Promotion of New Products & Services to Existing Customers and/or Markets

Promotion of New Products & Services to Existing Customers and/or Markets (renamed from New Products & Services) is finding ways to introduce a new product or service to people who are already familiar with your other products. These may include coupons or discounts for current customers or competition/prizes

The Limitations of Interdependence

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InterdependenceWhat do you think? Will Joe stay or leave?

And, more importantly, what would you do?

Joe had worked in the operations side of his uncles’ technology company for ten years before he told them that he wanted to run his own business.

Good for Joe. That conversation led to the creation of an installation company that was actually separate from the base business, and Joe had his opportunity to be a President. Since they financed the startup, Joe’s uncles owned the new installation business. Within a few years, Joe became a minority shareholder. Today with ten more years now under his belt, Joe and his uncles have equal shares.

Whether you handle computers, telephones, furniture, sun rooms or sound systems, growing an installation business has its challenges. It’s labor-intensive with lots of moving parts, conflicting schedules, union versus non-union jobs, tight budgets, high expectations and too little control over what’s promised.

Installers are dependent on salespeople to make reasonable commitments. In a highly competitive environment, that becomes almost impossible. To get the account or the project, a sales person can feel forced to agree to just about any demand. This pressure is tough enough to handle when the installers are in a department within the core business. Installers in a separate business are dependent on promises made by salespeople in someone else’s company.

So Joe and his uncles negotiated a deal to help the companies be interdependent. The core technology company would get discount pricing and give Joe’s business right of first refusal on their installations. For a few years, the majority of Joe’s installation projects came from the family’s technology business. However, he wanted to grow his business faster and learn how to work with a broad range of customers. Joe can’t hire, train or supervise the sales people in the technology company, but he can develop his own sales department. Today, less than 20% of Joe’s business comes from his uncles’ technology company. Hmm…They are his partners. That could be awkward.

Who gets to decide which companies Joe’s salespeople can approach? What about companies that directly compete with the family-owned technology company? How many other customers can be extended the right-of-first-refusal discount before its value is diluted? Have the installers lost the influence they once had with the technology company salespeople? If the promises made by the family-owned technology business become unacceptable, could Joe charge them more money? Could Joe ever buy his uncles’ shares and become the majority owner? If the family-owned technology company continued to be his largest customer, could Joe change his pricing? If independence is Joe’s primary life goal, could he focus “his” installation company on completely different products or customers than the family-owned technology business?

What do you think? Will Joe stay or leave?

And, more importantly, what would you do?

Do Some Homework Before Expanding into “THE CITY”

New York City

Recently, I was visiting with a family from Vietnam. They were convinced they knew what America is like because they had visited New York City. To me, that is like saying you have a sense of Mongolia because you once visited Beijing.

A few of our growth strategy and executive search clients have their eyes (and hearts?) set on expansion into Manhattan. One is headquartered in NE Pennsylvania. The other is in Princeton, New Jersey. They are both very very good at what they do. NYC is enticing. We “get it”, but when we started to run some cost projections that included multiple team members, office space and increased out of pocket allocations for dining & entertainment, ground transportation & parking and gifts & donations both clients seemed a bit taken aback. The truth is some cities like NYC, Tokyo, Singapore, Hong Kong, Rio de Janeiro, Monte Carlo and Dubai are more like separate countries than cities. Despite the value of new technology, you still just can’t phone (or Skype) it in.

Perhaps you have seen the tongue-in-cheek posters of “Manhattan’s View of the World” that include clear images of individual buildings in Manhattan, a blur of images for boroughs like Brooklyn & Queens, and just curved words for LONG ISLAND, NEW JERSEY & CONNECTICUT. The poster’s images jump fairly quickly to FLORIDA and CALIFORNIA. You would never know that the United States includes places like IOWA, ALABAMA or WYOMING.

Those posters are correct. How many people just say “I’m going into THE CITY” when referring to Manhattan? A LOT! Go ahead and try to ask a Manhattan-based person to come meet you for lunch in a great restaurant in Jersey City! Right!!!

Companies, like Welocalize, Inc., have become increasingly important as more businesses seek globalization. Expansion is not just about geographic distance. Many times, it is more about culture and a capacity to relate to the people involved. Welocalize provides valuable research about local cultures, customs, purchasing patterns, neighborhoods, community leaders, sensitivities, etc. We have concluded that just as much research and thought is needed to expand into NYC as when a firm expands from Princeton into Frankfurt, Sydney, or Shanghai.

