Ali Ghaemi

Discounting – Do Not Do It

 Articles, Management, Marketing, Negotiating, Prospecting, Selling  Add Comments »
Jun 032011
 

One of the worst behaviours in the realm of sales and sales management is discounting. The corporate euphemism is usually something along the lines of ‘providing the customer an incentive to buy.’
Hold on a second! Why does a customer need another incentive to buy if the product has benefits and offers superior advantages over the competition?
Discounting – or positively responding to such requests from potential customers – is self-defeating and bad practice. It is a negative not just for the seller either. It is also a negative for the buyer. How so?
First, giving away margin and price points upfront is rarely, if ever, a temporary situation. The new lower price is now the permanent price. A customer that has successfully obtained a lower price will demand the same going forward. Not only are customers prone to protecting their gains, but also the discounted price is perceived as the fair value price for the product or service. Any salesperson that agrees to a lower price should not be under any illusion that the loss will be made up later. There is no such thing as an introductory price anymore.
Moreover, prices are set according to costs, business plans and market conditions. Losing the required profit margin might imply incurring a loss and jeopardizing the seller’s longevity or security. Buying a customer’s business is the wrong notion.

Why is the lower price ultimately bad for the customer? It does several things. A buyer and a seller should maintain a mutually beneficial synergistic relationship. When one is threatened, the other should be concerned. The seller needs to provide after-sales support and, in most cases, enhancements, maintenance and upgrades. Furthermore, discounting tells the buyer that the initial price was dishonest and false. Not a good start to a relationship. Pricing integrity takes honesty and courage in the short-term, but is a good idea for the long-term.

    1. Maintain a healthy pipeline
    2. Allow your fair pricing policy to become your reputation
    3. Sell according to identified benefits and Return On Investment and
    4. Remember that a customer should not be a loss leader.

      Japanese Group Mentality

       Articles, Uncategorized  Add Comments »
      Jun 012011
       

      On a recent trip to Japan, I witnessed how the Japanese maintain a penchant for thinking in terms of the group often above one’s own interests.
      The identity belongs to the larger group. Individualism is subordinate to the larger group’s interests. In turn, one’s interests are served best by being a member of a successful, healthy and comfortable group.

      This group orientation has recently been on display to the world with the Japanese response to the world’s biggest natural calamity, the 9.0 Richter earthquake, tsunami and nuclear disaster that followed and hit Japan in succession.
      An article reports on skilled Japanese retirees and pensioners who have volunteered to go into the Fukushima nuclear plant which has undergone a meltdown in order to do what they can to stabilize the cores and the situation. These elder men know that exposure brings cancer and other hazards and there is a great risk to the bodies of the group, but believe it is better for them to undertake such a mission than younger engineers as the older generation has less years to live.

      Is a group orientation above and beyond one’s own better and more validating for all concerned? And can Western values be acclimated to such a shift?

      Japanese service Japanese pensioners volunteer to go into the Fukushima power plant

      Leaders Cannot Motivate Their Employees

       Articles, Management  Add Comments »
      Jun 012011
       

      Anne Dranitsaris is a “corporate therapist, author and creator of the Striving Styles Personality System” whose website can be found at http://strivingstyles.com/the-art-of-not-demotivating-your-employees/
      So far, so standard. Except, Ms. Dranitsaris has an intriguing theorem. She believes that leaders cannot motivate people, more specifically their employees.
      Instead, she advises leaders to refrain from demotivating employees. Imagine that, in one fell swoop she dismisses bonuses, Christmas parties, designated parking spots, Hawaiian shirt days* and… well, I am exaggerating (probably), but her notion is extraordinary and brave.

      Ms. Dranitsaris’ assertion is that motivation an emotional issue and not a rational decision. As such, it is impossible for a leader to make or create motivation. Moreover, motivating employees creates dependence.
      Instead, she advises leaders to not demotivate employees by:

      • Not overwhelming employees with work and not set an example of living (overstaying) in the office
      • Showing appreciation for employees, but not to be patronizing.
      • Not micromanage. Nit-picking leads to anxiety.
      • Not devalue. Cut back on the sarcasm and do not summarily dismiss ideas.
      • Do not allow employees to feel helpless. Nepotism, old boys network, favouritism and even fostering of competition are upsetting to employees. This last notion jives somehow with Daniel Pink’s assertion’s regarding employees and allowing them freedom, but one wonders how much Ms. Dranitsaris’ ideas coincide with Pink’s ideas that differentiate between intrinsic and extrinsic motivation.
      • Finally, she insists that employees need to know what they are doing and what is expected of them.

      How controversial is the notion that leaders cannot and should not try to directly motivate employees and that motivation should be self-directed within the right environment?

       

      *Things That Need To Go Away: designated parking spots and Hawaiian (or any theme) short days – unless a sales team actually wants them.

      Microsoft ISV Summit

       Articles, Marketing, Uncategorized  1 Comment »
      Jun 012011
       

      I attended the Microsoft Canada ISV Summit yesterday. It took place at Microsoft Canada’s office near Toronto. One of the speakers was marketing thinker and writer Mitch Joel.

