Contents;

·         The companies involved.

·         The Sales Drive.

·         The “Puppy Dog Sale” – giving a free sample.

·         Face to Face works best.

·         Trade shows – good idea or waste of money?

·         Social Networks.

·         Getting the message wrong.

·         Size, Weight, Power and Price.

·         The Value Proposition.

·         Short & Precise.

·         All of the above.

·         The Hook.

·         Find the Fox.

Companies Involved

This workshop had individuals from oil & gas instrumentation, design consultancy, chief engineer – test solutions, chief engineer internal manufacturing, infra red sensors, spectroscopy, base station filters, MEMS based pressure switches and polygon scanners, radar design, electronics systems design, specialist ceramics, gas sensors, miniature displays and lasers.

The Sales Drive

Before we look at specific answers to the workshop it is worth commenting on a debate on the subject of a “sales drive”. The question raised was whether this was seen as a separate “project” or was it an integral part of business strategy. The fact that this was discussed exposes a fundamental concern. Some technology companies still think of a “sales drive” as a separate business activity that you might get involved with when the need arises. This suggests that it is engineers who design products in isolation, manufacturers who then make them and finally some sort of sales team whose job it is to bring in the orders. This compartmentalised view of business is flawed. From concept to end of life the best business process always includes the demands of the customer. You must know how you are going to sell a product before you design it. Thankfully the general view was that sales process is now integral to the business strategy and that Product Management can advise this strategy.

 Q1– Which methods would you use

·            Advert / Exhibition space / technical proposals / application notes / puppy dog (loan sample) / road show / internet / social networks / a round of golf.....any other good ideas?

·            which work best and why?

·            How have you measured success. (gut feel or statistics?)

Initial thoughts were to define the concept of how the product will work – it’s market application. This was needed to refine the answer. i.e. Any or all of the above could apply dependent upon the situation.

One interesting question was how “consultancy” sales – i.e. selling brain power as opposed to a physical product would differ. After some debate it was determined that the same rules apply. Even when it was determined that perhaps the killer technique was a sample product.

“The Puppy Dog sale” – Providing a free sample to the customer (or a demonstrator for large systems)

This is still regarded as very powerful. Give a customer a free or loan version of the product and they are much more likely to adopt it into their business. Consultancies often provide and initial review free of charge – and in doing so can help define how the project should proceed.

You do need to be careful with free samples – to avoid them sitting on a shelf gathering dust. Make sure that the person you are offering it to can and will use it. You must also follow up, get some feedback which may be vital in your product development even if they do not adopt your product at this time, you need to exactly why.

Face to Face works best

Another general conclusion was that a face to face meeting is vital. Deals are sealed and confidence built around mutual trust – generated only through meetings. Therefore the “advert” is not the whole sales pitch, but a hook around which you can broker a meeting – a chance to get the ball rolling. This changes the way we consider the elements of the advert. The advert does not need to achieve the final sale it simply needs to get the customer interested in your product.

Only if you are selling a commodity would it be necessary to detail the whole product specification.

Trade shows – Good Idea or Waste of Money?

Trade shows were discussed with some key directives emerging. They are expensive and time consuming and are often not treated with the respect they deserve. Simply putting up a stand and waiting is not good practice.

(one cautionary tale emerged where company X pulled out of a trade show due to previous years being less than rewarding, only to find that rumours had spread that the business had gone bust – simply because they were no longer exhibiting!)

Trade shows are not just about finding out what the competition are up to. – One company decided to BLITZ the Eletronica trade show last year. They had a large stand, invited many guests, held a wine reception and planned a new product launch. What they got out of this was a sudden understanding that what they thought was going to sell well – did not! And what they thought would not sell was in huge demand! i.e. they had lost touch with the general market needs. They also identified a funnel of enquiries worth some $15M. (The ratio may be as much as 10:1 conversion to orders – but this still qualified the exhibition costs).

The conclusion was that – planned properly and well targeted, with a new message or product launch – Trade Shows can still be very good for business. Do not be drawn into the big big shows with huge halls and many stands. Pick small shows – perhaps built around a market rather than generic ones.

You should remember that often engineers visit trade shows with no specific purpose other than to keep abreast with technology advances. For you stand to meet these needs you must also have engineering staff on hand to answer questions and build relations with new customers. Look out especially for engineering managers or chief engineers. These guys are critical to your success, if they like your technology they can champion its use. If they are not persuaded they will stop other engineers from using your ideas.

