Posts Tagged ‘recession’

The Wages of Fear

Wednesday, July 1st, 2009

This crisis is more difficult than anything I’ve faced professionally in my entire life. It makes me realize how fortunate I was for my first 20 work years–how protected and insulated from the business cycle I was.

As I began my work career in 1984 for GTE, I envisioned, like the preceding generation, that I would eventually retire from that company. “You are the future leaders of GTE,” managers told the group of new hires into their management-training program, and I believed it. I even felt that someday I could be CEO of GTE.

Six years later, I left, entranced by the possibility of a startup. I loved the small team size, the direct connection between my performance and the company’s results. We had all-employee meetings standing up in the lab.

Less than two years later, it was apparent that the dream of riches wasn’t to be (a good lesson; I didn’t realize then how rarely startup dreams convert into riches).

Next step was EDS, a gigantic company, though I was in a remote outpost (Boston) which made working for a mammoth corporation much more palatable. The work concerned cellular telephony. (At the time, handsets were called “bricks,” and were nearly as heavy. They cost $1000.) The industry grew so quickly that there was plenty of new business for all comers. I was in marketing now, product management, where I developed my love for launching new products. I made lots of mistakes there, and I learned a ton, eventually developing a specialty helping salespeople structure, price and communicate complex outsourcing deals.

But in 1997 EDS started to retrench in telecom, and I had spent enough time in Boston. I moved to Atlanta, had a brief cup of coffee with Alltel (that’s another story) which I will cherish forever because I met my wife there, and was recruited to join LHS, an IPO wonder story.

LHS was a crazy place, full of conflicts, overcommitted, with everyone checking the stock price on Yahoo five times a day. I loved it. I managed alliances with Airtouch, Logica and others. I helped close some important deals and learned about the give and take required to create and sustain a successful alliance–as well as lots of lessons about what not to do.

Then LHS was sold, and the buyer offered me a lame marketing position. Not for me. My wife and I were looking to move north, closer to relatives, when a job opening came up at a telecom billing provider near Harrisburg, PA. It was a chance to report to a CEO, be a part owner of a company, and get pretty close to the top (as close, I learned, as I wanted to get).

Of course, this was in 2000. The tech bubble had burst, and all the telecom growth projections that had proven conservative in prior years were insanely optimistic now. We struggled to grow (not fun for the VP of Sales & Marketing), but worked hard to keep our most important customers and bring on important new ones.

But like lots of companies you read about now, we were overleveraged. The loans came due, and we couldn’t refinance. We were sold, and there wasn’t a great fit between me and the new owners.

I went out on my own, which was difficult, then as I started to get a foothold, all this shit happened in the summer of 2008, which we’re still living with.

So here we are. I wouldn’t want to go back. I love what I do now. But I do miss how easy it was in the old days. I can’t decide if this is an anomalous situation or whether 1984-2000 was the anomaly. Perhaps they both are.

I started this post to make a point, but I honestly can’t remember it now. I’d rather teach and share than vent or complain. We’ll make it through this era, and someday we’ll look back on this as the greatest life lesson we ever learned. But at the moment I’m ready for the lesson to end.

Please consider sharing your feelings in the comments.

N.B.: Each company I mention in this post has been merged out of independent existence. One, LHS, re-emerged as a standalone company.

(”The Wages of Fear” is a 1953 French movie.)

Selling: the unacknowledged ingredient of innovation

Thursday, May 21st, 2009

You never read about selling in books about innovation. But, for B2B products, the first sales of a new product or service are crucial lifelines. Let’s be clear about this: no matter how cool, fast, inventive, or buzzworthy your product is, if you can’t bring paying customers on board, it’s not worth anything to your business–in fact, it’s a drain.

I’ve blogged about this before, but it’s come to the forefront of my thinking yet again. First, because the word that innovation is the key to thriving in a down economy is everywhere (for example, here here and here). Second, because I work with companies developing new products and offerings–and these days they’re not looking for help in strategy, packaging or marketing.

They’re looking for sales.

Think about some of the obstacles to selling a new product:

- no reference customers
- immature (at best) marketing materials
- no operational/support experience
- no customer negotiating experience
- untested value propositions
- the perception of risk
- oh yeah, that down economy thing

So selling new products is not for the faint of heart. What does it take to move these difficult deals across the finish line?

- A sense for customers. Many business customers cannot or will not be the first on board with a new product. Others are willing to jump on board first (and usually value the perks, such as reduced price or enhanced support) that go along with being a pilot customer. Your salesperson must be able to sniff out these good prospects quickly, and move past the late adopters.

- Creativity. A new product won’t fit perfectly into the prospect’s business. The functionality, delivery terms, the pricing, legal terms will need to be adjusted as you engage customers.

- Learning as you go. The process of probing the market with a new product is a rich learning environment. Your old sales models probably won’t work. Your salesperson must parse customer reactions for insight to improve the product and sales approach. The ability to reflect, while in the heat of the pursuit, and adjust course frequently, is essential.

