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Watch these two advertisements from two competitors in the same industry. Both advertisements appeared on YouTube this month, within the past week.

Xerox:

and,

Konica Minolta:

None of the above will achieve viral status, but they reveal how these two businesses approach their markets. One, Xerox, embraces customer intimacy.  In fact the entire video is about solving their customers’ issues.

The other, Konica Minolta, creates an implausible fiction around a product.  When was the last time you saw everyone gather around and welcome the new MFP?  Speaking of which, what is a MFP?  They don’t tell you in the ad. (FYI, it’s a Multi-Function Printer). On a historical note, Xerox’s very first advertisement is in may ways more compelling than the inauthentic product tall-tale we see here.

But let’s get serious for a minute. We see Xerox stressing its ability to impact major accounts.  Their story is around managing business processes in a sustainable way.  I believe Xerox created this market and although other companies play in it, Xerox is consistently telling the market that they are the player that can impact business.

This is a fundamental business model difference. Here’s how the two companies define themselves:

• Xerox Corporation is a $22 billion leading global enterprise for business process and document management. 

• Konica Minolta Business Solutions is a leader in advanced imaging and networking technologies for the desktop to the print shop.

While they both make claims that are true, only Xerox has positioned itself as meeting customer’s true business needs. We all know that Xerox’s has a rich history of product innovation. But Xerox is a business partner and solution provider not just a product seller. And the market is rewarding them for it.

A Gartner report shows that a segment of this industry - Managed Print Services (MPS) - is a cost-effective alternative to the traditional purchase and leasing arrangements under which organizations acquire their office printers and multifunctional devices. Here’s how Gartner phrases it:

Cost savings is the main driver behind the decision to go with MPS, and the poor economic climate has boosted MPS opportunities. MPS enables organizations to reduce the cost associated with printing and copying through product consolidation or redeployment. It gives them a consolidated contract for hardware, supplies and maintenance for greater visibility of spending. MPS also provides the flexibility to scale pages, print resources and cost to match business volume and staffing. It has the ability to shift costs to where customers have available budget via chargeback and by turning capital expenditure into operating expenditure or vice versa.

Xerox is now really competing with HP on the basis of customer intimacy. It knows that solution selling is not enough. So what could Xerox do to further differentiate itself in this market?  For starters, Xerox could easily do what HP is doing and put out a line of ads stressing its varied and deep solutions and its ability to impact many more customer issues. Where is Xerox in its customer intimacy journey?  As stated Xerox has a vibrant and varied solutions business with a global reach.  Further, Xerox has a strong focus on major accounts and is building strong capabilities to impact them through a variety of solutions. 

If you look at the copier segment of Xerox’s other competitors they often stress features and functions; they’re addicted to product innovation. These companies are using traditional market awareness story-telling - so that customers will be familiar with their brand when sales representative many times an outside channel calls on the accounts.  Unfortunately, far too many of the stories told are not compelling, especially in this economic environment.

Eighty-eight percent of all CEOs say getting closer to the customer is the most important dimension to realize their strategy in the next five years.  According to an IBM study, "The most successful organizations co-create products and services with customers, and integrate customers into core processes. They are adopting new channels to engage and stay in tune with customers. By drawing more insight from the available data, successful CEOs make customer intimacy their number-one priority."

This is not news for anyone who views customer intimacy as a business model and not just a sales technique. One of the key tenets of a superior customer intimacy practice is to constantly maintain a tight linkage between service delivery and value creation.  In fact, by definition, you can't have real customer intimacy if you're not solving your customer's most strategic issues.


The diagram above makes the following point: there must exist an optimal balance between your promise and your delivery, i.e., you gotta walk the talk.  Further, the value proposition you bring to your client must impact your customer's value drivers in a perceptible way.  Once you have convinced the customer that your idea will in fact deliver value (idea selling), then you must in fact deliver what you promised.  In our case, we say that you must offer True Solutions™ and be an intimate partner in solving problems and bringing new ideas to your clients. Of course, you also have to keep in mind that your ideas or propositions must be screened to ensure they meet your criteria for fostering customer intimacy.

If your solutions don't deliver on your value proposition, you're guilty of marketing hype.  This can be a fatal mistake.  Far too many companies believe their own marketing propaganda, and don't know how to deliver on their marketing promises.  90% of the time, this is why customer intimacy gets a bad rap.

