Airbus Jet Family Courtesy of the Dubai Chronicle

How to Create a Product Family to Maximize the Lifetime Value of Your Customers

In some of my previous blogs I’ve often highlighted case studies of killer products from Lexus and upstarts like ClearVue. These were instances where the company needed a standout product to get their ventures started. However, once they establish themselves, what happens next?

Business Growth Strategies: Two Options for Maintaining a Competitive Advantage

1) Ride the Hot Hand

Clearvue did this successfully by targeting a market segment where they could maintain a competitive advantage and avoid confronting national brands. Their primary strategy was to maintain a loyal customer base.

For B2B SaaS companies out there, this is not the best strategy. The shelf life of any innovation in the SaaS space is too short to rest on your laurels. You could iterate and improve your product, but then you’re limited to one market and the applicable segments.

2) Seek Growth by Building Out a Product Family

Companies have a few options when it comes to this route.

a) You can offer tiers of the same product to allow for scalability: Airbus has followed a similar formula which has contributed to their success. While they started with the short haul A300, today they have a full product family of aircraft from the A320 to the super jumbo A38o to meet the full range of their customers’ needs.

In the technology world, this might be the easiest option: Offer a “Lite” lower-cost version of your product to get the smaller customers, along with a normal “Enterprise” level offering for everyone else.

b) You can offer complementary products to build out a “one-stop shop” for your customers: General Motors had a “Step Up” product strategy. The goal was to use Chevrolet to bring young buyers just starting out into the GM Family. They had numerous brands (GMC, Chevrolet, Buick, Pontiac, Oldsmobile, Cadillac) that would serve their young buyers as they matured, got married, had families, and grew in affluence.

GM also offered more than scale, they offered different types of products (Car, SUV, Truck) to keep their customers in the family.

This is the harder more long-term option. Given the product lifecycles in the technology world are short, it will take significant financial resources to keep multiple product lines fresh and competitive.

So, What is the “Best” Option?

The convenient answer is, “It depends.” What is certain is that it is crucial to maintain a comparative advantage: What does your company do best? And what customer segment can it serve best? That should be the core of your product planning.

Once you’ve established yourself in a specific segment and product class you can then take steps to branch out. What are your customers asking for help on? What core competencies can you leverage in your organization to address those needs?

The next question is: How do you best address those needs? On approach is to seek partnerships and white label their product, or you can develop your own solutions.

Each organization has to weigh these questions and develop a product strategy that makes sense specifically for them. It could be that either one of the options that I laid out above might work, or a combination of the two.

What questions do you have about creating a product family for your customers?

How to make up for poor customer service Source: Forbes

How To Say Sorry To Your Clients: Lessons in Customer Service Conflict Resolution

Everyone has a bad day sometimes. I recently took my car in for service to a dealership that has served me well for many years. As usual, I dropped off my car, handed over my keys, and was given a clean and new loaner car to drive. The trusty service consultant told me to expect a call from him later in the day. He had told me given the nature of the problems I had discussed with him over the phone, I might want to anticipate a few days. The expectation had been set, but soon enough things would start to go south.

A few hours passed, and I was told to keep the loaner for the day as some parts were needed. He had set my expectations, so I was not surprised. The next day I received a call indicating there were some considerable problems with the car and the ignition needed to be replaced. I was very surprised given the car is only two years old. The service consultant outlined the issues and gave me a fair quote for the items not covered under the warranty. He indicated that they were having some issues resolving a problem and that he would keep me updated.

Towards the end of the day he got back in touch to tell me the part they had received was defective and they’d be ordering another one. I was pretty surprised and starting to get frustrated. The next day, I received an email that the car was ready. But I arrived at the dealership and was handed an invoice for double what I was expecting. They had forgotten to inform me about the cost of the original service. Since the car had so many issues to document when it was dropped off, this had slipped.

To add insult to injury, the mechanic had performed an alignment that they hadn’t gotten permission from me for. However, the service consultant recognized my long personal relationship with him, and the dealer immediately gave me a significant discount. He made sure to apologize and spent several minutes speaking with me since he knew I was not happy.

While I finished up at the cashier, the Service Consultant made sure my car was cleaned and ready for me to go. As I walked to my car, he thanked me for my business, and I slid into the seat.

The car wouldn’t start and flashed an ominous message “Service Required.” Before I could say or do anything the service consultant was at my side. He profusely apologized and made sure the loaner car I returned was given back to me. He promised to get to the bottom of this, and said he’d have my car dropped off at my house when it was done.

The next day I received a phone call and an apology from him. He took the time to explain it was a miscommunication between him and the mechanic and discuss the steps being taken to ensure they got it right this time.

3 Customer Service Conflict Resolution Tips

Normally, most customers wouldn’t return to a dealership that made this many mistakes, but I will and here’s why:

1. Constant Communication: Throughout the process, I was kept informed of how things were going. Even after things started to go wrong, I was updated with what the problem was and how they planned to fix it.
2. Strong Relationship with My Service Adviser: I have known him for years, even when he switched dealerships, I started going to his new one because he had consistently surpassed my expectations. I see him more as a trusted adviser who would always tell me the truth.
3. The Service Adviser took Responsibility and had an Action Plan to Remedy the Situation: The service adviser didn’t hesitate to offer a discount, apologize, and make sure I wasn’t inconvenienced any further by ensuring my car would be dropped off at my house when ready.

Mistakes happen, and in any relationship, it’s how the mistakes get handled that matters. The service adviser did an outstanding job of handling the situation, and that’s why I will be back.

Tailoring the Cloud Computing Message to Resonate With Your Prospects Image courtesy of CloudIt. Net

What are the Business Perceptions of the Cloud? Some Thoughts Based on My Customer Interviews

Since I’ve joined OpenView I’ve had the opportunity to speak to Managers of IT and decision makers across several industries and get their input on the Cloud. For this post I wanted to present some key findings from these calls and offer up some suggestions for how to best educate your customers on how the Cloud can work for them. When it comes to selling cloud solutions, it pays to bring the conversation down to earth.

3 Ways to Educate Your Buyers by Bringing the Cloud Down to Earth

1) Provide Concrete, Practical Examples of the Cloud in Action

The most popular comment I have come across by far has been, “I hear about the Cloud all the time, but how does it relate to my business, specifically?”

The key insight here is that businesses are sold on the Cloud as as the “next big thing,” but they are left wanting for details. Customers need to be educated on how the Cloud works for their business in practice.

If you are designing content, highlight case studies on how the Cloud (whether it be a SaaS product or infrastructure) has benefited your clients, and express tangible results.

2) Produce Industry-Specific Messaging

Each industry has specific pain points that can range from reducing costs and industry-driven technology purchases to compliance issues, so it is important to tailor your pitch, content, and sales presentations to each industry.

It is also important to factor in the importance of industry regulation (ex: HIPAA for Healthcare and FINRA/Dodd Frank for Financial Services firms). If you are pitching to a highly regulated industry, be sure to do some research to find out what laws and regulations apply to the companies you are targeting.

In the Professional Services (consulting, market research, etc.) sector, they may not be bound by direct state or federal regulations, but their clients often are. During my time in consulting, our firms were subject to compliance audits from our clients and there were very specific guidelines we had to follow regarding their data.

3) Create Content Targeted to Typical Cloud Buyer Personas

Each decision maker has a distinct set of needs and potential objections. While we have many blog posts on buyer personas, I want to pass along some quick thoughts on who they are for cloud solutions and what their objections typically are:

• IT directors are often concerned about maintaining ownership of the data and implications of a SaaS application failure. They are worried about risk, integrating with their existing infrastructure, and minimizing the workload on their teams.
• CTO/CIOs take a longer range, more strategic view of the business. They want to see how your application/solution adds value to the bottom line. They place value on being seen as a strategic adviser to the broader business. How does your solution help them achieve their strategic vision?
• CFOs unsurprisingly are concerned with the bottom line. “What is this going to cost and what will I get from it?”

The best advice I can offer is that prospects need to be educated on how your solution is applicable to them, how it will add value, and how it will fit into their strategic goals. Of course, it’s always important to understand the specific needs and pain points of each prospect to best position yourself to make the sale.

Are you selling cloud services/solutions? What tips, opportunities, and challenges would you add to this post?

Terry Myerson, Coporate VP of Windows Phone

Microsoft Embraces the Startup Mentality for its Windows Phone Strategy

Last week, an article in TechCrunch highlighted comments from Microsoft’s Windows Phone Chief Terry Myerson about how they approach the mobile space. He referred to his team as a “scrappy albeit well funded startup” operating within Microsoft. Before you laugh, it’s worth noting that while they can’t really identify directly with all of the hardships that startups face, it is true that Myerson himself was at the helm of a startup that was acquired by Microsoft in 1997.

But with Windows Phone is Microsoft really embracing a startup mentality? And, more importantly, is it working?

As I’ve discussed in a prior review of Windows Phone, there are some definite holes in the product right now. Overall, they’ve struggled to gain share in the market, and are positioning themselves as a solid Number 3 option behind iOS and Android. That said, it’s far too early to count Microsoft out just yet.

Here are three ways the Microsoft Windows Phone strategy is taking pages from the startup playbook in its hunt for a competitive advantage.

1) Targeting Smaller Markets Its Competitors Are Vulnerable In

While Microsoft has publicly said they are focused US market, they are committed to picking the segments where they can get traction in other countries. According to IDC Windows Phone is outpacing iPhone sales in Argentina, India, Poland, Russia, South Africa, and Ukraine.

Specifically, they have identified markets where smartphone purchases are not subsidized by the Cell providers. Since the full price of Windows Phone handsets are significantly lower than competitors, they have an inherent price advantage in those markets. Even though Microsoft has near unlimited resources, they’ve chosen to go the path of least resistance in terms of gaining market share.

2) Focusing on Core Competency and Leveraging Partners

They are relying on their hardware partners HTC and Nokia to build attractive phones. While Apple and even Google have built their own phones, Microsoft is unwilling to commit to building their own phone yet. They leveraged the strong brand presence of both Nokia and HTC in Asia to leverage the customer bases these partners already have.

While there have been rumors of a Surface Phone, Microsoft has been quick to shoot these rumors down. They are concerned about damaging their partner relationships and prefer to focus on their core competency: the Windows Phone operating system.

3) Adopting the Role of the Consumer-Focused Underdog

Terry Myerson has generally avoided confronting Apple and Android directly in his public comments. He attended the Dive Into Mobile Conference recently to talk about Windows Phone, and was asked to comment on the competition.