- Patience. Salespeople won’t be able to explain things using proven words, graphics or models. Demos will miss the mark. Customers will be slow to grasp the unique value of your new offering. The great new-product salesperson keeps on an even keel and focuses on what the offering can deliver to the prospect.

- Persistence. The product will take longer to sell than salespeople think it should. They can’t give up.

- Ability to communicate internally. Salespeople are the first proxy for the marketplace. They will receive intimate, detailed feedback from prospects that your marketing and product groups will need to improve the product for this and future sales. It’s not enough to be great with the customer. When I ran a new-business group, I talked to our salesperson every day, and our entire group met weekly to discuss what prospects were saying about our products, competitors and marketplace.

- Problem-solving. The sale isn’t complete when the contract is signed. Referenceability is the goal. And that means shepherding the customer through the implementation process with minimum agony. This is difficult because the support processes are immature, the product is certain to have defects, and the customer doesn’t know how to use it yet. It doesn’t matter. It’s the salesperson’s job to make sure the customer receives the value expected when the product is put in service.

Not an easy job. Not surprisingly, it comes with a high failure rate.

Think about that the next time you grumble that you’re still paying a commission to someone who brought in that first or second sale of your product. Without her, your business would be quite different, wouldn’t it?

Related post:
Principles of New Product B2B Marketing

Photo by jchatoff via Flickr Creative Commons

E-Book Available on selling through the slump (I contributed)

Thursday, April 30th, 2009

I was honored to contribute to a new e-book, “Selling Through A Slump” (free-registration required). Some of my favorite people (and friends of this blog), such as Dave Stein and Jill Konrath, also contributed.

It’s organized by industry and covers 11 industry groups, including health care (Anneke Seley), insurance (Mike Wise), services (Jill Konrath) and telecom (yours truly).

One of my favorite experiences during this project was polling the best salespeople* I know to get their viewpoints on the question. Their contributions greatly improved the chapter and I thank them very much for sharing their expertise.

*Robert Wiesheu, Brent Harris, Jeff Fraser, Bill Rogers and Ford Harding

Download “Selling Through A Slump” (registration required)

Guest post by Denise Lee Yohn – The Economy Made Us Do It

Wednesday, February 18th, 2009

I’m delighted to present today a guest post by Denise Lee Yohn. This is the first time we’ve done a guest post. I’m curious about people’s thoughts on this–if you have an opinion, leave it in the comments. regards, John

It seems today’s tough economic climate has become the ultimate scapegoat for pretty much everything.

This past week’s New York Times Sunday Styles section included a piece describing the cleverness with which people have used the economy to get out of social obligations. From firing the nanny to avoiding a dreaded family reunion, the recession, it seems, provides a convenient excuse for folks who can’t bring themselves to deliver an honest, yet unpleasant message.

And Business Week just ran an article about how companies are trying to get out of contracts by arguing that the economic crisis should void legal obligations. Although the troubled economy isn’t technically addressed by force majeure clauses, companies in tight situations aren’t letting technicalities stop them from trying to pull one over their creditors and business partners.

Such behavior seemed somewhat comical to me until I found myself on the receiving end of a similar excuse yesterday. It came from a service rep who relayed a change in the company’s policy by saying, “We’ve been hit hard by the economy so we had to cut some of our services and that was one of them.” The momentary sympathy I felt for the company was quickly replaced by indignation against it for trying to excuse the change by blaming the recession. And my questioning of the wisdom of such a tack soon followed.

Now, I understand that economic pressures have forced companies to change the way they do business. They’re cutting back and by definition that involves tough decisions. I get that. What I find curious is executing the changes in a way that smacks of a“victim mentality.” Why would any business want to give the impression they’re helpless and desperate?! Companies weaken their brand perceptions with a thoughtless –sorry, it’s the economy — excuse.

If companies want to retain any measure of respect and trust with their customers (respect and trust being key drivers of brand equity), they should assume responsibility for the decisions they make and use these tough economic times as an opportunity to reinforce their relationships with customers. A message along the lines of the following would be a good first step in taking a proactive, brand-building stance: “Please accept our sincere apologies for making a change that we know adversely affects you. We are diligently working on ways to improve and will resume the suspended service as soon as possible.”

Communicating this type of message — and delivering a customer experience consistent with it — has the power to transform brand perceptions. Instead of being perceived as a weak player that’s relinquished control of its destiny, the business is portrayed as a brand with the integrity and customer commitment to come out of this economic storm even stronger.

With excuses to be found everywhere these days, I certainly hope we’re not seeing the beginning of a trend that makes adopting an excuse culture”– an acceptable way companies do business –– but I fear it may be. After all there’s an excuse, it seems, for everything from criminal acts to indiscretions by politicians. But business leaders should realize excuses erode brand credibility and equity.

Simply put, excuses are bad for business.

Denise Lee Yohn is an independent brand as businessTM consulting partner who inspires and teaches companies how to operationalize their brands to grow their businesses. World-class brands including Sony, Frito-Lay, Burger King, and Nautica have called on Denise to maximize brand impact. She can be reached through her blog, brand as business bitesTM.