August 20, 2010

WHO to SERVE? Your Choice

I read an interesting blog article recently by Seth Godin titled Choosing Your Customers. Seth’s view which I agree with is that you really have a choice who to do business with. The marketer has an array of tools to select the Fans she wants: the Value provided, price and distribution to name a few.

I would like to add another dimension to the discussion, however, as I don’t think Seth goes far enough. Customer selection is much more than a marketing task. It is a fundamental element of an organization’s strategy. And the selection decision needs to be integrated with the overall direction the company intends to take.

Let me explain. The Strategy Creation Process I have talked extensively about involves answering three questions. For the complete discussion check out the blog Articles referenced below. For my purposes here I will talk about only the first two questions.
1. HOW BIG do you want to be? Start with your overall growth goals. Do you want to grow top line revenue by 10% over the next 12 months or 25%? It makes a difference. A 25% growth target is more aggressive and more risky and will require a different strategy than a 10% growth goal.

2. WHO do you want to SERVE? This is the customer selection decision. And it needs to b made within the context of the HOW BIG question. This is where Seth’s Article in my view oversimplified the issue. The customer choice needs to be made within the context of HOW BIG. It can’t be made on its own using micro-marketing tools. A 25% growth goal requires a customer group that has the latent potential to deliver that type of growth. Selecting a group of customers based on any other criteria will result in missed financial targets.

Bottom Line: Choose a group of customers that has the inherent capability to satisfy your growth goals, THEN use marketing tools to attract and keep them.

Cheers, Roy

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HOW BIG do you want to be?
WHO do you want to SERVE
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Posted 8.20.10 at 07:00 am by Roy Osing | Permalink | Comments (0)

August 14, 2010

“GM Deal Helps Bad-Credit Buyers”

The facts:
- GM fails. Heads for bankruptcy as a result of years and years of failed leadership and inability to create inspiration for their customers.
- They file for protection.
- Enter President Obama with $45 Billion in financial help in return for a 60% equity position in the company.
- GM is reported to have $30 Billion in cash at the moment. Hmmmmm what to do?
- GM buys Americredit for $3.5 Billion cash. Why? To offer financing for “sub-prime” car buyers. (Seriously, this is a critical piece of their growth strategy!)
- The winners: Americredit and credit risky car buyers
- The losers: taxpayers, GM employees and the few loyal customers GM has left.

What is the CEO Mr. Whitacre thinking? What are the new owners thinking? Take taxpayers money and enter the financial risk business? Too much cash creating illusionary thinking. Too much cash looking for a place to park.

If you need a financing capability for the sub-prime buyers (making the stretch assumption that this segment is worth chasing), why not partner with someone to share the risk? Or sub-contract it out to another company who is already in the business and let them take ALL the risk? In fact I don’t understand why target this segment at all.

Are these the people Ford and others don’t want to serve? How do credit risky people contribute to the Company’s bottom line as compared to “good” customers? How big is the segment relative to the other less credit-risky groups? How fast is it growing? How much Shareholder Value does it add? Does it give a better return on investment that taking the $3.5 Billion and investing it in other customer segments? I just don’t get it.

An Industry pundit is quoted to say “If managed properly, lending to non-prime and sub-prime customers can be a source of profitability for automakers, retailers and lenders.” The operative words here are ”... If managed properly…”Isn’t mis-management what got GM into the mess in the first place? Why should I believe they will get it right this time? Oh ya, I forgot. A new CEO and lots of cash.

Heads up people. I smell another fiasco on its way. This could be a good case study for the importance of WHO to SERVE.

Cheers, Roy
Remember to follow me on Twitter

Recent Blog Articles
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Posted 8.14.10 at 07:00 am by Roy Osing | Permalink | Comments (0)

August 9, 2010

Absolutes of The ONLY

Quick Review: The ONLY Statement is THE way to stake your distinctive competitive position in the market. If you can declare yourself as “We are the ONLY ones that…..” the blur of non-unique competitve claims will fade away and your organization will stand clearly in focus to thrive and survive!

Your checklist to being the ONE and ONLY.

