Selling lollipops

The information visualisation I liked the most from a recent course I took was the lollipop diagram.  (Infographics and Data Visualisation, run online by the University of Texas.)

I created the 'lollipops' above to try and summarise and reinforce a point on a recent training course I gave for a European blue chip company (a course on growing its services business). Lollipops are a great way to show data in an informative and visually appealing way.

The point in question was how intimately you have to know the whole customer environment in order to sell them a service. The rich discussion with course participants was that the steps in selling should be the same. But the extent to which you have to master the elements above (you can probably add others yourself) is far higher when a customer trusts you enough to buy a service from you.

More about pursuing bids ... Spiders!

The 2 x 2 matrix (previous post) is a good tool for measuring your competitive position for a bid. With only 2 factors to work, yo have to be a bit ruthless in determining the key factors.  But there may be times when you want a richer picture of your competitive position to be able to judge whether the bid is right for you.

A very useful tool here is the Spider Chart (a.k.a. radar chart), which has been very instructive in some of my recent work.  The example in the chart below applies to a fictitious IT services provider.  (It has 8 axes, but you can tailor as required.)  The idea is that you choose the scaling consistently, so that 'good' makes the web as large as possible on all the axes.  (For consistency across different prospects it's a good move to create a table of the scaling criteria for the axes.)

In this example let us imagine you are a large corporation which provides enterprise solutions to other large corporations or public bodies.  You are likely to provide most aspects of an IT service in-house, deal with the most demanding network, security and service needs.  Your reputation is an important reassurance for your blue-chip customers.  What you don't do in-house, you are well used to buying and controlling through your supply chain management functions.

If the target client is currently doing its thing in-house, it is unlikely to have kept abreast with latest tools and methodologies, and also be running a pot-pourri of legacy systems.  In such a case scope for bringing savings may be considerable.  You have technological/capability mastery of the whole business domain/space, so are a one-stop shop.  This increases customer trust in your credibility.

The 'Ansoff Position' needs a bit of explanation:  ECES means Existing Customer Existing Solution, NCNS means New Customer New Solution, etc.  The idea is that if you can sell an off-the-shelf (existing) solution to an existing customer, you have a strong incumbency relationship already and your and the customers processes are well aligned.  It's a pain for them to switch!  If you're at the opposite end of the spectrum (NCNS) they don't know you and are having to buy something new which they aren't familiar with.  It's a much more level playing field against the competition.

So how did the technique work in practice???  In one real example where the "web" was small we competed against a number of low-cost competitors in a fairly 'commoditised' market space.  We had to work hard to differentiate ourselves and communicate our benefits to the client.  Much in line with what the tool 'predicts'! In another case, where the web was larger, we played to our strengths and there were fewer competitors.  Compared to the previous case, the competition were quite similar companies to ourselves.  We could use the tool to either 'think how to ghost' the competition (counter what they say about their relative strengths) or emphasise the strength of our approach.

Should you pursue this bid?

Pursuing a bid makes sense if you have a strong competitive position.  For a straight-forward equipment product his might be reasonably easy: Do you have the right features? Are you at a good price point? Does the product look good? Do you have the right marketing channels?

But how can you judge this when there are many complex factors?  For Business-to-Business or Business-to-Government the 'complex factor's are very often many and varied.  They could include your reputation, track record, willingness to take risk or make a or long-term commitment, your ability to manage large programmes, and so on.

Although it's often difficult because of the very narrow choice of factors, in this case two, a classic 2 x 2 matrix of factors can give fundamental insight into underlying factors that will reveal your relative competitive position.  For example, the 2 most important factors for a large IT project for government or a large corporation could be Complexity and Size.  Can you credibly, in this example, master the all of the technical complexities, or do you have some niche skills?  If the project is very large, do you have the resources, additional manpower (when things go wrong) and credibility to deliver the implementation?

This doesn't mean you can't compete when (in this example) things aren't complex and large!  Smaller companies may well have a lower cost base and generic skills to pursue simple, small projects more competitively than a large brand name.  Large companies may choose not to compete here.  The 2 x 2 matrix will help your positioning, whatever your size.

Service discriminators - the home broadband analogy

Copyright Virginmedia

Responding to a question of what discriminated one service over another, the best answer given recently was the home broadband analogy. Basically one reputable broadband service should be pretty much like the next. So what made me choose one provider over another?

