Kamran Qamar » plan for new sales

Market Coverage Maps

Kamran — Sun, 08 Nov 2009 17:16:09 +0000

After deciding which channels align with customers’ needs and with your business objectives—and thus are suitable for your target markets—it is time to bring them together into a sound multichannel market coverage model. In developing such a model, perfection isn’t necessary. The coverage model will evolve over time in any event, as you and your channels adapt to market conditions, and as you learn what works and what doesn’t. The goal should be to develop a sound, workable channel coverage concept that will get you in front of the maximum possible amount of target customers, cost-effectively.

Though perfection is not required, still, developing market coverage models is a complex task. It involves careful structuring of the overall channel mix in a market as well as the integration of channels within the sales process. Like any complex problem, the best solution is to break it into pieces and tackle them one by one. Hence, first create a channel mix, in which you decide how each channel will serve sales opportunities more or less independently, to increase growth in sales and your market share. Then, perform channel integration by developing tight coordination of channels within a single sale to improve profitability and to service complex transactions. This two-step process will result in a winning, innovative, integrated multichannel go-to-market solution.

Let's have a detailed look at both these steps, starting with the "Channel Mix".

Channel-Product Fit

Kamran — Sun, 08 Nov 2009 02:48:23 +0000

How you sell has to match with what you sell. Ever heard of a jet aircraft being sold in a supermarket? Products are a key factor in the selection of sales channels. Some products can be sold through only one channel, while others offer more flexibility. For example, if you want to sell to the federal government, the only channel opportunity you have is to respond to a RFQ—okay, there are some tricks, too, but you got the point.

The idea behind this step is not to shorten your channel option list based on your product. Instead, the idea is to prioritize channels into two categories: i) channels that fit perfectly with your product, and ii) channels that don’t immediately fit with your product but which customers are demanding.

There are numerous product attributes that affect the product-channel fit. A few important ones are:

Definition – How recognizable a product and how well-articulated are its benefits e.g., a pair of shoes from Nike is very well-recognized as compared to business advisory services.
Customization – The level of customization needed in the sales process. For example, Microsoft Office can be bought off the shelf, but it requires a good deal of customization to deploy the company's middle-ware application.
Aggregation – Does the product need to be integrated with other components to make a full solution? For example, an Intel CPU and ball bearings both need to be combined with other components to make a full solution.
Exclusivity – Is the product designed for mass production or exclusive use? For example, Rolex watches are for limited markets and sold through exclusive channels.
Customer risk – How much education does a customer need to make a valid decision? The riskier the product, the more education is needed eg., open heart surgery as compared to hair implantation.
Negotiation – Negotiation could be needed on price, customization, post-sales support, etc. The higher the need, the more complex the solution.

The chart below compares product attributes to generic channel attributes. You can use this grid as the starting point to divide your list of channels into two categories.

As the chart shows, complex products require high-touch channels. Simple products, on the other hand, can be sold through low-cost, low-touch channels. This commonsense wisdom works very well. However, the goal of this exercise is not to do what everyone else is doing. Rather, we want to innovate how we sell. For example, as the chart shows, complex products like strategic management consulting or customized customer relationship management software are generally sold through high-touch points like a field sales force and partners, but companies are selling a complex CRM solutions using low-cost channels like the Internet e.g., Salesforce.com. What gives? Next section "Channelizing a Product" answer this question.

Applying Customers’ Filters

Kamran — Sun, 08 Nov 2009 02:47:21 +0000

The success of a company depends on its ability to align with its customers, and this certainly includes its choice of sales channels. If a company chooses channels that meet its customers when, where, and how they want to do business, it'll sell more stuff. Otherwise it will sell less. Thus, we have to make sure that the list of channels we have brainstormed meets the buying criteria of customers. You can basically rule in all the channels that your customers want and rule out the rest.

There are two tools—i) customer needs criteria, and ii) customer buying behavior—that you can use to align your channel selection with customers. We collected all the information needed to apply these tools in the last section. Let’s see how to make the best use of it.