When asked about where Microsoft sees opportunities to go after their competitors, he simply said that Windows Phone was focused on the consumer.

However, while he had the audience’s attention, he did “hesitantly” jab Apple as lacking a sense of urgency and called Android “a mess”. Not exactly subtle and his comments created a buzz in the tech circle.

With that statement, he positioned Windows Phone’s core mission as serving the customer and separately implied Apple and Android were losing focus.

While Microsoft and “startup” sounds so contradictory, they are utilizing some of the tactics startups do to get traction in the hotly contested smartphone industry. While it is too soon to tell whether the Microsoft Windows Phone strategy will pay off, it’s interesting to see the behemoth compete in an industry where it is the clear underdog.

What do you think? Does Windows Phone stand a chance in the market? Is Microsoft’s attempt to adopt a startup mentality a winning strategy?

Picture courtesy of: Powerpoint Presentation Writing.com

Connecting with your clients through PowerPoint presentations

One of the key things I learned from my prior roles in management consulting is that each organization had a distinct way of how they present information. One of the chief challenges I had was “speaking the client’s language,” not only in terms of fitting in culturally, but ensuring my deliverables matched the organization’s tone and standards.

Your content (PR materials, White Papers, and especially client PowerPoints) serve as a brand ambassador. They represent the look and feel of your organization and reflect how you think.

So what are some best practices for crafting PowerPoint presentations that fit your client’s corporate culture?

1. Ask your main point of contact for a presentation he/she can share with you, preferably something that has been presented to senior management.
2. Once you have the presentation, review it for the following:
   • How visual are the slides? Does the organization prefer dense text slides or do they prefer to use visuals to simplify things?
   • How are the presentations structured? Some organizations like to see the process laid out (what we did, how we did it) before seeing the final conclusions. Others like to see the main conclusions of the presentation at the beginning in order to center the discussion around those key findings.
   • How much third party research (IDC, Gartner, Forrester) or case studies are included in their presentations? Every organization has their “go to” data source. One of my favorite quotes during my consulting engagements was “No one ever got fired for hiring or quoting McKinsey and Company.” If you’re pitching to a company that isn’t familiar with your technology or approach, give them some sources they respect to validate your approach.
   • Is there a corporate initiative that your solution can help address? If so, include it in your presentation. Final decision makers love to see their work quoted, and it shows you went the extra mile to understand their business needs. Of course, make sure with your end client that this tact is considered appropriate.

Picking the right delivery format

Once you’ve created a PowerPoint deck, the next task is delivering it to your audience. It is important to think about how each client has their own preferred presentation styles.

Some companies prefer the usual format of someone standing in front of the projection screen and making their pitch. Others favor a more intimate setting where there is roundtable type discussion. Ask you client contact for their advice on what works best for their organization.

photo: StockMonkeys.com

B2B Customer Relationship Management: Building a Customer Touchpoint Plan

Last week, I talked about building a customer focused company. This week, I’d like to focus on customer relationship management and the types of touchpoints you should consider to develop the relationship.

So you’ve done the hard work of winning the customer over and delivering a product that hopefully has met their expectations. But what happens next?

Like anything, a business relationship requires maintenance. In a previous blog I wrote about how customer satisfaction isn’t the sole driver of retention and the importance of establishing a “Trusted Adviser” relationship. While measurement of satisfaction is an important step in keeping your customers happy, there are some important steps you need to take in order to build the relationship further.

Customer Relationship Management Techniques

1) Build automated marketing campaigns to share educational content with your customers.

As part of building the trusted adviser relationship, ensure your marketing department continues to reach out to your customer base with content that informs them of new products, changes in the business, and other industry-related advances.

2) Have your client service teams reach out on a fixed schedule.

Client service teams at Fidelity often reach out to their high net worth at least quarterly. The calls are typically ten minutes. The client manager asks a few simple questions:

“How are things going?”

“Has anything changed that requires us to rethink our portfolio strategy?”

“Have you thought about your positions for tax purposes?”

The customer’s responses to these questions gives the client service team member an opportunity to triage the customer’s needs and suggest solutions (up-selling). It also gives them a heads up on any potential issues in the customer’s world that they might need to address.

More importantly, it can be an opportunity to address any issues the customer has with the product or service they have received.

3) Leverage your content/social media strategy to help increase customer engagement.

This can be as simple as a newsletter that you send out to your customers. You can ask your audience to pose questions about your company, product, or future plans, and answer them either via social media or in the next newsletter to make it more interactive.

It can be as complex as a webinar to show useful product tips and/or a sneak peek of new products and features. Boeing for example, often makes their product designers available to their media teams to speak about their newest jets and coolest features. It’s often exciting for customers to have a “Behind the Scenes” look and learn more about your company.

These are just a few techniques you can use to help build a stronger relationship with your customers. Make sure your touchpoints are relevant and frequent, and always solicit feedback.

Putting the Customer First: Creating a Customer Service Oriented Organization

At Walmart, the world’s largest retailer, there is one quote from its founder Sam Walton that states the company’s core mission:

There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

That attitude towards pleasing the customer is embodied in every aspect of the organization. Measuring, assessing, and improving customer satisfaction is a core element of Walmart’s internal conversation on how to grow as a business. In practice, customers are asked to take a survey that gives them the opportunity to give their feedback. Their responses are used to prioritize improvements and help them understand the core issues the customers are facing.

3 Lessons from the Walmart Approach to Customer Satisfaction

1) Have the mandate for customer service come from the top

In the Walmart example, the mandate came from the founder of the company. The “Customer Comes First” mandate has continued on past Sam Walton and is fully integrated into the culture of the company.

In the tech SaaS space, the founder of a company has a unique opportunity to set the tone for the organization. Incorporate the need for delivering a superior customer service experience in your firm’s values and goals.

At OpenView, our stated mission is to be the best firm in the industry for our stakeholders. We also have a set of stated priorities, values, and a core vision. We regularly review all of our outputs, feedback, and incoming work against these priorities and values.

We also collect feedback from our portfolio companies after each project, to learn how we can improve.

2) “Measure, Distribute, Improve, and Measure Again”

First, measure the customer’s satisfaction. You can do this via a simple online survey, or even a phone call. Collecting feedback doesn’t have to be a static process, you can include feedback links in your customer service emails, too. Automotive dealerships collect feedback after every service, since it is their principal driver of revenue.

Distribution of feedback is just as important as measuring it. While it’s important for the executive team to know the results, it is equally important for the operations teams to know the state of their customer base. They are the employees who have the most touch points with the customer, and can lend a qualitative color to the data you receive.

One pitfall organizations fall into is becoming fixated by the data they receive from the surveys, without getting the rest of the story from the operations team. That can often pit the Managers vs. Operations and undermine the whole initiative.

Plan your improvements based on the feedback. Once you’ve launched a performance improvement initiative, continue to solicit feedback. Asking for feedback after every customer service interaction is a very good way of tracking whether your changes are in fact working.

3) Understand when to “Let a Customer Go”

There is always at least one customer that becomes a menace to your customer service teams. They are rude, needy, and full of criticism despite your best efforts. Sometimes you just have to cut your losses and stop going the extra mile for them. I know this sounds contradictory since I’ve spent most of this blog post arguing for the need to delight the customer.

But it comes down to efficiency. You can’t be all things to everyone. And allowing a single customer to become a significant burden on your organization is an impediment you can’t afford, especially at the expansion stage.

Herb Kelleher, the former CEO of Southwest Airlines, gave a good example of this. He had received a scathing letter from one disappointed traveler. After making some inquiries, he realized no matter what he did, this particular person wasn’t going to cut them much slack. He wrote back with a simple note: “We Will Miss You.”

I hope these tactics prove useful in creating an organization that is customer focused, in a collaborative way that includes everyone. Getting operations/client service teams on board is crucial to your success.

How important are strong B2B customer relationships? You might be surprised how these three customer engagement tactics can help impact your bottom line.

A common misconception of business relationship management is that B2B buyers aren’t as emotionally invested in the relationship as their B2C counterparts.

At first glance, a Gallup study seems to confirm this: Only 22% of B2B customers termed themselves as “Engaged,” and only 13% are “Fully Engaged.”  However, very few B2B companies invest the time in attempting to engage their customers.

While customer satisfaction is an important driver of retention, it is not the only predictor of loyalty. It is important to get your customers emotionally engaged.

Why Should You Engage Your Customers? What Are the Benefits?

The Gallup Study above found that: “Fully engaged customers deliver a 23% premium over average customers in share of wallet, profitability, revenue, and relationship growth, while actively disengaged customers represent a 13% discount on the same measures.”

How to Get Your Customers Engaged

In the research studies I’ve run over the years, we have tested the biggest drivers of customer retention extensively. What we have commonly found is that emotional dimensions such as “Integrity, Pride, etc” play as strong a role as objective measures such as “Price, Product Features, etc.” This holds true for both B2C and B2B companies.

Building Trust is Key

At OpenView, we solely concentrate on the B2B SaaS space. Over the past few months, the Research & Analytics team has talked to many prospects and clients of SaaS companies and found a similar result to what Gallup reports. In the crowded SaaS space differentiation is very difficult. Of course a stellar product is required, but customers want more.

Most prospects and customers reported that trust is an important factor. They want to be able to regard their chosen vendor as a trusted adviser. This requires frequent touchpoints: emails checking in, phone calls to discuss what is going on in their company, and any new products or services that might be useful to them. They need to feel confident both parties are fully vested in the relationship.

Customer Engagement Role Models: The Automotive Industry

In the B2C world, the automotive industry does a fantastic job of including prospective buyer opinion throughout the development of a prototype vehicle. They produce teaser shots and solicit feedback on blogs, Twitter, and message boards to build a buzz and — more importantly — develop a connection to their product. Before a car is formally introduced, a microsite goes live where the public can configure various options and learn more about the automobile prior to release. They also offer up their product design teams to the press. The logic is, no one can speak with more passion and enthusiasm than the very people who created the automobile.

3 Customer Engagement Tactics for B2B Companies

Of course, in the B2B world not all of this is possible. In the spirit of keeping things simple, here are a few tactics:

1. Keep customers informed of new product releases and exciting features via phone or email.
2. Solicit questions about your product or company and then address them in a blog or a webinar (if product related). As mentioned, customers especially love to hear from the product team about their vision for the product and roadmap.
3. Offer customers a sneak peak of future releases of a SaaS product, and solicit their feedback.