Your ONLY Statement Absolutely MUST:
> Address the HIGH PRIORITY needs, interests, desires, secrets of your FANS. Being the Only one on something that doesn’t matter to your FANS will achieve nothing. If it doesn’t matter to your FANS you will talk about it at your own peril.
> BE TRUE. Claiming you are the ONLY one at something that your FANS don’t believe is deadly. The sneezers will tell everyone, remember? Make sure you test your ONLY with your FANS. In addition to getting feedback on it’s believability you are likely to get input to bake your Statement even better.
> Express VALUE CREATION. Product flogging has a limited life. Unique value creation has longevity that is difficult to copy by others in the herd. Focus on the solution that is being provided and you are getting closer to the element of value.
> BE BRIEF. If it takes you 10 floors on an elevator to declare your ONLY Position you’ve missed it. It’s a Nano-Statement that shouldn’t require you to take a second breath.
> BE COMPELLING. It has to have some WOW emotional appeal to capture the hearts of your customers. Avoid being pedantic and terribly intellectual.
> GET EMPLOYEE JUICES FLOWING. ONLY is a war-rallying-cry of sorts. It defines the hill you are claiming and dares the herd to climb it. Your employees have to FEEL (there’s that key strategic concept again) what it says. What it requires of each and every one of them to win the battle.

Here’s an ONLY I like. Lets test it against the Absolutes:
“Queen’s Full-Time MBA is one of the world’s premier MBA programs, renowned for its leading-edge curriculum and innovative approaches to learning. But what really sets it apart is its focus on you. Only Queen’s provides personal development coaching to build on your individual strengths, as well as specialized electives tailored to your specific career aspirations, in order to help you achieve the greatest personal and professional growth.”
> Students need a more personal approach to business education; feedback states that they believe Queens delivers it consistently.
> Queen’s ONLY talks about Student Value, not specific courses or programs being supplied.
> Their ONLY is more that Godin’s eight-word Rule, but it is to the point and clear.
> Compelling? Oh Ya! An educational institution that actually focuses on personalized education for the unique requirements of each student. Brilliant. Outstanding. Remarkable. Gaspworthy.
> Don’t know if Queen’s faculty gets an adrenalin rush from their ONLY. I do. They should. Anyone could explain it. It’s exciting to be The ONLY at what they are.

The ONLY journey. You need to be on it.
Cheers, Roy

Remember to follow me on Twitter

Recent Blog Articles
SHOUTS for the ONE and ONLY
What’s Your Remarkable Point of View?
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Posted 8.9.10 at 07:00 am by Roy Osing | Permalink | Comments (1)

August 7, 2010

Perfect or DiFFERENT?

Reading Linchpin by Seth Godin these days and I was smitten by his piece on Perfection because it resonates so well with BE DiFFERENT. Seth declares that “Asymptotes are sort of boring” and asserts that successive improvements made in an organization get less and less noticed as they approach the state of perfection. Makes sense.
The first 50% is noticeable and maybe even the next 25%. But as the improvement process continues over months (and probably years) you will eventually get to the stage where 1% improvements are made. Who notices 1%? Very few if any. Certainly not enough people to warrant the investment to achieve the 1%.

BE DiFFERENT implications:
> If you’re not NOTICEABLE you will be IGNORED. Being ignored in a hungry herd of competitors is a deadly place to be.
> How do you get NOTICED? Make BIG Change in your organization that capture the imagination of your Fans.
> Beware of Benchmarking. By its very nature, Benchmarking encourages incremental change over time. Noticeability Factor = LOW; BE DiFFERENT Factor = LOW
> Focus on creating Remarkable and Gaspworthy change that distinguishes your organization from the competitive blur. The quest for Zero Defects is laudable but who notices things that actually work the way they are suppose to?
> Maybe we are going to have to get more comfortable with making the odd mistake. Seth argues that creating anything Remarkable is an Art Form, and “Art is never defect-free”. The reality is that organizations will NEVER eradicate mistakes and defects; people and technology aren’t capable of it. So why covet error-free if it is the impossible dream? And no one notices your progress along the way!
> Why not put our energy into getting BE DiFFERENT, Distinctive, Unique, Remarkable, Unbelievable and Take-their-breath-away stuff “almost right”? Appeal to the emotions of your Fans with services and solutions that blow them away. If you do, do you think they will be ok with the odd mistake or error? Apple’s iPod 4 antenna problem is a good example. Apple Fans. Addicts. Relentless followers. FORGIVING. Apple has earned the right to be forgiven.

Remember: You don’t have to be better, best or perfect but you have to be Incredible and DiFFERENT. Spend your time seeking Noteworthy change rather than increments of improvement.

Cheers, Roy
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Posted 8.7.10 at 07:00 am by Roy Osing | Permalink | Comments (0)