How Can Changes in Technology Influence Growth Strategy Decisions?

No matter what industry you are in, advances in technology influence what your growth strategies should be.

Maybe you don’t view your company as directly related to technology. Perhaps you sell things like paper products, over the counter medications, or canned or bottled foods. The reality is, each year’s flu season drives increased sales for Kleenex tissues, Charmin’ toilet paper, Chap Stick lip balm, TheraFlu, Halls cough drops, Vicks Vapo Rub, Canada Dry ginger ale, Joy Mangano’s cotton and bamboo blend blankets, Hallmark get well cards, and Campbells chicken noodle soup. The flu even impacts which items are purchased from the Home Shopping Network.

If your company is involved with these and similar products, you may not be happy to learn about progress being made by Dr. Rider and his team at MIT, but you do need to know about it. An article by Scott Tarone in the September 2013 issue of TECHLIFESCINEWS shares information about DRACO, which is a double stranded RNA activated caspase oligomerizer that has been successful against 15 different viral infections including the H1N1 flu virus!

If customers tend to purchase and use your products when they are feeling well, you need to know about DRACO too. You might decide to establish higher market penetration goals.

If you don’t think that something like DRACO is relevant, maybe a better question is whether someone from your team should attend the annual CES event. Their advertisement in the Sept 2013 issue of WIRED magazine accurately describes the event as “It’s a Lab. A Social Phenomenon. A Marketplace and a Look into the Future.” This global stage for innovation will be in Las Vegas, Nevada from January 7-10 in 2014.

What your team members read is also important. If your business is influenced by techno gadgets, maybe someone in your company should be reading Liszewski’s Gizmodo blog.

Think about it. The formulation of growth strategy includes rethinking: your company’s positioning, products/services, customers & market, competition, and business model. We all need to be informed about technological advances before making these big decisions. Who is leading and coordinating the research effort for your organization?

[video] Lessons from the Plights of Associations

What Role Does Loyalty Play in Your Organization?

This will inevitably be one of those blogs where I ask you to think rather than provide a firm answer. It’s just that I’ve noticed some business people getting into trouble with loyalty issues recently.

In one situation, the CEO seems to view loyalty as belonging to him.  In his mind, the board members, the employees, the vendors, the customers are all supposed to be loyal to him. That often means that anyone who disagrees with him isn’t being loyal. A consultant who is paid to provide an objective viewpoint is quickly dismissed if his/her conclusion isn’t that this CEO is always right. He denies that this is true, but it is so obvious to everyone else.

In another organization, the millennial generation employees are not inclined to be loyal to anyone but themselves. They have seen their Baby Boomer parents suddenly let go and their retirement savings reduced when the financial industry imploded. They don’t trust that Social Security will be there for them when they retire. They may like what they do, but loyalty to the company or the employer isn’t even an option.

The CEO of another client organization resists loyalty to him.  He wants people to be loyal to the business, its mission and the results it achieves. He is concerned about where the company would be if loyalty is aimed at him and he is suddenly killed in a car accident or develops prostate cancer like his father did.

Often it is the truly visionary leaders, like Steve Jobs, who can generate loyalty for both them and the company. Nido Quebein seems to be able to spark that dual loyalty (for the CEO and the organization) as the Provost of High Point University in North Carolina. But that is rare these days.  Too many CEOs view themselves as visionary because they enjoy doing new things. But if they are indecisive inconsistent leaders, they will get superficial loyalty from employees and vendors.

Do you know the role loyalty plays in your company?

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.  Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business. VoiceAmerica. com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

If You Decide to Take a Chance and Develop a Truly Innovative Product

A lingering recession is actually a very good time to introduce exciting new products.  Continuing to provide the same old thing just doesn’t do it. But a product that truly represents “value add”, advanced technology, or ease of use garners the attention of even the most cash tight customers.

But this may be the first real innovation your well established midsized company has done in a long long time. If so, it pays to focus your attention on a small group of your most desirable customers (the sweet spot). Beta tests can be done for people you truly care about and the product can be tweaked until it is really ready to launch.  A broader launch is much easier and more successful if you can confidently brag about the premiere customers who chose to embrace your new product.  Frankly, most customers are followers and won’t take a chance on a new product until leaders endorse it. And the percentage of followers increases during tight economic times.