Customer engagement is a difficult concept for B2B businesses, especially since it can take a long time to establish. While it does require extra effort, it can positively impact your bottom line. Not only will engaged customers buy more, they can also become vocal advocates for your brand.

The Vision Vs The Reality. Ferris’ vision crumbled at the unveiling of the new “Allegis” brand. Courtesy of the Name Droppings Blog at WordPress

What’s In a Name? Lessons from United Airlines Rebranding Blunder

It was 1987. Richard Ferris, CEO of United Airlines was at the top of his game, having amassed a full service travel empire. He had diversified United Airlines into the car rental business through his purchase of Hertz, and had bought up the Hilton and other hotel chains. He had a grand vision of passengers coming to United as a one-stop shop for all of their travel needs.

Flash-forward to today: Now that the internet has revolutionized the travel industry, Ferris’s “grand” vision seems almost matter of fact. Yet back in 1987 it was a novel concept.

Ferris had grown United aggressively both as an airline and a company. He wasn’t just pursuing growth, but a long term vision of how an airline should function and service its customers.

He had many skeptics on Wall Street, a community he had a very tenuous relationship with. They felt his strategy was misguided, especially in the short term. United, they felt, was best broken up into pieces to realize maximum value for the shareholders. However, no matter how focused on the short term, even the biggest skeptics saw the potential in Ferris’ strategy.

Rebranding to Market a New Era of Travel: The Allegis Corporation

Ferris countered with an aggressive campaign, but he wanted a single brand to convey his vision of travel. He decided on “Allegis” as it conveyed a sense of allegiance and loyalty to the customer.

It was a complete disaster. Donald Trump, who at the time was a United shareholder, called it a “world-class disease.” The choice of the Allegis name was unfortunate as foreign investors even had trouble pronouncing the name. To activist investors “Allegis” just rang empty, and added further fuel to the fire surrounding their doubts about Ferris’s leadership.

While they had significant misgivings over the new strategy, the new name made it far more “real.” As a result, they know had something tangible to rail against. The rebranding had set off a firestorm that galvanized the opposition. Within four months Ferris was gone. In the end,  Allegis’ board capitulated to their stockholders demands and agreed to sell off Hertz and the hotels.

For years Ferris defended his strategic moves, but admitted the “Allegis” name hadn’t helped his cause.

So, What’s in a Name? 4 Must-Have Qualities

For the less-motivated, there are certainly short-cuts, but with so much riding on a company’s name to effectively establish a successful brand, it pays to really think things over and make sure your moniker has the four following qualities:

1. Clarity: It should convey a clear concept that doesn’t require a lengthy explanation like “Allegis” did. If you can’t explain it in a simple sentence then try again. The time honored aphorism “Don’t make me think!” applies here.
2. Simplicity: It should be simple and easy to pronounce. “Allegis” was a tough word to pronounced for those who didn’t speak English as a first language. Contrast that with a “Microsoft” or “Lexus.”
3. Timely: A brand name should be current with the times. General Motors eliminated all of its dated name plates from the Cadillac brand to compete with the “alphabet soup” models of their German counterparts. Model names like “Seville, Eldorado, etc” have given way to “CTS, XTS, and ATS.”
4. Unbiased: Test it out with individuals who are outside of your business and don’t have any skin in the game. Ferris’ son later told him, “Dad it was a great idea, but it just had a bad name.” Within United,  Ferris hadn’t been able to get a real unbiased opinion.

These are just a few tactics to help develop a brand that works for your company and clearly conveys your mission statement to your prospects, investors, and your employees.

Do you have any favorite naming tactics to share?

Over the past few weeks, I’ve discussed the B2B Buyer’s Decision Making Process and Keys to Building a Strategic Partnership with them. This week, I want to discuss how to translate buyer persona research into a message that will help your BDRs build a rapport with prospects.

The goal of buyer persona research is to give an insight into who an organization should target, the buying process, their pain points, their goals, and their criteria for making a purchase. But what is the next step?

Developing Personalized Sales Messaging from Buyer Persona Research

Translate your Persona Research into Compelling Messages for Your Prospect Calls (Image courtesy of Sales Training Tactics.com)

The next step is taking the pain points you’ve learned from the personas and translating them into talking points that your BDRs can leverage in their outreach calls.

For example, we interviewed financial services executives about their IT operations and the pains related to them. They expressed their need to reduce overhead costs and keep their IT resources focused on revenue generating activities, not systems management.

So how can you adapt insights like this into a message a BDR can quickly convey?

1. Boil insights down to a simple phrase that will speak to the buyer in business language. If you were to simply say “we can save you money” it will ring as a standard sales call. The key is to show you’ve researched the buyer’s particular business and understand the issues they face.
2. Try to craft at least three messages to use. Word choice is going to matter here, so it’s important to test out whether it’s just the phrasing or the underlying message that is or is not working.

Here is an example using the CEO example above:

Their need was to a) Reduce overhead costs; and b) keep IT focused on revenue generating activities. Reduce overhead costs can be phrased as: “I can help reduce your IT cost ratio,” or “ease your IT staff workload so they can focus on what matters.”

Reusing Messages for Other Buyer Personas

You can reuse the underlying messages you have developed for your other personas, but remember you will need to adapt them to suit the specific needs of the new persona. For example, you can perhaps use “reduce costs” as a theme for an IT Director, as well, but you will need to adapt it to speak more specifically to that role.

For example, “reducing costs” to an IT Director can often trigger concerns you’re looking to outsource their position. A better way to reach out to them is to say, “We can help you deal with pressure from senior management to cut IT costs.” This positions your company as a helper, not a a potential threat.

After taking the time to build buyer personas, it is important you think through how to best apply what you have learned by creating messages for each persona. Consider the tactics discussed above as a rough guide to help you craft the best message for your prospects.

How to Manage Critical Product Reviews: 3 PR Lessons from Elon Musk’s Reaction to the New York Times Tesla Review

Elon Musk, the founder of PayPal, SpaceX, and Tesla Motors has found himself embroiled in a war of words with the New York Times over what he alleged is an unfair review of the Tesla Model S.

The original reviewer had wrote a critical review of the car, titled “Stalled on Tesla’s Electric Highway” with a picture of the Tesla Model S on the back of a tow truck. The article essentially claimed the car’s range did not live up to Tesla’s billing, required the author to turn off the car’s heater to save energy, and in fact stranded him with little warning.

Elon Musk quickly retorted on Twitter: “NYTimes article about Tesla range in cold is fake. Vehicle logs tell true story that he didn’t actually charge to max & took a long detour.”

The first salvo had been fired, but there was more to come. Musk posted a point by point rebuttal on his blog called  “A Most Peculiar Test Drive” using data from the car itself. He took a very aggressive tone, one that is generally not recommended when dealing with the media. But when you have the public profile of Elon Musk, you can take the bull by the horns so to speak.

Was Musk’s Charged Reaction to the New York Times Tesla Review the Right Response?

Musk laid out a very convincing case and — in the eyes of many — he aggressively defended his company against the apparent charges the NYT reporter had levied. The reporter issued a rebuttal and chalked up the apparent inaccuracies in his article to an honest mistake. The matter was not closed, however, and the NYT Public Editor ended up reviewing the article. She posted her examination of the facts and felt while inaccurate the reporter had not been dishonest.

The response to her article has been less than charitable, especially as she described Musk’s rebuttal as “misleading” in some ways. Given Musk used his car’s data logs to justify his points, it’s hard to dispute his conclusions.

Elon Musk seemingly has accepted the apology via Twitter. From a public relations point of view, it appears he won the battle, so he didn’t see the need to push further.

Clearly Musk’s approach was unique because of who he is. That said, there are some lessons from his approach that we might be able to apply to the B2B space.

3 PR Lessons We Can Learn from Musk’s Approach

1. Always offer a rebuttal if you feel your product hasn’t received a fair shake. But choose your channels wisely. While Elon Musk was very aggressive in his rebuttal, he used Twitter and his company blog as primary channels in communication. In doing so, he allowed his numerous Twitter followers and fans to spread the word. Clearly, he knew how to harness the power of social media to make sure he was heard. It was a 21st century approach to a 20th century media slam.
2. Be thorough and rely on data to tell the true story. Musk’s blog post took the NYT article point by point and refuted the author’s conclusions, and backed his own points up with data. The tone was very aggressive and drilled the point home that the reporter was way off base. While it was rather long, it was very thorough and those who took the time to read through it were convinced the NYT had been unfair in their reporting.
3. Know when to bury the hatchet. Most importantly, Musk knew when to call off the war of words. He clearly had gauged the winds of public opinion and felt his job had been done.

Do you agree with Musk’s handling of the New York Times Tesla review?

If you’re a emerging state technology venture company, you’ve likely encountered fierce competition to get to where you are. In some cases where customers have difficulty differentiating providers, there can be a “race to the bottom” in terms of competing on price. Typically, that is a situation you obviously want to avoid. But what are other ways you can differentiate yourself?

For some, a core differentiator is the technology. If your product provides a clear competitive advantage then you can market to your product’s strengths and let your marketing and sales teams take it from there.

But what happens if that competitive advantage isn’t obvious to the customer? Or if the advantage doesn’t give you a clear distinction in the market? Offering prospects more than just a product or service, but also a partnership might be a compelling strategy.

What is a Strategic Partnership?

The term “strategic partnership” has become derided these days as little more than pure “marketing.” With every company espousing they are terrific “partners” to their clients, has the term ceased to carry any significant meaning? Note quite yet, but in order for your customers to truly feel that a strategic partnership exists, you will need to follow up your promises with actions.

In the Buyers Insights interviews I’ve conducted, clients have often have told me true strategic partners are those who go the extra mile and try to build a long-term relationship. Here are a few tactics you can use to form a long-term strategic partnership with your customers:

1. Proactively understand the customer’s needs and propose solutions: Examine their business issues and propose any solutions that your company can offer them. Check in regularly with your primary client to see if their needs have changed.
2. Be sensitive to their limitations: If you’re proposing to transition them to a new technology, give them options. If you are pitching to small or medium-sized businesses, discuss at length what their needs are. Make sure to distinguish between their most crucial/time sensitive requirements and those that can be put off until later.
3. Gauge the potential objections of your prospect’s stakeholders and tailor your proposal accordingly: Be aware of their buying process, the chief stakeholders involved, and the concerns they each will have.
4. Leverage all of your selling points: Sell your proposal not only on the technical merits, but also on the strength of your product roadmap and customer service teams.
5. Ensure your pricing is competitive, and explain your value add services: Unsurprisingly, pricing is typically at the top of the prospect’s mind, but services also play a role. It’s important to illustrate the full cost of your competitor’s offerings (especially if they only provide a “bare bones” service) in comparison to yours.
6. Prepare marketing materials that help them make the sale: This could be as simple as a matrix chart that compares what your product offers versus the competition. Other materials include a Total Cost of Ownership and ROI calculations to help them compare the competitor products versus yours.

