Tag Archives: strategy

How companies are adopting Holacracy principles to build effective sales teams

For many companies, sales function is an area where outcome is never closer to expectation. Companies suffer from weak funnels, missed closures, lengthier closure cycles, order losses and attrition.  These are the waste that emanate in sales function. It is well known sales teams that hunt as a pack always produce better results than those that hunt individually. Unfortunately, many sales teams discourage sharing of information about networks & influence of client organizations across team members. Many a times a particular sales resource may be approaching a client organization in a certain suboptimal way without privy to alternate courses. Other colleagues may have prior experience of the account and/or situation to tide over the apprehensions. Bereft of multiple perspectives, the sales cycle would linger, and eventually the sales resource will lose interest on the account and drop it from his hunt. Incomplete sharing of information and inadequate planning for a particular opportunity is another challenge sales team face.  Weak alignment, between inside sales and direct sales teams or KAM teams with others is another area that leads to sales inefficiencies.  Role conflicts and tensions may also arise due to operational and personality issues.  Poor policies on account transfer between direct and inside sales team, weak sales operations, and ineffective review can exacerbate drop rates. A salient issue in solution selling companies is lack of comprehensive involvement, poor alignment and ineffective role management between pre-sale and sale teams across various stages of a customer acquisition. Diffused and selective ownership without a complete coverage of customer experience management leads to lengthy customer requirement cycles, protracted customer sign off process and potential financial loss.

Companies are realizing to counter bounded rationality problems, improve commitment and camaraderie within the sales teams, they need to build coopetition teams.  Teams in a coopetition collaborate to address common challenges, and address gaps and yet can remain competitive in pursuit of the individual goals. In recent years, companies like Ternary software, Zappos, David Allen Co, Precision Nutrition and others have adopted Holacracy (the system of self-governance) as an approach to build self-managing teams. Holacracy is an approach to distribute authority across the organization. In a Holacracy the organization evolves continuously adapting its structure and process through ongoing peer-to-peer governance. Common elements of organizations adopting Holacracy principles are a) constitution that defines the roles and distribution of authority related to tasks or outputs, b) roles and accountabilities, c) collaborative decision-making process enabling change in roles and authority consistent with evolution and d) meeting process that promotes co-creation and collaborative working.

Companies adopting Holacracy principles for sales organization implement following. Firstly, they create a leadership ring to build multiple owners who can eschew same corporate and sales dream and chase the horizon. However, unlike the Holacracy organizations, these rings are limited to the first level of sales, pre-sale and delivery management, the organization below each leader is still hierarchical. The leadership ring collectively evaluates opportunities, discusses approach or various sales motions (national, key accounts, acquisition, strategic account, label wins), creates proposals and pricing models, and comprehensively manages customer interaction.  The group runs as a virtual organization within the company. They validate customer requirements, aligned design and delivery, and eliminate rework. Recognizing the need for flexibility to counter exigencies, leadership ring has weekly rhythm meets to discuss progress and exceptions. Any engagement model deviations, change requests, requirement changes or client leadership exits are discussed openly, opinions are considered and a comprehensive approach is arrived after considering multiple perspectives. One strategy is collectively approved individuals are given complete ownership ad freedom to pursue the actions. To support the changes in the roles and ownership of different teams over the life cycle of a customer engagement, the sales teams build a culture and process where different people wear the leadership hat. In the initial part of customer engagement, sales resources own and direct inform and influencing of customer. However, a pre-sale expert takes over the solution enumeration and client acceptance, after which the sales leader and pricing teams dons the mantle. Finally, the crown comes back to the sales resource to chase the closure. Once the order is picked, the mantle moves to delivery as the prime owner and sales as the secondary owner. Finally, what distinctly distinguishes “Holacracy” team sales reviews, is this is not the typical high octane name calling threat laced ritual. The review system moves away from status and fault finding to status and solution offering. Each review meeting is initiated with a revisit of the purpose and with a focus on actions by individuals and team can impact positive outcome.