So in brief, Trade shows work if planned. Adverts should be designed to hook interest and get you a meeting. Face to face is where business is done, and the puppy dog is still the best idea.

Social Networks

Discussion forums on LinkedIn are becoming more powerful. For many years IT managers have used online forums to help resolve all sorts of issues. The next generation of engineers have grown up with Facebook and will consider the use of on-line discussions as standard practice. The general view is that this will not replace the business meeting in the same way that video telephony has not replaced travel costs. We need to trust people in business and we need to meet to build that trust.

The use of Social Networks is growing however and we need to be aware of its potential. If you are about to meet a new customer, would you not first of all check him out on Linked In? Them determine if any of your contacts may know them well enough to get the inside track.

Maybe in the near future they may prove a valuable marketing tool, could you use an APP for your company?

Watch this space carefully.

One other note – ensure that a Google search for your new technology will return your web address!

Getting the message wrong!

It is also worth discussing the simple truth that you can get this wrong despite good practice. One of the SME’s explained that a new product which they thought would be “brilliant” had been advertised and marketed fully but had not generated any sales. This was debated and it was shown that it is very easy to be fooled by your own enthusiasm for a new product. You practice the sales pitch so often that you start to believe it yourself, despite the customers not being interested.

Underscoring all of the Product Management good practice is a need for honesty. It’s all too easy to predict a high market share for an as yet untried product and forecast a roaring sales success. Customers too can be less than accurate with forecast demand. When they are NOT making a commitment they can often be very bullish about adopting a new supplier, or innovative technology or simply forecasting high demand. Later, when you have the product designed and ready to roll off of the production lines, they start to hesitate, explaining that there is a process to approve a new supplier – which takes months, or, that they cannot use the new technology until the next full redesign – which has just gone back two quarters at least, or just that their demand is lower than expected and they cannot bring you on board this year. Once they are asked to make a commitment, things get very much tougher. This is a fundamental part of Product Management, to continually assess the market response to a new product line. Things can shift quite quickly in business, and you may need to shelve a project in mid-development if the market really is not ready.

It may be worthwhile testing the market as early as possible. If you can identify the right customer, try to get an order with for your new product even with a very long lead time. If they are convinced that your new product is ideal for their needs they will place an order, if they will not make any commitment you need to know why.

Here are some other fundamental questions.

1.        Does the contact that you are talking to have the authority to approve me as a customer? If you are unsure, ask.

2.        If you are not currently on the preferred supplier list, who approves you and do you have a good relationship with them?

3.How will the competition react to you bidding into their contract? They will not take this lying down, they will fight. They could simply cut their margin and negate the perceived value of your product. So you will have developed a new product, forced the competitions price down – but have no sales?

We know from previous workshops that many companies will not start a product development unless they really do have tangible commitments to sales from at least one customer

•         Q2 – How to choose which features to push

·            Price / size / power consumption / go faster stripes

·            Who decides which features to promote, marketing or engineering or committee.

·            Do you focus on one or two features or define whole spec’?

Size, Weight, Power & Price

The first acronym! SWAP€ - Size, Weight & Power not forgetting price are the key drivers in many systems. Reduced size, weight, power consumption or price are the differentiators that are most common.

The Value Proposition

Another “marketing speak” piece of jargon arose in the Value Proposition. Everyone accepted this phrase as standard business terminology which suggests that it is well understood. The danger is that there are individuals in an organisation who, having missed that training day, have no idea what a “value proposition” is, and do not want to appear stupid, so don’t ask for clarification. So let us be clear. In any quotation, advert or product application sheet it is important to emphasise why your product is different and of more value to the customer than the competition’s product. Additionally you should explain the advantages of buying from your company. This is the “value proposition”. If you think about carefully you will quickly realise that for this to work you need a clear understanding of what the CUSTOMER thinks is important and of value – and not what YOU think is value.

An example was raised where a product had traditionally been sold on technical merits, almost exclusively. Yes the price, delivery and quality were important, however if the bandwidth was 5% wider, or the Insertion Loss was 0.1dB lower the product was seen as market leading. Therefore all development resource was channelled into improving the technical performance. However the company involved was unaware of a subtle but vital market development. Changes in the way the equipments were being charged for had meant that power consumption was now the most significant factor to the customer. They would tolerate all other parameters being slightly degraded as long as they could use the lowest power units. This was not in the “value proposition” and the contract was lost to a competitor who had offered what was previously thought to be an inferior product. This is the danger of getting the Value Proposition wrong – it is not what YOU think is superior – it is what the CUSTOMER thinks.