Going the extra mile to maintain your existing customers and establish long-standing strategic partnerships will help maintain a steady revenue stream, and the potential for growth down the road. It is always cheaper to keep the customers you have, versus sourcing new prospects and trying to make the sale.

Do you agree establishing yourself as a strategic partner can still help distinguish you from the competition?

Making the Business Case for your SaaS Solution. Picture courtesy of Intel

Steps to Developing a Business Case for SaaS Solutions

Last week, I discussed the factors that stakeholders consider when choosing a specific SaaS solution. This week I want to discuss how to build a business case for your solution when presenting to customers.

There are a few approaches depending on the product you are selling. Ask yourself two key questions:

1. Do you have to sell the customer on a specific concept or technology?  Ex: Transitioning specific functions to the cloud, adopting a new technology, or controversial changes such as outsourcing entire IT functions.
2. Are you seeking to just differentiate your offering from that of your competition? Ex: If the vertical you are competing is sold on the promise of the cloud, then you can put most of your emphasis on the value proposition of your product.

If your answers to 1) and 2) are both “yes” then you will have to structure your business case differently. First, you need to to sell the concept you are proposing. Then you will have to illustrate the potential benefits and value proposition for your solution.

Establishing the Business Case for Your SaaS Concept or Technology

Your pitch should include the following elements:

1. Illustrate the pain points your customer is experiencing: Outline what the issue is and how it negatively impacts your customer’s business. If possible, assign a cost in terms of productivity lost or dollars.
2. Establish credibility: Demonstrate the endorsement of thought leaders or prominent researchers behind the technology to lend authority to your product or solution.
3. Address any concerns: Your customers may be wary about making a leap of faith on an “unproven” or “new” concept. This could come down to addressing concerns about reliability, transition plans, and/or post sale support.

In many of the customer interviews I’ve conducted, the chief selling point and differentiator of a “new” product/solution is the strength of the account team and customer service.

Customers can be convinced to take a leap of faith on a new technology, as long as they have confidence in the account team and the strength of the technical support team standing behind the product. It’s the secret of German luxury carmakers that has allowed them to stay at the top of the heap even though their Japanese counterparts surpass them on quality.

Establishing Your Value Proposition and Competitive Messaging

If your prospect is sold on the technology, the next battle is convincing them your product is the way to go. Make sure your pitch includes the following:

1. A head-to-head matrix on your product versus the competition: This should include pricing, features, and/or technology used. B2C technology companies and automakers do this to great effect. If you want to avoid the competitive angle, just lay out the best attributes of your solution for this step.
2. Key endorsements: Include testimonials from satisfied customers, industry thought leaders, and honors from third party research firms (Gartner’s Magic Quadrant is a good example of this).
3. Include real world examples of your product in action: What pain points did it address? What cost savings or benefits did the product provide? Provide some examples on how the implementation went and how your company helped the customer deploy the solution.
4. Your approach to customer service: As discussed above, customer serivce can be a major differentiator. This is especially true if you are in a market where solutions are perceived as similar (Comcast’s Xfinity and Verizon FIOS are good B2C examples of this).

Following the approach laid out in both sections can go a long way towards making the best case possible to your prospect. By doing so you will address the technical, practical, and qualitative dimensions that factor into how an organization chooses a solution.

Are there any other factors one should consider? Let me know in the comments below!

Making the SaaS Sale: Key Factors that Determine A Buyer’s Decision

In the Buyer’s Insights projects I’ve conducted recently, a common theme has emerged from the question “What are the factors that led you to purchase the SaaS solution that you did?”

The answer to that has always been a two part solution. The first half of the response formal criteria such as:

1. The Product Itself: Does it fulfill all of the requirements laid out in the RFP?
2. The Cost: How competitive is it with other solutions?
3. Ease of Integration: How difficult will it be to implement?
4. Ease of Use: How difficult it will be to get the user base to adopt it?
5. Business Case: How is it going to help the organization? What are the use cases (instances where the product brought value to another customer)

Attributes such as those above are used to formally evaluate RFPs using a framework that assigns a score. Each client has different dimensions, but they can broadly fit into the categories mentioned above.

These formal evaluations are used to narrow down the slate of options that are appropriate for the customer. But there are more factors at play in making a final decision.

The Intangibles that Play a Crucial Role in Making the Sale

Beyond the crucial business factors, the relationship the customer had with the winning company during the RFP process always played a significant role in the final decision. While the more objective factors were used to create a set of finalists, it was the intangibles that were considered in making the final decision.

These Intangibles are factors such as:

1. Willingness of the provider to be flexible to their needs.
2. A provider they feel will work will/align with their values.
3. Rapport the provider built during the the RFP process.
4. A vendor that is committed to a long term partnership.

The first three intangibles are the vital components of the “partnership” that each customer is looking for. This is a long wish list, so the question is: How do you learn what matters to the customer?

Here are some tips:

1. Read their annual report and website to see what their leadership has identified as their corporate values and mission statement.
2. Try to get a feel of what your prospective customer is trying to accomplish in the near term. What are the key “wins” they need to have, and how can you help them?
3. Discuss their vision for your product and how it fits into their broad vision of their department/function going forward.
4. Take what you have learned from these three steps and include them in your presentation to the client. Pitch not only the product, but your desire to become a “strategic partner.” Give them a vision for how you intend to work with them to accomplish this goal.

In a competitive landscape, differentiation is the key. Great product and marketing will get you in the door, but the pitch you make will often be the deciding factor.

Focusing on becoming a “strategic partner” can show the key stakeholders that you understand their needs, are looking for a partnership, and are committed to their success.

What other key factors have you found play a major role in buyers choosing a SaaS solution?

Surface Pro Tablet (From ZD Net)

The Surface Pro is set to debut, but will there be any takers?

The original Surface tablet from Microsoft has debuted to mixed reviews. Much of that can be blamed on the limited Windows RT operating system, limited distribution at launch, and the seemingly uncoordinated marketing campaign.

Customers and reviewers were confused from the start, “Is it a Tablet or is it a PC?” And while the impressive quality and Type Cover stood out, there was no clear value proposition or consistent theme in Microsoft’s marketing.

Microsoft has tried to remedy the situation. They belatedly realized the folly of limiting the Surface to Microsoft stores and rolled it out to chains such as Best Buy. They’ve launched new commercials that do more than just show people dancing with the product. Finally, Microsoft has told us to wait for the Surface Pro, promising significant updates.

I eagerly embraced the Surface RT but was left disappointed

I had reviewed the Surface when it originally came out, but ended up returning it. It was a well-made product, but the limitations of Windows RT were very frustrating. It left me wanting more, so I went back to the Microsoft Store, returned the Surface RT, and kept the Type Cover promising the salesman I’d be back for the Pro. He replied that he’d heard that from many people.

What does the Surface Pro Bring to the game?

Given the initial reviews post CES, it lives up to the promise of the original Surface and goes further. It is basically a laptop in a tablet form. It runs Windows 8, is powered by the Intel Core i5 processor, and offers a slim form factor with little compromise.

Unlike its Windows RT counterpart, the Surface Pro won’t be hampered by a less-than-stellar app ecosystem. It also has a stylus that allows you to write, draw, and paint on the tablet.

Battery life is still an unknown and has been a point of contention with this implementation. Coupled with the $999 starting price, there are still questions left unanswered.

The chatter around the Surface has been “What is it really?” Microsoft is seeking to reinvent the tablet space, and provide something that can be used as a Desktop replacement.

What do thought leaders and leading media outlets think?

The initial reviews so far are largely positive. However, Microsoft has only given reporters limited time with the Surface Pro after the CES conference. David Pogue of the New York Times summed it up best in his review: “But even if the Surface Pro is not strictly a laptop killer, it nonetheless changes the game. It’s a machine nobody’s built before, and it should get a lot of imaginations whirring.”

My personal belief is that enterprises will readily adopt the Surface Pro, given its native Windows 8 support. It will also appeal to software developers and systems administrators who value portability.

It is set to launch in the last week of January, so stay tuned for more on the Surface Pro when I get my hands on it.

With 2013 comes new challenges for the Technology sector. What are industry experts predicting for 2013?

TechCrunch recently profiled a Forrester article that covered some predictions for 2013 in the SaaS space, in particular:

1) Significant Growth

This year experts believe the SaaS software market will grow by 25% to $59 billion. By 2014 they expect it to grow further to $75 billion.

2) Smart Computing

Forrester profiles a segment called “Smart Computing.” These are apps that provide direct access to to data that is used for decision making purposes. They estimate this market to be $41 Billion. By 2014, it is projected to increase to $48 Billion.

Forrester feels these “smart computing” apps overlap with SaaS products “because the browser-based access model for SaaS products works better for collaboration among internal and external participants than behind-the-firewall deployments.”

3) The US Tech Market is Expected to be the Growth Market

European growth is expected to be sluggish, given the economic troubles in the region. The Asia Pacific tech market, meanwhile, is a mixed bag as Japan will continue to slump after its post-Fukushima disaster pickup in 2012. China, however, is in better shape and will continue to rise in 2013 and 2014 after a 2012 slowdown.

4) Increased Tech Spending from US buyers

It will be US tech buyers who will make the biggest adjustment, stepping up their tech spending as an improving US economy combines with strong demand for new mobile, cloud, and smart technologies to accelerate growth in the US tech market.  5.4% growth anticipated in 2013, and 6.7% growth in 2014.

A separate IDC report also had some compelling predictions for SaaS space in 2013.

1) Eyes on Emerging Markets

Emerging markets IT spending will grow by nearly 9% to over $730 billion. This is nearly twice the developed markets growth, and accounts for 34% of all IT spending and 51% and all IT growth. Given the predicted slack growth in Europe, this might provide a set of alternative markets to explore.

2) Big Year for Mobile

Mobile devices, especially smartphones will grow by 20% and will drive 57% of all IT market growth.