Companies adopting Holacracy principles for sales must understand it is a cultural change and requires both management investment and patience.  Sales team members must experience the trust and openness to share everyone view and the collective decision making. Parochial leaders may find the process limiting insular control of team and threatens group politics.  Importantly the ability to steer the focus towards “problem solving” than “one man up”  behaviour is the key to the success of the program.

Vasavi R, Sai Vinoth and Dr TR Madan Mohan

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Priming your Industrial (B2B) sales…..

Industrial or B2B presents unique set of challenges.

Vendors may be selling to an intermediary for example an EPC or a contractor who in turn may be executing the project for an end user. While the intermediary may be more concerned with price, speed and availability, end user may focus on quality and performance. Managing diverse decision criterion requires fine balancing of relationships and strategies.

  1. Getting the product as an industry standard or emerge as a default choice is most important part of marketing. This may require informing and influencing not just the end user, but intermediaries like EPC also. Importantly the design folks within the client organization and outside need to be influenced and won over.
  2. B2B environment is highly competitive, in fact in some segments your former employees may be working for your competition with complete tacit information about sales strategy. Often there would be handful of customers with balance of purchasing power tilted towards them.
  3. B2B markets also highly exposed to commoditization. Pricing pressures could be high. Product cycles may be shortened by innovations and substitutes emerge often to displace the markets.
  4. Replacement market is a major growth opportunity. But the decision-making can be short, and unscientific. Replacements are made are 3rd party advice, availability, and price rather than quality or performance.
  5. White labelling or contract manufacturing is yet another sales growth opportunity that brings its own challenges of cannibalization of focus.
  6. B2B sale requires sales process to be customized to the procurement process. Unlike B2C business cold calls by themselves will not get business. According to a Forbes article, more than 50% of B2B sales resources consistently miss their targets. Many orders fail to materialize as the arc of meeting; educating, influencing and closing the order have been missed.

 

How can one ensure their B2B sale is firing? Right structural alignment, adherence to process to capture the activity at each sales stage, and appropriate incentive systems help a company realize right sales outcomes is what I actually needed to make B2B sales happen.

Get the right rhythm of activities between arc of initial meeting, mapping of key decision makers, product education and influence, defining right commercial terms and closure. End users need to have a solid reason to place an order, may need to follow up documentation and hierarchy before the decision is made.  Customer segmentation, need analysis, profitability and associated risks must be weighed much before you respond to an RFP.  If the end user happens to be government or large organization additional challenges of bank guarantees, penalties and receivables must be evaluated in detail.

With increased adoption of mobility and availability IT tools, companies can use appropriate structural arrangements to minimize the cost of sales and yet improve reach and conversion. Sales structures must include not just direct sales teams, but inside, partner and product teams that complement the direct sales. Create a dynamic sales organization that not only covers the markets, but builds partners and ambassadors for it. A dynamic sales organization must include:

  • Inside sales – Identify people, Google search, secondary data
  • Sales Executive – Feet on street, Coverage, Meet people, Verifying data and collect Information
  • Branch Manager – Administrative Cover, Link with Technical and Project people, Pre-order and post-order point of contact
  • Product Manager – Technical specialist, Influence Design/ Technical team, Identify the cost saving technical options, Match/ Improve technical
  • Regional Manager – Business Leader for the region, Price and Margin manager
  • General Manager – P&L leader, management representative, maximum interest with company and across company, Revenue Leader

With new technologies B2B companies must realize sales resources are not the only one to open door and neither opportunities nor marketing is the exclusive promoter. With many B2B buyers self-educating using tools like social media, vendors need to effectively empower and promote product and application engineering teams to network and influence the ecosystem, right from design companies, EPC contractors, Standard setting bodies and user community. Role of product management that helps in inform and educate, influence the design and procurement teams by its expertise and bring alignment between requirement and solution is often under invested. Product managers are key to requirement gathering but also define the specs of an RFP.  Promote product management –client and design interactions at all levels.

Invest in sales operations. Sales operation has different meaning for every company. In some, sales operation does number collation and crunches data. In some they are responsible for system, programs and process. In some they are responsible for pricing and participate in large complex deals. Fundamentally, the role of sales operations is to capture the data related to sales activities, and help sales team to make decisions based on data rather than subjective assessment. Sales operations more than just being a data sink, helps integration benefits to the organization by linking various activities.

