Is your online presence making a difference to your sales? How can you improve it? Here are 9 principles for Social Media Marketing which can help you achieve that online GLORY!
One thing common about Sales is that it exhibits a common tendency to go uncertain! Many companies suffer from unpredictable, unsustainable sales and thus profitability. Most organizations fall into a common fallacy that only numbers matters, what is the sales output. In my view, measurement of sales functions requires one to take a comprehensive view of the inputs harnessed, the sales process and outcomes. First let’s look at sales inputs. Does your organization have a sales structure to exploit new customer acquisitions and mining independently? Dedication brings focus and efficiency. Second part of input, is what investments are made to identify opportunities and how to quickly convert them, what most management theorists call “sense and respond”. Have you built intelligence tools (not just salesforce.com, but more humane partner info systems) that help in steering the sales organization to new ebbing business opportunities? Is your sales org agile enough to notice and cash on gaps in competitive product space, new delivery requirements or just plain fulfilment opportunities? Most crucial part of your sales is the sales person. How lively and active they are in engagement skills, listening, requirement gathering and solution selling. Plain Jane product pushers may not drive sales and customer engagement in markets beset with technological and requirement advances. Hire them for attitude and not some fancy degree.
Sales process arrangement and efficiency drives the sales process. Is sales process comprehensive to capture all that happens during a sales process? Does it help you uncover where the current status is and why the sale is stuck at this junction? Is the process simple enough for sales guy on the street to work with? How does the sales process enable your staff to take calculated and approved risks? Does the sales process allow sales people to function within ethical guidelines and yet remain competitive? Are the incentives sharp enough to drive the expected behaviour? Do the incentives stretch the performance of individuals?
Finally, on the output side, what is that one wants to measure, how often and how this measurement must drive a particular behaviour? An insight from world class manufacturing organizations warrants a look here. Companies that have built great products and are successfully competing globally, have one thing in common. The number of measures of output is few, they allow ownership and risk taking at the front line and overall the performance is highly “visible”. The benefits the world class companies’ gain is relevant, reliable and accurate information to know where they are leading and how to land at the determined shores.
Private Equity investments provide a sense of security and an initiation to growth to many companies worldwide. They are known to build and grow companies. Private Equity (PE) is an investment which is realized in the long term. This long term focus is aligned with the interest of both the investor and the company to succeed and grow the company. But these notions are turning out to be fictitious considering the current scenario. According to some studies conducted, 16% of the companies shut down in the seeding stage and only 21% of the companies later go ahead with angel fund.
Prodding further on this, it becomes essential for PEs to analyze what could be reasons for such failure considering both the parties get into such an agreement with a win-win scenario in mind. PEs invest in the companies with an intention to develop and grow the company within a short period of time, making it lucrative for potential buyers and realizing maximum return on investment. The companies too, in an urge to succeed, rush in with their strategies with an aim to build and grow this company. These companies give in to the pressure of the PEs to perform better and falter to execute the strategies in the right manner while hastening the process. Some companies fail to understand the actual market requirement and do not optimally utilize the resources available with them. The PEs too, are not often very well equipped to mentor, monitor and strategise the growth path for these companies. PEs who invest in varied industries often lack the complete understanding and expertise required to succeed in those industries. They work on the simple rule of thumb of return on investment to determine the success of a company. Companies’, who have just taken baby steps in the market and are yet to establish themselves, need someone to back them up with the required know how and strategy to run the business and succeed.
This indicates that today companies not only need investment to build and establish themselves, but they also need profound levels of expertise to align, hold up and lend a hand in bringing the required changes. These companies need someone to analyze the strengths and weaknesses from a third party perspective, understand the market conditions, provide expert opinion on the functioning of the company and be those extra pair of hands that could facilitate in bringing about the right changes in the company. PEs along with the association of such specialists could be rest assured about the company’s progress. This will enable them to transform the company and move towards accomplishment of the set objectives. To keep up the focus on organization’s goals and increase its opportunity to grow, an independent voice and an unbiased view by an expert which is not influenced by both the parties of interest (PE or company management) is essential. This provides the required perspective in decision making. Organizations are facilitated to strategise and put their plans into action. PEs aligning with such specialists brings about the right mix of investment backed with expert advice fulfilling the purpose of the business.