This carries implications for marketers as smartphones start to supplant PCs as the method of choice for surfing the web and reading email. It also presents a challenge for SaaS providers — given the growing use of tablets in the marketplace, users will want to ensure a SaaS solution can work on their Tablet platform.

With tablets like Microsoft’s Surface Pro coming to market, there will be greater emphasis on how well traditional applications work on a smaller touch enabled screen.

3) M&A will Pick Up in the SaaS Space

IDC predicts there will be $25+ Billion in SaaS acquisitions over the next 20 months. That’s an increase from $17 Billion in the prior 20 month period.

4) Platform as a Service (PaaS) will Continue to Grow in Popularity

The number of “industry focused” Public Cloud platforms is predicted to increase by ten times by 2016.

It will be interesting to see how accurate these predictions given the instability facing the world economies. For my next blog, I will focus on the growing importance of mobile tablets in the workplace, specifically the Microsoft Surface Pro. I’ve commented on the past about the original Surface, but will see if the x86 version brings anything new to the table.

What are your predictions for the SaaS space in 2013?

Nokia’s Mee-Go platform that was briefly on market before being shelved for Windows Phone 8. (Courtesy of TechCrunch)

During the late 1990s and early 2000s, Nokia was the world leader in mobile technology. Today, they have been eclipsed by the likes of Samsung and Google. Once a pioneer, they’ve put their chips on the Windows Phone bandwagon, the future of which is equally uncertain.

So what happened? Like many companies, they missed sight of key innovations that would prove disruptive to their business later.

Here are some highlights (or should I say “lowlights”) of some Nokia’s key mistakes:

What Went Wrong?

1) Misreading the Market and Failing to Understand the Future of Mobile Devices was in Data, Not Voice

Nokia’s initial dominance was due in part to well designed mobile phones. They emphasized top quality hardware powered by their in house OS Symbian. The OS was slated more towards providing phone functionality than Apps or other features that have become commonplace on smartphones today. Nokia had been content with providing phones with some minimal features dubbed “Feature phones.”

2) Riding Their Existing Operating System Too Long

The Symbian Operating System became a staple on Nokia phones. But it provided a limiting factor when trying to extend the platform to compete with smartphones. The key sticking point was App development. Each Symbian UI required its own custom build which limited the ability to support any third party apps. Eventually, in 2008 Nokia decided to open-source Symbian, but it was too late. The OS was dated, still focusing on phone functions in an era where smartphones were beginning to disrupt PCs.

3) A Confused Product Roadmap

Nokia had been developing a series of potential successors to the Symbian OS. However, there was no clear roadmap dictating when it would supersede Symbian. They had settled on a solution called Mee-Go, but it released in 2011. By then the ship had sailed, and Nokia’s CEO made the decision to go with Windows Phone 8, so it essentially was an orphaned platform.

4) Missing the App Ecosystem Train

Nokia historically had not prioritized building an app ecosystem. This was demonstrated in their apathetic attitude towards providing backwards compatibility between versions of Symbian. As a result, third party developers were not willing to create Apps for the Symbian operating system. This in turn made their devices less appealing when Android and Apple arrived on the scene.

What Can We Learn From Nokia’s Fall From Grace?

What Nokia’s downfall came down to was an inability to to anticipate where the market was going. They failed to grasp their buyer’s habits — how they were really using the product and the things that determined what phone they purchased.

Additionally, they did not have a clear vision internally about their future product roadmap. Without a set of clearly established goals and timelines, Symbian was left on the market too long without a replacement. The disconnect with understanding the market created the circumstances for being eclipsed by Samsung and Apple.

Hi everyone! As 2012 winds down, I wanted to reflect on the some of the top tech highlights I’ve noticed this year.

1) The era of the PC as our only connection to the Internet is slowly waning

It’s not to say I think the PC is dead. Nothing could be further from the truth. But as I mentioned in my blog about Microsoft and the Surface, smartphones and tablets are a disruptive innovator.

A recent Forrester Study highlighted some key trends in how people are connected to the internet:

• 84% of US adults use the internet daily
• 50% use Smartphones and 19% use tablets
• 18-23 year-olds are the most active social media users
• Gen X’ers spend the most money shopping online

The age of consumers using multiple devices is here. And software companies are doing their best to offer a unified experience across all of these devices. I’ve discussed Microsoft’s gamble with Windows 8 at length, but the move towards tablets and smartphones has implications for more than just the B2C space.

If you are a B2B marketer, you will need to take Tablets and Smartphones into account when designing your outreach programs. For example, with people increasingly relying on their smartphones for email, outreach emails will need to be concise and contain a simple attention grabbing subject.

Websites will need to be tailored to Tablet and Mobile devices. In essence, you will want to simplify your message so your value proposition is clearly conveyed in a mobile device setting.

2) The Cloud is becoming more prominent in the market

If you’re a B2B marketer in the SaaS space you already know this. But the public and many people in Enterprise are just starting to look into the Cloud as a solution for their needs. Much of what they know about the Cloud comes from daily interactions via Apple’s iCloud, Dropbox, and popular apps like Spotify.

Given the public’s awareness of the Cloud is in its nascent stages, as marketers you have an opportunity to educate them on what the Cloud is, how it can help them, and why it will cost less.

At the same time, you will need to keep attuned to what the mainstream media is reporting about the Cloud. Over Christmas, Netflix went down to the dismay of many. Interestingly, in their press release, Netflix pointedly blamed Amazon Web Services for the outage. This is only one example, but it goes to show the impact this style of reporting can have on a potential economic buyer. While your user buyer is likely well acquainted with the Cloud and the benefits, an economic buyer might not as aware.

3) Economic and regulatory pressures will continue to open up more opportunities for SaaS space

In my buyer research at Openview I’ve found a consistent pattern in the interviews I’ve conducted. Economic and user buyers are turning to the Cloud for potential cost savings and the ability to access their resources on demand. In addition, buyers who are operating in heavily regulated environments see the Cloud as a critical tool to deal with compliance regulations and simplify their operations.

What tech trends do you see impacting 2013?

Win back your lost customers.

I came across an interesting post on LinkedIn recently about a Delta frequent flier who was very upset with Virgin Atlantic for not going the extra mile to help him on a recent trip. He was a lost customer for Virgin Atlantic and he felt they missed an opportunity to win his business back. His post stirred up debate on LinkedIn. Some called him elitist and entitled since his elite status on Virgin Atlantic had long since lapsed.

But reading through his post, I felt he made a compelling point:

“I fly a lot. I have Diamond status on the Delta airlines loyalty scheme, the highest you can get. I really fly a lot! On my briefcase and all my bags I have the Delta Diamond tags. This is like wearing a beacon that says ‘this guy flies a lot!’

My question is, ‘When I fly with other airlines, do they ignore this display that says I am a high value customer and could be one of your best customers?’ It seems that my badge has the cloak of invisibility as everyone ignores it. Why?”

His detractors charged he was seeking special treatment when he hadn’t purchased a first class ticket or had any status on that airline. Was he being entitled or was there more to this story?

Why Reach Out to Lost Customers?

I think the detractors are wrong. First and foremost, if you see a customer who is clearly a premium value customer you engage them. His Delta tags clearly highlighted he flew frequently and was a higher dollar customer than someone traveling for leisure. While Virgin Atlantic didn’t owe him anything, it was certainly a missed opportunity. With all the marketing dollars spent on advertising and frequent flyer programs, a simple waiver for luggage might have led him to reconsider his flying habits and choose Virgin Atlantic in the future.

His detractors also overlooked that he previously had elite status on Virgin Atlantic, so at some point he had been sold on their value proposition. While I don’t have the numbers to prove this, it should be cheaper to reacquire an old customer versus attempting to sell your product to a “blank slate” customer.

If you are a B2B SaaS provider, you know all too well the cost of acquiring a customer.

Sometimes customers leave due to price, competitive offerings, or just circumstances beyond your control. In some of the research I have conducted, I’ve noticed economic buyers are willing to give emerging companies another chance if they can illustrate what has changed for the better.

Here are some things you can do to target and reach out to lost customers with the most potential:

1. Mine your CRM to sort through and identify the best prospects for an outreach: It could be someone who left on good terms and only for business reasons. Conversely, it could be a company that left on bad terms but where the economic buyers have moved on.
2. Customize your outreach: What were the pain points that made them leave in the first place? Your communication should address what has changed, what you have learned, and how you can help them.
3. Maintain a communication stream: The frequency, content, and tone should be customized to the customer. There is nothing worse than receiving a form letter asking for another chance that doesn’t clearly state why they should.
4. Don’t be afraid to engage your lost customers to better understand why they left: At Openview Labs, we often do this kind of research and find lost customers are more than willing to give feedback. It gives you an opportunity to listen to their constructive feedback and develop actionable strategies for change. The added benefit is that it keeps the conversation going and hopefully the door open in the future.

Finding new leads, educating them on your value proposition, and converting to a paying customer can be a long expensive process. One way to augment your lead generation is to mine your CRM to see what lost customers you can potentially revisit. Each situation is different, so use your discretion on how to choose for an outreach.

The “Handshake,” it’s more than just a greeting.

When working across teams, it’s always easy to become siloed and lose track of the other team’s workload. In my consulting career, each project often had multiple teams across different offices working on common tasks. We often ran into trouble when one team would become overloaded with work and would start to push back against the others.

It was a symptom of a resource management problem: Each team was unaware of the tasks on the plate of the other.

As we increasingly have remote employees spread across different offices and even countries, the challenge remains: How do we keep everyone on the same page?

In this blog post I will present a simple solution called “Handshaking.” It’s a simple thing we can do to make sure everyone is on the same page and is actively communicating with each other.

What is Handshaking?

At the risk of dating myself, the term Handshaking hails from the days of Dial Up Modems and Fax Machines. That loud irritating noise was both modems linking up, assessing the quality of the phone line, each other’s speed, and deciding how fast to transmit the data.

Wikipedia defines “Handshaking” as follows:

“Handshaking is an automated process of negotiation that dynamically sets parameters of a communications channel established between two entities before normal communication over the channel begins. It follows the physical establishment of the channel and precedes normal information transfer.

Handshaking can be used to negotiate parameters that are acceptable to equipment and systems at both ends of the communication channel, including, but not limited to, information transfer rate, coding alphabet, parity, interrupt procedure, and other protocolor hardware features.”