Now, a few words about customer value drivers. We're all indebted to the academician Jag Sheth's theoretical model that explains the five values that drive customer choice:

1. Functional value: the perceived utility that derives from a product's physical, utilitarian, or functional attributes.
   
2. Social value: derived from an alternatives association with an identified demographic, socioeconomic, cultural, or ethnic group.
   
3. Emotional value: derived from the ability of an alternative to arouse an emotional or affective state.
   
4. Epistemic value: acquired by an alternative as the result of its ability to arouse curiosity, provide novelty, and/or satisfy a desire for knowledge.
   
5. Conditional value: derived from the specific situation or context of the purchase decision. 

At McMann & Ransford, we help our clients build True Solutions™ that meet all five customer values.  Unfortunately, far too many companies are focused on functional value alone, a classic symptom of the product-driven company.  In our next post, we'll look at an industry which is addicted to innovation and examine the consequences of this behavior.

Today I want to examine the HP Let’s Do Amazing campaign:

First I want to congratulate HP on the campaign. They highlight the power of solutions - to differentiate themselves with a powerful, substantiated message, and keep the commercials interesting and novel.  From a practical point of view, this is an excellent example of explaining to the world the power of  True Solutions™ that pull through HP hardware and software. 

Although we have all seen companies produce ad-campaigns that place their company’s solutions ability ahead of their reality - in this case HP created, sold and implemented the solution.

Let’s first discuss the power of the ad campaign. What does it do?

• Differentiation. The campaign places them above many other technology providers - Dell, Sony, Toshiba etc. as having more to offer.  So many conversations in the major-account technology sector that HP plays in are about price/discounts etc.  HP is stating that for its major B2B accounts it is something different.  They offer True Solutions™ and are an intimate partner in solving problems and bringing new ideas to the accounts.
• Intimacy. Reveals a level of intimacy with clients - they solved a true issue or provided a new opportunity.  The ad shows that HP is working with the account to solve real problems not just selling existing products to the account.  You get the feel of a partnership facing the world of competition together.  
• Vertical/customer-centric business model. Shows that HP has industry expertise in business and can provide concrete ideas to solve real problems.  Further, it shows an outside-in strategy.  Finally, the success was driven not by great sales but by great account intimacy (trust us we know and care), consulting (finding the answer) and delivery (making it work).
• Repositioning. Places HP’s B2B business offerings as a worthy IBM, Accenture competitor.  Once you are successful in the Intimacy EngineTM and have a successful portfolio of solutions you want to reposition your company away from old competitors towards the people you want to be compared to.  Get prospects to think: “We should consider HP.”
• Credibility. Provides a halo-effect for other vertical account discussions, an intro for further solution discussions across industries. It gives credibility to HP’s solution business.
  

What does it tell us about HPs journey to the Customer Intimacy Engine™ Business Model?


Again, we do not suggest any firm build an ad campaign ahead of its ability to deliver on the True

Solutions™ promise. But if we take the HP ad and determine their position we might find things that help you on your journey.
 
Are they in the Form stage?  The Form stage is all about early success.  Getting your company comfortable with the new model (getting out of its way if you will), producing success in getting market participation strategy, selecting an initial portfolio and offer, taking it to market and getting some success to build upon - a pilot if you will.  Clearly HP has chosen key or major accounts within verticals to focus upon. Further, they have successes to show case and the broader company must understand the Customer

Intimacy Engine™ business model or the idea of the ad campaign would never have got momentum within the company.  So we can easily determine that they are not in the Form Phase.

Are they in the Commercialize phase?  This phase is all about proving that the model makes commercial sense for the company - building a critical mass of solution creation, delivery, and account management resources to drive meaningful revenue (at least in sections of the business) and pull through their other products - the ones they push to market today.  Clearly HP can pull through hardware and software; the ads show this explicitly. Also, they have the critical mass for the vertical and the key accounts but they have more - they have accepted the business model as the way they do business for at least the major accounts of HP.  Therefore they are further along than the Commercialization phase.