Have a peek at our sales transformation video showcasing how our sales consulting experience works and what has been the gains a clients gets.
Many reports assert that about 70% of all change management efforts fail. The reasons for failure could be many. Studies cite lack of champions, inadequate or inconsistent senior management support, and top down change push without involving the people at all levels or paucity of high quality resources review and guide the change management process as contributors for failure. Many senior managers acknowledge that inappropriate balancing of expected results with resources at hand or inappropriate alignment of resources and the activities are most common reasons for failure. Aligning the individual’s role and responsibilities, ownership and accountability with the intended change or outcomes is a tough task. A change management program progress from defining strategy and setting goals at different levels of organization. Change management must include plan for identifying of appropriate departmental and individual roles and changed behavior consistent with intended results. While many approaches to change management exist, no single tool fits all companies. Common drawback of many tools is their inabilities to monitor progress and adjust activities to ensure the expected results are achieved. Many tools do not facilitate learning, documenting evaluations, changes so that important knowledge is codified and used in subsequent planning phase. Tools also have a limited capability in linking the intermediate results (lead indicators) achieved and their contribution to the expected goal.
Result based management (RBM) is a management approach that can be adopted to drive change management. RBM is aimed at improving managerial effectiveness, ownership and accountability in achieving results. Largely used in Not-for-profit sector, RBM adopts a life-cycle approach to integrating strategy, resources, process, people and results. RBM focus is on integrating measurements that can improve decision making, transparency of the case and effect, and accountability at various levels. RBM uses a logical relationship between inputs, activities, outputs, outcomes and impact.
Inputs could be financial, manpower, plant, partnerships, etc. that are required to conduct various business activities. The activities would be promotional programs, creation of new sales teams, partner program structures or marketing events which are expected to deliver certain short-term results. These short term results in RBM parlance are termed outputs. Outcomes are mid-term results that indicate the direction and scale of achievement. Impact is what the company wants to achieve by undertaking the change. For example, a company may want to achieve a state of high profitability and de-risk itself from marketing and customer segments. Towards this the company has identified 3 strategies that would yield results. For each of this program, certain resources in terms of additional manpower, investment into branding, channel development etc. may be required. The company may identify certain activities that may need to be done in the next 2 years. Let us say the company has chosen to be present in an industrial event with an investment of $25,000 showcasing its products and solutions. It would have invested in resources including manpower, exhibits, sales and marketing collaterals, etc. Post the event, the number of walk-ins, number of product demos are output measures. Number of new customers gained is an Outcome measure that is captured over next couple of quarters. The outcome measure reflects the causal effect between resources marshalled and activities pursued to reach certain objectives. The output indicates the results in short-term. Mid-period review using output and outcome measures are useful indicators of what is working and what is not working. The company can quickly calibrate alignment between activities, resources and outputs to see the returns are on expected line.
For companies attempting business transformation over longer horizon, RBM offers certain advantages. Group and individual KPI can rightly aligned with the change management process and modified based on the level of change. RBM drives individual ownership and focus on results so that managing for results by directing right staff behaviour and initiative taking is facilitated. RBM interlinks individual, departments and program level performance with low cost of data collection and monitoring. RBM supports management learning and decision making, emphasizing more on reporting and fixing accountability. Measurement of effectiveness, efficiency, equity and sustainability at various levels becomes easy. RBM facilitates cascading down with measures that drive and capture the status of activities and outputs (short term results) so that progress can be measured and rewarded. Large and complex change management programs can immensely benefit from RBM to interlink at various stages of hierarchy, and aggregate data and disaggregate reporting wherever required.