Breakeven and ROI can be difficult to project if product development isn’t an ongoing part of your daily lives, so it pays to learn from companies with a track record of successful product launches. They immediately measure the time, effort, and cost involved in developing a new product and winning first wave early adopter premiere customers.  And then they measure the time, effort, and costs associated with attracting their followers.

If it’s been a long time since you launched a truly innovative product, you may not like the numbers that are generated when you measure these things but you do need to know. It’s important to have some faith in your capacity to improve.  With information, each subsequent product launch can be more cost efficient.   The ROI on product launches becomes easier to calculate with each innovation.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions. Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, radio show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.  Ambler is in her 7th year hosting a weekly peer-to-peer-to-peer on line program at www.Business.VoiceAmerica. com and www.growthstrategistradioshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

How to Resuscitate Your Product/Service Development Process

If your business feels like it’s on life support, look at your product development process right now.  Working harder, laying people off, cutting expenses, and wishing the banks would loosen up a bit is not going to do it for you these days.  Think about your reaction to my few sentences for some hints about whether you are in more trouble than you care to admit.  If you shut down or felt like yelling at the page, your product development process probably needs resuscitation.  Try not to assume you have to throw lots of money at this either.  It’s behavioral, not financial.

One way to get back into product development when you are stretched  thin is to convene short debriefing sessions within your company.  Frustrated sales people need a safe place to vent anyway.  Marketing folks who are running out of ideas need a chance to talk. Production-related employees who feel blamed for everything that goes wrong deserve special time.  The accounting department must be getting tired of collection, whining, cash demands, etc.  You all need this!

You know, before you even read the rest of this sentence that will be important for everyone to move beyond complaining within a short period of time.  But you also know how to make that happen.  Set an alarm clock.  Assign a time keeper. Use an hour glass.   Do whatever seems funny to some people and irritating to others. Capture peoples’ complaints in writing.  Be careful not to become defensive or promise radical changes that you can’t deliver.  Then shift to capturing the customers’ complaints, worries, excuses, and objections.  There will be an overlap, some common ground in the two lists.  Those are hints about where you may need to start.  Why should we feel like the only strategy available to us these days to simply accept irritability and excuses as “the new normal”?

When petroleum costs were skyrocketing, a client of mine (an electrical wholesaler) used this technique. Their team decided to create a buying collective for their employees and best customers so everyone could afford gasoline for their cars and heating fuel for their homes. Think about that for a minute. A fuel buying group probably would not have been the most obvious new product/service to come out of a traditional strategic planning retreat, but it was a brilliant idea for them.  It felt proactive and positive.  Both the employees and the customers felt like someone cared about them, heard them, and most importantly, they no longer felt powerless.   Today’s complaints and problems are our cues for tomorrow’s BEST products and services…and the process helps us all get unstuck.

Are You Ready to Live Above The Radar?

As the President/CEO of a $20+Mil/yr company, you now live above the radar. You’ve been successful and others are watching to see what your next move will be. You used to drive the growth of your business, identify candidates for acquisition, target key accounts, introduce new products/services, and pace your growth.  Now other entities seem to be approaching you with offers to purchase, merge, or align.

In some ways that feels good because you don’t always have to come up with the ideas.  Others bring them to you.  You’ve become a bit of a celebrity. You are invited to serve on boards, chair fund raising events, and do media interviews. You are asked to speak to business school students or be a panelist at industry conferences.  You’ve even considered authoring a book or going out on a speaking tour.

I have found that many executives aren’t ready to live above the radar. When their businesses were smaller, there was less presumption that they would know what to do.  There was more room for error. It didn’t feel like every move was being watched.  The limelight can actually be distracting and becomes an excuse to not address strategic issues.  Some executives seem to believe all of the hype in their own press clippings and start to coast. Do you really know how to execute an initial public offering? Do you really know what’s expected of a CEO over a $ Bil/yr enterprise?

Take a moment to ask yourself if the limelight is setting you back. You or your company may have won some prestigious awards, but are your executive leaders wondering if they will continue to deserve awards that honor excellence, innovation, and profitability? You may have a strong executive team in place and annual strategic planning retreats, but somehow does it feel like a lot of hard work with too little ROI for the executives?  Have you carefully selected and trained managers, but they just don’t seem to have the same sense of urgency so deadlines that had never been missed before are at risk? Even if you are not ready to retire, you know that your strategic plan should consider succession and options for an exit strategy, but you keep putting that topic off. Does your midsized company have new systems in place, like daily huddles and key metrics/dashboard, but you know that something is missing?