Are they in the Scale phase?  The scale phase is about making this the way you do business (at least for the appropriate segments of your business).  The account management, R&D, business management, go to market, HR, Finance functions have all aligned in the business model and there is no more internal fighting about should we do this and will this work and why is this different etc.   Further, it is about fast growth of the model to be the driver of traditional product sales throughout the segments that are affected.  HP appears to be on top of these issues and has made the decision about business model and is confident enough to reposition its B2B business accordingly.  Therefore I think they are firmly in the Scale phase and are trying to move to the Dominate phase.

Again, I believe HP has put together a very impactful way to announce to the world in clear and interesting fashion where they are and where they are going.   Also, you should look at your company to see where you are and determine if you can move faster to the safe and profitable ground the HP appears to have found.

I've shared some thoughts on how marketing executives should ensure the Customer Intimacy Engine™ is as integral part of their company strategy.

Now, I'd like to delve deeper into "why?"

Specifically, we'll look at the Customer Intimacy Engine™ from the perspective of the CFO or VP of Finance. I sometimes think of this role as the reality role - the CFO sees the next year plans as related to strategy clearly and is responsible for their ability-to-reach factor and is looking closely at this year's are-we-get-getting-there reality.

The CFO is the key advisor and early warning system of the P&L leader of a business. They know when things are not and will not work and that trying the same thing year after year without fundamental change is perilous. Over the years I have found their insights to be clear and sound and they almost always can clearly see the value of the Intimacy Engine™.

Recent surveys show that CFOs are focused on four types of growth:

Core growth: Increasing market share within existing or related segments. This contributes approximately 45 percent on average to a company's growth.

Customer or markets growth: Entering new markets or customer segments that are unrelated to existing ones. This contributes 23 percent to growth.

Product and service growth: Growing an existing customer base and identifying its needs to develop new products and services, especially in new sectors. This contributes 26 percent to growth.

Value chain expansion and/or new business: Vertically integrating the value chain or expanding into a brand new business opportunity that is only loosely related to the core. This represents about 8 percent of growth.

To achieve this growth, most enterprises will leverage a multi-year investment planning mechanism in their planning calendar. This is the tool that several CFOs have used to introduce the topic of  Intimacy Engine™ into the planning process. They do this because they have been through too many underperforming strategies, strategies that did not fundamentally alter the price compression that the product portfolio inevitably experiences as it is commoditized. Acquisitions that expand the product list (SKUs) but do not provide better profitability are just more options for making sales quotas. The same can be said for expensive product enhancements, announced with great fan fare but which only make a blip in the revenue numbers and sometimes reduce margin (R&D and go to market expenses related to new enhancements).

The list goes on and on.

Let's accept that it is very difficult to use the old business model to fundamentally change market forces of commoditization of a product line when others can catch up to anything new in a matter of months (or get ahead of us in same time frame) and often offer their products below your price point.

The very nature of a Customer Intimacy business model is based on value-creating activities. Here are some typical characteristics of an effective Customer Intimacy practice:

Strategic Partnerships
Customer Intimacy implies that you are working on solving your customers' most strategic problems. Your solutions create true partnerships.

Brand Equity
Customer Intimacy creates a sense that your organization is branded as a trusted advisor. Earlier, we mentioned that Customer Intimacy means actual daily presence in the trenches, solving real client problems. Remember, customer Intimacy means your organization  becomes an extension of your clients' organization.

Larger Deal Sizes
Customer Intimacy drives large deals - because they are more strategic and focus on solving critical business problems for your client.  You are not selling point-products.

Product Pull Through
Customer Intimacy enables product pull in these large deals. Your products are not competing on features and function any more. Rather, they become part of the larger solution.

Product Lifecycle Extension
Because your products are embedded in your solutions, they are not subject to typical price-competition.  We have found that this significantly extends the lifecycle for most products. 

Scalability
Once you understand and solve the key problems facing your clients, your ability to solve that problem for others in the industry becomes a key selling point.  Your successes create further opportunities to grow.

Reduced Selling and Marketing Costs
Over time, your brand equity and reputation as a trusted advisor to the industry means you don't have to spend as much money marketing.  The cost of customer interaction is greatly reduced, because you are already being paid to interact with the customer. 