This is a fairly technical definition, but it’s essentially two parties assessing the quality of the connection, what data rate to exchange the data, conducting the transfer, and closing the connection with confirmation the job got done.

Handshaking In Practice:

So how does it work? I am going to propose keeping it simple. When you send a request to another team, ask a few questions:

1) What is on your plate currently?

2) How are you doing in terms of resources?

3) How is my request going to be prioritized?

4) (If it is an urgent request) What can I do to help you get this done sooner?

The other team’s reply will be the basis of the handshake and opens the door to further communication and planning. It’s also a team building move: each team will understand the other is aware of their workload and actively helping to minimize the burden of their requests.

Handshaking is one of many tactics you can use to make sure your teams are working together and actively communicating their needs to one another. As we become more diverse in our work styles (work from home, vs in office) it will be important to make sure everyone is on the same page.

From CD Players to “Infotainment” Systems

Over the past ten years, there has been a dramatic leap in the technology brought to the automobile. Back in the 1990s a car with a good stereo, keyless entry, memory, and heated seats was considered cutting edge. By the year 2000 navigation systems were starting to debut in high-end luxury cars. BMW took it further in 2002 with iDrive, allowing you to use a joystick to control nearly all functions of the car.

As 2013 nears, we’re poised for another leap forward as more automakers are turning to the cloud to better distinguish themselves in an ever competitive marketplace.

The Future of “Infotainment” Systems in the Cloud: A Win for Consumers and Automakers, Alike

1) The Cloud Enhances the In-Car User Experience

The standard of most well-equipped automobiles has been “Infotainment” systems that provide Navigation, Satellite Radio, and more recently iPod connectivity. Audi and Mercedes Benz debuted in-car internet in selected models last year. The connectivity was limited to providing navigation traffic updates and in-car internet access.

But others are going further. With smartphones becoming a consumer staple, there is demand for in-car connectivity to apps like Pandora,  Facebook, and Google, and even the option to view email.

Honda, Ford, Cadillac, and Toyota have debuted systems that connect their cars to the internet via the consumer’s smartphone. It gives automakers the ability to offload the processing burden from their infotainment systems and use the cloud to provide the user experience that the customers want. It also provides a datalink to the vehicle that can be leveraged to keep Navigation and other software up to date.

2) It Also Lowers Warranty Costs for Automakers

The benefits aren’t limited to the consumer, however. The automakers see the cloud as the next logical step for reducing warranty costs and improving quality.

The current method is to have the customer bring the car to the service department, where a mechanic manually updates the software. Furthermore, it inconveniences the consumer and lowers their perception of the car’s quality.

Given the complexity of software in vehicles, the ability to roll out software updates over the air presents a significant cost savings. It also presents the opportunity to download real world usage data to give them an early warning of a potential flaw and devise a solution quickly.

3) It Can Help Improve Perceptions of Quality

The move to the cloud presents an opportunity for improving quality. As Ford has found out with their My Touch infotainment system, buggy software can have real implications in perceptions of quality. Once at the top of JD Power rankings in quality, they’ve fallen to the middle of the pack. The ability to tweak their vehicle software in real time brings them another tool to improve quality on the fly.

Overall, the cloud brings new abilities to the automobile that we haven’t seen before. The ability to remain connected while on the the road brings an unprecedented level of information to the fingertips of the driver. It also gives automakers a new stream of data to analyze, parse, and proactively develop solutions for faults they wouldn’t have otherwise known about.

How do you think automakers’ adoption of cloud computing will continue to evolve?

The Flagship Windows 8 Phone: The Nokia 920

Over the past few weeks I’ve been reviewing Microsoft’s Windows 8 Strategy and shared my initial impressions of the Microsoft Surface . This week, I want to focus on the Windows Phone 8 and my impressions of the Nokia Lumia 920 to examine how it fits into the overall strategy.

Windows Phone 8: The Vision

Windows Phone 8 is Microsoft’s attempt to unify all of their devices onto a single platform. The outgoing Windows Phone 7 was largely uncompetitive and ignored by the marketplace. Windows Phone 8 is their latest attempt to become more relevant in the mobile space, which many analysts feel has slipped through their fingers.

Microsoft is hoping the common user interface, integrated social media experience, ability to edit Office documents, along with access to Skype and Skydrive will help drive adoption of their phone platform.

A Review of Windows Phone 8 Step by Step

The Interface:

During the setup process, I used my Microsoft account to sign in and set up the device. My Skydrive contents were immediately available when the phone started up. Windows Phone uses what they call Live Tiles on their main screen. They dynamically update themselves as new information becomes available.

It’s very easy to navigate through the screens and get to what you are looking for. Microsoft seems to be toeing the middle ground between iOS and Android in terms of customizing the user experience. Android allows you to customize your home screen to no end, but Microsoft has some limitations on what you can do with the Live Tiles and sizing. You can add shortcuts to the main screen, which is convenient and something you can’t do on a iPhone.

The Social Media Experience:

Overall, the experience is very smooth. Facebook is integrated into the operating system similar to Windows 8. You can quickly access your profile and that of your friends outside of Facebook. However, the actual Facebook App seems like an afterthought, far less advanced than the one for iOS.

Email:

This is where the platform excels. It’s very easy to manage inboxes and the Live Tiles keep you updated without having to go into the Mail App. I found it very easy to organize my emails, send attachments, and function as I normally would with a PC.

Music:

The Lumia 920 has access to Nokia music which allows you to stream music for free and download some songs offline. The Windows music store had quite the selection of Bollywood music, so color me impressed.

Microsoft’s Take on the Cloud:

The combined Office and Skydrive integration makes it easy to edit documents on the fly and keep them on the Cloud. Also any pictures you take are immediately uploaded to Skydrive. I could log in using my desktop or Surface and everything was there ready to go. My calendars from Google and my corporate Exchange were immediately synced to my Live Tiles. It’s very easy to see your next appointment using the Tiles.

You can also manage your phone remotely, similar to iCloud.

Phone features:

Skype integration is very good — you can receive Skype calls as if they were regular calls.

Normal calls were pretty standard, but they don’t have the ability to respond with a text like iPhone has if you are busy on a call. They also lack a centralized notification center like Android to keep track of any alerts, but the Live Tiles do a good job of keeping you informed.

Navigation:

The Lumia 920 comes with Nokia maps which seems good, but lacks some of the detail of Google Navigation. That said, they give you the option to download the maps to the phone so you don’t need to use your data plan, and offer maps for different countries which is a huge plus.

Apps:

The app ecosystem for Windows Phone 8 is definitely a weakness. There weren’t apps available for Google Voice or the Instant Message clients I normally use. As I mentioned the Facebook App seems a big step back from an iPhone. That said, a basic amount of apps exist but there is room for significant improvement.

Windows Phone 8 Product Execution Grade: B+

Overall, Windows Phone 8 has a good foundation, but it strikes me as a building whose exterior has been completed, but missing some interior fittings. I think they have enough to be competitive and have the edge in business productivity, but the lack of apps will hurt them in the short term.

Making the Sale: How Airbus gambled with their product strategy to gain a foothold in the US Airline Market

Humble Origins:

Airbus had been founded with a clear mission statement: Challenge the traditional American stalwarts Boeing, Douglas, and to a lesser extent Lockheed, in the US Airliner market. This was the largest market in commercial aviation, and Airbus had done their research and crafted a winning product strategy to grab market share.

They had a great plane in the A300 — nearly as large as their rivals’ models, but more advanced, and more efficient.

But they also had a big problem in the 1970s — their order book was largely empty. By 1978, four brand new A300s sat unused outside the factory. No US airline was interested in the aircraft. Predictably protectionist lawmakers and domestic aircraft producers had united to keep Airbus out of the US market.

Without a foothold in the US, Airbus’ days were numbered. The senior executives knew they had to embark on an aggressive marketing campaign to educate the airliners on the advantages of the A300 and create buzz about the product.

So what did they do?

Elements of the Airbus Product Strategy

1) Product Events: Airbus took their prototype on a six-week goodwill tour across North and South America. Guests were invited to view and tour the aircraft at selected stopovers, and were treated to champagne with Airbus executives, test pilots, and engineers.

They didn’t secure any buyers during the tour, but they made sure to touch base with the largest US airlines.

2) Look to Other Segments to Build Sales Momentum: Since Airbus couldn’t get at their primary segment (the US market), they turned to their secondary markets — in this case Korea, India, and South Africa. While they only won a handful of orders it was proof positive they could sell the A300 outside of Europe.

3) Customize the Product to Make the Sale: Initially, the Koreans weren’t interested in the existing A300s. They wanted a plane that had longer range. Eager to make the sale, Airbus decided to offer them a longer range version to meet their needs. Their willingness to be flexible earned them a sale.

4) Develop a Value Proposition Relevant to the Business: Airbus knew their product was more advanced and efficient than the competition. But they needed to develop a consistent message for their marketing. The 1973 oil price shock had sent the cost of jet fuel through the roof. Combined with the pending de-regulation of the US Airline industry, airline executives were under pressure to get their costs in line.

Airbus focused on the efficiency of their aircraft, highlighting the fact that the A300′s operating costs were 20% lower per trip than their rivals. In addition, the A300 had only two engines compared to their rivals’ three. The economic advantage was clear, and the A300 became directly relevant as a solution to the challenges the airlines were facing.

5) An Interesting Take on Product Trial: Frank Borman, CEO of Eastern Airlines had been intrigued by what he had seen of the A300. As a former astronaut, Borman knew the ins and outs of aeronautics and aviation. He felt the A300 was something worth learning more about but his company was ailing and their ability to buy new aircraft, especially an unproven one, was limited.

Airbus knew an opportunity when they saw one. They sent their founder Roger Beteille to speak with Borman directly. Cognizant of Eastern’s shaky finances, he made Borman an unbelievable offer: Lease the four unused A300s for six months at no charge. If Eastern didn’t like them after the trial period they could return them no questions asked.

On the face of it, this seems like an incredible gamble on the part of Airbus. But even if they couldn’t meet Eastern’s needs with the A300, they were betting on the odds the airline’s competition would be eager to learn more about the plane and their experiences with it.

6) Salesmanship: Roger Beteille had done his homework on Frank Borman. Borman had enjoyed an illustrious career at NASA culminating with being the commander of the first crew to orbit the moon on Apollo 8. He had tremendous credibility amongst airline pilots. Now Airbus had the opportunity to secure the endorsement of a well respected figure in aviation and beyond.