Aligning Channels with Customers’ Needs

If you focus on channels that satisfy your customers’ needs and eliminate channels that don’t, you will sell more. For example, customers who need and expect training, on-site installation, and easy access to a real person will be very dissatisfied with low-cost channels like the Internet or phone. On the other hand, customers who value self-service and ease of transactions will love the Internet and might hate people calling on them. The table below shows how different channels stack up against the most common needs of customers. You can use this table as a starting point to get the first-cut channel list.

You can create a table like this and rank your list of channels. You don’t need any complex ranking—a simple three- or five-star ranking system will work.

Align Channels With Customers’ Buying Behavior

The second tool provides a much more exact approach for aligning channels with customers. It’s based on the facts gathered in the last step regarding customers’ buying behaviors, where you asked how they buy a product today and how they intend to buy it in the near future. The chart below, for example, shows the findings of how customers are buying a camera bag today and how they want to buy it in the future.

It is clear that currently most sales happen through manufacturing reps and distributors. Catalog or mail order is also a major channel, whereas the Internet is not a major player at this time. However, customers are indicating that they are interested in buying directly, either from a retail store or via the Internet. Such an obvious indication warrants that a business take a serious look into building these two channels to capture sales in the future.

These two tools together help you shorten the possible list of channels in more manageable touch points. However, it is still outside-in view. A product may not have be suitable for a particular channel. Next section "Channel Product Fit" describes the process of filtering channels from a product's suitability perspective. You will also find tools to customize a product for a channel.

Reference:

Go-To-Market Strategies by Lawrence Friedman

Establish Touch Points to Deliver the Wow! Experience

Kamran — Sun, 08 Nov 2009 00:50:33 +0000

Channels are pipes that connect your products and services with your customers. They establish the touch points to deliver the customer experience.

In every industry, customers have channel preferences as well as an actual history of buying behavior. These preferences and behaviors define the outer boundaries of what could possibly work in terms of new channels. In order to establish the right touch points, there are three pieces of information that you should look for:

How do customers purchase a specific product today—through which channels?
How will customers purchase a specific product in twelve to eighteen months?
How much flexibility exists in selecting a channel

You've already gathered answers to these question while drawing a detailed customer journey. Here, I'll present a four step process to distill this information into actionable program. The diagram below lays out the four-step process. It starts with a structured brainstorming session to identify all the channel possibilities, which are then weighed against the customer intelligence we gathered in the last step to align our channels with customer buying behavior.

Let’s look at each step in detail:

Brainstorm Possible Ways to Sell Your Product(s)

One common characteristic among all the companies that have limited, and limiting, ways of selling their products and services is that they fail to consider the full range of channel opportunities available to them. You don’t want to make this mistake. You want to look into every feasible channel opportunity, and carefully select the right ones. Here is a structured way to brainstorm these opportunities:

Identify all of the channels that you are using today for different tasks in the sales process including lead generation, sales, support, service, and account management.
List all the channels that your direct competitors are using. You can find this information right on their websites. You should also have some of this information from the research work you did in the last step.
Look for comparable products in other industries and list all the channels that companies are using to sell them.
Ask yourself these questions:
- Who can sell our product? (offline/online retailer)
- Who can sell our products to our retailers? (distributors)
- Who is selling comparable products or services to our target market, and can we partner with them? (alliances)
- Can we collaborate with our competitors to increase market size? (coopetition)

This structured thinking will give you a near-exhaustive list of channels that you can use to reach your target market. The list below shows a few possible channels that are available for a sample camera bag manufacturer—and channels that its competitors are using, as well as channels used to sell comparable products in other industries.

In-house sales force
Manufacturer's reps
Distributors
International distributors
Retail camera store chain
Offline and online camera rental shops
Trade shows
Box retail stores with photo printing services (CVS, Staples, Wal-Mart, etc.)
Internet/eCommerce website
Internet affiliate program
Online bag retailers
Camera stores with an online presence
Holiday gift catalog
Workshops hosted by individual photographers
Photography schools
Mail order
and so on and so on…

As this simple list shows, there are many ways to reach more customers and deepen your relationships with existing customers using some very innovative channels. The challenge is how to narrow down this list to a practical set of go-to-market options. That’s what next two steps "Applying Customer Filters", and "Channelizing a Product" are for.