So where does the CFO turn to create business value?   We see that customer intimacy impacts enterprise value creation across numerous factors. Back in October 2004 Deloitte Consulting LLP surveyed 124 financial executives about the creation of value at their companies, and constructed eight value-creating behaviors.  The study led to the creation of Deloitte's Enterprise Value Map - a useful tool which we can use as a starting point to study the impact of Customer Intimacy on business value.


Specifically, we can point how embracing a Customer Intimacy business model creates a new platform for growth by impacting Revenue Growth, Operating Margin and Expectations. Here's how:

• Revenue Growth is driven by "volume" and "pricing." Customer Intimacy enhances your ability to attract new customers as well as retain and grow current customers. It also significantly improves your  understanding of business unit performance and market values. You tailor products and services to new customer segments - with service chains that solve your customers' fiercest problems. Your pricing is strengthened because it is optimized based on the value-impact you have on your client. 
  
  
• Operating Margins are improved because your SG&A costs go way down, as does your COGS.  In fact there is evidence that when you co-create products and services with your client, the value creation potential is far higher at a far lower cost.
  
  
• Expectations in the market are changed as well.  Your company is viewed as a thought-leader, with unique solutions and capabilities.  Your partners are viewed as key contributors. In fact you build an entire ecosystem of value-creators. 
  

Thus, we often find the CFO hosting workshops to help business leaders learn:

- What is the real impact of the Customer Intimacy Engine™ as a business model?
- How does it truly work?
- What does it take to be successful?
- What markets/segments are most conducive to this business model?

Out of these event - almost always - an understanding is reached that the Customer Intimacy Engine™ business model must be embraced and that the company must find a way to become proficient in the model. Usually an effort is kicked off to prioritize the market/segments and build a cost benefit analysis. This finds its way into the proper annual business plans for R&D investment for the new offers, solution practice creation, and go-to-market adjustments etc.

Another path we have seen is where the financial executive leads the company in an educational process. By this I mean the executive starts building a corporate understanding of the problems caused by innovation and need for the Customer Intimacy Engine™. This is a mindshift approach and allows a greater degree of flexibility for education of a leadership team and a longer period of time for analysis and planning before the effort is placed into the regular planning and budgeting cycles. You could think of this effort similar to a strategy effort where the current state is examined, options considered, education provided and then direction selected. The value of this approach is it can be begun immediately - not dependent on planning cycles and can be done at the pace and manner that enables a deeper understanding of the model and a stronger by in of the effort.

Again why is the Finance leader an appropriate leader of this effort?

- They can clearly see when the Innovation Curve is no longer working for the company. Quarter after quarter they see the company strategy is not panning out. The CFO hears these phrases echoing in the halls: "Market share is slipping. Losing key deals on price. New features don't drive the impact we expected. Bundling our products was copied by our competitors. The length of time that our new product stays differentiated is ever shorter. Our services are leveraged almost given away to get low-margin product deals..."

- They see the entire business and have the data to support their views. No other role spends the amount of time they do examining the Financials and seeing trends.

- They are trusted and unbiased - they just want success and they do not have a dog in the hunt on a given sales approach nor are they enamored with a given product or product line.

- They can readily understand the potential financial impact of the Customer Intimacy Engine™

In closing, I encourage the Finance leaders to challenge their companies views of what is possible and take the strategic steps necessary to lead the transformation.  It is not easy, of course. But the payoff is immensely rewarding.

You may recall that I recently wrote a blog post about enabling the sales executive and her organization titled Why Solution Selling is not Enough.

Today, I would like to discuss the role of the marketing executive in terms of customer intimacy.

In the simplest sense, marketing has a direct role in market strategy, participation strategy, and enabling the success. Because of their unique role and perspective on the business, marketing owns or is heavily involved in the strategy of the business, and often drives the decision-making process of how to address commoditization issues.

These include:
•    Expanding product lines to leverage current channels
•    Acquiring market share and thereby eliminating competitors
•    Moving to a platform offering
•    Moving to a suite of products that can be sold in a bundle format
•    Moving to the Intimacy Engine™ model.

All of these and other strategies make sense at different times and for different reasons and many times they need to be combined in order to deliver the transformation required. We believe that the Intimacy Engine™ should always be considered as a mechanism to change the paradigm of a business that is experiencing or will be experiencing the crushing cycle of innovation that does not yield the long term price differential needed to support the growth and profit margins of a sustainable business.

