Tag Archives: Sales

How Does a Customer Perceive Value – A Case Study

Allied Technologies is a manufacturer of Special Purpose Machine (SPM) and friction welding machines in Bangalore. The company had received an order to manufacture tablet filling machines from one of its clients. Servo drives is an important sub-assembly for this application. Being an SPM, the company had invited a market leader called MACK servo ( name changed) along with a medium sized company called Leonardo Automation. In the morning session, after the client gave a presentation about the SPM dimensions and application, the senior managers of MACK Servo started pitching in their products. The MD was a bit perturbed as he could sense the sales pitch. He was expecting the vendors to provide a solution rather than pitch a product.MACK Senior managers changed the approach sensing the client discomfort.

Mr. Anil Purohit, the Director from Leonardo is a person known for his technical expertise. Rather than speaking about his servo products; he started speaking about the machine design and the relevance of the number of units needed in the SPM as suggested by the design team ( of the client) At one point of time Anil even suggested the client that the same result can be achieved by using less number of servo drives. The design team was quite apprehensive as the vendor was challenging the former’s competence.. However the client MD gave a patient listening to Anil’s proposal.. The meeting with both the vendors was over prior to lunch.The team from MACK were thanked profusely for their efforts. Anil was asked to wait.

After lunch the MD called for another round of meeting with the mechanical design team where Anil was also invited. The team listened to his novel idea of bringing down the machine cost by innovative design. A decision was taken where Leonardo was considered as a sole vendor and the order was placed on it. The price of Leonardo Servo was higher vis-à-vis MACK. However the overall cost was lower due to an innovative design approach.

This was achieved due to the technical expertise of Anil about his product but also for value he brought for the client’s machine design.

Quite often salespeople feel price is the main factor in today’s business environment. However it has more to do with your technical expertise and what value your bring to the customer. Can the salespersons change their paradigm from price to cost of ownership?

Rajan Parulekar, rajan@paradigm-info.com

New Strategies to Manage the Downturn

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It is said that when the going gets tough the tough get going. Some of the strategies companies are employing to beat the downturn are:

Find New Niches: Some companies are finding new niches which are more visible, easier to record and have a lower cost of acquisition. Maruti is targeting priests in Tamil Nadu and turmeric growers in Nashik. Groundnut and cotton growers in Jamnagar due to the bumper harvest are cash-rich and are buying mid range and high-end Maruti cars. The sales team was also able to sell 40 Eeco vans as a cost-effective mode of transport to restaurant and motel owners on the highways of Ahmedabad and Baroda.

The niches can be in rural market too where there is more scope for growth vis-à-vis the urban centres. Mayank Pareek, the CMO of Maruti has identified 300 new niches which account for 10% of company’s growth which include potato growers in West Bengal, blue-pottery makers in Jaipur, timber merchants in Gujarat, granite polishers in Hyderabad, painters in Madhubani in Bihar & Nut-bolt manufacturers in Sonepat.

For the migrant workers in Mumbai using entry-level feature-phones, Vodafone launched an application of booking train tickets on IRCTC , says Vivek Mathur, Chief Commercial Officer, “with an application much cost-effective than a connection of MBs of a data plan.”

Godrej was selling Aer, its car freshener as a FMCG product through its traditional trade channels. But the response was not encouraging. The consumer care research team found that the car owners are possessive about their cars and the accessories and may not visit the conventional FMCG outlets to buy a ‘freshener’. Godrej changed the strategy and appointed different distributors mainly from the car accessory market. The sales started picking up.

2. Get out of the Office: Axis Bank is coming out with similar initiatives which include involving senior citizens to open accounts. The Senior Citizen Privileged Account offers health checks, bill payment, an ID card for medical emergencies and a CD of old movie songs. Manish Lath, head of marketing says, “it is not about acquisition business but more of people relationship.”

3. Listen to the Sellers: Dealers, retailers considered as an extended arm of an organization are the important touch-points with the customers. Aircel has launched a new reward scheme for the retailers who sell the highest number of mobile connections. The star performer’s wife is eligible for a brand new Hyundai Santro car and the runner-up gets to meet MS Dhoni in person. Chandu Virani, MD of Balaji wafers has meetings with 800 dealers in group of 40-50. The purpose is not about sales and achieving the numbers but to listen to them and resolve the bottlenecks.

Whatever business you are in; can you identify the new niches which were hitherto untapped and with whom there is a greater fit between your offerings and the niche’s requirement?

My experiences At IIM-A

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I had enrolled for a MDP on Enhancing Sales Force Performance program at IIM-A. The four-day program was to commence on Monday 18^th February.

I reached the campus at 8.00 PM the previous day. After entering the campus I was given the course material in a bag with the room keys. The participant list of 35 executives included Sr. managers, CEOs from India and also 3 from Sri Lanka, one from Singapore and Bahrain each.