Avoid Wishful Thinking and Presumed Conclusions During Deal Making

A deal is a sale with a non-customer.

Some deals help your company acquire new technologies or capabilities more quickly than trying to develop it yourselves.  Some mergers and acquisitions are done between complementary companies to expand the product or service offering to better serve the best customers. Acquisitions can also be done to eliminate a competitor in an important market.

I noticed that the lingering recession has led some tired entrepreneurs to consider acquisitions and mergers as a way to get relief from their intense schedules.  Unfortunately, this increases the vulnerability of the already tired entrepreneur.  Wishful thinking takes over, and the entrepreneur convinces him/herself that an acquisition can solve their problems.  Why not hire a strong “#2” and get centered again before considering any acquisition or merger?

I have become convinced that acquisitions are like marriage.  When a tired single parent marries to “solve his/her problem,” new problems often develop.  Acquisition, merger, and marriage negotiations all seem to go more smoothly when each participant is centered.

But what do you do when/if the two entities don’t seem “centered”?  What if you thought you were negotiating a merger, and the other entity (key person) waffles, seems a bit too nervous, and withholds information? It pays to slow down and expand your view. Maybe the other person just wants to cash out and retire.  Maybe he/she had become bored. Maybe the transaction will only involve the purchase of assets so you don’t take on their debt or “people” issues.  Maybe you should only offer to pay a licensing fee and not purchase anything.  I’ve seen acquisition negotiations end in simple subcontracting arrangements.  We all know couples who concluded that they should just continue dating one another.

The best deals are when the leaders of two companies look for synergy (fit) and leave their options open…instead of starting the process assuming the answer will be an acquisition or merger. If there is not win/win fit, the title of the deal you don’t make won’t matter. It pays to leave the structure of the deal to attorneys.  Whether it’s a strategic alliance, a joint venture, an acquisition, a merger, an asset purchase, or something else isn’t the most important question.

Pegging

Have you concluded that you really should expand the definition of (what you call) “your market”?

Instead of diving in to try to reach millions of people you don’t know, try a technique called PEGGING to expand your reach based on your customers’ preferences.

  1. Identify the primary trait(s) your customers have in common.  To help you see how this works, let’s follow an example. Imagine that your customers are all Catholic.
  2. Look for secondary demographic traits of subgroups within your market.  Are some single mothers? Are some grandparents? Are some high school students?
  3. Choose one subgroup with 2 shared traits. (e.g. Catholic single moms). Survey. Listen. Observe.  What do they read? Which websites do they visit? Which blogs do they read? Who do they listen to? What do they buy? Where do they shop? Which associations do they join?
  4. Then obtain access to those websites, subscriptions to those magazines, membership in those associations, use of related lists, etc.
  5. Send outbound marketing messages through those websites, magazines, associations, stores, lists, etc. to reach out to a broader group of single moms beyond those you have had as customers in the past. Include a secondary message that would particularly appeal to the Catholics among them.  You’ll attract even more Catholic single moms and have expanded your marketing methodologies.
  6. Now select a second subgroup from within your existing market (customers) that differs from the first subgroup.  Catholic grandfathers perhaps.  Again, reach out to that subgroup of existing customers.  Don’t just sell them more products.  Learn who they listen to. Find out what they read. See which memberships they value. Observe which websites they visit.
  7. Now repeat the process. Do a marketing outreach through those websites, magazines, associations, lists, etc. (with a Catholic sub message) to sell products to a broader group of grandfathers, including those who are Catholic.  Make sure to choose a range of characteristics (age, career, geographic location, income level).
  8. For many companies, 3 or 4 subgroups capture the range of people within their customer base.  You will undoubtedly end up with dramatically different websites, blogs, stores, publications, associations, and list…AND that’s the idea.  After a few rounds of research and marketing outreach, you will have an expanded data base of prospects and some new effective marketing mediums.
  9. This technique can help community banks attract more small business customers away from the large impersonal financial institutions that precipitated the recession of 2008/2009.

Growth Strategy Tip

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