Marketing is key in assisting the organization in gaining an understanding of what’s at stake. Marketing has a future view of the business and therefore brings that to the discussion - often line executives must be immersed in the day to day do not have the time or maybe the information to question what can be different and what direction to go.

All significant product portfolio changes including the adoption of the Intimacy Engine™ require significant investment, process changes, leading new buyers, creating new messages, but the Intimacy Engine™ takes advantage of what we have today and what markets we’re in. It moves up the organization to executive buyers and provides a portfolio of things they are interested in. Furthermore, it allows the pull through of the existing products and services.

We have seen several marketing executives take the lead in getting their organizations head around the power and journey of the Intimacy Engine™.

Here, Mike Mendenhall of HP explains their campaign titled “Let’s Do Amazing”:

We’ll examine HP’s campaign in detail in another blog post, but suffice to say, it fits within the purview of marketing to take the lead.

Now here are the steps used by one of our clients as they lead their company’s business model transformation.

•    Market Participation strategy
Use these questions as inputs to the process:

- Which Markets/segments must you win in to continue your growth and margin requirements?
- What markets/segments do you do you need to move into wither to take from competitors or to leverage your product strategy
- What capabilities do you have that can be leveraged in a True Solution™?

Often, your customers think of themselves as part of a vertical business segment - phama, food and beverage, energy etc. It is important when discussion an Intimacy Engine™ business that this perspective is used as the overriding structure.

•    Business Model development
A model can be developed to explain the investment and return rate including timing should be developed for the organization. This will most likely include a lengthy discussion of the Intimacy Engine™ business model, its components, benefits, and other unique attributes. Also, where to pilot the model should be identified and reasoning provided.

•    Socialization Effort
The Marketing Executive is the perfect executive to take the lead in getting the broader management team on board. This often requires intellectual material, and an event set aside for the team to gather and go through and develops an understanding of the power and impact the Intimacy Engine™ can provide.

•    Pilot Implementation
This by definition is a combined, collaborative effort between a line executive and marketing to assure that appropriate resources are allocated - often new hires are required, for example. But, it is important that the broader executive team stay deeply evolved in the pilot’s progress - this will provide support for the inevitable challenges that occur, and the broadest understanding of the power of the model to be understood.

Obviously, there are significant efforts made during the pilot on offer development, market messaging and go to market messaging. Although these are quite different than traditional offers and messaging they follow the same process and must be properly enabled for success.

I hope I’ve made the case for why the marketing executive is a natural to take the lead in Customer Intimacy transformational initiatives.  Stay tuned for more on this topic.

In our line of work, we often see companies which innovate past the point that customers need or will pay for. 

We have seen this phenomenon in almost every B2B product group.

The cause?  A mistaken belief or assumption that companies can compete only through continuous innovation which is translated as continuous product differentiation.  At a certain point this leads to product over-engineering - too many features, product bloat, unnecessary complexity, and product extensions which customers dislike.  Technology replaces common sense.

We must have empathy for the company stuck in this mindset. They view themselves as product innovators and they always move their product forward in an effort to stay ahead of the competition. Furthermore, two powerful groups within the company - product development and sales - both push for continued expansion of features and functions. The product development group is always clamoring for more money to keep ahead of the Joneses, and sales must account for tougher market conditions. Thus, we hear a refrain: "the customer wants x and y and z!"

One example from the world of consumer electronics comes to mind. Although not a B2B example,  it fits this category and we can all relate to it: the heralded release of 3D TVs!   Just think how tough it is for TV companies to get us all to replace our cool flat screen TVs with the next big thing! perfect If they don't get us all to continue buying - we all know what that will mean!

In the B2B world, we see the same dilemma in medical devices where the technology is only needed in rare cases and is sold for much higher prices than current technology in use (which works for 99% of the cases).

We also see it in office machines - where the optimistic projections of an optimistic sales force hopes that the new color options will drastically improve the sales rate of a product under considerable pressure.

Sound familiar?

We see it all the time.  The relentless pressure to outdo the competition (if only for a few months) with products that just aren't needed.

So, what can you do?

First and foremost we must accept that innovation of current products has a limited life cycle and at some point drastically diminishing return on investment opportunities. Challenge the mindset, the assumptions, the myth of endless innovation.

