The Customer Intimacy Journey: Phase 2 - Commercialize

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One way to think about the commercialization phase is to think about consistency - consistency in the ability to create offers and take them to market; consistency in driving product pull through; consistency in making financial forecasts; and consistency in bringing on talent and making them successful. 

Let's outline the characteristics of success in the commercialization phase:

  • Ability to take accounts once hostile to your company - It is important at this stage that you convince your company that this business is important and a differentiation for the company.  The chances are - unless you have been aggressive in making acquisitions - that your group's revenue and profits are not material to the company.  Therefore, one key way to be above the radar screen in your company is a focused effort to win hostile or competitive accounts. This can usually be accomplished with the portfolio you have already developed or envisioned. However, do not shy away from creating things especially for this market - you can usually leverage them back into the current accounts.  But this must be a focused effort that you assign, measure and reward resources to accomplish.  The issue of dedicated resources or non-dedicated resources is determined by the opportunity size (many accounts and lots of dollars to get) and disciplined maturity of your team (are you able to task them with multiple responsibilities.) This one effort, - getting hostile accounts -  if accomplished correctly with pulled through products and reported loudly, can be one of the most important efforts to get your company on board and keep them there.

  • Ability to make margin on accounts, markets, and from a portfolio - You are not a business, just a hobby, if you cannot make money and make it predictably and consistently.  By this point in your business, you need to be able to manage profitability in the accounts, markets and portfolios.  The accounts buy your solutions - consulting, products and services - and they should produce a margin of 30% - 40%, depending on the mix for the consulting and services and better than average product margins (average for your products in that market). A market should produce enough of a margin to cover the solution development efforts, any product development efforts (residing in the business) and still produce high margins before corporate allocation.  A portfolio should always be evaluated for its margin mix - this does not mean that the portfolio does not have need of some high impact/lower margin offers, it does.   It means that as a portfolio, you need to know what stage its offers are in. 

    As illustrated in the chart below, every offer goes through a life cycle of growth and decline, or different messages to the market, and of adding and removing staff.  It is important to understand your portfolio, manage your offers appropriately, and add and kill offers to maintain health, growth and the intimacy you need to make the Customer Intimacy Engine work.

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  • Ability to pull through products - During this phase you must prove that you can pull through significant products into your accounts.  This does not mean significant as compared to all the products sold the old way, but significant as viewed as an account. This will force you to prove that you are creating intimacy and that you know how to leverage it. Further, it will validate your portfolio - especially those offers closely aligned to your products. 

  • Ability to add and equip staff - Remember that as you grow, you will be adding a significant number of people (this can be very stressful for today's companies that monitor the addition of talent like each new employee was marrying their child).  Therefore you will be forced to be closer to "just in time" hiring then you might be comfortable with.  There is not space here to completely explain the "just in time" hiring model and all its components .  I will address that in another blog entry.  Also remember that much of the staff you will be adding (at least until you are large enough to have a college and grad school hiring and development program) will come from the consulting firms.  If you have been reading my blog, you know the benefits and challenges with this group.   For everything else to work you must be able to hire, on-board to your business model and make them quickly successful.  This is a strategic imperative and I can't tell you how many of our clients try to ignore this issue and then regret it until it is corrected.  The methods for this are for another entry.
In summary you need to accomplish these things during this phase:

- You must be able to impact the company while you continue to perfect your ability to run this business and grow to become relevant - this can be done by taking hostile accounts
- You must make money, and make it consistently while managing the life cycle of your portfolio
- You must pull through products
- You must be able to add and deploy staff in this people-dependent business
 

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About this Entry

This page contains a single entry by Dean McMann published on August 26, 2010 2:05 AM.

The Customer Intimacy Journey: Are You Ready to Commercialize? was the previous entry in this blog.

Customer Intimacy Transformation: GE's Jeff Terry is the next entry in this blog.

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