Articles
Where’s the target?
Opening new markets
by John Graham“We can’t figure out what happened,” said the president
of a company that had spent two years trying to break into a new market.
“Frankly, we fell on our faces and we’re not sure why.”
Some of the confusion came from the results of a survey they had done before
they kicked off the sales effort. The survey results indicated that a market
existed and since they could overcome the limitations of their competition there
was room in this market for them.
“We thought this was going to be a slam dunk situation sitting here and
we’d be raking in the money,” commented the manager of sales. “It
was almost too good to be true.”
As it turned out, it was too good to be true. In fact, it was another
case of the naïve belief that if you build it, they will come.
What went wrong? The survey results clearly indicated there was room for a new
player and this finding was bolstered by what appeared to be customer dissatisfaction
with the competitors.
Based on the combination of these two factors, the company moved forward aggressively,
believing success was all but assured.
What they didn’t realize is that the “better widget”
doesn’t always win. The salespeople spread out through the territory
calling on the prospects offering low prices and substantial incentives.
“We thought we were going to take it all,” said the president.
“We wrote a few accounts, but nothing like we expected. It just
didn’t happen. And we couldn’t figure out how we could be
so wrong.”
On further analysis, it was found that although buyers thought the products were
in some ways an improvement over what they were currently using and the pricing
was excellent, they didn’t change suppliers. Why? First, they were reluctant
to make a change. A bad decision could have disastrous repercussions, particularly
for those who made the recommendation to change vendors. Second, they didn’t
really know the company. Aggressive pricing and product improvements couldn’t
overcome the fear––and that’s what it was–– of
doing business with an unknown supplier.
There are a couple worthwhile lessons to gain from this case history:
1. Conduct the right research.
Like so many others, the management of the company made the assumption
that because there was a need for its services that the customers would
come to them. Caught up in their own enthusiasm, they made no effort
to determine what it would take to attract customers or to find out
if they would make a move to the new competitor.
Even when conducting surveys, it’s easy to fall (almost unconsciously)
into the trap of getting the results we want rather than the results
we need. For example, many companies “survey” their customers
following the sale or a service call. For the most part, these are
self-serving and customers are reluctant to tell the truth. While this
particular company uncovered information indicating there was indeed
a market for their product, they failed to uncover what would motivate
customers to move from their present suppliers.
In the same way, they could have discovered through a survey what those
customers valued and then developed a marketing program that focused
on those issues.
2. Create a buying environment.
More often than not, most companies concentrate on “making sales,”
as did this company. And to the surprise of everyone, they hit a stone
wall.
Even armed with attractive offers, competitive pricing and a high level
of technical competence, the company was less than successful in penetrating
the market. If the company had used its research to uncover what it
would take to win sales, they would have led with an awareness campaign
that communicated the message that it was safe to do business with
them. They could have had a “starter” program and performed
customer satisfaction follow-ups. In other words, they would have taken
time to build their case with the customers. All this could have led
to customer testimonials and other feedback techniques that build buyer
confidence.
Generally, it’s not the sales strategy that’s faulty, although
this can be the cause of poor performance. More often than not, it’s
the marketing strategy that’s either absent or faulty. What is
needed is to develop a buying environment, one that taps into
the buyer’s needs and offers the right solution. When this happens,
the sales effort is successful.
If there were a basic error in this company’s overall strategy,
it is one that’s ever so common in business today. It’s pulling
the trigger before establishing the target. It’s moving
ahead before knowing the right direction. Deep down, it’s believing
that all that’s needed is a great idea or more to the point,
all that’s required is enormous enthusiasm for a great idea.
The result is unnecessary failure including wasted resources, lost
time and discouraged salespeople.
What is so confusing is that the scenario is repeated time-and-again…often
by the same companies. Both consumers and business buyers are cautious––and
rightfully so. While they want good deals, they also want to be sure.
When it comes to shortcuts to sales, there aren’t any.
John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He is the author of The New Magnet Marketing and Break the Rules Selling, writes for a variety of business publications, and speaks on business, marketing and sales issues. Contact him at 40 Oval Road, Quincy, MA 02170; 617-328-0069; jgraham@grahamcomm.com.