Second, we must decide what portion of our markets/segments we must win to continue growth and profitability. Then we must look at those markets critically and determine where we are in the product innovation curve and admit that we might need a more dramatic impact than a product that no one really needs and won't pay a premium for.

Third, examine what alternatives truly exist:

•    Eliminate competitors through acquisition - consolidate the market
•    Expand our product lines - hopefully to a new innovation curve.
•    Bundle our products into larger deals where we can provide greater price flexibility and still remain profitable, and/or
•    Add the Customer Intimacy Engine™ business model to those areas that you must protect, or acquire from competitors, or improve product margins.

By adding the Customer Intimacy Engine™ to your strategy options (yes, it is a different business model with its own challenges) you have a viable alternative to the "innovate at all costs" mindset. Re-directing R&D money to a portfolio of True Solutions™ (ones that your customers executive truly need and want) you can add years of life to your product lines and focus on delivering what the customer truly needs and will pay for.  Sometimes it's not a bad idea to become a fast follower of proven new features instead of the company that has to get there first.

I've been amazed at the ability of companies to maintain the useful life of a product or products by owning the executive suite of their key customers and driving intellectual thought-leadership in their marketspace.
 
Granted it is not easy to begin to solve your customer's true problems or help them take advantage of big opportunities. It requires a new kind of offer set to be added to your product portfolio, different market and customer messaging and different account management techniques and often different talent and talent development efforts.

But, compared to spending millions - sometimes hundreds of millions - on product that will inevitably fail, it is a bargain and well worth the effort of learning a new business model.

P.S. - We may be wrong about the 3D TVs but I would not want to be betting my career or significant $$$ on products that are well past the sweet spot of a market.

How does IBM go beyond marketing platitudes to create a Smarter Planet campaign to change the world?  And is the campaign a True Solution™?  What lessons can we glean from IBM’s efforts?

In this blog entry, we’ll examine the depth and breadth of IBM’s Smarter Planet campaign. I use the word campaign, because at first glance, it looks like a marketing pitch.  But if you spend five minutes examining the message, you soon understand that IBM is leading the with a profound idea.

The idea is introduced eloquently by IBM’s Chairman and CEO Sam Palmisano:

we are all now connected—economically, technically and socially. But we’re also learning that being connected is not sufficient. Yes, the world continues to get “flatter.” And yes, it continues to get smaller and more interconnected. But something is happening that holds even greater potential. In a word, our planet is becoming smarter.

This isn’t just a metaphor. I mean infusing intelligence into the way the world literally works—the systems and processes that enable physical goods to be developed, manufactured, bought and sold… services to be delivered… everything from people and money to oil, water and electrons to move… and billions of people to work and live.

The idea, which in essence says that all areas of human endeavor can now be better understood by data-driven insights, is captured in three bullet-points:

• Instrument the world’s systems
• Interconnect them
• Make them intelligent
  

IBM is proposing a new vision for an “intelligent” planet - broad enough to engage individuals, citizens, shareholders, industries, and governments under the concept of an almost utopian “smarter planet.”

Palmisano also states:

CEOs, CIOs, governors and mayors are asking:

• How do I infuse intelligence into a system for which no one enterprise or agency is responsible?    
• How do I bring all the necessary constituents together?     
• How do I make the case for budget?     
• How do I get a complex solution through my procurement department?     
• How do I coalesce support with citizens?   
  
• Where should I start?

If you recall, in a previous blog post I had stated that a solution is the embodiment of an idea - and how the idea can be realized.  The idea is the kernel of the change in the relationship from pushing products and discussing business opportunities.

I also explained that the power of ideas is that they immediately accomplish several things:

Two other candidates for a similar company-wide True Solution™ can be seen at Accenture and Deloitte.

Accenture is building an idea-led solution business around “competing on analytics” - a term they clearly lead the industry in.

And at Deloitte, they too have a game-changing idea in “The Shift Index.” Will they use it to lead their customers to a new level of business competition?  

The opportunity for building a True Solution™ lies within every B2B services division. Where do you stand?

