Sales Manager Blog

2006-08-27T05:08:00.000-07:00

Interesting Articles

2006-06-25T08:57:00.000-07:00

A lesson for all sales men who ask for more product features....

Feature Bloat: The Product Manager's Dilemma

If you are a manager in a consumer products company, our research presents you with a dilemma. Adding features improves the initial attractiveness of a product but ultimately decreases customers' satisfaction with it. So, what should you do? If you give people what they want, they will suffer for it later, and that has three follow-on effects.
First, many of them will return the product. Recently the Consumer Electronics Association, a U.S. trade association, commissioned a survey on consumers' experiences in a complicated new product realm: home networking. The survey found that 9 percent of consumers had returned a home networking product (for example, a hub, router, bridge, adapter, or modem) within the previous year. Only 15 percent of the returns were the result of broken or defective products; most of the remaining returns were simply because people couldn't get the equipment to work.
Second, consumers who are dissatisfied with a product after using it will take their business elsewhere in the future. Certainly, it's true that you can't satisfy a customer you've never won in the first place. Many companies may believe 'tis better to have sold and lost than never to have sold at all. But that's a dangerous attitude for any company focused on growing customer equity—the lifetime value of their customers. A company looking for repeat business should hesitate to pit its features against its future.
Finally, frustrated product owners . . . will spread the word of their dissatisfaction. This appears to be the case with BMW, whose 7 Series cars feature the complicated iDrive system, which offers about 700 capabilities requiring multifunction displays and multistep operations—even for functions that formerly required the twist of a knob or the flick of a switch. BMW included instruction sheets in the glove compartment because it is almost impossible to give the car to a valet parker without an impromptu lecture. According to industry news reports, sales of the 7 Series in the United States in the first half of 2005 were down about 10 percent relative to the same period in 2004. Past studies have established the power of positive word of mouth and the much greater prevalence of its negative form—and most of those studies were conducted before the Internet gave every dissatisfied party a global sphere of influence.
In light of these long-term consequences, how should companies today be designing products? It's undeniable that, in a store setting, consumers reach for the product that boasts the most features. But how much of a good thing is too much?
Finding the happy mediumTo achieve lasting prosperity, companies must find a way to resolve the dilemma we've described. The first step for many companies may simply be to take stock of the complexity they have built into their products and the toll it is taking on their customers. Executives at Mercedes-Benz recently did just that and, as a result, removed more than 600 functions from its cars. In 2004, Stephan Wolfsried, vice president for electrical and electronic systems and chassis unit at DaimlerChrysler's Mercedes Car Group, said that integrating all those functions caused truly important electronic parts to malfunction occasionally and made testing the system more expensive. Moreover, Wolfsried said, the functions were ones that "no one really needed and no one knew how to use." One example he noted was the storage of a driver's personal seat position in the car key. "It was done with good intentions, but if I take my wife's key at some point and can't find my own seat position any more, that tends to be annoying for me instead of comfortable." We suspect that in many companies, simply gaining this kind of heightened awareness of customer impact would help contain feature bloat. Beyond that, we offer five other pieces of advice.
A company looking for repeat business should hesitate to pit its features against its future.
Consider long-term customer equity and not just customers' initial choices. To get the right mix of capability and usability in a product, managers need much more guidance than the general advice that "less is more." On the basis of our results, we developed an analytical model to help managers balance the sales benefits of adding features against the customer equity costs of feature fatigue. The model steers decision makers away from the extremes—too few features to capture initial sales or too many features to ensure ease of use—and toward a middle ground that maximizes the net present value of the typical customer's profit stream. The model also demonstrates that the optimal number of features depends on a company's objectives.
Build simpler products. In general, our results suggest that managers should consider offering a wider assortment of simpler products instead of all-purpose, feature-rich products. Perhaps this is the intent behind electronics giant Koninklijke (Royal) Philips Electronics' new brand promise: sense and simplicity. The concept is that products should be easy to use and should improve the quality of people's lives. The company apparently wants to take this idea beyond sloganeering: It created a Simplicity Advisory Board, a think tank consisting of designers, healthcare specialists, and technology experts, to help translate the message into new products. Meanwhile, we like the salute to simplicity offered by Adam Baker, a Web-based commentator:
I have an electronic garage door opener. It works perfectly: I just push a big, obvious button on a simple, single-function control, and the garage door opens (or closes, depending on whether it was open or closed to begin with). I only needed to use the device once before I understood how it worked. It doesn't do anything else, and it doesn't have any fancy gimmicks.
Particularly in cases where a company has packed one model with many features to address market heterogeneity, consumer satisfaction might be greatly enhanced by tailoring products with limited sets of capabilities for various segments.
Give consumers decision aids. We've just suggested creating and marketing more narrowly targeted products. Admittedly, this makes the decision process more difficult for consumers, forcing them to think carefully about which features they actually need. Moreover, our empirical results suggest that people will be tempted by products that offer greater capability. To help consumers learn which products best suit their needs, managers should consider designing decision aids, such as recommendation agents that "interview" buyers about their requirements, or offering extended product trials—two techniques that can increase the salience of usability in the purchase decision. For example, the companies that sell digital media players RealPlayer and Winamp offer evaluation versions, which give people the opportunity to fiddle with a working model of the product, sometimes with limited functionality and sometimes with full functionality for a limited time. By decreasing the gap between consumers' preferences during choice and use, such strategies may increase customers' satisfaction and their lifetime value.
Design products that do one thing very well. Perhaps the worst outcome of feature creep is the one captured in a New Yorker cartoon that shows a man arriving in a store with a simple question: "Do you have any phones that make phone calls?" Too often, in their eagerness to layer on additional functionality, developers lose sight of the product's basic function—the one thing it must do extremely well. Examples abound of products that have captured their owners' hearts by performing their central task admirably. The phenomenally popular iPod, Apple's personal music player, shows how effectively a company can make sales and satisfy customers with a tightly focused solution. As a new digital product, the iPod could have combined numerous features at extremely low incremental cost. Instead, it aimed to be a single-purpose tool that performed so well and so simply that everyone had to have one.
Use prototypes and product-in-use research. One way or another, managers must correct for the misleading information that many market-research techniques deliver. As noted, our findings call into question the predictive power of attribute-based models for determining the optimal number of features. If companies conduct market research by asking consumers to evaluate products without using them, too much weight will be given to capability, and the result will likely be products with too many features. Instead, designing research that gives consumers an opportunity to use actual products or prototypes may increase the importance of usability so that its relevance in choice approaches its relevance in use