This is of course at the hub of the Product Management system. To identify customer needs and continually seek validation for this point of view.

Once your foot is in the door and you are in debate on a project, make sure that you build a full picture of the customers key demands. If they are pushing very hard for a short development time then it is in your and your customers interest that you veto any additional features which would risk delaying the development. Determine who is really in control of the project and work with them to focus on an achievable specification in the time allowed. First to market with a “good enough” product is often far better than second to market with an “excellent” product.

BE SHORT & PRECISE! Can you write a single short sentence that explains what you do. E.g. We make bricks which are available in seven colours and four strength specifications. Do not waffle! Do not fill an advert with bland statements that any or indeed all companies can claim. E.g. We are committed to customer satisfaction (who isn’t), or World Class design (what does that mean anyway?)

•     Q3 – Who are the adverts aimed at? (which will generate most sales?)

·            Is it engineer to engineer?

·            Marketing to procurement?

·            Business to business?

All of the Above

The simple answer is “all of the above”. Each of the three key customer contacts have their own specific agendas, which can be quite separate. The engineer is looking to solve their next big challenge, which might be performance, size or weight and is therefore looking for technical innovation which offers a solution. The buyer has pressure on supply chain management, is looking for best cost, reliable delivery and quality and perhaps an agreement to supplier owned inventory. These non-technical elements drive his choice of key supplier. The business manager is aware of tactical demands on his company such as delivery performance, price and so forth, however he also has a strategic goal to position his business for future market demands. He will want a supply chain that is investing in the correct strategic areas which could be anything from East European manufacturing base to development of MEMS based sensors.

The conclusion that we will draw from this is that, depending upon the situation, the sales message will need to be adapted. When considering the sales message for a product you should consider what the message is for all three of the above customer agendas.

Do not just write a message based upon the improved technical performance. You must explain why this enhanced performance is of value to the engineer who will use it. In addition lay out a case for the buyer to see value, which may be that the higher reliability will translate as reduced back up stock, or that the simpler manufacturing process can be translated into reduced lead times which in turn requires lower stock levels and a more reactive supply chain – which in turn reduces cash demand for the customer. You should also develop a business message. This is to appeal to the senior managers at the customer. This is where you explain the strategic direction of your developments and how they are aligned to the strategic trends in his market. It may for example be a drive in the market to significantly reduce power consumption. Explaining that your new product includes a key stepping stone on the path towards the target of ultra low power usage will confirm that you are likely to be developing the type of product he will need for the long term, as you understand where the market is going.

It must be emphasised here that getting these messages correct is vital. To do this well you really do need to know your customers point of view. This can only be understood if your are regularly immersed with your customers and get to know their challenges and needs. This is the true value in trade shows or networking events, or buying a customer a coffee. This will slowly build up a picture of the market and its trends. This cannot be achieved sat in front of a computer.

Once you have the whole message prepared you can the select different elements for different situations. You can use the technical elements in an advert or article in a trade magazine such as electronics weekly. You may wish to create a banner on the “buyers” perspective for a trade show. Your strategic message can be adapted into an advert or a bid document for the next big contract.

The key is that all of this is planned, considered, targeted and deliberate. This is how you intend to sell your product, you know who is the target customer, you know what his needs are and will be, and you know how and when you will communicate this to him.

The Hook

As we discussed in an earlier workshop debate – it is felt that business is best done face to face and that you need to build a relationship with a customer to develop trust and to determine their needs. The purpose of the advert / poster / technical article is to act as a hook that could precipitate that first meeting. One way of achieving this is to deliberately omit some key information from the advert. This will encourage a potential customer to make contact and start the process and will also avoid your competitors gaining insight into your products best feature. So instead of defining the performance that your product has, instead you can explain its benefits without saying why it works. Thus leaving the open question to act as a hook.

As an example, if your newly designed power amplifier with a new chipset has a higher efficiency and runs at a lower temperature you may wish to avoid these parameters and instead refer to best in class signal performance or smallest size on the market. Express the advantage in terms that means something to the customer and avoid telling everyone how you do it.

Find the Fox

One of the delegates raised an interesting process called “Find the Fox” which probably comes from a sales training course. The theory is that within most organisations there is an individual who is regarded as the senior technology advisor or guru. This is the chap that the boss will turn to for advice. More junior staff will nearly always defer to his view. IF you are trying to sell in new technology you must get this person on your side. You need to understand his agenda and sell your products to meet this.