Reference:

Six Disciplines for Excellence by Gary Harpst
Co-opetition by Adam Brandenburger and Barry Nalebuff

Levers to WOW Customers

Kamran — Sat, 07 Nov 2009 23:34:06 +0000

Did Dell decided to sell computers on Internet by looking at existing customer buying behavior? Of course, not. When Dell started selling PC on the web no one else was selling them using Internet. Dell’s innovative approach of selling was based on a clear thinking about how customers would be willing to buy, based on what is important for them in the sale of PCs, including: low price, exact configuration to customers’ specifications, and ease of doing business, among other factors. All of these needs could be met—and better met—using direct channels such as telephone and the Internet.

You can do the same, if you step back and identify the buying criteria at each stage in your customer journey. The list below provides you a good starting point to identify key criteria at each step. The vivid customer persona that you created in the last step will help you customize it for your business:

Steps in Customer Journey	Barriers
Awareness	Identify venues where prospects go for information and establish touch points to communicate your value proposition in comparison with your competitors
Investigation	Understand prospects needs and present information such that it answer their questions quickly and clearly. Position your message to effectively address your competitors' message
Consideration	Understand prospects key criteria and hierarchy of need and provide them with information that readily speak to them. Ensure a consistent brand experience across all the touch points
Selection / Purchase	Understand real objections; get familiar with prospects evaluation process; articulate how your solution fit well with their hierarchies of needs; become personal
Use	Don't make promises that you couldn't keep. Improve product quality and on-time delivery; provide training; generous return policies; customize offerings
Satisfaction	Poor customer service; inconsistent brand experience; poor sales process; lack of tools to engage customers
Loyalty	Recognize that good customer service is the only way to do business; improve product or service quality; invest in profitable customers; initiate loyalty programs; engage customers
Advocacy	Understand the emotional drivers of your customers; Track and measure Net Promoter Score; provide tools like social networks

As you go through the list above, you will notice that the requirement to establish proper and adequate touch points at each step cut across all the steps. Next section shows how to pick right channels to deliver the wow experience.

[ THIS SECTION NEEDS TO BE RE-WRITTEN: Possibly add SWOT Analysis for each step in customer journey?]

Customer’s Moments of Truth

Kamran — Sat, 07 Nov 2009 22:52:20 +0000

The great thing about creating a vivid customer profile is that it gives you insight into your customers’ world, which in turn allows you find what they really need at different stages of their buying cycle. After outlining the customer relationship cycle, audit yourself to identify the barriers that are stopping you from simply meeting your customer needs at each stage. Figure 6.6 articulates a few common barriers at every customer relationship lifecycle stage. This could be the starting point for your brainstorming session.

Steps in Customer Journey	Barriers
Awareness	Prospects are not aware about your company and brand, they don't know if your product can address their needs or can do it better than your competitors
Investigation	Available information on your offerings do not readily address prospects key criteria; it is difficult to understand and hard to translate
Consideration	Difficult to access all the right information needed to make decision; poor sales process; competitive brands seems to offer more value
Selection / Purchase	In-decision; conflicting opinion; pricing; external factors e.g. economy, legislation; internal factors e.g. budget, shifting priorities etc.
Use	Product or service doesn't meet the performance expectation of the customer; price/value ratio changes; Unrealistic expectations
Satisfaction	Poor customer service; inconsistent customer experience; lack of tools to measure customer experience
Loyalty	Poor customer service; inconsistent brand experience; poor sales process; lack of tools to engage customers
Advocacy	&Customers are not comfortable recommending your products; no tool exists for them to promote you; emotional experience is weak

After identifying the barriers at each moment of truth, it is time to resolve them by identifying appropriate levers / existing company capabilities. Next section shows you how.

