The concept of Value in Services – 3

I had written two posts earlier on this topic. I wanted to explore a couple of other things to get this topic to a logical end.

We are clear that the value is what the customer thinks it’s worth. But there are a couple of other components – one is the price and the other is your cost of providing the service. One thing that I have learnt with service projects, in B2B customers, is that, they always take longer than planned. And costing is always done on the plan.

Since most of us are under pressure to pick up the deal, we don’t like the idea of putting in buffers for the project going over time, because we are afraid that competition will pick up the order because of the increase in price.

The over runs generally happen in the final stages of the project. If you were to think of the full project as an elephant walking through a gate, then, generally all the components of the project – the trunk, the ears, the 4 legs, everything comes out but the the tail gets stuck in the gate for some reason or the other.

This is the time that the final User Acceptance is getting done and because the user feels that she should not miss anything, she tries to ensure that all the “t”s are crossed and all the “I”s are dotted.

This is where your costs go higher than you had budgeted. The resources that you had thought will get off the project, can’t leave the project to start on another one. That is the people. Then there are the pieces of equipment and tools that are getting used in the project. You will be paying for all this. Without realising, slowly the actual profit starts falling.

The customer doesn’t realise this. If you take the argument of cost over-run to the procurement person, he will find all kinds of reasons to put you on the back foot and in most cases never pay-up.

So you need to figure out a way to ensure that your “Costs” actually take this into account when you give the “Price” to the customer and you need to figure out a way to show the “Value” to the customer. You also need to be clear on the process of signing off the project from the customer end. What kind of tests will they get done, what kind of reports will be needed, the kind of dashboards that will be needed. List out all the points up front while closing the order.

Till next time then …. make more profits

Carpe Diem!!!

The B2B sales person’s tight rope walk

B2B, Sales

The sales person is the face of the company but she is also the interface of the customer. So while the company pays the salary, its the customer who gives the business, because of which the company earns revenue and can pay salaries.

So whose orders should the sales person take…..this is a very big dilemma. When I was young and new in sales , I actually ended up offending a few customers, because I literally took my boss’s orders on some issues.

Luckily I was able to salvage the situation and some of those customers gave me business for a long time after that. This situation could have happened with any sales person not only in B2B.

In B2B the challenges are that we are a looking at more than one person with whom you deal. In addition there’s long term business at stake because B2B buyers don’t change suppliers quickly. So if you offend one person, the news may spread and you may also lose business with the other buyers over time.

There’s another peculiar situation in B2B. You may be doing business with one buyer, let’s call him Sam. You may try to explore business with another buyer in the same company, let’s call him Tom. Now Tom is even willing to talk to you, but Sam wants you to route all your interactions through him and if you try bypassing him, he gets upset and holds your payment or other such issues.

You later find out that Tom and Sam are actually not on speaking terms and therefore Sam is penalizing you for talking with Tom.

This is a very delicate situation. You want to expand the business because that’s what your company and you want, but if you offend Sam you may actually even lose the business that you presently have.

If you think, I have an answer that can solve this problem for you….no I don’t. Each situation is different and has to be handled carefully, it really is a tight rope walk.

However one tool which I tell my team members to use is to “make me the bad guy” . Meaning for this situation, my team could tell Sam,’ you know my boss is such a jerk , he wants me to get the business from Tom at any cost, what do you think I should do’ . This works in a lot of situations for my team members because the sales person now earns sympathy of Sam.

See if this works for you and let me know. Also let me know in the comments below if you have come across some other things which have worked.

Till next time then.

Carpe Diem!!!

Working backward from the customer result – B2B scenario -2

B2B, Customer Delight, Customers, Marketing, Marketing Stamina, messaging, service quality, single target market, Triggers

In my post yesterday I had shared all the challenges that a B2B target audience faces in her day. Having recognised the result you can offer to your customer to delight them and also identified clearly whom you won’t want to attract. How do you get their attention? If they don’t get their attention, they won’t know if you exist and you won’t be able to do business with them. However given the challenges on their time and attention, you window of opportunity is just a few seconds, before you are dumped.

The other bigger issue is that the B2B buyer is not an impulse buyer. She cannot just buy something, until and unless it’s something of extremely low value. Chances are that the need that your product or service is fulfilling is already being done by some other vendor or some other means (the Porter’s model of competitive forces) . If that be the case, its absolutely impossible to displace the existing set-up until and unless the dissatisfaction has reached a threshold value.

So one of the things that works with B2B buyers is identifying the points of dissonance and then communicating with the buyer over the long term. Over a 3 year period, at least 50% of the buyers will face challenges and if you are there in front of them at that time when the threshold is reached, they will consider you. However for this you need to plan your marketing expenses in such a way so that you don’t run out of money before the business starts coming. Marketing stamina in case of B2B is critical.

The other things which could get the attention are typically triggers – I have done detailed posts on this topic earlier also, so I won’t go into the details here. But a new customer getting onboarded or a their existing vendor going bankrupt or a new boss. All those triggers can suddenly change the dynamics, if you can exploit them.

Till next time then.

Carpe Diem!!!

Working backward from the customer result – B2B scenarios

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

I wrote a few posts on how you start with the customer result – what will delight the customer so much that they will become “raving fans”.

Lets now look at how this could possibly work in a B2B scenario where you have a multiple people involved in making the decision.

So if you start with a result that will delight the customer – define that customer in as much detail , with who that customer WILL be and who WILL NOT BE. I keep emphasising on this point in all my product management and marketing posts. It is always more important to define whom you will not like to serve. That portion of the market is always larger than the market which you can serve.

Once you have defined the boundaries of your service or product to delight, then look at how you will reach her and get her attention. In a B2B scenario this is a very big challenge.

Many people are wanting to get attention of our person. These are primarily 3 sets of stakeholders who are vying for her attention. First is her seniors, then her peers and more than anyone her reportees.

Now within all this chaos there are hundreds of messages which are also vying for her attention from all these stakeholders as well as vendors like us. In addition there are the pressures of her personal life which could also be occupying the same attention span.

So who gets priority
Not your message for sure….until and unless it is something that catches her attention.

Till next time then

Carpe Diem!!!