Business Manager articles

2006-06-11T06:56:00.000-07:00

The New Articles in Sales Knowledge bank talks about different prespective a Sales Manager has to take to make this transition to Business Manager

Pl note post this we will again focus on nitty grity of Sales Management as that is what concerns majority of readers of this blog

From Sales Manager to Business Manager

2006-05-07T04:38:00.000-07:00

The desire to grow is always high among every sales "bred" managers. Well from this post onwards I will try to change Sales manager outlook to Business Manager outlook .

Every Sales Manager has to start thinking Big , Beyond Revenues to Profits too . Beyond Micro picture of your market & customers to Macro picture of shifts in the world economy etc . This is neccesary to understand your market , customer better & help them serve better. Global Gyan . But this is a new reality which every sales manager has to go thru & grow accordingly

New Beginning

2006-04-23T05:58:00.000-07:00

In sales the new learning is saying no to a product lines . We need to realize that we cannot have product after product ride on the same channel . One need to optimize the sales force time by rightly choosing products , assessing the products over a period of time & force marketing to reinvent if need be .

As a sales manager one needs to think like a business man . He needs to realize that he is like a retail store with a a consumer to serve , He needs to think like a procurement executive in selcting a right product for the team . Also seeing to the fact that product ends up a right over all value proposition in terms of price & attributes .

In future don't let your sales force sweat in vain . You owe a lot to them .

Week 10 : Prespective

2006-03-17T04:05:00.000-08:00

Last few weeks I was coaching a team on Goal setting . How does one set goals for a quarter , year ??. The Sales goal setting makes Sales Managers defensive . They are afraid to set big goals . They weren't ready to dream big as all incentives were linked to % over budgets in that organisation . Budgets are virtual but last year / quarter sales are actual. But one cannot link incentives to bases as different geographies & products have varying potential to grow . In such a deadlock best option is change the prespective of Goal setter from one year earning to long term earning capability

Interesting I gave them a perspective that if organisation size doubles next year , that would suddenly throw opportunities for growth as larger size would mean more infrastructure , people & hence promotion for lot of people . This suddenly changed the outlook of these sales managers . They looked at Goal setting as a process to increase opportunities to for their own growth rather than maximizing their incentives for this year. Then we were talking BIG & planning resources to achieve this big Goal

Effectiveness Contd

2006-02-22T07:18:00.000-08:00

In last few weeks we have moved ahead significantly in measuring sales men productivity . The clear output shows that sales men by themselves often define their own productivity parameters . The focus on end result is often in line with the company's direction but the process may not be .

