Are You Still Competing On Price?

If you still struggle daily with low price competitors, here are a couple of mantras for your wall:

1. At any given time, SOMEONE can do it for less.

This means that despite your best efforts, another bidder or rival for the project at hand could easily trump your low price. They may do so because they made a mistake (isn’t that how you won that big job last year?), don’t care about profit, or have secret, unfair advantage that you just don’t understand. What is more likely is that they know HOW to do it for less, but if the other excuses help you sleep at night then please use them. The fact is you cannot always be the low bidder, and you probably don’t want to.

2. At any given time, there is always something more important than price.

Regardless of what the buyer may tell you, the only time a low bid is appealing is when the other most important issue has been addressed. Consider the extreme, if the low bidder is incompetent or otherwise inadequate for the project – they can and will be rejected. If they are not rejected, then maybe your assessment of their suitability (and therefore your opinion of where you fit in) was wrong.

I often teach sales folks to focus on the second or third most important thing to the customer. In today’s economy, it’s unpopular to have anything but price as most important. Quality or suitability comes in second (but really, that’s probably their most important criteria!). If everyone addresses only the biggest two issues, the proposals will all look the same. There may even be a third criteria that the decision-maker values, but is uncomfortable emphasizing. Maybe the third priority is something you are uniquely qualified to offer. DO IT!

Don’t be the low bidder. Check.

Do address the buyer’s second criteria. Check.

Put the force of your value proposition into the tiebreaker. What have you got to lose?

The Monthly Strategy Meeting

It’s OK that you don’t like meetings. Not many of us do. However, if the meeting gives you something you need, then – provided the time investment was reasonable for the gain – you might leave glad that you attended. This is more easily accomplished in tactical or project meetings. You talk about progress, assign new tasks, and schedule the next meeting. What about the strategy meeting?  That’s the one where everyone gets to talk – or hear themselves talk – but nothing seems to come out of it. It’s the meeting that usually collapses into a detailed tactical discussion about how to solve current problems or who to promote instead of peering into the future. If your complaint about management or strategy meetings is “We talk about the same stuff every time and never do anything different,” then change the agenda. When you talk about your company the conversation will always become tactical. The trick is to talk about the rest of the world. Here’s one agenda idea:

What’s New? What’s Hot? What’s Working? What’s Not?

Start with What’s New? Attendees have to offer one news item or interesting development from outside your firm that is relevant to what you do or should be doing. If someone brings up old news – slap it down. You don’t have to discuss every item brought up. Some things are just informational, but you will notice that these items will come up later in your discussions.

Next up, What’s Hot? The previous news items are not hot – they are information or developments. Hot is emerging trends or established trends that you somehow missed. This is the time for goofy out of the box talks. Attendees should bring something that excites or worries them. This takes some discipline as it requires that managers read and stay on top of news, products, and technology. Not every Hot item will change the way you do business in the future. Consider this a monthly environmental scan.

What’s Working? is success stories from outside the company. It could be a marketing campaign, an advertisement, a cool product that is gaining traction, a brand – you name it. It doesn’t have to be from your industry; you can learn a lot from what others do. It’s not fair to ask the presenter “Well, that’s a nice story Tom, but what’s it have to do with us?” If it works for someone, then it’s worth knowing about.

And finally, What’s Not? brings stories of other folk’s missteps. Not to dwell on the negative, but “They also serve who are bad examples.” I have seen more than one executive delete planned initiative slides after hearing the story of someone else failing at trying the same thing.

What does this exercise do for you and your team? It gives you PRACTICE at thinking strategically. These stories will plant seeds of ideas that will one day change how you do business or what you sell or to whom. Learn to ask the right questions. Why did that company develop this new idea? Why is this trend hot and what happened to the last trend? What makes their idea work when the other guy’s didn’t? Why did that idea fail?