Drawing Customer Persona

Kamran — Sat, 07 Nov 2009 21:09:17 +0000

By now you are quite familiar with Shootsac example, so let’s continue with it and create a customer profile for one of their target market segments i.e., "female professional wedding photographer." It could look something like this: a female working professional photographer with a dog—meaning, most probably, she is single—who just had a bad day on a shoot where she almost lost her lens. She is determined not to let it happen again, meaning she loves her work and is strong-minded about it. It is almost midnight when she fires up her browser, goes to Google and searches for "camera bag," "lens protector," or "lens bag." She finds Shootsac on the search results, browses the website and gets acquainted with the product. She is excited about the changing cover feature of the bag—she is artistic and loves art.

She is a realistic person; instead of impulse-buying, she wants to understand if the bag will solve her problem or not. She browses the Shootsac blog and reads what other customers are saying. She is interested but still not convinced. She goes to her favorite forum and posts her questions. The crowd gives her an unbiased opinion. She makes up her mind to buy the bag and goes to the website to place an order. She wants to make sure that the order is delivered on time, so she makes a phone call to the customer service center. She gets her bag and loves it. She takes photos and posts them on her blog.

This vivid description readily shows the customer journey and identifies the opportunities where a business can establish touch points i.e., Google Ads or search engine optimization; an active blog with customer testimonials; influences throughout the blogosphere; a website that clearly says how to protect the lens; close monitoring of blogosphere and forum posts to respond to prospects’ question; a painless one-click shopping cart experience, etc.

You can create this kind of vivid customer profile for your business by gathering information about customers from four sources:

Existing customers—They provide you with a wealth of information on how they already buy (which channels they use, where sales volumes are going up, where they are going down, etc.) and how they plan to buy in the future. The best part is you can reach them with your in-house staff rather quickly.
Competitors’ customers – Some competitive intelligence will allow you to understand the behavior of the most important customers that you want to acquire. One way of knowing their preferences is to visit your competitors’ websites and marketing collaterals, which tell you a lot about their strategies. You can collect this information very cheaply using in-house resources.
Out-of-industry customers – Most companies sell products that look somewhat like those offered in other industries. For example, companies that sell boats share many characteristics with companies selling luxury cars—both of these products are targeted to high-end customers. Understanding their customer relationship cycle will provide powerful insight into your own customer relationship cycle.
Customers in your blue ocean segment – These are the customers in new markets where you don’t have any prior knowledge. Targeting these customers poses the biggest risk, and hence deserves detailed research. Collecting information about them is a big undertaking. I recommend hiring consultants and/or market research firms to conduct a detailed study of customers in these market segments.

Once you have articulated persona of your customers, you can draw a clear customer journey map. Please note there could be different journey maps for different market segments and customer persona.

The second step is to identify objections that will rise as they will step through their journey. Preempting these objections help you create exceptional customer experience at every moment of truth.

Mapping Customer Experience

Kamran — Sat, 07 Nov 2009 20:48:33 +0000

This simple idea of aligning with your customer using customer journey mapping is the most powerful tool in the arsenal of any company. This alignment can be achieved in three simple steps:

Draw a customer journey map
Identify moments of truth at each stage
Discover levers to wow customers at each moment of truth
Establish touch points to deliver the wow experience

Figure 6.6: Aligning with Customers

Let’s see these three steps in detail:

Step 1: Draw the customer journey map

To draw a customer journey map, you need to know what customers buy, why they buy it, how they buy it, how they want to buy it, and what will motivate them to buy more of it from you. One way of answering these questions is to first define a customer profile or persona and then use the customer relationship cycle shown in Figure 6.3 as the starting point to map her journey. The more vivid a customer persona is, the easier the mapping.

So let's see how to draw customer persona.

