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Customer Manufacturing Update |  |
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Dear Mitchell,
Here is your August Customer Manufacturing
Update. Our member, Bob Johnson, who is
based
outside of Boston, has spent a number of years
studying and trying to understand the nature of
expertise and why consulting works ... or doesn't. He
has some useful and intriguing insights to share in
this month's white paper where he looks at the
nature of expertise and how you can understand
whether you are getting it from outside or internal
experts.
If you have friends or colleagues who would
appreciate receiving this e-zine, feel free to forward
a copy to them using the "Forward e-mail" link at the
bottom of the e-zine.
Why are some experts "better" than others? Why are some experts not really as expert as they appear to be? Whether these so-called experts are outside consultants or insiders, what is the nature of expertise, and how can you evaluate it and use it to your best advantage? This month's white paper, What is Expertise Anyway?, examines the issue from a consulting expert perspective, but the ideas transcend the world of consulting.
What's the world coming to? We understand that Fresh & Easy Neighborhood Markets (the Tesco owned U.S. stores) are charging more for some of their house brand than for similar national brand products. How can this be? Everyone knows that house or private brands sell for less than the comparable national brand (while still earning more margin for the retailer) because they can't command the brand price premium the national brands have established. Well maybe not. As major retailers create large chains and they are able to find sources of supply that can create specific products that meet their customers needs, they are challenging the national brands that may be less in tune with consumer trends. Whether it be WalMart with the Sam's Choice "value priced" line, or Nordstrom (and now Tesco) with private, higher end lines, retailers are taking advantage of their potentially better understanding of consumer needs, wants, and demands combined with their ability to find high value sources of supply How did this happen? Two reasons:
While their U.S. launch has not been flawless, a review of commentary on the Internet shows that customers are finding the stores to be a positive experience. It is way past time for brand manufacturers to recognize that the historic value of their brands can erode if the promise is not sustained. And this is true for all companies whose product or service is priced to provide a "value-added" component, whether branded or not.
In our collective years in industry as individual contributors, managers and so-called, senior executives, the issue of employee incentives often came up. Not just when discussing sales people, but all employees. Management was always looking for how to incentivize people for even higher performance, while balancing that against the idea that these people were already getting paid. We recently became aware of what has to be the most unnecessary performance incentive to which I have ever been exposed. The Philippine government, in partnership with private individuals, is offering a cash bonus of some $200,000 to the first Filipino athlete at the Olympics to bring home a Gold Medal to the Philippines. Apparently the Philippines has never won a Gold Medal. Closest they came was a Silver Medal in boxing at the Atlanta Olympics. Let's think about this rationally (or even irrationally). Is there any amount of money you could offer an Olympic athlete to get them to perform better than their best? Is money really likely to provide a greater incentive than to stand on that center platform in front of the whole world? If money really mattered, why would professional athletes compete in the Olympics where they do not get paid? while we appreciate that giving money to people who might need it is a nice thing, it is impossible for us to believe that this incentive is going to impact the person's desire or ability to win a Gold Medal. What's the lesson for managers: If you are going to offer an incentive, make sure it is relevant and necessary or don't bother.
Mitch recently had the opportunity to speak in the Republic of Ireland as well as in Northern Ireland. While there he was interviewed on BBC Radio Ulster regarding his take on how to deal with the economic downturn facing some companies and industries. You can listen to the 5-minute interview if you like. While speaking to one of his audiences they got on the subject of CMO (Chief Marketing Officer) tenure and the fact that it is so short (19-23 months according to various sources). He pointed out that the CMO position (as a separate and distinct person) exists primarily in large, publicly traded companies and that one reason he believed that the CMO has short tenure was due to the combination of two things:
One member of the audience, Aiden Gordon of Jardine, Lloyd, Thompson, Ireland Ltd. had an insightful idea to share. He suggested that the main reason for CMO turnover was that too many of them followed a three step process:
Whether your company has a distinct person with the title of CMO or a Marketing function tasked with helping increase revenue and company value, that function must be tied to identified business outcomes so that you can tell if Marketing is helping the company get closer to its goals or just further from the start (to paraphrase our Principal, Bayard Bookman's favorite line).
We appreciate any feedback you can provide to help us make sure these Updates give you value each month. Feel free to respond to this e-mail with any comments or suggestions for future topics or ways we can make these Customer Manufacturing Updates more valuable to you.
Thank you for your interest, and if we can provide
any
additional assistance in sales, marketing, strategy, or
innovation to help you increase your sales,
let us know.
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