Make available non-sales oriented platforms and information content to inform, educate and advocacy of their expertise and products.  More educational content from a B2B vendor helps in build trust and respect for its expertise. Share original content on social media platforms and optimize for search. Companies that go beyond their product range and address the complete industry are seen as leaders and more such content augments the credibility of the company’s brand.

A major change B2B vendors need to make to their sales strategy is to consciously move away from the decades old sales playbooks they treat as mantras. B2B vendors who just moved their sales process to modern technologies without fundamental changes in the sales engagement find the results are always below expectations. With the new technologies and information intensive markets, B2B vendors may have to rework their sales playbooks but also rethink how they are enabling the sales person to decipher and deepen the customer’s knowledge. While adopting the new technologies ensure the playbooks allow sales resources to adjust their individual strategies and styles to add value to the sales engagement process.

T R Saivinoth

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How B2b companies can benefit from Youtube marketing

While many of us associate YouTube with videos of cats or people falling off their skateboards in new and interesting ways, the reality is that YouTube can be an extremely powerful weapon for a B2B marketer. In a recent study, the top three social networks for online B2B marketing are Twitter, LinkedIn and YouTube. With more than 800 million unique visitors each month, YouTube is now the world’s second biggest search engine. More than 100 million people take social action (likes, shares, comments, etc.) on YouTube every week.

In addition to providing your prospects with information about your product or service, a YouTube channel is also important from a brand equity perspective. HP, for example, has a large part of their channel devoted to their work in health and education. In a press release or blog format the average prospect may not ever bother looking into this kind of material, as it doesn’t have a direct connection to the buying process. But if a prospect is considering purchasing a new printer for their business and is watching a product demonstration video on YouTube, they are more likely to do so. By establishing an emotional connection, HP is able to position its brand in the prospect’s mind as caring and trustworthy.

Youtube is humungous. Each minute about 400 hour worth of video content is uploaded, but only  5% may elicit more than 10K views. 50% of all YouTube views come via a mobile device and the average time spent on YouTube per mobile is about 40 minutes. YouTube has more than 1 billion active users surfing the site. Importantly, for most companies the promotion is free and always available. Even if your content may not reach top 5% of the post, it could serve as an alternate marketing asset to inform, and influence customers.

As a B2B company, you can gain the most from YouTube marketing if you can stick to some fundamentals listed below.

  • Making content stand out: Well we all know the power of viral videos. People will actively share unique content on their social media networks, even if it’s associated with a brand. The key is to include your brand or product in the video in a way that’s not so invasive that it feels like an advertisement. A common technique used to encourage sharing is humour, but it might also be the format that captures the prospect’s attention (e.g. using a unique animation or live action scenario to tell your product’s story). You need to plan out the needs and essence your video is going to fill in your prospect’s mind and heart.
  • Make it easy to find and share: After uploading a video to YouTube, make sure to give your videos searchable titles, well described & brief descriptions and lots of tags. Embed videos on your business website as well as its social media platforms (Facebook, LinkedIn, Twitter and Google+). If the video resonates with the prospects, they will react to it and might share it on their own social media accounts.
  • Put faces to your brand: Great thing about YouTube is that it allows you to put a face to your brand; this is extremely important in building trust with your prospect. It’s often better to use real people from business or mascots representing your brand or company. Prospects get attached to these adding a layer of transparency which is often extremely difficult to establish using traditional online marketing such as blogs, whitepapers, online forums etc.
  • First few seconds to impress: YouTube is all about small sized (length) video content. Use it to get attention in short span and condense your videos to 2-3 minute on specific areas of interest, e.g. product feature demonstrations or testimonials. According to 8-second rule, research has indicated that if users have to wait longer than 8 seconds without any attention seeking action or interest, they will go elsewhere. Because there is an ocean of information waiting online to get their precious attention. You have only 8 seconds to impress a person & to get him watch your whole content, so make first 8 seconds impactful and rather creative than just showcasing your product or feature. You need to take an innovative route to enter into the mind of the prospect for a sustaining impression. Be creative and sometimes be more natural. Shoot, animate, use info graphics etc. in your video to make it more compelling and informative according to your content.
  • One video many use or a particular use: More specific content is also helpful from the perspective that you can utilize the video or the YouTube link to focus on a particular product/service in your target email marketing campaigns & product description pages in your website. Whereas generic informative and rather flexible branding videos can be used in you landing home page to describe what your brand is all about. This will increase the engagement time prospect surfs information about your brand & will generate an impactful visit to your website.
  • Take time to create your own brand space with a YouTube channel to make it easier for your users to find all of your video content at same place. Include links to your site, campaign information, conference updates etc. Encourage comments and subscriptions from viewers. Listen and react to what’s being said as feedback or comments. Take positive notes and keep on the light glowing around with more inputs and changes. Treat your prospects comments as advices & necessary recommendations giving your marketing a continuous boost for years to come.