12 Innovation Concepts That Will Dominate the Recovery

I have just returned from a landmark event called The InfoComm 100. This was a three-day networking think tank of leaders and visionaries from all over the AV Industry and around the world. I will write more about it in future blogs and articles, but let me just say that my brain is full of ideas and concepts generated by this experience. Rich Karlgaard, Publisher of Forbes Magazine provided us with an eloquent keynote in which he predicts that the recession will end this quarter (Q2, 2009). While he makes a compelling case, the real takeaway of his talk was a list of attributes of the companies that will do well in the recovery. Here is his list of the 12 Innovations and my thoughts on what they mean for us.

DESIGN
People, humans are wired for great aesthetics and companies that can satisfy or feed that need will produce more compelling products. Elegant design (Apple Computer) in both form and function (and packaging) will be a huge differentiator. Consider that everything you do directly or indirectly touches your customer. Will successful companies have Chief Design Officers? Perhaps, but at the very least they will have the dialogue about whether that would be the right thing to do.

SPEED of OPERATIONS
Time is money, but more importantly – time is time. We can’t get time back and neither can our customers. In the new economy spawned by this recession, speed will have even greater value than the financial byproduct of efficiency.

ANALYTICS
Companies that understand the marketplace and customers at subtle levels will be able to do more with smaller market shares. But analytics and metrics matter in other areas as well. Having access to real time data and then knowing which data is relevant will be a huge competitive advantage.

SUPPLY CHAIN MASTERY
Yes, this applies to you. Whatever your supply chain involves, it can improved upon. Companies that master the supply chain (Dell Computer) will gain market share and improve their cost basis for ongoing business. Those that stray from that mission (again, Dell Computer) will feel its recoil. (See SPEED of OPERATIONS).

SELF SERVICE
There is a growing segment of society that would prefer to do all they can themselves before involving the supplier. This is why we buy products online instead of visiting a retail store or use a ticket kiosk instead of standing in line at the airport or movie theater. The key is making self-service fun and intuitive.

LOW COST
This goes beyond choices about processes and efficiencies; this is a philosophy (Walmart). Even luxury and service offerings can make low cost (Green, profitable, resourceful) appealing. (See SELF SERVICE).

DISRUPTIVE TECHNOLOGY
Market leaders have a hard time disrupting themselves. Breakaway companies will find ways to reinvent themselves to make room for new ideas. Disruptive Innovation fills a gap that doesn’t exist until that innovation is born (iPod).

TRAINING
The world, society, youth – everyone is learning more and learning differently. Whether you are training your employees or customers – or maybe training is your product – this attribute will a big advantage going forward.

OPEN SOURCE
This goes beyond opening your products to sharing and improvement. Think TALENT. Seek and share ideas and contributions from unconventional people and places.

CUSTOMER FEEDBACK
This ties back to ANALYTICS and SUPPLY CHAIN. How we process and apply customer feedback can set us apart and rive return business.  Customer feedback is a philosophy, not an initiative.

VIRTUAL INNOVATION
A big company does not need to be all under one roof. This does not simply mean branches or glocal (global/local) offices – it even goes beyond telecommuting. Virtual innovation might mean Second Life customer interfaces or marketing initiatives initiated by artificial intelligence.

INNOVATION OF MEANING AND PURPOSE
Trust for institutions is at a low. Companies that exist for a purpose create added value for the customer and every person that works for or with the firm.

Any one of these innovations could propel a company into spotlight. And I think that choosing one of these 12 and trying to find your unique solution could also be a mistake. What is innovative about looking for innovation? Start with this quote from the InfoComm 100 roundtable “The future is based on customers we haven’t met yet.” Now, what would that customer want from a company he/she hasn’t met yet?