A strong willed founder sees an opportunity, builds clientele and services and all suddenly disappears leaving the business at risk. Academicians Sascha Becker and Hans Hvide in their study of 341 privately owned companies observed that the death of founder in the first 10 years of the establishment had a deep and profound effect on the survival of the company. Unlisted and family owned business are awful poor at planning for future. Many business owners and family CEO’s just do not know how to prepare for eventuality. From our consulting experience we suggest a 8 point approach. First evaluate the family’s interest and children suitability for roles and responsibilities in the company. Involve outside professionals and independent directors to provide third party neutral assessment of the children and seek their suggestions on who could possibly more suited to run the business in future. Once assessment is made, communicate the decision within the family and children, seek their opinions and arrive at consensus. Biggest challenge is preparing them for a change. Ask independent directors and family to suggest a management structure without compromising the legal and family interests. Involve the management group in creation of a succession plan and document the role of each family member, responsibilities they could carry and the possible succession plans. Communicate the plans to all the involved parties and formalize the succession plan. Identify the competencies the successor may need, training gaps and development support needed. Hire and fill professionals in roles that may be needed in future and start implementation of the succession plan with a dry run. Take a vacation and see how the succession team is responding to the business needs. Start stepping back over time, and allow them to learn from failure.
Rewards and recognition is an important organizational element that used wisely can hasten the pace of business transformation and bring about the desired change in behavior and outcomes at various levels. Rewards and recognition come in many forms: monetary, prize, gifts, awards, empowerment, etc. A common fallacy in many organizations is that they tend to use the rewards & recognition programs without any consideration of life-cycle of the organization, or the stages of any change management program or the intended role of R&R systems. Role of right rewards and recognition in organizational development and change management is highly researched topic. Accordingly, in the initial stages of the company, the focus is on getting things right. For example, in a software product company the R&R must focus on “do” part. CTO would have broadly identified a product/service to develop, a software developer role is to develop the code in time without any bugs and within the accepted or budgeted number of revisions. In the initial phase, the rewards and recognition systems must be more on “directing” the required outcomes. R&R at this stage may include proficiency based pay, performance based incentives, feedback, appreciation letters, initiative to complete the work faster, extending beyond role, recognition and interdepartmental coordination. As the organization grows the focus is on improvements that can be initiated within the teams and at individual levels to gain from efficiency, effectiveness and knowledge management. Appropriate R&R at this juncture must emphasize individual incentives to encourage incremental innovations, public recognition, town hall appreciations, employee of the year/month, sponsorship for conferences, training and higher education keeping in mind the developmental path of the employee. As organization matures, the emphasis of R&R must shift to encourage innovation as conscious efforts must be encouraged and attempted at all levels of the organization to ensure it does not become a victim of “Core rigidity”. Many successful organizations and family led businesses fail to survive longer because they tend to adhere to their core competencies and do not invest enough to diversify and de-risk the organization from technology and market changes. Hence, while continuing with some of the earlier R&R measures, more focus should be on designing measures such as gain and risk sharing incentives, team goal sharing incentives, new product or process application awards, hall of fame awards, high-priority skunk team awards, nominations to benchmarking tours, suggestion over-the wall award, etc.
Analysis of successful long term change management programs also indicate the R&R scheme must change with the stages of change management. While there are many frameworks describing the change management process, most models have three common stages. First stage “Initiate”, is the preparatory stage, where the new directions are discussed to obtain buy-in across the organization, and change leaders are identified. Few fundamental initiatives that can showcase positive outcomes in short time are rolled out to win over nay says and increase the adoption rate of change management activities. In the second stage, “extend”, more departmental and sub-departmental level changes in line with the major changes attempted in initiate stage are deployed. Departmental integration and managing outcome becomes the focus at this stage. In the third stage, “sustain”, continued efforts are made with the changes adopted in the previous stages to gain efficiencies and productivity. Scaling up of business operations to benefit from both economies of scale and scope gains are pursued. In this stage change management focus also must shift to identification of activities to improve profitability, new revenues streams and products/services to de-risk the business. Consistent with the above stages, we argue R&R systems and their focus must vary across the change process. In the initial stage, the R&R must be a heavy mix of extrinsic measures like skill based incentives, performance based incentives, written and town hall awards. In the extend stage, the focus would be on mix of individual recognition, financial awards and appreciations to encourage the employees to own and drive changes. In the sustain stage, the R&R measures must be a heavy mix of monetary awards, individual and group recognition and development support (training, professional development, college education, specialized courses, etc). Such alignment of R&R systems with focus on evolutionary stage of the firm and change management will help in designing appropriate R&R systems that can be goal directive, supporting and reinforcing the behavioral changes.
