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Oct 2010 - Vol 5, Issue 9
In This Issue
Where's Tom?
Survey Results
Best Practices Series
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Greetings,

I have enjoyed talking to many companies this past month while visiting Roadshow destinations in New York, Chicago, and Los Angeles. The post-recession economic rebound is continuing its east to west progression across the US. Lots of companies are anticipating a big finish to their year and are looking forward to a more normal (?) 2011.

Another economic indicator: over here in the management consulting world the conversations are moving from 'how do we scale operations?' to 'how do we increase profit from the sales side?'  Yes, many companies have decided that profit is more important than revenue. The question now is how to compete against companies that haven't figured this out.

In this month's Best Practices column, I touch on how to increase the perceived value of your services and turn the conversation away from price. We also have survey results from last month's social media topic.

Thanks for reading,

Tom Stimson
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 Where's Tom?
LDI 2010

We need to meetup! This week I will be in Las Vegas at the LDI Show from late Wednesday to early Saturday. If you will be there, send me an email and lets setup a time to chat. Or you can find me at the ETCP Booth #1250 (across from the ESTA/PLASA booth) from 10am to noon on Friday. Come say hello and learn about how this successful program is keeping us safer on show site while raising professionalism across North America.

I will also be at the InfoComm Rental & Staging Reception on Friday evening 5:30-7:30pm at Piero's Italian Cuisine (directly across from the convention center). This event has become a tradition and an easy way to meet up with friends you missed on the floor. Email John Hardwick, Membership Coordinator at InfoComm to RSVP.

Social Media Survey

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In September we rolled out a brief survey asking about your attitudes on social media tools as they relate to business. You can download the complete results and analysis on my website: September Survey. To put the survey into context, 88% of respondents have a Linkedin profile and 80% are on Facebook. That's a huge penetration given how reclusive (and aging) our community typically is. This one statistic alone should prompt you to review the rest of the results!
sept2010survey
My favorite part of the surveys is your comments and responses to the short answer questions. This survey asked about the challenges in assimilating Gen Y into the workforce. The responses ranged in tone from curmudgeonly to very supportive. Here's two samples:

"Motivating Gen Y is tough by old standards. I think that their motivations are really more about quality of life (read vacation) and money, rather than the quality of the work.  Not necessarily a bad thing, but there has to be a balance. When the only two questions a potential candidate has are "How much will I make?" and "When is my first vacation?", you can pretty well guess you are in for trouble somewhere down the line."


"We have not seen less of a work ethic from the newer generation, in my opinion.  In fact, I would argue that the work ethic is stronger among our youngest and brightest employees vs. the Gen-X generation - especially if you can align their passion with their role. There definitely is not a "punch the clock" mentality.  I do agree that [retention] is an issue and we have increased turnover - from not being able to keep them motivated and/or moving fast enough for them."


There are many more comments in the full survey report. Download it here.

Best Practices Series
Selling Beyond Price

All things being equal, why are you worth more?

I could have said, "If all things are equal, you probably aren't worth more," - that's the issue we really need to address, isn't it? Recently I have been hearing a recurring comment from dealers - both integrators and stagers - that customers are very price-focused, margins are too low already, and it has become increasingly difficult to convince anyone that one company is worth more than another. "The lowballer always seems to win." For years we have been earnestly trying to level the playing field to get to an apples to apples comparison. Now that we're there, we need to realize that the whole purpose of the level field was to showcase our differences.

How can I differentiate when I am doing the same thing as everyone else?

The glib answer is "Stop doing it like everyone else." Ask yourself, what value can you sell at a premium? There are two things for which customers might pay extra.
  1. Any product or service that uniquely meets their needs.
  2. Any feature that unexpectedly adds value to the outcome, but is difficult to quantify.
We are in a service industry, but our approach has been very product focused. You may have access to a unique technology and that can improve your chances of winning premium business. However, products are fleeting differentiators and others will soon have the same or competitive products. And even unique products have to compete on price with reasonable substitutions. In a growing economy, customers can look beyond price for features or a customer experience that exceeds their expectations - something that is difficult to put a value on.

Be Mysteriously Attractive

In the custom project business (Event Staging or Design-Build Integration), being mysteriously expensive is all about image before the sale and execution afterward. You have to look like a company that provides a premium experience, and that is impossible to do when you look like your competition. For the consumer, mystery is expensive. If you can describe an outcome that meets the customer's needs, provides them an experience they want (but perhaps didn't know they needed), and demonstrates that you know some sort of magic that no one else knows, then you have created at the very least - a need for further conversation. Look at it another way. If you acknowledge the commodity side of the transaction and redirect their attention to the intangibles, the customer will have to focus on what makes you different or ignore you altogether.

But, you say, this won't work in bidding situations. My response is that unless your core business is bid work and you regularly win by on price, then I agree this method is not for you. However, if you struggle to win worthy projects in an open bid evaluation, then you have nothing to lose by using a creative approach to the project, working outside the lines on the proposal submission, and putting a price the difference between what they have asked for and what you will provide instead. Let the bid review committee decide that the specification was wrong.

Redefine ANYTHING

One of the biggest challenges for AV dealers is to look different in a world that is increasingly defined by standards and best practices. Not all clients interpret good service the same way, and this is something you can take advantage of. Can you redefine a difficult to copy process that will consistently yield better service and outcomes than your competition? Is there an overlooked human element to working with clients? Does your team look like someone customers would want in their building? Finding a unique approach has to start with asking customers what they value, but let's face it - if they knew the answer then everyone would be providing that service. Successfully differentiated companies will supply fresh ideas to their research results to create an approach that meets customer needs in an unexpected way.

Keep Redefining Your Product

Two are things to remember. If you find the perfect solution, you will eventually be copied. Innovative companies are continually looking for their next differentiators. Secondly, not all customers will respond to what you are selling. Teach your sales team to recognize the right kinds of buyers, and task your marketing team with creating more demand for your unique approach. Management must continually look for chinks in the armor and take responsibility to be two steps ahead of customers that will tend to commoditize anything they get used to, and one step ahead of your own employees who will tend to rely on old successes to make new ones.

Comments?

Closing Thoughts
Here's a few scribbles from the margins:

Green is still here, except we call it sustainability now. For many people it has become a way of life. If you continue to treat it like a fad, you risk alienating innovative customers that will pay more for sustainable services.

There is a right and wrong way to do most everything. Mirroring a 'best practice' is not cheating. It saves you the expense of coming up with your own solution, plus it gives you time to work on things that actually need innovation.

When our services become commoditized, we create void that is filled by middlemen and brokers who add value by squeezing points out of the suppliers. The the middleman provides services for a fee that would have been provided by the supplier.

About Thomas R. Stimson, MBA, CTS

Stimson Portrait


Tom Stimson is celebrating over twenty-five years in the information communications technology industry.  As a Consultant, Tom helps companies determine their next goal and then execute the plan that takes them there. For more information visit the website.