Example of Customer Experience Mapping

Kamran — Sat, 07 Nov 2009 19:49:48 +0000

Let’s look at the example of the movie rental business. Customers rent a movie for many reasons, e.g. for entertainment; to spend quality time with their families; to increase their knowledge of a certain topic; to explore new ideas; to kill time, etc. Figure 6.4 shows a typical customer journey in renting a movie as a sequence of eight steps i.e., learning about a subject or movie; planning to watch it on a weekend or weekday, in the theater or online or on video, alone or with family and friends; browsing available titles on the subject; choosing the right movie based on other viewers or friends or movie marketing material; receiving or renting the actual movie and paying for it; viewing it in the comfort of your home; returning the movie; and paying the late fee if they are late.

Figure 6.4: Customer Journey in Media Rental

So how are movie rental companies at providing the experience in this customer journey?

The chart below in Figure 6.5 intuitively illustrates how traditional media rental companies like Blockbuster, Hollywood and other small media rental companies rank on the customer experience scale. The chart—provided by Tim Olgive of Peer Insight, a management consulting company—divides the customer experience into two broad categories i.e., "customer responsibility" or below-the-surface experiences and "media rental company" or above-the-surface customer experiences. To rank a company, the chart uses a simple three-grade scale i.e., negative experience (the customer is not happy with what she got for the price she paid); neutral (the customer is getting what she expected); and positive (the customer values the experience more than the price she paid).

Figure 6.5: Traditional Media Rental Company’s Customer Experience

As is apparent from the figure, traditional media rental companies believe that the most important draw for customers is the location of their retail rental stores. These companies assume that when a customer walks into their store, she already knows what movie she wants; therefore, in their world, customer awareness, planning, and choosing a movie is the customer’s responsibility. They don’t influence these steps. Overall, major traditional media rental companies provide a reasonably good customer experience at all the touch points that they have created. This particularly applies to browsing and renting touch points, where customers get the instant gratification of holding the movie in their hand, renting, and watching it right away. They provide a negative customer experience, however, when they punish their customers for not returning the movie on time. It is like telling them, "You are a bad person. You did wrong and you deserve to be punished."

Blockbuster and Hollywood were doing a great job. However, they were not properly aligned with their customers’ changing buying behaviors, so the customer experience became more bleak with every passing moment. This is where Netflix spotted an opening and created a business that threw Hollywood out of business and significantly affected Blockbuster’s market. The chart in Figure 6.6 shows the touch points that Netflix created, and how the company aligned itself with the customer journey.

Figure 6.6: Netflix’s Customer Experience

While traditional media rental companies were viewing learning and planning stages as the customer's responsibility and were relying on customers to do it themselves, customers were demanding easier ways to choose movies. By spotting this need, Netflix changed the equation of the media rental business by creating special touch points in the shape of online search and recommendation engines. This helped them engage customers from the start, which reduced their sales cycle time and improved customer retention and satisfaction, resulting in increased repeat business.

Netflix also noticed customers' frustration at the final stage of their journey i.e., late fees, and completely eliminated it. Netflix inspired customers to try its service with a simple message: “No late fee ever.” Instead of punishing customers with a late fee, their negative experience is this: If a customer is late, they don't get another movie to watch! This is somewhat like saying, "You cut it in half and I will pick the half."

How did this customer alignment work for Netflix? In 2008, Netflix posted a 45 percent increase in its profits. Its customer acquisition cost decreased to $26.67 per customer from $34.58 a year earlier, while they added almost 2 million new subscribers. This brought Netflix's total circulation to 9.39 million subscribers, up 26 percent from the 7.48 million customers it had at the end of 2007. Churn, or the rate of subscriber cancellations, was 4.2 percent in the fourth quarter, compared with 4.1 percent a year earlier.

So let's see how you can map experiences of your customers to grow your business.

Reference

Tim Ogilive – Peer Insight Consulting

Align with Your Customers

Kamran — Sat, 07 Nov 2009 19:20:34 +0000

Market segmentation is the process that looks at opportunities from a business perspective. It allows a business to select the customers that it wants to pamper by providing an exceptional customer experience. It is not much different from finding compatibility matches on the largest online dating website, Match.com. In order to really make a connection—in our case, close a sale—you still need to dance around the potential match. You will perform much better if you know the steps of their favorite dance.