Although day-to-day experience of broadband is the pretty homogenous whoever the provider, when we moved house there was a single major discriminating factor. My chosen provider (you can guess who) installed broadband the day after we moved in.  Not bad! Another, major household name, provider couldn't connect us until 2 weeks later.  Choice was a bit of a no-brainer!

Of course there are generally other elements in the decision making mix when you buy a service: what's the basic product like; how easy do they make it for me to deal with them (endless 'press 1 for ...' or straight through to a knowledgeable advisor); what's their image as a supplier; do I expect they will able offer future innovation and extra services; are they an innovation leader or a follower. Oh yes - there's also price! (Also, do I expect lower price/more for my money in future as technology develops or the market matures.)

For my broadband service there was some internal mental calculus around the above factors that led to my particular choice.  (A simple decision based on the wait for installation.)  In a business-to-business context, there's probably no single discriminator between providers. Likely it's the sum of performance in each of the important service elements put together coherently, and weighted in a formal assessment, that counts.

If you want to win, be world class/industry leading in all the elements.  Then you're in the game!

Maximising your Services Value

There are numerous ways Services can add value!

A previous post discussed how the value of a service is not just the 'technical solution'. So what's a checklist of other things that can add value to the customer?

The graphic shows 5 areas where value can be added (risk transfer, efficiency, etc). Value-adding features don't always sit just in one area. For instance a feature might be more efficient because it has superior 'output'. (One could also use the word 'performance' instead, remembering that sometimes performance just needs to be as good as asked for and not better.) So as the value-adding areas are sometimes over-lapping and re-inforcing - and in the spirit of London 2012 this year - the 5 areas are shown as interlocking Olympic rings.

The 'running track' shows a list of potential value-adding features. Some are common phrases, such as Sweat Assets. Others are less well known, such as 3PR (3rd Party Revenue, selling excess capacity) or Serial Sell (sell capacity/assets/service to someone else when 1st customer no longer needs it). It might be as simple as selling a service to a customer so that assets employed sit off their balance sheet and on yours or other parties!

There's probably no end of features and combinations that could be used, and they can be every bit as important as the prima-facie solution!

What to tell your service Customers!

Now you've got a 'rich picture' and a succinct value proposition.  Can you look the Customer in the eye and tell them the following things?

How you've added value in all the solution areas, to maximise your proposition?

What defined/known problems have you solved for the Customer?  (What's your evidence? Ideally shouldn't be more of the same.)

That you've quantified the improvement they see?

How are you tying in your reward to their service improvement?

How you are helping them transform and making the transition trouble-free? (There's an inevitable change of Customer internal processes and procedures - hopefully there'll be less of them.)  

Service? What Service?

"What was it you needed again?"

Full of beans, you and the organisation are ready to create a rich picture of the service you want to offer.

A trap companies can fall into is to immediately design the service you want to give the customer, based on what you're best at or known for.  So you're already delving in to the how, whether it's delivering technology, insurance or a retail experience.  It's a fairly natural move - it's comfortable, it's familiar.  But it might also stop you thinking what can be done better or differently for a customer or market segment.

An approach I recently used, that flowed very naturally, was using the step sequence below. (Admittedly some of us had dived down to some extent in familiar areas before seeing the holistic picture.  But a little of what you fancy does you good, in our case leading to a richer and better informed discussion.)

The sequence went:

• Create a high level vision for the service.
• E.g. what are you going to deliver, where, when, how quickly, with what level of confidence, and at what relative price?
• What are the high level requirements for the service?
• Examples might be rapid deployment, low management burden but high transparency and control, improved decision-making support, ...
• What are the top level capabilities and skills required?
• E.g. strong project planning & execution skills, excellent supply chain management, efficient global logistics, ...
• What are the required behaviours and culture?
• Are you going to be transactional or collaborative, how much transparency will you give, will you create embedded teams, are there shared outcomes/targets?
• What is the transition and phasing?
• How much due diligence is needed, are there pilot schemes, what are the interim capability levels, how will you phase the roll-out?
• What is the service 'architecture'?
• So finally (!), what activities will you do, what are the logical/physical/information flows, what innovation can you bring?
• What do you want to get paid for and how?
• Are your prices fixed, volume/activity-based, are you going to offer efficiency targets, what is your profit expectation?
• Can you do it?
• Do you have the core skills, how will you address gaps, are you going to team with other organisations? 
• On what grounds are you competing?
• On what grounds aren't you competing, what is your unique blend of skills and capabilities?

Once that all that is sorted, you can begin to use rich pictures, storyboards or executive summaries of the service you are going to offer.  

Service? That Service!