Hence the effectiveness study reinforced need for better training & coaching even to senior sales men as to what company's long term & middle term priorities are . The need to adhere to a particular process like finding new potential customers even in existing distributor area etc were highlighted . The need to agenda planning for each call was highlighted & explained with case studies within the team

Overall I feel we have moved ahead on this agenda .. Lets see how we proceed ahead

Week 8 : Overheads

2006-02-03T08:56:00.000-08:00

Sales without financial prudence is often a big waste . The knowledge of working capital in particular cash flow is very important . In sales we need to understand the same for our own company , our customers & also our competitors . This will help us to plan better value propositions for customers without compromising our financial health or sometimes making propositions that will bleed competitors

Week7 : Effectiveness exercise Initiated

2006-01-21T22:23:00.000-08:00

FW Taylor " Father of Scientific Management” initiated a concept of simplifying job content. This reduced the employee’s required skill & the payout to recruit & retain them

Today we are facing the same situation in sales management . The only way we one can maintain some stability in our sales force is to have a proper division of basic & value add jobs . See if it is possible to outsource basic / routine jobs & save on cost . Simultaneously recruit better professionals ( higher paid) to do value added jobs

For this task division its is critical to map how much time your frontline spends on each of these tasks . Subsequently we can work towards the division of Core & Non Core tasks
The first process has started . The tasks has been listed & we are in process of measuring the same . More on this in the coming week

Week 6 : Simplication initiative

2006-01-15T04:39:00.000-08:00

Sales Staff visit report a significant tool to assess

1) Understand Resource effectiveness

Sales Staff Prioirities/ Objectives
Time busters
Underleverage & overleverage staff

2) Future Resource Planning

The key task is simplication of the overall VFR measurement process & computerisation of the same

Next few weeks will deal with this plan & execution of the same

Week 5 : New Year plans

2006-01-08T03:47:00.000-08:00

My plans for this year

1) Setting Right objectives : ie Focus on the right products, network & procedures, the ones that can increase value in the long term .

2) Simplify : Products & sales procedures

3) Outsource : Non core activities while maintaining customer contact.

Week 4 : Self motivation

2005-12-24T08:36:00.000-08:00

Even when the going is great you need a lot of motivation

1) Start your day with "focus on Goals" : Think about it every morning & write down the steps that you will take today to reach the final goal

2) Mid Morning Praise : Analyze your morning routine & congratulate yourself on activities you did right .

3) Evening Review : Analyze your day routine & write down things that you could have done better . Set your plan for tomm.

This in totality will keep your focus alive , motivation high & improve continuously

week 3: Initiatives Meet

2005-12-19T09:00:00.000-08:00

The highlight of this week was Initiative Meet . The meet focussed on how sales managers can get that " Market Development focus"

The Sales Mangers are highly Number focussed & often are thought to have a short term focus . This initiative meet was to display how sales managers are thinking long term & how they design sales promotion schemes that add value to the brand they are selling

It was interesting how sales managers were talking about brand salience when they designed their trade promotion schemes & at the same time delivered on the sales numbers front . Every initiative was backed by the Cost to achievement & sales numbers .

I think this is a way to go ., Get more & more sales managers in to marketing & vice versa

Week 2: President's Market visit

2005-12-13T21:59:00.000-08:00

The agenda was more to get market feel about the present & the past retail trends & plans for future months

The retailers chosen for the market visit had a good mix of large & small , within the city & the growing extensions

The insights were indeed positive

1) Market was overall positive about the future
2) All retailers seemed motivated & were keen on product upgradations
3) All retailers seem enthused by retailing program launched by the company . They felt shop upkeep & upgrading customer services are the trends to watch out

Well it seems we are set for a good month & year.....

Week : 1 : Sales Review

2005-12-03T22:41:00.000-08:00

1st week is all about last month review & setting direction for next month

Key "take away" from the sessions.....

1) 5 point agenda for all SALES MANAGER for the next quarter : the idea was that at the end of each review session each Territory Manager was to bring out what according to him are 5 key things that he needs to do . His peers & superior played a key role in helping him zeroing on this goals for next quarter

2) Helping new managers understand how to effectively review their Territory performance & convert data into usable information . Also seek solution with help of team that can help them solve " stuck issues "

Overall I think it review has proceeded well