President shifts stance on business travel

This is great news for a Friday the 13th. After much wailing and gnashing of teeth by the travel and business meetings industry – several top executives got an audience with President Obama. It seems the President listened and understood. See this news story:

http://www.msnbc.msn.com/id/29667132/

A few poorly placed words by Obama fueled already aggressive media hype and uninformed lawmaker’s grandstanding against incentive and business meetings. The combined result has been devastating to destinations like Las Vegas and Orlando and all the millions of workers that support meetings and live events. Today’s announcement won’t change things overnight, but I hope that the many companies that have canceled meetings and other events will revisit those plans.

Tom Stimson

The Stimson Group

More TARP Madness Threatening the Travel and Events Industry

Sen. Kerry has introduced legislation that would ban all 421 firms including the nation’s largest banks that received money from the Troubled Assets Relief Program (TARP) from hosting, sponsoring or paying for conferences, holiday parties and entertainment events.

This is anti-business, anti-growth, and demonstrates just how little politicians know about how to run a company. Sure, there are some stupid things that TARP recipients might do that fall into this list of banned activities, but that does not mean ALL conferences and events are frivolous. This kind of talk goes too far. The petition below recommends that the travel and events industry be allowed to join the discussion and offer some ideas about how best to monitor for junkets.
As fellow industry folks I hope you will click on the link below and it will allow you to easily email your senators and congressmen and women.

http://capwiz.com/nbta/utr/2/?a=12773376&i=91979931&c <http://capwiz.com/nbta/utr/2/?a=12773376&i=91979931&c> =

Here is the petition in its entirety:

I was dismayed to hear that Sen. Kerry has introduced legislation that bans Troubled Assets Relief Program (TARP) recipients from hosting, sponsoring or paying for conferences, holiday parties and entertainment events. I understand and share the concern that taxpayer funds are being used for questionable items, but Sen. Kerry’s comments amd actions are part of a disturbing trend that paints company travel and events as a picture of lavish, unnecessary parties. When in truth, the vast majority of meetings, conventions and conferences are cost efficient, well planned tools used by companies to drive business and are an economic boon to cities that host the meetings.

The industry recognizes there are concerns with how companies are spending money. My association, the National Business Travel Association has been at the forefront of managed travel for forty years. A well managed travel program ensures companies are following guidelines that include competitive bidding, expense reporting, cost containment, and policy compliance. Exactly the type of transparency and accountability President Obama has called for. The travel industry believes so strongly in the benefits of effectively managed travel that it has published a set of standards that are being recommended to TARP companies. The industry is also working with the Treasury Department to ensure that these real world practices are a part of the solution.

The introduction of legislation and media driven stories are having a chilling effect on the entire travel community, not just TARP recipients. Companies that have never taken a cent of TARP money are canceling meetings and other events because they are afraid of being attacked as wasteful. This hurts the business travel industry, but it also affects the bellman, the maid, the waitress and other hourly employees that will be laid off as these meetings and conventions decline.

As a member of a community that creates $244 billion in spending, 2.4 million America jobs and $39 billion in tax revenue at the federal, state and local level, I hope you will listen to our ideas and suggestions. Let the Treasury Department work with the business travel industry to set guidelines for managed travel. The worst possible step Congress can do now is to ban meetings and conferences. This knee-jerk reaction would not only hurt the targeted companies, it would hurt the entire American economy.

Seth’s Blog: Three kinds of meetings

Three kinds of meetings by Seth Godin

Meetings are marketing in real time with real people. (A conference is not a meeting. A conference is a chance for a circle of people to interact).

There are only three kinds of classic meetings:

1. Information. This is a meeting where attendees are informed about what is happening (with or without their blessing). While there may be a facade of conversation, it’s primarily designed to inform.

2. Discussion. This is a meeting where the leader actually wants feedback or direction or connections. You can use this meeting to come up with an action plan, or develop a new idea, for example.

3. Permission. This is a meeting where the other side is supposed to say yes but has the power to say no.

PLEASE don’t confuse them. Confused meeting types are the number one source of meeting ennui. One source of confusion is that a meeting starts as one sort of meeting and then magically morphs into another kind. The reason this is frightening is that one side or the other might not realize that’s actually occurring. If it does, stop and say, “Thanks for the discussion. Let me state what we’ve just agreed on and then we can go ahead and approve it, okay?”