Most B2B companies strive to build an intimate and trusted relationship with their customers, at least that's what they say they want. They expend a lot of energy educating their sales professionals to work in that space thinking that this is the area most in need of help. After dedicating considerable resources and time on sales training, most find that it's unfortunately not the panacea they hoped it would be.

As we've stated on this blog several times - Customer Intimacy is a business model change, not simply a series of training session for customer-facing employees.

 

As the diagram shows us, customer intimacy business model re-invention is more than just a sales approach. It is literally a new way of thinking and executing work.  Let's save that discussion for another post.  For now, I'd like us to examine the plight of the sales organization. 

How does your sales organization meet the challenge? How does your customer relationship become an intimate one?

Often, we find that a major stumbling block is that the "solutions" the sales organization take into customer discussions are  in fact little more than a bundling of products - which tend to emanate from a single product family, business unit, or process.

True, they may make a larger sales - but the customer does not engage in a meaningful way.

At other times, we see companies selling the "solution pricing" premise, that is, "buy this bundle of stuff and get better pricing." Finally, we sometimes see an effort to refocus the discussion around the products as a driver of savings - this approach will be of some interest to the customer, but it does not differentiate your offerings from the competition. In fact, it can spiral into destructive price warfare.
 
All these and many other approaches are tried every day and then foisted upon the sales organization with little more than sales training, which, let's face it, does not change the central problem - are you really solving your customer's most strategic problems?

Your customer executive still does not engage, and your solution pitch is still viewed as just another sales pitch. 

After literally over a thousand discussions with key executives, I can state that they are tired of this approach and don't want to solve your problem: finding out what's important to them so you can pitch your products to that issue or topic.

So what does work? Equipping your sales talent with True Solutions™ - that is to say, accept that you must create and offer things that create a true partnership. 

You must develop a portfolio of intimacy driving things that the executive truly cares about - for example, hospital executives are more interested in patient safety than the name on the MRI; food and beverage companies are more interested in getting new product ideas and out in the market, then what copier is used.  This does not mean that your current products don't need to be sold. But, if you want an executive to sit up and take notice, you must equip them with the right True Solutions™. 

I know this sounds impossible (you ask: how can we have anything to offer that would fit the bill?) and its sounds impractical (how does this sell my products?).  In answer to both questions, I hope you have been reading this blog and are gaining an understanding of the power of the Customer Intimacy Engine™.  But let's be logical for a second; if the customer executive wants to meet more often with your team because they are truly helping they will be more sympathetic to your products and services.  Also, many times a section of the portfolio can directly pull through products and build intimacy.  My empathy is always with the people on the front lines - those actually helping your customers. 

We need to accept that it is asking a lot of sales people alone to carry the weight of building those key relationships. In addition to the right solutions they need a support organization that can come into an account with the type of vertical expertise and specific solution knowledge to convince the customer that your are for real and can/will implement appropriately.  Building the right kind of expert consultancy internally is crucial.  That is no easy task, but it can and must be done.  These experts will have experience talking "straight" to executives and holding their own when tough information must be delivered.

Finally, "solution selling" by itself is not enough to equip the sales talent to be successful in this new and different landscape.  We must equip them to leverage the power of ideas and consultative help available through team selling. This is a large conceptual change but once they are doing it - almost all can become proficient in this type of leverage - they can go to any executive with confidence that they will be well received and well thought of.

In summary, the notion that solution sales training will get us into an intimate executive relationship where we are providing that proverbial "trusted-advisor" impact is just not true. 

We need to equip ourselves in a much more serious manner - and it's worth it because owning the customer's mind share always leads to wallet share. 

These include:

• True Solutions™ - ones that meet the executives needs not yours,
• Consultative Support - people that can dominate the intellectual issues of the industry and the solution in a "doctor-patient" relationship
• Training on how to master idea-driven relationships, and
  
• Leveraging a team selling environment.

I'm often asked by senior executives about how they should assess their company's progress on the Customer Intimacy Journey.
A quick Customer Intimacy Assessment can be done by answering the following set of questions. Executives should be familiar with the key milestones for each phase, and, most importantly, they need to be as objective as possible in order to come up with their next set of actions.

Getting Started

• Does your organization understand that this is a business model and not a sales technique?
• Does the executive team understand what it takes to be successful?
• Do you have buy-in for the long term transformation?