To clinch the deal they offered Borman a chance to fly the A300 and put it through its paces. He loved the aircraft, and took up Airbus on their offer to lease the planes.

Six months later, he ordered 23 more, and gave Airbus the break they needed in the US Airline market. By the end of the 1970s, the company had delivered 81 A300s to 14 airlines. They were on their way to becoming a giant in the aviation industry.

In our quest to measure the “happiness” of the customer we are often led to focus solely on customer satisfaction as a predictor of retention. But in my years of researching drivers of customer retention, I’ve found that customer satisfaction doesn’t paint the full picture.

Why Customer Satisfaction Does Not Tell The Whole Story

Here’s one example from the auto industry:  JD Power is considered the benchmark for satisfaction (sales, service) and quality. Automakers make it a point to perform well in those rankings. At first glance, when you look at top selling performers such as Toyota, Lexus, and Honda, they perform well on JD Power’s satisfaction metrics. That would seem to confirm satisfaction is the way to go. But what happens when you compare satisfaction figures with retention rates?

If you were to plot satisfaction and retention figures for each automaker on a graph, you might expect something close to a 1:1 correspondence.

Surprisingly, that isn’t the case. One example is Jaguar. The company has consistently scored well on sales and service satisfaction but suffered poor retention. If the company were to focus solely on the satisfaction numbers, Jaguar would have been given a false sense of security. The other factors to pay attention to in this case were depreciation, maintenance, long term reliability, and competitive offerings. But the most important factor was Jaguar’s relationship with the service department and particularly its service advisor.

How does this translate to early-stage technology companies? Satisfaction remains important, but the lessons of the auto industry still apply.

So what are possible drivers of retention in the technology space?

1) The Product: Users are looking for a product that is easy to use, high quality, and — most importantly — does the job they purchased it for.

2) The Relationship between the Account Manager and User Buyer: In my prior career as a consultant, I often found the relationship between the account teams and the user buyers was a critical driver of renewal. It’s not enough to have a transactional relationship; account managers have to build a relationship where they are seen as a strategic adviser.

In a world of buzz words, what does a “strategic adviser” really mean?  Clients will tell you a strategic adviser acts as the buyer’s vocal advocate within the organization and is simply someone they can trust.

3) Strength of the Technical Support Teams: Similar to the auto industry, the relationship between the client and the tech support team is crucial to the relationship.

4) Pricing: Even though conventional wisdom would put this at the top of the list, I chose to list it last. Why? I’ve run a number of customer satisfaction surveys over the years, and customers always suggest lowering the price. Understandably, everyone wants to lower their costs, but the fact is it’s not always feasible.

That said, it’s impossible to ignore pricing entirely, given the competitiveness of the markets. Incentives are always popular on the sales side, but other options include à la carte pricing, bundled options, or even sneak previews of beta platforms or features.

The Big Picture

Satisfaction is a great metric to track, and it does a good job of telling you the state of your customer base. But it’s important to realize there are more dimensions that need to be considered when thinking about drivers of retention.

Microsoft’s Surface Tablet

The Microsoft Surface Tablet In Person

Last week, I discussed the merits of Microsoft going bold and embracing a Tablet orientated Operating System in the form of Windows 8. Over the weekend I actually went to the Microsoft Store and, somewhat on impulse, bought a Surface Tablet. I wanted to share my impressions.

The Microsoft Store Buying Experience

I decided to go in person to the local Microsoft store to evaluate the customer experience and the Surface. The store was brightly lit, with an airy feel and an interior decor generous in its use of color. The salespersons wore bright shirts that were not so subtle copies of the Apple Store next door.

The Surface was prominently featured up front, and there were numerous sales people eagerly standing by to help. One thing jumped out right away, however — surprisingly, the Windows Phones were nowhere to be seen. I had to ask, and was told they “were in the back.” That was pretty disappointing, given the fortune Microsoft has spent promoting the product.

The salespeople were low pressure and unassuming. They asked nicely if you wanted help, and if you said no they left you to your own devices.

There were plenty of Surface tablets up and running and the demos were well laid out. Pricing was featured discreetly next to the products similar to the manner of the Apple Store.

I hadn’t planned on buying a Surface. But after an hour of playing with it, I decided it was well worth it. The Microsoft sales person quickly processed the transaction and then walked me through the process of setting it up. Great orientation, very similar to what luxury automakers do when they deliver a car. The sales experience definitely had that “premium” feel to it.

The Surface in Person

The Surface comes across as well made, modern looking, and versatile. Purely on construction alone I was impressed. The kickstand comes out with a satisfying click and is made of metal. However, the standard “TouchCover” feels like you are typing on something made out of egg cartons. The slightly more expensive “TypeCover” provides a better experience. It also comes with a USB 2.0 port, mini HDMI out, and a SD card slot to inexpensively upgrade the storage capacity.

The Surface is powered by a ARM processor, so it can’t run legacy x86 programs nor is it as powerful as a Core i5/7 Intel based PC. However, it seems to competently do most tasks. The screen resolution isn’t up to Apple Retina standards, but it is sufficient for most uses.

Microsoft Builds Their Disruptive Innovator to the PC

Last week I mentioned the traditional PC space had been “disrupted” by tablets and smartphones. The Surface goes one step further in disrupting the PC market. Here’s why:

The key feature of the Surface is Windows 8 RT. My desktop PC runs the full Windows 8 Professional edition, so within a few minutes I was able to acclimate myself to the Surface. The touch screen makes navigating the operating system much easier.

The main interface formerly known as “Metro” is simple and easy to use. Anyone who found the traditional desktop of Windows past overwhelming will prefer this one. However, power users are more likely to be annoyed at the “cuteness” and difficulty of changing settings.

The Surface comes preloaded with Internet Explorer, Skype, Office 13, Skydrive, and some basic apps. The addition of Office 13 is what distinguishes Surface from any tablet on the market and positions it as a PC replacement. With the TouchCover keyboard, I was able to use Office as I would normally would on my laptop. And it’s free to boot.

With Wi-Fi turned on I’ve been able to use it for 5 hrs and still haven’t charged it yet. That’s the advantage of a ARM processor versus a x86 one. It also doesn’t generate a lot of heat, like my laptop normally does.

As I mentioned in my last post, Apps are a big problem for Microsoft. This is where Surface lets you down. The Windows App Marketplace is largely barren — no Google apps, Firefox, or Chrome. The upside is that Surface will be the beneficiary of the huge Windows 8 ecosystem. Programmers should be able to port their PC-based Windows Pro Apps over to Windows RT with relative ease, so this drawback will be addressed in due time.

The Verdict:

If you are a power user, wait until early next year for the Surface Pro. It will sport a Core i5 processor and be a true PC replacement. However, if you are looking for a tablet that will allow you do most things your PC can, then the Surface is a compelling alternative to Netbooks and iPad/Android based tablets.

A dizzying array of devices running Windows 8

My colleague Nick Petri posted last week critiquing Microsoft’s product strategy with Windows 8. His chief concern was that Windows 8 is too much too soon and is too disruptive. Many industry insiders feel Steve Ballmer is betting the house on Windows 8 after nearly missing the boat on tablets and smartphones.

Microsoft has dominated the traditional PC space for so long that some feel they should have played it safe. After all, they are a multi-billion dollar company that is still making a profit. But there is one problem:

The Disruptive Innovation Problem

The concept of Disruptive Innovation was pioneered by Harvard Business School Professor Clayton Christensen. Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. You can hear Professor Christensen speak more about this concept here: Disruptive Innovation Explained.

A perfect example of a “disruptive product” is your cell phone. While initially bulky, expensive, and with poor sound quality, cell phones are rapidly disrupting landlines. In addition, given the advantage cellular technology offers, payphones are now largely a relic of the past.

In the IT world, the PC has begun to be disrupted by tablets and smartphones. Powered by battery friendly ARM processors, they’re able to do basic tasks that most consumers use PCs for. And they do so at a fraction of the cost of the traditional PC. Microsoft’s dominance in the consumer market was being threatened and they were dangerously close to being left behind. Many an IT company has failed to grasp the threat emerging technologies have posed (Wang Computer, Digital, Palm, etc.) and as a result they’ve been consigned to the annals of history.

Microsoft’s Dilemma

Microsoft hadn’t simply rested on its laurels during these changes in the marketplace. They had released Windows Mobile based phones and tablets. But the consumer market has greeted these products with a collective shrug and continued to buy Android or Apple smartphones and tablets at a dizzying pace.

In addition, Microsoft faced another problem: Developers. Steve Ballmer famously stressed the importance of software developers at a Microsoft conference many years ago. A software platform is only as good the breadth of software available for it. Given the popularity of tablets and smartphones, developers are seeking to write applications for platforms that offer them the best opportunity. Because Windows Phones are neither popular nor widespread Microsoft has faced continued problems attracting developers to create apps. The situation was compounded by the fact that an app developed for a Windows Phone wouldn’t work on a Windows 7 PC.

The Bold Product Strategy

Microsoft knew that without a common platform, they would never be able to compete with the likes of Apple and Google. They were already late to the game, and needed to make a dramatic shift in their product strategy.

Windows 8 gives Microsoft a common platform to compete across a broad spectrum of devices: traditional PCs, laptops, tablets, smartphones, etc. By utilizing a common operating system, they provide developers a much broader marketplace to develop their Apps for. Developers can be assured if they develop the next “Angry Birds” they will be able to port their App to work across all devices running Windows 8.

Why Consumers and Developers Alike Will Embrace Windows 8

1) Windows 8 certainly comes with a steep learning curve, but it simplifies the Windows Experience dramatically.

2) It allows Microsoft to leverage their dominant position with developers in the Enterprise space and give the developer audience a common set of software development tools, a common marketplace, and a common operating system to develop for.

3) Most importantly, it makes Microsoft relevant in a world that is rapidly moving towards smartphones and tablets.

Change is disruptive, but Microsoft has done this before. Each leap ahead (From DOS to Windows 3.1 to Windows 95, for example) has resulted in disruption to consumers and enterprises alike. That said, once they adjusted they were sold on the performance improvements and capabilities each successive generation offered.

In 1989, ClearVue was a $60,000 per year product sold by a small Massachusetts glass company that was being taken over by Brooks O’Kane, who was handed the responsibility of growing the business by his father-in-law. At the time, O’Kane knew very little about customer segmentation, but he realized that he would be in for a tough fight — a true David vs. Goliath battle. Yes, O’Kane thought that he had the superior product, but he had superior competition, too. And they wouldn’t go down without a fight.

photo: notfrancois

As a result, ClearVue was at a crossroads. Thankfully for the company, O’Kane chose the right path by making a crucial decision based on customer segmentation research that would ultimately cement ClearVue’s place in the industry.