While I’m at it, let me remind you that there are two kinds of questions.

1. Questions designed to honestly elicit more information.

2. Questions designed to demonstrate how much you know or your position on an issue and to put the answerer on the defensive.

There’s room for both types of questions, particularly in a team preparing for a presentation or a pitch. Again, don’t confuse them. I like to be sure that there’s time for the first type, then, once everyone acknowledges that they know what’s on the table, open it up for the second, more debate-oriented type of question.

via Seth’s Blog: Three kinds of meetings.

TR Stimson’s Comments:

I like to read Seth Godin and have added him to my RSS feed so I can easily see his daily updates. I thought that this particular entry would be not make it to my contemplation list. But things work in the back of my mind and I soon realized that Seth falls short on this one. So, I want to add one more item to his list and explain why I think it’s not covered by his categorization.

4. Planning. This is a meeting where the leader wants the participants to share information and then reconcile the ensuing conflicts and devise next steps. The input is the planning to date in the various information silos related to a project. The output is Action Items that will allow the silos to progress towards shared goals as opposed to the inevitable drift apart if planning goes on unchecked.

This is a combination of discussion and permission meetings, but the need and outcome is fundamentally different. Seth’s three meetings all contain a Leader (with capital L) for whom the meeting satisfies some need to know. In a plannng meeting, the event is run by a facilitator – guiding and refereeing the discussion to keep it on track and goal-focused. This may or may not be a Leader but it is always a vested party with the ability to remove obstacles to progress.

It is just as important that a Planning meeting not digress into any of the other three, but it is likely that unresolved conflicts from planning will necessitate one of the other three kinds of meetings. So meet if you must, just stay on topic for everyone’s sake.

Thoughts on the value of downtime

I generally find myself to be very busy. There are always 20 things on my immediate to-do list and rarely time for the projects that take a lot of thought and quality time. When I talk to leaders of companies, I hear much the same. Even in a down economy with 30% plus drops in revenue – people are busier than ever. Most will tell you that they work from a sense of urgency, trying to get more done in case the last task is the one that will make a difference.

My projects have spaced apart a little more this year, but I sense that it’s not because there is less demand for my services. On the contrary,  my inquiries are up. My clients and prospects are struggling to find the time in their schedule and their team’s to fit me in. They need what I offer, but feel they cannot risk not being available for every little opportunity that might pop up. Business downtime seems to be at a premium these days.

I know the value of taking the time to sit back and think. I teach it, advise it, and in times like these – I practice it. Business downtime is not the same as personal time. Thinking about work is not the same as thinking about life, family, friends, or personal goals. Some types of downtime work better for me than others. This past week I traveled to Phoenix to attend the Business Leadership Conference hosted by NSCA (and sponsored by InfoComm). This event involved two days and three nights of networking, keynotes, and seminars. I do all three of these things for a living, but in this case I was just another attendee. This is my favorite type of business downtime –  the results were cathartic and motivating.

I don’t connect with every speaker or topic, but I often find one tidbit that propels me on a thinking journey. I have ten pages of notes that have nothing to do with the seminar content to prove it. The subject matter and presentations also provide inspriation and challenge me to sort out my time management obstacles and prioritize my long terms goals. In short, I recharge the left side of my brain by listening while the right side plays with each new idea.

You may have your own way of retooling yourself. I have been known to take a day to go sailing or spend a long morning at the Karate studio. This will clear my head and help me focus on that to-do list. But attending a business seminar really clears the decks and prompts me to higher levels of contemplation. My to-do’s are shrinking faster, my long terms projects are bubbling to the top, and I have the time and energy to start yet another ongoing idea outlet – a blog. So thanks for reading. Let me know how you spend your business downtime.

Tom Stimson

The Stimson Group

www.trstimson.com

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