Vikash Prasad

 

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Why after-sales service lacks the sting…….?

After-sales service is often seen as necessary devil and not many organizations think about the impact it has on revenues and customer satisfaction. This is despite the fact that dealers and OEM’s margins on the virgin equipment may be less than 2-3% of the final price, while parts revenues can hover around 25++ margins.

The biggest cause for lack of proper after-sales service is that many organizations have no proper service strategy aligned with their organizational goals. Many adopt the concept of “Outsourcing of parts logistics” without realizing the zone of conflicts it can create and the impact. The idea to make cost efficient parts supply and distribution is appreciated, but this doesn’t synchronize with the field customer service. Worst part, is that various divisions work at loggerheads within the organization, causing a lack of cohesion between the field service and parts supply. The parts and service aspect of an automotive organization go hand-in-hand.

More than 60% of parts per vehicle, on an average, are out-sourced by the OEMs from individual parts supplier. In order to avoid risk, OEMs develop 4-5 vendors per part when 2-3 vendors are more than sufficient. This policy of the OEM forces these suppliers to supply in the open market to increase revenues. Moreover, Parts supply and parts sales in open market are more profitable than sales through the respective OEMs. This inevitably leads to revenue loss from services for the OEM.

Product development regulations are pretty high in developed nations, leading to high quality. Hence, minimum levels of Standard Operating Procedures (SOP) for service are adequate to ensure there is no cause for complaint from consumers. When the same SOPs are implemented in the Indian market, it leads to service failure due to the lower quality of components. When the foreign culture of highly reliable and innovative product doesn’t exist in the cost conscious Indian automotive industry, then why does the after-sales service strategy and policy remain the same for both the markets?

With a specialized mechanic in every corner of the street providing service at cheaper rates and the availability of cheaper spare parts in grey market, the dealership revenues are in doldrums. The automation and IT infra-structure connecting the OEM and dealerships is not robust and not fool-proof. Moreover, the revenue generating model for the dealerships is not very sustainable in the long-run especially during economically low periods, considering the huge infrastructure investment made by each dealership of an OEM. All these factors induce the dealer to purchase from grey market and eventually, a loss for the OEM occurs.

The Indian Automotive Industry is moving towards technology saturation. There is no substantial product variation, especially in terms of technology. Brand differentiation can only be improved through an effective and efficient after-sales service channel. Issues such as development and implementation of a sustainable after-sales strategy, with focus on number of parts suppliers, India centric SOPs for service, and not outsourcing the parts logistics, are just tip of the iceberg issues that need to be grappled with. There needs to be a well thought out and integrated service strategy specific to local markets, since it is a substantial revenue stream that will improve bottom line and help companies tide out the troughs in sales!!!

Bangaru Vignesh

Junior Consultant – Marketing & Strategy

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Late but not too late; late market entry strategies

Nobody remembers the second person who climbed Mt. Everest or set foot on moon. Why? Because we have a culture in which only the pioneers are revered. Everyone is in a hustle to get that one sacred spot on top. 21st century companies are no different than the humans in this endeavor. They crave to become the pioneers in their respective fields even though it comes at a huge cost and risk. But is that the only way to enter a market? The answer is no! The good news is that late market entrants can also make substantial profits and at times outperform pioneers with right set of marketing strategies at hand. Let’s dig deeper into these strategies.