Forming the Business

• Do you have ideas that are strictly applicable to the niche (vertical market) you want to compete in?
• Do you have proof points to differentiate your company?
• Are you selling to the key executives in your target market?
• Can you upsell more solutions to the executives you currently serve?

Commercializing the Business

• Can you save disaffected accounts?
• Do you add new accounts through solutions?
• Are you pulling through significant product deals?
• Do you have a portfolio that touches several key executives in the vertical?
• Can you grow rapidly?

Scaling the Business

• Do you have integrated verticals where key accounts are run by a Customer Intimacy business model?
• Do you have large transactions sold without sales activity?
• Have you eliminated some corporate cost by leveraging solution teams to do them?

Dominating the Market

• Are you running the company/business in a new way?
• Have you changed your performance metrics?
• Are you still running to business models - old and new?
• Are you promoting Customer Intimacy leaders to top leadership jobs?

At McMann & Ransford we guide our clients throughout the Customer Intimacy Journey - from getting started to dominating the market. Do you know where you stand?  

We work with many new practices that include people from our clients' legacy businesses, consultants with vertical expertise that are recent hires, and other new hires that might sell solutions.  While they each have been successful in their own careers and think they know how to build customer intimacy, in practice it is often a challenge to get the group to work together effectively.

This can be especially challenging for management consultants hired into the practices - they have done billable work before, sold consulting deals, and managed clients and they don't readily see the difference between selling services and customer intimacy.

The effort of getting everyone performing in a fast-growth, repeatable, Customer Intimacy Engine™ - that pulls through products as its primary goal - can be very frustrating for our clients and they often find this part of the journey the most surprising.

I wanted to walk through the steps we believe are best practices and what effect they have during this part of the journey.  Please keep in mind that each time you move to a new practice area you will experience many of the same issues, so the ability to get this right and do it again and again becomes a key skill in taking you company into and being successful on the journey.

Complete Integrated Training Program
This seems to be an area that most major companies have trouble adapting as necessary.  You need to know you are building an entire business model that works differently.  You must know what skills and competencies are needed for each job category, and you must be able to deliver the skills transformation and be able to hold your people accountable. (We'll take up this topic in detail in a future entry.)

I will say that we have been doing this for 17 years and the amount of IP and transformational education materials required are immense.

On-boarding begins During the Interview
From the first time an internal or external person is introduced to the business - they should begin the education on the business model and how the role they are considering fits in - some use extensive materials even video vignettes.  This opens a question I often here - sharing methods - I am asked why we openly share on our blog and elsewhere how to make the journey.  I like to use the Toyota story - Toyota has always opened their miracle of manufacturing for inspection by other car companies. They are asked why they do that - my understanding of their answer is - it is not knowing what can be done but having the discipline, fortitude and guidance to do it.  That is the way we feel - we want companies to make the journey and if sharing helps them get going great - but we know that it requires more than a cursory knowledge to make it through the journey.  Anyway, every discussion with a candidate should reinforce and question their understanding of the model and role.  This also helps determine who should join the business.

The First Six Months
We think of this as the time members of the business go through a personal understanding and skills transformation.  It includes a great deal of training and role playing - only by doing do they begin to see the differences. Also as the business grows you can have your own clients come in and play their roles in this effort.  Further, each newbie gets a coach that rates their adaptation to the new skills - intellectual, emotional, and demonstrable - this can go directly into their review.  Further, they need to do fail-first learning (harsh, perhaps, but effective) they must be pushed into client situations - this will begin to dispel the false idea that "I can do this my own way."

On-Going Learning
Usually the members of the organization are now hungry for the continued learning aspect of the roles and the roles they aspire to.  They embrace the training/role playing activities they will experience over the coming years.  Please remember this is like the army: the action is on the ground not at headquarters - people must know what to do in client situations and feel free to take action. They cannot take problems back to senior management or cut prices to make things work. 

Teams
The final support for the people is that everything works like a project and they are always on teams - although the teams are different.  On a close knit team, day-to-day coaching and feedback become the norm.  Think of a family - you don't wait till the end of a review period to tell your kid that they did something wrong or great.
 
I hope this entry helps you get an introduction to the breadth of the issues and some best practices to drive the change using the Customer Intimacy Engine™.