In the business world, the customer experience cycle is the dance and touch points are the steps. By understanding and mapping the customer journey for a targeted market, a business can align itself closely with its customers. This mapping allows a business to identify levers that it could pull to further enhance the customer experience at each touch point, hence allowing a business to develop yet another set of differentiation: [customer] experience-based differentiation (EBD). Darn these marketing guys! They always come up with new catchphrases, don’t they?

Catchphrase aside, there is no doubt about the fact that providing an exceptional customer experience will build brand loyalty and repeat business. There are two ways to go about mapping the customer experience: 1) Start with your existing selling process and document all touch points, hence creating a customer relationship cycle, or 2) Start fresh with a customer profile and try to guess what possible routes she will follow to buy your products and create touch points. No matter what approach you take, note that there is a fundamental structure to the customer experience as shown in Figure 6.2. It is:

Figure 6.2: Atomic Structure of the Customer Experience

Customer journey
A customer journey is the sum of all the experiences that a customer gains as she goes through her buying cycle. It includes experiences due to interaction with your business—above-the-surface experiences—as well as experiences due to a customer's environment and circumstances beyond your control—below-the-surface experiences.

For example, Tim, who forgot to buy a gift on his anniversary, may rush to a flower shop to pick up a bouquet of roses for his wife. The flower shop may be providing a pleasant experience by offering a wide variety of flowers at a reasonable cost. Tim is making a journey towards a lovely evening and a quality life.

It is important to realize that a vendor’s touch point is just one part of the overall customer journey. Figure 6.2 shows the customer journey as a series of decision steps. The red steps are a customer’s own responsibility, or below-the-surface steps, where a vendor does not have direct influence. These points offer a real opportunity to outsmart and leapfrog your competitors. The green steps, on the other hand, are where a customer interacts with a vendor and the vendor can directly influence these steps.
Touch points or customer relation lifecycle
Each decision step where a customer comes into direct contact with a business is termed a touch point e.g., an advertisement, a website, sales rep, receptionist, customer service representative, etc. The collection of these touch points results in the environment that a company creates to let its customers do business with them. It is termed a customer relationship cycle. Figure 6.3 shows eight stages—each stage could have multiple decision steps—of the customer relation lifecycle, both from a business and customer perspective. Titles in black represent the business perspective and titles in the white represents customers’ intents. Customer relationship lifecycle provide businesses an opportunity to understand what their customers value at each stage and what are the drivers to fulfill their unmet needs, hence moving them from one stage to another.

Figure 6.3: Customer Relationship Lifecycle: A Customer and Business View
Moment of truth
In his book The Moment of Truth, former Scandinavian Airlines CEO Jan Carlzon stated: “Anytime a customer comes into contact with any aspect of a business, however remote, is an opportunity to form an impression.” This impression is the moment of truth. These are little moments that have unusually high emotional significance. They are what a customer will remember longest after the journey is over. Identifying these moments is the key strategic step in aligning your business with customers' needs and expectations.

This atomic view of the customer experience allows you to align your business with your customers, which lets you shorten the sales cycle, stop the leak in your sales pipeline, and hold your prices in today’s cut-throat business environment. This alignment is achieved by mapping the customer experience and providing exceptional, memorable experiences at every moment of truth.

To illustrate the point, let’s look at the example of customer experience mapping.

Reference

Tim Ogilive – Peer Insight Consulting

Kamran Qamar » plan for new sales

Market Coverage Maps

Related:

Channel-Product Fit

Related:

Applying Customers’ Filters

Aligning Channels with Customers’ Needs

Align Channels With Customers’ Buying Behavior

Related:

Reference:

Establish Touch Points to Deliver the Wow! Experience

Brainstorm Possible Ways to Sell Your Product(s)

Related:

Reference:

Levers to WOW Customers

Related:

Customer’s Moments of Truth

Related:

Drawing Customer Persona

Related:

Mapping Customer Experience

Step 1: Draw the customer journey map

Related:

Example of Customer Experience Mapping

Related:

Reference

Align with Your Customers

Related:

Reference