Penetration pricing is one of the classic strategies used by the late entrants while entering an already cluttered market. The prices are set lower than those of incumbents to attract the customers. This pricing mechanism assumes that the customers will switch to the new offerings if the price is low. Take Xiaomi for that matter. This upstart Chinese electronic company has been successfully selling smart phones in the highly competitive Indian market. Apart from their innovative distribution strategy and low cost of production, their pricing is one of the main reasons for the success. Xiaomi phones are comparatively cheaper than any other smart phone with the similar features. With this strategy, they have managed to taste success in the market, and will most likely follow up with high end products once a brand name gets established. They have been able to identify the gap i.e. non availability of an affordable smart phone with the features of a high class smart phone. This brings us to the next late entrant strategy.

No matter how good or successful a product or a service is, there is always a scope for improvement. This is mantra of the late market entrants. By identifying the gaps in the current offerings of the pioneers, some of the companies have been able to differentiate their offerings to gain the market share. The Indian truck market was dominated by companies like Ashok Leyland and Tata before Volvo entered. Leyland and Tata trucks used to take around 6 days to travel from Bangalore to Delhi, were uncomfortable, difficult to drive and maneuver, and had reliability issues. Volvo cleverly identified this gap and came up with trucks though more expensive, adopted a value based pricing strategy, and pitched on total cost of ownership, business benefits over the long term (like more load carrying capacity, lesser inventory on road, higher safely and comfort for drivers, reliability and 24 hour service by Volvo). Leveraging existing gaps, and educating consumers on long term benefits, Volvo has successfully managed to enter the market with high priced products.

Niche marketing is another strategy followed by the late entrants. A peculiar segment of the market is targeted which is unexploited by any other players. The rise of specialty hospitals and Montessori schools are some examples of niche marketing. Chobani yoghurt which entered US market 9 years later than the pioneer Fage total yoghurt has been tremendously successful because of niche marketing. Unlike other strategies, niche marketing strategy doesn’t require “demand generation”. The demand is already there, only the identification and exploitation of the demand with the correct offerings is required.

Therefore, when presented with opportunities to enter a new market, companies need to take a step back and evaluate their options before taking the leap. After all, it’s not about grabbing the first position but rather about making more profits and establishing a brand, and being in business for the long haul.

Ajita Poudel

Young Dolphin Fellowship

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Structuring Global Expansion

Structuring global expansion is a complex decision requiring one to weigh multitudes of treaties, cost advantages and cost of monitoring. Expansion enables the company to benefit from economies of scale providing additional profit enhancement. Companies often face the question of whether to structure the new venture as a separate legal entity or a subsidiary. Factors such as taxation, transfer pricing, legalities and profit sharing form the crux of these expansion strategies. Companies need to also ensure treaties between two countries and the nature of business that they could likely engage in. The profit could be pooled in the country where the tax laws are less stringent and the law for transfer of funds flexible. The increasing volume and variety of inter-company transactions have given rise to companies concentrating on transfer pricing as a leading risk management issue. The right strategies if adopted can save a company billions of dollars while a wrong decision could initiate the increase in costs and penalties. 

– Pratibha Sharma

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To De-risk, Diversify

‘Don’t put all your eggs in one basket’. Most companies swear by this phrase in the software industry today. The mature companies are expanding their market and exploring the existing products whereas the emerging companies strive for a wider portfolio with a gamut of products catering to multiple needs of the customers. The strategic shift of the companies from a single or few product / solutions to an array of products/ solutions demonstrates the focus on risk mitigation. The companies are constantly innovating and developing products to be at par with technology, gain competitive advantage and increase the predictability of revenue. One aspect of profitability gaining significance is the increase in revenue streams to augment the opportunity in the existing market and open doors in the unexplored market. This reduces the reliance of revenue from one product/service and there is an alternate arrangement for growth and disparate income, result of a wider portfolio.