Marketers have recognized Word of mouth (WOM) as the most effective form of promotion. Most trustable sources of WOM are friends, family and peer groups. +WOM spreads even faster when curiosity is kindled in the minds of direct consumers and influencers. Marketers can adopt various methods to create curiosity. Puzzle and riddle, games with an element of surprise or teasers are common forms of pre-consumption curiosity tools used by marketers. It isn’t always about the answer to the riddle, but the adventure and thinking to know what would be the answer. For example when the Rubik’s cube was first released, people were curious on how to solve it and sales of the cube was sky rocketing and it was even talked about in the daily news. Many ads end with the quote saying “What would happen next?” these ads have always been the most popular ones as people discuss and talk about it more.
The element of surprise can be created by marketers in a product to sell it easily. This is specially done by using surprise gifts at the time of using a product. Example of one such famous product is Lays with Tazos inside the packet made kids buy the chips regularly in order to have the full collection. Anticipation is also a key factor for creating curiosity, but the kill switch in this is the level of anticipation the marketers tries to create. A prolonged waiting time can become a curse for the marketers. Longer the waiting time, confirmation-disconfirmation gaps can be longer. Hence marketers should select an appropriate waiting time and also fulfill the necessary level of expectation of the consumer accordingly.
While it is very easy to create pre-consumption curiosity, creating and sustaining curiosity after actual consumption and experiencing of the product/service, is rather a daunting task. Ambiguity in closure promoting personalization and personalized interpretations is what some products and services naturally enable to sustain post-consumption curiosity. Best example is the movie that allows multiple interpretations of its ending. Examples of such movies are the Inception, the Shutter Island, and Memento etc. These movies had a very large fan following and people kept talking about the ambiguous ending both online and offline which drew more audience.
Accordingly there are five mantras to sustain post consumption curiosity to fuel word of mouth. Firstly to keep Story line broad enough for multiple interpretations. Secondly be Flexible enough for personalization. Third to promote co-creation and outsources promotion. Fourthly, ensure enough room for anticipation even with the various variants. Lastly have no restrictions on extension by an individual. For example Silent Hill a game created by Konami features customization of the character the user is going to play as, and has multiple endings to the game according to the choices the user takes during the game play. This became one of the most universally popular games. The five principles can also be applied to create the next best seller book or Oscar winning movie (remember the pun filled Mr. Bean holidays…where everybody goes with a handy cam) or interactive movie experiences.
Kaarthik Shakthi R
Designing appropriate performance management system (PMS) for organization and its employees is a great challenge. Many companies find the PMS designed and deployed at fancy price and huge efforts have several limitations. Common reason why PMS do not deliver value is that they have too many measures, difficult to understand, have low relevance from corporate objectives and individual role perspectives, do not reflect actual behavior and sometimes inaccurately report the outcomes. Many well intended PMS fail to take off for reasons including: inability to instill right orientation, ineffective in fixing individual target responsibility, inability to forecast capabilities and its impact, and does not encourage the front line staff to take initiative and act appropriately. While there are several approaches available for PMS, we find some of the tools may require huge investment in terms of time and manpower, which many SME are not endowed with.
Based on our experience of working with SME companies we find a light weight PMS that does not require huge IT and manpower requirement can be designed following a simple PCCIO framework. Evaluate whether the proposed PMS has elements of Purpose (P), Comprehensiveness (C), Consistency (C ), Impact (I) and Outcome (O). Check whether the system captures the purpose why you are rolling out the PMS, whether it is to measure impact or direct change and promote a certain behaviour. Next check whether it is comprehensive enough, both in terms of levels, and depth and breadth of information required to make informed decisions. Evaluate whether the PMS can provide you consistent and reliable readings. If too much externalities influence the measures, then your measure is inaccurate. As many academicians and seasoned managers suggest a good PMS must be able to measure the impact (did we achieve what we intended to do) and what is the outcome.
Ensure the PMS has a good mix of both financial and non- financial indicators. PCCIO framework helps you to link KPIs with professional development and holistic development of the employees. This stimulates continuous improvement in all aspects of the business like Quality of output, Delivery time, finance, Customer satisfaction, cultural aspects of working environment and Employee Satisfaction.
S Indupriya. Junior Consultant (Strategy & HR)