessarily be limited to R&D or Engineering, they are more likely to contribute ideas that – while they may not lead to breakthrough products – could certainly lead to product improvements or cost reductions.

Redefining Profit Drivers

Additional routes to growth and innovation should also involve taking an objective view of your business model to clearly understand your profit drivers as they relate to your customers’ needs. This can prove a valuable tool and may lead to a reassessment of your market metrics and a redefinition of how you position your product and/or services and better align your offering to customer needs. We are seeing this more and more as businesses strive to offer insights and solutions rather than individual products.

 Free up Resources by Controlling Hidden Costs

While all of this is going on, there is one more important element that should be incorporated in the innovation process – and that is the regular and consistent review and maintenance of the existing product portfolio. Are the products still relevant and in demand? Are there any weak or inefficient products that could or should be repositioned, improved, or even removed to make way for newer products? Maintenance of inefficient products is a hidden cost and resource drain in many organizations. To allow innovation to function at its most effective, these resources should be freed up in order to be allocated to efforts that add greater long term value.

Strategy x Execution = Success

 

Of course – as with all strategies and my own personal mantra – it’s not just about the strategy but about the implementation and execution of that strategy. Often strategies fail – be they innovation, business, market or product strategies – not necessarily because the strategy itself is flawed but because the implementation and execution is flawed. As the entrepreneur Naveen Jain once said

“Success doesn’t necessarily come from breakthrough innovation but from flawless execution. A great strategy alone won’t win a game or battle; the win comes from basic blocking and tackling.”

Market Segmentation: Understanding Your Customers

Written by Dora Cheatham, Program Manager, Emerging Enterprise Center

“Any color-so long as it’s black.”  Why Henry Ford’s famous quote is no longer relevant.

When we utter Ford’s words today, they are often said in jest. Ford lived in a time of limited competition and his goal was straightforward:  minimize costs through mass production.  And the consumer was more than happy with the deal.  Today’s consumer is different:  he wants choice, lots of it, and with the proliferation of brands and channels, it’s there for the taking.  Whether you are a business or non-profit organization, selling a product or a service,  by segmenting  your market and customers into groups with similar needs and buying criteria, then adjusting your marketing mix to meet the needs of each group,  you enhance 

THE 5 CRITERIA FOR EFFECTIVE SEGMENTATION

  1. HOMOGENOUS—the needs within each segment should be               homogeneous within the segment and different from the other        segments.
  2. IDENTIFIABLE– the customers within the segment must be identifiable and specific.
  3. PROFITABLE—The more segments identified, the greater the opportunity to offer a targeted high value offer.  However, the number of segments identified should be balanced against the cost to serve those segments.
  4. ACCESSIBLE—the customers in the segments should be readily accessible in order to be able to serve effectively.
  5. ACTIONABLE—the segmentation should be such that the company can act on the segmentation to implement appropriate programs for each segment.

Once segmented, the business can then determine its business and marketing strategy on the segments themselves—their size, growth and profitability—the competition and the capabilities of the business.  Which segment(s) will you focus on?  Which segment(s) offer the greatest growth/profitability/maximum barriers to entry? Will your marketing mix (product, price, distribution, marketing message, processes, people) be the same for each segment or will they differ? The chart below shows the various marketing strategy options for business development based on market segmentation.

Creating and Selling Value: Creating Value: Sales & The Value Pyramid

By Dora Cheatham, Emerging Enterprise Center

Going from supplying a product that meets basic customer expectations to contributing to a client’s organization can be hard to establish and even harder to maintain, but is an invaluable strategy for long term profitability. Keeping a customer requires the creation of a relationship of mutual trust and partnership that goes beyond supplying a quality product.

Seeking to create value and a sustainable competitive advantage is increasingly difficult in today’s data-filled environment. Buyers today are educated and savvy. In the B2B world, the buyer can be 60-65% through the purchase process before he or she even makes contact with an incumbent or potential vendor. They know what’s out there and what it costs so if all you have to offer is a product that meets specifications, then you have effectively created a situation where your only option is to sell on price—and the lowest price invariably wins. That also means that as soon as a competitor emerges with the same option at a lower price, then chances are that customer is lost to the newcomer. So how can you ensure that your customer remains loyal to your product and business?

Smart Buyers Seek Value

A truly smart buyer understands the value of a vendor that contributes to the smooth running of his or her business. If you can deliver a flawless product, on-time, every time, with excellent customer service, then it behoves him to use your product—because spending time dealing with vendor-related problems and quality issues costs money and impacts his own customer service and bottom line (think about the UPS “I’m happy” ads where department managers and customers are happy thanks to UPS Logistics).