Considering the transaction costs and the investment required in developing a new product, companies are now looking at an extension, version or division of the existing product to enhance the product and fit the requirement scale of a larger customer base. Extension of the product would mean the enhancement and improvement of the existing product to suit the current market need and technology. Versioning the product could create a market for the product at multiple levels. A comprehensive product is separated and developed into individual products to facilitate the ease of selling and quicker revenue generation. Though a risk mitigation strategy the company has to constantly drive these products and evolve itself to excel and compete.

Discovering a new path to growth is a well known risk mitigation approach by most of the informed and vigilant companies. Re-examining the path taken and exploring new avenues to growth is a strategy to look out for. Companies need to have a broad perspective and bring out the best in what they have to offer to ensure consistent revenue and increased profitability.

Pratibha Sharma

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Simple Rules for Growth

My consulting experience, though short and lively, has revealed some interesting insights. Contrary to big frameworks and theories, what is underlying the growth of some companies is that they seem to struck to some common sense approach. These companies have first understood where their strength lies, have chosen customers and markets where they could make a difference, have been respectful of the competitors and focused on their own processes for continuous improvement.  Three elements of this mantra made lots of sense.

One the management invested in defining and explaining the long term vision of organisation to effectively communicate the goals and to align the resources (financial, manpower etc) to the objectives.  Second, they ensured the right structure, process and incentives were available to support the objectives and revive the existing function to yield better results. One important lesson was about the resource. They all seem to have followed the dictum hire the resource only if the current resource is stretched by over 50% more than what he/she could optimally deliver. Another common elements is incentivising for each win asap and not going by QoQ incentive structures. Third, they de-risked from Market/product by appropriate diversification. Companies succeed by segregating the existing product into separate individual products catering to a larger customer base thereby increasing the probability of revenue.

Pratibha Sharma

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Emergence of Cultural Entrepreneurs

Art has always occupied an important position in any culture. Considering performing art alone, there are a huge number of art forms prevalent in communities. Be it a dance form, instrumental music, vocal performance or a play; art is a consummate experience. A successful artiste, whether it is Lady Gaga, Balamurali Krishna or Shankar-Ehsan-Loy understand that the key to their success is to make people buy and share the experience. So how do ‘Cultural Entrepreneurs’ establish themselves? What are the strategies they use to promote themselves?

An informed view regarding the business of culture reveals that establishing oneself in the fraternity sometimes requires more than just talent. The comparative advantage of being backed up by a well-known brand, trained by an established teacher or certifications/scholarships from well-known institutes carve a less tough path to recognition.
Successful artistes can be classified as two types, conventional or novel. The conventional ones reflect the “traditions and time valued customs”, and therefore should play upon “puritans” to be accepted. Initially, to reinforce the cultural trait and the audience preference, it is important that the artiste targets a limited but knowledgeable audience. Certain music schools in Bangalore and Mumbai have adopted the concept of “Baithak”. This is a platform where students get to perform to a limited audience; feedback from the Guru is given immediately. This gives them an opportunity to correct imperfections, build confidence to perform to a larger audience and increase network. The strategy is to build a selective platform.
Sticking to the “core” of the presentation plays a major role in getting passable reviews; many successful artistes climb the ladder by pursuing a policy of “no novelty and no confrontation”. Many church choirs and classical music gurus follow this strategy. Their use of social media is more to inform users. In fact, their strategy mimics the movie industry where trailers released on Youtube etc. are to draw crowd to a musical or the theatre.
On the other hand, the novel ones who are often with limited exposure and resources, who have to quickly establish themselves against the tide and win over newer converts. Many of them understand the power of being in the news, whether it is related to their work or otherwise. Propaganda must start about one’s strengths only and the purpose is to ritualize and glorify the nuances.
The approach similar to the ones used by all newer religions is to attract early converts and build intensive distribution. Platforms for intensive distributions may be many – charity events, Youtube releases, awards functions and live events. A successful artiste follows a strategy of Appearance – Court noise – Build cathedral – Establish order. In the first phase the artiste tries out novel tunes, music or interpretations and follows this up with systematic “noise” to be in the media for any reason to fortify recall. Once elements of success are seen, build organization to codify and ritualize the movement and thus establish order.
The longevity of the artiste depends on the retracing of the cycle. The artiste must show tenacity and a drive to grow.
Amrita Rao
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