      He promised to be provocative and he was. He was unbridled and extremist in his support of the web, digital and social media. I didn’t discern much, or any, limit in these regards with him. Fortunately, for I and those like me who despise the style (or lack thereof), he was not a ‘ra-ra’ style speaker and kept his delivery intelligible.

      He spoke about the humanization of technology: real interactions with real human beings as his subject.
      He talked about a huge shift: to be present when and where potential buyers/interested/consumers are. He made a case for making it simple for people to buy from you (that should be marketing 101). He implored the audience to be active in their worlds and not wait for customers to come to them.

      Joel spoke of his 6 points (pixels) of separation:

      1- Accept it
      2- But don’t stop everything else you are doing
      3- Don’t write cheques that Social Media cant cash: improve your digital marketing value (websites, mobile, etc.)
      4- Be open (social media should be shareable and findable)
      5- Think like a publisher (it is content after all) and a marketer: have valuable content
      6- Don’t ask what you are doing, ask why… focus on strategy and build value for your brand

      Key Provocations:

      • This is the first time in history that marketers are behind consumers. Utilize and rejoice the disintermediation with your potential customers and users.
      • Remove yourself from traditional value systems, don’t be stuck in the old ways.
      • Keyboards are like rotary phones.
      • Get online, be interactive, open up to technology and its semantics.
      • It is not just for teens. Youtube and Facebook are dominated by middle-age or older demographics.

       

      Other speakers talked about the company’s cloud focus. However, one senior Microsoft manager was bold enough to announce the end of the Cloud era. Calling the proverbial Cloud the past, he told the (likely surprised) audience that 2011 is the beginning of the end of the Cloud era. 2011 and on belongs to NUI (the heir to the throne of GUI, namely Natural User Interface) comprised of human interactions like voice, touch, gestures and thought. The fastest selling consumer good, the Microsoft XBox Kinect is an actual example of what the speaker had in mind.

      Other speakers were quick to emphasize the company’s Cloud (SAAS, PAAS and IAAS) capabilities and exhort the ISV partner community to jump aboard the Microsoft Azure ship.

       

       

      Kinect

      *I do work on behalf of Microsoft

      The $0.99 Pricing Plague

       Articles, Marketing  1 Comment »
      May 152011
       

      In Canada, and much of the Western world, most pricing is set in the $0.99 format.
      This annoying policy of the business is misleading to the consumer, wasteful, propagates nearly useless loose change (1 cent coin or the penny) and perpetuates the antipathy most people feel towards business.

      Businesses mislead customers by pricing their goods with a 99¢ ending. This allows them to set a price at $19.99, for example, and advertise it as “less than $20” or “under $20″ when the price, a penny notwithstanding” is $20 and not $19, $14 or $1.
      Wal-Mart has taken this type of pricing to the extreme with $18.97 and $7.48 type pricing stickers. So for the meaningless savings of 3¢ or 2¢ respectively the average person is stimulated to travel further, spend more time, burn more gas and pollute and possibly hoard goods that potentially go bad in the fridge or pantry. Ironically, when advertising ‘buy 2’ or ‘buy 3’ pricing Wal-mart reverts back to even pricing, as in ‘buy 3 for $5.’

      Consumers need to understand and react negatively to this type of marketing, or in this case trickery.
      Governments need to step in and free the populace from misleading so-called savings that cost us more than they save us. Essentially, as it often does, legislation would be freeing business from itself and people from themselves in the same way as traffic lights mitigate and hinder people to everyone’s advantage.

      In the meantime, I will cross the street for the same good if it is priced and tagged honestly i.e. evenly there.

      Microsoft And Skype

       Articles  2 Comments »
      May 132011
       

      Let’s face it. Mergers And Acquisitions (M&A) are more popular today than it has been for a long time. Post-recession companies are sitting on large amounts of cash and are picking up smaller target companies and technologies. But more on that in a second.

      Essentially, companies can grow by buying (M&A) or creating/making using their internal know-how. M&A is the more expensive option, but a faster route to market and in today’s frenzied environment the speed-to-market is a major issue. The downside, however, is that companies can dive headlong into a FAD, end up buying products that ultimately do not integrate and, of course, may suffer from cultural incompatibilities/be mishandled. Nortel is a good example of this last issue.
      Unfortunately many a CEO is more adept at throwing around shareholder/reserve money than innovating and marshalling internal resources to create from within – and saving money. I say this, especially, because organic creation has a much better chance of success in the long-term than an acquisition. Time and internal collaboration allows for far more consideration of the issues involved than a surprise one-shot outside acquisition.

      Having said that, I have been reading 2 articles that perhaps inadvertently point out how these decisions are more complex and perhaps more thought-out than we think.