After checking into the well-furnished room, I freshened up, headed straight towards canteen which was to close at 9 PM.

When I returned to my room I said to myself, “ anyway the program is next day and after a hectic travel I deserve a good night’s sleep to do justice for the program.” But then curiosity caught over and I thought of glancing through the course contents.

A binder consisting about 12 case studies and other reading material totaling about 400 pages was dumped on each participant. My heart sank into my boots. “Anyway 400 pages, I can start it tomorrow. ” I said to myself. My attention was drawn to a small booklet which read Instructions for Participants and that I was a part of group 2 consisting of 6 participants who have to read 3 case studies amounting to 80 pages and prepare presentation of not more than 6 slides. And this has to be prepared on Sunday night. That means I have no pleasure of enjoying the sleep.

I went to room no 132. The other guys were sitting there most of them in their early 40s utterly lost in what they were reading. After exchanging pleasantries I asked Sudhakar, a manager from an event management company. He said, “ look at this case study on Ingersoll Rand. I cannot make out what a compressor is, the different types of products, around 7 tables with huge voluminous data and a case study 20 pages long. And if this is not enough there are no questions at the end of the case. “

Abraham Mathew, a Sr. manager from Kanan Devan tea said, “ we need to read at least till 4 AM to complete the assignment.”

Confusion and boredom loomed large over all the group members’ faces. I said, “ Friends, take it easy. You do not have to be so nervous. Guidelines for handling a case study are”:

What is the major issue?
What are the minor issues?
What decision needs to be taken?

Try to separate the wheat from the chaff. You do not have to take all the data seriously. Take a distant outlook to get a broad perspective. And above all take it easy. This is not the only case you need to attempt. There are two more to be solved.”

Secondly do not waste your precious energy in reading all the case studies individually. What you can do is each of you read only ONE CASE today which I feel you can complete by 12 midnight. Come here at 7 PM and each member briefs the group within 5-10 minutes the synopsis” . Next You can make a ppt within 10 minutes.without any frils.”

Everyone heaved a sigh of relaief. That is a jugaad which we Indians are god at!

Suddenly the tension prevailing in the room subsided and everyone started looking at the problem with a cool mind. Now why do IIM professors subject the participants with such a huge workload?

We shall see in my next blog…

Is Goal Setting useful All the Time?

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Who has not heard of Goal Setting particularly the SMART ( Specific, Measurable, Attainable , Realistic and Time Bound) Many of us might have attended training programs on Goal setting , but then in spite of all the hype and the hoopla why does it become a such a stressor? In spite of all the SMART goals, why do 95% people give up on the new year resolutions? I have even heard some executives saying that the only resolution they make is not to have a resolution.

The positive side of goal setting is it gives you a sense of direction. But what is the flip side? The Yale study of Goals is cited by Brian Tracey and also renowned magazines like Psychological Foundations of success. The 1953 batch of graduates were asked about their goals for the future. Only 3% of the graduates had a clear set of well-written goals.It was like getting a specific salary, a designation, a big villa etc.

It seems 10 years down the line the researchers observed that 3% who had a clear focus had amassed more wealth than the 97% who had no clear goals. This study was often cited by management gurus like Brian Tracey, Zig Ziglar, Tony Robbins on which they make millions of dollars with their motivational seminars. The self-help industry has been thriving on Goal Setting for so many years.

A journalist from Fast Company, a technology magazine tried to trace the origins of the Yale Study of Goals and he realized no academic journal was ever cited for the Yale Study. When the motivational gurus were approached, Brian Tracey pointed out fingers to Zig Ziglar who in turn pointed to Tony Robbins who again referred to Brian Tracey. ( ref: If Your Goal Is a success Don’t Consult These Gurus: fast Company 18 December 2007)

Oliver Burkeman in his book The Antidote – happiness for People who Don’t Stand Positive Thinking called on Beverley Waters the archivist at the Yale school who said that such study was never carried out.

Goal Setting as a concept was introduced by Gary Latham & Edwin A Locke who between them have written 20 books on the motivational aspects of life.

One of side-effects of Goal setting, particularly in corporate settings is managers tend to lie about their achievements. I remember while working for my previous company, my Divisional Manager whose initials were PR said during the annual Sales Conference: In the next five years we are going to be a Rs 100 core company. We had barely touched Rs 2 crores in 1987 then. Within 6 months PR had put in his papers and moved to greener pastures.

Two years later another Sr.Manager called NV made inflated invoicing where the goods were shipped from the Mysore factory but were never despatched to the dealers. But the order booking was shown so as to meet the targets. He barely escaped getting sacked. ( Company A).

Another person, a Sr. manager AGI used to narrate how on 31^st March vendors used to supply empty boxes ( in place of Complete instruments) to the customers carry out the invoicing then recall the boxes for repairs and then supply the products. ( Company B)

Both the companies have closed down their operations by 1995. Most of them attended seminars on Goal Setting particularly the SMART ones.