Selling – Products versus Services

B2B, Sales

When I was younger and people would ask me what I did for a living – my typical answer would be – I get out of the house on my rounds and sell whatever I have been asked to sell that day – some times its potato chips, sometimes its computers. That was in a lighter vein but over the years I have been involved in selling so many different products and services that I don’t actually see too many differences.

I fundamentally believe that selling is selling. Irrespective of what you are selling and to whom you are selling. Whether you are selling a product or a service, at the end of the day, the customer is buying a result that the purchase will give her/him. So you need to figure out the result that the customer is looking for and how you can get them the result. However there’s a lot of academic discussions which talk about why they are different.

My two cents on this topic are as follow

Every thing that you sell has a nuance to it. Even within products – different products would have different kind of audiences , different price points, different results, same would be the case with different kinds of services
The orientation of the consumer sale would be different from the business sale, in terms of the complexity involved in the business to business sale (i.e. number of people and steps) and the time involved.
The way you showcase the result could be different – in consumer products you use advertising, while in B2B you might use a direct sales team.
The way you solicit the business may vary – but some consumer products are also sold to businesses and what was once considered a business product (like computers) could soon become a consumer product.

Inspite of all the above points – one distinct difference is that , generally, products have well defined boundaries while it is tougher to put boundaries on what is constituted as a service because humans are involved in the delivery. So standardisation is much tougher.

In most cases today, the product and service get intertwined – do you go to a restaurant because the food is good or because the ambience and service is excellent or all of them.

Till next time then – it doesn’t matter what you are selling as long as you know the result you get for the customer – rest of the things can be managed.

Carpe Diem!!!

Market forecasts – how I would get them wrong – 3

Assumptions, B2B, Marketing, Product Management

So in my last 2 posts I wrote about couple of areas, on how as a product manager, I would get my forecasts wrong.

In this one, we will talk about competition. Whenever there’s a good market, you will have competition come in, sooner rather than later. The more the competition, the more the challenges because you have to estimate in advance how competition would react to your offering.

The advantage of the B2B market is that generally, the competition is defined. Until a rank outsider comes in with a revolutionary product, generally the B2B space is defined and the products/services are also known.

In the market – perception is the reality. So if your competition creates a perception of a superior product/service or a cheaper service or a more flexible service, then all your forecasts can go haywire, if the market believes that your product is inferior in any way / more expensive / less flexible.

When you are working with a specific software tool or you are a partner for only a specific kind of equipment, then your options for differentiation decrease. It limits you to primarily two things – experience that you have and the kind of technical expertise that you have created.

If its your own product/service you can leverage on other things like the kind of packaging that you do, or the software code that you have built.

From a competition perspective the other thing that you need to note is the number of sales people in the market from your competitors versus yourself. If you have 3 sales people while you have competition with 7 sales people each, then its not practical for your team to outrun the competition. Your competition will always have more people covering more accounts. Which means your chance of losing a deal is always higher. Planning without this aspect clearly articulated in your assumptions is a grave mistake.

But marketing – especially in B2 is very interesting because of these factors.

Till next time then.

Carpe Diem!!!

Market forecasts- how I would get them wrong – 2

Assumptions, B2B, Marketing, Product Management, Sales

In yesterday’s post I wrote about how your plans and forecasts go wrong, if the product on which you have based your service model itself doesn’t succeed or the OEM loses focus.

Today we will look at other aspects where because we didn’t see the obstacles in advance, we couldn’t meet our forecasts. This is again from a B2B perspective where we were involved in direct sales to customers.

One big gap which generally arises when we the product managers, do forecasts, is discounting the human factor. We are so focused on the positives of our product or services that we forget that our product has to be sold by someone. I have tried giving targets and I have tried to get sales people to create their own targets and I have failed in both situations.

The key reasons I think, are because we believe that human beings will work consistently like a machine. We lose focus quite fast. If you have to ensure that your forecasts don’t fail then you need to incorporate the factors which can get your persons de-focused.

So think in terms of what all obstacles may come up that you will need to face and what will be your plan. This doesn’t mean that other things can’t go wrong. Its about figuring out what all you can think of in terms of the obstacles. Also understand that I am not looking at moves your competition will make.

As an example one project execution has not gone as per schedule….and your sales person has to hand-hold the customer. How will he make the sales calls then. What happens if half your sales force leaves together or spread across the year and you are not able to hire the right kind of sales people on time. In B2B sales where the lead times are high getting the new person fully operational is a very big challenge. Same could happen on your delivery side.

The more assumptions about your plan that you can call out in advance, the better you can work your forecasts.

Till next time then.

Carpe Diem!!!

The advantages of a Single Target Market

B2B, Marketing, Product Management, segmentation, single target market

Once you have identified your niche and segmented the market by usage, you may be left with a very small portion of the overall market which you had originally thought.

In context of the B2B space you should at least have a bundle of around 100 accounts to start out , as your minimum economically viable market, to test your offerings. You can build this to a maximum of a thousand. Anything more will be unmanageable if you’re a small company.

Once you start of with this bundle of 100 accounts, you get to learn and adapt your offerings extremely quickly. Within these 100 if you keep sustained education based marketing, you will be able to create a “brand” for yourself. While B2B marketing is a slow process because of the inherent inertia of a complex structure like an organisation, you can also be sure that within a typical period of 3-5 years 50% of these prospects will be looking for a new vendor for the services you offer.

Once you’re able to get into a conversation with one prospect, you can quickly identify the challenges and mould your future communication with the new understanding. As you grow, your interactions, your learning compounds at a much faster rate because all the prospects are similar in nature. So the challenges they face could be similar and the solutions that you deploy can also be deployed faster.

Which helps you reach critical mass faster and you’re able to quickly dominate that market before moving to th we next market.

Till next time then .

Carpe Diem!!!