      Take a look:

      This article points out that the cost per user of Microsoft’s acquisition of Skype is not significant and Microsoft will regain its cash reserve, if not recoup its investment, in less than a year: http://www.businessinsider.com/numbers-microsoft-skype-deal-2011-5

      This article captures some of the collateral ill feeling M&A can attract from the user, analyst or investor community. In other words, there are other factors to be considered when a company is large or public (several brokers, analysts and users exclaim that this will be the end of Skype and Microsoft will tarnish the service): http://www.theglobeandmail.com/globe-investor/markets/markets-blog/microsoft-bashing-unleashed/article2017074/

      Also see this article which points out more M&A tech deals have been announced in 2011 ($94 billion) than at any year since 2000. Microsoft’s contribution via Skype alone: $8.5 billion alone. If you are on the block this is the year to sell: http://www.theglobeandmail.com/globe-investor/investment-ideas/wall-streets-five-favourite-tech-heavyweights/article2020063/

      *I do work on behalf of Microsoft

      Is The Right Salesperson In The Right Role?

       Articles, Management  Add Comments »
      May 112011
       

      In order for a salesperson to be successful correct execution of the company plan is a must. It is improbable for a salesperson to succeed on his own and in isolation from the company’s plans and agenda. That, however, means a salesperson needs to be the right fit in and to understand the company’s goals, time-lines and model in the first place.

      First things first. Do you have the right person in role? Is there a hunter doing a farmer’s job? Is the farmer getting paid like a hunter? Does the hunter or the farmer really understand where all of this is going? Without these motivation will be hard to come by. In fact, motivation will move in reverse.

      But let’s back up. The right person needs to be sitting in the salesperson’s chair. Some people like to be assertive and aggressively attack and ‘hunt’ for new business. Some live off of relationships and care passionately for nurturing and growing existing business.

      Do you have the right person in the right job and are they receiving the right information and context? Without these demotivation will set in. Negativity is very quickly followed by failure.
      As controversial as this statement might seem, it is management and the company’s duty to motivate, train, inform and support their salespeople. Even the most positive warrior will tune out without the right inputs and in the wrong job. Why so many companies hire ‘motivated’ people, but do nothing to sustain it is a puzzle that has something to do with laziness, stupidity and arrogance. Salespeople’s motivation and productivity does not come by accident. Give your carefully placed salespeople goals and support them with direction and clarity. Within those contexts allow for autonomy.

      Pick your people correctly and support them accordingly.

      Cold Calling Or Cold Mailing

       Articles, Marketing, Prospecting, Selling  Add Comments »
      Apr 032011
       

      The rule of thumb in recent years for the success rate of cold calling prospects or following up on mailers by telephone has been a five percent achievement. In other words, typically in these situations, 5% of prospects allow the seller to advance further in the sales process.

      That ratio is now likely obsolete and too high. Nowadays, there is a whole cottage industry of experts and methodologies on how to prospect, or not to, but the fact remains that responses are less and less likely. It could be that the positive responses are at 0.5%. In other words, for every 100 prospects that receive an unsolicited call or brochure less than 1 moves forward and shows interest.

      Why? What can a marketer do?

      Knowledge is power. Prospectors need relevant information with which to target their customers. That means, one must call into a company in possession of much more information than before. One cannot cold call prospects without having up-to-date information. In fact, that would not even be cold calling.

      The ‘need to know’ goes beyond having a name and having perused a website nowadays. Know the name, the history, the events, the news and the website’s information. Have you studied the prospects’ social media profile? Have they tweeted something? Is your pitch aligned with their needs and is it targeted and customized?
      No more mass mailers. The mailing list requires customization and personalization for each an every prospect.
      Every potential client is unique and the marketer needs to incorporate that in the approach or risk failure.

      Read this again: http://www.alighaemi.com/wp/?p=508

      Microsoft Dynamics CRM 2011

       Articles, Marketing  Add Comments »
      Mar 292011
       

      I attended the launch of Microsoft Dynamics CRM 2011* earlier today.

      Dynamics CRM 2011 is really version 5.0 (should you forget how there was not a version 2.0), but Microsoft has synchronized its products’ releases nomenclature. The usual feature advances were touted. Among these were Connectivity, Familiarity and Intelligence. However, the emphasis was the ‘Social’ aspect of the release. The phrase ‘Social CRM’ was uttered more than once, as was the connectivity to the likes of LinkedIn and Twitter.

      Case in point: aside from Microsoft Canada President Eric Gales, presenters and panellists were Jordan Banks, Managing Director, Facebook Canada, Jonathan Lister, Managing Director, LinkedIn Canada & Latin America, Brian Solis, author of Engage! and Paul Greenberg, author of CRM At The Speed Of Light.

      The ‘Social Media’ aspect and emphasis of the new release is evident. How many companies are actually paying heed? Is there a need out there? Could it be a case of ‘build it and they will come?’ Where does the input occur? Is it hype to differentiate product? In reality, time will tell, but how many companies are actually making ‘Social Media’ integration a search criterion is one question. The answer is ‘not many.’

      Earlier this year Microsoft CEO Steve Ballmer had introduced the product in a Webcast. Clearly, Microsoft is not ignoring this product.

      Microsoft CRM

      *I do work on behalf of Microsoft

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