By supplying a quality product with excellent customer service you have already established some level of competitive advantage. And many companies today provide good products with good service – it is a prerequisite to staying in business. To sustain that advantage however you need to continually climb the value pyramid and add to your product in terms of additional service and knowledge, eventually making a quantum leap to the peak of the value pyramid to establish yourself as more than a vendor, but a trusted strategic partner.

Can you help lower your customers’ costs or improve their productivity? Can you help them identify new products or markets? At an even broader level, can your customers call on you for advice on operational systems and processes or strategic direction? In other words, does your customer consider you a supplier or a partner?

Schematic adapted from Doyle P. and Stern P., Marketing Management & Strategy, 4th ed., Prentice Hall

 

As you climb the value pyramid, commoditization decreases and company and product value increases, with fewer competitors able to compete at the same level. The fundamental difference between the lower and upper levels of the pyramid is distinct: to be good at the former, the salesperson and business needs to have a top quality product to sell and needs to understand his product and his own business well.

To be good at the latter, the salesperson and business needs to have an understanding not only of his own product and business, but of his customer’s business as well. He needs to understand his customer’s individual and industry needs and must excel at consultative selling, offering solutions that are of mutual benefit to both organizations. Only then can you hope to ensure an enduring partnership and long term rewards.

You don’t close a sale; you open a relationship if you want to build a long-term, successful enterprise. Patricia Fripp.

Breaking News – New Program Director Announced!

The Emerging Enterprise Center is proud to announce Dora Cheatham as the new Program Director. Dora has had a long career focused on sales, marketing and product development in a corporate setting. For the past several years, she has run her own consulting shop focused on assisting small businesses here in Delaware and throughout the region. She has also been a key player in organizational and promotional work for the Delaware Sustainable Chemistry Alliance.
Dora Cheatham was born in the UK and grew up in Europe, studying and/or working in the UK, France, Spain and Cyprus regions. She holds degrees in foreign languages and business from Thames Valley University and the University of London and speaks fluent Spanish, French and Greek.
She relocated to Delaware 25 years ago and has since held several positions in International Business Development and Marketing, most recently as International Business Development Manager with Celeste Industries Corp-a subsidiary of ITW, Inc. Where she implemented and managed New Product Development & Marketing procedures to create and commercialize new products on the global stage, generating over $5 million in new business and helping to establish Celeste Industries as a leader in aviation industry cleaning chemicals. On a local level, she has also worked as Director of Development at Kent-Sussex Industries, Milford, Delaware, where she coordinated a $2.2 million capital campaign and successfully increased non-campaign donations.
She has published several editorials for the aviation industry including:
  • “How Safe Is Your Water?”
  • “Complete Hygiene-Cleaning & the Disinfection Myth”
  • “How Green Is My Cleaner?”
Thanks to all of you for your patience and understanding during the time we have taken to search for a person to fill the role of EEC Program Director.  We are very excited to have Dora join the team at the EEC to continue to provide support, access to resources, and advice to our members.
Dora will begin work with us on Monday, June 26th. Join us in congratulating her.

Program Director, Emerging Enterprise Center

DORA CHEATHAM, Program Director, Emerging Enterprise Center
Dora Cheatham is the Program Director of the Emerging Enterprise Center. Dora has had a long career focused on sales, marketing and product development in a corporate setting. For the past several years, she has run her own consulting shop focused on assisting small businesses here in Delaware and throughout the region. She has also been a key player in organizational and promotional work for the Delaware Sustainable Chemistry Alliance.
Dora Cheatham was born in the UK and grew up in Europe, studying and/or working in the UK, France, Spain and Cyprus regions. She holds degrees in foreign languages and business from Thames Valley University and the University of London and speaks fluent Spanish, French and Greek.
She relocated to Delaware 25 years ago and has since held several positions in International Business Development and Marketing, most recently as International Business Development Manager with Celeste Industries Corp-a subsidiary of ITW, Inc. Where she implemented and managed New Product Development & Marketing procedures to create and commercialize new products on the global stage, generating over $5 million in new business and helping to establish Celeste Industries as a leader in aviation industry cleaning chemicals. On a local level, she has also worked as Director of Development at Kent-Sussex Industries, Milford, Delaware, where she coordinated a $2.2 million capital campaign and successfully increased non-campaign donations.
She has published several editorials for the aviation industry including:
  • “How Safe Is Your Water?”
  • “Complete Hygiene-Cleaning & the Disinfection Myth”
  • “How Green Is My Cleaner?”
Dora is a member of the Delaware State Chamber of Commerce, the Central Delaware Chamber of Commerce Marketing Committee, the Delaware Sustainable Chemistry Alliance Operations Team and is an active volunteer for the Biggs Museum of American Art.