In the late 1980s, the glass cleaner market was sized at $160 million. There were three established entrants: Windex, Glass Plus, and SOS Glass Works, which combined to control 75 percent of the market. The remaining 25 percent was filled by private label and regional competitors. The market was mature, and the larger competition had plenty of resources to fight any new entrant.

So, O’Kane started by evaluating the market. When he took over ClearVue, it was being made in a tub in the back of his glass company. It had never been advertised, but it had gained a small and loyal following. Consumers would even write fan mail praising the product and come up with novel uses for it. As he read these letters, O’Kane felt he had a winner on his hands. But the challenge he faced was how to take on the Goliaths of the industry?

Here is what he did:

• Product: It all starts with a best in class product with a winning value proposition. Clearvue was a better glass cleaner and it was cheaper.  Another chief distinction was that it was a clear solution, while the competitions’ products were dyed blue.
• Packaging: As Steve Jobs proved with the original iMac, you can sell a commodity for a profit if you package it attractively. Brooks invested in a higher quality plastic bottle which was clearer and when filled with the colorless ClearVue stood out from the competing products. He worked with a graphic designer to create a two sided label so people could read about the ClearVue story on the back of the bottle. They could claim an industry “first” and start a trend.
• The Sales Pitch: Everyone loves an underdog story, and O’Kane told anyone who would listen about the humble beginnings of ClearVue. After much lobbying, he was able to get interviewed on the local Boston TV show called, “Chronicle.”
• Pricing: O’Kane was advised to keep the price low in the beginning. Since glass cleaners were a commodity, a low price would be essential to encourage trial use by the increasingly price sensitive public.
• Promote, Promote, Promote: Brooks made sales calls to the local New England grocery stores, thinking they were the most likely outlets to give his product a shot. He sought advice from industry experts on how to hone his pitch, and it worked. Within a few months, he had scored deals with the three largest grocery chains in the region.

From there, O’Kane even went knocking on Walmart’s door. When his traditional approaches failed, he wrote Sam Walton a personal letter telling him he was a young guy who was starting out who had a killer product and just wanted a chance. Eventually, a buyer from Walmart got back to him and ordered 15,000 cases.

All was going well. O’Kane had grown ClearVue into a multi-million dollar operation. But there was one problem, the competition was waking up and it fought back with killer discounts and copycat products.

Customer Segmentation to the Rescue

The innovative clear solution and bottle at work

Brooks had two lines of business: the mainstream grocery business and the Automotive business. On the surface, the Grocery market was large, and offered a better opportunity to showcase the brand. But as he had discovered, the Grocery competition was fierce and the consumer was very price conscious.

The story was different in the Automotive market. It wasn’t nearly as concentrated, and the automotive consumer was not nearly as price conscious. They were willing to pay a premium for car care products that worked. So, Brooks made what would be a fateful decision to concentrate on the automotive market. It was the right call, too. ClearVue became a hit in its market segment and remained so until it was recently sold to Turtle Wax. O’Kane’s customer segmentation strategy ultimately proved to be a life-altering decision.

As my business professor at Brandeis used to always remind us, “You don’t steal Superman’s lunch!” I think that lesson applies here. By avoiding a long entrenched fight with national brand glass cleaner competition, Brooks gave ClearVue a steady foundation upon which it could grow.

A picture taken from the flight deck of Dash 80 showing the plane flying upside down while Tex Johnston performs a barrel roll.

The Birth of a Compelling Sales Strategy

It was August 6, 1955 and good flying weather in Lake Washington, Seattle. Boeing Test Pilot Tex Johnston was at the controls of the company’s sole Dash 80 prototype of the now iconic 707. He was slated to demo the aircraft to representatives of the Aircraft Industries Association (AIA) and International Air Transport Association (IATA). All he was supposed to do was make a few passes and let the crowd see the plane. He had a slightly different sales strategy, however. And, eventually, it would help Boeing introduce America to the Jet Age.

The Jet Age Arrives

Here’s a little bit more about the gamble Boeing had taken. The company knew that the Jet Age had arrived and was the way of the future. Airlines, while initially wary, would have to upgrade soon, and Boeing knew their competitors would not rest on their laurels. So they invested 2/3rds of their post WWII profits into the development of the Dash 80 prototype. Gambling with the company’s future, Boeing’s leadership decided to set up production lines once the prototype was near complete. They did this without having a single order.

Crafting a Compelling Sales Strategy

At the same time, the public was very concerned about the safety of Jets. The first passenger jet introduced, the De Havilland Comet had suffered three fatal crashes which resulted in the type being withdrawn from service. Additionally, Boeing understood that the airlines were at the mercy of the public. While those Airlines bought and operated the aircraft, their decisions were driven by the flying public.

So, Boeing launched an advertising campaign that went directly to the public. They showed people and children that flying could be more — an enjoyable, quiet, and smooth ride that only a Jet could provide. They had scheduled Tex Johnston’s flyby in Seattle to show off the prototype with Airline executives, industry pundits, and government officials in attendance.

Going Rogue

Tex Johnston had been told to make a few passes over the crowd and that would be all. But Tex understood the audience needed to be sold on the plane’s performance and safety. He had a little more in mind than just a simple fly by. Here’s what happened.

He was flying at more than 400 miles per hour and was ready for the flyby. But suddenly Johnston pulled back on the controls, and the plane started to climb. He started a complete 360 degree roll, flying for a short time upside down. Then, as the crowd watched in amazement, he did it again. The potential jet buyers were duly impressed. Bill Allen, the president of Boeing who was also in attendance, was in shock.

The Aftermath

The next day, Johnston was summoned to Bil Allen’s office to explain himself. Allen was furious and demanded to know what Johnston was thinking, foolishly risking the company’s sole prototype.

Johnston’s reply was simple: “I was selling airplanes”

He then explained how it was a safe maneuver and hadn’t risked the aircraft in any way. Allen told him he appreciated the explanation, but to never do it again.
For more, you can listen to Johnston tell the story in his own words.

While Johnston’s actions were seen as reckless, it created a buzz amongst the airline executives in attendance. They had studied the economic case study behind the plane and knew all the technical details. Seeing a passenger aircraft pull off that sort of stunt, however, was something else entirely.

In the end, the 707 sold over 1,000 copies and it brought the jet age to the flying public. Furthermore, it established Boeing as a bona fide jet maker and set the foundation for the large presence Boeing has today in Commercial Aviation. Ultimately, that’s the true definition of a compelling — and successful — sales strategy.

The now-famous “Balance” ad, part of the initial series of commercials introducing the LS 400 to the US market.

Hi Everyone! I’m Sudip Verma and I just joined the Research & Analytics team at OpenView Labs. Prior to OpenView, I spent over five years in Strategy Consulting serving the Insurance, Automotive, Financial Services, Retail, and IT industries.

To kick off my blogging efforts, today’s post will highlight the 1989 launch of the Lexus brand in the US, outlining the key aspects of the Lexus brand strategy that made it successful in the face of fierce competition.

The Opportunity: Gain a foothold in the largest luxury car market in the world.

The Problem: Establishing Lexus as a prestige luxury brand in the US, despite being a division of Toyota. The brand faced fierce competition from the likes of Mercedes-Benz, BMW, Jaguar, Lincoln, and Cadillac.

Establishing the Brand and Product:

Understanding the Market: Before launching the Lexus brand, Toyota interviewed dealerships and consumers to understand their desires, needs, and habits while they drove. A key result was that Toyota found they could not launch a luxury nameplate under the “Toyota” brand. The US market (as VW found out with the Phaeton) would not consider the Lexus LS400 a “true” luxury car if it sat next to a Toyota Corolla on a lot. As a result, a new network of dealerships was selected based on a very stringent criteria.

Emphasis on a Superior Product: From 1983 to 1989 Toyota spent an unprecedented sum (nearly a billion dollars!) developing their flagship LS400. They built over 450 prototypes, representing the work of 24 engineering teams.

The goal was to leverage their core competencies in building quality automobiles to beat the market leader S Class Mercedes. To do so, they needed the product to be credible. The strategy they pursued wasn’t parity, but superiority.

Toyota emulated (some would say shamelessly copied) the best features of their competition and took them one step further. They tested their cars on the Autobahn for 15 months to understand the driving dynamics of the Germans, and made the car quiet enough to have a normal conversation while driving 150 MPH.

The result was a car that pushed the bar and set a new standard. Leveraging Toyota’s expertise in engineering and quality, the company produced a car that took the fight to the competition and re-established the standards for what a class-leading luxury car should be.

Establishing a Winning Value Proposition: This was best embodied by the Lexus motto: “The Relentless Pursuit Of Perfection.” Lexus launched a series of ads championing the car’s Japanese quality, attention to detail, and technology (including the now-famous spot featuring the Champagne glasses stacked on a LS 400, as well as the ball bearing test, etc.). And all of this for tens of thousands less than the S Class Mercedes.

Superior After-Sales Service Experience: In the automotive world, the service experience is often a key driver of satisfaction. Lexus sought to offer an industry best service experience, complete with loaner cars, free car washes, and free car pick up/drop off.

Seeking out the Support of Thoughts Leaders and Influencers: Lexus sought to gain the endorsement of Car and Driver and Consumer Reports. Also, they understood the importance of JD Power and Associates in the industry. JD Power is considered the industry benchmark for quality and satisfaction on the automotive industry. As a long term strategy, they sought to be the at the top of both quality and satisfaction metrics.

Standing by the Product: Despite the resources devoted to the LS 400 launch, in 1990, Lexus had to recall all of their cars for a potential cruise control fault and issues with a brake light housing. Given how young the company was, this could have been a devastating blow.

Dealers contacted LS400 owners personally, picked up the cars from homes, made the fixes, and quickly returned the vehicles freshly washed with full tanks of gas.

Their owners remained brand loyal and Lexus continued to score at the top of JD Power’s Quality and Sales Satisfaction Index. By 1991, Lexus became the Number 1 luxury import in the US with over 70,000 cars sold.

Lexus has continued to grow in the US and abroad with great success. The core emphasis on product quality, design, and customer service continues to serve them well. And the Lexus brand strategy continues to serve as a terrific example for companies looking to disrupt a crowded, competitive marketplace.